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Exhibit 4.2
EXECUTION COPY
QUATRX PHARMACEUTICALS COMPANY
AMENDMENT
TO
FOURTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
THIS
AMENDMENT TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS
AGREEMENT
(the "AMENDMENT") is made and entered into as of this 25th day of
May, 2005, by
and among QUATRX PHARMACEUTICALS COMPANY, a Delaware corporation
(the
"COMPANY"), and the entities whose names are set forth on EXHIBIT A
attached
hereto (referred to hereinafter collectively as the "INVESTORS" and
each
individually as an "INVESTOR").
RECITALS
WHEREAS, the Company and certain of the Investors (the "PRIOR
INVESTORS")
have entered into that certain Fourth Amended and Restated
Investors' Rights
Agreement, dated as of November 22, 2004 (the "INVESTOR RIGHTS
AGREEMENT"),
pursuant to which the Company and the Prior Investors made certain
agreements
regarding registration rights and other matters set forth therein.
Capitalized
terms used herein but not otherwise defined shall have the meaning
given such
terms in the Investor Rights Agreement;
WHEREAS, the Company proposes to issue up to 5,357,141 additional
shares of
its Series D Convertible Preferred Stock, par value $0.01 per share
("SERIES D
PREFERRED") and 4,260,035 shares of its Series D-1 Convertible
Preferred Stock,
par value $0.01 per share ("SERIES D-1 PREFERRED") to additional
Investors (the
"ADDITIONAL INVESTORS");
WHEREAS, Section 6.2 of the Investor Rights Agreement provides that
the
Investor Rights Agreement may be amended and the observance thereof
may be
waived only with the written consent of (i) the Company, (ii) the
holders of at
least 60% of the outstanding shares of the Company's Series A
Preferred and
Series B Preferred considered together as a single class
(calculated on an as if
converted into Common Stock basis), (the "REQUISITE SERIES A AND B
MAJORITY"),
(iii) the holders of at least 60% of the outstanding shares of
Series C
Preferred as a separate class (the "REQUISITE SERIES C MAJORITY")
and (iv) the
holders of at least 60% of the outstanding shares of Series D
Preferred as a
separate class (the "REQUISITE SERIES D MAJORITY") (including for
each purpose
any shares of Conversion Stock). Collectively, the Requisite Series
A and B
Majority, the Requisite Series C Majority and the Requisite Series
D Majority
are referred to herein as the "REQUISITE MAJORITIES";
WHEREAS, the Company, the Prior Investors and the Additional
Investors
desire to amend the Investor Rights Agreement as provided herein;
and
WHEREAS, the Investors executing this Amendment hold the
Requisite
Majorities as of the date hereof.
NOW,
THEREFORE, for and in consideration of the mutual promises and
covenants set forth herein and for other good and valuable
consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties to this
Amendment hereby agree as follows:
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AMENDMENT
1.
Pursuant to Section 7.8 of the Investor Rights Agreement, upon
its
execution of a counterpart signature page to the Investor Rights
Agreement, each
of the Additional Investors shall be deemed an "Investor" under,
and a party to,
the Investor Rights Agreement.
2.
SECTION 1.1 of the Investor Rights Agreement (Financial
Information) is
hereby amended by deleting the first paragraph thereof in its
entirety and
replacing it with the following:
"The
Company covenants and agrees that, commencing on the date of
this
Agreement, the Company will furnish to each Major Investor, as
defined
below, the information specified in this Section 1.1. For purposes
of this
Section 1.1 only, for so long as an Investor, together with its
affiliates,
holds not less than 500,000 shares of the Series A Preferred, the
Series B
Preferred, the Series C Preferred, the Series D Preferred, the
Series D-1
Preferred and/or the equivalent number (on an-as-converted basis)
of shares
of
Common Stock of the Company ("COMMON STOCK") issued upon the
conversion
of
such shares of Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred, or Series D-1 Preferred, such
Investor shall
be a
"MAJOR INVESTOR"."
3.
SECTION 1.2 of the Investor Rights Agreement (Inspection) is
hereby
amended by adding the following sentence at the beginning of such
section:
"For
purposes of Section 1.2 only, a "MAJOR INVESTOR" means an
Investor
that, together with its affiliates, holds not less than 1,000,000
shares of
the
Series A Preferred, the Series B Preferred, the Series C Preferred,
the
Series D Preferred, the Series D-1 Preferred and/or the equivalent
number
(on
an-as-converted basis) of shares of Common Stock issued upon
the
conversion of such shares of Series A Preferred, Series B
Preferred, Series
C
Preferred, Series D Preferred, or Series D-1 Preferred."
4.
SECTION 2.1 of the Investor Rights Agreement (Registration
Rights;
Definitions) is hereby amended by replacing each occurrence of the
phrase
"Series A Preferred, Series B Preferred, Series C Preferred or
Series D
Preferred" with the phrase "Series A Preferred, Series B Preferred,
Series C
Preferred, Series D Preferred or Series D-1 Preferred."
5.
SECTION 3.1 of the Investor Rights Agreement (Pre-emptive
Rights;
General) is hereby amended by replacing the phrase "Series A
Preferred, Series B
Preferred, Series C Preferred and/or Series D Preferred" with the
phrase "Series
A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred and/or
Series D-1 Preferred."
6.
SECTION 3.2 of the Investor Rights Agreement (Pre-emptive Rights;
New
Securities) is hereby amended as follows:
(A) Section 3.2(a) is amended and restated in its entirety to
read
"shares of Conversion Stock;"
(B) The following is added as Section 3.2(f):
"(f) Shares of Common Stock, Series D Preferred and Series D-1
Preferred
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issued pursuant to that certain Exchange Agreement, made as of
May
___, 2005, by and among the Company, Hormos Medical Corporation
("HORMOS"), and the shareholders of Hormos signatories thereto
(the
"EXCHANGE AGREEMENT")."
7.
SECTION 4.1 of the Investor Rights Agreement (Right to Purchase
in
Connection with Initial Public Offering; Grant of Option) is hereby
amended as
follows:
(A) the phrase "Series A Preferred, Series B Preferred, Series
C
Preferred and Series D Preferred" is replaced by the phrase "Series
A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred and
Series D-1
Preferred";
(B) the phrase "or issued to the Investor pursuant to the
Exchange
Agreement" is inserted after "or the Series D Purchase Agreement"
and before ",
as the case may be".
8.
SECTION 6.1 of the Investor Rights Agreement (Assignment), is
hereby
amended by (i) adding the phrase ", 40,000 shares of Series D-1
Preferred" after
"40,000 shares of Series D Preferred" and (ii) by adding the
following clause
(g) after clause (f) of the penultimate sentence thereof: "and (g)
in the case
of a transfer by SITRA, a partnership or other investment vehicle
in which SITRA
is a significant investor and that is managed by present or former
personnel of
SITRA, provided that as a condition precedent to such transfer,
SITRA has
delivered to the Company, if so requested by the Company, an
opinion of U.S.
counsel that the transfer of the Company's securities held by SITRA
to such
partnership or other investment vehicle is exempt from the
registration
requirements under the Securities Act."
9.
SECTION 6.2 of the Investor Rights Agreement (Amendment of Rights),
is
hereby amended by deleting the phrase "60% of the outstanding
shares of Series D
Preferred as a separate class" and replacing it with "65% of the
outstanding
shares of Series D Preferred as a separate class". In addition, the
following
sentence shall be added to the end of Section 6.2: "Notwithstanding
the
foregoing, the Company may amend EXHIBIT A hereto without the
consent of the
Investors to add additional shares of Series D Preferred purchased
under the
Amended and Restated Series D Preferred Stock Purchase
Agreement."
10.
Exhibit A to the Investor Rights Agreement is hereby amended
and
restated in its entirety by EXHIBIT A attached hereto.
11.
This Amendment may be executed in counterparts, each of which will
be
deemed an original, but all of which together shall constitute one
and the same
instrument.
12.
This Amendment shall become effective immediately upon execution by
the
Company and the Requisite Majorities.
13.
Other than as set forth in this Amendment, all of the terms and
conditions of the Investor Rights Agreement shall continue in full
force and
effect.
14.
This Amendment shall be governed by and construed exclusively
in
accordance with the substantive laws of the State of Delaware as
applied to
agreements among Delaware residents entered into and to be
performed entirely
within Delaware excluding the body of law relating to conflict of
laws and
choice of law.
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[SIGNATURE PAGE FOLLOWS]
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EXECUTION COPY
IN
WITNESS WHEREOF, the parties hereto have caused this AMENDMENT TO
FOURTH
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT to be executed and
delivered by
their respective officers hereunto duly authorized on the date
first above
written.
COMPANY:
QUATRX PHARMACEUTICALS COMPANY
By: /s/ Robert L. Zerbe
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Print Name: Robert L. Zerbe
Title: CEO
PRIOR INVESTORS:
MPM BIO VENTURES III, L.P.
MPM BIOVENTURES III-QP, L.P.
By: MPM Bio Ventures III GP, L.P., By: MPM
Bio Ventures III GP, L.P., its
its General Partner
General Partner
By: MPM Bio Ventures III LLC, its By:
MPM Bio Ventures III LLC, its
General Partner
General Partner
By: /s/ Nicholas J.
Simon
By: /s/ Nicholas J. Simon
---------------------------------
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Name: Nicholas J. Simon
Name: Nicholas J. Simon
Title: Series A Member
Title: Series A Member
MPM BIOVENTURES III PARALLEL FUND, MPM
BIOVENTURES III GMBH & CO.
L.P.
BETEILINGUNGS KG
By: MPM Bio Ventures III GP, L.P., By: MPM
BioVentures III GP, L.P., in its
its General Partner
capacity as the Managing Limited Partner
By: MPM Bi
