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Exhibit 4.4
EXECUTION COPY
ALTUS PHARMACEUTICALS INC.
AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE
AGREEMENT
This Amended and
Restated Right of First Refusal and Co-Sale Agreement
(this "Agreement") dated as of May 21, 2004
is entered into by and among Vertex
Pharmaceuticals Incorporated, a
Massachusetts corporation ("Vertex"), the
persons and entities listed on Exhibit A
attached hereto (individually, a
"Purchaser" and collectively, the
"Purchasers"), Altus Pharmaceuticals Inc., a
Delaware corporation (the "Company") (f/k/a
"Altus Biologics Inc."), each of the
executives of the Company listed on Exhibit
B hereto (individually, an
"Executive" and collectively, the
"Executives") who is now, or after the date
hereof becomes, an executive of the Company
and joins in and becomes a party to
this Agreement by executing and delivering
to the Company an Instrument of
Accession in the form of Annex 1 hereto,
and each other holder of 1% or more of
the outstanding voting stock of the Company
listed on Exhibit C hereto
(individually, an "Other Holder" and
collectively, the "Other Holders"), who
owns, or shall after the date hereof
acquire, 1% or more of the outstanding
voting stock of the Company and joins in
and becomes a party to this Agreement
by executing and delivering to the Company
an Instrument of Accession in the
form of Annex 2 hereto, and amends and
restates that certain Right of First
Refusal and Co-Sale Agreement among the
Company and the parties thereto dated
September 26, 2001, as amended as of
December 7, 2001 (the "Prior Agreement").
Vertex, the Purchasers and the Other
Holders are sometimes referred to in this
agreement as the "Stockholders." Executives
and Former Employees (as defined
below) are expressly excluded from the
definition of Stockholders,
notwithstanding the fact that an Executive
may hold 1% or more of the
outstanding voting stock of the Company.
For the purposes of this Agreement a
"Former Employee" shall be any Executive
who ceases to be employed by or serve
as a consultant to the Company. A Former
Employee ceases to be an Executive for
all purposes under this Agreement.
Recitals
WHEREAS, the
Company, Vertex, certain of the Purchasers, the Executives and
the Other Holders have previously entered
into the Prior Agreement;
WHEREAS, the
Company and certain of the Purchasers are parties to that
certain Series C Convertible Preferred
Stock and Warrant Purchase Agreement of
even date herewith (the "Purchase
Agreement");
WHEREAS, the
execution and delivery of this Agreement is a condition to the
consummation of the transactions
contemplated by the Purchase Agreement;
WHEREAS, the
parties to the Prior Agreement desire to amend and restate the
Prior Agreement in its entirety so as to
read in its entirety as set forth
herein;
WHEREAS, the
undersigned parties represent the necessary voting power in
order to amend the Prior Agreement as set
forth in Section 11.5 thereof; and
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WHEREAS, the
purpose of this Agreement is to protect the management and
control of the Company from influence by
any person not acceptable to the
Stockholders, and to assist the
Stockholders in selling their Shares if they so
desire.
NOW, THEREFORE,
for valuable consideration, it is agreed as follows.
1. Certain
Definitions.
As used in this
Agreement, the term "Shares" shall include all shares of
capital stock of the Company held by
Stockholders, Executives and/or Former
Employees, whether now owned or hereafter
acquired. For purposes of calculating
any person's "pro rata" ownership of
Shares, all shares of capital stock that
are convertible into common stock, $.01 par
value per share, of the Company (the
"Common Stock") shall be deemed to have
been converted into Common Stock of the
Company, and for purposes of Sections 5 and
6 only, the warrants held by Vertex
as of the date hereof, warrants (the
"Series B Warrants") held by certain
Purchasers as of the date hereof to
purchase shares of Series B Convertible
Preferred Stock, $.01 par value per share,
(the "Series B Preferred") and the
warrants (the "Series C Warrants") issued
on the date hereof to the Purchasers
of Series C Convertible Preferred Stock,
$.01 par value per share, (the "Series
C Preferred") to purchase shares of Series
C Preferred (the Series C Warrants
together with the Series B Warrants, the
"Purchaser Warrants"), so long as they
remain outstanding, shall be deemed to have
been exercised.
2. Restrictions
on Transfer.
2.1 Any sale, transfer or other disposition, whether voluntarily or
by
operation of law ("Transfer") of any of the
Shares by a Stockholder, Executive
or Former Employee, other than according to
the terms of this Agreement, shall
be void and shall not transfer any right,
title, or interest in or to any of
such Shares to the purported
transferee.
2.2 An Executive may not Transfer Shares except in accordance
with
Section 3 or Section 8.
2.3 An original copy of this Agreement, duly executed by each of
the
parties hereto, shall be delivered to the
Secretary of the Company and
maintained at the principal executive
office of the Company and made available
for inspection by any person requesting
it.
2.4 Each Stockholder, Executive and Former Employee agrees to
present
the certificates representing the Shares
presently owned or hereafter acquired
by him, her or it to the Secretary of the
Company and cause the Secretary to
stamp on such certificates in a prominent
manner the following legend in
substantially the following form:
"The sale or other disposition of any of the shares represented
by
this certificate is restricted by an Amended and Restated Right
of
First Refusal and Co-Sale Agreement, dated as of May 21, 2004,
as
amended from time to time, among certain of the shareholders of
this
corporation and
this corporation (the "Agreement"). A copy of the
Agreement is available for
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inspection during normal business hours at the principal
executive
office of this corporation."
3. Transfers Not
Subject to Restrictions. Any Stockholder, Executive or
Former Employee may Transfer Shares (i) to
his or her parents, spouse, children,
siblings, in-laws, grandchildren, or
children or grandchildren of siblings or
in-laws, or to a trust established for the
benefit of himself or herself or any
such family member, or dispose of them
under his or her will (in the case of a
Stockholder, Executive or Former Employee
who is a natural person), (ii) to an
affiliate (as such term is defined under
the Securities Act of 1933, as amended
(the "Securities Act")) of such Stockholder
(in the case of a Stockholder that
is an entity) or (iii) to a partner, a
retired partner, member or retired member
of such Stockholder, or to the estate of
any such partner or member (in the case
of a Stockholder that is a partnership or
limited liability company), without
compliance with Sections 4 through 6,
provided that any transferee pursuant to
clause (i), (ii) or (iii) above delivers to
the Company and the Stockholders a
written instrument agreeing to be bound by
the terms of this Agreement as if it
were the transferor.
4. Offer of
Sale; Notice of Proposed Sale.
If any
Stockholder or Former Employee desires to Transfer any of his,
her
or its Shares, or any interest in such
Shares, in any transaction other than
pursuant to Section 3 of this Agreement,
such Stockholder or Former Employee
(the "Selling Stockholder") shall first
deliver written notice of his, her or
its desire to do so (the "Notice") to the
Company and each of the Stockholders
in the manner prescribed in Section 12.4 of
this Agreement. The Notice must
specify: (i) the name and address of the
party to which the Selling Stockholder
proposes to sell or otherwise dispose of
the Shares or an interest in the Shares
(the "Offeror"), (ii) the number, class and
series of Shares the Selling
Stockholder proposes to sell or otherwise
dispose of (the "Offered Shares"),
(iii) the consideration per Share to be
delivered to the Selling Stockholder for
the proposed sale, transfer or disposition,
and (iv) all other material terms
and conditions of the proposed
transaction.
5. Stockholders'
Option to Purchase.
5.1 Subject to Section 6, each Stockholder other than the
Selling
Stockholder (the "Non-Selling
Stockholders") shall have an option, exercisable
for a period of fifteen (15) business days
from the date of delivery of the
Notice, to purchase, on a pro rata basis
according to the number of Shares owned
by such Non-Selling Stockholder, the
Offered Shares for the consideration per
share and on the terms and conditions set
forth in the Notice. Such option shall
be exercised by delivery by such
Non-Selling Stockholder of written notice to
the Secretary of the Company.
Notwithstanding the foregoing, in no event shall
Vertex be entitled to exercise any rights
under this Section 5 to the extent
that any purchase hereunder by Vertex would
result in Vertex holding more than
ten percent (10%) of the Company's issued
and outstanding shares of Series B
Preferred or Series C Preferred.
5.2 Subject to the terms of Section 6, each Non-Selling
Stockholder
who does not elect to purchase Shares
pursuant to Section 5.1 may, within the
same 15-day period referred to in Section
5.1, notify the Secretary of the
Company of its desire to participate in the
sale of the
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Shares on the terms set forth in the
Notice, and the number, class and series of
Shares it wishes to sell.
5.3 In the event options to purchase have been exercised by the
Non-Selling Stockholders with respect to
some but not all of the Offered Shares,
those Non-Selling Stockholders who have
exercised their options within the
15-day period specified in Section 5.1
shall have an additional option, for a
period of ten (10) days next succeeding the
expiration of such 15-day period, to
purchase all or any part of the balance of
such Offered Shares on the terms and
conditions set forth in the Notice, which
option shall be exercised by the
delivery of written notice to the Secretary
of the Company. In the event there
are two or more such Non-Selling
Stockholders that choose to exercise the
last-mentioned option for a total number of
Offered Shares in excess of the
number available, the Offered Shares
available for each such Non-Selling
Stockholders option shall be allocated to
such Non-Selling Stockholder pro rata
based on the number of Shares owned by the
Non-Selling Stockholder so electing.
5.4 If the options to purchase the Offered Shares are exercised
in
full by the Non-Selling Stockholders, the
Company shall immediately notify all
of the Non-Selling Stockholders of that
fact. The closing of the purchase of the
Offered Shares shall take place at the
offices of the Company no later than five
(5) days after the date of such notice to
the Non-Selling Stockholders.
5.5 The option to purchase provided for in this Section 5 shall
not
apply to any Approved Sale as that term is
defined in Section 7.
5.6 The option provided for in this Section 5 shall have priority
over
any first refusal rights held by the
Company or by any other parties to this
Agreement.
6. Failure to
Fully Exercise Options; Co-Sale.
6.1 If the Non-Selling Stockholders do not exercise their options
to
purchase all of the Offered Shares within
the periods described in this
Agreement (the "Option Period"), then all
options of the Non-Selling
Stockholders to purchase the Offered
Shares, whether exercised or not, shall
terminate, and each Non-Selling Stockholder
which has, pursuant to Section 5,
expressed a desire to sell Shares in the
transaction (a "Participating
Stockholder"), shall be entitled to do so
pursuant to this Section; provided,
however, that with respect to Offered
Shares consisting of Series C Preferred,
the Participating Stockholders may only
elect to sell Shares consisting of
Series C Preferred. The Company shall
promptly, on expiration of the Option
Period, notify the Selling Stockholder of
the number of Shares the Participating
Stockholders wish to sell, specifying the
class and series of such Shares and
the number of Shares within each class and
series. The Selling Stockholder shall
use his, her or its best efforts to
interest the Offeror in purchasing, in
addition to the Offered Shares, the Shares
that any Participating Stockholder
wishes to sell. If the Offeror does not
wish to purchase all of the Shares made
available by the Selling Stockholder and
the Participating Stockholders, then
each Participating Stockholder and the
Selling Stockholder shall be entitled to
sell, at the price and on the terms and
conditions set forth in the Notice
(provided that the price set forth in the
Offer with respect to shares of Common
Stock shall be appropriately adjusted, if
necessary, based on the
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conversion ratio of any Convertible
Preferred Stock to be sold), a portion of
the Shares being sold to the Offeror as
follows:
(i) With respect to the Offered Shares consisting of shares of
Series C Preferred, that number of shares
of Series C Preferred in the same
proportion as such Selling Stockholder's or
Participating Stockholder's
ownership of Series C Preferred bears to
the aggregate number of shares of
Series C Preferred owned by the Selling
Stockholder and the Participating
Stockholders; and
(ii) With respect to the Offered Shares that do not consist of
shares of Series C Preferred, that number
of Shares in the same proportion as
such Selling Stockholder's or Participating
Stockholder's ownership of Shares
bears to the aggregate number of Shares
owned by the Selling Stockholder and the
Participating Stockholders.
The transaction contemplated by the Notice
shall be consummated not later than
sixty (60) days after the expiration of the
Option Period.
6.2 If the Participating Stockholders do not elect to sell the
full
number of Shares which they are entitled to
sell pursuant to Section 6.1, the
Selling Stockholder shall be entitled to
sell to the Offeror, according to the
terms set forth in the Notice, that number
of his, her, or its own Shares which
equals the difference between the number of
Shares desired to be purchased by
the Offeror and the number of Shares the
Participating Stockholders desire to
sell pursuant to Section 6.1. If the
Selling Stockholder wishes to Transfer any
such Shares at a price per Share which
differs from that set forth in the
Notice, upon terms different from those
previously offered to the Stockholders,
or more than sixty (60) days after the
expiration of the Option Period, then, as
a condition precedent to such transaction,
such Shares must first be offered to
the Stockholders on the same terms and
conditions as given the Offeror, and in
accordance with the procedures and time
periods set forth above.
6.3 The proceeds of any sale made by the Selling Stockholder
without
compliance with the provisions of this
Section 6 shall be deemed to be held in
constructive trust in such amount as would
have been due to the Participating
Stockholders if the Selling Stockholder had
complied with this Agreement.
7. Voting and
Required Sale. If any person or entity offers to acquire all
or substantially all of the assets or
business of the Company, by merger, sale
of assets, stock purchase or otherwise,
and
(i) the aggregate consideration payable in respect thereof is
equal to or greater than the Threshold
Price (as defined below) and the
Purchasers holding 55% in interest of the
voting power of the then outstanding
shares of Series B Preferred and Series C
Preferred voting together as a single
class on an as converted basis have voted
in favor of such transaction (whether
at an annual or special meeting of
stockholders or by written consent in lieu
thereof); or
(ii) the aggregate consideration payable in respect thereof is
less than the Threshold Price and at least
55% of the voting power of all issued
and outstanding shares of capital stock of
the Company (other than issued and
outstanding shares of voting capital
stock
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held by Vertex or any holder of capital
stock of the Company for which the
transaction is an Interested Transaction
(as defined below)) have voted in favor
of such transaction (whether at an annual
or special meeting of stockholders or
by written consent in lieu thereof) (any of
(i) or (ii) above shall be referred
to herein as an "Approved Sale")); then
Vertex, the
Executives and the Former Employees (the "Obligees") shall be
obligated to (a)
vote all of their Shares in favor of the transaction, (b)
sell, transfer
or exchange all of their Shares in connection with such
transaction on
the same terms as those consented to by such consenting
stockholders of
the Company's voting capital stock (with appropriate
adjustment to
reflect the conversion of convertible securities and the
preferences and
priorities of the Company's preferred stock, $.01 par value
per share (the
"Preferred Stock")), and (c) execute and deliver such
instruments of
conveyance and transfer and take such other action,
including
executing any purchase agreement, merger agreement, indemnity
agreement,
escrow agreement or related documents, as may be reasonably
required by the
Company in order to carry out the terms and provisions of
this Section 7.
If the Approved Sale is structured as a merger or
consolidation,
the Obligees shall waive any dissenters' rights, appraisal
rights or
similar rights in connection with the Approved Sale. If an
Obligee fails or
refuses to vote or sell his, her or its Shares as required
by, or votes
his, her or its Shares in contravention of, this Section 7,
then each such
Obligee hereby grants to the Secretary of the Company an
irrevocable
proxy, coupled with an interest, to vote such Shares in
accordance with
this Section 7, and hereby appoints the Secretary of the
Company its
attorney in fact, to sell such Shares in accordance with the
terms of this
Section 7. At the closing of the Approved Sale, each Obligee
shall deliver,
against receipt of the consideration payable in such
transaction,
certificates representing the Shares which such Obligee holds
of record or
beneficially, with all endorsements necessary for transfer. In
the event that
an Obligee fails or refuses to comply with the provisions of
this Section 7,
the Company, the Stockholders and the purchaser in such
transaction, at
their option, may elect to proceed with such transaction
notwithstanding
such failure or refusal and, in such event and upon tender
of the specified
consideration to any such Obligee, the rights of any such
party with
respect to the Shares shall cease.
The "Threshold Price" shall mean $8.549420 times the number of
shares
of Common Stock
then outstanding (and assuming the conversion of all
outstanding
convertible preferred stock, the exercise of all outstanding
options and the
exercise of all outstanding warrants (options and warrants
that are
outstanding at any point in time are hereinafter referred to as
"Common Stock
Equivalents")).
An "Interested Transaction" with respect to any "Person" (which
for
purposes of this
Agreement shall include persons and entities) shall mean a
transaction
between the Company and any other corporation, limited
liability
company, partnership, association, organization o
