Document:

Exhibit

EXHIBIT 4.3

DTE ENERGY COMPANY

LONG-TERM INCENTIVE PLAN

AMENDED AND RESTATED EFFECTIVE MAY 3, 2018

ARTICLE I

Purposes

1.01    General Purposes
The DTE Energy Company Long-Term Incentive Plan is intended to:

(a)    assist the Company and its Subsidiaries in recruiting and retaining individuals with ability and initiative by enabling such persons to participate in the future success of the Company and its Subsidiaries and to associate their interests with those of the Company and its shareholders; and

(b)    permit the grant of Options qualifying as Incentive Stock Options and Options not so qualifying, the grant of Stock Awards, Performance Shares and Performance Units.

1.02    Use of Proceeds
The proceeds received by the Company from the sale of shares of Common Stock pursuant to this Plan shall be used for general corporate purposes.

ARTICLE II

Definitions

2.01     Accounting Firm 
Accounting Firm means the public accounting firm retained as the Company’s independent auditor as of the date immediately prior to the Change in Control, unless another firm is designated by the Committee.

2.02     Administrator 
Administrator means:

(a)    the Board, with respect to awards made under this Plan to members of the Board who are not employees of the Company or a Subsidiary; and

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(b)    the Committee or the Chief Executive Officer of the Company to the extent responsibilities are delegated to him by the Committee under Article III with respect to awards made under this Plan to all other persons.

2.03    Agreement 
Agreement means a written agreement (including any amendment or supplement) between the Company and a Participant specifying the terms and conditions of a Stock Award, an award of Performance Shares, an award of Performance Units or an Option granted to the Participant.

2.04    Board 
Board means the Board of Directors of the Company. 

2.05    Capped Parachute Payments 
Capped Parachute Payments means the largest amount of Parachute Payments that may be paid to a Participant without liability for any excise tax under Code Section 4999.

2.06    Change in Control 
Change in Control means the occurrence of any of the following events: 

(a)    The consummation of a transaction in which the Company is merged, consolidated or reorganized into or with another corporation or other legal person (the “Surviving Entity”), and as a result of the transaction less than 55% of the combined voting power of the then-outstanding Voting Stock of the Surviving Entity immediately after the transaction is held in the aggregate by the holders of Voting Stock of the Company immediately prior to the transaction;

(b)    The consummation of a sale or transfer in which the Company sells or otherwise transfers all or substantially all of its assets to another corporation or other legal person (the “Acquiring Entity”), and as a result of the sale or transfer less than 55% of the combined voting power of the then-outstanding Voting Stock of the Acquiring Entity immediately after the sale or transfer is held in the aggregate (directly or through ownership of Voting Stock of the Company or a Subsidiary) by the holders of Voting Stock of the Company immediately prior to the sale or transfer; or 

(c)    The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

2.07    Code 
Code means the Internal Revenue Code of 1986, as amended. 

2.08    Committee 
Committee means the Organization and Compensation Committee, or any other Board committee designated from time to time by the Board, provided that the Committee is composed solely of individuals who are “Non-Employee Directors,” as the term is used in Rule 16b-3 under the 

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Exchange Act, and “Outside Directors,” as the term is used in Code Section 162(m) and the related Treasury Regulations.

2.09    Common Stock 
Common Stock means common stock of the Company.

2.10    Company 
Company means DTE Energy Company, a Michigan corporation, or any successor corporation.

2.11    Control Change Date 
Control Change Date means the date on which a Change in Control occurs. If a Change in Control results from a series of transactions, the Control Change Date is the date of the last transaction.

2.12    Exchange Act 
Exchange Act means the Securities Exchange Act of 1934, as amended. 

2.13    Fair Market Value 
Fair Market Value means, on the specified date, the closing price of Common Stock on the New York Stock Exchange, as reported by a source selected by the Committee. If, on the specified date, no share of Common Stock is traded, then Fair Market Value is determined as of the next preceding day that Common Stock was traded.

2.14    Incentive Stock Option 
Incentive Stock Option means an Option that satisfies the requirements of Code Section 422 and is intended by the Administrator to be an Incentive Stock Option.

2.15    Net After Tax Amount 
Net After Tax Amount means the amount of any Parachute Payments or Capped Parachute Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any state or local income taxes applicable to a Participant with respect to the payments as in effect for the year for which the determination is made. The determination of the Net After Tax Amount is made using the highest combined marginal rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Parachute Payments, as applicable, in effect for the year for which the determination is made.

2.16    Option 
Option means a stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price set forth in an Agreement.

2.17    Parachute Payment 
Parachute Payment means a payment described in Code Section 280G(b)(2) (without regard to whether the aggregate present value of such payments exceeds the limit prescribed by Code Section 280G(b)(2)(A)(ii)). The amount of any Parachute Payment is determined under Code Section 280G and the related Treasury Regulations, or, in the absence of final regulations, the proposed Treasury Regulations under Code Section 280G.

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2.18    Participant 
Participant means an employee of the Company or a Subsidiary, and any member of the Board, whether or not the Board member is an employee of the Company or a Subsidiary, who satisfies the requirements of Article IV and is selected by the Administrator to receive an award of Performance Shares, a Stock Award, an Option, or an award of Performance Units, in any combination.

2.19    Performance Objectives 
Performance Objectives means objectives stated with respect to:

(a)    shareholder value growth based on stock price and dividends;
(b)    customer price;
(c)    customer satisfaction;
(d)    growth based on increasing sales or profitability of one or more business units;
(e)    performance against the companies in the Dow Jones Electric Utility Industry Group index, the companies in the S&P 500 Electric Utility Industry index, a peer group, or similar benchmark selected by the Committee;
(f)    earnings per share growth;
(g)    employee satisfaction;
(h)    nuclear plant performance achievement;
(i)    return on equity;
(j)    economic value added;
(k)    cash flow;
(l)    earnings growth;
(m)    diversity;
(n)    safety;
(o)    production cost; or 
(p)    any other performance measures selected by the Administrator.

Each Performance Objective may be stated with respect to the performance of the Company, a Subsidiary, or a division of the Company or a Subsidiary.  Each Performance Objective is intended to be a “performance goal” as defined in the Treasury Regulations under Code Section 162(m).

2.20    Performance Shares 
Performance Shares means an award stated with reference to a specified number of shares of Common Stock determined by the Administrator that, in accordance with the terms of an Agreement, entitles the Participant to receive a cash payment, or shares of Common Stock, or a combination of cash and shares.

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2.21    Performance Units 
Performance Units means an award of a specified number of units, determined by the Administrator, with a face amount of $1.00 per unit that, in accordance with the terms of an Agreement, entitles the Participant to receive a cash payment, shares of Common Stock, or a combination of cash and shares.

2.22    Plan 
Plan means the DTE Energy Company Long-Term Incentive Plan.
 
2.23    Rule 16b-3 
Rule 16b-3 means Rule 16b-3 under the Exchange Act. 

2.24    Stock Awards 
Stock Award means Common Stock awarded to a Participant under Article VII. 

2.25    Subsidiary 
Subsidiary means a corporation, partnership, joint venture, limited liability company, unincorporated association, or other entity in which the Company has a direct or indirect ownership or other equity interest.

2.26    Voting Stock 
Voting Stock means securities entitled to vote generally in the election of directors.

ARTICLE III

Administration

3.01     Administrator; Terms of Awards
The Plan is administered by the Administrator. To the extent of its delegated authority, the Administrator has authority to grant Stock Awards, Performance Shares, Performance Units, and Options on terms that the Administrator considers appropriate and that are not inconsistent with the provisions of this Plan.  The terms may include conditions in addition to the conditions in this Plan on the Participant’s ability to exercise all or any part of an Option or on the transferability or forfeitability of Stock Awards, or an award of Performance Shares or Performance Units.  Any Agreement specifying the terms of a grant of a Stock Award, Performance Shares, Performance Units, or Options must provide that any Options not exercised, any Stock Awards not vested, or any Performance Shares or Performance Units not paid at the time the Participant violates any confidentiality, non-competition, or non-solicitation covenants imposed on the Participant under a separate agreement between the Participant and the Company or a Subsidiary (as determined under the terms of the separate agreement) are immediately forfeited.  The Administrator may, in its discretion, supersede the terms of any Agreement and accelerate the time at which any Option may be exercised, Stock Awards may become transferable or non-forfeitable, or an award of Performance Shares or Performance Units may be settled, when determined by the Administrator to be equitably 

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required.  The Administrator may, in its discretion, suspend or waive the forfeiture of any award made under this Plan.

3.02    Authority of Administrator
The Administrator has complete authority to:

(a)    interpret all provisions of this Plan;

(b)    adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan;

(c)    correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any award in the manner and to the extent the Administrator deems desirable;

(d)    authorize any one of its number or any officer of the Company to execute and deliver documents on its behalf; and

(e)    make all other determinations necessary or advisable for the administration of this Plan.

The express grant in the Plan of any specific power to the Administrator does not limit any power or authority of the Administrator. Any decision made or action taken by the Administrator in connection with the administration of this Plan is final and conclusive. The Administrator, any member of the Board or Committee, or the Chief Executive Officer or the President of the Company is not liable for any act done in good faith with respect to this Plan or any Agreement, Option, or Stock Award, Performance Shares, or Performance Units. All expenses of administering this Plan are borne by the Company.

3.03    Delegation
The Committee, in its discretion, may delegate to the Chief Executive Officer or the President of the Company all or part of the Committee’s authority and duties with respect to grants and awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act.  The Committee may revoke or amend the terms of a delegation at any time.  However, any revocation or amendment of a delegation does not invalidate any prior actions of the Committee’s delegate or delegates that were consistent with the terms of the Plan.

ARTICLE IV

Eligibility

4.01    General Eligibility
Except as limited by Section 4.02, any employee of the Company or a Subsidiary (including an entity that becomes a Subsidiary after the adoption of this Plan) or any member of the Board, whether or not the Board member is employed by the Company or a Subsidiary, is eligible to participate in 

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this Plan if the Administrator, in its sole discretion, determines that the person has contributed significantly or can be expected to contribute significantly to the profits or growth of the Company or a Subsidiary.

4.02    Limited Eligibility for Incentive Stock Options
Incentive Stock Options may be granted only to persons who are employees of the Company or a “subsidiary,” as defined in Code Section 424(f), on the date of grant.

ARTICLE V

Common Stock Subject to Plan

5.01    Common Stock Issued or Delivered 
Common Stock to be delivered by the Company under a Stock Award, in settlement of an award of Performance Shares or Performance Units, or by exercise of an Option to a Participant (or the Participant’s successor in interest or personal representative or, if the Participant so directs, broker) will be:

(a)    from the Company’s authorized but unissued Common Stock; or

(b)    outstanding Common Stock acquired by or on behalf of the Company in the name of a Participant (or the Participant’s successor in interest, personal representative or broker); or

(c)    a combination of (a) and (b).

5.02    Maximum Shares Available 
(a)    Aggregate Limit
No more than 16,500,000 shares of Common Stock may be issued or acquired and delivered under this Plan through the exercise of Options, the grant of Stock Awards, and the settlement of Performance Shares and Performance Units. This maximum aggregate number of shares of Common Stock that may be issued or delivered under the Plan is subject to adjustment under Article X.  The actual number of shares of Common Stock issued or acquired and delivered under the Plan is determined under Section 5.03.

(b)    Limit on Awards to Non-Employee Directors
The total number of shares of Common Stock issued or acquired and delivered under the Plan to members of the Board who are not employees of the Company or a Subsidiary cannot exceed 100,000 shares.

5.03    Reallocation of Shares 
(a)    Termination of Award
If an Option is terminated, in whole or in part, for any reason other than its exercise, the number of shares allocated to the termination Option or termination portion may be 

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reallocated to other Options, Performance Shares, Performance Units and Stock Awards to be granted under this Plan, subject to the limits in Section 5.02.

If a Stock Award is forfeited, in whole or in part, for any reason, the number of shares of Common Stock allocated to the terminated Stock Award or terminated portion may be reallocated to other Options, Performance Shares, Performance Units and Stock Awards to be granted under this Plan, subject to the limits in Section 5.02.

If an award of Performance Shares is terminated, in whole or in part, for any reason other than its settlement with cash, shares of Common Stock, or a combination of cash and shares, the number of shares allocated to the terminated Performance Share award or termination portion may be reallocated to other Options, Performance Shares, Performance Units, and Stock Awards to be granted under this Plan, subject to the limits in Section 5.02.

If an award of Performance Units is terminated, in whole or in part, for any reason other than its settlement with shares of Common Stock, the number of shares allocated to the Performance Unit award or portion thereof may be reallocated to other Options, Performance Shares, Performance Units, and Stock Awards to be granted under this Plan, subject to the limits in Section 5.02.

(b)    Reallocation Prohibited
Shares of Common Stock that would otherwise be issued or delivered under the Plan but are not issued or delivered because the shares are:

(i)    Tendered in full or partial payment of any Option price;

(ii)    Tendered or withheld by the Company in satisfaction of tax withholding obligations; or

(iii)     Repurchased by the Company with Option proceeds.

may not be reallocated to other Options, Performance Shares, Performance Units, or Stock Awards to be granted under the Plan.  Any shares of Common Stock not issued or delivered under (i), (ii), or (iii) are treated as shares of Common Stock issued or delivered under the Plan for purposes of the limits in Section 5.02.

ARTICLE VI

Options

6.01    Terms of Award 
The Administrator will designate each individual to whom an Option is to be granted.  The Agreement for the Option will specify:

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(a)    the number of shares of Common Stock covered by the award, subject to Section 6.02;

(b)    the exercise price of the Option, subject to Section 6.03;

(c)    the earliest date when the Option can be exercised, subject to Section 6.04;

(d)    the maximum exercise period of the Option, subject to Section 6.05;

(e)    whether the Option is transferable as permitted under Section 6.07;

(f)    any specific terms regarding exercise of the Option permitted under Section 6.09; and

(g)    any specific terms regarding payment permitted under Section 6.10.

6.02    Maximum Number of Shares
No Participant may be granted Options in any calendar year covering more than 500,000 shares of Common Stock.

6.03    Option Price 
The price per share for shares of Common Stock purchased on the exercise of an Option will be determined by the Administrator on the date of grant and cannot be less than the Fair Market Value on the date the Option is granted.

6.04    Earliest Exercise Date
The earliest date on which the Participant may exercise an Option will be determined by the Administrator on the date of grant.  However, the Administrator may not permit a Participant to exercise any Options covered by the Agreement earlier than as follows:

(a)    before one year after the date the Options were granted, no Options may be exercised;

(b)    at least one year after and before two years after the date the Options were granted, Options for 1/3 of the shares covered by the Agreement may be exercised;

(c)    at least two years after and before three years after the date the Options were granted, Options for 2/3 of the shares covered by the Agreement may be exercised; and

(d)    at least three years after the date the Options were granted, Options for all of the shares covered by the Agreement may be exercised.

6.05    Maximum Option Period 
The maximum period in which an Option may be exercised will be determined by the Administrator on the date of grant.  However, no Option is exercisable more than 10 years after the date the Option was granted.

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6.06    Non-transferability 
Except as provided in Section 6.07, each Option granted under this Plan is non-transferable except by will or by the laws of descent and distribution. Except as provided in Section 6.07, during the lifetime of the Participant to whom the Option is granted, the Option may be exercised only by the Participant. No right or interest of a Participant in any Option is liable for, or subject to, any lien, obligation, or liability of the Participant.

6.07    Transferable Options 
If the Agreement provides, an Option that is not an Incentive Stock Option may be transferred by a Participant to persons or entities permitted under Rule 16b-3 on terms and conditions permitted under Rule 16b-3. The holder of an Option transferred under this Section is bound by the same terms and conditions that governed the Option during the period that it was held by the Participant, except this Section 6.07.  The transferee may not transfer the Option except by will or the laws of descent and distribution.

6.08    Status as Employee or Director 
For purposes of determining the applicability of Code Section 422 (relating to Incentive Stock Options), or if the terms of any Option provide that it may be exercised only during employment or within a specified period of time after termination of employment or Board service, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons will not be deemed interruptions of continuous employment or Board service.

6.09    Exercise 
Subject to the provisions of this Plan and the applicable Agreement, an Option may be exercised in whole at any time or in part from time to time at times and in compliance with requirements as the Administrator determines.  However, Incentive Stock Options (granted under the Plan and all plans of the Company and its subsidiary corporations, as those terms are defined in Code Section 424) may not be first exercisable in a calendar year for shares of Common Stock having a Fair Market Value (determined as of the date an Option is granted) exceeding $100,000. An Option granted under this Plan may be exercised with respect to any number of whole shares less than the full number for which the Option could be exercised. A partial exercise of an Option does not affect the right to exercise the Option from time to time in accordance with this Plan and the applicable Agreement with respect to the remaining shares subject to the Option.

6.10    Payment of Option Price
Subject to rules established by the Administrator and unless otherwise provided in an Agreement, payment of all or part of the Option price may be made in:

(a)    cash or a cash equivalent acceptable to the Administrator; or

(b)    unrestricted shares of Common Stock previously acquired by the Participant and, if those shares were acquired from the Company, that have been held by the Participant for at least six months.

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If shares of Common Stock are used to pay all or part of the Option price, the sum of the cash and cash equivalents and the Fair Market Value (determined as of the date of exercise) of the shares surrendered must not be less than the Option price of the shares for which the Option is being exercised. Payment in “cash” or “cash equivalents” includes delivery of cash or cash equivalents by a broker under a “cashless exercise” arrangement at the time of exercise or following the sale of shares to which the exercise relates.  Any shares of Common Stock used to pay any part of the Option price will not be reallocated to other Options, Performance Shares, Performance Units, and Stock Awards to be granted under this Plan and will not otherwise be made available to be issued under this Plan.

6.11    Shareholder Rights 
No Participant has any rights as a shareholder with respect to shares subject to the Participant’s Option until the date the Option is exercised.

6.12    Disposition of Shares 
A Participant will notify the Company of any sale or other disposition of shares acquired under an Option that was an Incentive Stock Option if the sale or disposition occurs:

(a)    within two years of the grant of the Option; or

(b)    within one year of the issuance of shares to the Participant.

The notice must be in writing and directed to the Corporate Secretary of the Company.

6.13    Restriction on Repricing and Purchasing Options 
Without prior shareholder approval:

(a)    the Administrator is not permitted to authorize the amendment of any outstanding Option to reduce the Option price; 

(b)    an Option cannot be cancelled and replaced with new awards having a lower Option price, where the economic effect would be the same as reducing the Option price of the Option; and

(c)    at any time when the Option price of a previously granted Option is above the Fair Market Value of one share of Common Stock, the Administrator is not permitted to offer to purchase the previously granted Option for a cash payment in substitution for or upon the cancellation of the Option.

6.14    Incentive Stock Options
No Option that is intended to be an Incentive Stock Option is invalid for failure to qualify as an Incentive Stock Option.

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ARTICLE VII

Stock Awards

7.01    Award 
The Administrator will designate each individual to whom a Stock Award is to be made.   The Agreement for the Stock Award will specify:

(a)    the number of shares of Common Stock covered by the award, subject to Section 7.02;

(b)    when the Stock Award vests, subject to Section 7.03; and

(c)    any Performance Objectives to which the Stock Award is subject, as described in Section 7.04.

7.02    Maximum Number of Shares
No Participant may receive Stock Awards in any calendar year for more than 150,000 shares of Common Stock.

7.03    Vesting 
The Administrator, on the date of the award, may prescribe that a Participant’s rights in a Stock Award will be forfeitable or otherwise restricted for a period of time.  The Administrator generally may not provide that the Participant’s right to a Stock Award becomes non-forfeitable or unrestricted earlier than three years after the date of the award.  In special situations, such as awards to newly hired Participants or Participants reasonably expected to retire in less than three years, the Administrator may provide that the Participant’s right to a Stock Award becomes non-forfeitable or unrestricted earlier than three years after the date of the award.  In no event, however, may the Administrator provide that a Participant’s right to a Stock Award becomes non-forfeitable or unrestricted earlier than one year after the date of the award.

7.04    Performance Objectives 
In addition to any vesting of a Stock Award imposed under Section 7.03, the Administrator may prescribe that Stock Awards will become vested or transferable or both based on Performance Objectives. In cases where a Stock Award will become non-forfeitable and transferable only upon the attainment of Performance Objectives and satisfaction of the “performance based compensation” exception to the limit on executive compensation imposed by Code Section 162(m) is intended, then the shares subject to the Stock Award will become non-forfeitable and transferable only to the extent that the Committee certifies that the Performance Objectives have been attained.

7.05    Status as Employee or Director 
If the terms of any Stock Award provide that shares become transferable and non-forfeitable only after completion of a specified period of employment or Board service, the Administrator may decide in each case to what extent leaves of absence for governmental or military service, illness, 

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temporary disability, or other reasons will not be deemed interruptions of continuous employment or Board service.

7.06    Shareholder Rights 
Prior to their forfeiture (in accordance with the applicable Agreement and while the shares of Common Stock granted under the Stock Award may be forfeited or are non-transferable), a Participant will have all rights of a shareholder with respect to a Stock Award, including the right to receive dividends and vote the shares.  However, during that period:

(a)    a Participant may not sell, transfer, pledge, exchange or otherwise dispose of shares granted under a Stock Award;

(b)    the Company will retain custody of the certificates evidencing shares granted under a Stock Award; and

(c)    if requested by the Administrator, the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each Stock Award.

After the shares granted under the Stock Award are transferable and no longer forfeitable, the above limitations will not apply.  The Company will deliver to the Participant certificates evidencing shares of Common Stock subject to the award as soon thereafter as possible.

ARTICLE VIII

Performance Share Awards

8.01    Award 
The Administrator will designate each individual to whom an award of Performance Shares is to be made.   The Agreement for the award of Performance Shares will specify:

(a)    the number of shares of Common Stock covered by the award, subject to Section 8.02;

(b)    when the Performance Shares vest, subject to Section 8.03;

(c)    any Performance Objectives to which the Performance Shares are subject, as described in Section 8.04;

(d)    any shareholder rights granted to the Participant under Section 8.06; and

(e)    whether the Performance Shares are transferable under Section 8.08.

8.02    Maximum Number of Shares

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No Participant may receive awards of Performance Shares in any calendar year for more than 300,000 shares of Common Stock (based on the maximum possible payout under the awards).

8.03    Vesting 
The Administrator, on the date of the grant, may prescribe that a Participant’s rights in Performance Shares will be forfeitable for a period of time.  However, the Administrator may not provide that the Participant’s rights in Performance Shares become non-forfeitable earlier than one year after the date of the award.

8.04    Performance Objectives 
The Administrator, on the date of the grant of an award, may prescribe that all or a portion of the Performance Shares will be earned, and the Participant will be entitled to receive a payment under the award of Performance Shares, only upon the satisfaction of Performance Objectives during a performance measurement period of at least one year, or other criteria prescribed by the Administrator. With respect to Performance Shares that will be earned only upon satisfaction of Performance Objectives, and as to which satisfaction of the “performance based compensation” exception to the limit on executive compensation imposed by Code Section 162(m) is intended, a payment will be made under the Performance Shares only if, and to the extent that, the Committee certifies that the Performance Objectives have been attained.

8.05    Payment 
In the discretion of the Administrator, the amount payable when an award of Performance Shares is earned may be settled in cash, by the issuance of shares of Common Stock, or any combination of cash and Common Stock.  A fractional share of Common Stock is not deliverable when an award of Performance Shares is earned; a cash payment will be made in lieu of the fractional share. The Administrator will also determine when an award of Performance Shares that has been earned will be settled.

8.06    Shareholder Rights 
No Participant, as a result of receiving an award of Performance Shares, has any rights as a shareholder until and to the extent that the award of Performance Shares is earned and settled in shares of Common Stock. After an award of Performance Shares is earned and settled in shares, a Participant will have all the rights of a shareholder as described in Section 7.06. However, all Agreements awarding Performance Shares after December 31, 2009 must provide that dividend equivalents with respect to the award will not be paid before the Performance Shares are earned and vested.  During the period beginning on the date the Performance Shares are awarded and ending on the certification date of the Performance Objectives, the number of Performance Shares awarded will be increased, assuming full dividend reinvestment at the Fair Market Value on the dividend payment date.  The cumulative number of Performance Shares will be adjusted to determine the final payment based on the Performance Objectives as certified by the Committee.  The final adjusted number of Performance Shares will be paid as provided under Section 8.05.

8.07    Non-Transferability 

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Except as provided in Section 8.08, Performance Shares granted under this Plan are non-transferable except by will or by the laws of descent and distribution. No right or interest of a Participant in any Performance Shares is liable for, or subject to, any lien, obligation, or liability of such Participant.

8.08    Transferable Performance Shares 
If the Agreement provides, an award of Performance Shares may be transferred by a Participant to persons or entities permitted under Rule 16b-3 on terms and conditions permitted under Rule 16b-3. The holder of Performance Shares transferred pursuant to this Section is bound by the same terms and conditions that governed the Performance Shares during the period that they were held by the Participant, except this Section 8.08.  The transferee may not transfer Performance Shares except by will or the laws of descent and distribution.

8.09    Status as Employee or Director 
If the terms of any Performance Share award provide that no payment will be made unless the Participant completes a stated period of employment or Board service, the Administrator may decide to what extent leaves of absence for government or military service, illness, temporary disability, or other reasons will not be deemed interruptions of continuous employment or Board service.

ARTICLE IX

Performance Units

9.01    Award 
The Administrator will designate each individual to whom an award of Performance Units is to be made.   The Agreement for the award of Performance Units will specify:

(a)    the number of Performance Units covered by the award, subject to Section 9.02;

(b)    when the Performance Units vest, subject to Section 9.03;

(c)    the Performance Objectives to which the Performance Units are subject, as described in Section 9.04; and

(d)    whether the Performance Units are transferable under Section 9.07.

9.02    Maximum Number of Units
No Participant may receive an award of more than 1,000,000 Performance Units in any calendar year.

9.03    Vesting 
The Administrator, on the date of the award, may prescribe that a Participant’s rights in Performance Units will be forfeitable for a period of time.  However, the Administrator may not provide that the Participant’s rights in Performance Units become non-forfeitable earlier than one year after the date of the award.

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9.04    Performance Objectives 
The Administrator, on the date of grant of an award, will prescribe that all or a portion of the Performance Units will be earned and the Participant will be entitled to receive a payment under the award of Performance Units, only upon the satisfaction of Performance Objectives and other criteria prescribed by the Administrator during a performance measurement period of at least one year. With respect to Performance Units as to which satisfaction of the “performance based compensation” exception to the limit on executive compensation imposed by Code Section 162(m) is intended, a payment will be made under the Performance Units only if, and to the extent that, the Committee certifies that the Performance Objectives have been attained.

9.05    Payment 
In the discretion of the Administrator, the amount payable when an award of Performance Units is earned may be settled in cash, by the issuance of shares of Common Stock, or any combination of cash and Common Stock.  A fractional share of Common Stock is not deliverable when an award of Performance Units is earned; a cash payment will be made in lieu of the fractional share. The Administrator will also determine when an award of Performance Units that has been earned will be settled.

9.06    Non-Transferability 
Except as provided in Section 9.07, Performance Units granted under this Plan are non-transferable except by will or by the laws of descent and distribution. No right or interest of a Participant in an award of Performance Units is liable for, or subject to, any lien, obligation, or liability of such Participant.

9.07    Transferable Performance Units 
If provided in an Agreement, an award of Performance Units may be transferred by a Participant to persons or entities permitted under Rule 16b-3 on terms and conditions as may be permitted under Rule 16b-3. The holder of Performance Units transferred under this Section is bound by the same terms and conditions that governed the Performance Units during the period that it was held by the Participant, except this Section 9.07.  The transferee may not transfer the Performance Units except by will or the laws of descent and distribution.

9.08    Status as Employee or Director 
If the terms of an award of Performance Units provide that a payment will be made only if the Participant completes a stated period of employment or Board service, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability or other reasons will not be deemed interruptions of continuous employment or Board service.

9.09    Shareholder Rights 
No Participant, as a result of receiving an award of Performance Units, has any rights as a shareholder of the Company or any Subsidiary on account of the award.

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ARTICLE X

Adjustment Upon Change in Common Stock

10.01    Equitable Adjustments
(a)    Events Resulting in Adjustments
If any of the following events occurs, the Committee will make the adjustments described in Section 10.01(b):

(i)    the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares;

(ii)    the Company engages in any transaction to which Section 424 of the Code applies; or

(iii)    there occurs any other event that, in the judgment of the Committee, necessitates adjustments.

(b)    Adjustments
To the extent the Committee determines adjustment is equitably required, the Committee will adjust the following, subject to Section 10.01(c):

(i)    the maximum number and kind of shares as to which Options, Stock Awards, Performance Shares, and Performance Units may be granted;

(ii)    the terms of outstanding Stock Awards, Options, Performance Shares, Performance Units; and

(iii)    the per individual limitations on the number of shares of Common Stock for which Options, Performance Shares, Performance Units and Stock Awards may be granted.

(c)    Limitation on Adjustments
The Committee in its sole discretion may elect not to adjust Performance Objectives under any award if it determines that the adjustment would cause the award to cease to qualify as performance-based compensation under Code Section 162(m).

(d)    Replacement of Awards
The Committee may provide for the replacement of any outstanding awards under the Plan (or any portion of any award) with alternative consideration (including, without limitation, cash) as the Committee in good faith determines to be equitable under the circumstances.  The Committee may require, in connection with any replacement, the surrender of all awards so replaced.

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(e)    Authority of Committee
Any determination, adjustment, or replacement made by the Committee under this Section 10.01 is final and conclusive.

10.02    Affect of Issuance of Stock
No adjustments described in Section 10.01(b) will be made as a result of the issuance by the Company of stock of any class or securities convertible into stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe for the stock or securities, or upon conversion of stock or obligations of the Company convertible into stock or other securities.

10.03    Substitution of Awards
The Committee may make Stock Awards and may grant Options, Performance Shares, and Performance Units in substitution for performance shares, phantom shares, stock awards, stock options, or similar awards held by an individual who becomes an employee or director of the Company or a Subsidiary in connection with a transaction described in Section 10.01(a).  Subject to the requirements of Section 5.02, the terms of the substituted Stock Awards, Options, Performance Shares or Performance Units will be as the Committee, in its discretion, determines appropriate.

ARTICLE XI

Compliance With Law and Approval of Regulatory Bodies

11.01    Required Compliance
No Option will be exercisable, no shares of Common Stock will be issued, no certificates for shares of Common Stock will be delivered, and no payment will be made under this Plan except in compliance with:

(a)    all applicable Federal and state laws and regulations (including, without limitation, withholding tax requirements);

(b)    any listing agreement to which the Company is a party; and

(c)    the rules of all domestic stock exchanges on which the Company’s shares may be listed.

The Company has the right to rely on an opinion of its counsel as to compliance with the above.

11.02    Legends on Stock Certificates
Any stock certificate issued to evidence shares of Common Stock:

(a)    when a Stock Award is granted;

(b)    when a Performance Share or Performance Unit is settled; or

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(c)    for which an Option is exercised

may bear legends and statements the Administrator deems advisable to assure compliance with Federal and state laws and regulations.

11.03    Prior Regulatory Approval
Until the Company has obtained any consent or approval deemed advisable by the Administrator from regulatory bodies having jurisdiction over the Plan:

(a)    no Option will be exercisable;

(b)    no Stock Award, Performance Shares or Performance Units will be granted;

(c)    no shares of Common Stock will be issued;

(d)    no certificate for shares of Common Stock will be delivered; and

(e)    no payment will be made

under this Plan.

ARTICLE XII

Change in Control Provisions

12.01    Effect on Awards

(a)    Subject to Section 13.09, the following provisions govern the treatment of an outstanding award under this Plan upon a Change in Control if the award is not continued under Section 12.02(a) and is not substituted under Section 12.02(b):  

(i)    Options 
Each outstanding Option is fully exercisable (in whole or in part at the discretion of the holder) on and after a Control Change Date.

(ii)    Stock Awards 
Each outstanding Stock Award is transferable and non-forfeitable on and after a Control Change Date without regard to whether any Performance Objectives or other conditions to which the award is subject have been met.

(iii)    Performance Shares
Each outstanding Performance Share award is earned as of a Control Change Date and will be settled as soon thereafter as practicable.

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(iv)    Performance Units
All outstanding Performance Units are earned as of a Control Change Date and will be settled as soon thereafter as possible.  

(b)    Subject to Section 13.09, the following provisions govern the treatment of an outstanding award under this Plan upon a Change in Control if the award is continued under Section 12.02(a) or substituted under Section 12.02(b):  

(i)    Options 
Each outstanding Option is fully exercisable (in whole or in part at the discretion of the holder) on and after the earlier of:

(A)    The date specified in the Award Agreement; or

(B)    The Participant’s Change in Control Termination.

(ii)    Stock Awards 
Each outstanding Stock Award is transferable and non-forfeitable on and after the earlier of:

(A)    The date specified in the Award Agreement; or

(B)    The Participant’s Change in Control Termination without regard to whether any Performance Objectives or other conditions to which the award is subject have been met.

(iii)    Performance Shares
Each outstanding Performance Share award is earned as of the earlier of:

(A)    The date specified in the Award Agreement; or

(B)    The Participant’s Change in Control Termination, and will be settled as soon thereafter as practicable.

(iv)    Performance Units
Each outstanding Performance Unit Award is earned as of the earlier of:

(A)    The date specified in the Award Agreement; or

(B)    The Participant’s Change in Control Termination, and will be settled as soon thereafter as practicable.

(c)    Definitions
For purposes of this Article XII:

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(i)    Change in Control Termination.  A Participant has a Change in Control Termination if:

(A)    The Participant’s employment is terminated by the Company or a Subsidiary during the Severance Period other than:

(I)     because of the Participant’s death;

(II)    because the Participant became permanently disabled within the meaning of, and began receiving disability benefits under, the Company or Subsidiary sponsored long-term disability plan in effect for, or applicable to, the Participant immediately prior to the Change in Control;

(III)    under any mandatory retirement policy of the Company or a Subsidiary; or

(IV)    for Cause;

or

(B)    The Participant terminates his or her employment during the Severance Period for Good Reason, regardless of whether any other reason, other than Cause, for the Participant’s termination exists or has occurred, including other employment.

(ii)    Severance Period. A Severance Period resulting from a Change in Control is the period beginning on the date the Change in Control occurs and ending on the earliest of:

		
	(A)
	The second anniversary of the Change in Control;

		
	(B)
	The Participant’s 65th birthday, if the Participant is subject to the DTE Energy Mandatory Retirement Policy; or

		
	(C)
	The Participant’s death.

(iii)    Good Reason. A Participant terminates employment for Good Reason if the Participant terminates his or her employment during the Severance Period following the occurrence of any of the following events during the Severance Period:

(A)    Failure to elect or reelect to the office, or otherwise maintain the Participant in a position within the same or higher Executive Grouping Level (as in existence prior to the Change in Control) with the Company and/or a 

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Subsidiary, as applicable, which the Participant held immediately prior to the Change in Control, or the removal of the Participant as Chairman of the Company (or any successor to the Company) if the Participant was Chairman of the Company immediately prior to the Change in Control;

(B)    A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company and its Subsidiaries as compared to other executives in the same Executive Grouping Level within the Company or the Subsidiary which the Participant held immediately prior to the Change in Control;

(C)    A reduction in the Participant’s Base Pay or the opportunity to earn Incentive Pay from the Company, its Subsidiaries or the failure to pay the Participant Base Pay or Incentive Pay earned when due;

(D)    The termination or denial of the Participant’s rights to Employee Benefits or a material reduction in the aggregate scope or value of Employee Benefits (unless, in the case of Welfare Benefits or Pension Benefits the termination, denial or reduction applies to all similarly situated employees of the Company and its Subsidiaries), any of which is not remedied by the Company within 10 calendar days after the Company receives written notice from the Participant of the change, reduction or termination;

(E)    Without the Participant’s prior written consent, the Company:

(I)    Requires the Participant to change the Participant’s principal location of work to any location that is in excess of 300 miles from the location immediately prior to the Change in Control; or

(II)    Requires the Participant to travel away from the Participant’s office in the course of discharging the Participant’s responsibilities or duties at least 40% more (in terms of aggregate days in any calendar year or in any calendar quarter when annualized for purposes of comparison to any prior year) than the average number of travel days per calendar year that was required of the Participant in the three full calendar years immediately prior to the Change in Control; 

(iv)    Cause. The Participant’s employment will be considered terminated for Cause if prior to termination of the Participant’s employment, the Board reasonably determines, based on a preponderance of the evidence reasonably available to the Board as of the date the Board adopts the resolution described below, that the Participant committed or engaged in:

(A)    an intentional act of fraud, embezzlement or theft at a level that constitutes a felony in connection with the Participant’s duties or in the course 

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of the Participant’s employment with the Company or a Subsidiary, whether or not the Participant is convicted or pleads guilty or nolo contender (no contest) to any related criminal charges;

(B)    Intentional wrongful damage to property of the Company or a Subsidiary;

(C)    Intentional wrongful disclosure of secret processes or confidential information of the Company or a Subsidiary;

(D)    Intentional wrongful engagement in any Competitive Activity;

(E)     Willful and continued failure by the Participant to substantially perform the Participant’s duties with the Company that is not cured within 30 days after the Board delivers to the Participant a written demand for substantial performance specifically identifying the Participant’s failure to perform; or

(F)    Other intentional activity, including but not limited to a breach of the Participant’s fiduciary duties with respect to the Company, a Subsidiary, or any welfare plan or pension plan sponsored by the Company or a Subsidiary;

which, in the reasonable judgment of the Board and based on a preponderance of the evidence available to the Board is significantly detrimental to the reputation, goodwill or business of the Company or significantly disrupts the workplace environment or operation of the Company’s business or administrative activities.

For purposes of this Article XII, no act or failure to act on the part of a Participant will be deemed “intentional” if it was due primarily to an error in the Participant’s judgment or the Participant’s negligence. An act will be deemed “intentional” only if done or omitted to be done by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Company.

For purposes of this Article XII, the Participant has not been terminated for Cause unless and until:

(G)    A meeting of the Board is called and held for the purpose of determining if the Participant is to be terminated for Cause; and

(H)    The Participant is given reasonable notice of the meeting and an opportunity to be heard before the Board, with Participant’s counsel if the Participant so chooses; and

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(I)    At that meeting the Board finds, in the good faith opinion of the Board, that the Participant has committed an act entitling the Board to terminate the Participant’s employment for Cause; and

(J)    The Participant has been provided a copy of the resolution duly adopted at that meeting by the affirmative vote of not less than three-quarters of the Board then in office and specifying in detail the particulars of the Board’s finding.

The Participant and the Participant’s beneficiaries retain the right to contest the validity or propriety of the Board’s determination that the Participant’s employment was terminated for Cause.

(v)    Competitive Activity.  Competitive Activity is a Participant’s direct employment, without the written consent of the Board (or any Committee of the Board to which the Board delegates its authority in writing), in any business or enterprise (including the Participant’s own business or enterprise) if:

(A)    The business or enterprise engages in substantial and direct competition with the Company or any of its Subsidiaries in any state in which the Company or Subsidiary was engaged in business or actively negotiating to enter business as of the Participant’s Change in Control Termination; and

(B)    The business’s or enterprise’s sales of any product or service competitive with any product or service of the Company or any of its Subsidiaries amounted to 10% of the business’s or enterprise’s net sales for its most recently completed fiscal year; and

(C)    the Company’s or Subsidiary’s net sales of the competitive product or service amounted to 10% of the Company’s or Subsidiary’s net sales for its most recently completed fiscal year; and

(D)    The Board determines the Participant’s employment in the business or enterprise is detrimental to the Company or any of its Subsidiaries.

“Competitive Activity” does not include the mere ownership of not more than 10% of the total combined voting power or aggregate value of all classes of stock or other securities in the enterprise and the Participant’s exercise of rights resulting from ownership of the stock.

The Board (or its delegate) has sole discretion and authority to determine if a Participant is engaging in Competitive Activity for purposes of this Article XII.  It is the Participant’s responsibility to provide information sufficient for the Board (or its delegate) to make these determinations.

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(vi)    Incentive Pay.  Incentive Pay is the aggregate annual payments of cash or equity compensation (determined without regard to any deferral election) and annual vesting of equity compensation, in addition to Base Pay, under any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of the Company or a Subsidiary, or any successor, providing economic value on an aggregate basis at least as favorable to the Participant, in terms of the amount of benefits, levels of coverage and performance measures and levels of required performance, as the benefits payable prior to the Change in Control.

(vii)    Base Pay.  Base Pay is the Participant’s annual base salary (prior to any pre-tax deferrals made under any employee benefit plans of the Company) in effect immediately prior to the Change in Control or immediately prior to the Participant’s Change in Control Termination, if higher.

12.02    Conversion of Outstanding Awards

(a)    Continuation of Plan
If the Change in Control is described in Section 2.06(a) or (b) and the Surviving Entity or Acquiring Entity is a corporation with common stock publicly traded on an established U.S. stock exchange, the Board may enter into an agreement with the Surviving Entity or Acquiring Entity for the Surviving Entity or Acquiring Entity to adopt and maintain the Plan and to adopt and maintain all outstanding Award Agreements under the existing terms of the Agreement.  Equitable adjustments will be made to all outstanding Award Agreements to reflect the Fair Market Value of the Common Stock as of the day before the Control Change Date and to substitute Common Stock subject to Agreements with comparable common stock of the Surviving Entity or Acquiring Entity.

(b)    Substitution of Plan
If the Change in Control is described in Section 2.06(a) or (b) and the Surviving Entity or Acquiring Entity is a corporation with common stock publicly traded on an established U.S. stock exchange, the Board may enter into an agreement with the Surviving Entity or Acquiring Entity for the Surviving Entity or Acquiring Entity to adopt a comparable equity compensation plan and grant new Awards under that plan in substitution for outstanding Awards under this Plan.  The fair market value of the common stock of the Surviving Entity or Acquiring Entity subject to the substituted Awards will not be less than the Fair Market Value of the Common Stock subject to outstanding Awards under this Plan as of the day before the Control Change Date.

12.03    Settlement of Awards

(a)    Options

(i)    If outstanding Options under this Plan are not continued under Section 12.02(a) and are not substituted under Section 12.02(b) and the Options become 

25

exercisable under Section 12.01(a)(i), each Participant with an outstanding Option will be paid, for each share of Common Stock for which the Participant holds an outstanding Option, the excess, if any, of the Fair Market Value of the Common Stock as of the day before the Control Change Date over the exercise price of the Option.

(ii)    If outstanding Options under this Plan are continued under Section 12.02(a) or substituted under Section 12.02(b), and the Options become exercisable under Section 12.01(b)(i)(B), the Participant will be paid, for each share of substituted common stock for which the Participant holds an outstanding Option, the excess, if any, of the Fair Market Value of the substituted common stock as of the day before the Participant’s Change in Control Termination over the exercise price of the Option. 

(b)    Stock Awards

(i)    If outstanding Stock Awards under this Plan are not continued under Section 12.02(a) and are not substituted under Section 12.02(b) and the Stock Awards become transferable and non-forfeitable under Section 12.01(a)(ii), each Participant with a Stock Award will be paid, for each share of Common Stock subject to an outstanding Stock Award, the Fair Market Value of the Common Stock as of the day before the Control Change Date.

(ii)    If outstanding Stock Awards under this Plan are continued under Section 12.02(a) or substituted under Section 12.02(b), and the Stock Awards become transferable and non-forfeitable under Section 12.01(b)(ii)(B), the Participant will be paid, for each share of substituted common stock subject to an outstanding Stock Award, the Fair Market Value of the substituted common stock as of the day before the Participant’s Change in Control Termination. 

(c)    Performance Shares

(i)    If outstanding Performance Share Awards under this Plan are not continued under Section 12.02(a) and are not substituted under Section 12.02(b) and the Performance Share Awards become earned under Section 12.01(a)(iii), an award is based only on criteria other than Performance Objectives (such as continued service) is earned in full.  The amount of a Performance Share Award based on Performance Objectives earned is the greater of the amount that would have been payable on attainment of:

(A)    target levels of performance; or

(B)    actual levels of performance,

using performance through the Control Change Date for purposes of determining actual levels of performance.  Performance Shares will be settled in cash based on 

26

the Fair Market Value of the Common Stock as of the day before the Control Change Date.

(ii)    If outstanding Performance Share Awards under this Plan are continued under Section 12.02(a) or substituted under Section 12.02(b) and the Performance Share Awards become earned under Section 12.01(b)(iii)(B), an award is based only on criteria other than Performance Objectives (such as continued service) is earned in full.  The amount of a Performance Share Award based on Performance Objectives earned is the greater of the amount that would have been payable on attainment of:

(A)    target levels of performance; or

(B)    actual levels of performance,

using performance through the date of the Participant’s Change in Control Termination for purposes of determining actual levels of performance.  Performance Shares will be settled in cash based on the Fair Market Value of the substituted common stock as of the day before the Participant’s Change in Control Termination.

(d)    Performance Units

(i)    If outstanding Performance Unit Awards under this Plan are not continued under Section 12.02(a) and are not substituted under Section 12.02(b) and the Performance Unit Awards become earned under Section 12.01(a)(iv), the amount earned with respect to each award of Performance Units is the greater of the amount that would have been payable on attainment of:

(A)    target levels of performance; or

(B)    actual levels of performance,

using performance through the Control Change Date for purposes of determining actual levels of performance.  Performance Units will be settled in cash based on the Fair Market Value of the Common Stock as of the day before the Control Change Date.

(ii)    If outstanding Performance Unit Awards under this Plan are continued under Section 12.02(a) or substituted under Section 12.02(b) and the Performance Unit Awards become earned under Section 12.01(b)(iv)(B), the amount earned with respect to each award of Performance Units is the greater of the amount that would have been payable on attainment of:

(A)    target levels of performance; or

(B)    actual levels of performance,

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using performance through the date of the Participant’s Change in Control Termination for purposes of determining actual levels of performance.  Performance Units will be settled in cash based on the Fair Market Value of the substituted common stock as of the day before the Participant’s Change in Control Termination.

12.04    Qualified Termination Before Qualified Change-in-Control
(a)    Status as of Change in Control
If an Eligible Executive experiences a Qualified Termination, the Eligible Executive will be treated as if a Change in Control occurred the day before the date of the Eligible Executive’s Qualified Termination.

(b)    Eligible Executive
For purposes of this Section 12.04, an “Eligible Executive” is a Participant who has an effective Change in Control Severance Agreement with the Company at the time of the Participant’s Qualified Termination.

(c)    Qualified Termination 
For purposes of this Section 12.04, a Qualified Termination is the Eligible Executive’s involuntary termination that entitles the Eligible Executive to benefits under the Eligible Executive’s Change in Control Severance Agreement, but only if:

(i)    the Executive’s involuntary termination occurs during a Severance Period (as defined in the Eligible Executive’s Change in Control Severance Agreement) resulting from a change in control event under the Change in Control Severance Agreement that precedes and is anticipatory of a second change in control event under the Change in Control Severance Agreement (the “Qualified Severance Period”); and

(ii)    the Executive’s involuntary termination occurs before a Qualified Change-in-Control occurs under this Plan.

(d)    Qualified Change-in-Control
For purposes of this Section 12.04, a Qualified Change-in-Control under this Plan is a Change in Control that:

(i)    occurs after the Eligible Executive’s Qualified Termination; and

(ii)    occurs before the end of the Qualified Severance Period; and

(iii)    is the consummation of the anticipatory event that resulted in the Eligible Executive’s Qualified Severance Period.

(e)    Computation

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The outstanding Options held by the Eligible Executive as of the day before the date of the Eligible Executive’s Qualified Termination, reduced by Options exercised by the Eligible Executive after the Eligible Executive’s Qualified Termination, will be converted under Section 12.02 or settled under Section 12.03, as applicable.

The outstanding Stock Awards held by the Eligible Executive as of the day before the date of the Eligible Executive’s Qualified Termination, reduced by Stock Awards that became transferable and non-forfeitable because of the Eligible Executive’s Qualified Termination, will be converted under Section 12.02 or settled under Section 12.03, as applicable.

The outstanding Performance Shares held by the Eligible Executive as of the day before the date of the Eligible Executive’s Qualified Termination will be settled under Section 12.03.  The settlement amount paid to the Eligible Executive will be reduced by any amount paid to the Eligible Executive after the Eligible Executive’s Qualified Termination with respect to the same Performance Shares.

The outstanding Performance Units held by the Eligible Executive as of the day before the date of the Eligible Executive’s Qualified Termination will be settled under Section 12.03.  The settlement amount paid to the Eligible Executive will be reduced by any amount paid to the Eligible Executive after the Eligible Executive’s Qualified Termination with respect to the same Performance Units.

ARTICLE XIII

General Provisions

13.01    Effect on Employment and Service 
The adoption of this Plan, the operation of this Plan, or any document describing or referring to this Plan (or any part of this Plan) does not: 

(a)    confer on any individual the right to continue in the employ or service of the Company or a Subsidiary; or

(b)    in any way affect any right and power of the Company or a Subsidiary to terminate the employment or service of any individual at any time with or without a reason.

13.02    Unfunded Plan 
The Plan is unfunded.  The Company is not required to segregate any assets that may at any time be represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan is based solely on contractual obligations created under this Plan. No obligation of the Company under this Plan is secured by any pledge of, or other encumbrance on, any property of the Company.

13.03    Rules of Construction 

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Headings are given to the articles and sections of this Plan solely as a convenience. The reference to any statute, regulation, or other provision of law refers to any amendment to or successor of the provision.

13.04    Restrictions on Transfer of Shares Issued or Delivered 
(a)    Company’s Right of First Refusal
An Agreement may provide that the Company has reserved a right of first refusal to purchase the Common Stock acquired on exercise of Options or under a Stock Award or award of Performance Shares or Performance Units at a price equal to the Fair Market Value per share repurchased determined as of the day preceding the day the Company notifies the Participant of its intention to repurchase the shares. If the Company reserves this right, the Participant must comply with the terms of the Agreement and any procedures established by the Administrator prior to any disposition of Common Stock acquired under the Agreement.  The Company will have a maximum of five days following the date on which Participant is required to notify the Company of the Participant’s intent to dispose of the Common Stock to advise the Participant whether the Company will purchase the Common Stock.

(b)    Additional Restrictions
An Agreement may provide that the shares of Common Stock to be issued or delivered on exercise of an Option or in settlement of an award of Performance Shares or Performance Units or the shares of Common Stock subject to a Stock Award that are no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Article VII are subject to additional restrictions on transfer.

13.05    Effect of Acceptance of Award 
By accepting an award under the Plan, a Participant and the Participant’s successor in interest or personal representative is conclusively deemed to have indicated acceptance or ratification of, and consent to, any action taken under the Plan by the Company or the Administrator.

13.06    Governing Law 
The provisions of this Plan will be interpreted and construed in accordance with the laws of the State of Michigan, other than its choice-of-law provisions.

13.07    Coordination with Other Plans 
Participation in the Plan does not affect an employee’s eligibility to participate in any other benefit or incentive plan of the Company or any Subsidiary. Treatment of any income realized as a result of the exercise, vesting, or settlement of awards under the Plan for purposes of any Company-sponsored or Subsidiary-sponsored employee pension benefit plan, insurance or other employee benefit programs will be governed by the terms of the other plans or programs.

13.08    Tax Withholding 
If required by law, the Company will withhold or cause to be withheld Federal, state and/or local income and employment taxes in connection with the exercise, vesting or settlement of an award under the Plan. Unless otherwise provided in the applicable Agreement, each Participant may satisfy any required tax withholding by any of the following means in any combination:

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(a)    a cash payment;

(b)    delivery to the Company of a number of shares of Common Stock previously acquired by the Participant having a Fair Market Value, on the date the tax liability first arises, equal to the tax liability being paid and, if the shares were acquired from the Company, that have been held by the Participant for at least six months; or

(c)    by authorizing the Company to withhold from the shares of Common Stock otherwise issuable to the Participant under the exercise, vesting or settlement of an award either:

(i)    the number of shares of Common Stock having a Fair Market Value, on the date the tax liability first arises, equal to the minimum statutory withholding required for the Participant based on applicable law; or

(ii)    if permitted by the Company, a specified number of shares of Common Stock having a Fair Market Value of not less than the minimum statutory withholding required for the Participant based on applicable law and not more than tax withholding calculated using the maximum statutory tax rates in the applicable jurisdiction.

Any Common Stock delivered to the Company by the Participant or withheld from Common Stock otherwise issuable to the Participant to satisfy any required tax withholding will not be reallocated to other Options, Performance Shares, Performance Units, and Stock Awards to be granted under this Plan and will not otherwise be made available to be issued under this Plan. 

If the amount required is not paid, the Company may refuse to issue or deliver shares or cash under the award.

13.09    Limitation on Benefits 
(a)    Purpose of Benefit Limitation
Benefits, payments, accelerated vesting and other rights under this Plan may constitute Parachute Payments subject to the “golden parachute” rules of Code Section 280G and the excise tax under Code Section 4999. It is the Company’s intention to reduce any Parachute Payments if, and only to the extent that, a reduction will allow the affected Participant to receive a greater Net After Tax Amount than the Participant would receive absent a reduction. This Section 13.09 describes how the Company’s intent will be effected.

(b)    Determination of Parachute Payment Amount
The Accounting Firm will first determine the amount of any Parachute Payments payable to a Participant. The Accounting Firm will also determine the Net After Tax Amount attributable to the Participant’s total Parachute Payments. The Accounting Firm will next determine the amount of the Participant’s Capped Parachute Payments. Finally, the Accounting Firm will determine the Net After Tax Amount attributable to the Participant’s Capped Parachute Payments.

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(c)    Amount Paid to Participant
That Participant will receive the total Parachute Payments unless the Accounting Firm determines that the Capped Parachute Payments will yield a higher Net After Tax Amount.  In that case that Participant will receive the Capped Parachute Payments. If a Participant receives Capped Parachute Payments, the Participant’s benefits, payments, accelerated vesting or other rights under this Plan will be adjusted, if at all, as determined in the sole discretion of the Committee. The Accounting Firm will notify the Participant and the Company if it determines that the Parachute Payments must be reduced to the Capped Parachute Payments and will send the Participant and the Company a copy of its detailed calculations supporting that determination.

(d)    Adjustment of Amount Paid
As a result of any uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determination under this Section 13.09, it is possible that amounts will have been paid, vested, earned or distributed that should not have been paid, vested, earned or distributed under this Section 13.09 (“Overpayments”), or that additional amounts should be paid, vested, earned, or distributed under this Section 13.09 (“Underpayments”).

(i)    Overpayment
If the Accounting Firm determines, based on either controlling precedent, substantial authority, or the assertion of a deficiency by the Internal Revenue Service against a Participant or the Company which the Accounting Firm believes has a high probability of success, that an Overpayment has been made, then the Participant is required to:

(A)    pay the Company upon demand the sum of the Overpayment plus interest on the Overpayment at the prime rate provided in Code Section 7872(f)(2) from the date of the Participant’s receipt of the Overpayment until the date of repayment; or
(B)    agree to other arrangements that the Committee determines to be equitable in the circumstances.

The Participant will be required to make the repayment or agree to other arrangements, if, and only to the extent, that the repayment or other arrangement would either reduce the amount on which the Participant is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999.

(ii)    Underpayment
If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Participant and the Company of that determination.  The Company will:

32

(A)    pay the Participant the sum of the Underpayment plus interest on the Underpayment at the prime rate provided in Code Section 7872(f)(2) from the date the Underpayment should have been paid until actual payment; or
(B)    take other action the Committee determines to be equitable in the circumstances.

(e)    Determinations by Accounting Firm
All determinations made by the Accounting Firm under this Section 13.09 are binding on the Participant and the Company.  The determinations must be made as soon as practicable but no later than 30 days after a Control Change Date.

(f)    Exclusion from Benefit Limitation
This Section 13.09 does not apply to any Participant entitled to an indemnification of excise taxes incurred under Code Section 4999, by a Change in Control Severance Agreement or other arrangement or agreement with the Company, with respect to Parachute Payments otherwise subject to limitation under this Section 13.09.

13.10    Clawback
(a)    Definitions
For purposes of this Section 13.10:

(i)    Dodd-Frank Act means the Dodd-Frank Wall Street Reform and Consumer Protection Act; and

(ii)    incentive compensation means Options, Stock Awards subject to Performance Objectives under Section 7.04, Performance Shares, and Performance Units (but specifically excludes Stock Awards subject only to vesting under Section 7.03) paid or awarded to a Participant under the Plan.

(b)    Conditions Required for Clawback of Incentive Compensation
Clawback of incentive compensation from a Participant may occur when all three of the following conditions exist:

(i)    The incentive compensation payment or award (or vesting of the award) was based on the achievement of financial results reported on Form 10-Q, Form 10-K, or other report filed with the Securities and Exchange Commission and the financial results were the subject of a subsequent restatement because of the Company’s material noncompliance with any financial reporting requirement under federal securities laws (other than a restatement as a result of a change in applicable accounting principles); and

(ii)    A lower incentive compensation payment or award would have been made to the Participant (or lesser or no vesting of the award would have occurred) based on the restated financial results; and

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(iii)    The incentive compensation payment or award or the vesting of the award occurred during the three-year period preceding the date on which the Company was required to prepare the accounting restatement (with that date determined under applicable regulations under the Dodd-Frank Act).

(c)    Clawback of Incentive Compensation
If the Committee determines that the requirements of Section 13.10(b) have been satisfied, the Company may seek to recover from a Participant, in accordance with applicable law and regulations and employing the recovery mechanisms in any Clawback Policy adopted by the Company, the portion of any incentive compensation paid to or received by the Participant for or during the three-year period described in Section 13.10(b)(iii) that is greater than the amount that would have been paid to or received by the Participant if the incentive compensation had been determined based on the restated financial results.

(d)    Adjustment of Outstanding Awards
If the Committee determines that the requirements of Section 13.10(b) have been satisfied, the Committee may cancel, in whole or in part, any outstanding incentive compensation award if the Administrator took the Company’s financial results into account in granting the award and those financial results were reduced in the subsequent restatement.

(e)    Acceptance by Participant
By accepting an award of incentive compensation under the Plan, a Participant (and the Participant’s successor in interest or personal representative) is conclusively deemed to have accepted the requirements of this Section 13.10 and agreed to comply with any clawback of incentive compensation required by this Section 13.10.

ARTICLE XIV

Amendment

14.01    Authority to Amend
The Board may amend this Plan from time to time or terminate it at any time.  However, no material amendment to the Plan may become effective until shareholder approval is obtained.  A material amendment to the Plan is any amendment that would:

(a)    materially increase the aggregate number of shares of Common Stock that may be issued or delivered under the Plan or that may be issued to a Participant; 

(b)    permit the exercise of an Option at an Option price less than the Fair Market Value on the date of grant of the Option or otherwise reduce the price at which an Option is exercisable, either by amendment of an Agreement or substitution with a new Award with a reduced price; 

(c)    change the types of awards that may be granted under the Plan; 

34

(d)    expand the classes of persons eligible to receive awards or otherwise participate in the Plan; or

(e)    require approval of the shareholders of the Company to comply with applicable law or the rules of the New York Stock Exchange.

14.02    Participants’ Rights
No amendment or termination may, without a Participant’s consent, adversely affect the rights of the Participant under any Option, any Stock Award, or any award of Performance Shares or Performance Units outstanding at the time the amendment is made or the termination occurs.

ARTICLE XV

Duration of Plan

No Option, Stock Award, Performance Shares, or Performance Units may be granted under this Plan more than 10 years after the earlier of the adoption of the Plan by the Board in 2014 or the Plan’s approval by the Company’s shareholders in 2014. Options, Stock Awards, Performance Shares, and Performance Units granted before that date remain valid in accordance with the terms of their Agreements.

ARTICLE XVI

Effective Date of Plan

Options, Performance Shares and Performance Units may be granted under this Plan upon its adoption by the Board in 2014.  However, Options granted under this Plan may not be exercised, Performance Shares and Performance Units granted under this Plan cannot be settled in Common Stock or Cash, and Stock Awards cannot be issued under this Plan until the Plan is approved by the Company’s shareholders at the Company’s 2014 annual meeting of shareholders.

35Exhibit 4.2

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
Definitions
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Registration Rights
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Demand Registration
    	
 
    	
5
    
	
 
    	
2.2
    	
Company Registration
    	
 
    	
6
    
	
 
    	
2.3
    	
Underwriting   Requirements
    	
 
    	
7
    
	
 
    	
2.4
    	
Obligations of the   Company
    	
 
    	
8
    
	
 
    	
2.5
    	
Furnish Information
    	
 
    	
9
    
	
 
    	
2.6
    	
Expenses of   Registration
    	
 
    	
10
    
	
 
    	
2.7
    	
Delay of Registration
    	
 
    	
10
    
	
 
    	
2.8
    	
Indemnification
    	
 
    	
10
    
	
 
    	
2.9
    	
Reports Under Exchange   Act
    	
 
    	
12
    
	
 
    	
2.10
    	
Limitations on   Subsequent Registration Rights
    	
 
    	
13
    
	
 
    	
2.11
    	
“Market Stand-off”   Agreement
    	
 
    	
13
    
	
 
    	
2.12
    	
Restrictions on   Transfer
    	
 
    	
14
    
	
 
    	
2.13
    	
Termination of   Registration Rights
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
Covenants of the   Company
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
Information and   Observer Rights
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Observer Rights
    	
 
    	
19
    
	
 
    	
4.2
    	
Termination of   Information and Observer Rights
    	
 
    	
20
    
	
 
    	
4.3
    	
Confidentiality
    	
 
    	
20
    
	
 
    	
4.4
    	
Announcements
    	
 
    	
21
    
	
 
    	
4.5
    	
Rights to Future Stock   Issuances
    	
 
    	
21
    
	
 
    	
4.6
    	
Termination
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
Additional Covenants
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Employee Stock
    	
 
    	
23
    
	
 
    	
5.2
    	
Matters Requiring   Investor Director Approval
    	
 
    	
23
    
	
 
    	
5.3
    	
Board Matters
    	
 
    	
24
    
	
 
    	
5.4
    	
Successor   Indemnification
    	
 
    	
25
    
	
 
    	
5.5
    	
Indemnification and   Insurance Matters
    	
 
    	
25
    
	
 
    	
5.6
    	
FCPA
    	
 
    	
26
    
	
 
    	
5.7
    	
Termination of Covenants
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
Miscellaneous
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Successor and Assigns
    	
 
    	
27
    
	
 
    	
6.2
    	
Governing Law
    	
 
    	
27
    
	
 
    	
6.3
    	
Ceasing to Hold Shares
    	
 
    	
27
    
	
 
    	
6.4
    	
Counterparts
    	
 
    	
27
    
	
 
    	
6.5
    	
Titles and Subtitles
    	
 
    	
28
    
	
 
    	
6.6
    	
Notices
    	
 
    	
28
    
	
 
    	
6.7
    	
Amendments and Waivers
    	
 
    	
28
    
	
 
    	
6.8
    	
Severability
    	
 
    	
28
    

 

i

 

TABLE OF CONTENTS
  (continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.9
    	
Additional Parties
    	
 
    	
29
    
	
 
    	
6.10
    	
Entire Agreement
    	
 
    	
29
    
	
 
    	
6.11
    	
Dispute Resolution
    	
 
    	
29
    
	
 
    	
6.12
    	
Acknowledgment
    	
 
    	
30
    
	
 
    	
6.13
    	
Delays or Omissions
    	
 
    	
30
    

 

ii

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”), is made as of the 21 day of July, 2017, by and among Replimune Group, Inc., a Delaware corporation (the “Company”), each of the investors listed on Schedule A (the “Investors”) and each of the stockholders listed on Schedule B hereto, each of whom is referred to herein as a “Key Holder”.

 

WHEREAS, the Company and certain of the Investors (the “Prior Investors”) previously entered into the Investors’ Rights Agreement, dated July 10, 2017 (the “Prior Agreement”), in connection with the acquisition of shares of Series Seed Preferred Stock of the Company, par value $0.001 per share (the “Series Seed Preferred Stock”) and/or shares of Series A Preferred Stock of the Company, par value $0.001 per share (the “Series A Preferred Stock”);

 

WHEREAS, the Prior Investors and the Company desire to induce certain of the Investors to purchase shares of Series B Preferred Stock of the Company, par value $0.001 per share (“Series B Preferred Stock” and together with the Series Seed Preferred Stock and Series A Preferred Stock, the “Preferred Stock”), pursuant to the Series B Preferred Stock Purchase Agreement dated as of the date hereof by and among the Company and certain of the Investors (the “Purchase Agreement”) by amending and restating the Prior Agreement to provide the Investors with the rights and privileges as set forth herein.

 

NOW, THEREFORE, the Company and the Investors (including the Prior Investors) each hereby agree to amend and restate the Prior Agreement in its entirety as set forth herein, and the parties hereto further) agree as follows:

 

NOW, THEREFORE, the Company and the Investors agree as follows:

 

1.                                      Definitions. For purposes of this Agreement:

 

1.1                               “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.

 

1.2                               “Business Day” means a day on which clearing banks are ordinarily open for the transaction of normal banking business in the city of New York (other than a Saturday or Sunday).

 

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

 

1.4                               “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other

 

 

federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an 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 indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

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

 

1.6                               “Excluded Registration” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered; or (v) the Company’s IPO.

 

1.7                               “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

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

 

1.9                               “Fully Diluted Capital Stock” means the capital stock of the Company from time to time (assuming that all options and warrants over shares in the Company and all rights of conversion into shares in the Company are exercised in full, irrespective of whether or not such options, warrants or rights of conversion, as the case may be, are, on their terms, exercisable or convertible at such time, in respect of the maximum number of shares into which they are capable of being exercised or converted).

 

1.10                        “Fund” means a limited partnership, limited liability partnership, partnership, company, syndicate, body corporate, trust or other undertaking or entity formed for the purpose of investment, whose principal business is to make investments, or whose business is managed by a Fund Manager.

 

1.11                        “Fund Manager” means a person whose principal business is to make, manage or advise upon investments in securities.

 

1.12                        “Group” means the Company and its subsidiary or subsidiaries (if any) from time to time and “Group Company” shall be construed accordingly;

 

2

 

1.13                        “Holder” means any holder of Registrable Securities who is a party to this Agreement.

 

1.14                        “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, civil partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships, of a natural person referred to herein.

 

1.15                        “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

1.16                        “Investor Director Consent” means the prior written consent of a majority of the Investor Directors (as such term is defined in the Company’s Second Amended and Restated Certificate of Incorporation (the “Restated Certificate”)) either given in writing or orally at a Board meeting (provided that the same is properly recorded in the minutes of such meeting).

 

1.17                        “IPO” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.

 

1.18                        “Key Employee” means any employee, contractor or advisor who is employed or engaged by a Group Company:

 

(a)                            in the case of an employee as a director or at management grade; or

 

(b)                            in a senior capacity with a basic salary of $75,000 per annum or more (or such higher amount as the majority of Investor Directors may approve in writing from time to time).

 

1.19                        “Key Holder Registrable Securities” means, for only when such Key Holder no longer provides services to the Company as an employee, consultant, officer or director, (i) the 500,000 shares of Common Stock held by the Key Holders, and (ii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of such shares.

 

1.20                        “New Securities” means any shares or other securities convertible into, or carrying the right to subscribe for, shares issued or proposed to be issued by the Company after the Date of Adoption.

 

1.21                        “Preferred Stock” means, collectively, shares of the Company’s Series B Preferred Stock, Series A Preferred Stock and Series Seed Preferred Stock.

 

1.22                        “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock, (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, acquired by the Investors after the date hereof; (iii) Key Holder Registrable Securities;

 

3

 

and (iv) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to this Agreement, and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Section 2.13 of this Agreement.

 

1.23                        “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.

 

1.24                        “Restricted Securities” means the securities of the Company required to be notated with the legend set forth in Section 2.12(b) hereof.

 

1.25                        “SEC” means the Securities and Exchange Commission.

 

1.26                        “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.27                        “SEC Rule 145” means Rule 145 promulgated by the SEC under the

 

Securities Act.

 

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

 

1.29                        “Selling Expenses” means 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, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.6.

 

1.30                        “Series A Preferred Stock” means shares of the Company’s Series A Preferred Stock, par value $0.001 per share.

 

1.31                        “Series B Preferred Stock” means shares of the Company’s Series B Preferred Stock, par value $0.001 per share.

 

1.32                        “Series Seed Preferred Stock” means shares of the Company’s Series A Preferred Stock, par value $0.001 per share.

 

1.33                        “Social Obligations” means:

 

(a)                                 any common or statutory law, regulation, directive, code of practice or other law in any jurisdiction relating to the relationship between the Company and its employees, any potential employee and any trade unions and/or the health and safety of its employees; and

 

4

 

(b)                                 any agreements or arrangements between the Company and its employees and/or any trade union or other organization which represents some or all of its employees.

 

1.34                        “Warrants” means warrants to subscribe for shares of Series Seed Preferred Stock issued by the Company from time to time;

 

2.                                      Registration Rights. The Company covenants and agrees as follows:

 

2.1                               Demand Registration.

 

(a)                                 Form S-1 Demand. If at any time after the earlier of (i) three (3) years after the date of this Agreement or (ii) one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a request from Investors holding at least 30% of the Registrable Securities then outstanding and held by the Investors that the Company file a Form S-1 registration statement with respect to the outstanding Registrable Securities of such Holders having an anticipated offering price, net of Selling Expenses, of at least $30 million, then the Company shall (x) within ten (10) days after the date receipt by the Company of such notice, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (y) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3.

 

(b)                                 Form S-3 Demand. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Investors holding at least thirty percent (30%) of the Registrable Securities then outstanding and held by the Investors that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $3 million, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within forty-five (45) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and, in each case, subject to the limitations of Sections 2.1(c) and 2.3.

 

(c)                                  Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to be filed and it is therefore necessary to defer the filing of such registration statement, then the Company shall have the right to defer taking action with respect

 

5

 

to such filing for a period of not more than one hundred twenty (120) days after the request of the Initiating Holders is given; provided however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided  further that the Company shall not register any securities for its own account or that of any other stockholder during such one hundred twenty (120) day period other than pursuant to a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

 

(d)                                 The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a) (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two registrations pursuant to Section 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b) (i) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has effected two registrations pursuant to Section 2.1(b) within the twelve (12) month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Section 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Section 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 2.1(d).

 

2.2                               Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Investors) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.

 

6

 

2.3                               Underwriting Requirements.

 

(a)                                 If, pursuant to Section 2.1, 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 Section 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Initiating Holders, subject only to the reasonable approval of the Company. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Section 2.3, if the underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.

 

(b)                                 In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion to the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, or (ii) the

 

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number of Registrable Securities included in the offering be reduced below thirty percent (30%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering or (iii) notwithstanding (ii) above, any Registrable Securities which are not Key Holder Registrable Securities be excluded from such underwriting unless all Key Holder Registrable Securities are first excluded from such offering. For purposes of the provision in this Section 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

 

(c)                                  For purposes of Section 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Section 2.3(b), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.

 

2.4                               Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)                                 prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to sixty (60) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;

 

(b)                                 prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

 

(c)                                  furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other

 

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documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

 

(d)                                 use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(e)                                  in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

(f)                                   use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

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

 

(h)                                 promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(i)                                     notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

 

(j)                                    after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

2.5                               Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.

 

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2.6                               Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed $50,000, of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b), as the case may be; provided  further that if, at the time of such withdrawal, the Holders shall 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 after learning of such information then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.7                               Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.8                               Indemnification. If any Registrable Securities are included in a registration statement under this Section 2:

 

(a)                                 To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

 

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(b)                                 To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided  further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Sections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

(c)                                  Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, 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 action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

 

(d)                                 To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be

 

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required on the part of any party hereto for which indemnification is provided under this Section 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. 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 allegedly untrue statement of a material fact, or the omission or alleged omission of 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; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided  further that in no event shall a Holder’s liability pursuant to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

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

 

(f)                                   Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement.

 

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

 

(a)                                 make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;

 

(b)                                 use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and

 

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(c)                                  furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company; and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

 

2.10                        Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of at least 75% of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would provide to such holder the right to include securities in any registration on other than with respect to Registrable Securities on a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of Registrable Securities that they wish to so include.

 

2.11                        “Market Stand-off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the IPO, and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days, or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports, and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately before the effective date of the registration statement for the IPO or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 2.11 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, shares purchased in the IPO or open market transactions, the transfer of any shares to any trust for the direct or indirect benefit of the Holder or the immediate family of the Holder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided  further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders only if all officers, directors and stockholders individually owning more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock) are subject to the same restrictions. The

 

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underwriters in connection with such registration are intended third-party beneficiaries of this Section 2.11 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 2.11 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements.

 

2.12                        Restrictions on Transfer.

 

(a)                                 The Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.

 

(b)                                 Each certificate, instrument, or book entry representing (i) the Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Section 2.12(c)) be notated with a legend substantially in the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

 

THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

(c)                                  The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Section 2.12.

 

(d)                                 The holder of such Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or

 

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transfer. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144; or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided that each transferee agrees in writing to be subject to the terms of this Section 2.12. Each certificate, instrument, or book entry representing the Restricted Securities transferred as above provided shall be notated with, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Section 2.12(b),except that such certificate instrument, or book entry shall not be notated with such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act.

 

(e)                                  The registration rights contained in this Section 2 may be transferred to any transferee who acquires at least five (5%) percent of an Investor’s Registrable Securities, provided that the transfer has been made in compliance with this Agreement. For the avoidance of doubt, no transfer of Registrable Securities by an Investor to an Affiliate of such Investor will be subject to the restrictions in this Section 2.12(e).

 

2.13                        Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Sections 2.1 or 2.2 shall terminate upon the earliest to occur of:

 

(a)                                 the closing of a Liquidity Event, as such term is defined in the Restated Certificate;

 

(b)                                 such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation during a three-month period without registration; and

 

(c)                                  the fifth anniversary of the IPO.

 

3.                                      Covenants of the Company. The Company covenants as follows:

 

(a)                                 The Company shall take out and maintain insurance satisfactory to the Investors and shall on request supply the Investors with a schedule of such insurance.

 

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(b)                                 The Company shall take all such reasonable action as may be required of it by the Investors to protect its intellectual property rights and/or other property and assets.

 

(c)                                  All new business opportunities relevant to the Company shall only be taken up through the Company or a wholly owned subsidiary.

 

(d)                                 New employees engaged by the Company shall not bring with them and employ Intellectual Property (as defined in the Restated Certificate) belonging to their ex-employers and other third parties.

 

(e)                             All present and future employees engaged by the Company shall enter into agreements containing non-solicitation provisions with a restrictive period of 12 months, together with non-disclosure and developments provisions, in each case in a form reasonably acceptable to an Investor Majority (as defined in the Restated Certificate).

 

(f)                                   The Company shall comply with the terms of this Agreement, the Right of First Refusal and Co-Sale Agreement dated on or about the date hereof among the Company, the Investors and the Key Holders (the “ROFR Agreement”), the Voting Agreement dated on or about the date hereof among the Company, the Investors and the Key Holders (the “Voting Agreement”) and the Restated Certificate (together, the “Transaction Documents”);

 

(g)                                  The Company shall comply with all applicable laws and regulations and maintain all required licenses and consents and shall immediately notify the Investors if the Company loses any such license or consent.

 

(h)                                 The Company shall enter into such tax elections as required by applicable law in respect of any securities acquired by its stockholders.

 

(i)                                     The Company shall comply with its Social Obligations.

 

(j)                                    The Company shall comply with Forbion Policy for Responsible Investments (Environment, Social and Governance (ESG)) policy.

 

(k)                                 The Company shall inform the Board (including the Investor Directors) of any investment proposals, merger or sale opportunities from any person as soon as practicable and in any event within two (2) Business Days after receiving or becoming aware of the same.

 

4.                                      Information and Observer Rights.

 

(a)                                 Delivery of Financial Statements. The Company shall deliver to each Investor:

 

(i)                                     as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company (i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and

 

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certified by independent public accountants of nationally recognized standing selected by the Company;

 

(ii)                                  as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, a comparison between (x) the actual amounts in 4(a)(i)-(ii) above, as of and for such fiscal year and (y) the comparable amounts for the prior year and as included in the Budget (as defined below), with an explanation of any material differences between such amounts and a schedule as to the sources and applications of funds for such year,

 

(iii)                               as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of stockholders’ equity as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments; and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(iv)                              as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Major Investors to calculate their respective percentage equity ownership in the Company, and certified by the chief financial officer or chief executive officer of the Company as being true, complete, and correct;

 

(v)                                 as soon as practicable, but in any event within thirty (30) days of the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited balance sheet and statement of stockholders’ equity as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(vi)                              as soon as practicable, but in any event thirty (30) days before the end of each fiscal year, a budget and business plan for the next fiscal year (collectively, the “Budget”), approved by the Board of Directors and prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any other budgets or revised budgets prepared by the Company;

 

(vii)                           such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as any Investor may from time to time reasonably request; provided, however, that the Company shall not be obligated under this Subsection 4(a) to provide information (i) that the Company reasonably determines in good faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality

 

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agreement, in a form acceptable to the Company); or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

Notwithstanding anything else in this Subsection 4(a) to the contrary, the Company may cease providing the information set forth in this Subsection 4(a) during the period starting with the date sixty (60) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Subsection 4(a) shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.

 

(b)                                 Inspection. The Company shall permit each Investor (provided that the Board of Directors has not reasonably determined that such Investor is a competitor of the Company), at such Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Investor; provided, however, that the Company shall not be obligated pursuant to this Subsection 4(b) to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

(c)                                  The Company shall promptly provide the Investors with full details of any offer or proposed offer from any person wishing to enter into any sale or purchase any of the Company’s assets or equity which may from time to time be brought to its or their attention.

 

(d)                                 If the Company does not comply with its obligations in Sections 4(a) to 4(c), the Investors, the Investor Directors (as such term is defined in the Restated Certificate) and a firm of accountants nominated by the Investors at the Company’s expense will be entitled to attend the Company’s premises to examine the books and accounts of the Company and to discuss the Company’s affairs, finances and accounts with its directors, officers and senior employees. The Company undertakes to the Investors to co-operate with any accountants or representatives appointed by the Investors pursuant to this Section 4(d).

 

(e)                                  The Investor Directors shall be at liberty from time to time to make full disclosure to their respective appointing Investor(s) of any information relating to the Company.

 

(f)                                   Each Investor shall be at liberty from time to time to make such disclosure:

 

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(i)                                     to its employees, directors, officers, limited partners, trustees, stockholders, unitholders and other participants and/or to any member of the same Group as an Investor for the purposes of, but not limited to, reviewing existing investments and investment proposals; and

 

(ii)                                  to any lender or bona fide prospective lender to the Company and/or to any stockholder of the Company;

 

(iii)                               about the Company as shall be required or requested by law and any regulatory authority to which any Investor is subject;

 

(iv)                              to the Company’s auditors and/or any other professional advisers of the Company; and

 

(v)                                 to the Investor’s professional advisers and to the professional advisers of any person to whom the Investor is entitled to disclose information pursuant to this clause 4.7, in relation to the business affairs and financial position of the Company as it may in its reasonable discretion think fit.

 

(g)                                  Notwithstanding anything in this Section 4, the Company shall not be obligated to provide or to provide access to information under this Section 4:

 

(i)                                     which the Company reasonably determines in good faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement in a form reasonably acceptable to the Company); or

 

(ii)                                  the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

(h)                                 Part of the monies invested by the Investors is coming from the EIF-ERP, the LfA-EIF facilities and from KFW (through the ERP - Venture Capital Fondsfinanzierung facility) and ERP-Sondervermögen (ERP-SV) facilities. In connection therewith, the Company acknowledges and agrees that EIF, KFW, the German Ministry of Economic Affairs (Bundesministerium für Wirtschaft und Energie), the German Federal Court of Auditors, the LfA, the KFW and any third party authorized by the LfA or KFW will have the right to have unlimited access to the premises of the Company and to examine all relevant books and documents of the Company and the management.

 

4.1                               Observer Rights. Bain (as defined in Schedule A hereto) shall be entitled to appoint one person to act as an observer (an “Observer”) to the Board, to the board of directors of any subsidiary and any committee of the Board or board of directors of any subsidiary established from time to time, subject to the execution by the Observer of a confidentiality agreement reasonably satisfactory to the Board and which imposes confidentiality obligations which are substantially the same as those set forth herein.

 

(a)                                 The Observer shall be entitled to attend and speak at all meetings of the Board and receive copies of all Board papers as if he or she were a director but shall not be entitled to vote on any resolutions proposed at a Board meeting (provided that the Board may

 

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exclude an Observer from any meeting or part of a meeting to the extent that the presence of the Observer would, based on the advice of the Company’s outside counsel, adversely affect the attorney-client privilege between the Company and its counsel.

 

(b)                                 The Observer appointed by Bain shall initially be Ricky Sun.

 

4.2                               Termination of Information and Observer Rights. The covenants set forth in Sections 4(a)-(h) and Section 4.1 shall terminate and be of no further force or effect (i) with respect to any Investor, when such Investor no longer holds at least 50% of the shares of Registrable Securities originally purchased by such Investor, (ii) immediately before the consummation of the IPO, (iii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iv) upon a Liquidity Event, as such term is defined in the Restated Certificate, whichever event occurs first.

 

4.3                               Confidentiality. Subject to this Section 4.3, each of the parties agrees to keep secret and confidential and not to use, disclose or divulge to any third party or to enable or cause any person to become aware of (except for the purposes of the Company’s business or, with respect to an Investor, for the purposes of monitoring its investment in the Company in accordance with this Section 4.3) any confidential information in any medium or format relating to the Company including but not limited to Intellectual Property (as defined in the Restated Certificate) (whether owned or licensed by the Company), lists of customers and suppliers, reports, notes, memoranda and all other documentary records pertaining to the Company or its business affairs, finances, suppliers, customers, officers, employees or contractors or contractual or other arrangements but excluding any information which is in the public domain (otherwise than through the wrongful disclosure of any Party) or which they are required to disclose by law or by the rules of any regulatory body or securities exchange to which the Company is subject.

 

(a)                                 Notwithstanding this Section 4.3, the Company acknowledges that the Investors are in the business of venture capital investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company. Nothing in this Agreement shall preclude or in any way restrict the Investors from:

 

(i)                                     investing or participating in any particular enterprise whether or not such enterprise has products or services which compete with those of the Company; or

 

(ii)                                  disclosing confidential information:

 

(1)                                 to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company;

 

(2)                                 to any prospective purchaser of any shares of stock from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 4.3;

 

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(3)           to any existing or prospective affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such person that such information is confidential and directs such person to maintain the confidentiality of such information; or

 

(4)           as may otherwise be (a) required or requested by law, including under a judicial or governmental order or in connection with a judicial or governmental proceeding, or (b) required or requested under any regulation or any regulatory or supervisory authority with authority over such Investor, provided that, to the extent permitted to do so under applicable law, rule, regulation or order, the Investor promptly notifies the Company of such disclosure (other than in the case of where such disclosure is made in connection with an examination by any regulatory or supervisory authority) and takes reasonable steps to minimize the extent of any such required disclosure.

 

(b)           The Investor Directors shall be at liberty from time to time to make full disclosure to their respective appointing Investor of any information relating to the Company.

 

4.4          Announcements.

 

(a)           Except in accordance with Section 4.3 or (a), the parties shall not make any public announcement or issue a press release or respond to any enquiry from the press or other media concerning or relating to this Agreement or its subject matter (including but not limited to the Investors’ investment in the Company) or any ancillary matter without the prior written consent of the Investor Directors (as defined in the Restated Certificate.)

 

(b)           Notwithstanding Section 4.4, any party may:

 

(i)            with the prior approval of the Board, make a press release to the effect that it has made an investment in the Company and/or that it is a Stockholder; or

 

(ii)           after consultation with the other parties and with the prior written approval of an Investor Majority (as defined in the Restated Certificate) and the Board as to its form and content or if and to the extent required by:

 

(1)           law; or

 

(2)           any securities exchange on which any party’s securities are listed or traded; or any regulatory or governmental or other authority with relevant powers to which any party is subject or submits, whether or not the requirement has the force of law, make or permit to be made an announcement concerning or relating to this Agreement or its subject matter or any ancillary matter.

 

4.5          Rights to Future Stock Issuances.

 

(a)           Right of First Offer. Subject to Section 4.5(b), if the Company proposes to issue any New Securities, those New Securities shall not be issued to any person unless the Company has in the first instance offered to the Investors the proportion of the total

 

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number of New Securities to be issued as represents the “Preferred Proportion” of such number (being the proportion that the number of shares of Common Stock such Investors would hold on conversion of all of the shares of Preferred Stock at the Conversion Rate bears to the Fully Diluted Capital Stock from time to time) on the same terms and at the same price as those New Securities are being offered to other persons on a pari passu basis and, as between the Investors, on a pro rata basis to the number of shares of Preferred Stock held by them (as nearly as may be without involving fractions) (a “Preferred Stockholder Offer”).

 

(b)           A Preferred Stockholder Offer:

 

(i)            shall be in writing, and shall give details of the number and subscription price of the New Securities which are being offered to each Investor;

 

(ii)           shall remain open for a period of at least 10 Business Days from the date of service of the offer;

 

(iii)          shall stipulate that any Investor that wishes to subscribe for a number of the Preferred Proportion of the New Securities in excess of the proportion to which each is entitled shall in their acceptance state the number of excess New Securities (“Excess Securities”) for which they wish to subscribe;

 

(iv)          and made to an Investor that is a Fund shall be on terms which allow (at the option of the Fund and in the proportions which the Fund may direct) the offer to be accepted by:

 

(1)           such Fund; or

 

(2)           any other Fund of which the Fund Manager of such Fund is the fund manager at the time the Preferred Stockholder Offer is made;

 

(c)           Any amount of the Preferred Proportion of the New Securities not accepted by Investors (or any other applicant pursuant to Section 4.5(b)(iv)) pursuant to the offer made to them in accordance with Section 4.5(a) shall be used for satisfying any requests for Excess Securities made pursuant to Section 4.5(b) and in the event that there are insufficient Excess Securities to satisfy such requests, the Excess Securities shall be allocated to the applicants on a pro rata basis to the number of shares of Preferred Stock held by such applicants immediately prior to the offer made to Investors in accordance with Section 4.5(a) (as nearly as may be without involving fractions or increasing the number allocated to any Investors beyond that applied for by it).

 

(d)           Following the issuance under Section 4.5(c) any Excess Securities remaining, together with the remaining New Securities which were not part of the Preferred Proportion, shall then be offered to any other person as the Board may determine at the same price and on the same terms as the Preferred Proportion was offered to the Investors.

 

(e)           For the purposes of this Agreement, an issue of new “New Securities” shall not include any Exempted Securities (as defined in the Restated Certificate):

 

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(f)            Except with the consent of the Board acting with Investor Director Consent, no Shares shall be issued to any Employee, director, officer, prospective Employee, prospective director or prospective officer unless such person has entered into a tax election required by any applicable jurisdiction.

 

4.6          Termination. The covenants set forth in Section 4 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Liquidity Event (as defined in the Restated Certificate),, whichever event occurs first.

 

5.             Additional Covenants.

 

5.1          Employee Stock. The Company shall maintain an Employee Stock Option Plan in a form acceptable to the Investor Majority whereby options over shares of Common Stock, subject to a maximum option pool of such number of shares of Common Stock as equals 10% of the Fully Diluted Capital Stock as of the date of this Agreement, may be granted to directors, officers, employees and consultants of the Company pursuant to the Employee Stock Option Plan in such number as may be decided by the Board (or a committee thereof.) Unless otherwise approved by the Board, all employees of the Company or its subsidiaries who purchase, receive options to purchase, or receive awards of shares of the Company’s capital stock after the date hereof shall be required to execute restricted stock or option agreements, as applicable, providing for vesting of shares over a four (4) year period, with the first twenty-five percent (25%) of such shares vesting following twelve (12) months of continued employment or service (or the date of grant in the case of a grant to an existing employee), and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months.

 

5.2          Matters Requiring Investor Director Approval. The Company shall not do any of the following, without Investor Director Consent:

 

(a)           Approve and modify the annual budget by more than $100,000;

 

(b)           Incur any capital expenditure (including obligations under hire-purchase and leasing arrangements, and whether in respect of a single item or multiple related items) which exceeds the amount for capital expenditure in the Company’s capital expenditure budget by more than $100,000;

 

(c)           Dispose (otherwise than in accordance with any relevant capital disposals forecast in the Company’s budget) of any asset of a capital nature having a book or market value greater than $100,000;

 

(d)           Modify the strategy of the Company;

 

(e)           Execute finance leases;

 

(f)            Agree to credit lines, leases or borrowings or indebtedness in the nature of borrowings in excess of $100,000;

 

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(g)           Mortgage or charge or permit the creation of or suffer to subsist any mortgage or fixed or floating charge, lien (other than a lien arising by operation of law) or other Encumbrance over the whole or any part of its undertaking, property or assets;

 

(h)           Make any loan or advance or give any credit (other than in the ordinary course of business) to any person or acquire any loan capital of any corporate body (wherever incorporated);

 

(i)            Appoint or dismiss Key Employees;

 

(j)            Engage any employee or consultant on terms that either his contract cannot be terminated by three months’ notice or less or his emoluments and/or commissions or bonuses are or are likely to be at the rate of $200,000 per annum or more or increase the emoluments and/or commissions or bonuses of any employee or consultant to more than $200,000 per annum or vary the terms of employment of any employee earning (or so that after such variation he will, or is likely to earn) more than $200,000 per annum;

 

(k)           Vary or make any binding decisions on the terms of employment and service of any director, officer, Key Employee of the Company, increase or vary the salary or other benefits of any such officer, or appoint or dismiss any such officer;

 

(l)            Appoint legal counsel responsible for monitoring the corporate matters of the Company and subsidiaries;

 

(m)          Conduct any litigation material to the Company, except for the collection of debts arising in the ordinary course of the business carried on by the Company or any application for an interim injunction or other application or action (including interim defense) which is urgently required in the best interests of the Company in circumstances in which it is not reasonably practicable to obtain prior consent; or

 

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

 

5.3          Board Matters. Unless otherwise agreed by the Board of Directors (the “Board”) with Investor Director Consent, the Board shall meet bi-monthly for the year following the execution date of this Agreement and thereafter shall meet as determined by the Board. Board meetings may be held by telephone or video conference between the Directors who are not all in one place so long as they are all able to speak and hear each other, provided that at least two Board meetings per calendar year will take place in person.

 

(a)           Except with Investor Director Consent, no business shall be transacted at any meeting of the Board (or committee of the Board) except for that specified in the agenda referred to in Section 4.3(b).

 

(b)           The Company shall send to the Directors (in electronic form if so required):

 

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(i)            reasonable advance notice of each meeting of the Board (being not fewer than five Business Days) and each committee of the Board, such notice to be accompanied by a written agenda specifying the business to be discussed at such meeting together with such reporting information as the Board requires (the format of such reporting information to be agreed at the first meeting of the Board and amended thereafter with the consent of the Board) and all relevant papers; and

 

(ii)           as soon as practicable after each meeting of the Board (or committee of the Board), a copy of the minutes.

 

(c)           The Investor Directors shall be entitled to call a Board meeting on the giving of one week’s notice to the remaining members of the Board.

 

(d)           The Company will reimburse the non-employee Directors and Observers for the reasonable costs and out of pocket expenses incurred by them in respect of attending meetings of the Company or carrying out authorised business on behalf of the Company.

 

(e)           The Board shall maintain a compensation committee consisting of any two Investor Directors (one of whom shall be the Series B Director) together with the Independent Director (to the extent an Independent Director has been appointed in accordance with the Restated Certificate), which shall be responsible for setting compensation for directors, officers and employees (including determining the allocation of equity pursuant to any Employee Stock Option Plan).

 

(f)            The Investor Directors may sit on any committee formed by the Board.

 

(g)           The composition of the board of directors of any subsidiary shall be determined by the Board acting with Investor Director Consent.

 

5.4          Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, its Certificate of Incorporation, or elsewhere, as the case may be.

 

5.5          Indemnification and Insurance Matters. Every director and officer of the Company shall be entitled to be indemnified by the Company (and the Company shall also indemnify directors of any associated company) out of the Company’s assets against all liabilities incurred by him in the actual or purported execution or discharge of his duties or the exercise or purported exercise of his powers or otherwise in relation to or in connection with his duties, powers or office, provided that no director of the Company or any associated company is indemnified by the Company against:

 

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(a)           any liability incurred by the director or officer to the Company or any associated company;

 

(b)           any liability incurred by the director or officer to pay a fine imposed in criminal proceedings or a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirements of a regulatory nature;

 

(c)           any liability incurred by the director or officer;

 

(i)            in defending any criminal proceedings in which he is convicted; or

 

(ii)           in defending civil proceedings brought by the Company or any associated company in which final judgment is given against him.

 

(d)           The Board may exercise all the powers of the Company to purchase and maintain insurance for any such director or officer against any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company, or any associated company including.

 

(e)           The Company shall (at the cost of the Company) effect and maintain for each Director policies of insurance insuring each Director against risks in relation to his office as each Director may reasonably specify including without limitation, any liability which by virtue of any rule of law may attach to him in respect of any negligence, default of duty or breach of trust of which he may be guilty in relation to the Company.

 

5.6          FCPA. The Company represents that it shall not (and shall not permit any of its subsidiaries or affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to) promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, to any third party, including any Non-U.S. Official (as (as such term is defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”)), in each case, in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to) cease all of its or their respective activities, as well as remediate any actions taken by the Company, its subsidiaries or affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to) maintain systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. Upon request, the Company agrees to provide responsive information and/or certifications concerning its compliance with applicable anti-corruption laws. The Company shall promptly notify each Investor if the Company becomes aware of any enforcement action. The Company shall, and shall cause any direct or indirect subsidiary or entity controlled by it, whether now in existence or formed in the future, to comply with the

 

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FCPA. The Company shall use its best efforts to cause any direct or indirect subsidiary, whether now in existence or formed in the future, to comply in all material respects with all applicable laws.

 

5.7          Termination of Covenants. The covenants set forth in this Section 5 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Liquidity Event, as such term is defined in the Restated Certificate, whichever event occurs first.

 

5.8          PFIC Status. The Company shall provide to the Investors an annual statement setting forth its calculations with respect to its determination of whether it is a “passive foreign investment company,” as defined in 16 U.S.C. § 1297 (a “PFIC”), by the seventy-five (75) days after the end of each fiscal year of the Company. If at any time the Company determines that it is a PFIC, it shall provide the Investors with written notice of such status and a statement summarizing calculations with respect to such determination within thirty (30) days of any such determination.

 

5.9          CFC Status The Company shall provide to the Investors an annual statement setting forth its calculations with respect to its determination of whether it is a “controlled foreign corporation,” as defined in Section 957 of the Internal Revenue Code of 1986, as amended (a “CFC”), by the seventy-five (75) days after the end of each fiscal year of the Company. If at any time the Company determines that it is a CFC, it shall provide the Investors with written notice of such status and a statement summarizing calculations with respect to such determination within thirty (30) days of any such determination.

 

6.             Miscellaneous.

 

6.1          Successor and Assigns.

 

(a)           Any Investor may assign the whole or part of any of its rights in this Agreement to any person who has received a transfer of shares of capital stock of the Company from such Investor in accordance with the terms of Restated Certificate this Agreement and who has executed an adoption agreement.

 

6.2          Governing Law. This Agreement shall be governed by the internal law of the State of Delaware.

 

6.3          Ceasing to Hold Shares. A party shall cease to be a party to this Agreement for the purpose of receiving benefits and enforcing his rights with effect from the date he (and each of his Permitted Transferees or nominees appointed from time to time, if any) ceases to hold or beneficially own any shares in the capital of the Company (but without prejudice to any benefits and rights enjoyed prior to such cessation).

 

6.4          Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000,

 

27

 

e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

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

 

6.6          Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A hereto, or to the principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Section 6.6. If notice is given to the Company, it shall be sent to 18 Commerce Way, Woburn, MA 01801, USA; Attn: President.

 

6.7          Amendments and Waivers. This Agreement may be amended, modified or terminated and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by (a) the Company and (b) the holders of at least 75% of the outstanding shares of Common Stock issued or issuable upon conversion of Preferred Stock (voting as a single class and on an as-converted basis). Notwithstanding the foregoing: (a) Schedule A hereto may be amended by the Company from time to time to add information regarding additional transferees without the consent of the other parties hereto; (b) any provision hereof may be waived by the waiving party on such party’s own behalf, without the consent of any other party; and (c) if the rights of the holders of Series B Preferred Stock are abrogated in any manner with respect to Sections 1.2, 4(a)—(f), and 4.5, then such amendment, modification, termination or waiver shall require the approval of the holders of at least 53% of the Series B Preferred Stock. Any amendment, modification, termination or waiver so effected shall be binding upon the Company, the Investors and all of their respective successors and permitted assigns whether or not such party, assignee or other stockholder entered into or approved such amendment, modification, termination or waiver. The Company shall give prompt written notice of any amendment, modification or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, modification, termination or waiver. No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. Notwithstanding the foregoing, Section 4.1 may not be amended, modified, terminated or waived without the prior written consent of Bain.

 

6.8          Severability. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement,

 

28

 

and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

 

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

 

6.10        Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. Upon the effectiveness of this Agreement, the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Agreement, and shall be of no further force or effect.

 

6.11        Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

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The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled. Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the District of Delaware or any court of the State of Delaware having subject matter jurisdiction.

 

6.12        Acknowledgment. The Company acknowledges that the Investors are in the business of venture capital investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company. Nothing in this Agreement shall preclude or in any way restrict the Investors from investing or participating in any particular enterprise whether or not such enterprise has products or services which compete with those of the Company. No Investor nor any Investor Director (as such term is defined in the Restated Certificate) shall be under any obligation to disclose any information or opportunities to the Company (except to the extent that the information or opportunity was passed to an Investor Director expressly in his capacity as a Director).

 

6.13        Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to 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. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

[Remainder of Page Intentionally Left Blank]

 

30

 

IN WITNESS   WHEREOF, the parties have executed this Agreement as of the date first   written above. REPLIMUNE GROUP, INC. By: /s/ Robert Coffin Name: Robert   Coffin Title: Chief Executive Officer SIGNATURE PAGE TO INVESTOR’S RIGHTS   AGREEMENT 

    

 

KEY HOLDERS:   Signature: /s/ Robert Coffin Name: Robert Coffin Signature: /s/ Philip   Astley-Sparke Name: Philip Astley-Sparke Signature: /s/ Colin Love Name:   Colin Love SIGNATURE PAGE TO INVESTOR’S RIGHTS AGREEMENT 

    

 

INVESTORS: BAIN   CAPITAL LIFE SCIENCES FUND, L.P. By: Bain Capital Life Sciences Partners, LP   its general partner By: Bain Capital Life Sciences Investors, LLC its general   partner By: /s/ Adam Koppel Name: Adam Koppel Title: Managing Director BCIP   LIFE SCIENCES ASSOCIATES, LP By: Boylston Coinvestors, LLC its general   partner By: /s/ Adam Koppel Name: Adam Koppel Title: Authorized Signatory   SIGNATURE PAGE TO INVESTOR’S RIGHTS AGREEMENT 

    

 

INVESTORS:   BIOTECHNOLOGY VALUE FUND, L.P. By: BVF Partners, L.P., its General Partner   By: BVF Inc., its General Partner By: /s/ Mark Lampert Name: Mark Lampert   Title:President BIOTECHNOLOGY VALUE FUND II, L.P. By: BVF Partners, L.P., its   General Partner By: BVF Inc., its General Partner By: /s/ Mark Lampert Name:   Mark Lampert Title:President BIOTECHNOLOGY VALUE TRADING FUND OS, L.P. By:   By: By: BVF Partners OS Ltd., its General Partner BVF Partners, L.P., its   Sole Member BVF Inc., its General Partner By: /s/ Mark Lampert Name: Mark   Lampert Title:President INVESTMENT 10, L.L.C. By: BVF Partners, L.P., as   Attorney-in-Fact By: BVF Inc., its General Partner By: /s/ Mark Lampert Name:   Mark Lampert Title:President MSI BVF SPV, L.L.C. By: BVF Partners, L.P., as   Attorney-in-Fact By: BVF Inc., its General Partner By: /s/ Mark Lampert Name:   Mark Lampert Title:President SIGNATURE PAGE TO INVESTOR’S RIGHTS AGREEMENT 

    

 

INVESTORS:   CORMORANT GLOBAL HEALTHCARE MASTER FUND, L.P. By: Cormorant Global Healthcare   GP, LLC By: /s/ Bihua Chen Name: Bihua Chen Title:Managing Member CORMORANT   PRIVATE HEALTHCARE FUND I, L.P. By: Cormorant Private Healthcare GP, LLC By:   /s/ Bihua Chen Name: Bihua Chen Title:Managing Member CRMA SPV, L.P. By:   Cormorant Asset Management, LLC, its Attorney-in-Fact By: /s/ Bihua Chen   Name: Title: Bihua Chen Managing Member SIGNATURE PAGE TO INVESTOR’S RIGHTS   AGREEMENT 

    

 

INVESTORS: FORESITE   CAPITAL FUND III, L.P. By: Foresite Capital Management III, LLC its general   partner By: /s/ Dennis Ryan Name: Title: Dennis Ryan Chief Financial Officer   SIGNATURE PAGE TO INVESTOR’S RIGHTS AGREEMENT 

    

 

INVESTORS:   Forbion Capital Fund III Cooperatief U.A acting by Forbion III Management   B.V., its director acting by Sander Slootweg and Martien van Osch. Titles:   Director By: /s/ Sander Slootweg By: /s/ Martien van Osch Name: Omega Fund   IV, L.P. acting by Omega Fund IV GP, L.P., its General Partner, acting by   Omega Fund IV GP Manager Ltd., its General Partner acting by its director   Anne-Mari Paster. Title: Director By: /s/ Anne-Mari Paster Name: Atlas   Venture Fund X, L.P. acting by Atlas Venture Associates X, L.P., its General   Partner acting by Atlas Venture Associates X, LLC its General Partner acting   by its CFO Ommer Chohan Title: CFO By: /s/ Ommer Chohan SIGNATURE PAGE TO   INVESTOR’S RIGHTS AGREEMENT 

    

 

INVESTORS:   Name: LEERINK HOLDINGS LLC acting by Tim Gerhold. Title: General Counsel By:   /s/ Tim Gerhold Name: LEERINK SWANN CO-INVESTMENT FUND, LLC acting by Joseph   R. Gentile. Title: Manager By: /s/ Joseph R. Gentile SIGNATURE PAGE TO   INVESTOR’S RIGHTS AGREEMENT 

    

 

INVESTORS:   REDMILE BIOPHARMA INVESTMENTS I, L.P. By: /s/ Jeremy Green Name: Jeremy Green   Title:Managing Member of the Management Company / General Partner REDMILE   CAPITAL OFFSHORE FUND II, LTD By: /s/ Jeremy Green Name: Title: Jeremy Green   Managing Member of the Investment Manager SIGNATURE PAGE TO INVESTOR’S RIGHTS   AGREEMENT 

    

 

INVESTORS:   FORESITE CAPITAL FUND IV, L.P. By: Foresite Capital Management IV, LLC Its:   General Partner By: /s/ Dennis Ryan Name: Title: Dennis Ryan Chief Financial   Officer SIGNATURE PAGE TO INVESTOR’S RIGHTS AGREEMENT 

    

 

 

SCHEDULE A

 

Investors

 

Forbion Capital Fund III Cooperatief U.A

Gooimeer 2 – 35, PO Box 5187, 1410 AD,

Naarden, The Netherlands 

Attention: Sander Slootweg

Tel: +31 35 699 3000 

Fax: +31 35 699 3001 

Email: sander.slootweg@forbion.com; marco.boorsma@forbion.com

 

Omega Fund IV, L.P

c/o Omega Fund Management (US) Inc. 

185 Dartmouth Street, Suite 502

Boston, MA 02116

Attention: Richard J. Lim

Email: rjl@omegafunds.net

 

Atlas Venture Associates X, L.P 

c/o Atlas Venture

400 Technology Square, 10th Floor 

Cambridge, MA, USA 02139

Attention: Ommer Chohan

Tel: +1.857.201.2745

Email: ommer@atlastventure.com

 

Foresite Capital Fund III, L.P. (“Foresite”) 

600 Montgomery Street, Suite 4500

San Francisco, CA 94111

Attention: Brett Zbar

Email: brett@foresitecapital.com

 

Foresite Capital Fund IV, L.P. (“Foresite”) 

600 Montgomery Street, Suite 4500

San Francisco, CA 94111

Attention: Brett Zbar

Email: brett@foresitecapital.com

 

Bain Capital Life Sciences Fund, L.P. (“Bain”) 

c/o Bain Capital Life Sciences, LP

200 Clarendon Street

Boston, Massachusetts 02116

 

BCIP Life Sciences Associates, LP (“Bain”) 

c/o Bain Capital Life Sciences, LP

200 Clarendon Street

 

 

Boston, Massachusetts 02116

 

Redmile Biopharma Investments I, L.P.

(“Redmile”)

Redmile Capital Offshore Fund II, Ltd (“Redmile”)

 

Cormorant Global Healthcare Master Fund, LP (“Cormorant”) 

200 Clarendon Street, 52nd Floor

Boston, MA 02116

 

Cormorant Private Healthcare Fund I, LP (“Cormorant”) 

200 Clarendon Street, 52nd Floor

Boston, MA 02116

 

CRMA SPV, L.P. (“Cormorant”)

PO Box 309, Ugland House

Grand Cayman; KY1-1104 Cayman Islands

 

Biotechnology Value Fund, L.P. (“BVF”) 

Spike Loy

c/o BVF Partners L.P.

One Sansome Street, 30th Floor

San Francisco, CA 94104

(415) 525-8890

 

Biotechnology Value Fund, L.P. (“BVF”) 

Spike Loy

c/o BVF Partners L.P.

One Sansome Street, 30th Floor

San Francisco, CA 94104

(415) 525-8890

 

Biotechnology Value Trading Fund OS, L.P. (“BVF”) 

Spike Loy

c/o BVF Partners L.P.

One Sansome Street, 30th Floor

San Francisco, CA 94104

(415) 525-8890

 

Investment 10, L.L.C. (“BVF”) 

Spike Loy

c/o BVF Partners L.P.

One Sansome Street, 30th Floor 

San Francisco, CA 94104

(415) 525-8890

 

 

MSI BVF SPV, L.L.C (“BVF”) 

Spike Loy

c/o BVF Partners L.P.

One Sansome Street, 30th Floor 

San Francisco, CA 94104

(415) 525-8890

 

Leerink Holdings LLC (“Leerink”)

One Federal Street, 37th Floor

Boston, MA 02110

Attention: General Counsel

Email: Staurt.Nayman@leerink.com; Sarah.Quinlan@leerink.com

 

Leerink Swann Co-Investment Fund, LLC (“Leerink”) 

One Federal Street, 37th Floor

Boston, MA 02110

Attention: General Counsel

Email: Staurt.Nayman@leerink.com; Sarah.Quinlan@leerink.com

 

 

SCHEDULE B
 Key Holders

 

Robert Coffin

37 Beacon Street, #63,

Boston, MA 02108, USA 

Email: rsc5321@gmail.com

 

Philip Astley-Sparke

8 Amanda Lane, Weston,

MA, USA

Email: pastleysparke@gmail.com

 

Colin Love

20 Woodhurst Road, Maidenhead 

Berkshire, SL6 8TF, UK

Email: colinalove99@gmail.com

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