Document:

Rise Gold Corp.: Exhibit 10.10 - Filed by newsfilecorp.com

EXHIBIT 10.10 

GEOLOGICAL CONSULTING SERVICES AGREEMENT

THIS AGREEMENT is made effective as of the
20th day of April, 2017. 

BETWEEN: 

RISE GOLD CORP.,
having an office at 488 – 1090 West 
Georgia Street, Vancouver, BC V6E 3V7

(the "Company") 

AND: 

FRED TEJADA, of 2
– 10340 156 Street, Surrey, BC V3R 4L8 

(the "Consultant")

WHEREAS the Company desires to engage the services of
the Consultant as an independent contractor to perform geological consulting
services for the Company in respect of, among other properties, the Grass Valley
Project and the Consultant agrees to the provision of such services on the terms
and subject to the conditions set out in this Agreement.

THIS AGREEMENT WITNESSES that in consideration of the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows: 

	1. 	
      Engagement

	 	 
		
      The Company hereby engages the Consultant to provide
      geological consulting services (the “Services”) respecting the
      Grass Valley Project and such other mineral properties the Company may,
      from time to time request, upon the terms and conditions set forth herein.
      While the Consultant shall not be obligated to provide services to the
      Company on an exclusive basis and shall be at liberty to provide services
      to others, the Consultant agrees to devote such time and attention to the
      business and affairs of the Company as is required to properly provide the
      Services.

	 	 
	2. 	
      Term

	 	 
		
      This Agreement shall be in force for a term commencing on
      April 20, 2017 and ending December 31, 2020 unless the parties have
      terminated this Agreement as set out paragraph 7.

	 	 
	3. 	
      Compensation

	 	 
		
      The Consultant will invoice the Company periodically for
      any work performed at the request of the Company, which invoice shall be
      payable within thirty (30) days after the date of the invoice. The
      Consultant shall be responsible for and shall pay all
  contractors and consultants retained by the Consultant, unless
      otherwise agreed to in writing by the parties. The parties acknowledge and
      agree that the Consultant currently holds 400,000 options (the “Options”)
      exercisable at a price of $0.15, until March 22, 2021 which Options were
      granted to the Consultant pursuant to an agreement dated March 23, 2016,
      at which time the Consultant served as a director and officer to the
      Company. The Options shall remain subject to, and be governed by the terms
      of the Company’s Stock Option Plan, as adopted and approved from time to
  time by the Company.

- 2 - 

	4. 	
      Status

	 	 
		
      The Consultant is acting as an independent contractor in
      performing services hereunder, and nothing in this Agreement creates or is
      intended to constitute an employment or agency relationship between the
      parties. The Company is under no obligation to request the Services of the
      Consultant and there is no minimum annual work commitment incumbent on
      either of the parties.

	 	 
	5. 	
      Ownership and Work Product

	 	 
		
      The Consultant acknowledges that all items of any and
      every nature or kind created, including but not limited to any and all
      data generated, acquired, or created by the Consultant in performance of
      the Services for the Company, or used by the Consultant pursuant to its
      engagement under this Agreement, or furnished by the Company to the
      Consultant, and all equipment, books, records, reports, files, diskettes,
      manuals, literature, or any other materials (whether in writing or stored
      in computerized, electronic, disk, tape, microfilm or any other form),
      shall remain and be considered the exclusive property of the Company at
      all times and shall be surrendered to the Company in good condition,
      promptly at the request of the Company or its subsidiaries, or in the
      absence of a request, upon the termination of this Agreement.

	 	 
	6. 	
      Confidentiality

	 	 
		
      The Consultant shall not, except as authorized or
      required by the Consultant’s duties, reveal or divulge to any unauthorized
      person or companies, without the prior written consent of the Company, any
      information (the “Confidential Information”) which is non-public,
      confidential or proprietary in nature relating to the Company or the
      Company’s business including without limitation business plans, financial
      data, products, past, current and prospective customers of the Company,
      transactions or other affairs of the Company and analyses, compilations,
      forecasts, documentation, software, know-how, technical information,
      graphic designs, ideas and trade secrets, in oral, written, electronic or
      any other form. The Consultant shall not use nor attempt to use any
      Confidential Information in any manner which may injure or cause loss
      either directly or indirectly to the Company’s business or may be likely
      so to do. This restriction shall continue to apply after the termination
      of this Agreement, but shall cease to apply to information or knowledge,
      which may come into the public domain other than as a result of disclosure
      by the Consultant. Confidential Information includes information saved in
      digital or analog form, and in electronic and magnetic mediums and
      pictures saved on film, on tape or
electronically.

- 3 - 

Nothing herein will prevent the
Consultant from disclosing, using or reproducing any Confidential
Information: 

	 	(a) 	
      which is or becomes public knowledge other than through
      acts or omissions attributed to the Consultant;

	 	 	 
	 	(b) 	
      which is independently obtained by the Consultant from a
      source which, to the Consultant’s knowledge, was not then prohibited from
      disclosing such information to the Consultant under any legal, contractual
      or fiduciary obligation to the Company;

	 	 	 
	 	(c) 	
      which is required to be disclosed by applicable law,
      regulation or legal process; or

	 	 	 
	 	(d) 	
      to the extent approved by the Company in
  writing.

		
      The Consultant agrees that in the event of a breach or
      threatened breach by the Consultant of any of the provisions of this
      Agreement, the Company, in addition to and not in limitation of any other
      rights, remedies or damages available to the Company at law or in equity,
      shall be entitled to an injunction in order to prevent or to restrain any
      breach by the Consultant, or by any or all of the Consultant’s partners,
      co-venturers, employers, employees, servants, agents, representatives and
      any and all persons directly or indirectly acting for, on behalf of, or
      with the Consultant.

	 	 
	7. 	
      Termination

	 	 
		
      This Agreement may be
terminated:

	 	(a) 	
      by the Company without prior notice if, at any time, the
      Consultant:

	 	 	 	 
	 		(i) 	
      commits a material breach of a provision of this
      Agreement;

	 	 	 	 
	 		(ii) 	
      is unable or unwilling to perform the duties under this
      Agreement; or

	 	 	 	 
	 		(iii) 	
      commits fraud or serious neglect or misconduct in the
      performance of the Consultant’s duties; or

	 	 	 	 
	 	(b) 	
      by the Consultant upon giving the Company thirty (30)
      day’s written notice.

	8. 	
      Assignment

	 	 
		
      Neither the Company nor the Consultant may sell, assign
      or transfer any rights or responsibilities under this Agreement without
      the prior written consent of the other, and any such assignment or
      delegation by either party without such consent shall be void.

	 	 
	9. 	
      Further Assurances

	 	 
		
      The parties agree to perform any further acts and to
      execute and deliver any further documents which may be necessary or
      appropriate to carry out the purposes of this
Agreement.

- 4 - 

	10. 	
      Severability

	 	 
		
      If any provision of this Agreement is held to be
      unenforceable, invalid or illegal by any court of competent jurisdiction,
      such unenforceable, invalid or illegal provision shall not affect the
      remainder of this Agreement.

	 	 
	11. 	
      Entire Agreement

	 	 
		
      This Agreement contains the entire agreement of the
      parties relating to the provision of the Services described herein. This
      Agreement may not be amended, modified, varied or supplemented except in
      writing signed by the Parties.

	 	 
	12. 	
      Notices

	 	 
		
      Any notice, payment or other communication required or
      permitted to be given or served pursuant to this Agreement shall be in
      writing and shall be delivered personally or forwarded by registered mail
      or transmitted by facsimile or e-mail to the party concerned addressed as
      follows:

	 	If to the Company: 
	 	 
	 	488 – 1090 West Georgia Street 
	 	Vancouver, BC V6E 3V7 
	 	 
	 	Attention: President 
	 	 
	 	Email: ben@risecapitalresources.com
  
	 	 
	 	If to the Consultant: 
	 	 
	 	2 – 10340 156 Street 
	 	Surrey, BC V3R 4L8 
	 	 
	 	Email: fred@skanderbegcapital.com
  

or at such other address as the other
party may from time to time direct in writing. Any notice, direction or other
instrument will, if delivered or faxed, be deemed to have been given and
received on the day it was delivered or faxed; if mailed, be deemed to have been
given and received on the fifth business day following the day of mailing,
except in the event of disruption of the postal service in which event notice
will be deemed to be received only when actually received; and, if sent by
e-mail, be deemed to have been received upon the date of a read receipt
acknowledgement. Any party may at any time give to the other notice in writing
of any change of address of the party giving such notice and from and after the
giving of such notice the address or addresses therein specified will be deemed
to be the address of such party for the purposes of giving notice hereunder.

- 5 - 

	13. 	
      Independent Advice

	 	 
		
      The Consultant acknowledges being advised to obtain and
      having received such independent legal, accounting and tax advice from the
      Consultant’s professional advisors as the Consultant has determined
      necessary or advisable to enter into this Agreement.

	 	 
	14. 	
      Arbitration

	 	 
		
      All disputes, controversies and differences which may
      arise under this Agreement between the Consultant and the Company which
      cannot be resolved between them shall be referred to and finally resolved
      by a single arbitrator (the “Arbitrator”) pursuant to the
      Arbitration Act, R.S.B.C. 1996, c. 55, as amended. The decision of
      the Arbitrator on all issues or matters submitted to the Arbitrator for
      resolution shall be conclusive, final and binding on all of the parties.
      The Arbitrator shall determine who shall bear the costs of arbitration
      pursuant to this Section 12.

	 	 
	15. 	
      Binding Effect

	 	 
		
      This Agreement shall enure to the benefit of and be
      binding upon the successors and permitted assigns of each of the parties
      hereto.

	 	 
	16. 	
      Governing Law

	 	 
		
      This Agreement shall be governed by and construed in
      accordance with the laws of the Province of British Columbia and the laws
      of Canada applicable therein.

	 	 
	17. 	
      Counterpart Execution and
Delivery

	 	 
		
      This Agreement may be executed in counterparts and
      delivered electronically or by fax, each of which shall be deemed to be an
      original and both of which shall constitute one
  instrument.

IN WITNESS WHEREOF the parties have executed this
Agreement as of the date first above written notwithstanding its actual date of
execution. 

RISE GOLD CORP. 

	Per: 	“Cale Thomas” 	 
	 	 	 
		 Authorized
      Signatory 	 

- 6 - 

	SIGNED, SEALED AND DELIVERED 	  	  
	by FRED TEJADA 	) 	  
	in the presence of: 	) 	  
	  	) 	“Fred Tejada” 
	  	) 	 
    
	Witness Signature 	) 	FRED TEJADA 
	  	) 	  
	  	) 	  
	Witness Name 	) 	  
	  	) 	  
	  	) 	  
	Address 	) 	  
	  	) 	  
	  	) 	  
	Occupation 	)Exhibit 4.2

 

RHYTHM PHARMACEUTICALS, INC.

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
Definitions
    	
2
    
	
 
    	
 
    	
 
    
	
2.
    	
Registration Rights
    	
5
    
	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Demand Registration
    	
5
    
	
 
    	
2.2
    	
Company Registration
    	
7
    
	
 
    	
2.3
    	
Underwriting   Requirements
    	
7
    
	
 
    	
2.4
    	
Obligations of the   Company
    	
9
    
	
 
    	
2.5
    	
Furnish Information
    	
11
    
	
 
    	
2.6
    	
Expenses of   Registration
    	
11
    
	
 
    	
2.7
    	
Delay of Registration
    	
11
    
	
 
    	
2.8
    	
Indemnification
    	
11
    
	
 
    	
2.9
    	
Reports Under Exchange   Act
    	
13
    
	
 
    	
2.10
    	
Limitations on   Subsequent Registration Rights
    	
14
    
	
 
    	
2.11
    	
“Market Stand-off”   Agreement
    	
14
    
	
 
    	
2.12
    	
Restrictions on   Transfer
    	
15
    
	
 
    	
2.13
    	
Termination of   Registration Rights
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
Information Rights
    	
17
    
	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Delivery of Financial   Statements
    	
17
    
	
 
    	
3.2
    	
Inspection
    	
18
    
	
 
    	
3.3
    	
Observer Rights
    	
19
    
	
 
    	
3.4
    	
Termination of   Information Rights and Observer Rights
    	
19
    
	
 
    	
3.5
    	
Confidentiality
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
Rights to Future Stock   Issuances
    	
20
    
	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Right of First Offer
    	
20
    
	
 
    	
4.2
    	
Termination
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
Additional Covenants
    	
23
    
	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Insurance
    	
23
    
	
 
    	
5.2
    	
Employee Agreements
    	
23
    
	
 
    	
5.3
    	
Employee Stock
    	
23
    
	
 
    	
5.4
    	
Qualified Small   Business Stock
    	
23
    
	
 
    	
5.5
    	
Matters Requiring   Investor Director Approval
    	
24
    
	
 
    	
5.6
    	
Board Matters
    	
25
    
	
 
    	
5.7
    	
Successor   Indemnification
    	
25
    
	
 
    	
5.8
    	
Indemnification Matters
    	
25
    
	
 
    	
5.9
    	
FCPA
    	
26
    
	
 
    	
5.10
    	
Termination of   Covenants
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
Miscellaneous
    	
27
    
	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Successors and Assigns
    	
27
    
	
 
    	
6.2
    	
Governing Law
    	
27
    
	
 
    	
6.3
    	
Counterparts
    	
27
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.4
    	
Titles and Subtitles
    	
28
    
	
 
    	
6.5
    	
Notices
    	
28
    
	
 
    	
6.6
    	
Amendments and Waivers
    	
28
    
	
 
    	
6.7
    	
Severability
    	
29
    
	
 
    	
6.8
    	
Aggregation of Stock
    	
29
    
	
 
    	
6.9
    	
Additional Investors
    	
29
    
	
 
    	
6.10
    	
Entire Agreement
    	
29
    
	
 
    	
6.11
    	
Dispute Resolution
    	
29
    
	
 
    	
6.12
    	
Waiver of Jury Trial
    	
30
    
	
 
    	
6.13
    	
Delays or Omissions
    	
30
    
	
 
    	
6.14
    	
Acknowledgment
    	
30
    

 

	
Schedule   A
    	
-
    	
Schedule of Initial Investors
    

 

ii

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made as of the 21st day of August, 2017, by and among (i) Rhythm Pharmaceuticals, Inc. (formerly known as Rhythm Metabolic, Inc.), a Delaware corporation (the “Company”), (ii) each of the persons listed on Schedule A hereto (the “Initial Investors”), and (iii) each person who hereafter becomes a party to this Agreement in accordance with Subsection 6.1 or Subsection 6.9 hereof.

 

RECITALS

 

WHEREAS, the Initial Investors, including, without limitation, Rhythm Holding Company LLC, a Delaware limited liability company and majority stockholder of the Company (“Parent”), are parties to that certain Investors’ Rights Agreement, dated as of August 3, 2015 (the “Prior Agreement”); and

 

WHEREAS, Parent holds 93,500,000 shares of Common Stock of the Company and all of such 93,500,000 shares of Common Stock are held by Parent subject to the provisions of the Prior Agreement in Parent’s capacity as an Investor (as such term is defined in the Prior Agreement) thereunder; and

 

WHEREAS, simultaneously with the execution of this Agreement, the Company and Parent are entering into an Exchange Agreement, dated of even date herewith (as amended and in effect from time to time, the “Exchange Agreement”), whereby Parent will transfer, assign and surrender to the Company 78,666,209 shares of Common Stock owned by Parent in exchange for 78,666,209 shares of Series A-1 Junior Preferred Stock (as defined in Section 1 below) issued by the Company to Parent (the “Exchange”); and

 

WHEREAS, the Initial Investors, including, without limitation, Parent, desire to amend and restate the Prior Agreement for purposes of, among other things, providing that all 78,666,209 shares of Series A-1 Junior Preferred Stock and all 14,833,791 shares of Common Stock (as defined in Section 1 below) owned by Parent immediately after the Exchange shall be held by Parent subject to the provisions of this Agreement in Parent’s capacity as an Investor hereunder; and

 

WHEREAS, concurrently with or as promptly as practicable following the consummation of the Exchange and the execution of this Agreement, Parent intends to effect a distribution (the “Distribution”) of all of the shares of capital stock of the Company owned by Parent to its Members (as such term is defined in the Rhythm Holding Company, LLC Third Amended and Restated Operating Agreement, dated as of August 21, 2017, as amended and in effect from time to time); and

 

WHEREAS, the Initial Investors, including, without limitation, Parent, represent at least the required number of holders of capital stock of the Company necessary to amend the Prior Agreement, and desire to amend and restate the Prior Agreement in its entirety and to accept the rights created pursuant to this Agreement in lieu of the rights granted to them under the Prior Agreement; and

 

 

WHEREAS, the Initial Investors, including, without limitation, Parent, hereby agree that this Agreement shall govern the rights of the Investors to cause the Company to register shares of Common Stock issuable to, or owned by, the Investors, to receive certain information from the Company, and to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby 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 or other investment fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company or investment advisor with, such Person, and, if the Person referred to is a natural Person, any Immediate Family Member of such Person or any trust for the benefit of such Person or for the benefit of such one or more of such Peron’s Immedate Family Members, and, if the Person is a trust, to its beneficiaries.

 

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

 

1.3                               “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.

 

1.4                               “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants.

 

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

 

2

 

required to be included in a registration statement covering the sale of the Registrable Securities; or (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.

 

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                               “GAAP” means generally accepted accounting principles in the United States.

 

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

 

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

 

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

 

1.13                        “Investment Securities” means (1) shares of Preferred Stock, (2) shares of Common Stock issued or issuable upon conversion of any shares of Preferred Stock and (3) shares of Common Stock acquired by any Investor at any time and from time to time after the date of this Agreement upon the exercise by such Investor of its rights of first refusal under the Rights of First Refusal and Co-Sale Agreement.

 

1.14                        “Investor Directors” shall have the meaning ascribed to such term in the Restated Certificate.

 

1.15                        “Investors” shall mean, collectively, (i) the Initial Investors, (ii) each person who hereafter becomes a party to this Agreement pursuant to Subsection 6.1 hereof and (iii) each person who hereafter becomes a party to this Agreement pursuant to Subsection 6.9 hereof.  Notwithstanding the foregoing, a person shall cease being an Investor for all purposes of this Agreement if and when such person no longer owns or holds any Registrable Securities.

 

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

 

1.17                        “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such

 

3

 

equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

 

1.18                        “Person” means any individual, corporation, association, general partnership, limited partnership, joint venture, trust, estate, limited liability company, limited liability partnership, unincorporated organization, government (or any agency or political subdivision thereof) or other legal entity or organization.

 

1.19                        “Pfizer” means Pfizer Inc.

 

1.20                        “Preferred Stock” means, as the context may require or permit, any or all of (i) the Series A Preferred Stock and (ii) the Series A-1 Junior Preferred Stock.

 

1.21                        “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of any series of Preferred Stock; (ii) any Common Stock held by the Investors as of the date of this Agreement or acquired by the Investors at any time and from time to time after the date of this Agreement; (iii) any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company held by the Investors as of the date of this Agreement or acquired by the Investors at any time and from time to time after the date of this Agreement; 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 securities referenced in clauses (i), (ii) and (iii) above; excluding in all cases, however, (x) any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Subsection 6.1, and (y) in the case of any Service Provider Investor, any and all shares of Common Stock held or that may be acquired by any such Service Provider Investor at any time and from time to time after the date of this Agreement, except if and to the extent that such shares of Common Stock are Investment Securities (which Investment Securities shall be Registrable Securities); and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Subsection 2.13 of this Agreement.

 

1.22                        “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.

 

1.23                        “Restated Certificate” means the Company’s Third Amended and Restated Certificate of Incorporation, as may be further amended, restated and in effect from time to time.

 

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

 

1.25                        “Right of First Refusal and Co-Sale Agreement” means that certain Amended and Restated Right of First Refusal and Co-Sale Agreement, dated of even date herewith, by and among the Company, the Initial Investors and any other stockholders of the Company that are parties thereto, as amended and in effect from time to time.

 

4

 

1.26                        “SEC” means the Securities and Exchange Commission.

 

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

 

1.28                        “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

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

 

1.30                        “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 Subsection 2.6.

 

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

 

1.32                        “Series A-1 Junior Preferred Stock” means the Company’s Series A-1 Junior Preferred Stock, par value $0.001 per share.

 

1.33                        “Service Provider Investor” means any Investor that is a current or former officer, director, employee or consultant of the Company or that is a permitted transferee under clause (ii) of Subsection 6.1 hereof or an Affiliate of any current or former officer, director, employee or consultant of the Company.

 

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

 

2.1                               Demand Registration.

 

(a)                                 Form S-1 Demand.If, at any time after one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a written request from Holders holding at least a majority of the Registrable Securities then outstanding and held by the Holders that the Company file a Form S-1 registration statement with respect to Registrable Securities owned by such Holder or Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least Fifteen Million Dollars ($15,000,000), then the Company shall (i) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders and (ii) 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 request 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 Subsections 2.1(c), 2.1(d) and 2.3.

 

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(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 Holders of at least ten percent (10%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders (x) that cannot be sold by such Holders pursuant to Rule 144 during the three month period immediately following such request and (y) that have an anticipated aggregate offering price, net of Selling Expenses, of at least Ten Million Dollars ($10,000,000), 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 that the Initiating Holders request 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 Subsections 2.1(c), 2.1(d) and 2.3.

 

(c)                                  Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Subsection 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 either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, 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 an Excluded Registration.

 

(d)                                 The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 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 Subsection 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 Subsection 2.1(b).  The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 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

 

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to cause such registration statement to become effective; or (ii) if the Company has effected two registrations pursuant to Subsection 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 Subsection 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 Subsection 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Subsection 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 Holders) 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 or in a registration effected by the Company for its own account that is not underwritten), 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 Subsection 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration.  If the Company proposes to sell shares of Common Stock that have already been registered “off the shelf” by means of a prospectus supplement in connection with a public offering of shares of Common Stock solely for cash by the Company for the account of the Company or any stockholders of the Company other than the Holders, the Company shall, at such time, promptly give the Holders notice of such contemplated offering.  Upon the request of a Holder given within (10) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, include in such offering all of the Registrable Securities that each such Holder has requested to be included in such offering.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Subsection 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 Subsection 2.6.

 

2.3                               Underwriting Requirements.

 

(a)                                 If, pursuant to Subsection 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 Subsection 2.1, and the Company shall include such information in the Demand Notice.  The underwriter(s) will be selected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders.  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 (together with the Company as provided in Subsection 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting.  Notwithstanding any other provision of this Subsection 2.3, if the managing 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

 

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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 Subsection 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. In no event shall any Registrable Securities be excluded from such offering unless all other stockholders’ securities have been first excluded. 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 (as nearly as practicable 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 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.  For purposes of the provision in this Subsection 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.

 

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(c)                                  For purposes of Section 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of an underwriter’s cutback provisions in Section 2.3(a), fewer than seventy percent (70%) 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 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 one hundred eighty (180) 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 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

 

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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;

 

(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;

 

(k)                                 as promptly as possible notify each seller of Registrable Securities and each underwriter under such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and

 

(l)                                     in the case of an underwritten offering, use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 2 on the date on which such Registrable Securities are sold to the underwriter, (1) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, and (ii) a “comfort” letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any.

 

In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act.

 

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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.

 

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 Subsection 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 then outstanding and held by the Holders agree to forfeit their right to one registration pursuant to Subsections 2.1(a) or 2.1(b), as the case may be; and 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 Subsections 2.1(a) or 2.1(b), as the case may be.  All Selling Expenses relating to Registrable Securities registered pursuant to this Section 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:

 

(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, accountants and investment advisors 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 Subsection 2.8(a) shall not apply to amounts paid

 

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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.

 

(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 Subsection 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 Subsections 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 Subsection 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 Subsection 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 Subsection 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 Subsection 2.8.

 

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(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 Subsection 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 Subsection 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 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 Subsection 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Subsection 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 Subsection 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:

 

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(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

 

(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); and (ii) 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 a majority of the Registrable Securities then outstanding and held by the Holders, enter into any agreement with any holder or prospective holder of any securities of the Company that would (i) provide to such holder the right to include securities in any registration on other than either a pro rata basis with respect to the Registrable Securities or 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 or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities held by such holder or prospective holder; provided that this limitation shall not apply to any additional Investor who becomes a party to this Agreement in accordance with Subsection 6.9.

 

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 any shares of Common Stock acquired at any time after such effective date upon exercise

 

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or conversion of any exercisable or convertible securities of the Company held immediately before such effective date 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 Subsection 2.11 shall not apply with respect to any offering of securities of the Company other than the IPO, shall not apply to the purchase of any shares in the IPO itself or in the open market following the IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement or to 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 the foregoing provisions of this Subsection 2.11 shall be applicable to the Holders only if all officers, directors, Holders and other 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 underwriters in connection with such registration are intended third-party beneficiaries of this Subsection 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 Subsection 2.11 or that are necessary to give further effect thereto. If any of the obligations described in this Subsection 2.11 are waived or terminated with respect to any of the securities of any officer, director, Holder or greater than one-percent (1%) stockholder (in any such case, the “Released Securities”), the foregoing provisions shall be waived or terminated, as applicable, to the same extent and with respect to the same percentage of securities of each Holder as the percentage of Released Securities represent with respect to the securities held by the applicable officer, director, Holder or greater than one-percent stockholder.

 

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 other transferee of shares of Preferred Stock or other Registrable Securities held by such Holder to agree in writing to take and hold such securities subject to the provisions and upon the conditions specified in Subsection 2.11 and this Subsection 2.12.  Notwithstanding the foregoing, the Company shall not require any transferee of shares pursuant to an effective registration statement or, following the IPO, SEC Rule 144, to be bound by such subsections with respect to such transferred shares.

 

(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 Subsection 2.12(c)) be notated with a legend substantially in the following form:

 

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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 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT, DATED AS OF AUGUST 21, 2017, AMONG THE COMPANY, AND CERTAIN  STOCKHOLDERS OF THE COMPANY, AS AMENDED AND IN EFFECT FROM TIME TO TIME.  A COPY OF SUCH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

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 Subsection 2.12.

 

(c)                                  The holder of any 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 or, following the IPO, the transfer is made pursuant to SEC Rule 144, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or 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, with respect to transfers under the foregoing clause (x) at any time prior to the IPO and with respect to transfers under the foregoing clause (y) at any time, each transferee agrees in writing to be subject to the terms of Subsection 2.11 and this Subsection 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 at any time after the IPO or pursuant to an effective registration statement, the appropriate restrictive legend set forth in Subsection 2.12(b), except that such certificate, instrument or book entry shall not be

 

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notated with the first of such restrictive legends 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.

 

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

 

(a)                                 the closing of a Deemed Liquidation Event, as such term is defined in the Restated Certificate, as amended and in effect from time to time;

 

(b)                                 following the IPO, 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 without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1); and

 

(c)                                  the fifth (5th) anniversary of the date of the IPO.

 

3.                                      Information Rights.

 

3.1                               Delivery of Financial Statements.  The Company shall deliver to each Investor, provided that the Board of Directors has not reasonably determined that such Investor is a competitor of the Company:

 

(a)                                 as soon as practicable, but in any event within one hundred eighty (180) 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 a comparison between (x) the actual amounts as of and for such fiscal year and (y) the comparable amounts for the prior year and as included in the Budget (as defined in Subsection 3.1(c)) for such year, with an explanation of any material differences between such amounts and a schedule as to the sources and applications of funds for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and certified by independent public accountants of regional or national reputation and recognized standing selected by the Company;

 

(b)                                 as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited statement of income and cash flow for such fiscal quarter, and an unaudited balance sheet 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);

 

(c)                                  as soon as practicable, but in any event no later than thirty (30) days before the end of each fiscal year, a budget for the next fiscal year (the “Budget”), approved by the Board of Directors;

 

(d)                                 with respect to the financial statements called for in Subsection 3.1(a) and Subsection 3.1(b) an instrument executed by the chief financial officer,

 

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treasurer or chief executive officer of the Company certifying that such financial statements were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (except as otherwise set forth in Subsection 3.1(b)) and fairly present the financial condition of the Company and its results of operation for the periods specified therein; and

 

(e)                                  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 Section 3.1 to provide information to any Investor if it determines in good faith that disclosure of such information would (i) be disadvantageous to the Company from a competitive standpoint, (ii) breach any confidentiality obligation of the Company, (iii) provide access to, or otherwise result in the disclosure of, any trade secret of the Company, (iv) otherwise pertain to an actual or potential conflict of interest or (v) adversely affect the attorney-client privilege between the Company and its counsel.  Notwithstanding anything to the contrary contained in this Agreement, the foregoing clauses (i) and (iv) shall not be deemed to prevent the investment, legal, finance, tax, accounting and audit personnel of Pfizer and its Affiliates from obtaining access to information under this Section 3.1 relating to the financial condition of the Company solely for the purpose of managing, evaluating and reporting on Pfizer’s investment in the Company.

 

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 3.1 to the contrary, the Company may cease providing the information set forth in this Subsection 3.1 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 3.1 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.

 

3.2                               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 and each of its subsidiaries’ 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 and upon reasonable notice to the Company; provided, however, that the Company shall not be obligated under this Section 3.2 to provide any Investor with access to any such information if it determines in good faith that such access would (i) be disadvantageous to the Company from a competitive standpoint, (ii) breach any confidentiality obligation of the Company, (iii) provide access to, or otherwise result in the disclosure of, any trade secret of the Company, (iv) otherwise pertain to an actual or potential conflict of interest or (v) adversely affect the attorney-client privilege between the Company and its counsel.  Notwithstanding anything to the contrary contained in this Agreement, the foregoing

 

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clauses (i) and (iv) shall not be deemed to prevent the investment, legal, finance, tax, accounting and audit personnel of Pfizer and its Affiliates from obtaining access to information under this Section 3.2 relating to the financial condition of the Company solely for the purpose of managing, evaluating and reporting on Pfizer’s investment in the Company.

 

3.3                               Observer Rights.  As long as OrbiMed Private Investments V, LP  (“OrbiMed”), Baker Brothers Life Sciences, L.P. (“Baker”), Deerfield Private Design Fund III, L.P. (“Deerfield”), any Investor advised by Wellington Management Company LLP (“Wellington”), New Enterprise Associates 13, L.P. (“NEA”) or Pfizer Inc. (“Pfizer”) owns any shares of Preferred Stock, the Company shall invite a representative of OrbiMed, Baker, Deerfield, Wellington, NEA and Pfizer, as the case may be, to attend all meetings of its Board of Directors in a nonvoting observer capacity (an “Observer”) and, in this respect, shall give such Observer copies of all notices, minutes, consents, and other materials that it provides to its directors contemporaneously with the delivery of such notices, minutes, consents, or other materials to the directors; provided, however, that such Observer shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and provided further, that the Company reserves the right to withhold any information and to exclude such Observer from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its Observer is a competitor of the Company.

 

3.4                               Termination of Information Rights and Observer Rights.  The covenants set forth in Subsections 3.1, 3.2 and 3.3 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 Deemed Liquidation Event, as such term is defined in the Restated Certificate, in which the consideration received by the Investors is in the form of cash and/or marketable securities, whichever event occurs first.

 

3.5                               Confidentiality.  Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Subsection 3.5 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Subsection 3.5; (iii) to any existing or prospective Affiliate, partner (and partners of such partner), equityholder, 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

 

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confidentiality of such information and provided, however, that, notwithstanding anything express or implied to the contrary in the foregoing provisions of this clause (iii) or in any of the other provisions of this Subsection 3.5, the rights of Pfizer to disclose or use confidential information (including, without limitation, the right to disclose confidential information to Affiliates or officers, directors, employees, agents of Pfizer or any Affiliate of Pfizer) shall be subject to the restrictions and limitations set forth in that certain letter agreement regarding confidentiality, dated of even date herewith, by and between the Company and Pfizer, as amended and in effect from time to time,; or; or (iv) as may otherwise be required by law, or requested by any governmental, regulatory or other legal authority, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure and seek confidential treatment for the information so disclosed to the extent practicable.  The Company acknowledges that at least some of the Investors are in the business of venture capital and other 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 or its subsidiaries.  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 or its subsidiaries.  The Company and each Investor acknowledges and agrees that Pfizer or its Affiliates may presently have, or may engage in the future, in internal development programs, or may receive information from third parties that relates to, and may develop and commercialize products independently or in cooperation with such third parties, that are similar to or that are directly or indirectly competitive with, the Company’s or its subsidiaries’ development programs, products or services.  Nothing in this Agreement or any other agreement related to the transactions contemplated by this Agreement shall in any way preclude or restrict Pfizer or its Affiliates from conducting any development program, commercializing any product or service or otherwise engaging in any enterprise, whether or not such development program, product, service or enterprise competes with those of the Company or its subsidiaries, so long as such activities do not result in a violation of the confidentiality provisions of this Agreement.  Notwithstanding the foregoing, in the case of any Investor that is advised by a registered investment adviser or Affiliates thereof, such Investor may identify the Company and the value of such Investor’s security holdings in the Company in accordance with applicable investment reporting and disclosure regulations or internal policies and respond to routine examinations, demands, requests or reporting requirements of a regulator without prior notice to or consent from the Company.

 

4.                                      Rights to Future Stock Issuances.

 

4.1                               Right of First Offer.  Subject to the terms and conditions of this Subsection 4.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Investor.  Each Investor shall be entitled to purchase a sufficient participation in the New Securities to retain such Investor’s pro rata percentage of ownership in the Company in accordance with the provisions of this Subsection 4.1 (including, without limitation, Subsection 4.1(b) below).

 

(a)                                 The Company shall give notice (the “Offer Notice”) to each Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such

 

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New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.

 

(b)                                 By notification to the Company within twenty (20) days after the Offer Notice is given, each Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the Common Stock then held by such Investor, including, without limitation, all shares of Common Stock then issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held by such Investor (except that, in the case of any Service Provider Investor, it will be the proportion that the Investment Securities then held by such Service Provider Investor) bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Preferred Stock and other Derivative Securities).  At the expiration of such twenty (20) day period, the Company shall promptly notify each Investor that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Investor”) of any other Investor’s failure to do likewise.  During the ten (10) day period commencing after the Company has given such notice, each Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Investors were entitled to subscribe but that were not subscribed for by the Investors which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Investor (except that, in the case of any such Fully Exercising Investor that is a Service Provider Investor, it will be the proportion that the Investment Securities then held by such Service Provider Investor) bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed shares (except that, in the case that any of the Fully Exercising Investors is a Service Provider Investor, only the Investment Securities then held by such Service Provider Investor shall be taken into account for purposes of any allocation of New Securities among the Fully Exercising Investors pursuant to this Subsection 4.1(b)).  The closing of any sale pursuant to this Subsection 4.1(b) shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Subsection 4.1(c).

 

(c)                                  If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Subsection 4.1(b), the Company may, during the ninety (90) day period following the expiration of the periods provided in Subsection 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice.  If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investors in accordance with this Subsection 4.1.

 

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(d)                                 The right of first offer in this Subsection 4.1 shall not be applicable to (i) Exempted Securities (as defined in the Restated Certificate) and (ii) shares of Common Stock issued in the IPO.

 

(e)                                  Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Subsection 4.1, the Company may elect to give notice to the Investors within thirty (30) days after the issuance of New Securities.  Such notice shall describe the type, price, and terms of the New Securities.  Each Investor shall have twenty (20) days from the date notice is given to elect to purchase up to the number of New Securities that would, if purchased by such Investor, maintain such Investor’s percentage-ownership position, calculated as set forth in Subsection 4.1(b) before giving effect to the issuance of such New Securities. The closing of such sale shall occur within sixty (60) days of the date notice is given to the Investors.

 

(f)                                   Each Investor shall have a right of first offer to purchase any equity securities offered by any majority-owned subsidiary of the Company.  Such right of first offer shall be on the same terms and conditions as the right of first offer set forth in this Subsection 4.1 with respect to any New Securities offered by the Company, and for purposes of implementing the foregoing provisions of this Subsection 4.1(f) any reference in this Section 4.1 or in the definition of the term “New Securities” to the Company shall be deemed and treated as a reference to the applicable majority-owned subsidiary of the Company that is offering any of its equity securities.  The Company hereby covenants and agrees that it will cause each of its majority-owned subsidiaries that is offering any of such majority-owned subsidiary’s equity securities to comply with the provisions of this Subsection 4.1 with respect to any such offering to the same extent as the Company is required to comply with the provisions of this Subsection 4.1 with respect to any offering of New Securities by the Company.

 

(g)                                  The rights of first offer of each Investor pursuant to this Subsection 4.1 shall be applicable only if and for so long as such Investor qualifies as an “accredited investor” pursuant to Regulation D promulgated under the Securities Act.

 

(h)                                 In the event that the rights of an Investor to purchase New Securities under this Subsection 4.1 are waived with respect to a particular offering of New Securities without such Investor’s prior written consent (a “Waived Investor”) and any Investor that participated in waiving such rights actually purchases New Securities in such offering, then the Company shall grant, and hereby grants, each Waived Investor the right to purchase, twenty (20) days following written notice of the sale of such New Securities, in a subsequent closing of such issuance on substantially the same terms and conditions, the same percentage of its full pro rata share of such New Securities as the highest percentage of any such purchasing Investor.

 

4.2                               Termination.  The covenants set forth in Subsection 4.1 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 Deemed Liquidation Event, as such term is defined in the Restated Certificate, whichever event occurs first.

 

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5.                                      Additional Covenants.

 

5.1                               Insurance.  The Company shall use its commercially reasonable efforts to obtain, within ninety (90) days of the date hereof, from financially sound and reputable insurers Directors and Officers liability insurance, in an amount and on terms and conditions satisfactory to the Board of Directors, and will use commercially reasonable efforts to cause such insurance policy to be maintained until such time as the Board of Directors determines that such insurance should be discontinued.  Such policy shall not be cancelable by the Company without prior approval by the Board of Directors.

 

5.2                               Employee Agreements.  The Company will cause each person now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment agreement.  In addition, the Company shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and any employee, without the consent of the Board of Directors.

 

5.3                               Employee Stock.  Unless otherwise approved by the Board of Directors (which approval shall include the approval of the Investor Directors so long as there are any Investor Directors), all future employees and consultants of the Company who purchase, receive options to purchase, or receive awards of shares of the Company’s capital stock (an “Award”) after the date hereof shall be required to execute restricted stock or option agreements, as applicable, providing for (i) 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, and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months, and (ii) a market stand-off provision substantially similar to that in Subsection 2.11.  In addition, unless otherwise approved by the Board of Directors, the Company shall retain a “right of first refusal” on employee transfers until the Company’s IPO and shall have the right to repurchase unvested shares at cost upon termination of employment of a holder of restricted stock.  The Company shall not issue any Common Stock pursuant to an Award, unless and until such time, if ever, as the applicable recipient of such Award shall have become a party to and bound by the Right of First Refusal and Co-Sale Agreement and any other agreement that the Board of Directors of the Company, in its sole discretion, requires that such individual enter into prior to, and as a condition to, the issuance of such Common Stock by the Company to such individual.

 

5.4                               Qualified Small Business Stock.  The Company shall use commercially reasonable efforts to cause those shares of Series A Preferred Stock that are Registrable Securities, as well as any shares of Common Stock into which such shares of Series A Preferred Stock are converted, within the meaning of Section 1202(f) of the Internal Revenue Code (the “Code”), to constitute “qualified small business stock” as defined in Section 1202(c) of the Code; provided, however, that such requirement shall not be applicable if the Board of Directors of the Company determines, in its good-faith business judgment, that such qualification is inconsistent with the best interests of the Company.  The Company shall submit to its stockholders (including the Investors) and to the Internal Revenue Service any reports that may be required under Section 1202(d)(1)(C) of the Code and the regulations promulgated thereunder.  In addition, within twenty (20) business days after any Investor’s written request therefor, the Company shall, at its option, either (i) deliver to such Investor a written statement

 

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indicating whether (and what portion of) such Investor’s interest in the Company constitutes “qualified small business stock” as defined in Section 1202(c) of the Code or (ii) deliver to such Investor such factual information in the Company’s possession as is reasonably necessary to enable such Investor to determine whether (and what portion of) such Investor’s interest in the Company constitutes “qualified small business stock” as defined in Section 1202(c) of the Code.

 

5.5                               Matters Requiring Investor Director Approval.  The Company hereby covenants and agrees with each of the Investors that it shall not, without approval of the Board of Directors, which approval must include the affirmative vote of a majority of the Investor Directors so long as there are any Investor Directors:

 

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

 

(b)                                 make, or permit any subsidiary to make, any loan or advance to any Person, including, without limitation, any employee or director of the Company or any subsidiary, except loans, advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors or that are permitted under Subsection 5.5(a) above;

 

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

 

(d)                                 make any investment, other than investments in (1) prime commercial paper, (2) money market funds, (3) certificates of deposit in any United States bank having a net worth in excess of $100,000,000 or (4) obligations issued or guaranteed by the Unted States of America, in each case having a maturity not in excess of one year;

 

(e)                                  incur any aggregate indebtedness in excess of $100,000 that is not already included in a budget approved by the Board of Directors, other than trade credit incurred in the ordinary course of business;

 

(f)                                   otherwise enter into or be a party to any transaction with any director, officer, or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such Person, including without limitation any “management bonus” or similar plan providing payments to employees in connection with a Deemed Liquidation Event, as such term is defined in the Restated Certificate, except for the following: (1) transactions contemplated by this Agreement; (2) any grant or issuance of stock options or other equity incentives under any stock option plan or equity incentive plan approved by a majority of the Board of Directors; (3) any payments or benefits provided under any employee benefit plan approved by a majority of the Board of Directors; (4) payment of salary or other cash compensation to officers, directors or employees in amounts that have been approved by a majority of the Board of Directors, that are reflected in a budget approved by a majority of the Board of Directors or that are required or permitted to be paid pursuant to a written agreement to which the Company is a party; (4) transactions resulting in payments to or by the

 

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Company in an aggregate amount less than $60,000 per year; or (5) transactions made in the ordinary course of business and pursuant to reasonable requirements of the Company’s business and upon fair and reasonable terms that are approved by a majority of the Board of Directors;

 

(g)                                  hire or terminate any of the executive officers of the Company, or change any of the compensation of (including approving the payment of bonues to) any of the executive officers unless contemplated in the Company’s budget or any agreement between the Company and such executive officer;

 

(h)                                 enter new lines of business that are not primarily related to the business of the Company as conducted as of the date of this Agreement, or exit the current line of business of the Company  as conducted as of the date of this Agreement, or change the principal business of the Company;

 

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

 

(j)                                    the acquisition of all or substantially all of the properties, assets or stock of another company or entity; or

 

(k)                                 increase the size of the Board of Directors of the Company above nine (9) members.

 

5.6                               Board Matters.  Unless otherwise determined by the vote of a majority of the directors then in office, the Board of Directors shall meet in person at least four (4) times per year in accordance with an agreed-upon schedule.  The Company shall reimburse the directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors, including committees thereof.  The Company shall maintain an audit and compensation committee of the Board of Directors.

 

5.7                               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.

 

5.8                               Indemnification Matters.  The Company hereby acknowledges that one (1) or more of the directors nominated to serve on the Board of Directors by the Investors (each a “Fund Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their affiliates (collectively, the “Fund Indemnitors”).  The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Fund Director are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Fund Director are secondary), (b) that it shall be required to advance

 

25

 

the full amount of expenses incurred by such Fund Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Fund Director to the extent legally permitted and as required by the Restated Certificate or By-laws of the Company (or any agreement between the Company and such Fund Director, each as may be amended an in effect from time to time), without regard to any rights such Fund Director may have against the Fund Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of any such Fund Director with respect to any claim for which such Fund Director has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Fund Director against the Company.

 

5.9                               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 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 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.

 

5.10                        Termination of Covenants.  The covenants set forth in this Section 5, except for Subsection 5.7 and Subsection 5.8, 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 Deemed Liquidation Event, as such term is defined in the Restated Certificate, whichever event occurs first.

 

26

 

6.                                      Miscellaneous.

 

6.1                               Successors and Assigns.  The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate, partner, member, limited partner, retired or former partner or former or retired member or shareholder of such Holder, (ii) is such Holder’s Immediate Family Member or is a trust for the benefit of such Holder or one or more of such Holder’s Immediate Family Members, in either case if such Holder is an individual or (iii) after such transfer either holds at least 200,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations) or all of the Registrable Securities held by such Holder prior to such transfer; provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee becomes a party to this Agreement by executing and delivering an Adoption Agreement, substantially in the form attached hereto as Exhibit A, whereupon such transferee shall be deemed an “Investor” for all purposes of this Agreement and shall be bound by and subject to the terms and conditions of this Agreement that are applicable to Investors, including the provisions of Subsection 2.11.  For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of shares of Registrable Securities of a transferee (1) that is an Affiliate or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those shares of Registrable Securities of the transferring Holder; provided further that all transferees who would not qualify individually for assignment of rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

6.2                               Governing Law.  This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.

 

6.3                               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  federal ESIGN Act of 2000, 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.

 

6.4                               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.

 

6.5                               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

 

27

 

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 only 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 Subsection 6.5.  If notice is given to the Company, it shall be sent to

 

Rhythm Pharmaceuticals, Inc.

500 Boylston Street

11th Floor

Boston, MA 02116

Attention:  Keith Gottesdiener, Chief Executive Officer

 

and a copy (which shall not constitute notice) to:

 

Morgan, Lewis & Bockius LLP

One Federal Street

Boston, MA 02110

Attention: Julio E. Vega, Esq.

Fax No.: (617) 951-8736

 

If notice is given to any of the Investors, a copy (which shall not constitute notice) also shall be sent to the party designated as the notice party by such Investor on Schedule A.

 

6.6                               Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding and held by the Holders; provided that (i) the Company may in its sole discretion waive compliance with Subsection 2.12; (ii) any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party; and (iii) Subsection 3.3 shall not be amended or waived with respect to the observer rights of OrbiMed, Baker, Deerfield, Wellington, NEA or Pfizer without the written consent of such Holder for so long as such Holder is entitled to exercise such rights set forth in Subsection 3.3.  Notwithstanding the foregoing, (x) this Agreement may not be amended or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment, termination, or waiver applies to all Investors in the same fashion (it being agreed that a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction), and (y) Schedule A attached hereto may be amended by written instrument executed by the Company without the consent, approval or agreement of any Investor if any such amendment is solely for purposes of reflecting any permitted assignment or

 

28

 

transfer in accordance with Subsection 6.1 hereof or any person that hereafter becomes a party to this Agreement pursuant to any of Subsections 6.1 and 6.9 hereof.  The Company shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver.  Any amendment, termination, or waiver effected in accordance with this Subsection 6.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto.  No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

6.7                               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, 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.

 

6.8                               Aggregation of Stock.  All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

 

6.9                               Additional Investors.  Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Preferred Stock after the date hereof, any purchaser or acquiror of such shares of Preferred Stock may become a party to this Agreement by executing and delivering an Adoption Agreement, substantially in the form attached hereto as Exhibit A, 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, including, without limitation, the Prior Agreement.

 

6.11                        Dispute Resolution.  The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of the State 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 the State 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

 

29

 

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.

 

6.12                        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.

 

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.

 

6.14                        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.

 

[Remainder of Page Intentionally Left Blank]

 

30

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
RHYTHM PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Keith M. Gottesdiener
    
	
 
    	
Name: 
    	
Keith M. Gottesdiener
    
	
 
    	
Title: 
    	
Chief Executive Officer
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL   INVESTORS:
    
	
 
    	
 
    
	
 
    	
ORBIMED PRIVATE INVESTMENTS V, LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: OrbiMed Capital GP V LLC,
    
	
 
    	
Its General Partner
    
	
 
    	
 
    
	
 
    	
By: OrbiMed Advisors LLC,
    
	
 
    	
Its Managing Member
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jonathan Silverstein
    
	
 
    	
Name: 
    	
Jonathan Silverstein
    
	
 
    	
Title: 
    	
Member
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL   INVESTORS:
    
	
 
    	
 
    
	
 
    	
667,   L.P.
    
	
 
    	
 
    
	
 
    	
By: Baker Bros. Advisors LP,   management company and investment adviser to 667, L.P., pursuant to authority   granted to it by Baker Biotech Capital, L.P., general partner  to 667, L.P., and not as the general   partner.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Lessing
    
	
 
    	
Name: 
    	
Scott Lessing
    
	
 
    	
Title: 
    	
President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BAKER   BROTHERS LIFE SCIENCES, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By: Baker   Bros. Advisors LP, management company and investment adviser to Baker   Brothers Life Sciences, L.P., pursuant to authority granted to it by Baker   Brothers Life Sciences Capital, L.P., general partner to Baker Brothers Life   Sciences, L.P., and not as the general partner.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Lessing
    
	
 
    	
Name: 
    	
Scott Lessing
    
	
 
    	
Title: 
    	
President
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
Hadley   Harbor Master Investors (Cayman) L.P.
    
	
 
    	
 
    
	
 
    	
By:   Wellington Management Company LLP, as investment adviser
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Emily   D. Babalas
    
	
 
    	
Name: 
    	
Emily D.   Babalas
    
	
 
    	
Title: 
    	
Managing   Director and Counsel
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
DEERFIELD   SPECIAL SITUATIONS FUND, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Deerfield   Mgmt, L.P.
    
	
 
    	
 
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
J.E.   Flynn Capital, LLC
    
	
 
    	
 
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David J. Clark
    
	
 
    	
Name: 
    	
David J. Clark
    
	
 
    	
Title: 
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DEERFIELD   PRIVATE DESIGN FUND III, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Deerfield   Mgmt III, L.P.
    
	
 
    	
 
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
J.E.   Flynn Capital III, LLC
    
	
 
    	
 
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David J. Clark
    
	
 
    	
Name: 
    	
David J. Clark
    
	
 
    	
Title: 
    	
Authorized Signatory
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
NEW ENTERPRISE   ASSOCIATES 13, L.P.
    
	
 
    	
 
    
	
 
    	
By: 
    	
NEA   Partners 13, L.P., its general partner
    
	
 
    	
By: 
    	
NEA 13   GP, LTD, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Louis S. Citron
    
	
 
    	
Name:
    	
Louis S. Citron
    
	
 
    	
Title:
    	
Chief Legal Officer
    
	
 
    	
 
    	
 
    
	
 
    	
NEA   VENTURES 2009, LIMITED PARTNERSHIP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Louis S. Citron
    
	
 
    	
Name:
    	
Louis S. Citron
    
	
 
    	
Title:
    	
Vice-President
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
MPM   BIOVENTURES V, L.P.
    
	
 
    	
 
    
	
 
    	
By: MPM   BIOVENTURES V GP LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
By: MPM   BIOVENTURES V LLC, its Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Todd   Foley
    
	
 
    	
Name: 
    	
Todd   Foley
    
	
 
    	
Title: 
    	
Member
    
	
 
    	
 
    
	
 
    	
MPM ASSET   MANAGEMENT INVESTORS BV5 LLC
    
	
 
    	
 
    
	
 
    	
By: MPM   BIOVENTURES V LLC, its Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Todd   Foley
    
	
 
    	
Name: 
    	
Todd   Foley
    
	
 
    	
Title: 
    	
Member
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
PFIZER   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Barbara Dalton
    
	
 
    	
Name: 
    	
Barbara   Dalton
    
	
 
    	
Title: 
    	
Vice President, Venture   Capital
    
	
 
    	
 
    	
Worldwide Business   Development
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
THIRD   ROCK VENTURES, LP
    
	
 
    	
 
    
	
 
    	
By: Third   Rock Ventures GP, L.P., its general partner
    
	
 
    	
 
    
	
 
    	
By: TRV   GP, LLC, its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kevin   Gillis
    
	
 
    	
Name: 
    	
Kevin   Gillis
    
	
 
    	
Title: 
    	
CFO
    
	
 
    	
 
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
SUTREPA   SAS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Olivier Jochem
    
	
 
    	
Name:
    	
Olivier   Jochem
    
	
 
    	
Title:
    	
President
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
RHYTHM HOLDING   COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Keith Gottesdiener
    
	
 
    	
Name
    	
Keith   Gottesdiener
    
	
 
    	
Title:
    	
Chief   Executive Officer
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
/s/ David Meeker
    
	
 
    	
David   Meeker
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Keith Gottesdiener
    
	
 
    	
Keith   Gottesdiener
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INITIAL INVESTORS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Bart Henderson
    
	
 
    	
Bart   Henderson
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

SCHEDULE A

 

INITIAL INVESTORS

 

	
Name and Address
    	
 
    	
Number of Shares of Series A
   Preferred Stock
    
	
 
    	
 
    	
 
    
	
OrbiMed Private Investments V, LP
   601 Lexington Avenue, 54th Floor
   New York, NY 10022
   Attention: Jonathan Silverstein
   Email:SilversteinJ@OrbiMed.com

With a copy (which shall not constitute notice) to:
   Sidley Austin LLP
   787 Seventh Avenue
   New York, New York 10019
   Attention: Geoffrey W. Levin, Esq.
   Email:glevin@sidley.com
    	
 
    	
23,349,531
    
	
 
    	
 
    	
 
    
	
667, L.P.
   667 Madison Avenue, 21st Floor
   New York, NY 10065
   Attention: Scott L. Lessing
   Email: slessing@bbinvestments.com
    	
 
    	
760,829
    
	
 
    	
 
    	
 
    
	
Baker Brothers Life Sciences, L.P.
   667 Madison Avenue, 21st Floor
   New York, NY 10065
   Attention: Scott L. Lessing
   Email: slessing@bbinvestments.com
    	
 
    	
9,913,242
    
	
 
    	
 
    	
 
    
	
ItalianFlare & Co.
   c/o Wellington Management Company LLP
   280 Congress Street
   Boston, MA 02210
   Attention: Steven M. Hoffman
   Email: seclaw@wellington.com
    	
 
    	
5,000,000
    
	
 
    	
 
    	
 
    
	
Deerfield Private Design Fund III, L.P.
   c/o Deerfield Management Company, L.P.
   Attn: Lawrence Atinsky
   780 Third Ave., 37th Fl.
   New York, NY 10017
    	
 
    	
2,668,518
    

 

 

	
latinsky@deerfield.com
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Deerfield Special Situations Fund, L.P.
   c/o Deerfield Management Company, L.P.
   Attn: Lawrence Atinsky
   780 Third Ave., 37th Fl.
   New York, NY 10017
   latinsky@deerfield.com
    	
 
    	
2,668,518
    
	
 
    	
 
    	
 
    
	
New Enterprise Associates 13, L.P.
    c/o New Enterprise Associates
 1954   Greenspring Drive, Suite 600
 Timonium,   MD 21093
    	
 
    	
12,864,324
    
	
 
    	
 
    	
 
    
	
MPM Bioventures V, L.P.
   c/o MPM Capital LLC
    450 Kendall Street
 Cambridge,   MA 02142
    	
 
    	
7,365,688
    
	
 
    	
 
    	
 
    
	
MPM Asset Management Investors BV5 LLC
   c/o MPM Capital LLC
    450 Kendall Street
 Cambridge,   MA 02142
    	
 
    	
286,143
    
	
 
    	
 
    	
 
    
	
Pfizer Inc.
   235 East 42nd Street
   New York, NY 10017
   Attn: Barbara Dalton
    	
 
    	
4,103,704
    
	
 
    	
 
    	
 
    
	
Third Rock Ventures, L.P.
   29 Newbury Street
   Boston, MA 02116
    	
 
    	
9,479,502
    
	
 
    	
 
    	
 
    
	
Sutrepa SAS
   65 quai Georges Gorse 92100 Boulogne-
   Billancourt, France
   Attn: Olivier Jochem
    	
 
    	
1,540,000
    
	
 
    	
 
    	
 
    
	
David Meeker
   20 Garland Road
   Lincoln, MA 01773
    	
 
    	
500,000
    
	
 
    	
 
    	
 
    
	
Keith Gottesdiener
   c/o Rhythm Pharmaceuticals, Inc.
   500 Boylston Street
    	
 
    	
250,000
    

 

 

	
11th Floor
   Boston, MA 02116
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Bart Henderson
   48 Prentiss Lane
   Belmont, MA 02478
    	
 
    	
200,000
    

 

	
Name and Address
    	
 
    	
Number of Shares of Series A-1
   Junior Preferred Stock
    
	
 
    	
 
    	
 
    
	
Rhythm Holding Company LLC
   500 Boylston Street
   11th Floor
   Boston, MA 02116
    	
 
    	
78,666,209
    

 

	
Name and Address
    	
 
    	
Number of Shares of Common
   Stock
    
	
 
    	
 
    	
 
    
	
Rhythm Holding Company LLC
   500 Boylston Street
   11th Floor
   Boston, MA 02116
    	
 
    	
14,833,791
    
	
 
    	
 
    	
 
    
	
David Meeker
   20 Garland Road
   Lincoln, MA 01773
    	
 
    	
200,000
    

 

 

EXHIBIT A

 

ADOPTION AGREEMENT

 

This Adoption Agreement (“Adoption Agreement”) is executed on [                   ], by the undersigned (the “Holder”) pursuant to the terms of that certain Amended and Restated Investors’ Rights Agreement dated as of August 21, 2017 (the “Agreement”), by and among the Company and certain holders of securities of the Company, as such Agreement may be amended or amended and restated hereafter.  Capitalized terms used but not defined in this Adoption Agreement shall have the respective meanings ascribed to such terms in the Agreement.  By the execution of this Adoption Agreement, the Holder agrees as follows.

 

1.1          Acknowledgement.  Holder acknowledges that Holder is acquiring certain Registrable Securities of the Company, and desires to become an Investor party to the Agreement with respect to such Registrable Securities.

 

1.2          Agreement.  Holder hereby (a) agrees that the Registrable Securities and any other securities of the Company required by the Agreement to be bound thereby, shall be bound by and subject to the terms of the Agreement and (b) adopts the Agreement with the same force and effect as if Holder were originally an Investor party thereto.

 

1.3          Notice.  Any notice required or permitted by the Agreement shall be given to Holder at the address or facsimile number listed below Holder’s signature hereto.

 

[Signature Page to Follow]

 

 

IN WITNESS WHEREOF, the parties have executed this Adoption Agreement as of the date first above written.

 

	
 
    	
HOLDER:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Facsimile Number:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ACCEPTED AND AGREED:
    
	
 
    	
 
    
	
 
    	
RHYTHM   PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00274-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00274-of-00352.parquet"}]]