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Exhibit 10.11
EXECUTION COPY
AMENDED AND
RESTATED INVESTOR RIGHTS AGREEMENT
AMENDED AND
RESTATED INVESTOR RIGHTS AGREEMENT made this 1 st day of
March, 2006 by and between Helicos BioSciences Corporation, a
Delaware corporation (the "Company") and the holders of the
Company's Series A Convertible Preferred Stock ("Series A
Preferred Stock") whose names are set forth under the heading
"Series A Investors" on Schedule I hereto, and the
holders of the Company's Series B Convertible Preferred Stock
(the "Series B Preferred Stock") whose names are set forth
under the heading "Series B Investors" on Schedule I hereto (the
Series A Investors and Series B Investors being referred
to collectively as the "Investors").
WHEREAS, the
Series B Investors have entered into a Series B Preferred
Stock Purchase Agreement dated as of the date hereof, by and among
the Series B Investors and the Company (the "Purchase
Agreement") to purchase an aggregate of up to Thirty-One Million
Seven Thousand Seven Hundred Fifty-Two (31,007,752) shares of
Series B Preferred Stock in one or more closings;
WHEREAS, as an
inducement to the Series B Investors to consummate the
transactions contemplated by the Purchase Agreement, the Company
and the holders of a majority of the Restricted Stock (as defined
herein) under the Investor Rights Agreement dated December 19,
2003, desire to amend and restate such agreement as provided
herein.
NOW, THEREFORE,
in consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Investors agree
as follows:
1.
Certain
Definitions. As
used in this Agreement, the following terms shall have the
following respective meanings:
-
"
Board of Directors "
shall mean the board of directors of the Company as constituted
from time to time.
"
Charitable Reserve Shares " shall mean shares of Common Stock reserved by the Company for
charitable donations to be granted by the Company at the discretion
of the Board of Directors from time to time, not to exceed in the
aggregate 1,250,000 shares of Common Stock (appropriately adjusted
to reflect stock splits, stock dividends, combinations of shares
and the like with respect to the Common Stock).
"
Code " shall mean the
Internal Revenue Code of 1986, as amended from time to
time.
"
Commission " shall mean
the Securities and Exchange Commission, or any other federal agency
at the time administering the Securities Act.
"
Common Stock " shall
mean the Common Stock, $0.001 par value, of the Company, as
constituted as of the date of this Agreement.
"
Conversion Shares "
shall mean shares of Common Stock issued or issuable upon
conversion of the Preferred Stock.
"
Confidential Information " shall mean any information that is labeled as confidential,
proprietary or secret which a holder of Restricted Stock obtains
from the Company pursuant to financial statements, reports and
other materials provided by the Company to such holder of
Restricted Stock pursuant to this Agreement or pursuant to
visitation or inspection rights granted hereunder.
"
Exchange Act " shall
mean the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
"
Fully-Diluted Basis "
shall mean, for purposes of calculating the number of outstanding
shares of capital stock of the Company at a particular time, all
shares of Common Stock outstanding at such time and all shares of
Common Stock issuable upon conversion or exercise of any options or
other convertible securities outstanding at such time (including
without limitation shares of Preferred Stock).
"
Indebtedness " shall
mean all obligations, which should, in accordance with generally
accepted accounting principles, be classified upon the obligor's
balance sheet (or the notes thereto) as liabilities, but in any
event including liabilities secured by any mortgage on property
owned or acquired subject to such mortgage, whether or not the
liability secured thereby shall have been assumed, and also
including all guaranties and endorsements, in respect of any such
obligations of others, whether or not the same are or should be so
reflected in said balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business.
"
Intellectual Property Rights
" shall mean all of the following: (i) patents,
patent applications, patent disclosures and all related
continuation, continuation-in-part, divisional, reissue,
re-examination, utility, model, certificate of invention and design
patents, patent applications, registrations and applications for
registrations, (ii) trademarks, service marks, trade dress,
logos, tradenames, service names and corporate names and
registrations and applications for registration thereof,
(iii) copyrights and registrations and applications for
registration thereof, (iv) mask works and registrations and
applications for registration thereof, (v) trade secrets and
confidential business information, whether patentable or
nonpatentable and whether or not reduced to practice, know-how,
manufacturing and product processes and techniques, research and
development information, copyrightable works, financial, marketing
and business data, pricing and cost information, business and
marketing plans and customer and supplier lists and information,
(vi) other proprietary rights relating to any of the foregoing
(including without limitation associated goodwill and remedies
against infringements thereof and rights of protection of an
interest therein under the laws of all jurisdictions) and
(vii) copies and tangible embodiments thereof.
"
Key Employee" or "Key Employees
" shall mean and include the President, chief
executive officer, chief financial officer, chief operating officer
and chief technology officer, or any other individual who performs
a significant role in the operations of the Company as may be
reasonably designated by the Board of Directors of the
Company.
"
Material Adverse Change " shall mean a material adverse change in the business,
operations, affairs, or condition (financial or otherwise) of the
Company.
"
Person or Persons "
shall mean an individual, corporation, partnership, joint venture,
trust, or unincorporated organization, or a government or any
agency or political subdivision thereof.
"
Preferred Stock " shall
mean (i) the Series A Preferred Stock issued pursuant to
that certain Series A Purchase Agreement dated as of
December 19, 2003 between the Company and the other parties
named therein and (ii) the Series B Preferred Stock
issued pursuant to the Purchase Agreement.
"
Qualified Public Offering " shall mean an underwritten public offering pursuant to an
effective registration under the Securities Act covering the offer
and sale by the Company of its Common Stock on the New York Stock
Exchange or the NASDAQ National Market in which the aggregate
offering proceeds to the Company equal or exceed $50 million
and the per share offering price is at least $3.87 (subject to
appropriate adjustment by the Company's Board of Directors in the
event of any stock split or similar event).
2
"
Registrable Shares "
shall mean (1) the Common Stock issuable upon conversion of
the Preferred Stock, (2) any Common Stock purchased by an
Investor (or its permitted transferees) pursuant to Section 12
hereof (or Common Stock issuable with respect to other securities
so purchased), (3) any Common Stock of the Company issued as a
dividend or other distribution with respect to, or in exchange or
in replacement of, such Preferred Stock or Common Stock,
(4) 540,556 shares of Common Stock issued to NewcoGen Group
LLC upon the exercise of that certain warrant dated
November 12, 2003, and (5) for the purposes of
Section 5 only, Common Stock held by Stanley N. Lapidus and
Stephen R. Quake.
"
Registration Expenses "
shall mean the expenses so described in Section 8.
"
Reserved Employee Shares " shall mean shares of Common Stock not to exceed in the
aggregate 14,076,382 shares (appropriately adjusted to reflect
stock splits, stock dividends, combinations of shares and the like
with respect to the Common Stock) reserved by the Company for
issuance pursuant to stock purchase, stock grant or stock option
arrangements for employees, directors or consultants of the
Company, all under arrangements approved by the Board of Directors.
The foregoing number of Reserved Employee Shares may be increased
by vote or written consent of the Board of Directors, including in
all cases the affirmative vote or consent of a majority of the
directors designated by the holders of Series A Preferred
Stock.
"
Restricted Stock "
shall mean (a) all shares of Common Stock held by the
Investors and (b) all Conversion Shares held by the Investors,
excluding, in the case of (a) and (b), shares which have been
(i) registered under the Securities Act pursuant to an
effective registration statement filed thereunder and disposed of
in accordance with the registration statement covering them or
(ii) publicly sold pursuant to Rule 144 under the
Securities Act.
"
Right Holder " shall
mean any holder of Registrable Shares. For the avoidance of doubt,
Stanley N. Lapidus and Stephen R. Quake shall only be deemed Right
Holders for purposes of Section 5 hereof.
"
Securities Act " shall
mean the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the
time.
"
Selling Expenses "
shall mean the expenses so described in Section 8.
"
Subsidiary" or "Subsidiaries
" shall mean any corporation or trust of which the
Company and/or any of its other Subsidiaries (as herein defined)
directly or indirectly owns at the time outstanding shares of every
class of such corporation or trust other than directors' qualifying
shares comprising at least fifty percent (50%) of the voting power
of such corporation or trust.
2.
Restrictive
Legend. Each
certificate representing Preferred Stock, Conversion Shares or
Restricted Stock shall, except as otherwise provided in this
Section 2 or in Section 3, be stamped or otherwise
imprinted with a legend substantially in the following
form:
"THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND ALL
SUCH APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE."
A certificate shall not bear such legend if in
the opinion of counsel reasonably satisfactory to the Company the
securities represented thereby may be publicly sold without
registration under the Securities Act and any applicable state
securities laws.
3
3.
Notice of Proposed
Transfer. Prior
to any proposed transfer of any Preferred Stock, Conversion Shares
or Restricted Stock (other than under the circumstances described
in Sections 4, 5 or 6), the holder thereof shall give written
notice to the Company of its intention to effect such transfer.
Each such notice shall describe the manner of the proposed transfer
and, if requested by the Company, shall be accompanied by an
opinion of counsel reasonably satisfactory to the Company to the
effect that the proposed transfer may be effected without
registration under the Securities Act and any applicable state
securities laws, whereupon the holder of such stock shall be
entitled to transfer such stock in accordance with the terms of its
notice; provided , however ,
that no such opinion of counsel shall be required for a transfer to
one or more partners or members of the transferor (in the case of a
transferor that is a partnership or a limited liability company,
respectively) or to an affiliated corporation (in the case of a
transferor that is a corporation) or to any family member, or to
any trust, family liability company, family limited partnership or
similar estate planning entity for the benefit of any such family
member of the transferor; provided,
further, however , that any
transferee other than a transferee receiving such shares for no
consideration shall execute and deliver to the Company a
representation letter in form reasonably satisfactory to the
Company's counsel to the effect that the transferee is acquiring
such shares for its own account, for investment purposes and
without any view to distribution thereof. Each certificate for
Preferred Stock, Conversion Shares or Restricted Stock transferred
as above provided shall bear the legend set forth in
Section 2, except that such certificate shall not bear such
legend if (i) such transfer is in accordance with the
provisions of Rule 144 (or any other rule permitting public
sale without registration under the Securities Act) or
(ii) the opinion of counsel referred to above is to the
further effect that the transferee and any subsequent transferee
(other than an affiliate of the Company) would be entitled to
transfer such securities in a public sale without registration
under the Securities Act. The restrictions provided for in this
Section 3 shall not apply to securities which are not required
to bear the legend prescribed by Section 2 in accordance with
the provisions of that Section.
4.
Required
Registration.
-
(a) At
any time after six months after the Company's initial public
offering, Right Holders holding Registrable Shares constituting at
least 50% in interest of all Registrable Shares then outstanding
may request the Company to register under the Securities Act all or
any portion of the Registrable Shares held by such requesting Right
Holder or Right Holders for sale in the manner specified in such
notice, provided that the reasonably anticipated aggregate price to
the public of such offering would exceed $5,000,000. For purposes
of this Section 4 and Sections 5, and 6 the only securities
which the Company shall be required to register shall be
Registrable Shares; provided
, however
, that, in any underwritten public offering
contemplated by this Section 4 or Sections 5 and 6, the
holders of Preferred Stock shall be entitled to sell such Preferred
Stock to the underwriters for conversion and sale of the shares of
Common Stock issued upon conversion or exercise and conversion, as
applicable, thereof. Notwithstanding anything to the contrary
contained herein, no request may be made under this Section 4
within 180 days after the effective date of any registration
statement on Form S-1 filed by the Company.
(b) Following
receipt of any notice under this Section 4, the Company shall
immediately notify all Right Holders from whom notice has not been
received and such Right Holders shall then be entitled within
30 days thereafter to request the Company to include in the
requested registration all or any portion of their Registrable
Shares. The Company shall use its best efforts to register under
the Securities Act, for public sale in accordance with the method
of disposition described in paragraph (a) above, the number of
Registrable Shares specified in such notice (and in all notices
received by the Company from other Right Holders within
30 days after the giving of such notice by the Company). The
Company shall be obligated to register Registrable Shares pursuant
to this Section 4 on two occasions only (except for on
Form S-3 or any equivalent successor form); provided , however , that such obligation
shall be deemed satisfied only when a
4
registration statement covering all Registrable
Shares specified in notices received as aforesaid for sale in
accordance with the method of disposition specified by the
requesting Right Holders shall have become effective or if such
registration statement has been withdrawn prior to the consummation
of the offering at the request of Right Holders holding a majority
in interest of the Registrable Shares to be covered by such
registration statement (other than as a result of a material
adverse change in the business or condition, financial or
otherwise, of the Company) and, if such method of disposition is a
firm commitment underwritten public offering, all such Registrable
Shares shall have been sold pursuant thereto (not including shares
eligible for sale pursuant to the underwriters' over-allotment
option).
(c) The
Company shall be entitled to include in any registration statement
referred to in this Section 4 shares of Common Stock to be
sold by the Company for its own account, except as and to the
extent that, in the opinion of the managing underwriter, such
inclusion would adversely affect the marketing of the Registrable
Shares to be sold. Except for registration statements on
Form S-4, S-8 or any successor thereto, the Company will not
file with the Commission any other registration statement with
respect to its Common Stock, whether for its own account or that of
other stockholders, from the date of receipt of a notice from
requesting holders requesting sale pursuant to an underwritten
offering pursuant to this Section 4 until the date that is
180 days after completion of the period of distribution of the
registration contemplated thereby.
5.
Incidental
Registration. If
the Company at any time (other than pursuant to Section 4 or
Section 6) proposes to register any of its securities under
the Securities Act for sale to the public, whether for its own
account or for the account of other security holders or both
(except with respect to registration statements on Forms S-4, S-8
or another form not available for registering the Registrable
Shares for sale to the public), each such time it will give written
notice to all Right Holders of its intention so to do. Upon the
written request of any such Right Holder, received by the Company
within 30 days after the giving of any such notice by the
Company, to register any of its Registrable Shares, the Company
will use its best efforts to cause the Registrable Shares as to
which registration shall have been so requested to be included in
the securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent requisite to permit
the sale or other disposition by the holder of such Registrable
Shares so registered. In the event that any registration pursuant
to this Section 5 shall be, in whole or in part, an
underwritten public offering of Common Stock, the number of shares
of Common Stock to be included in such an underwriting may be
reduced (first by eliminating any shares held by stockholders of
the Company other than Right Holders, then by eliminating any
shares which the Company may wish to register for its own account,
and thereafter, to the extent necessary, by eliminating shares held
by the Right Holders pro rata to the respective number of
Registrable Shares required by the Right Holders to be included in
the registration) if and to the extent that the managing
underwriter shall be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the
Company therein, provided, however , that in no event may
less than twenty percent (20%) of the total number of shares of
Common Stock to be included in such underwriting be made available
for Registrable Shares unless the managing underwriter shall in
good faith advise the Right Holders proposing to distribute their
securities through such underwriting that such level of
participation would, in its opinion, materially adversely affect
the offering price or its ability to complete the offering and
shall specify the number of Registrable Shares which, in its
opinion, can be included in the registration and underwriting
without such an effect.
6.
Registration on
Form S-3. If
at any time (i) a Right Holder or Right Holders request that
the Company file a registration statement on Form S-3 or
any successor thereto for a public offering of all or any portion
of Registrable Shares held by such requesting Right Holder or Right
Holders which have an expected aggregate offering price of at least
$1,000,000, and (ii) the Company is a registrant entitled to
use Form S-3 or any successor thereto to register such shares,
then the Company shall use its best efforts to register under the
Securities Act on Form S-3 or any successor thereto
(utilizing
5
Rule 415, if so requested), for public sale
in accordance with the method of disposition specified in such
notice, the number of Registrable Shares specified in such notice.
Whenever the Company is required by this Section 6 to use its
best efforts to effect the registration of Registrable Shares, each
of the procedures and requirements of Section 4 (including but
not limited to the requirement that the Company notify all Right
Holders from whom notice has not been received and provide them
with the opportunity to participate in the offering) shall apply to
such registration, provided
, however
, that there shall be no limitation on the number of
registrations on Form S-3 which may be requested and obtained
under this Section 6, and provided , further , however , that the requirements
contained in the first sentence of Section 4(a) shall not
apply to any registration on Form S-3 which may be requested
and obtained under this Section 6.
Notwithstanding anything to the contrary in this
Section 6, the Company shall not be required to effect more
than two registrations pursuant to this Section 6 in any
12 month period.
7.
Registration
Procedures. If
and whenever the Company is required by the provisions of Sections
4, 5 or 6 to use its best efforts to effect the registration of any
Registrable Shares under the Securities Act, the Company
will:
-
(a) as
expeditiously as possible, prepare and file with the Commission a
registration statement (which, in the case of an underwritten
public offering pursuant to Section 4, shall be on
Form S-1 or other form of general applicability satisfactory
to the managing underwriter selected as therein provided) with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the
period of the distribution contemplated thereby (determined as
hereinafter provided);
(b) as
expeditiously as possible, prepare and file with the Commission
such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to
keep such registration statement effective for the period specified
in paragraph (a) above and comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Shares covered by such registration statement in accordance with
the sellers' intended method of disposition set forth in such
registration statement for such period;
(c) furnish
to each seller of Registrable Shares and to each underwriter such
number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public
sale or other disposition of the Registrable Shares covered by such
registration statement;
(d) use
its best efforts to register or qualify the Registrable Shares
covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions as the sellers of Registrable
Shares or, in the case of an underwritten public offering, the
managing underwriter reasonably shall request, provided , however , that the Company shall
not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) use
its best efforts to list the Registrable Shares covered by such
registration statement with any securities exchange on which the
Common Stock of the Company is then listed;
(f) provide
a transfer agent and registrar for all such Registrable Shares, not
later than the effective date of such registration
statement;
(g) promptly
notify each seller of Registrable Shares and each underwriter under
such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of
the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated
6
therein or necessary to make the statements
therein not misleading in light of the circumstances then
existing;
(h) make
available for inspection by each seller of Registrable Shares, any
underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees
to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such
registration statement. The rights granted pursuant to this
subsection (h) may not be assigned or otherwise conveyed by
such person or by any subsequent transferee of any such rights
without the written consent of the Company, which consent shall not
be unreasonably withheld; provided that the Company may refuse such
written consent if the proposed transferee is a competitor of the
Company as determined by the Company's Board of Directors; and
provided further, that no such written consent shall be required if
the transfer is made to a party who is not a competitor of the
Company and who is a parent, subsidiary, affiliate, partner or
group member of such person;
(i) advise
each selling holder of Registrable Shares, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceeding for such purpose and promptly use all reasonable efforts
to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
(j) cooperate
with the selling holders of Registrable Shares and the managing
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Shares to be
sold, such certificates to be in such denominations and registered
in such names as such holders or the managing underwriters may
request at least two business days prior to any sale of Registrable
Shares; and
(k) permit
any holder of Registrable Shares which holder, in the judgment of
the Company might be deemed to be a controlling person of the
Company, to participate in good faith in the preparation of such
registration or comparable statement and to require the insertion
therein of material, furnished to the Company in writing, which in
the reasonable judgment of such holder and its counsel should be
included, subject to review by the Company and its counsel after
consultation with such holder.
For purposes of
Section 7(a) and 7(b) and of Section 4(c), the period of
distribution of Registrable Shares in a firm commitment
underwritten public offering shall be deemed to extend until each
underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Registrable
Shares in any other registration shall be deemed to extend until
the earlier of the sale of all Registrable Shares covered thereby
and 120 days after the effective date thereof.
In connection
with each registration hereunder, the sellers of Registrable Shares
will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as
reasonably shall be necessary in order to assure compliance with
federal and applicable state securities laws.
In connection
with each registration pursuant to Sections 4, 5 or 6 covering an
underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter
selected in the manner herein provided in such form and containing
such provisions as are customary in the securities business for
such an arrangement between such underwriter and companies of the
Company's size and investment stature.
8.
Expenses.
All expenses incurred by the
Company in complying with Sections 4, 5 and 6, including, without
limitation, all registration and filing fees, printing expenses,
fees and disbursements
7
of counsel and independent public accountants for
the Company, fees and expenses (including counsel fees) incurred in
connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars, costs of
insurance, and fees and disbursements of one counsel for the
sellers of Registr
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