EXHIBIT 4.6
FIRST AMENDMENT AND JOINDER
TO
SECOND AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT
(Series R Preferred Stock)
THIS FIRST AMENDMENT AND JOINDER TO
SECOND AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (the
“ Joinder and Amendment Agreement ”) is entered
into as of October 26, 2004 by and among Pharmasset, Inc. a
Delaware corporation (the “ Company ”),
Hoffmann-La Roche Inc., a New Jersey corporation (“
Roche ”), and the persons named under the headings
“Existing Investors” (the “ Existing
Investors ”) and “Existing Stockholders” (the
“ Existing Stockholders ”) on the signature
pages hereto.
RECITALS
WHEREAS, pursuant to certain stock
purchase and other agreements (as amended and restated,
collectively, the “ Prior Purchase Agreements
”), certain of the Company’s stockholders previously
purchased or acquired securities of the Company and/or its
predecessor and now hold (a) shares of the Company’s
Series A Preferred Stock, $0.001 par value per share (the “
Series A Stock ”), (b) shares of the
Company’s Series B Preferred Stock, $0.001 par value per
share (the “Series B Stock ”),
(c) shares of the Company’s Series C Preferred
Stock, $0.001 par value per share (the “ Series C
Stock ”), (d) shares of the Company’s
Series D Preferred Stock, $0.001 par value per share (the
“ Series D Stock ”) and (e) warrants
to acquire shares of the Company’s Series D-1 Preferred
Stock, $0.001 par value per share (the “ Series D-1
Stock ”); and
WHEREAS, pursuant to a Stock
Purchase Agreement of even date herewith between Roche and the
Company (the “ Series R Purchase Agreement
”), Roche has agreed to purchase and the Company has agreed
to sell an aggregate of 400,000 shares of the Company’s
Series R Preferred Stock, $0.001 par value per share (the
“ Series R Stock ”), and warrants (the
“ Series R-1 Warrants ”) to purchase
470,588 shares of the Company’s Series R-1 Preferred
Stock, $0.001 par value per share (the “ Series R-1
Stock ”); and
WHEREAS, as a condition to
completing the purchase, sale and issuance of the Series R
Stock and Series R-1 Warrants pursuant to the Series R
Purchase Agreement, Roche has requested that the Company extend to
Roche the registration rights of an “Investor” as set
forth in that certain Second Amended and Restated
Stockholders’ Agreement dated as of August 4, 2004
by and among the Company, the Existing Investors and the Existing
Stockholders, a copy of which is attached as Exhibit A
to this Joinder and Amendment Agreement (the “ Existing
Stockholders’ Agreement ”) and certain other rights
as specifically set forth herein; and
WHEREAS, the Existing
Stockholders’ Agreement may only be amended with the consent
of Existing Investors holding a majority of the Registrable
Securities (as defined by the Existing Stockholders’
Agreement) and the consent of Existing Stockholders (other than the
Existing Investors) holding at least a majority of the Shares (as
defined by the Existing Stockholders’ Agreement), on an
as-if-converted basis, held by such existing Stockholders, and an
amendment to the registration rights provisions of the Existing
Stockholders’ Agreement
additionally requires the consent of Existing
Investors holding at least two-thirds of the Registrable
Securities.
NOW, THEREFORE, in consideration of
the mutual promises, representations, warranties, covenants and
conditions set forth in this Joinder and Amendment Agreement and in
the Purchase Agreement, the Existing Stockholders’ Agreement
is hereby amended, and the Company, Roche, the Existing Investors
and the Existing Stockholders (collectively, the “
Parties ”) hereby agree, as follows:
SECTION 1. GENERAL
1.1 Definitions
. Capitalized terms used but not
otherwise defined in this Joinder and Amendment Agreement shall
have the meanings set forth in the Existing Stockholders’
Agreement, as amended hereby. As used in the Existing
Stockholders’ Agreement, as amended hereby, the term
“Agreement” shall hereafter be deemed to mean the
Existing Stockholders’ Agreement as amended by this Joinder
and Amendment Agreement. In addition, the Existing
Stockholders’ Agreement is hereby amended so that, as used in
the Existing Stockholders’ Agreement, as amended hereby, the
following terms shall have the following respective
meanings:
“ Certificate of
Incorporation ” shall mean the Company’s Second
Amended and Restated Certificate of Incorporation, as filed with
the Secretary of State of Delaware on or prior to the Series R
Closing Date, as amended from time to time.
“ Investors ”
shall mean the Series B Holders, the Series C Holders and
the Purchasers, and with respect to only Sections 2.1 through
2.13 of this Agreement (and with respect to any terms used within
Sections 2.1 through 2.13 hereof that, by definition, include
the “Investors” and solely with respect to the use of
such terms in such Sections) and with respect to Section 7.1
of this Agreement the term “Investors” shall also
include the Series R Holder.
“ Majority Investors
” shall mean those holders of a majority of the Registrable
Securities issued or issuable to the Investors upon conversion of
outstanding Series B Stock, Series C Stock, Series D
Stock, Series R Stock and Series R-1 Stock; provided, however,
that with respect to Section 3.10 of this Agreement and with
respect to Section 7.1 of this Agreement (solely as
Section 7.1 relates to amendments and waivers of this
Agreement that do not include amendments or waivers of the rights
granted to the Series R Holder pursuant to this Agreement),
the term “Majority Investors” shall not include the
holders of Registrable Securities issued or issuable upon
conversion of any Series R Stock or Series R-1
Stock.
“ New Shares ”
shall mean (a) any Common Stock or Preferred Stock or other
equity securities of the Company whether now authorized or not,
(b) any rights, options, or warrants to purchase said shares,
and (c) securities of any type whatsoever that are, or may
become, convertible into, exercisable, exchangeable, or carrying
rights to subscribe for any equity securities of the Company
(collectively with the securities referred to in clause (b)
above, “ Options ”); provided, however, that
“New Shares” does not include (i) securities
offered to the public pursuant to a registration statement filed
under the Securities Act in connection with a
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Qualified IPO; (ii) securities
issued pursuant to the acquisition of another Person by the Company
by merger, consolidation, amalgamation, exchange of shares, the
purchase of substantially all of the assets or otherwise in a
transaction that has been approved by the Majority Investors;
(iii) up to 3,675,522 shares of Common Stock (appropriately
adjusted to take account of any stock split, stock dividend,
combination of shares, recapitalization or other similar event)
issuable to officers, directors, employees and consultants of the
Company or a subsidiary pursuant to the exercise of options granted
or shares of Common Stock directly issued under the Equity
Incentive Plan and such options and other rights to acquire Common
Stock granted thereunder; (iv) securities issued to the
Company’s stockholders in connection with any share split,
share dividend, recapitalization, split-up, subdivision or other
similar event; (v) shares of Common Stock issued upon
conversion of Preferred Stock; (vi) any shares of Common Stock
issued to Emory University pursuant to Section 1.3 of that
certain Stock Purchase Agreement dated December 10, 1998,
between Emory University and the Company; (vii) shares of
Common Stock or Preferred Stock issued pursuant to rights of first
refusal, pre-emptive, anti-dilution or similar rights outstanding
on the date hereof; (viii) securities issued or deemed issued
in connection with a strategic business transaction approved by a
majority of the Board, including the representative (if any) of the
Series D Stock designated by the Lead Purchaser as contemplated by
Section 3.1(a)(ii) of this Agreement; and (ix) the
Warrants, the Series R-1 Warrants and all securities issued or
issuable upon exercise, conversion, exchange or transfer of either
the Warrants or the Series R-1 Warrants.
“ Preferred Stock
” shall mean the Series A Stock, the Series B
Stock, the Series C Stock, the Series D Stock, the
Series D-1 Stock, the Series R Stock and the
Series R-1 Stock authorized by the Certificate of
Incorporation.
“ Registrable
Securities ” shall mean (i) the Common Stock issued
or issuable to any Investor pursuant to the conversion of the
Purchased Securities or to the Series R Holder pursuant to the
conversion of the Series R Stock or the Series R-1 Stock,
(ii) any Common Stock issued or issuable in respect of the
shares contemplated by clause (i) above upon any share split,
share dividend, recapitalization, split-up, subdivision or other
similar event, and (iii) Common Stock issued or issuable in
replacement or exchange of any of the securities issued in
clauses (i) or (ii) above, provided however that shares
of Common Stock that are Registrable Securities shall cease to be
Registrable Securities (a) upon any sale pursuant to an
effective registration statement or Rule 144 under the
Securities Act or (b) upon any transfer or assignment which
does not comply with the requirements of Section 2.9 of this
Agreement.
“ Stockholders ”
shall mean the Existing Investors, the Existing Stockholders and
the Series R Holder.
Other than the foregoing, the other
terms defined in the Existing Stockholders’ Agreement
(including in Section 1.1 thereof and Schedule 6 thereto)
shall remain in full force and effect, as modified
hereby.
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The following definitions are hereby
added to the Existing Stockholders’ Agreement:
“ Series R Closing
Date ” shall have the meaning given to such term in
Section 1.2 of this Joinder and Amendment
Agreement.
“ Series R Holder
” shall mean Hoffmann-La Roche Inc.
“ Series R Stock
” shall mean the Series R Preferred Stock of the
Company, par value $0.001 per share.
“ Series R-1 Stock
” shall mean the Series R-1 Preferred Stock of the
Company, par value $0.001 per share.
“ Series R-1
Warrants ” shall mean the Warrant(s) to Purchase Shares
of Preferred Stock of Pharmasset, Inc. that are issued by the
Company to Roche on the Series R Closing Date with respect to
an aggregate of 470,588 shares of Series R-1 Preferred Stock,
together with all warrants issued in replacement or substitution
thereof, including, without limitation, balance warrants issued
upon the partial exercise of such warrants.
1.2 Effect
. This Joinder and Amendment
Agreement shall come into effect forthwith upon the closing of the
purchase by the Series R Holder of the Series R Stock
pursuant to the Series R Purchase Agreement (the date of such
closing being the “ Series R Closing Date
”). This Joinder and Amendment Agreement and the Certificate
of Incorporation filed in connection with the closing of the
transactions contemplated by the Series R Purchase Agreement
amend in certain respects the Existing Stockholders’
Agreement, the existing Amended and Restated Certificate of
Incorporation of the Company and all other prior agreements between
the Company and any one or more of the Stockholders with respect to
the subject matter hereof and thereof. Without limiting the
generality of the foregoing, upon the effectiveness of this Joinder
and Amendment Agreement, the Existing Stockholders’ Agreement
shall be amended to include the Series R Holder as a
Stockholder thereunder, and the Parties agree that the
Series R Holder shall be entitled to such rights and benefits
of, and shall be subject to the same obligations, restrictions and
terms applicable to, the Stockholders party thereto generally, as
if the Series R Holder was an original signatory
thereto as a Stockholder, all as specifically set forth herein and
therein.
SECTION 2. AMENDMENT AND JOINDER
TO REGISTRATION RIGHTS.
2.1 Amendment to
Section 2.11 .
Section 2.11 of the Existing Stockholders’ Agreement is
hereby deleted and replaced by the following:
“2.11 Other Registration
Rights . The Company shall not grant to any Person any
registration rights more favorable than or inconsistent with any of
those contained herein without the consent of the holders of at
least 66 2/3% of the outstanding Registrable Securities, so long as
any of the registration rights under this Agreement remain in
effect.”
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2.2 Joinder of Series R
Holder as “
Investor ”. From and after the Series R Closing
Date, the Parties agree that the Series R Holder shall be
deemed to be an “Investor” solely under
Sections 2.1 through 2.13 (inclusive) of the Existing
Stockholders’
