Document:

Exhibit 4.2

 

ENTASIS THERAPEUTICS HOLDINGS INC.

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the 14th day of September, 2018, by and among Entasis Therapeutics Holdings Inc., a corporation organized under the laws of the State of Delaware (the “Company”), and the investors listed on Schedule A hereto, referred to hereinafter as the “Investors” and each individually as an “Investor.”

 

WHEREAS, the Investors and Entasis Therapeutics Limited, company organized under the laws of England and Wales and a wholly owned subsidiary of the Company, entered into an Amended and Restated Shareholders’ Agreement, dated August 28, 2017, as further amended by a Deed of Variation, dated April 19, 2018 (the “Shareholders’ Agreement”);

 

WHEREAS, pursuant to a Deed of Adherence, dated April 23, 2018, the Company acknowledged and agreed that it shall adhere to the Shareholders’ Agreement as if it was originally a party to such agreement in place of Entasis Therapeutics Limited;

 

WHEREAS, the Shareholders’ Agreement provides for, among other things, specified registration rights with respect to the Company’s securities held by the Investors;

 

WHEREAS, the Company is contemplating an initial public offering of its common stock (the “Proposed IPO”), at which time the Shareholders’ Agreement would automatically terminate; and

 

WHEREAS, the Investors and the Company desire to enter into this Agreement to set forth the registration rights of the Investors that will be in effect upon the closing of the Proposed IPO, and in doing so, replace and supersede in their entirety any provisions in the Shareholders’ Agreement related to registration rights that would otherwise be in effect after the closing of the Proposed IPO.

 

NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.                         GENERAL.

 

1.1                               Effective Date. The effective date of this Agreement is the closing date of the Proposed IPO.  Only if, and when, such underwriting agreement has become effective, will the registration rights described herein become effective.

 

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

 

(a)                                 “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, director or trustee of such Person, or any venture capital fund or registered investment company now or hereafter existing that is controlled by one or more general partners, managing members or investment adviser of, or shares the same management company or investment adviser with, such Person.

 

(b)                                 “Board of Directors” means the board of directors of the Company.

 

(c)                                  “Certificate of Incorporation” means the Company’s Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time.

 

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(d)                                 “Common Stock” means the shares of common stock of the Company, par value $0.001 per share.

 

(e)                                  “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.

 

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

 

(g)                                 “Excluded Registration” means (i) a registration relating to the sale or grant of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; 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.

 

(h)                                 “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.

 

(i)                                    “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor or similar 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.

 

(j)                                    “Holder” means any holder Registrable Securities who is a party to this Agreement that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 3.1 hereof.

 

(k)                                 “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.

 

(l)                                    “Initial Offering” means the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.

 

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

 

(n)                                 “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

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(o)                                 “Preferred Stock” means the shares of preferred stock of the Company, par value $0.001 per share.

 

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

 

(q)                                 “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of Preferred Stock held by the Investors listed on Schedule A hereto and their permitted assigns, (ii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities and (iii) any Common Stock issued in a private placement concurrent with the Initial Offering. Notwithstanding the foregoing, Registrable Securities shall not include any securities (A) sold by a person to the public either pursuant to a registration statement or Rule 144 or (B) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned, and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Section 2.11 of this Agreement.

 

(r)                                  “Registrable Securities then outstanding” shall be the number of shares of the Company’s Common Stock that are Registrable Securities and either (i) are then issued and outstanding or (ii) are issuable pursuant to then exercisable or convertible securities.

 

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

 

(t)                                    “Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

(u)                                 “Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

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

 

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

 

SECTION 2.                         REGISTRATION; RESTRICTIONS ON TRANSFER.

 

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 Initial Offering, the Company receives a request from Holders of a majority the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to at least thirty percent (30%) of the Registrable Securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net of Selling Expenses, would exceed $15,000,000), then the Company shall (x) 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 (y) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3.

 

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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 one or more Holders 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 having an anticipated aggregate offering price, net of Selling Expenses, of at least $3,000,000, 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 requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3.

 

(c)                                  Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to be filed and it is therefore necessary to defer the filing of such registration statement, then the Company shall have the right to defer taking action with respect to such filing for a period of not more than one hundred twenty (120) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than twice in any twelve (12) month period.

 

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

 

2.2                               Company Registration.  If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the 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), the Company shall, at such time, promptly give each Holder notice of such registration.  Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in 

 

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such registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration.  The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.

 

2.3                               Underwriting Requirements.

 

(a)                                 If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1, and the Company shall include such information in the Demand Notice.  The underwriter(s) will be selected by the Board of Directors 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 Section 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 Section 2.3, if the underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting.  To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.

 

(b)                                 In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company.  If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering.  If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (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 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.  For purposes of the provision in this Section 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, 

 

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stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

 

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

 

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

 

(a)                                 prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that 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;

 

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

 

(e)                                  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, however, 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;

 

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(f)                                   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;

 

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

 

(h)                                 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;

 

(i)                                    promptly make available for inspection by the selling Holders, any 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;

 

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

 

(k)                                 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.

 

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.

 

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 Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b), as the case may be; provided  further, that if, 

 

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at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information, then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b).  All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.7                               Delay of Registration; Furnishing Information.  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.  In the event any Registrable Securities are included in a registration statement under Sections 2.1(a), 2.1(b) or 2.2:

 

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

 

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

 

(c)                                  Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled 

 

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to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof.  The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action.  The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action.  The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

 

(d)                                 To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.8 then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided  further that in no event shall a Holder’s liability pursuant to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

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

 

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

 

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

 

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

 

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

 

(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                        Limitation 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, enter into any agreement with any holder or prospective holder of any securities of the Company that would provide to such holder or prospective 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; provided that this limitation shall not apply to Registrable Securities acquired by any additional Investor that becomes a party to this Agreement in accordance with Section 3.9.

 

2.11                        Termination of Registration Rights.  The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Sections 2.1 and 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 Company’s Certificate of Incorporation;

 

(b)                                 such time after consummation of the Initial Offering as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares of Common Stock without limitation during a three-month period without registration.  Upon such termination, such securities shall cease to be “Registrable Securities” hereunder for all purposes; or

 

(c)                                  the fifth (5th) anniversary of the closing of the Initial Offering.

 

SECTION 3.                         MISCELLANEOUS.

 

3.1                               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 of a 

 

10

 

Holder or (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; 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 agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of 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 party 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.

 

3.2                               Governing Law. This Agreement shall be governed by the internal law 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.

 

3.3                               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 U.S. 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.

 

3.4                               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.

 

3.5                               Notices.

 

(a)                                 All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt.  All communications shall be sent to the respective parties at their addresses as set forth on Schedule A hereto, or to the principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Section 3.5.  If notice is given to the Company, a copy shall also be sent to Brent B. Siler, Cooley LLP, 1299 Pennsylvania Avenue, NW, Suite 700, Washington, DC 20004-2400, bsiler@cooley.com, facsimile: (202) 842-7899.

 

(b)                                 Consent to Electronic Notice.  Each Investor consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by electronic transmission pursuant to Section 232 of the DGCL (or any successor thereto) at the electronic mail address or the facsimile number set forth below such Investor’s name on Schedule A hereto, as updated from time to time by notice to the Company, or as on the books of the Company. To the extent that any notice given by means of electronic transmission is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected electronic mail address has been provided, and such attempted Electronic Notice shall be ineffective and deemed to not have been given. Each Investor agrees to promptly notify the Company of

 

11

 

any change in such stockholder’s electronic mail address, and that failure to do so shall not affect the foregoing.

 

3.6                               Amendments and Waivers. Any term of this Agreement may be amended, modified or terminated 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 at least a majority of the Registrable Securities then outstanding.  Notwithstanding anything to the contrary in this Section 3.6, this Agreement may not be amended, modified or terminated and the observance of any term hereunder may not be waived with respect to any Holder of Registrable Securities then outstanding without the written consent of such Holder unless such amendment, modification termination or waiver applies to all Holders of Registrable Securities then outstanding in the same fashion.  Notwithstanding the foregoing, Schedule A hereto may be amended by the Company from time to time to add transferees of any Registrable Securities in compliance with the terms of this Agreement without the consent of the other parties; and Schedule A hereto may also be amended by the Company after the date of this Agreement without the consent of the other parties to add information regarding any additional Investor who becomes a party to this Agreement in accordance with Section 3.9.  Any amendment, modification, termination, or waiver effected in accordance with this Section 3.6 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.

 

3.7                               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.

 

3.8                               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.

 

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

 

3.10                        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.

 

3.11                        Dispute Resolution.  The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the courts of the Commonwealth of Massachusetts and to the jurisdiction of the United States District Court for the District of Massachusetts 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 

 

12

 

Commonwealth of Massachusetts or the United States District Court for the District of Massachusetts, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

3.12                        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.

 

3.13                        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.

 

3.14                        Termination.  This Agreement shall terminate and be of no further force or effect upon the earlier of (i) a Deemed Liquidation Event, as defined in the Company’s certificate of incorporation; or (ii) the date five (5) years following the closing of the Initial Offering.

 

[THIS SPACE INTENTIONALLY LEFT BLANK]

 

13

 

IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
 
    
	
ENTASIS   THERAPEUTICS HOLDINGS INC.
    	
 
    	
CLARUS   LIFESCIENCES III, L.P.
    
	
 
    	
 
    	
acting by its General   Partner,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
CLARUS   VENTURES III GP, L.P.
    
	
By:
    	
/s/ Manoussos Perros
    	
 
    	
acting by its General   Partner,
    
	
Name: Manoussos Perros,   Ph.D.
    	
 
    	
 
    
	
Title: Chief Executive   Officer
    	
 
    	
CLARUS   VENTURES III, LLC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Nick Galakatos
    
	
 
    	
 
    	
Name: Nick Galakatos
    
	
 
    	
 
    	
Title: Managing   Director
    
					

 

REGISTRATION RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
 
    
	
ENTASIS   THERAPEUTICS HOLDINGS INC.
    	
 
    	
FRAZIER   LIFE SCIENCES VIII, LP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
acting by its General   Partner,
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Manoussos Perros
    	
 
    	
FHM   LIFE SCIENCES VIII, LP
    
	
Name: Manoussos Perros,   Ph.D.
    	
 
    	
 
    
	
Title: Chief Executive   Officer
    	
 
    	
acting by its General   Partner,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
FHM   LIFE SCIENCES VIII, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ James Topper
    
	
 
    	
 
    	
Name: James Topper
    
	
 
    	
 
    	
Title: Manager
    
					

 

REGISTRATION RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
 
    
	
ENTASIS   THERAPEUTICS HOLDINGS INC.
    	
 
    	
NOVO   HOLDINGS A/S
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Manoussos Perros
    	
 
    	
By:
    	
/s/ Thomas Dyrberg
    
	
Name: Manoussos Perros,   Ph.D.
    	
 
    	
Name: Thomas Dyrberg
    
	
Title: Chief Executive   Officer
    	
 
    	
Title: Director
    
					

 

REGISTRATION RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
 
    
	
ENTASIS   THERAPEUTICS HOLDINGS INC.
    	
 
    	
PIVOTAL   BIOVENTURE PARTNERS FUND I, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
acting by its General   Partner,
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Manoussos Perros
    	
 
    	
PIVOTAL   BIOVENTURE PARTNERS FUND I G. P., L.P.

 

acting by its General   Partner,
    
	
Name: Manoussos Perros,   Ph.D.
    	
 
    
	
Title: Chief Executive   Officer
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
PIVOTAL   BIOVENTURE PARTNERS FUND I U.G.P. LTD
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Robert Hopfner
    
	
 
    	
 
    	
Name: Robert Hopfner
    
	
 
    	
 
    	
Title: Authorized   Signatory
    
					

 

REGISTRATION RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
 
    
	
ENTASIS   THERAPEUTICS HOLDINGS INC.
    	
 
    	
TPG   BIOTECHNOLOGY PARTNERS V, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
acting by its General   Partner,
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Manoussos Perros
    	
 
    	
TPG   BIOTECHNOLOGY GENPAR V, L.P.
    
	
Name: Manoussos Perros,   Ph.D.
    	
 
    	
 
    
	
Title: Chief Executive Officer
    	
 
    	
acting by its General   Partner,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TPG   BIOTECH GENPAR V ADVISORS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Michael LaGatta
    
	
 
    	
 
    	
Name: Michael LaGatta
    
	
 
    	
 
    	
Title: Vice President
    
					

 

REGISTRATION RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
 
    
	
ENTASIS   THERAPEUTICS HOLDINGS INC.
    	
 
    	
SOFINNOVA   VENTURE PARTNERS IX, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
acting by its General Partner,
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Manoussos Perros
    	
 
    	
SOFINNOVA   MANAGEMENT IX, L.L.C.
    
	
Name: Manoussos Perros,   Ph.D.
    	
 
    	
 
    
	
Title: Chief Executive   Officer
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Mike Powell
    
	
 
    	
 
    	
Name: Mike Powell
    
	
 
    	
 
    	
Title: Managing Member
    
					

 

REGISTRATION RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
 
    
	
ENTASIS   THERAPEUTICS HOLDINGS INC.
    	
 
    	
ASTRAZENECA   AB
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Manoussos Perros
    	
 
    	
By:
    	
/s/ Yvonne Bertlin
    
	
Name: Manoussos Perros,   Ph.D.
    	
 
    	
Name: Yvonne Bertlin
    
	
Title: Chief Executive   Officer
    	
 
    	
Title: Director
    
					

 

 

REGISTRATION RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
INVESTOR:
    
	
 
    	
 
    	
 
    
	
ENTASIS   THERAPEUTICS HOLDINGS INC.
    	
 
    	
EVENTIDE   GILEAD FUND
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
acting by MUTUAL FUND SERIES TRUST
    
	
By:
    	
/s/ Manoussos Perros 
    	
 
    	
 
    
	
Name: Manoussos Perros,   Ph.D.
    	
 
    	
 
    
	
Title: Chief Executive   Officer
    	
 
    	
By:
    	
/s/ Erik Naviloff 
    
	
 
    	
 
    	
Name: Erik Naviloff
    
	
 
    	
 
    	
Title: Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
EVENTIDE   HEALTHCARE & LIFE SCIENCES FUND
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
acting by MUTUAL FUND SERIES TRUST
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Erik Naviloff 
    
	
 
    	
 
    	
Name: Erik Naviloff
    
	
 
    	
 
    	
Title: Officer
    
					

 

REGISTRATION RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

SCHEDULE A

 

INVESTORS

 

	
ASTRAZENECA   AB (PUBL)

 

c/o AstraZeneca UK   Limited

Academy House

136 Hills Road

Cambridge CB2 8PA   United Kingdom

E-mail: 

Attn: Deputy General   Counsel, Corporate

 

With copies to:

 

Paul Maher

Greenberg Traurig LLP

200 Gray’s Inn Road,   7th Floor

London, WC1X 8HF United   Kingdom

E-mail: 

 

and

 

Michael Helsel

Greenberg Traurig, LLP

200 Park Avenue

New York, New York   10166

E-mail: 

 

 

CLARUS   LIFESCIENCES III, L.P.

 

Clarus Ventures, LLC

101 Main Street,   Suite 1230

Cambridge, MA 02142

Email: 

Attn: Robert Liptak,   Managing Director

 

With a copy to:

 

Latham &   Watkins (London) LLP

99 Bishopsgate

London EC2M 3XF

United Kingdom

Email: 

Attn: Robbie McLaren
    	
 
    	
NOVO   HOLDINGS A/S

 

Novo Holdings A/S

Tuborg Havnevej 19

DK 2900 Hellerup

Denmark

Email: 

Attn: Thomas Dyrberg

 

With a copy to:

 

Latham &   Watkins (London) LLP

99 Bishopsgate

London EC2M 3XF

United Kingdom

Email: 

Attn: Robbie McLaren

 

 

FRAZIER   LIFE SCIENCES VIII, LP

 

Frazier Life Sciences

70 Willow Rd,   Suite 200

Menlo Park, CA 94025

Email: 

Attn: James Topper

 

With a copy to:

 

Latham &   Watkins (London) LLP

99 Bishopsgate

London EC2M 3XF

United Kingdom

Email: 

Attn: Robbie McLaren
    

 

REGISTRATION RIGHTS AGREEMENT

SCHEDULE A

 

 

	
EVENTIDE   GILEAD FUND

EVENTIDE   HEALTHCARE & LIFE SCIENCES FUND

 

Eventide Funds

One International   Place, 35th floor

Boston, MA 02110

Email: 

Attn: Finny Kuruvilla

 

With a copy to:

 

Latham &   Watkins (London) LLP

99 Bishopsgate

London EC2M 3XF

United Kingdom

Email: 

Attn: Robbie McLaren

 

 

PIVOTAL   BIOVENTURE PARTNERS FUND I, L.P.

 

1700 Owens Street,   Suite 595

San Francisco, CA 94158

Email: 

Attn: Robert Hopfner,   Ph.D.

 

With   a copy to:

 

BRL Law Group LLC

425 Boylston Street,   Third Floor

Boston, Massachusetts   02116

Email: 

Attn: Suzanne P. Hamel
    	
 
    	
SOFINNOVA   VENTURE PARTNERS IX, L.P.

 

3000 Sand Hill Road,   Building 4, Suite 250

Menlo Park, CA 94025

Email: 

Attn: Heather Behanna   and Hooman Shahlavi

 

With a copy to:

 

BRL Law Group LLC

425 Boylston Street,   Third Floor

Boston, Massachusetts   02116

Email: 

Attn: Suzanne P. Hamel

 

 

TPG   BIOTECHNOLOGY PARTNERS V, L.P.

 

301 Commerce Street,   Suite 3300

Fort Worth, TX 76102

Email: 

Attn: Office of General   Counsel, c/o Michael LaGatta

 

With a copy to:

 

BRL Law Group LLC

425 Boylston Street,   Third Floor

Boston, Massachusetts   02116

Email: 

Attn: Suzanne P. HamelExhibit 10.13

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of             , 2018, by and between Manos Perros (“Executive”) and Entasis Therapeutics Holdings Inc. (the “Company”), and which shall become effective upon the effectiveness of the registration statement for the Company’s initial public offering (the “Effective Date”).

 

Executive previously entered into an Offer Letter with the Company effective as of May 11, 2015, as amended on August 28, 2017 (the “Prior Agreement”);

 

The parties desire to amend, restate and replace the Prior Agreement;

 

The Company desires to continue to employ Executive and, in connection with such employment, to compensate Executive for Executive’s personal services to the Company; and

 

Executive desires to continue to be employed by the Company and to provide personal services to the Company in return for certain compensation.

 

Accordingly, in consideration of the mutual promises and covenants contained herein, the parties agree to the following:

 

1.                                      EMPLOYMENT BY THE COMPANY.

 

1.1                               At-Will Employment.  Executive will continue to be employed by the Company on an “at-will” basis, meaning either the Company or Executive may terminate Executive’s employment at any time, with or without cause or advanced notice.  Any contrary representations that may have been made to Executive are superseded by this Agreement.  This Agreement is the full and complete agreement between Executive and the Company on the “at-will” nature of Executive’s employment with the Company, which may be changed only in an express written agreement signed by Executive and a duly authorized officer of the Company.  Executive’s rights to any compensation following a termination are only as set forth in Section 6.

 

1.2                               Position.  Subject to the terms of this Agreement, the Company agrees to continue to employ Executive, as President and Chief Executive Officer, and Executive hereby accepts such continued employment.  During the term of Executive’s employment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention to the business of the Company.  As President and Chief Executive Officer, Executive will serve as member of the Board of Directors of the Company (the “Board”).  Upon termination of employment for any reason, Executive agrees to promptly resign as a director, unless otherwise requested by the Board.

 

1.3                               Duties.  As President and Chief Executive Officer, Executive will report to the Board performing such duties as are normally associated with Executive’s position and such duties as are assigned to Executive from time to time by the Board, subject to the oversight and direction of the Board.  Executive will perform Executive’s duties under this Agreement principally out of the Company’s corporate headquarters.  In addition, Executive will make such business trips to such places as may be necessary or advisable for the efficient operations of the Company.

 

 

1.4                               Company Policies and Benefits.  The employment relationship between the parties is also subject to the Company’s personnel and compliance policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.  Executive will continue to be eligible to participate on the same basis as similarly situated executives in the Company’s benefit plans in effect from time to time during Executive’s employment.  All matters of eligibility for coverage or benefits under any benefit plan will be determined in accordance with the provisions of the plan.  The Company reserves the right to change, alter, or terminate any benefit plan in its sole discretion.  Notwithstanding the foregoing, in the event that the terms of this Agreement differ from, or are in conflict with, the Company’s general employment policies or practices, this Agreement will control.

 

2.                                      COMPENSATION.

 

2.1                               Salary.  Executive will receive for Executive’s services to be rendered hereunder an initial annualized base salary of US$449,946, subject to review and adjustment from time to time by the Company in its sole discretion, payable subject to standard payroll withholding requirements in accordance with Company’s standard payroll practices (“Base Salary”).

 

2.2                               Bonus.  While this Agreement is in effect, Executive will continue to be eligible for a discretionary annual cash bonus with a target of forty-five percent (45%) of Executive’s then current Base Salary, subject to review and adjustment from time to time by the Company in its sole discretion, payable subject to standard payroll withholding requirements (“Target Bonus”).  Whether or not Executive earns any bonus will be dependent upon (a) the actual achievement by Executive and the Company of the applicable individual and corporate performance goals, as determined by the Board in its sole discretion, and (b) Executive’s continuous performance of services to the Company through December 31 of the year any bonus may be earned.  The bonus may be greater or lesser than the Target Bonus and may be zero.  In all events, any bonus earned pursuant to this Section 2.2 will be paid on or before March 15 of the year following the year for which it is earned.

 

2.3                               Equity.  Executive has been granted options to purchase shares of the Company’s Common Stock (the “Options”), the terms of which will continue to be governed in all respects by the governing plan documents, grant notices and stock option agreements.  Executive will be eligible to receive further stock grants and/or stock option awards in the sole discretion of the Board or its Compensation Committee.

 

2.4                               Expense Reimbursement.  The Company will reimburse Executive for reasonable business expenses with proper documentation and in accordance with the Company’s standard expense reimbursement policy.  For the avoidance of doubt, to the extent that any reimbursements payable to Executive are subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”): (a) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

 

2

 

3.                                            CONFIDENTIALITY AND PROPRIETARY RIGHTS OBLIGATIONS.   The parties have entered into a Confidentiality & Proprietary Rights Agreement and a Restrictive Covenant (collectively, “Confidential Information Agreement”), which may be amended by the parties from time to time without regard to this Agreement.  The Confidential Information Agreement contains provisions that are intended by the parties to survive and do survive termination or expiration of this Agreement.

 

4.                                      OUTSIDE ACTIVITIES DURING EMPLOYMENT.  Except with the prior written consent of the Chairman of the Board, Executive will not, while employed by the Company, undertake or engage in any other employment, occupation or business enterprise that would interfere with Executive’s responsibilities and the performance of Executive’s duties hereunder except for (i) reasonable time devoted to volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as Executive may wish to serve, (ii) reasonable time devoted to activities in the non-profit and business communities consistent with Executive’s duties, and (iii) such other activities as may be specifically approved by the Chairman of the Board.  This restriction will not, however, preclude Executive (x) from owning less than one percent (1%) of the total outstanding shares of a publicly traded company, or (y) from employment or service in any capacity with Affiliates of the Company.  As used in this Agreement, “Affiliates” means an entity under common management or control with the Company.  Notwithstanding this Section 4, the Chairman of the Board will continue to permit Executive to serve as a board member of one (1) other company or entity, such company or entity whose identity Executive has disclosed or will disclose to the Chairman of the Board, unless such company or entity is reasonably deemed by the Chairman of the Board to be competitive with the Company, and further provided that Executive’s service as a board member of that company or entity will not in any way materially limit or adversely impact Executive’s compliance with the duties and obligations that Executive has and owes to the Company, including under this Agreement or the Confidential Information Agreement.

 

5.                                      NO CONFLICT WITH EXISTING OBLIGATIONS.  Executive represents that Executive’s performance of all the terms of this Agreement and as an Executive of the Company does not and will not breach any agreement or obligation of any kind made prior to Executive’s employment by the Company, including agreements or obligations Executive may have with prior employers or entities for which Executive has provided services.  Executive has not entered into, and Executive agrees that Executive will not enter into, any agreement or obligation, either written or oral, in conflict with his obligations under this Agreement.

 

6.                                      TERMINATION OF EMPLOYMENT.  Executive and the Company each acknowledge that, pursuant to Section 1 of this Agreement, either party has the right to terminate Executive’s employment with the Company at any time for any reason whatsoever, with or without cause or advance notice.  The provisions in this Section 6 govern the amount of compensation, if any, to be provided to Executive upon termination of employment and do not alter this at-will status.

 

6.1                               Termination by the Company without Cause or Resignation by Executive for Good Reason (Other Than in Connection with a Change in Control).

 

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(a)                                 The Company will have the right to terminate Executive’s employment with the Company at any time without Cause (as defined below).  Likewise, Executive may resign for Good Reason (as defined below).  In the absence of a Change in Control (as defined below) and in the event Executive is terminated by the Company without Cause, but not in the event of a termination due to death or Disability under Section 6.4, or Executive resigns for Good Reason (as defined below), then Executive will be entitled to receive the Accrued Obligations (as defined below) and in addition, provided such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “Separation from Service”), and further provided Executive complies with the obligations in Section 6.1(b) below, Executive will also be eligible to receive the following “Severance Benefits”:

 

(i)                                    The Company will pay Executive an amount equal to Executive’s then current Base Salary for eighteen (18) months, less standard withholdings and deductions, paid in installments on the Company’s regular payroll dates.

 

(ii)                                If Executive is participating in the Company’s group health plans as of the date of termination, and if Executive timely elects continued coverage under COBRA or, if applicable, state continuation coverage laws, the Company will pay the premiums necessary to continue Executive and Executive’s covered dependents’ health insurance coverage in effect on the termination date until the earliest of:  (i) eighteen (18) months following the termination date; (ii) the date when Executive becomes eligible for health insurance coverage in connection with new employment or self-employment; or (iii) the date Executive ceases to be eligible for continuation coverage for any reason, including plan termination (such period from the termination date through the earlier of (i)-(iii), (the “COBRA Payment Period”).  Notwithstanding the foregoing, if at any time the Company determines that its payment of continuation coverage premiums on Executive’s behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying premiums pursuant to this Section, the Company will pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the premium it would have paid for such month, subject to applicable tax withholding (such amount, the “Special Severance Payment”), for the remainder of the COBRA Payment Period.

 

(b)                                 Executive will receive the Severance Benefits pursuant to Section 6.1(a) of this Agreement if:  (i) within the timeframe provided by the Company, Executive has signed and delivered to the Company a separation agreement containing an effective, general release of claims in favor of the Company and its affiliates and representatives, in a form presented by the Company (the “Release”), which cannot be revoked in whole or part by such date (the date that the Release can no longer be revoked is referred to as the “Release Effective Date”); and (ii) if Executive holds any other positions with the Company or any affiliate, including a position on the Board, Executive resigns such position(s) to be effective no later than the date of Executive’s Separation from Service (or such other date as requested by the Board); (iii) Executive returns all Company property; (iv) Executive complies with Executive’s post-termination obligations under this Agreement and the Confidential Information Agreement; and (v) Executive complies with the

 

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terms of the Release, including without limitation any non-disparagement and confidentiality provisions contained in the Release.

 

(c)                                  The Company will not make any payments to Executive with respect to any of the benefits pursuant to Section 6.1(a) prior to the 60th day following Executive’s date of termination.  On the 60th day following Executive’s date of termination, and provided that Executive has delivered an effective Release, the Company will make the first payment to Executive under Section 6.1(a)(i) in a lump sum equal to the aggregate amount of payments that the Company would have paid Executive through such date had the payments commenced on Executive’s date of termination through such 60th day, with the balance of the payments paid thereafter on the schedule described above.

 

(d)                                 For purposes of this Agreement, “Accrued Obligations” are (i) Executive’s accrued but unpaid salary through the date of termination, (ii) any unreimbursed business expenses incurred by Executive payable in accordance with the Company’s standard expense reimbursement policies, (iii) benefits owed to Executive under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan, and (iv) Executive’s accrued but unused vacation through the date of termination.

 

(e)                                  The Severance Benefits provided to Executive pursuant to Section 6.1(a) are in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy or program.

 

(f)                                   Any damages caused by the termination of Executive’s employment without Cause would be difficult to ascertain; therefore, the Severance Benefits for which Executive is eligible pursuant to Section 6.1(a) above in exchange for the Release is agreed to by the parties as liquidated damages, to serve as full compensation, and not a penalty.

 

(g)                                 For purposes of this Agreement, “Good Reason” means any of the following actions taken by the Company without Executive’s consent:  (i) any material diminution of Executive’s authority, duties or responsibilities; (ii) a material (greater than ten percent (10%)) reduction by the Company of Executive’s Base Salary except in the case of across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all similarly-situated employees of the Company; (iii) a relocation of Executive’s place of employment to a location in excess of fifty (50) miles from the Company’s current principal place of employment; (iv) any material breach of this Agreement by the Company; provided, however, that it will only be deemed Good Reason if (1) the Company has not previously notified Executive of its intention to terminate his employment; (2) the Company is given written notice from Executive within ninety (90) days following the first occurrence of a condition that Executive considers to constitute Good Reason (with such notice including a description of the condition); (3) the Company fails to remedy such condition within thirty (30) days following such written notice; and (4) Executive resigns from employment with the Company effective not later than thirty (30) days after the end of the Company’s cure period.  Notwithstanding the foregoing, any actions taken by the Company to accommodate a Disability of Executive or pursuant to the Family

 

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and Medical Leave Act or an applicable state leave law will not be a Good Reason for purposes of this Agreement.

 

6.2                               Termination by the Company for Cause or Resignation by Executive (Other Than for Good Reason).

 

(a)                                 If the Company terminates Executive’s employment for Cause or Executive resigns from employment with the Company without Good Reason, regardless of whether or not such termination is in connection with a Change in Control, then Executive will be entitled to the Accrued Obligations, but Executive will not receive the Severance Benefits or any other severance compensation or benefit.

 

(b)                                 “Cause” for termination will mean that the Board has determined in its sole discretion that Executive has engaged in any of the following:  (i) a material breach of this Agreement or any other written agreement between Executive and the Company; (ii) gross negligence or gross misconduct in the performance of Executive’s duties; (iii) the commission of any act or omission constituting dishonesty or fraud that is injurious to the Company or any affiliate thereof; (iv) any conduct which constitutes a felony under applicable law; (v) conduct by Executive which demonstrates gross unfitness to serve; (vi) failure to attempt in good faith to implement a clear, reasonable and legal directive of the Company’s Board or any Board committee; or (vii) breach of a fiduciary duty.

 

6.3                               Change in Control Severance Benefits.

 

(a)                                 In the event that the Company (or any surviving or acquiring corporation) terminates Executive’s employment without Cause or Executive resigns for Good Reason on or within eighteen (18) months following the effective date of a Change in Control (“Change in Control Termination”), Executive will be entitled to the Accrued Obligations, and upon executing and allowing to become effective the Release, Executive will be eligible to receive the following Change in Control severance benefits:

 

(i)                                    a lump-sum cash payment in an amount equal to eighteen (18) months of Executive’s Base Salary then in effect (the “Lump Sum Severance”);

 

(ii)                                a lump-sum cash payment in an amount equal to one and one half (1.5) times Executive’s Target Bonus for the year in which Executive’s employment terminates (the “Bonus Severance”);

 

(iii)                            if Executive is participating in the Company’s group health plans as of a Change in Control Termination, and if Executive timely elects continued coverage under COBRA or, if applicable, state continuation coverage laws, the Company will pay the premiums necessary to continue Executive and Executive’s covered dependents’ health insurance coverage in effect on the Change in Control Termination date until the earliest of:  (A) eighteen (18) months following a Change in Control Termination; (B) the date when Executive becomes eligible for health insurance coverage in connection with new employment or self-employment; or (C) the date Executive ceases to be eligible for continuation coverage for any reason, including plan termination, provided, however, if at any time the Company determines that its payment of

 

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continuation coverage premiums on Executive’s behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying premiums pursuant to this Section, the Company will pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the premium it would have paid for such month, subject to applicable tax withholding, for the remainder of the COBRA Payment Period; and

 

(iv)                             effective as of the later of Executive’s Change in Control Termination date or the effective date of the Change in Control, the vesting and exercisability of all outstanding stock options and other stock awards covering the Company’s Common Stock that are held by Executive as of immediately prior to the Change in Control Termination date, to the extent such awards are subject to time-based vesting requirements, will be accelerated (and lapse, in the case of reacquisition or repurchase rights) in full.  Executive’s stock options and stock awards will remain outstanding following Executive’s Change in Control Termination date if and to the extent necessary to give effect to this Section 6.3(a)(iv) subject to earlier termination under the terms of the equity plan and award agreements under which such awards were granted and the original maximum term of the award (without regard to Executive’s termination).

 

(b)                                 To receive the payments and benefits under (a) above, Executive’s termination or resignation must constitute a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)) and Executive must execute and allow the Release to become effective within the time period provided by the Company, which shall be no later than 60 days following Executive’s termination or resignation.  The Lump Sum Severance and Bonus Severance will be paid, subject to deductions and withholdings, by the 60th day following Executive’s termination or resignation, provided Executive has timely delivered the effective Release.  For the avoidance of doubt, in the event of a Change in Control Termination, Executive only will be eligible to receive the severance benefits under this Section 6.3 and not those severance benefits under Section 6.1.

 

(c)                                  For purposes of this Agreement, “Change in Control” will have the meaning ascribed to such term in the Company’s 2018 Equity Incentive Plan.

 

6.4                               Termination by Virtue of Death or Disability of Executive.

 

(a)                                 In the event of Executive’s death while employed pursuant to this Agreement, all obligations of the parties hereunder will terminate immediately.  Executive’s legal representatives will not receive the Severance Benefits, or any other severance compensation or benefit, except that, pursuant to the Company’s standard payroll policies, the Company will provide to Executive’s legal representatives the Accrued Obligations.

 

(b)                                 Subject to applicable state and federal law, the Company will at all times have the right, upon written notice to Executive, to terminate this Agreement based on Executive’s Disability (as defined below).  Termination by the Company of Executive’s employment based on “Disability” will mean termination because Executive is unable due to a physical or mental condition to perform the essential functions of Executive’s position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12)

 

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month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period.  This definition will be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. In the event Executive’s employment is terminated based on Executive’s Disability, Executive will not receive the Severance Benefits, or any other severance compensation or benefit, except that, pursuant to the Company’s standard payroll policies, the Company will provide to Executive the Accrued Obligations.

 

6.5                               Cooperation with the Company after Termination of Employment.  Following termination of Executive’s employment for any reason, Executive will fully cooperate with the Company in all matters relating to the winding up of Executive’s pending work including, without limitation, any litigation in which the Company is involved or such other inquiry concerning the Company that Executive may have knowledge, the signing of routine documents for administrative or compliance purposes, announcements concerning termination and the orderly transfer of any pending work to such other executives or Executives as may be designated by the Company.

 

6.6                               Section 409A.

 

(a)                                 Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided herein are subject to Section 409A of the Internal Revenue Code (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”).  Severance benefits will not commence until Executive has a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “separation from service”).   Each installment of  severance benefits is a separate “payment” for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i), and the severance benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9).  Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of Executive’s separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, and if any of the payments due upon separation from service set forth herein and/or under any other agreement with the Company are deemed to be “deferred compensation,” then to the extent delayed commencement of any portion of such payments is required to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code and the related adverse taxation under Section 409A, such payments will not be provided to Executive prior to the earliest of (i) the expiration of the six (6)-month period measured from the date of Executive’s separation from service with the Company, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation.  Upon the first business day following the expiration of such applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this paragraph will be paid in a lump sum to Executive, and any remaining payments due will be paid as otherwise provided in this Agreement or in the applicable agreement. No interest will be due on any amounts so deferred.  To the extent that any severance payments are deferred compensation under Section 409A, and are not otherwise exempt from the application of Section 409A, then, if the period during which Executive may consider and sign the Release spans two calendar years, the payment of severance will not be made or begin until the later

 

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calendar year.  The parties acknowledge that the exemptions from application of Section 409A to severance benefits are fact specific, and any later amendment of this Agreement to alter the timing, amount or conditions that will trigger payment of severance benefits may preclude the ability of severance benefits provided under this Agreement to qualify for an exemption.

 

(b)                                 Notwithstanding anything in this Agreement to the contrary or otherwise, with respect to any expense, reimbursement or in-kind benefit provided pursuant to this Agreement that constitutes a “deferral of compensation” within the meaning of Section 409A and its implementing regulations and guidance, (a) the expenses eligible for reimbursement or in-kind benefits provided to Executive must be incurred during the term of the Agreement (or applicable survival period), (b) the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive in any other calendar year, (c) the reimbursements for expenses for which Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred and (d) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

 

(c)                                  It is intended that this Agreement will comply with the requirements of Section 409A, and any ambiguity contained herein will be interpreted in such manner so as to avoid adverse personal tax consequences under Section 409A.  Notwithstanding the foregoing, the Company will in no event be obligated to indemnify Executive for any taxes or interest that may be assessed by the Internal Revenue Service pursuant to Section 409A of the Code to payments made pursuant to this Agreement.

 

6.7                               Section 280G.

 

(a)                                 If any payment or benefit Executive will or may receive from the Company or otherwise (a “280G Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment pursuant to this Agreement or otherwise (a “Payment”) shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive.  If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).

 

(b)                                 Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant

 

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to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows:  (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.

 

(c)                                  Unless Executive and the Company agree on an alternative accounting firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the change of control transaction triggering the Payment shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change in control transaction, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.  The Company shall use commercially reasonable efforts to cause the accounting firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.

 

(d)                                 If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 6.7(a) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive shall promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 6.7(a)) so that no portion of the remaining Payment is subject to the Excise Tax.  For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) in Section 6.7(a), Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.

 

7.                                      GENERAL PROVISIONS.

 

7.1                               Notices.  Any notices required hereunder to be in writing will be deemed effectively given:  (a) upon personal delivery to the party to be notified, (b) when sent by electronic mail or confirmed facsimile, if sent during normal business hours of the recipient, and if not, then on the next business day, (c) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of delivery.  All communications will be sent to the Company at its primary office location and to Executive at Executive’s then current address as listed in Company records, or at such other address as the Company or Executive may designate by ten (10) days advance written notice to the other.

 

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7.2                               Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

 

7.3                               Survival.  Provisions of this Agreement which by their terms must survive the termination of this Agreement in order to effectuate the intent of the parties will survive any such termination, whether by expiration of the term, termination of Executive’s employment, or otherwise, for such period as may be appropriate under the circumstances.

 

7.4                               Waiver.  If either party should waive any breach of any provisions of this Agreement, Executive or the Company will not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

 

7.5                               Complete Agreement.  This Agreement constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof.  This Agreement is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter and supersedes any prior oral discussions or written communications and agreements, including the Prior Agreement.  This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in writing signed by Executive and an authorized officer of the Company.  The parties have entered into a separate Confidential Information Agreement and may have entered into other agreements governing stock option(s) or other equity awards.  Any such separate agreements govern other aspects of the relationship between the parties, have or may have provisions that survive termination of Executive’s employment under this Agreement, may be amended or superseded by the parties without regard to this agreement and are enforceable according to their terms without regard to the enforcement provision of this Agreement.

 

7.6                               Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

 

7.7                               Headings.  The headings of the sections hereof are inserted for convenience only and will not be deemed to constitute a part hereof nor to affect the meaning thereof.

 

7.8                               Successors and Assigns.  The Company will assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any Company or other entity with or into which the Company may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said Company or other entity will by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder.  Executive may not assign or transfer this Agreement or any rights or obligations hereunder, other than to Executive’s estate upon Executive’s death.

 

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7.9                               Choice of Law.  All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the Commonwealth of Massachusetts.

 

7.10                        Resolution of Disputes.  To ensure timely and economical resolution of any disputes that may arise in connection with Executive’s employment with the Company, as a condition of Executive’s employment, Executive and the Company hereby agree that any and all claims, disputes or controversies of any nature whatsoever arising out of, or relating to, this Agreement, or its interpretation, enforcement, breach, performance or execution, Executive’s employment with the Company, or the termination of such employment, will be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration conducted before a single arbitrator by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) or its successor, under then applicable JAMS rules.  The arbitration will take place in Boston, Massachusetts; provided, however, that if the arbitrator determines there will be an undue hardship to Executive to have the arbitration in such location, the arbitrator will choose an alternative appropriate location.  Executive and the Company each acknowledge that by agreeing to this arbitration procedure, both Executive and the Company waive the right to resolve any such dispute, claim or demand through a trial by jury or judge or by administrative proceeding.  Executive will have the right to be represented by legal counsel at Executive’s expense at any arbitration proceeding.  The arbitrator will:  (i) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be available under applicable law in a court proceeding; and (ii) issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based.  The arbitrator, and not a court, will also be authorized to determine whether the provisions of this paragraph apply to a dispute, controversy, or claim sought to be resolved in accordance with these arbitration procedures.  The Company will pay all costs and fees in excess of the amount of court fees that Executive would be required to incur if the dispute were filed or decided in a court of law.  Nothing in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any arbitration.

 

IN WITNESS WHEREOF, the parties have executed this Employment Agreement effective as of the day and year first written above.

 

	
 
    	
ENTASIS THERAPEUTICS HOLDINGS   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
[Name]
    
	
 
    	
[Title]
    

 

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EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Manos Perros
    

 

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