Exhibit 4.2(c)
Amendment
No. 2 to
Third Amended
and Restated Investor Rights Agreement
THIS AMENDMENT NO.
2 to the Third Amended and Restated Investor Rights Agreement dated
March 16, 2006 (this “ Amendment ”) amends
the Third Amended and Restated Investor Rights Agreement dated
May 12, 2004, as amended (the “ Future IRA
”) by and among Targacept, Inc. (the “ Company
”) and the holders of shares of the Company’s Series C
Convertible Preferred Stock, $0.001 par value per share (“
Series C Stock ”), Series B Convertible Preferred
Stock, $0.001 par value per share (“ Series B
Stock ”), or Series A Convertible Preferred Stock, $0.001
par value per share (“ Series A Stock ” and,
together with the Series C Stock and Series B Stock, “
Preferred Stock ”) party thereto. Capitalized terms
used herein and not otherwise defined shall have the meanings
ascribed to them in the Future IRA.
R E C I T A L S:
WHEREAS, the
Future IRA was entered into in contemplation of an initial public
offering of the Company’s common stock in order to amend,
effective as of the closing of such initial public offering, the
Company’s Second Amended and Restated Investor Rights
Agreement dated November 26, 2002, as amended (the “
Current IRA ”), which is currently in effect;
and
WHEREAS, by its
terms, the Future IRA would not become effective or affect the
Current IRA unless and until the prospective initial public
offering is completed and would not become effective at all if such
initial public offering was not completed on or before
June 30, 2005 (the “ Trigger Date ”);
and
WHEREAS,
Section 3 of the Future IRA provides that the Future IRA may
be amended only with the prior written consent of the Company and
the holders of a majority of the outstanding Series A Registrable
Securities and Series B Registrable Securities and at least 65% of
the outstanding Series C Registrable Securities (collectively, the
“ Required Investors ”); and
WHEREAS, the
prospective initial public offering was not completed on or before
the Trigger Date, and the Company and the undersigned holders of
Preferred Stock, constituting the Required Investors, desire to
amend the Future IRA as provided herein to provide for a later
Trigger Date;
NOW, THEREFORE,
the undersigned parties agree as follows:
1. Section 9
of the Future IRA is hereby amended by replacing “June 30,
2005” therein with “September 30,
2006.”
2. As expressly
amended hereby, the Future IRA shall continue in full force and
effect.
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