Document:

Exhibit 10.2

 

ADAMAS PHARMACEUTICALS, INC.

 

2007 STOCK PLAN

 

ADOPTED ON DECEMBER 12, 2007

 

AMENDED THROUGH SEPTEMBER 3, 2013

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
SECTION 1.
    	
Establishment And Purpose
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    	
Administration
    	
1
    
	
(a)
    	
Committees of the Board of   Directors
    	
1
    
	
(b)
    	
Authority of the Board of Directors
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    	
Eligibility
    	
1
    
	
(a)
    	
General Rule
    	
1
    
	
(b)
    	
Ten-Percent Stockholders
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    	
Stock Subject To Plan
    	
2
    
	
(a)
    	
Basic Limitation
    	
2
    
	
(b)
    	
Additional Shares
    	
2
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    	
Terms And Conditions Of Awards   Or Sales
    	
2
    
	
(a)
    	
Stock Purchase Agreement
    	
2
    
	
(b)
    	
Duration of Offers and   Nontransferability of Rights
    	
2
    
	
(c)
    	
Purchase Price
    	
2
    
	
(d)
    	
Withholding Taxes
    	
2
    
	
(e)
    	
Restrictions on Transfer of Shares
    	
2
    
	
 
    	
 
    	
 
    
	
SECTION 6.
    	
Terms And Conditions Of Options
    	
3
    
	
(a)
    	
Stock Option Agreement
    	
3
    
	
(b)
    	
Number of Shares
    	
3
    
	
(c)
    	
Exercise Price
    	
3
    
	
(d)
    	
Exercisability
    	
3
    
	
(e)
    	
Basic Term
    	
3
    
	
(f)
    	
Termination of Service (Except by   Death)
    	
3
    
	
(g)
    	
Leaves of Absence
    	
4
    
	
(h)
    	
Death of Optionee
    	
4
    
	
(i)
    	
Restrictions on Transfer of Shares
    	
4
    
	
(j)
    	
Transferability of Options
    	
5
    
	
(k)
    	
Withholding Taxes
    	
5
    
	
(l)
    	
No Rights as a Stockholder
    	
5
    
	
(m)
    	
Modification, Extension and   Assumption of Options
    	
5
    
	
 
    	
 
    	
 
    
	
SECTION 7.
    	
Payment For Shares
    	
5
    
	
(a)
    	
General Rule
    	
5
    
	
(b)
    	
Services Rendered
    	
5
    
	
(c)
    	
Promissory Note
    	
5
    
	
(d)
    	
Surrender of Stock
    	
6
    
	
(e)
    	
Exercise/Sale
    	
6
    
	
(f)
    	
Other Forms of Payment
    	
6
    
				

 

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SECTION 8.
    	
Adjustment Of Shares
    	
6
    
	
(a)
    	
General
    	
6
    
	
(b)
    	
Dissolution or Liquidation
    	
6
    
	
(c)
    	
Mergers and Consolidations
    	
6
    
	
(d)
    	
Reservation of Rights
    	
8
    
	
 
    	
 
    	
 
    
	
SECTION 9.
    	
Securities Law Requirements
    	
8
    
	
 
    	
 
    	
 
    
	
SECTION 10.
    	
No Retention Rights
    	
8
    
	
 
    	
 
    	
 
    
	
SECTION 11.
    	
Duration and Amendments
    	
8
    
	
(a)
    	
Term of the Plan
    	
8
    
	
(b)
    	
Right to Amend or Terminate the   Plan
    	
9
    
	
(c)
    	
Effect of Amendment or Termination
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 12.
    	
Definitions
    	
9
    
				

 

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ADAMAS PHARMACEUTICALS, INC. 2007 STOCK PLAN

 

SECTION 1.        ESTABLISHMENT AND PURPOSE.

 

The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company’s Stock.  The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares.  Options granted under the Plan may include Nonstatutory Options as well as ISOs intended to qualify under Section 422 of the Code.

 

Capitalized terms are defined in Section 12.

 

SECTION 2.        ADMINISTRATION.

 

(a)           Committees of the Board of Directors.  The Plan may be administered by one or more Committees.  Each Committee shall consist of one or more members of the Board of Directors who have been appointed by the Board of Directors.  Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it.  If no Committee has been appointed, the entire Board of Directors shall administer the Plan.  Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function.

 

(b)           Authority of the Board of Directors.  Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan.  All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee.

 

SECTION 3.        ELIGIBILITY.

 

(a)           General Rule.  Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the direct award or sale of Shares.  Only Employees shall be eligible for the grant of ISOs.

 

(b)           Ten-Percent Stockholders.  A person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the date of grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant.  For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

 

 

SECTION 4.        STOCK SUBJECT TO PLAN.

 

(a)           Basic Limitation.  Not more than 2,378,200 Shares may be issued under the Plan (subject to Subsection (b) below and Section 8(a)).  All of these Shares may be issued upon the exercise of ISOs.  The number of Shares that are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan.  The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.  Shares offered under the Plan may be authorized but unissued Shares or treasury Shares.

 

(b)           Additional Shares.  In the event that Shares previously issued under the Plan are reacquired by the Company, such Shares shall be added to the number of Shares then available for issuance under the Plan.  In the event that an outstanding Option or other right for any reason expires or is canceled, the Shares allocable to the unexercised portion of such Option or other right shall be added to the number of Shares then available for issuance under the Plan.

 

SECTION 5.        TERMS AND CONDITIONS OF AWARDS OR SALES.

 

(a)           Stock Purchase Agreement.  Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company.  Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement.  The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical.

 

(b)           Duration of Offers and Nontransferability of Rights.  Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company.  Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted.

 

(c)           Purchase Price.  The Board of Directors shall determine the Purchase Price of Shares to be offered under the Plan at its sole discretion.  The Purchase Price shall be payable in a form described in Section 7.

 

(d)           Withholding Taxes.  As a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such purchase.

 

(e)           Restrictions on Transfer of Shares.  Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine.  Such restrictions 

 

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shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.

 

SECTION 6.        TERMS AND CONDITIONS OF OPTIONS.

 

(a)           Stock Option Agreement.  Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company.  The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Option Agreement.  The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

 

(b)           Number of Shares.  Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8.  The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option.

 

(c)           Exercise Price.  Each Stock Option Agreement shall specify the Exercise Price.  The Exercise Price of any Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant, and in the case of an ISO a higher percentage may be required by Section 3(b).  Subject to the preceding sentence, the Exercise Price shall be determined by the Board of Directors at its sole discretion.  The Exercise Price shall be payable in a form described in Section 7.

 

(d)           Exercisability.  Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable.  No Option shall be exercisable unless the Optionee (i) has delivered an executed copy of the Stock Option Agreement to the Company or (ii) otherwise agrees to be bound by the terms of the Stock Option Agreement.  The Board of Directors shall determine the exercisability provisions of the Stock Option Agreement at its sole discretion.  All of an Optionee’s Options shall become exercisable in full if Section 8(b)(iv) applies.

 

(e)           Basic Term.  The Stock Option Agreement shall specify the term of the Option.  The term shall not exceed 10 years from the date of grant, and in the case of an ISO a shorter term may be required by Section 3(b).  Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire.

 

(f)            Termination of Service (Except by Death).  If an Optionee’s Service terminates for any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following occasions:

 

(i)            The expiration date determined pursuant to Subsection (e) above;

 

(ii)           The date three months after the termination of the Optionee’s Service for any reason other than Disability, or such later date as the Board of Directors may determine; or

 

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(iii)          The date six months after the termination of the Optionee’s Service by reason of Disability, or such later date as the Board of Directors may determine.

 

The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination).  The balance of such Options shall lapse when the Optionee’s Service terminates.  In the event that the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination).

 

(g)           Leaves of Absence.  For purposes of Subsection (f) above, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company).

 

(h)           Death of Optionee.  If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the earlier of the following dates:

 

(i)            The expiration date determined pursuant to Subsection (e) above; or

 

(ii)           The date 12 months after the Optionee’s death, or such later date as the Board of Directors may determine.

 

All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death).  The balance of such Options shall lapse when the Optionee dies.

 

(i)            Restrictions on Transfer of Shares.  Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine.  Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.

 

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(j)            Transferability of Options.  An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence.  If the applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee.  An ISO may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal representative.

 

(k)           Withholding Taxes.  As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise.  The Optionee shall also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.

 

(l)            No Rights as a Stockholder.  An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option.

 

(m)          Modification, Extension and Assumption of Options.  Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price.  The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option.

 

SECTION 7.        PAYMENT FOR SHARES.

 

(a)           General Rule.  The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7.

 

(b)           Services Rendered.  At the discretion of the Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award.

 

(c)           Promissory Note.  At the discretion of the Board of Directors, all or a portion of the Purchase Price or Exercise Price (as the case may be) of Shares issued under the Plan may be paid with a full-recourse promissory note.  The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon.  The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code.  Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note.

 

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(d)           Surrender of Stock.  At the discretion of the Board of Directors, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee.  Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value as of the date when the Option is exercised.

 

(e)           Exercise/Sale.  To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company.

 

(f)            Other Forms of Payment.  To the extent that a Stock Purchase Agreement or Stock Option Agreement so provides, the Purchase Price or Exercise Price of Shares issued under the Plan may be paid in any other form permitted by the Delaware General Corporation Law, as amended.

 

SECTION 8.        ADJUSTMENT OF SHARES.

 

(a)           General.  In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a reclassification, or any other increase or decrease in the number of issued shares of Stock effected without receipt of consideration by the Company, proportionate adjustments shall automatically be made in each of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option and (iii) the Exercise Price under each outstanding Option.  In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a recapitalization, a spin-off, or a similar occurrence, the Board of Directors at its sole discretion may make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option; provided, however, that the Board of Directors shall in any event make such adjustments as may be required by Section 25102(o) of the California Corporations Code.

 

(b)           Dissolution or Liquidation.  Unless the Board of Directors at its sole discretion determines otherwise, upon a dissolution or liquidation of the Company, all outstanding Options shall be cancelled.  Optionees shall be able to exercise their outstanding Options (to the extent vested) during a period of not less than five full business days preceding the closing date of such dissolution or liquidation, unless (A) a shorter period is required to permit a timely closing of such dissolution or liquidation and (B) such shorter period still offers the Optionees a reasonable opportunity to exercise such Options.  Any exercise of an Option during such period may be contingent on the closing of such dissolution or liquidation.

 

(c)           Mergers and Consolidations.  In the event that the Company is a party to a merger or consolidation, all Shares acquired under the Plan and all Options shall be subject to the agreement of merger or consolidation.  Such agreement need not treat all Options in an 

 

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identical manner, and it shall provide for one or more of the following with respect to each Option:

 

(i)            The continuation of the Option by the Company (if the Company is the surviving corporation).

 

(ii)           The assumption of the Option by the surviving corporation or its parent in a manner that complies with Section 424(a) of the Code (whether or not the Option is an ISO).

 

(iii)          The substitution by the surviving corporation or its parent of a new option for the Option in a manner that complies with Section 424(a) of the Code (whether or not the Option is an ISO).

 

(iv)          The cancellation of the Option without the payment of any consideration.  To the extent provided by the Board of Directors or in the agreement of merger or consolidation, the Option may (but need not) become fully vested contingent on the closing of such merger or consolidation.  The Optionee shall be able to exercise the Option (to the extent vested) during a period of not less than five full business days preceding the closing date of such merger or consolidation, unless (A) a shorter period is required to permit a timely closing of such merger or consolidation and (B) such shorter period still offers the Optionee a reasonable opportunity to exercise the Option.  Any exercise of the Option during such period may be contingent on the closing of such merger or consolidation.

 

(v)           The cancellation of the Option and a payment to the Optionee equal to the excess of (A) the Fair Market Value of the Shares subject to the Option (to the extent the Option is exercisable or the Shares subject to the Option are vested as of the closing date of the merger or consolidation) as of the closing date of such merger or consolidation over (B) the Exercise Price of the Option.  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount.  If the Exercise Price of the Shares subject to the Option exceeds the Fair Market Value of such Shares, then the Option may be cancelled without making a payment to the Optionee.

 

(vi)          The cancellation of the Option and a payment to the Optionee equal to the excess of (A) the Fair Market Value of the Shares subject to the Option (whether or not the Option is then exercisable or such Shares are then vested) as of the closing date of such merger or consolidation over (B) the Exercise Price of the Option.  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount.  Subject to Section 409A of the Code, such payment may be made in installments and may be deferred until the date or dates when the Option would have become exercisable or such Shares would have vested.  Such payment may be subject to vesting based on the Optionee’s 

 

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continuing Service, provided that the vesting schedule shall not be less favorable to the Optionee than the schedule under which the Option would have become exercisable or such Shares would have vested.  If the Exercise Price of the Shares subject to the Option exceeds the Fair Market Value of such Shares, then the Option may be cancelled without making a payment to the Optionee.  For purposes of this Paragraph (vi), the Fair Market Value of any security shall be determined without regard to any vesting conditions that may apply to such security.

 

(d)           Reservation of Rights.  Except as provided in this Section 8, an Optionee or Purchaser shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class.  Any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option.  The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

SECTION 9.        SECURITIES LAW REQUIREMENTS.

 

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded.

 

SECTION 10.      NO RETENTION RIGHTS.

 

Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Purchaser or Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.

 

SECTION 11.      DURATION AND AMENDMENTS.

 

(a)           Term of the Plan.  The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to the approval of the Company’s stockholders.  If the stockholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred under the Plan shall be rescinded and no additional grants, exercises or sales shall thereafter be made under the Plan.  The Plan shall terminate automatically 10 years after the later of (i) the date when the Board of Directors adopted the Plan or (ii) the date when the Board of Directors approved the 

 

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most recent increase in the number of Shares reserved under Section 4 that was also approved by the Company’s stockholders.  The Plan may be terminated on any earlier date pursuant to Subsection (b) below.

 

(b)           Right to Amend or Terminate the Plan.  The Board of Directors may amend, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan shall be subject to the approval of the Company’s stockholders if it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 8) or (ii) materially changes the class of persons who are eligible for the grant of ISOs.  Stockholder approval shall not be required for any other amendment of the Plan.  If the stockholders fail to approve an increase in the number of Shares reserved under Section 4 within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred in reliance on such increase shall be rescinded and no additional grants, exercises or sales shall thereafter be made in reliance on such increase.

 

(c)           Effect of Amendment or Termination.  No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination.  The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan.

 

SECTION 12.      DEFINITIONS.

 

(a)           “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time.

 

(b)           “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(c)           “Committee” shall mean a committee of the Board of Directors, as described in Section 2(a).

 

(d)           “Company” shall mean Adamas Pharmaceuticals, Inc., a Delaware corporation.

 

(e)           “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.

 

(f)            “Disability” shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.

 

(g)           “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary.

 

(h)           “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement.

 

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(i)            “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board of Directors in accordance with applicable law.  Such determination shall be conclusive and binding on all persons.

 

(j)            “Family Member” shall mean (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the Optionee own more than 50% of the voting interests.

 

(k)           “ISO” shall mean an employee incentive stock option described in Section 422(b) of the Code.

 

(l)            “Nonstatutory Option” shall mean a stock option not described in Sections 422(b) or 423(b) of the Code.

 

(m)          “Option” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

 

(n)           “Optionee” shall mean a person who holds an Option.

 

(o)           “Outside Director” shall mean a member of the Board of Directors who is not an Employee.

 

(p)           “Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

 

(q)           “Plan” shall mean this Adamas Pharmaceuticals, Inc. 2007 Stock Plan.

 

(r)            “Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors.

 

(s)            “Purchaser” shall mean a person to whom the Board of Directors has offered the right to acquire Shares under the Plan (other than upon exercise of an Option).

 

(t)            “Service” shall mean service as an Employee, Outside Director or Consultant.

 

(u)           “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable).

 

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(v)           “Stock” shall mean the Common Stock of the Company.

 

(w)          “Stock Option Agreement” shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to the Optionee’s Option.

 

(x)           “Stock Purchase Agreement” shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to the acquisition of such Shares.

 

(y)           “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

 

11

 

ADAMAS PHARMACEUTICALS, INC. 2007 STOCK PLAN

 

NOTICE OF STOCK OPTION GRANT

 

The Optionee has been granted the following option to purchase shares of the Common Stock of Adamas Pharmaceuticals, Inc.:

 

	
Name of Optionee:
    	
«Name»
    
	
 
    	
 
    
	
Total Number of Shares:
    	
«TotalShares»
    
	
 
    	
 
    
	
Type of Option:
    	
«ISO»     Incentive   Stock Option (ISO)
    
	
 
    	
 
    
	
 
    	
«NSO»    Nonstatutory   Stock Option (NSO)
    
	
 
    	
 
    
	
Exercise Price per Share:
    	
$«PricePerShare»
    
	
 
    	
 
    
	
Date of Grant:
    	
«DateGrant»
    
	
 
    	
 
    
	
Date Exercisable:
    	
Provided the Optionee remains in continuous Service   on each such date: (i) this option may be exercised with respect to the   first 25% of the Shares subject to this option on the 12 month anniversary of   the Vesting Commencement Date set forth below and (ii) this option may   be exercised with respect to an additional 1/48th of the Shares subject to this   option on the first day of each month thereafter.
    
	
 
    	
 
    
	
Vesting Commencement Date:
    	
«VestComDate»
    
	
 
    	
 
    
	
Expiration Date:
    	
«ExpDate». This option expires earlier if the Optionee’s Service terminates   earlier, as provided in Section 6 of the Stock Option Agreement.
    

 

By signing below, the Optionee and the Company agree that this option is granted under, and governed by the terms and conditions of, the 2007 Stock Plan and the Stock Option Agreement.  Both of these documents are attached to, and made a part of, this Notice of Stock Option Grant.  Section 13 of the Stock Option Agreement includes important acknowledgements of the Optionee.

 

 

	
OPTIONEE:
    	
 
    	
ADAMAS PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

ADAMAS PHARMACEUTICALS, INC. 2007 STOCK PLAN:

STOCK OPTION AGREEMENT

 

SECTION 1.        GRANT OF OPTION.

 

(a)           Option.  On the terms and conditions set forth in the Notice of Stock Option Grant and this Agreement, the Company grants to the Optionee on the Date of Grant the option to purchase at the Exercise Price the number of Shares set forth in the Notice of Stock Option Grant.  The Exercise Price is agreed to be at least 100% of the Fair Market Value per Share on the Date of Grant (110% of Fair Market Value if this option is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the Plan applies).  This option is intended to be an ISO or an NSO, as provided in the Notice of Stock Option Grant.

 

(b)           $100,000 Limitation.  Even if this option is designated as an ISO in the Notice of Stock Option Grant, it shall be deemed to be an NSO to the extent (and only to the extent) required by the $100,000 annual limitation under Section 422(d) of the Code.

 

(c)           Stock Plan and Defined Terms.  This option is granted pursuant to the Plan, a copy of which the Optionee acknowledges having received.  The provisions of the Plan are incorporated into this Agreement by this reference.  Capitalized terms are defined in Section 14 of this Agreement.

 

SECTION 2.        RIGHT TO EXERCISE.

 

(a)           Exercisability.  Subject to Subsection (b) below and the other conditions set forth in this Agreement, all or part of this option may be exercised prior to its expiration at the time or times set forth in the Notice of Stock Option Grant.

 

(b)           Stockholder Approval.  Any other provision of this Agreement notwithstanding, no portion of this option shall be exercisable at any time prior to the approval of the Plan by the Company’s stockholders.

 

SECTION 3.        NO TRANSFER OR ASSIGNMENT OF OPTION.

 

Except as otherwise provided in this Agreement, this option and the rights and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by

 

 

operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process.

 

SECTION 4.        EXERCISE PROCEDURES.

 

(a)           Notice of Exercise.  The Optionee or the Optionee’s representative may exercise this option by giving written notice to the Company pursuant to Section 12(c).  The notice shall specify the election to exercise this option, the number of Shares for which it is being exercised and the form of payment.  The person exercising this option shall sign the notice.  In the event that this option is being exercised by the representative of the Optionee, the notice shall be accompanied by proof (satisfactory to the Company) of the representative’s right to exercise this option.  The Optionee or the Optionee’s representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 5 for the full amount of the Purchase Price.

 

(b)           Issuance of Shares.  After receiving a proper notice of exercise, the Company shall cause to be issued one or more certificates evidencing the Shares for which this option has been exercised.  Such Shares shall be registered (i) in the name of the person exercising this option, (ii) in the names of such person and his or her spouse as community property or as joint tenants with the right of survivorship or (iii) with the Company’s consent, in the name of a revocable trust.  The Company shall cause such certificates to be delivered to or upon the order of the person exercising this option.

 

(c)           Withholding Taxes.  In the event that the Company determines that it is required to withhold any tax as a result of the exercise of this option, the Optionee, as a condition to the exercise of this option, shall make arrangements satisfactory to the Company to enable it to satisfy all withholding requirements.  The Optionee shall also make arrangements satisfactory to the Company to enable it to satisfy any withholding requirements that may arise in connection with the disposition of Shares purchased by exercising this option.

 

SECTION 5.        PAYMENT FOR STOCK.

 

(a)           Cash.  All or part of the Purchase Price may be paid in cash or cash equivalents.

 

(b)           Surrender of Stock.  At the discretion of the Board of Directors, all or any part of the Purchase Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee.  Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value as of the date when this option is exercised.

 

(c)           Exercise/Sale.  All or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company.  However, payment pursuant to this Subsection (c) shall be permitted only if (i) Stock then is publicly traded and (ii) such payment does not violate applicable law.

 

 

SECTION 6.        TERM AND EXPIRATION.

 

(a)           Basic Term.  This option shall in any event expire on the expiration date set forth in the Notice of Stock Option Grant, which date is 10 years after the Date of Grant (five years after the Date of Grant if this option is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the Plan applies).

 

(b)           Termination of Service (Except by Death).  If the Optionee’s Service terminates for any reason other than death, then this option shall expire on the earliest of the following occasions:

 

(i)            The expiration date determined pursuant to Subsection (a) above;

 

(ii)           The date three months after the termination of the Optionee’s Service for any reason other than Disability; or

 

(iii)          The date six months after the termination of the Optionee’s Service by reason of Disability.

 

The Optionee may exercise all or part of this option at any time before its expiration under the preceding sentence, but only to the extent that this option had become exercisable before the Optionee’s Service terminated.  When the Optionee’s Service terminates, this option shall expire immediately with respect to the number of Shares for which this option is not yet exercisable.  In the event that the Optionee dies after termination of Service but before the expiration of this option, all or part of this option may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option had become exercisable before the Optionee’s Service terminated.

 

(c)           Death of the Optionee.  If the Optionee dies while in Service, then this option shall expire on the earlier of the following dates:

 

(i)            The expiration date determined pursuant to Subsection (a) above; or

 

(ii)           The date 12 months after the Optionee’s death.

 

All or part of this option may be exercised at any time before its expiration under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option had become exercisable before the Optionee’s death.  When the Optionee dies, this option shall expire immediately with respect to the number of Shares for which this option is not yet exercisable.

 

(d)           Part-Time Employment and Leaves of Absence.  If the Optionee commences working on a part-time basis, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s part-time work

 

 

policy or the terms of an agreement between the Optionee and the Company pertaining to his or her part-time schedule.  If the Optionee goes on a leave of absence, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s leave of absence policy or the terms of such leave.  Except as provided in the preceding sentence, Service shall be deemed to continue for any purpose under this Agreement while the Optionee is on a bona fide leave of absence, if (i) such leave was approved by the Company in writing and (ii) continued crediting of Service for such purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company).  Service shall be deemed to terminate when such leave ends, unless the Optionee immediately returns to active work.

 

(e)           Notice Concerning ISO Treatment.  Even if this option is designated as an ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an ISO to the extent that it is exercised:

 

(i)            More than three months after the date when the Optionee ceases to be an Employee for any reason other than death or permanent and total disability (as defined in Section 22(e)(3) of the Code);

 

(ii)           More than 12 months after the date when the Optionee ceases to be an Employee by reason of permanent and total disability (as defined in Section 22(e)(3) of the Code); or

 

(iii)          More than three months after the date when the Optionee has been on a leave of absence for 90 days, unless the Optionee’s reemployment rights following such leave were guaranteed by statute or by contract.

 

SECTION 7.        RIGHT OF FIRST REFUSAL.

 

(a)           Right of First Refusal.  In the event that the Optionee proposes to sell, pledge or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in such Shares, the Company shall have the Right of First Refusal with respect to all (and not less than all) of such Shares.  If the Optionee desires to transfer Shares acquired under this Agreement, the Optionee shall give a written Transfer Notice to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer price, the name and address of the proposed Transferee and proof satisfactory to the Company that the proposed sale or transfer will not violate any applicable federal, State or foreign securities laws.  The Transfer Notice shall be signed both by the Optionee and by the proposed Transferee and must constitute a binding commitment of both parties to the transfer of the Shares.  The Company shall have the right to purchase all, and not less than all, of the Shares on the terms of the proposal described in the Transfer Notice (subject, however, to any change in such terms permitted under Subsection (b) below) by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was received by the Company.

 

(b)           Transfer of Shares.  If the Company fails to exercise its Right of First Refusal within 30 days after the date when it received the Transfer Notice, the Optionee may, not

 

 

later than 90 days following receipt of the Transfer Notice by the Company, conclude a transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the Transfer Notice, provided that any such sale is made in compliance with applicable federal, State and foreign securities laws and not in violation of any other contractual restrictions to which the Optionee is bound.  Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in Subsection (a) above.  If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Shares on the terms set forth in the Transfer Notice within 60 days after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Shares was to be made in a form other than cash or cash equivalents paid at the time of transfer, the Company shall have the option of paying for the Shares with cash or cash equivalents equal to the present value of the consideration described in the Transfer Notice.

 

(c)           Additional or Exchanged Securities and Property.  In the event of a merger or consolidation of the Company with or into another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or distributed with respect to, any Shares subject to this Section 7 shall immediately be subject to the Right of First Refusal.  Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be made to the number and/or class of the Shares subject to this Section 7.

 

(d)           Termination of Right of First Refusal.  Any other provision of this Section 7 notwithstanding, in the event that the Stock is readily tradable on an established securities market when the Optionee desires to transfer Shares, the Company shall have no Right of First Refusal, and the Optionee shall have no obligation to comply with the procedures prescribed by Subsections (a) and (b) above.

 

(e)           Permitted Transfers.  This Section 7 shall not apply to (i) a transfer by beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of the Optionee’s Immediate Family or to a trust established by the Optionee for the benefit of the Optionee and/or one or more members of the Optionee’s Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement.  If the Optionee transfers any Shares acquired under this Agreement, either under this Subsection (e) or after the Company has failed to exercise the Right of First Refusal, then this Agreement shall apply to the Transferee to the same extent as to the Optionee.

 

(f)            Termination of Rights as Stockholder.  If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Shares to be purchased in accordance with this Section 7, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of such

 

 

Shares (other than the right to receive payment of such consideration in accordance with this Agreement).  Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement.

 

(g)           Assignment of Right of First Refusal.  The Board of Directors may freely assign the Company’s Right of First Refusal, in whole or in part.  Any person who accepts an assignment of the Right of First Refusal from the Company shall assume all of the Company’s rights and obligations under this Section 7.

 

SECTION 8.        LEGALITY OF INITIAL ISSUANCE.

 

No Shares shall be issued upon the exercise of this option unless and until the Company has determined that:

 

(a)           It and the Optionee have taken any actions required to register the Shares under the Securities Act or to perfect an exemption from the registration requirements thereof;

 

(b)           Any applicable listing requirement of any stock exchange or other securities market on which Stock is listed has been satisfied; and

 

(c)           Any other applicable provision of federal, State or foreign law has been satisfied.

 

SECTION 9.        NO REGISTRATION RIGHTS.

 

The Company may, but shall not be obligated to, register or qualify the sale of Shares under the Securities Act or any other applicable law.  The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Agreement to comply with any law.

 

SECTION 10.      RESTRICTIONS ON TRANSFER OF SHARES.

 

(a)           Securities Law Restrictions.  Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act or have been registered or qualified under the securities laws of any State, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act, the securities laws of any State or any other law.

 

(b)           Market Stand-Off.  In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, the Optionee or a Transferee shall not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing

 

 

transactions with respect to, any Shares acquired under this Agreement without the prior written consent of the Company or its managing underwriter.  Such restriction (the “Market Stand-Off”) shall be in effect for such period of time following the date of the final prospectus for the offering as may be requested by the Company or such underwriter.  In no event, however, shall such period exceed 180 days plus such additional period as may reasonably be requested by the Company or such underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports or (ii) analyst recommendations and opinions, including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the National Association of Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules.  The Market Stand-Off shall in any event terminate two years after the date of the Company’s initial public offering.  In the event of the declaration of a stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities without receipt of consideration, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off.  In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Agreement until the end of the applicable stand-off period.  The Company’s underwriters shall be beneficiaries of the agreement set forth in this Subsection (b).  This Subsection (b) shall not apply to Shares registered in the public offering under the Securities Act.

 

(c)           Investment Intent at Grant.  The Optionee represents and agrees that the Shares to be acquired upon exercising this option will be acquired for investment, and not with a view to the sale or distribution thereof.

 

(d)           Investment Intent at Exercise.  In the event that the sale of Shares under the Plan is not registered under the Securities Act but an exemption is available that requires an investment representation or other representation, the Optionee shall represent and agree at the time of exercise that the Shares being acquired upon exercising this option are being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel.

 

(e)           Legends.  All certificates evidencing Shares purchased under this Agreement shall bear the following legend:

 

“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES).  SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES.  THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

 

 

All certificates evidencing Shares purchased under this Agreement in an unregistered transaction shall bear the following legend (and such other restrictive legends as are required or deemed advisable under the provisions of any applicable law):

 

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

(f)            Removal of Legends.  If, in the opinion of the Company and its counsel, any legend placed on a stock certificate representing Shares sold under this Agreement is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend.

 

(g)           Administration.  Any determination by the Company and its counsel in connection with any of the matters set forth in this Section 10 shall be conclusive and binding on the Optionee and all other persons.

 

SECTION 11.      ADJUSTMENT OF SHARES.

 

In the event of any transaction described in Section 8(a) of the Plan, the terms of this option (including, without limitation, the number and kind of Shares subject to this option and the Exercise Price) shall be adjusted as set forth in Section 8(a) of the Plan.  In the event the Company is subject to a dissolution or liquidation, this option shall be cancelled, as provided in Section 8(b) of the Plan.  In the event that the Company is a party to a merger or consolidation, this option shall be subject to the agreement of merger or consolidation, as provided in Section 8(c) of the Plan.

 

SECTION 12.      MISCELLANEOUS PROVISIONS.

 

(a)           Rights as a Stockholder.  Neither the Optionee nor the Optionee’s representative shall have any rights as a stockholder with respect to any Shares subject to this option until the Optionee or the Optionee’s representative becomes entitled to receive such Shares by filing a notice of exercise and paying the Purchase Price pursuant to Sections 4 and 5.

 

(b)           No Retention Rights.  Nothing in this option or in the Plan shall confer upon the Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.

 

(c)           Notice.  Any notice required by the terms of this Agreement shall be given in writing.  It shall be deemed effective upon (i) personal delivery, (ii) deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii) deposit with Federal Express Corporation, with shipping charges prepaid.  Notice shall be

 

 

addressed to the Company at its principal executive office and to the Optionee at the address that he or she most recently provided to the Company in accordance with this Subsection (c).

 

(d)           Entire Agreement.  The Notice of Stock Option Grant, this Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof.  They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof.

 

(e)           Choice of Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State.

 

SECTION 13.      ACKNOWLEDGEMENTS OF THE OPTIONEE.

 

(a)           Tax Consequences.  The Optionee agrees that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes the Optionee’s tax liabilities.  The Optionee shall not make any claim against the Company or its Board of Directors, officers or employees related to tax liabilities arising from this option or the Optionee’s other compensation.  In particular, the Optionee acknowledges that this option is exempt from Section 409A of the Code only if the Exercise Price is at least equal to the Fair Market Value per Share on the Date of Grant.  Since Shares are not traded on an established securities market, the determination of their Fair Market Value is made by the Board of Directors or by an independent valuation firm retained by the Company.  The Optionee acknowledges that there is no guarantee in either case that the Internal Revenue Service will agree with the valuation, and the Optionee shall not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service asserts that the valuation was too low.

 

(b)           Electronic Delivery of Documents.  The Optionee agrees that the Company may deliver by email all documents relating to the Plan or this option (including, without limitation, a copy of the Plan) and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission).  The Optionee also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company.  If the Company posts these documents on a website, it shall notify the Optionee by email.

 

SECTION 14.      DEFINITIONS.

 

(a)           “Agreement” shall mean this Stock Option Agreement.

 

(b)           “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.

 

(c)           “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(d)           “Committee” shall mean a committee of the Board of Directors, as described in Section 2 of the Plan.

 

 

(e)           “Company” shall mean Adamas Pharmaceuticals, Inc., a Delaware corporation.

 

(f)            “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.

 

(g)           “Date of Grant” shall mean the date of grant specified in the Notice of Stock Option Grant, which date shall be the later of (i) the date on which the Board of Directors resolved to grant this option or (ii) the first day of the Optionee’s Service.

 

(h)           “Disability” shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.

 

(i)            “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary.

 

(j)            “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of this option, as specified in the Notice of Stock Option Grant.

 

(k)           “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith.  Such determination shall be conclusive and binding on all persons.

 

(l)            “Immediate Family” shall mean any 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 and shall include adoptive relationships.

 

(m)          “ISO” shall mean an employee incentive stock option described in Section 422(b) of the Code.

 

(n)           “Notice of Stock Option Grant” shall mean the document so entitled to which this Agreement is attached.

 

(o)           “NSO” shall mean a stock option not described in Sections 422(b) or 423(b) of the Code.

 

(p)           “Optionee” shall mean the person named in the Notice of Stock Option Grant.

 

(q)           “Outside Director” shall mean a member of the Board of Directors who is not an Employee.

 

(r)            “Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

 

(s)            “Plan” shall mean the Adamas Pharmaceuticals, Inc. 2007 Stock Plan, as in effect on the Date of Grant.

 

(t)            “Purchase Price” shall mean the Exercise Price multiplied by the number of Shares with respect to which this option is being exercised.

 

(u)           “Right of First Refusal” shall mean the Company’s right of first refusal described in Section 7.

 

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

 

(w)          “Service” shall mean service as an Employee, Outside Director or Consultant.

 

(x)           “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 of the Plan (if applicable).

 

(y)           “Stock” shall mean the Common Stock of the Company.

 

(z)           “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

(aa)         “Transferee” shall mean any person to whom the Optionee has directly or indirectly transferred any Share acquired under this Agreement.

 

(bb)         “Transfer Notice” shall mean the notice of a proposed transfer of Shares described in Section 7.

 

 

ADAMAS PHARMACEUTICALS, INC. 2007 STOCK PLAN

NOTICE OF STOCK OPTION EXERCISE

 

You must sign this Notice on Page 3 before submitting it to the Company.

 

OPTIONEE INFORMATION:

 

	
Name:
    	
Social Security Number:
    
	
 
    	
 
    
	
Address:
    	
Employee Number:
    
	
 
    	
 
    

 

OPTION INFORMATION:

 

	
Date of Grant:                                    ,   20
    	
 
    	
Type of Stock Option:
    
	
 
    	
 
    	
 
    
	
Exercise Price per Share: $
    	
 
    	
o Nonstatutory (NSO)
    
	
 
    	
 
    	
 
    
	
Total number of shares of Common Stock of Adamas   Pharmaceuticals, Inc. (the “Company”) covered by the option:
    	
 
    	
o Incentive (ISO)
    

 

EXERCISE INFORMATION:

 

Number of shares of Common Stock of the Company for which the option is being exercised now:                                 .  (These shares are referred to below as the “Purchased Shares.”)

 

Total Exercise Price for the Purchased Shares: $

 

Form of payment enclosed [check all that apply]:

 

	
o
    	
Check for   $                        ,   payable to “Adamas Pharmaceuticals, Inc.”
    
	
 
    	
 
    
	
o
    	
Certificate(s) for                                      shares of Common Stock of the Company. These shares will be valued as of the   date this notice is received by the Company. [Requires   Company consent.]
    
	
 
    	
 
    
	
o
    	
Attestation Form covering                                      shares of Common Stock of the Company. These shares will be valued as of the   date this notice is received by the Company. [Requires   Company consent.]
    
	
 
    	
 
    
	
Name(s) in which the Purchased Shares should be   registered [please review the attached explanation of   the available forms of ownership, and then check one box]:
    
	
 
    	
 
    
	
o
    	
In my name only
    

 

 

	
o
    	
In the names of my spouse and myself as community   property
    	
 
    	
My spouse’s name (if applicable):
    
	
 
    	
 
    	
 
    	
 
    
	
o
    	
In the names of my spouse and myself as community   property with the right of survivorship
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
o
    	
In the names of my spouse and myself as joint tenants   with the right of survivorship
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
o
    	
In the name of an eligible revocable trust [requires Stock Transfer Agreement]
    	
 
    	
Full legal name of revocable trust:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
The certificate for the Purchased Shares should be   sent to the following address:
    	
 
    	
 
    

 

REPRESENTATIONS AND ACKNOWLEDGMENTS OF THE OPTIONEE:

 

SECTION 1.         I represent and warrant to the Company that I am acquiring and will hold the Purchased Shares for investment for my account only, and not with a view to, or for resale in connection with, any “distribution” of the Purchased Shares within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

SECTION 2.                            I understand that the Purchased Shares have not been registered under the Securities Act by reason of a specific exemption therefrom and that the Purchased Shares must be held indefinitely, unless they are subsequently registered under the Securities Act or I obtain an opinion of counsel (in form and substance satisfactory to the Company and its counsel) that registration is not required.

 

SECTION 3.                            I acknowledge that the Company is under no obligation to register the Purchased Shares.

 

SECTION 4.                            I am aware of the adoption by the Securities and Exchange Commission of Rule 144 under the Securities Act, which permits limited public resales of securities acquired in a non-public offering, subject to the satisfaction of certain conditions.  These conditions may include (without limitation) that certain current public information about the issuer be available, that the resale occur only after a holding period required by Rule 144 has been satisfied, that the sale occur through an unsolicited “broker’s transaction” and that the amount of securities being sold during any three-month period not exceed specified limitations.  I understand that the conditions for resale set forth in Rule 144 have not been satisfied and that the Company is not required to take action to satisfy any conditions applicable to it.

 

SECTION 5.                            I will not sell, transfer or otherwise dispose of the Purchased Shares in violation of the Securities Act, the Securities Exchange Act of 1934, or the rules promulgated thereunder, including Rule 144 under the Securities Act.

 

SECTION 6.                            I acknowledge that I have received and had access to such information as I consider necessary or appropriate for deciding whether to invest in the Purchased Shares and that I had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the issuance of the Purchased Shares.

 

 

SECTION 7.                            I am aware that my investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss.  I am able, without impairing my financial condition, to hold the Purchased Shares for an indefinite period and to suffer a complete loss of my investment in the Purchased Shares.

 

SECTION 8.                            I acknowledge that the Purchased Shares remain subject to the Company’s right of first refusal and the market stand-off (sometimes referred to as the “lock-up”), all in accordance with the applicable Notice of Stock Option Grant and Stock Option Agreement.

 

SECTION 9.                            I acknowledge that I am acquiring the Purchased Shares subject to all other terms of the Notice of Stock Option Grant and Stock Option Agreement.

 

SECTION 10.                     I acknowledge that I have received a copy of the Company’s explanation of the forms of ownership available for my Purchased Shares.  I acknowledge that the Company has encouraged me to consult my own adviser to determine the form of ownership that is appropriate for me.  In the event that I choose to transfer my Purchased Shares to a trust, I agree to sign a Stock Transfer Agreement.  In the event that I choose to transfer my Purchased Shares to a trust that does not satisfy the requirements described in the attached explanation (i.e., a trust that is not an eligible revocable trust), I also acknowledge that the transfer will be treated as a “disposition” for tax purposes.  As a result, the favorable ISO tax treatment will be unavailable and other unfavorable tax consequences may occur.

 

SECTION 11.                     I acknowledge that I have received a copy of the Company’s explanation of the federal income tax consequences of an option exercise.  I acknowledge that the Company has encouraged me to consult my own adviser to determine the tax consequences of acquiring the Purchased Shares at this time.

 

SECTION 12.                     I agree that the Company does not have a duty to design or administer the 2007 Stock Plan or its other compensation programs in a manner that minimizes my tax liabilities.  I will not make any claim against the Company or its Board of Directors, officers or employees related to tax liabilities arising from my options or my other compensation.  In particular, I acknowledge that my options are exempt from section 409A of the Internal Revenue Code only if the exercise price per share is at least equal to the fair market value per share of the Company’s Common Stock at the time the option was granted by the Company’s Board of Directors.  Since shares of the Company’s Common Stock are not traded on an established securities market, the determination of their fair market value was made by the Company’s Board of Directors or by an independent valuation firm retained by the Company.  I acknowledge that there is no guarantee in either case that the Internal Revenue Service will agree with the valuation, and I will not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service asserts that the valuation was too low.

 

SECTION 13.                     I agree to seek the consent of my spouse to the extent required by the Company to enforce the foregoing.

 

 

	
SIGNATURE:
    	
 
    	
DATE:Exhibit 10.5

 

 

ADAMAS PHARMACEUTICALS, INC.

 

FOURTH AMENDED AND RESTATED

 

INVESTORS’ RIGHTS AGREEMENT

 

June 30, 2011

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
Section 1 Definitions
    	
2
    
	
 
    	
 
    	
 
    
	
1.1
    	
Certain Definitions
    	
2
    
	
 
    	
 
    
	
Section 2   Registration Rights
    	
4
    
	
 
    	
 
    
	
2.1
    	
Requested Registration
    	
4
    
	
2.2
    	
Company Registration
    	
6
    
	
2.3
    	
Registration on Form S-3
    	
8
    
	
2.4
    	
Expenses   of Registration
    	
8
    
	
2.5
    	
Registration   Procedures
    	
9
    
	
2.6
    	
Indemnification
    	
11
    
	
2.7
    	
Information by Holder
    	
13
    
	
2.8
    	
Restrictions on Transfer
    	
13
    
	
2.9
    	
Rule 144 Reporting
    	
15
    
	
2.10
    	
Market Stand-Off Agreement
    	
16
    
	
2.11
    	
Delay of Registration
    	
16
    
	
2.12
    	
Transfer or Assignment of   Registration Rights
    	
16
    
	
2.13
    	
Limitations on Subsequent   Registration Rights
    	
16
    
	
2.14
    	
Termination of Registration Rights
    	
17
    
	
 
    	
 
    
	
Section 3   Covenants of the Company
    	
17
    
	
 
    	
 
    
	
3.1
    	
Basic Financial Information
    	
17
    
	
3.2
    	
Inspection Rights
    	
18
    
	
3.3
    	
Confidentiality
    	
18
    
	
3.4
    	
Stock Option Vesting
    	
18
    
	
3.5
    	
Termination of Covenants
    	
19
    
	
3.6
    	
Key Man Insurance
    	
19
    
	
3.7
    	
Proprietary Information and   Inventions Agreements
    	
19
    
	
 
    	
 
    
	
Section 4   Right of First Refusal
    	
19
    
	
 
    	
 
    
	
4.1
    	
Right of First Refusal to Preferred   Holders
    	
19
    
	
 
    	
 
    
	
Section 5   Drag-Along Rights
    	
21
    
	
 
    	
 
    
	
5.1
    	
Drag-Along Rights
    	
21
    
	
5.2
    	
Certain Future Common Holders
    	
22
    
	
5.3
    	
Restrictions on Sales of Control of   the Company
    	
22
    
	
 
    	
 
    
	
Section 6   Miscellaneous
    	
23
    
	
 
    	
 
    
	
6.1
    	
Amendment
    	
23
    
	
6.2
    	
[Intentionally Omitted]
    	
23
    
	
6.3
    	
Notices
    	
23
    
	
6.4
    	
Governing Law
    	
24
    
	
6.5
    	
Successors and Assigns
    	
24
    
	
6.6
    	
Entire Agreement
    	
24
    

 

i

 

TABLE OF CONTENTS

 

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
6.7
    	
Delays or Omissions
    	
25
    
	
6.8
    	
Severability
    	
25
    
	
6.9
    	
Titles and Subtitles
    	
25
    
	
6.10
    	
Counterparts
    	
25
    
	
6.11
    	
Telecopy Execution and Delivery
    	
25
    
	
6.12
    	
Further Assurances
    	
25
    
	
6.13
    	
Aggregation of Stock
    	
26
    
	
6.14
    	
Termination of Prior Agreement
    	
26
    
	
6.15
    	
Waiver of Pro Rata
    	
26
    

 

ii

 

ADAMAS PHARMACEUTICALS, INC.

 

FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

This Fourth Amended and Restated Investors’ Rights Agreement (this “Agreement”) is made as of June 30, 2011, by and among Adamas Pharmaceuticals, Inc., a Delaware corporation (the “Company”) and the persons and entities listed on Exhibit A hereto (each, an “Investor” and collectively, the “Investors” or “Preferred Holders”) and the persons and entities listed on Exhibit B hereto (each, a “Common Holder” and collectively, the “Common Holders”).  Unless otherwise defined herein, capitalized terms used in this Agreement have the meanings ascribed to them in Section 1.

 

RECITALS

 

WHEREAS:  In connection with the sale and issuance of its Series D Convertible Preferred Stock, par value $.001 per share, the Company entered into that certain Third Amended and Restated Investors’ Rights Agreement dated June 25, 2008 (the “Prior Agreement”) with the purchasers of such Series D Preferred Stock and the holders of the Existing Preferred (as defined below) (collectively, the “Parties to the Prior Agreement”);

 

WHEREAS:  the Investors are purchasing shares of the Company’s Series AA Convertible Preferred Stock, par value $.001 per share (the “Series AA Preferred Stock”) pursuant to that certain Series AA Convertible Preferred Stock Purchase Agreement (the “Purchase Agreement”) of even date herewith, and it is a condition to the closing of the sale of the Series AA Preferred Stock to the Investors listed on such Schedule of Investors that such Investors and the Company execute and deliver this Agreement;

 

WHEREAS:  the requisite holders of the Company’s outstanding shares of Series A Convertible Preferred Stock, par value $.001 per share, Series B Convertible Preferred Stock, par value $.001 per share, Series C Convertible Preferred Stock, par value $.001 per share, Series C-1 Convertible Preferred Stock, $.001 par value per share and Series D Convertible Preferred Stock, par value $.001 per share (collectively referred to herein as the “Old Preferred”) converted all such outstanding shares into shares of the Company’s common stock, par value $.001 per share (the “Converted Common”) in accordance with the Purchase Agreement;

 

WHEREAS:  the Company and the Parties to the Prior Agreement who together hold (i) not less than a majority of the outstanding Registrable Securities (as defined in the Prior Agreement), and (ii) no less than a majority of the Old Preferred now desire to amend and restate the Prior Agreement in its entirety as set forth below.

 

NOW, THEREFORE:  In consideration of the mutual promises and covenants set forth herein, and other consideration, the receipt of and adequacy of which is hereby acknowledged, the parties hereto further agree as follows:

 

 

Section 1
 Definitions

 

1.1                               Certain Definitions.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

(a)                                 “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

 

(b)                                 “Common Stock” shall mean the Common Stock, par value $0.001 per share of the Company, including without limitation the Converted Common.

 

(c)                                  “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

(d)                                  “Free Writing Prospectus” means a free-writing prospectus, as defined in Rule 405.

 

(e)                                  “Holder” shall mean (i) any Preferred Holder that holds Registrable Securities and (ii) any holder of Registrable Securities to whom the registration rights conferred by this Agreement have been duly and validly transferred in accordance with Section 2.12 of this Agreement.

 

(f)                                   “Indemnified Party” shall have the meaning set forth in Section 2.6(c) hereof.

 

(g)                                  “Indemnifying Party” shall have the meaning set forth in Section 2.6(c) hereof.

 

(h)                                 “Initial Closing” shall mean the date of the initial sale of shares of the Company’s Series AA Convertible Preferred Stock pursuant to the Purchase Agreement.

 

(i)                                     “Initial Public Offering” shall mean the closing of the Company’s first firm commitment underwritten public offering of the Company’s Common Stock registered under the Securities Act.

 

(j)                                    “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold not less than thirty percent (30%) of the outstanding Registrable Securities, provided that for the purpose of Section 2.3 the term “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold not less than twenty percent (20%) of the outstanding Registrable Securities.

 

(k)                                 “Investors” shall mean the persons and entities listed on Exhibit A hereto.

 

(l)                                     “New Securities” shall have the meaning set forth in Section 4.1(a) hereof.

 

2

 

(m)                             “Preferred Holders” shall have the meaning set forth in the Preamble hereto.

 

(n)                                 “Preferred Stock” shall mean the Series AA Preferred Stock.

 

(o)                                 “Purchase Agreement” shall have the meaning set forth in the Recitals hereto.

 

(p)                                 “Registrable Securities” shall mean (i) shares of Converted Common, (ii) shares of Common Stock issuable or issued pursuant to the conversion of the Shares and (iii) any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (i) above; provided, however, that Registrable Securities shall not include any shares of Common Stock described in clause (i), (ii) or (iii) above which have previously been registered or which have been sold to the public either pursuant to a registration statement or Rule 144, or which have been sold in a private transaction in which the transferor’s rights under this Agreement are not validly assigned in accordance with this Agreement.

 

(q)                                 The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

 

(r)                                    “Registration Expenses” shall mean all expenses incurred by the Company in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, printing expenses, accounting fees, escrow fees, fees and disbursements of counsel for the Company, fees and disbursements of one special counsel for the Holders (selected by a majority-in-interest of the Holders) not to exceed $50,000, blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses, fees and disbursements of other counsel for the Holders and the compensation of regular employees of the Company, which shall be paid in any event by the Company.

 

(s)                                   “Restricted Securities” shall mean any Registrable Securities required to bear the first legend set forth in Section 2.8(b) hereof.

 

(t)                                    “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

(u)                                 “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

(v)                                 “Rule 415” shall mean Rule 415 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

3

 

(w)                               “Rule 405” shall mean Rule 405 under the Securities Act.

 

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

 

(y)                                 “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Holder (other than the fees and disbursements of one special counsel to the Holders not to exceed $50,000 included in Registration Expenses).

 

(z)                                  “Series AA Preferred Conversion Stock” shall mean shares of Common Stock issued upon conversion of the Series AA Preferred Stock.

 

(aa)                          “Series AA Preferred Stock” shall have the meaning set forth in the Preamble hereto.

 

(bb)                          “Shares” shall mean (i) the Company’s Series AA Preferred Stock, and (ii) any securities issued with respect to the foregoing upon any stock split, stock dividend, recapitalization, or similar event or upon any conversion.

 

(cc)                            “Significant Holder” shall have the meaning set forth in Section 3.2 hereof.

 

Section 2
 Registration Rights

 

2.1                               Requested Registration.

 

(a)                                 Request for Registration.  Subject to the conditions set forth in this Section 2.1, if the Company shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration with respect to at least thirty percent (30%) of the Registrable Securities (or a lesser amount if such offering shall have an aggregate offering price to the public of not less than Ten Million Dollars ($10,000,000) net of underwriting discounts and commissions) (such request shall state the number of shares of Registrable Securities to be disposed of by such Initiating Holders), the Company will:

 

(i)                                     within twenty (20) days of receipt of such request, give written notice of the proposed registration to all other Holders; and

 

(ii)                                  as soon as practicable, file and use its commercially reasonable efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered; provided that, unless a

 

4

 

registration pursuant to this Section 2.1 is the Company’s Initial Public Offering, the Company also shall use its reasonable best efforts to file the registration statement within ninety (90) days of the receipt of the request from the Initiating Holders.

 

(b)                                 Limitations on Requested Registration.  The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2.1:

 

(i)                                     Prior to the earlier of (A) the five (5) year anniversary of the date of this Agreement or (B) six (6) months following the effective date of the Company’s Initial Public Offering;

 

(ii)                                  In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification, or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(iii)                               After the Company has initiated two (2) such registrations pursuant to this Section 2.1 (counting for these purposes only registrations which have been declared or ordered effective and pursuant to which securities have been sold); or

 

(iv)                              During the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days after the effective date of, a Company-initiated registration (other than a registration on Form S-4 or S-8 or any successor form); provided that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration statement to become effective.

 

(c)                                  Deferral.  If (i) in the good faith judgment of the Board of Directors of the Company, the filing of a registration statement covering the Registrable Securities would be materially detrimental to the Company, and the Board of Directors of the Company concludes, as a result, that it is in the best interests of the Company to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to the limitations set forth in Section 2.1(b)(iv) above) the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, and, provided further, that the Company shall not defer its obligation in this manner more than twice in any twelve-month period.

 

(d)                                 Underwriting.  If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.1 and the Company shall include such information in the written notice referred to in subsection 2.1(a)(i).  In such event, the right of any Holder to include all or any portion of its Registrable Securities in a registration

 

5

 

pursuant to this Section 2.1 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities to the extent provided herein.  If the Company shall request inclusion in any registration pursuant to Section 2.1 of securities being sold for its own account, the Initiating Holders shall, on behalf of all Holders, offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Company or such other persons in such underwriting and the inclusion of the Company’s and such person’s other securities of the Company and their acceptance of the further applicable provisions of this Section 2 (including Section 2.10).  The Company shall (together with all Holders proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the majority-in-interest of the Initiating Holders, which underwriters shall be reasonably acceptable to the Company.

 

Notwithstanding any other provision of this Section 2.1, if the underwriters advise the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten (including Registrable Securities), the number of Registrable Securities that may be so included shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders.  In no event shall Registrable Securities be excluded from such registration unless all other stockholders’ securities (including securities for the account of the Company) have been first excluded.

 

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Initiating Holders.  The securities so excluded shall also be withdrawn from registration.  Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration.  If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 2.1(d), then the Company shall then offer to all Holders who have retained rights to include securities in the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion, as set forth above.

 

2.2                               Company Registration.

 

(a)                                 Company Registration.  If the Company shall determine to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its securities either for its own account or the account of a security holder or holders, other than a registration pursuant to Section 2.1 or 2.3, a registration relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating to a corporate reorganization or other Rule 145 transaction, or a registration on any registration form that does not permit secondary sales, the Company will:

 

(i)                                     promptly give written notice of the proposed registration to all Holders; and

 

6

 

(ii)                                  use its commercially reasonable efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 2.2(b) below, and in any underwriting involved therein, all of such Registrable Securities as are specified in a written request or requests made by any Holder or Holders received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered.  Such written request may specify all or a part of a Holder’s Registrable Securities.

 

(b)                                 Underwriting.  If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 2.2(a)(i).  In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein.  All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company.

 

Notwithstanding any other provision of this Section 2.2, if the underwriters advise the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the underwriters may (subject to the limitations set forth below) limit the number of Registrable Securities to be included in the registration and underwriting.  In no event shall any Registrable Securities be excluded from such registration and underwriting unless all other stockholders’ securities have been first excluded.  In the event that the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such registration and underwriting, then the Registrable Securities that are included in such registration and underwriting shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders.  Notwithstanding the foregoing, in no event shall the amount of securities of the selling Holders included in the registration and underwriting be reduced below thirty percent (30%) of the total amount of securities included in such registration and underwriting, unless such registration is the Company’s Initial Public Offering, in which case the selling Holders may be excluded if the underwriters make the determination described above.

 

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be excluded therefrom by written notice from the Company or the underwriter.  The securities so excluded shall also be withdrawn from such registration.  Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

 

(c)                                  Right to Terminate Registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.  The expenses of such withdrawn registration shall be borne by the Company.

 

7

 

2.3                               Registration on Form S-3.

 

(a)                                 Request for Form S-3 Registration.  If the Company is then qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 2 and subject to the conditions set forth in this Section 2.3, if the Company shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration on Form S-3 or any similar short form registration statement with respect to all or part of the Registrable Securities (such request shall state the number of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by such Holder or Holders), the Company will take all such action with respect to such Registrable Securities as required by Section 2.1(a)(i) and (ii); provided, that in the case of a registration pursuant to this Section 2.3, the Company also shall use its reasonable best efforts to file the registration statement within ninety (90) days of the receipt of the request from the Initiating Holders.

 

(b)                                 Limitations on Form S-3 Registration.  The Company shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 2.3:

 

(i)                                     In the circumstances described in either Sections 2.1(b)(ii) or 2.1(b)(iv);

 

(ii)                                  If the Initiating 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) on Form S-3 at an aggregate price to the public (net of any underwriters’ discounts and commissions) of less than Three Million Dollars ($3,000,000); or

 

(iii)                               If, in a given six-month period, the Company has effected one (1) such registration in such period.

 

(c)                                  Deferral.  The provisions of Section 2.1(c) shall apply to any registration pursuant to this Section 2.3.

 

(d)                                 Underwriting.  If the Initiating Holders requesting registration under this Section 2.3 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Section 2.1(d) shall apply to such registration.  Notwithstanding anything contained herein to the contrary, registrations effected pursuant to this Section 2.3 shall not be counted as requests for registration or registrations effected pursuant to Section 2.1.

 

2.4                               Expenses of Registration.  All Registration Expenses incurred in connection with registrations pursuant to Sections 2.1, 2.2 and 2.3 hereof 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 Sections 2.1 and 2.3 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered or because a sufficient number of Holders shall have withdrawn so that the minimum offering conditions set forth in Sections 2.1 and 2.3 are no longer satisfied (in which case all participating Holders shall bear such expenses pro rata among each other based on the number of Registrable Securities requested to be so registered), unless the Holders of a majority

 

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of the Registrable Securities agree to forfeit their right to a demand registration pursuant to Section 2.1; and provided further, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and 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 retain their rights pursuant to Section 2.1 or 2.3.  All Selling Expenses shall be borne pro rata by the selling Holders based on the number of Registrable Securities requested to be so registered.

 

2.5                               Registration Procedures.  In the case of each registration effected by the Company pursuant to Section 2, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof.  At its expense, the Company will use its commercially reasonable efforts to:

 

(a)                                 Keep such registration effective for a period ending on the earlier of the date which is one hundred twenty (120) days from the effective date of the registration statement or such time as the Holder or Holders have completed the distribution described in the registration statement relating thereto;

 

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

 

(c)                                  Furnish such number of prospectuses, including any preliminary prospectuses and any Free Writing Prospectus,  and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

 

(d)                                 Use its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdiction 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, underwriters, or managing underwriter on behalf of the underwriters, of such offering;

 

(f)                                   Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus or Free Writing Prospectus (to the extent prepared by or on behalf of the Company) relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus or Free Writing 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

 

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the statements therein not misleading or incomplete in light of the circumstances then existing, and following such notification promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing, and, at the request of any such Holder, the Company will, as soon as reasonably practicable, file and furnish to all such Holders a supplement or amendment to such prospectus or Free Writing Prospectus (to the extent prepared by or on behalf of the Company) so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in light of the circumstances under which they were made;

 

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

 

(h)                                 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;

 

(i)                                     Otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

 

(j)                                    In connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 2.1 hereof, enter into an underwriting agreement in form reasonably necessary to effect the offer and sale of Common Stock, provided such underwriting agreement contains reasonable and customary provisions, and provided further, that each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement;

 

(k)                                 Use its reasonable best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 2, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 2, 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;

 

(l)                                     Take all reasonable actions to ensure that any prospectus or Free Writing Prospectus utilized in connection with any registration effected pursuant to this Section 2 complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related registration statement, will not

 

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contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and

 

(m)                             Use all reasonable efforts to prevent the issuance of any stop order (“Stop Order”) suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any securities included in such registration statement for sale in any jurisdiction, and, in the event of such issuance, the Company shall immediately notify the Holders of Registrable Securities covered by such registration statement of the receipt by the Company of such notification and shall use all reasonable efforts promptly to obtain the withdrawal of such order, and, in the event of the withdrawal of such order, the Company shall immediately notify such Holders thereof.

 

2.6                               Indemnification.

 

(a)                                 To the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors and partners, legal counsel, and accountants and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification, or compliance has been effected pursuant to this Section 2, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages, and liabilities (or actions, proceedings, or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular, or other document (including any related registration statement, notification, or the like) incident to any such registration, qualification, or compliance; (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; or (iii) any violation (or alleged violation) by the Company of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by such registration, qualification, or compliance, and the Company will reimburse each such Holder, each of its officers, directors, partners, legal counsel, and accountants and each person controlling such Holder, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action as they are incurred; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder, any of such Holder’s officers, directors, partners, legal counsel or accountants, any person controlling such Holder, such underwriter or any person who controls any such underwriter and stated to be specifically for use therein; and provided further that, the indemnity agreement contained in this Section 2.6(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).

 

(b)                                 To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification, or

 

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compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers, partners, legal counsel, and accountants and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder, and each of their officers, directors, and partners, and each person controlling such Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any such registration statement, prospectus, offering circular, or other document, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Holders, directors, officers, partners, legal counsel, and accountants, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action as they are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided that in no event shall any indemnity under this Section 2.6 exceed the net proceeds from the offering received by such Holder.

 

(c)                                  Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; provided, further, however, that an Indemnified Party (together with all other Indemnified Parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6, to the extent such failure is not prejudicial.  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.  Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

 

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(d)                                 If the indemnification provided for in this Section 2.6 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 herein, 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, however, that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 2.6(b), shall exceed the net proceeds from the offering received by such Holder.  The relative fault of the Indemnifying Party and of the 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.

 

2.7                               Information by Holder.  Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this Section 2.

 

2.8                               Restrictions on Transfer

 

(a)                                 The holder of each certificate representing Registrable Securities by acceptance thereof agrees to comply in all respects with the provisions of this Section 2.8.  Each Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Restricted Securities, or any beneficial interest therein, unless and until (x) the transferee thereof has agreed in writing for the benefit of the Company to take and hold such Restricted Securities subject to, and to be bound by, the terms and conditions set forth in this Agreement, including, without limitation, this Section 2.8 and Section 2.10, and (y):

 

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

 

(ii)                                  Such Holder shall have given prior written notice to the Company of such Holder’s intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and, if requested by the Company, such Holder shall have furnished the Company, at such Holder’s expense, with (A) an opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such Restricted Securities under the

 

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Securities Act or (B) a “no action” letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by the Holder to the Company.  It is agreed that the Company will not require opinions of counsel or “no action” letters for transactions made pursuant to Rule 144, except in unusual circumstances.

 

(iii)                               Notwithstanding the provisions of subsections (a)(i) and (a)(ii) above, no such registration statement or opinion of counsel or “no action” letter shall be necessary for: (A) a transfer by a Holder to any of its affiliates (including an affiliated fund 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, each an “Affiliated Fund”); (B) a transfer by a Holder that is a partnership, limited liability company or corporation to a partner, limited partner, retired partner, member, retired member or stockholder of a Holder; (C) a transfer by gift, will or intestate succession of any partner to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or his or her spouse; or (D) the transfer by a Holder exercising its co-sale rights under the Fourth Amended and Restated Right of First Refusal and Co-Sale Agreement by and among the Company and the Investors and Common Holders named therein of even date herewith, as amended from time to time, if in each transfer under clauses (A), (B) or (C) the prospective transferee agrees in all such instances in writing to be subject to the terms hereof to the same extent as if he or she were an original Holder hereunder.

 

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

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES.  THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (1) RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD OF UP TO 180

 

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DAYS IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN A FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT, AND (2) VOTING RESTRICTIONS AS SET FORTH IN A STOCKHOLDERS’ VOTING AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

 

The Holders consent to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer established in this Section 2.8.

 

(c)                                  The first legend referring to federal and state securities laws identified in Section 2.8(b) hereof stamped on a certificate evidencing the Restricted Securities and the stock transfer instructions and record notations with respect to such Restricted Securities shall be removed and the Company shall issue a certificate without such legend to the holder of such Restricted Securities if (i) such securities are registered under the Securities Act; or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a public sale or transfer of such securities may be made without registration under the Securities Act; or (iii) such holder provides the Company with reasonable assurances, which may, at the option of the Company, include an opinion of counsel reasonably satisfactory to the Company, that such securities can be sold pursuant to Rule 144 under the Securities Act.

 

2.9                               Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Restricted Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:

 

(a)                                 Make and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;

 

(b)                                 File with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and

 

(c)                                  So long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon written request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.

 

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2.10                        Market Stand-Off Agreement.  Each Preferred Holder hereby agrees that such Holder shall not sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale of any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during the one hundred eighty (180) day period following the effective date of the Company’s Initial Public Offering without the consent of the underwriter of such Initial Public Offering.  The obligations described in this Section 2.10 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future.  The Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in Section 2.8(b) hereof with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day period.  Notwithstanding the foregoing, if (x) during the last seventeen (17) days of the one hundred eighty (180) day restricted period, the Company issues an earnings release or material news or a material event relating to the Company occurs; or (y) prior to the expiration of the one hundred eighty (180) day restricted period, the Company announces that it will release earnings results during the sixteen (16) day period beginning on the last day of the one hundred eighty (180) day period, the restrictions imposed by this Section 2.10 shall continue to apply until the expiration of the eighteen (18) day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.  Each Holder agrees to execute a market standoff agreement with said underwriters in customary form consistent with the provisions of this Section 2.10.

 

2.11                        Delay of Registration.  No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.12                        Transfer or Assignment of Registration Rights.  The rights to cause the Company to register securities granted to a Holder by the Company under this Section 2 may be transferred or assigned by a Holder only to: (a) a transferee or assignee of not less than 100,000 shares of Registrable Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like); (b) an affiliate of a Holder (including an Affiliated Fund) or a subsidiary, parent, partner, limited partner, retired partner, member, retired member or stockholder of a Holder; or (c) a Holder’s family member or trust for the benefit of an individual Holder or Holder’s family member; provided that (i) any such transfer or assignment of Registrable Securities is effected in accordance with the terms of Section 2.8 hereof, and applicable securities laws; (ii) the Company is given written notice prior to said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to which such registration rights are intended to be transferred or assigned; (iii) the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Agreement, including without limitation the obligations set forth in Section 2.10; and (iv) any such transferee is not engaged in competition with the Company as reasonably determined by the Board of Directors.

 

2.13                        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 holding a

 

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majority of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder the right to include any of such securities in any registration filed under Section 2.1, Section 2.2, or Section 2.3 hereof, unless under the terms of such agreement (i) such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holders that are included, (ii) in the case of demand or required registration rights, any such rights may not be exercised prior to the demand rights of the Holders of Registrable Securities hereunder and (iii) any grant of demand or required registration rights shall provide that the Holders of Registrable Securities hereunder have incidental or “piggyback” registration rights with respect thereto in accordance with the provisions of Section 2.2 hereof.

 

2.14                        Termination of Registration Rights.  The right of any Holder to request registration or inclusion in any registration pursuant to Section 2.1, 2.2 or 2.3 shall terminate on the earlier of (i) such date, on or after the closing of the Company’s Initial Public Offering, on which (x) all shares of Registrable Securities held or entitled to be held upon conversion by such Holder may immediately be sold under Rule 144 during any ninety (90)-day period and (y) such Holder holds less than .5% of the Company’s Common Stock (on an as-converted basis) on a fully-diluted basis; and (ii) five (5) years after the closing of the Company’s Initial Public Offering.

 

Section 3
 Covenants of the Company

 

The Company hereby covenants and agrees, as follows:

 

3.1                               Basic Financial Information.  The Company shall deliver to each holder of at least 10,000 shares (as adjusted for stock splits, stock dividends, reverse stock splits and the like) of Converted Common the following financial information:

 

(a)                                 as soon as practicable, but in any event within one hundred twenty (120) 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 of nationally recognized standing selected by the Company;

 

(b)                                 as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three quarters of each fiscal year of the Company, an unaudited profit or loss statement, a statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by GAAP) and fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment; and

 

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(c)                                  as soon as practicable, but in any event within thirty (30) days prior to the commencement of each new fiscal year of the Company, an annual budget and operating plan for such fiscal year.

 

3.2                               Inspection Rights.  The Company will afford to each Significant Holder reasonable access during normal business hours to all of the Company’s properties, books and records.  Significant Holders may exercise their rights under this Section 3.2 only for purposes reasonably related to their interests as a stockholder.  The rights granted pursuant to this Section 3.2 may not be assigned or otherwise conveyed by any Significant Holder or by any subsequent transferee of any such rights to any transferee reasonably deemed by the Company to be a competitor of the Company.

 

3.3                               Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Holder by reason of this Agreement shall have access to any trade secrets or classified information of the Company.  The Company shall not be required to comply with any information rights or inspection rights of Section 3 in respect of any Holder whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of more than ten percent (10%) of a competitor, nor shall the Company be obligated to disclose any information which the Board of Directors of the Company determines in good faith is attorney-client privileged and should not, therefore, be disclosed.  The Company shall not be obligated to disclose details of contracts with, or work performed for, specific customers and other business partners where to do so would violate confidentiality obligations to those parties.  Each Holder agrees that it will not use any information received by it pursuant to this Agreement in violation of the Exchange Act or reproduce, disclose or disseminate such information to any other person (other than its employees, agents or partners having a need to know the contents of such information, and its attorneys), except in connection with the exercise of rights under this Agreement, unless the Company has made such information available to the public generally.  Notwithstanding the foregoing, the Company recognizes that certain of the Holders or their affiliates are engaged in the business of providing venture capital financing and management advice to companies in which they invest (the “Venture Holders”), and that in their business the Venture Holders may seek to invest in and/or provide advice to companies that may be competitive to the Company.  Accordingly, the Company understands and agrees that nothing in this Agreement will restrict the Venture Holders from investing or participating in the management of any business or entity which competes or may compete, directly or indirectly, with the Company so long as such Venture Holder does not disclose any confidential information to such business or entity in violation hereof.  The Company further agrees that, provided a Venture Holder does not disclose confidential information to a third-party in violation hereof, such Venture Holder shall be free to use in its normal operations as a venture capital fund any information it has obtained or will obtain from the Company for such limited purpose.

 

3.4                               Stock Option Vesting.  Unless otherwise decided by the Board of Directors, all option grants to employees and consultants of the Company made after the date of this Agreement shall vest over a four year period with 25% of the shares subject to each option vesting a year after the vesting commencement date and the remainder of the shares vesting in equal amounts on a monthly, quarterly or annual basis thereafter.

 

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3.5                               Termination of Covenants.  The covenants set forth in this Section 3 shall terminate and be of no further force and effect after the closing of the Company’s Initial Public Offering or upon a Liquidation Event or Deemed Liquidation Event, as those terms are defined in the Amended and Restated Certificate of Incorporation of the Company (the “Restated Certificate”).

 

3.6                               Key Man Insurance.  The Company will maintain key-man life insurance with respect to the life of Gregory T. Went, Ph.D., having a death benefit of at least $5,000,000, payable to the Company.  The Company will maintain this key-man life insurance with respect to Gregory T. Went, Ph.D., for so long as he continues to be employed by the Company.

 

3.7                               Proprietary Information and Inventions Agreements.  The Company shall require all employees and consultants with access to confidential information to execute and deliver a proprietary information and inventions agreement in substantially the form delivered or made available to the Investors, or substantially the form of prior agreements containing substantially equivalent provisions in favor of the Company.

 

Section 4
 Right of First Refusal

 

4.1                               Right of First Refusal to Preferred Holders.  The Company hereby grants to each holder of at least 60,000 shares (as adjusted for stock splits, stock dividends, reverse stock splits and the like) of Series AA Preferred Stock the right of first refusal to purchase its pro rata share of New Securities (as defined in Section 4.1(a)) which the Company may, from time to time, propose to sell and issue after the date of this Agreement.  A Significant Holder’s pro rata share, for purposes of this right of first refusal, is equal to the ratio of (A) the number of shares of Common Stock owned by such Significant Holder on the date hereof (assuming (I) full conversion of the Shares and exercise of all outstanding convertible securities, rights, options and warrants, directly or indirectly, into Common Stock held by said Holder and (II) the issuance of all shares of Series AA Preferred Stock and Common Stock to such Holder as provided for in the Purchase Agreement, whether at the Initial Closing or a Subsequent Closing (each as defined in the Purchase Agreement)) to (B) the total number of shares of Common Stock outstanding on the date hereof (assuming (1) full conversion of the Series AA Preferred Stock and exercise of all outstanding convertible securities, rights, options and warrants, directly or indirectly, into Common Stock, and (2) the issuance of all shares of Series AA Preferred Stock and Common Stock as provided for in the Purchase Agreement, whether at the Initial Closing or a Subsequent Closing). For purposes of this Section 4.1, a Significant Holder includes any general partner, managing member and affiliates (including Affiliated Funds) of a Significant Holder.  A Significant Holder who chooses to exercise the right of first refusal may designate as purchasers under such right itself and/or its partners or affiliates (including Affiliated Funds), in such proportions as it deems appropriate.

 

(a)                                 “New Securities” shall mean any capital stock (including Common Stock and/or Preferred Stock) of the Company whether now authorized or not, and rights, convertible securities, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, exercisable or convertible into capital stock; provided that the term “New Securities” does not include:

 

19

 

(i)                                     the Shares and the Series AA Preferred Conversion Stock;

 

(ii)                                  securities issued or issuable to employees, officers or directors, of, or consultants or advisors to the Corporation or any subsidiary pursuant to stock grants, option plans or similar arrangements which vest over a period of 4 years at a rate of 25% after the first year with 1/48 of the remainder vesting monthly, unless otherwise determined by a unanimous vote of the Board of Directors of the Company;

 

(iii)                               securities issued upon the conversion or exercise of any convertible or exercisable securities outstanding as of the date of this Agreement;

 

(iv)                              securities issued or issuable as a dividend or distribution on Preferred Stock of the Company or pursuant to any event for which adjustment is made pursuant to Sections 4(f), (g) or (h) of the Restated Certificate of Incorporation of the Company;

 

(v)                                 securities issued in a registered public offering under the Securities Act in connection with which all outstanding shares of Preferred Stock are converted into Common Stock;

 

(vi)                              securities issued or issuable pursuant to the bona fide acquisition of another corporation by the Company by merger, purchase of substantially all of the assets or other reorganization, which acquisition is approved by a unanimous vote of the Board of Directors of the Company;

 

(vii)                           securities issued or issuable to banks, equipment lessors or other financial institutions pursuant to a debt financing, equipment lease or bank credit arrangement entered into for primarily non-equity financing purposes and approved by a unanimous vote of the Board of Directors of the Company;

 

(viii)                        securities of the Company which the Board of Directors of the Company unanimously determines shall be excluded from the definition of New Securities and which are not offered to any existing stockholder of the Company;

 

(ix)                              any right, option or warrant to acquire any security convertible solely into the securities excluded from the definition of New Securities pursuant to subsections (i) through (vii) above;

 

(x)                                 securities issued in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by a unanimous vote of the Board of Directors of the Corporation;

 

(xi)                              securities issued to strategic suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions approved by a unanimous vote of the Board of Directors of the Corporation; and

 

(xii)                           securities issued in connection with a Subsequent Closing (as defined in the Purchase Agreement).

 

20

 

(b)                                 In the event the Company proposes to undertake an issuance of New Securities, it shall give each Significant Holder written notice of its intention, describing the type of New Securities, their price, the number of New Securities to be offered, and the general terms upon which the Company proposes to issue the same.  Each Significant Holder shall have twenty (20) calendar days after any such notice is mailed or delivered to agree to purchase (i) such Holder’s pro rata share of such New Securities (each, a “Basic Amount” and collectively, the “Basic Amounts”) and (ii) any additional portion of the New Securities as such Significant Holder shall indicate it will purchase should the other Significant Holders subscribe for less than their pro rata share of the New Securities (each, an “Undersubscription Amount” and collectively, the “Undersubscription Amounts”) for the price and upon the terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased.  If the Basic Amounts subscribed for by all Significant Holders are less than the Basic Amounts to which all Significant Holders are entitled, then each Significant Holder who has agreed to purchase an Undersubscription Amount shall be entitled to purchase, in addition to the Basic Amount subscribed for, the Undersubscription Amount it has subscribed for; provided, that should the Undersubscription Amounts subscribed for exceed the difference between the Basic Amounts to which all Significant Holders are entitled and the Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Significant Holder who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Undersubscription Amount subscribed for by such Significant Holder bears to the total Undersubscription Amounts subscribed for by all Significant Holders, subject to rounding by the Board of Directors to the extent it reasonably deems necessary.

 

(c)                                  In the event the Significant Holders fail to exercise fully the right of first refusal within said twenty (20) day period (the “Election Period”), the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within ninety (90) days from the date of said agreement) to sell that portion of the New Securities with respect to which the Significant Holders’ right of first refusal option set forth in this Section 4.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company’s notice to Significant Holders delivered pursuant to Section 4.1(b).  In the event the Company has not sold within such ninety (90) day period following the Election Period, or such ninety (90) day period following the date of said agreement, the Company shall not thereafter issue or sell any New Securities without first again offering such securities to the Significant Holders in the manner provided in this Section 4.1.

 

(d)                                 The right of first refusal granted under this Agreement shall expire upon, and shall not be applicable to, (i) the Company’s Initial Public Offering or (ii) on the first date upon which no Shares are outstanding with respect to the Significant Holders.

 

Section 5
 Drag-Along Rights

 

5.1                               Drag-Along Rights.  If the holders of a majority of the outstanding shares of Series AA Preferred Stock and Common Stock (including the Converted Common), each voting as a separate class, approve (i) an acquisition of the Company by another entity by means of any

 

21

 

transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) that would result in the transfer of fifty percent (50%) or more of the outstanding voting power of the Company or in which the stockholders of the Company immediately prior to such transaction would own, as a result of such transaction, less than a majority of the voting securities, in the same relative proportions, of the successor or surviving corporation immediately thereafter or a sale of all or substantially all of Company’s assets, whether by means of a merger, consolidation, sale of stock or assets or otherwise (a “Sale of the Company”) or (ii) a proposed round of equity financing by the Company (the “Equity Financing”), then all Common Holders shall consent to and vote their shares of Common Stock in favor of the Equity Financing or the Sale of the Company, and if the Sale of the Company is structured as (a) a merger or consolidation of the Company, or a sale of all or substantially all of the Company’s assets, each Common Holder shall waive any dissenters’ rights, appraisal rights or similar rights in connection with such merger, consolidation or asset sale, or (b) a sale of the stock of the Company, the Common Holders shall agree to sell their shares of Common Stock on the terms and conditions approved by the holders of a majority of the outstanding shares of Preferred Stock and Common Stock, each voting as a separate class.  Each Common Holder hereby irrevocably constitutes and appoints the Company and any representative or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Common Holder and in the name of such Common Holder or in its own name, for the purpose of carrying out the terms of this Section 5, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Section 5.  Such Common Holder hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.  The rights under this Section 5 shall expire upon the Company’s Initial Public Offering.

 

5.2                               Certain Future Common Holders.  The Company will require anyone who, after the date of this Agreement, is granted a stock option or other equity award and subsequently becomes the holder of shares of Common Stock equaling one percent (1%) or more of the Company’s then outstanding capital stock to, as a condition to such acquisition, execute a counterpart signature page hereto as a Common Holder, and such person shall thereby be bound by, and subject to, all the terms and provisions of this Agreement applicable to Common Holders; provided, however, that this Section 5.2 shall not apply to holders of Converted Common.

 

5.3                               Restrictions on Sales of Control of the Company.  No stockholder shall be a party to any Stock Sale (as defined below) unless all holders of Preferred Stock are allowed to participate in such transaction and the consideration received pursuant to such transaction is allocated among the parties thereto in the manner specified in the Certificate of Incorporation (as if such transaction were a Deemed Liquidation Event under the Certificate of Incorporation), unless the holders of at least a majority of the Preferred Stock elect otherwise by written notice given to the Company at least ten (10) days prior to the effective date of any such transaction or series of related transactions.  For the purposes hereof, “Stock Sale” means a transaction or series of related transactions in which a person, or a group of related persons, acquires from stockholders of the Company shares representing more than fifty percent (50%) of the outstanding voting power of the Company.

 

22

 

Section 6
 Miscellaneous

 

6.1                               Amendment.  Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the Company and the Holders holding a majority of the Registrable Securities held by the Preferred Holders and the holders of Converted Common (excluding any of such shares that have been sold to the public or pursuant to Rule 144); provided, however, that (a) Holders purchasing shares of Series AA Preferred Stock in a Closing after the Initial Closing (each as defined in the Purchase Agreement) may become parties to this Agreement, by executing a counterpart of this Agreement without any amendment of this Agreement pursuant to this paragraph or any consent or approval of any other Holder and (b) this Agreement may be amended by the Company from time to time to add additional Common Holders to this Agreement under Section 5.2 without the consent of the other parties hereto; provided, further, however, (i) that Sections 4, 5 and 6 may not be amended without the consent of at least a majority of the holders of the Series AA Preferred Stock, and (ii) Sections 5 and 6 may not be amended, if such amendment would adversely affect the rights of the Common Holders, without the consent of the Common Holders holding at least a majority of the Common Stock; and provided, further, that if a waiver or amendment of any provision contained herein would adversely affect any holder of Registrable Securities in a manner that does not similarly adversely affect all other holders of Registrable Securities, the written consent of such holder shall be required.  Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each Holder and each future holder of all such securities of Holder.  Each Holder acknowledges that by the operation of this paragraph, the Holders of a majority of the Registrable Securities held by the Preferred Holders (excluding any of such shares that have been sold to the public or pursuant to Rule 144) will have the right and power to diminish or eliminate all rights of such Holder under this Agreement.

 

6.2                               [Intentionally Omitted]

 

6.3                               Notices.  All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand or by messenger addressed:

 

(a)                                 if to an Investor, at the Investor’s address, facsimile number or electronic mail address as shown in the Company’s records, as may be updated in accordance with the provisions hereof; if such Investor is aeris CAPITAL Equity Investments L.P. (“Aeris”), then a copy to Peter M. Rosenblum, Foley Hoag LLP, at 155 Seaport Boulevard, Boston, MA 02210;

 

(b)                                 if to any Holder, at such address, facsimile number or electronic mail address as shown in the Company’s records, or, until any such holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address of the last holder of such shares for which the Company has contact information in its records; or

 

(c)                                  if to the Company, one copy should be sent to Adamas Pharmaceuticals, Inc., 1900 Powell Street, Suite 1050, Emeryville, CA 94608, Attn: Chief Executive Officer, or at such other address as the Company shall have furnished to the Investors, with a copy to

 

23

 

Ivan A. Gaviria, Esq., Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, 1200 Seaport Boulevard, Redwood City, CA 94063.

 

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the electronic mail address set forth in the Company’s records.

 

6.4                               Governing Law.  This Agreement shall be governed in all respects by the internal laws of the State of Delaware, without regard to principles of conflicts of law.

 

6.5                               Successors and Assigns.  This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by any Investor without the prior written consent of the Company; provided, however, that notwithstanding the foregoing or any other provision of this Agreement, Mohr, Davidow Ventures (“MDV”) and any MDV affiliate shall be permitted to transfer all or any portion of the Shares (and any and all accompanying rights, duties and obligations) it owns to MDV or any affiliate of MDV or any entity or vehicle including a partnership in which MDV and/or its affiliate has a majority economic interest and which is managed by MDV or any of its affiliates; and provided, however, that notwithstanding the foregoing or any other provision of this Agreement, DAG Ventures (“DAG”) and any DAG affiliate shall be permitted to transfer all or any portion of the Shares (and any and all accompanying rights, duties and obligations) it owns to DAG or any affiliate of DAG or any entity or vehicle including a partnership in which DAG and/or its affiliate has a majority economic interest and which is managed by DAG or any of its affiliates; and provided, further, that notwithstanding the foregoing or any other provision of this Agreement, BioMedical Sciences Investment Fund Pte Ltd. (“BMSIF”) and any BMSIF affiliate shall be permitted to transfer all or any portion of the Shares (and any and all accompanying rights, duties and obligations) it owns to any affiliate of BMSIF or any entity or vehicle including a partnership in which BMSIF and/or its affiliate has a majority economic interest and which is managed by BMSIF or any of its affiliates; and provided, further, that notwithstanding the foregoing or any other provision of this Agreement, that Aeris and any Aeris affiliate shall be permitted to transfer all or any portion of the Shares (and any and all accompanying rights, duties and obligations) it owns to Aeris or any affiliate of Aeris or any entity or vehicle including a partnership in which Aeris and/or its affiliate has a majority economic interest and which is managed by Aeris or any of its affiliates.  Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void.  Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

 

6.6                               Entire Agreement.  This Agreement and the exhibits hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and supersedes all prior written or oral agreements and understandings relating to such subject matter.  No party hereto shall be liable or bound to any other party in any manner with regard to

 

24

 

the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein.

 

6.7                               Delays or Omissions.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

 

6.8                               Severability.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision.  The balance of this Agreement shall be enforceable in accordance with its terms.

 

6.9                               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.  All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

6.10                        Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument.

 

6.11                        Telecopy Execution and Delivery.  A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen.  Such execution and delivery shall be considered valid, binding and effective for all purposes.  At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

 

6.12                        Further Assurances.  Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.

 

25

 

6.13                        Aggregation of Stock.  All shares of Common Stock and Preferred Stock held or acquired by affiliated entities or persons or entities under common investment management or control shall be aggregated together for the purpose of determining the availability of any rights or obligations under this Agreement.

 

6.14                        Termination of Prior Agreement.  Upon the effectiveness of this Agreement, the Prior Agreement shall terminate and be of no further force and effect, and shall be superseded and replaced in its entirety by this Agreement.

 

6.15                        Waiver of Pro Rata.  The undersigned, which holders together (i) hold at least a majority of the Registrable Securities that are currently held by Holders and (ii) hold at least a majority of the Company’s Preferred Stock and the Converted Common, on behalf of themselves and all Holders, hereby unconditionally waive all rights to notice and of first offer as set forth in Section 4.1 of the Prior Agreement with respect to the issuance and sale of the Series AA Preferred Stock (and the Common Stock issuable upon conversion hereof) pursuant to the Purchase Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

26

 

IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amended and Restated Investors’ Rights Agreement effective as of the day and year first above written.

 

 

	
 
    	
ADAMAS   PHARMACEUTICALS, INC.
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Gregory T. Went
    
	
 
    	
 
    	
Gregory T. Went, Chief   Executive Officer
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DAG Ventures III-QP, L.P.
    
	
 
    	
By: DAG Ventures   Management III, LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
by: 
    	
/s/ Greg Williams
    
	
 
    	
 
    	
Greg Williams, Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DAG Ventures III, L.P.
    
	
 
    	
By: DAG Ventures   Management III, LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
by: 
    	
/s/ Greg Williams
    
	
 
    	
 
    	
Greg Williams, Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DAG   Ventures GP Fund III, LLC
    
	
 
    	
By: DAG Ventures   Management III, LLC, its Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
by: 
    	
/s/ Greg Williams
    
	
 
    	
 
    	
Greg Williams, Managing   Director
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MDV VII, L.P.
    
	
 
    	
as nominee for
    
	
 
    	
MDV VII, L.P.,
    
	
 
    	
MDV VII Leaders’ Fund,   L.P.,
    
	
 
    	
MDV ENF VII(A), L.P. and
    
	
 
    	
MDV ENF VII(B), L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
Seventh MDV Partners,   L.L.C.,
    
	
 
    	
 
    	
General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/PB Cleveland
    
	
 
    	
 
    	
Member
    
	
 
    	
 
    
	
 
    	
 
    
	
Address:          
    	
Mohr, Davidow Ventures
    
	
 
    	
3000 Sand Hill Road
    
	
 
    	
Bldg. 3, Suite 290
    
	
 
    	
Menlo Park, CA 94025
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MDV IX, L.P.
    
	
 
    	
as nominee for
    
	
 
    	
MDV IX, L.P.,
    
	
 
    	
and MDV ENF IX, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: Ninth MDV Partners,   L.L.C., General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ PB Cleveland
    
	
 
    	
 
    	
Member
    
	
 
    	
 
    
	
 
    	
 
    
	
Address:       
    	
Mohr, Davidow Ventures
    
	
 
    	
3000 Sand Hill Road
    
	
 
    	
Bldg.   3, Suite 290
    
	
 
    	
Menlo   Park, CA 94025
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BLACKBOARD   VENTURES INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Imtiaz Khan
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Imtiaz Khan
    
	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
Authorized Signatory
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DAVID MAHONEY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ David Mahoney
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
aeris   CAPITAL Equity Investments, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Gregory Link
    
	
 
    	
 
    	
 
    
	
 
    	
Print Name: 
    	
Gregory Link
    
	
 
    	
 
    	
 
    
	
 
    	
Its: 
    	
Director
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NCD Investors, a Delaware Multiple   Series LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Brent Jones
    
	
 
    	
 
    	
 
    
	
 
    	
Print Name: 
    	
Brent Jones
    
	
 
    	
 
    	
 
    
	
 
    	
Its: 
    	
Managing Director
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GRANITE   POINT CAPITAL, L.P.
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Warren Lammert
    
	
 
    	
 
    	
 
    
	
 
    	
Print Name: 
    	
Warrant Lammert
    
	
 
    	
 
    	
 
    
	
 
    	
Its: 
    	
Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GRANITE POINT CAPITAL OFFSHORE   FUND, LTD
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Warren Lammert
    
	
 
    	
 
    	
 
    
	
 
    	
Print Name: 
    	
Warrant Lammert
    
	
 
    	
 
    	
 
    
	
 
    	
Its: 
    	
Managing Member
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Gregory T. Went
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Gregory T. Went
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Patricia C. Went
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Patricia C. Went
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ M. Curtis Young     /s/ Jane L. Young
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
M. Curtis Young     Jane L. Young
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
COMMON HOLDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GREGORY WENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Gregory Went
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
COMMON HOLDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MICHAEL S. URDEA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Michael S. Urdea
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
COMMON HOLDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IVAN LIEBERBURG
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Ivan Lieberburg
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
WS   INVESTMENT COMPANY, LLC
   (2011A)
    
	
 
    	
 
    
	
 
    	
By:    
    	
/s/   WS Investment Company, LLC (2011A)
    
	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:  
    	
/s/ A. V. Katdare
    
	
 
    	
 
    	
 
    
	
 
    	
Name:  
    	
A. V. Katdare
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FIELDS FAMILY REVOCABLE TRUST
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:  
    	
/s/ Robert Fields
    
	
 
    	
 
    	
 
    
	
 
    	
Name:  
    	
Robert Fields
    
	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
Trustee
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NANCY M. GIRAGOSIAN
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:  
    	
/s/ Nancy M. Giragosian
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Nancy M. Giragosian
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

ADAMAS PHARMACEUTICALS, INC.

 

COUNTERPART SIGNATURE PAGE

 

TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

By execution and delivery of this signature page, the undersigned hereby agrees to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Rights Agreement”) by and among Adamas Pharmaceuticals, Inc., a Delaware corporation, the Investors (as defined in the Rights Agreement) and the Common Holders (as defined in the Rights Agreement) dated as of June 30, 2011 and is entitled to all of the benefits under and subject to all of the obligations, restrictions and limitations set forth in the Rights Agreement that are applicable to the Investors and/or the Common Holders, as the case may be.  This Counterpart Signature Page shall take effect and shall become a part of said Rights Agreement immediately upon execution.

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BURTON W. WENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:  
    	
/s/ Burton W. Went
    
	
 
    	
 
    	
 
    
	
 
    	
Name:  
    	
Burton W. Went
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

EXHIBIT A

 

INVESTORS

 

aeris CAPITAL Equity Investments, Inc.

 

DAG Ventures III-QP, L.P.

 

DAG Ventures III, L.P.

 

DAG Ventures GP Fund III, LLC

 

MDV VII, L.P., as nominee for MDV IX, L.P., and MDV ENF IX, L.P.

 

Blackboard Ventures Inc.

 

Granite Point Capital, L.P.

 

Granite Point Capital Master Fund, L.P. (and/or its affiliates)

 

NCD Investors, a Delaware Multiple Series LLC

 

WS Investment Company, LLC

 

Patricia C. Went

 

M. Curtis Young

 

David Mahoney

 

The Ashok V. Katdare, Declaration of Trust dated 9/21/05

 

Gregory T. Went

 

Fields Family Revocable Trust

 

Nancy M. Giragosian

 

Burton W. Went

 

 

EXHIBIT B

 

COMMON HOLDERS

 

Gregory Went

 

Michael S. Urdea

 

Ivan Lieberburg

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