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EXHIBIT 10.2
AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT
This Amended and Restated Shareholder Rights Agreement (the
"Agreement") is effective as of May 3, 1995 by and between Immusol, Inc. (the
"Company") and the investors designated on Exhibit A attached hereto (the
"Investors"). This Agreement amends and restates the Shareholder Rights
Agreement dated July 27, 1992 (the "Prior Agreement"), and such amendment and
restatement is effective upon the execution of this Agreement by the Company
and the Holders of at least a majority of the Registrable Securities under the
Prior Agreement.
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Section 1:
(a) The terms "register", "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act including
any pre-effective or post-effective amendments necessary thereto, and the
declaration or ordering of effectiveness of such registration statement or
document;
(b) The term "Registrable Securities" means (1)
the Common Stock issuable or issued upon conversion of the Series A, Series B1,
Series B2, and Series B3 Preferred Stock (together, the "Preferred Stock") and
(2) any Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, such Preferred Stock or Common Stock, excluding in all cases,
however, (i) any Registrable Securities sold by a person in a transaction in
which his rights under this Section 1 are not assigned, or (ii) any Registrable
Securities sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction.
(c) The number of shares of "Registrable
Securities then outstanding" shall be determined by the number of shares of
Common Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities which are,
Registrable Securities.
(d) The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.12 hereof; and
(e) The term "Form S-3" means such form under the
Act as in effect on the date hereof or any registration form under the Act
subsequently adopted by the
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Securities and Exchange Commission (the "SEC") which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
(f) The term "Act" shall mean the Securities Act
of 1933, as amended.
(g) The term "Purchase Agreements" shall mean the
Series A Preferred Stock Purchase Agreement dated July 27, 1992 and the
Preferred Stock Purchase Agreement of even date herewith.
1.2 Request for Registration.
(a) If the Company shall receive at any time
after the earlier of (i) December 31, 1997 or (ii) six (6) months after the
effective date of the first registration statement for a public offering of
securities of the Company (other than a registration statement relating either
to the sale of securities to employees of the Company pursuant to a stock
option, stock purchase or similar plan or a SEC Rule 145 transaction), a
written request from the Holders of at least 500,000 shares of the outstanding
Registrable Securities (including securities convertible into Registrable
Securities) that the Company file a registration statement under the Act
covering the registration of at least forty percent (40%) of the Registrable
Securities then held by the Holders, or a lesser number if the anticipated
aggregate offering price, net of underwriting discounts and commissions,
exceeds $7,500,000, then the Company shall, within ten (10) days of the receipt
thereof, give written notice of such request to all Holders and shall, subject
to the limitations of Section 1.2(b), effect as soon as practicable, and in any
event within ninety (90) days of the receipt of such request, the registration
under the Act of all Registrable Securities which the Holders request to be
registered within thirty (30) days of the mailing of such written notice by the
Company; provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 1.2(a):
(i) During the period starting with the
date ninety (90) days prior to the Company's estimated date of filing of, and
ending on the date one hundred eighty (180) days immediately following the
effective date of, any registration statement pertaining to securities of the
Company (other than a registration of securities in a Rule 145 transaction or
with respect to an employee benefit plan), provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
(ii) After the Company has effected two
(2) such registrations pursuant to this Section 1.2(a), and such registrations
have been declared or ordered effective, provided that a request for
registration under this Section 1.2(a) shall not be counted for such purpose
unless the Registrable Securities included in such registration as of the time
of the pertinent registration statement became effective were in fact
registered and distributed in accordance with the intended method of
distribution; or
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(iii) If the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its shareholders for a registration statement to
be filed at such time, then the Company's obligation to use its best efforts to
register, qualify or comply under this Section 1.2(a) shall be deferred for a
period not to exceed one hundred eighty (180) days from the date of receipt of
written request from the Holders; provided, however, that the Company may not
utilize this right more than once in any twelve-month period.
(b) If the Holders initiating the registration
request hereunder (the "Initiating Holders") intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 1.2 and the Company shall include such information in the written
notice referred to in Section 1.2(a). 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 (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company as provided in Section 1.4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders.
Notwithstanding any other provision of this Section 1.2, if the underwriter
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Holder.
1.3 Company Registration. If (but without any obligation
to do so) the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its stock or other securities under the Act in connection with the
public offering of such securities solely for cash (other than a registration
relating solely to the sale of securities to participants in a Company stock
plan, or a registration on any form which does not include substantially the
same information as would be required to be included in a registration
statement covering the sale of the Registrable Securities), the Company shall,
at such time, promptly give each Holder written notice of such registration.
Upon the written request of each Holder given within thirty (30) days after
mailing of written notice by the Company, the Company shall, subject to the
provisions of Section 1.8, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
However, the Company shall not be obligated to take any action to effect the
registration of the Registrable Securities of the Holders pursuant to this
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Section 1.3 after the Company has effected three (3) such registrations
pursuant to this Section 1.3, and such registrations have been declared or
ordered effective.
1.4 Obligations of the Company. Whenever required under
this Section 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to one hundred
twenty (120) days.
(b) Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such registration statement.
(c) Furnish to the Holders such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them.
(d) Use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, and do any and all other acts and things reasonably
necessary or advisable to enable the sale or disposition in such jurisdictions
of the shares covered by the registration statement, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in
any such states or jurisdictions.
(e) In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering. Each Holder participating in such underwriting shall also enter into
and perform such Holder's obligations under such an agreement provided that
such underwriting agreement shall not provide for indemnification or
contribution obligations on the part of the Holders greater than the
obligations set forth in Section 1.9(b).
(f) Cooperate with the selling Holders, to
facilitate the timely preparation and delivery of certificates representing
shares to be sold and not bearing any restrictive legends, and enable such
shares to be in such denominations and registered in such
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names as the prospective underwriters may request at least two (2) business
days prior to any sale of shares to the prospective underwriters.
(g) Cause all shares covered by any registration
statement to be listed on each securities exchange on which similar securities
issued by the Company are then listed if requested by the Holders of a majority
of the Registrable Securities. The Company further agrees to provide a
transfer agent and registrar for such Registrable Securities covered by such
registration statement not later than the effective date of such registration
statement.
(h) Provide a CUSIP number of all shares of
stock, not later than the effective date of the registration statement.
(i) 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 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.
(j) Furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1,
on the date that such Registrable Securities are delivered to the underwriters
for sale in connection with a registration pursuant to this Section 1, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities, if possible.
1.5 Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 1 with respect to the Registrable Securities of any selling Holder that
such holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such
Holder's Registrable Securities.
1.6 Expenses of Demand Registration. All expenses other
than underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications
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pursuant to Section 1.2, including (without limitation) all registration,
filing and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Holders (not to exceed $25,000)
shall be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all Participating Holders shall bear such expenses),
unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to a demand registration pursuant to Section 1.2; provided further,
however, that if at the time of such withdrawal, the Holders have learned of a
material adverse change in the condition, business, or prospects of the Company
from that known to the Holders at the time of their request, then the Holders
shall not be required to pay any of such expenses and shall retain their rights
pursuant to Section 1.2.
1.7 Expenses of Company Registration. The Company shall
bear and pay all expenses incurred in connection with any registration, filing
or qualification of Registrable Securities with respect to all registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as
provided in Section 1.12), including (without limitation) all registration,
filing, and qualification fees, printers and accounting fees relating or
apportionable thereto and the fees and disbursements of one counsel for the
selling Holders selected by them (not to exceed $25,000), but excluding
underwriting discounts and commissions relating to Registrable Securities.
1.8 Underwriting Requirements. In connection with any
offering involving an underwriting of shares being issued by the Company, the
Company shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it, and then only in such quantity as will not, in the opinion of the
underwriters, jeopardize the success of the offering by the Company; provided
that such underwriting agreement is in customary form and is reasonably
acceptable to the Holders of a majority of the Registrable Securities requested
to be included in such registration and does not provide for indemnification or
contribution obligations on the part of the Holders greater than the
obligations set forth in Section 1.9(b). If the total amount of securities,
including Registrable Securities, requested by shareholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters reasonably believe 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 believe will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling
shareholders according to the total amount of securities entitled to be
included therein owned by each selling shareholder or in such other proportions
as shall mutually be agreed to by such selling shareholders) but in no event
shall any shares being sold by a shareholder exercising a demand registration
right similar to that granted in
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Section 1.2 be excluded from such offering. For purposes of apportionment, any
selling shareholder which is a Holder of Registrable Securities and which is a
partnership or corporation, the partners, retired partners and shareholders of
such Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall
be deemed to be a single "selling shareholder", and any pro rata reduction with
respect to such "selling shareholder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such "selling shareholder", as defined in this sentence.
1.9 Indemnification. In the event any Registrable
Securities are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, each of it officers, directors
and agents, any underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act or the Securities Exchange Act of 1934, amended (the "1934 Act"),
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Act, the 1934
Act, any state securities law or any rule or regulation promulgated under the
Act, the 1934 Act or any state securities law; and the Company will pay to each
such Holder, each of its officers, directors and agents, underwriter or
controlling person, as incurred, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 1.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, its officers, directors
and agents, 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 Act, any underwriter, any other Holder selling securities in
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such registration statement and any controlling person of any such underwriter
or other Holder, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will pay, as incurred, any legal
or other expenses reasonably incurred by any person intended to be indemnified
pursuant to this Section 1.9(b), in connection with investigating or defending
any such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 1.9(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this Section 1.9(b) exceed the gross proceeds from the offering received
by such Holder.
(c) Promptly after receipt by an indemnified
party under this Section 1.9 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
1.9, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 1.9, but the omission
so to deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this Section 1.9.
(d) The obligations of the Company and Holders
under this Section 1.9 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1, and
otherwise.
1.10 Reports Under Securities Exchange Act of 1934. With
a view to making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the
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Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) make and keep public information available,
as those terms are understood and defined in SEC Rule 144, at all times after
ninety (90) days after the effective date of the first registration statement
filed by the Company for the offering of its securities to the general public;
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the 1934 Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable after
the end of the fiscal year in which the first registration statement filed by
the Company for the offering of its securities to the general public is
declared effective;
(c) file with the SEC in a timely manner all
reports and other documents required of the Company under the Act and the 1934
Act; and
(d) furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of SEC Rule
144 (at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company) or the Act and the 1934 Act (at
any time after it has become subject to such reporting requirements), or that
it qualifies as a registrant whose securities may be resold pursuant to Form
S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so
filed by the Company, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.
1.11 Form S-3 Registration. In case the Company shall
receive from any Holder or Holders who hold in excess of 500,000 shares of the
Company's Registrable Securities, a written request or requests that the
Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and
(b) as soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder's or Holders' Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities
of any other Holder or Holders joining in such request as are specified in a
written request
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given within twenty (20) days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
1.11: (1) if Form S-3 is not available for such offering by the Holders; (2) if
the Holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than
$1,000,000; (3) if the Company shall furnish to the Holders a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its shareholders for such Form S-3 Registration to be effected
at such time, in which event the Company shall have the right to defer the
filing of the Form S-3 registration statement for a period of not more than 120
days after receipt of the request of the Holder or Holders under this Section
1.11; provided, however, that the Company shall not utilize this right more
than once in any twelve (12) month period; (4) if the Company has already
effected three registrations on Form S-3 for the Holders pursuant to this
Section 1.11; or (5) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance.
(c) If the Holders initiating the registration
request hereunder (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 part of their request made pursuant to this
Section 1.11 and the Company shall include such information in the written
notice referred to in Section 1.11(a). 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 (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company as provided in Section 1.4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders.
Notwithstanding any other provision of this Section 1.11, if the underwriter
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Holder.
(d) Subject to the foregoing, the Company shall
file a registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders. All expenses
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incurred in connection with a registration requested pursuant to Section 1.11,
including (without limitation) all registration, filing, qualification,
printer's and accounting fees and the reasonable fees and disbursements of
counsel for the selling Holder or Holders and counsel for the Company, but
excluding any underwriters' discounts or commissions associated with
Registrable Securities, shall be borne by the Company. Registrations effected
pursuant to this Section 1.11 shall not be counted as demands for registration
or registrations effected pursuant to Sections 1.2 or 1.3, respectively.
1.12 Assignment of Registration Rights. The rights to
cause the Company to register Registrable Securities pursuant to this Section 1
may be assigned by a Holder to a transferee or assignee who acquires at least
500,000 shares of Registrable Securities, provided the Company is, within a
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; and provided, further, that
such assignment shall be effective only if immediately following such transfer
the further disposition of such securities by the transferee or assignee is
restricted under the Act. Notwithstanding the above, such rights may be
assigned by a Holder to a limited partner, general partner or other affiliate
of an Investor (the "Transferee") regardless of the number of shares acquired
by such Transferee.
1.13 Limitations on Subsequent Registration Rights. From
and after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of at least a majority of the outstanding
Registrable Securities, enter into any agreement with any holder or prospective
holder of any securities of the Company which would allow such holder or
prospective holder to include such securities in any registration filed under
Section 1.2 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of his securities will not reduce the amount of
the Registrable Securities of the Holders which is included.
1.14 "Market Stand-Off" Agreement. Each holder of
securities which are Registrable Securities (or which are convertible into
Registrable Securities) hereby agrees that, during a period not to exceed 180
days, following the effective date of a registration statement of the Company
filed under the Act, it shall not, to the extent requested by the Company and
reasonably required by the underwriter in a firm commitment underwriting, sell
or otherwise transfer or dispose of (other than to donee who agree to be
similarly bound) any Common Stock of the Company held by it at any time during
such period except Common Stock included in such registration; provided,
however, that:
(a) such agreement shall be applicable only to
the first such registration statement of the Company which covers Common Stock
(or other securities) to be sold on its behalf to the public in an underwritten
offering; and
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(b) all officers and directors of the Company
enter into similar agreements.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
1.15 Amendment of Registration Rights. Any provision of
this Section 1 may be amended and the observance thereof 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. Any
amendment or waiver effected in accordance with this section shall be binding
upon each holder of any securities which are or at one time were Registrable
Securities (or which are or were convertible into Registrable Securities), each
future holder of all such securities, and the Company.
1.16 Termination of Registration Rights. No shareholder
shall be entitled to exercise any right provided for in this Section 1 after
five (5) years following the consummation of the sale of securities pursuant to
a registration statement filed by the Company under the Act in connection with
the initial firm commitment underwritten offering of its securities to the
general public for a total offering of more than $7,500,000.
2. Right of First Offer.
2.1 Grant of Right. Subject to the terms and conditions
specified in this Section 2, the Company hereby grants to each Investor who
holds at least 500,000 shares of Registrable Securities (a "Major Investor") a
right of first offer with respect to future sales by the Company of its Future
Shares (as hereinafter defined). Each time the Company proposes to offer any
shares of, or securities convertible into or exercisable for any shares of, any
class of its Future Shares, the Company shall first make an offering of such
Future Shares to each Major Investor in accordance with the provisions listed
below.
2.2 Future Shares. "Future Shares" shall mean shares of
any capital stock of the Company, whether now authorized or not, and any
rights, options or warrants to purchase such capital stock, and securities of
any type that are, or may become, convertible into such capital stock; provided
however, that "Future Shares" do not include (i) the shares of Preferred Stock
purchased or to be purchased under the Purchase Agreements or the Common Stock
issued or issuable upon the conversion of such Preferred Stock, (ii) securities
offered pursuant to a registration statement filed under the Securities Act, as
hereinafter defined, (iii) securities issued pursuant to the acquisition of
another corporation by the Company by merger of, purchase of substantially all
of the assets or other reorganization, and (iv) all shares of
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Common Stock hereafter issued or issuable to officers, directors, employees or
consultants of the Company pursuant to any employee or consultant stock
offering, plan or arrangement approved by the Board of Directors of the
Company.
2.3 Notice. In the event the Company proposes to
undertake an issuance of Future Shares, the Company shall deliver a notice by
certified mail (the "Notice") to the Major Investors stating (i) its bona fide
intention to offer such Future Shares, (ii) the number of such Future Shares to
be offered and (iii) the price, if any, for which it proposes to offer such
Future Shares. Within 30 calendar days after receipt of the Notice, the Major
Investor may elect to purchase or obtain, at the price and on the terms
specified in the Notice, up to that portion of such Future Shares which equals
the proportion that the number of Registrable Securities held by such Major
Investor bears to the total number of shares of Common Stock issued and
outstanding, including shares issuable upon conversion of convertible
securities issued and outstanding.
2.4 Sale after Notice. If all such Future Shares
referred to in the Notice are not elected to be obtained as provided in Section
2.3 hereof, the Company may, during the 90-day period following the expiration
of the period provided in Section 2.3 hereof, offer the remaining unsubscribed
Future Shares to any person or persons at a price not less than, and upon terms
no more favorable to the offeree than those specified in the Notice. If the
Company does not enter into an agreement for the sale of the Future Shares
within such period, or if such agreement is not consummated within 90 days of
the execution thereof, the right provided hereunder shall be deemed to be
revived and such Future Shares shall not be offered unless first reoffered to
the Major Investors in accordance herewith.
2.5 Assignment. The right of first offer granted under
this Section 2 is assignable by the Major Investors to any transferee of a
minimum of 500,000 shares of Registrable Securities.
2.6 Termination of Rights. No shareholder shall be
entitled to exercise any right provided for in this Section 2 (i) upon the
consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Act in connection with the initial firm
commitment underwritten offering of its securities to the general public of a
firm commitment underwritten public offering for a total offering of more than
$7,500,000 or (ii) when the Company first becomes subject to the periodic
reporting requirements of Section 12(g) or 15(d) of the Securities Exchange Act
of 1934, whichever event shall first occur.
3. Obligation to Participate. Pfizer, Inc. ("Pfizer") and its
assignees of Registrable Securities shall purchase securities offered by the
Company in its initial public offering. Pfizer and its assignees shall
purchase such proportion of securities, that the number of Registrable
Securities held by Pfizer and its assignees bears to the total number of shares
of Common Stock then issued and outstanding, including shares issuable upon
conversion of convertible
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securities then issued and outstanding; provided, however, the valuation of the
Company upon the close of such initial public offering must be greater than
$150,000,000 and the initial public offering raises at least $15,000,000 in the
aggregate.
4. Waiver of Right of First Offer. The Right of First Offer
under Section 2 of the Prior Agreement to purchase shares of Series B1, Series
B2, and Series B3 Preferred Stock to be sold pursuant to the Preferred Stock
Purchase Agreement of even date herewith is hereby waived. This waiver is
effective upon the execution of this agreement by First Small Business
Investment Corporation of California, the sole Major Investor under the Prior
Agreement.
5. Miscellaneous Provisions.
5.1 Waivers and Amendments. Except as provided in
Section 1.15 of this Agreement, any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Holders of at least a majority of
the Registrable Securities. Any amendment or waiver effected in accordance
with this Section 5.1 shall be binding upon each Investor or its assignee and
the Company
5.2 Notices. All notices and other communications
required or permitted hereunder shall be in writing and, except as otherwise
noted herein, shall be deemed effectively given upon personal delivery,
delivery by nationally recognized courier or upon deposit with the United
States Post Office, (by first class mail, postage prepaid) addressed: (a) if
to the Company, at 3050 Science Park Road, San Diego, California 92121 (or at
such other address as the Company shall have furnished to the Holders in
writing) attention of President and (b) if to a Holder, at the latest address
of such person shown on the Company's records.
5.3 Descriptive Headings. The descriptive headings
herein have been inserted for convenience only and shall not be deemed to limit
or otherwise affect the construction of any provisions hereof.
5.4 Governing Law. This Agreement shall be governed by
and interpreted under the laws of the State of New York.
5.5 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument, but only one of
which need be produced.
5.6 Expenses. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable
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attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
5.7 Successors and Assigns. Except as otherwise
expressly provided in this Agreement, this Agreement shall benefit and bind the
successors, assigns, heirs, executors and administrators of the parties to this
Agreement.
5.8 Entire Agreement. This Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
the subject matter of this Agreement.
5.9 Separability; Severability. Unless expressly
provided in this Agreement, the rights of each Investor under this Agreement
are several rights, not rights jointly held with any other Investors. Any
invalidity, illegality or limitation on the enforceability of this Agreement
with respect to any Investor shall not affect the validity, legality or
enforceability of this Agreement with respect to the other Investors. If any
provision of this Agreement is judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired.
5.10 Stock Splits. All references to numbers of shares
in this Agreement shall be appropriately adjusted to reflect any stock
dividend, split, combination or other recapitalization of shares by the Company
occurring after the date of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first set forth above.
IMMUSOL, INC.
/s/ TSVI GOLDENBERG
--------------------------------------
Tsvi Goldenberg, Ph.D., Chairman
of the Board and Chief Executive
Officer
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BankAmerica Ventures
By: _______________________________
Title: ____________________________
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PFIZER, INC.
By: _______________________________
Title: ____________________________
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THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
By: _______________________________
Title: ____________________________
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