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Targanta Therapeutics Corp. – IPO: ‘S-1’ on 5/11/07 – EX-4.2

On:  Friday, 5/11/07, at 12:00pm ET   ·   Accession #:  1193125-7-111369   ·   File #:  333-142842

Previous ‘S-1’:  None   ·   Next:  ‘S-1/A’ on 6/27/07   ·   Latest:  ‘S-1/A’ on 10/5/07   ·   2 References:   By:  SEC – ‘UPLOAD’ on 7/9/07 By:  SEC – ‘UPLOAD’ on 6/6/07 

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/11/07  Targanta Therapeutics Corp.       S-1                   22:3.4M                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1         Registration Statement (General Form)               HTML   1.86M 
 2: EX-3.1      2nd Amended & Restated Certificate of               HTML    113K 
                          Incorporation                                          
 3: EX-4.2      Amended & Restated Registration Rights Agreement    HTML    114K 
 4: EX-10.1     2005 Stock Option Plan, as Amended                  HTML     80K 
 5: EX-10.1.1   Form of Notice of Stock Option Grant                HTML     20K 
 6: EX-10.1.2   Form of Stock Option Agreement                      HTML     24K 
 7: EX-10.1.3   Form of Notice of Stock Option Grant for Montreal   HTML     22K 
                          Employees                                              
 8: EX-10.1.4   Form of Stock Option Agreement for Montreal         HTML     24K 
                          Employees                                              
13: EX-10.12    Asset Purchase Agreement                            HTML    172K 
14: EX-10.13    Note Issuance Agreement                             HTML    141K 
15: EX-10.14    Senior Secured Convertible Acquisition Note         HTML     35K 
16: EX-10.15    Omnibus Amendment to Asset Purchase Agreement       HTML     36K 
17: EX-10.17    Form of Indemnification Agreement                   HTML     64K 
18: EX-10.18    Form of Employee Agreement Re: Non-Competition,     HTML     35K 
                          Non-Solicitation                                       
19: EX-10.19    Form of Series C-1 Preferred Stock Warrant          HTML     76K 
20: EX-10.20    Form of Common Stock Warrant                        HTML     76K 
 9: EX-10.3     Employment Agreement With Mark Leuchtenberger       HTML     53K 
10: EX-10.4     Employee Agreement With George Eldridge             HTML     53K 
11: EX-10.7     Lease Agreement With American Twine Ltd.            HTML    202K 
                          Partnership                                            
12: EX-10.7.1   1st Amendment to Lease With American Twine Ltd.     HTML     23K 
                          Partnership                                            
21: EX-21.1     List of Subsidiaries                                HTML      9K 
22: EX-23.2     Consent of Ernst & Young LLP                        HTML     10K 

Exhibit 4.2

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

This Amended and Restated Registration Rights Agreement dated as of January 31, 2007 (the “Agreement”) by and between Targanta Therapeutics Inc., a corporation duly incorporated under the Canada Business Corporations Act having its head office and principal place of business in the City of Montreal, Province of Québec (“Targanta Québec”), Targanta Therapeutics (Ontario) Inc., a corporation duly incorporated under the Canada Business Corporations Act having its head office and principal place of business in the City of Toronto, Province of Ontario (“Targanta Ontario,” with Targanta Québec, the “Canadian Corporations” and, individually, a “Canadian Corporation”), Targanta Therapeutics Corporation, a corporation duly incorporated under the Delaware General Corporation Law having its head office and principal place of business in the City of Indianapolis, Indiana (“Targanta U.S.”) and the Investors parties to this Agreement listed on Schedule A hereto (the “Investors”).

WHEREAS in accordance with the Québec Articles of Incorporation, each Québec Class A Exchangeable Share and Québec Class B Exchangeable Share may, at the holder’s option, at any time or automatically, subject to certain conditions, be converted into one (subject to adjustment as provided in such articles) Québec Common Exchangeable Share.

WHEREAS in accordance with the Ontario Articles of Incorporation, each Ontario Class B Exchangeable Share and Ontario Class C Exchangeable Share may, at the holder’s option, at any time or automatically, subject to certain conditions, be converted into one (subject to adjustment as provided in such articles) Ontario Common Exchangeable Share.

WHEREAS in accordance with the Québec Articles of Incorporation and the Exchange Agreement, each Québec Class A Exchangeable Share, Québec Class B Exchangeable Share and Québec Common Exchangeable Share is exchangeable for a share of Series A Preferred Stock, Series B Preferred Stock and Common Stock, respectively, at the option of the holder and, under certain circumstances, at the option of Targanta Québec.

WHEREAS in accordance with the Ontario Articles of Incorporation and the Exchange Agreement, each Ontario Class B Exchangeable Share, Ontario Class C-1 Exchangeable Share, Ontario Class C-2 Exchangeable Share, Ontario Class C-3 Exchangeable Share and Ontario Common Exchangeable Share is exchangeable for a share of Series B Preferred Stock, Series C-1 Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock and Common Stock, respectively, at the option of the holder and, under certain circumstances, at the option of Targanta Ontario.

WHEREAS, on or prior to the date hereof, Targanta U.S. will have issued the InterMune Note.

WHEREAS in order to induce the Investors to subscribe for shares in the Canadian Corporations and Targanta U.S., Targanta U.S. and the Canadian Corporations have agreed to grant the rights provided in this Agreement.

NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

1.1 For the purposes of this Agreement:

“1934 Act” means the United States Securities Exchange Act of 1934, as amended;

“2005 Registration Rights Agreement” shall mean that Registration Rights Agreement, by and among Targanta U.S., the Canadian Corporations and the other parties thereto, dated as of December 23, 2005, as amended and restated from time to time;

“Act” means the United States Securities Act of 1933, as amended;

“Canadian Corporations” has the meaning ascribed thereto in the preamble hereof;

“Canadian Securities Laws” means all applicable securities laws in each of the provinces of Canada, or such provinces in Canada as may be acceptable to the Investors, acting reasonably, and the respective regulations and rules under such laws together with applicable published policy statements, notices and orders of the securities regulatory authorities in such provinces;

“Certificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of Targanta U.S. as filed with the Secretary of the State of Delaware, as amended and restated from time to time;

“Class A Exchangeable Shares” means Québec Class A Exchangeable Shares, collectively, and, individually, a “Class A Exchangeable Share”;

“Class B Exchangeable Shares” means Ontario Class B Exchangeable Shares and Québec Class B Exchangeable Shares, collectively, and, individually, a “Class B Exchangeable Share”;

“Class C Exchangeable Shares” means Ontario Class C-1 Exchangeable Shares, Ontario Class C-2 Exchangeable Shares and Ontario Class C-3 Exchangeable Shares, collectively, and, individually, a “Class C Exchangeable Share”;

“Common Exchangeable Shares” means Ontario Common Exchangeable Shares and Québec Common Exchangeable Shares, collectively, and, individually, a “Common Exchangeable Share”;

“Common Stock” means the Common Stock, par value $0.0001 per share, of Targanta U.S.;

“Converted Basis” means, when referring to a number of:

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“Diluted Basis” means when referring to a number of shares of Series C-2 Preferred Stock and Series C-3 Preferred Stock, the number of shares of such series determined when assuming the full conversion of all principal amounts outstanding on the InterMune Note, provided, however, that the InterMune Note will be deemed to convert into the lesser of (a) the number of shares of Series C Preferred Stock (of the applicable series) at the applicable issue price that would represent 19.9% of the shares of Common Stock on a Fully Diluted, Converted and Exchanged Basis, and (b) the actual number of shares of Series C Preferred Stock (of the applicable series) to which InterMune would then be entitled if the InterMune Note were converted or deemed to have been converted into the Series C Preferred Stock (of the applicable series) at the applicable issue price for such series;

“Exchange Agreement” means the Amended and Restated Exchange Agreement, dated on or around the date hereof, by and among Targanta U.S., the Canadian Corporations and their respective shareholders and certain others, as amended and restated from time to time;

“Exchangeable Shares” means the Common Exchangeable Shares and the Preferred Exchangeable Shares;

“Exchanged Basis” means, when referring to a number of shares of Common Stock or Preferred Stock, the number of shares of Common Stock or Preferred Stock determined when assuming the exchange for such shares of all then outstanding Common Exchangeable Shares and Preferred Exchangeable Shares, respectively;

“Form F-1” means such form under the Act as is in effect on the date hereof or any similar registration form under the Act subsequently adopted by the SEC;

“Form F-3” means such form under the Act as is in effect on the date hereof or any similar registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by Targanta U.S. with the SEC;

“Form S-1” means such form under the Act as is in effect on the date hereof or any similar registration form under the Act subsequently adopted by the SEC;

“Form S-3” means such form under the Act as is in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by Targanta U.S. with the SEC;

“Fully Diluted, Converted and Exchanged Basis” means, when referring to a number of shares of Common Stock, the number of shares of Common Stock determined on a Diluted Basis, Converted Basis and Exchanged Basis;

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“Holder” means any person owning or having the right to acquire, directly or indirectly, Registrable Securities (including, without limitation, upon conversion of the InterMune Note) or any assignee thereof in accordance with subsection 8.1 hereof;

“Initial Offering” means the sale by Targanta U.S. of shares of Common Stock in its first underwritten public offering pursuant to a registration statement under the Act pursuant to which shares of Common Stock will be listed on the Nasdaq Global Market or another United States-based securities exchange or quotation system;

“Initiating Holders” shall have the meaning ascribed thereto in subsection 2.1;

“InterMune” means InterMune, Inc., a Delaware corporation;

“InterMune Note” means the Senior Secured Convertible Acquisition Note issued by Targanta U.S. pursuant to the Asset Purchase Agreement, by and between Targanta U.S. and InterMune, dated as of December 23, 2005, as amended, and in accordance with a related Note Issuance Agreement, by and between Targanta U.S. and InterMune, dated as of December 23, 2005, as amended;

“Investment Shares” means the Exchangeable Shares, the shares of Preferred Stock and the shares of Common Stock issued or issuable to the Investors, including for these purposes: (a) shares of Preferred Stock or Common Stock issued or issuable upon the exchange of the Exchangeable Shares owned by the Investors; (b) shares of Preferred Stock issuable upon the conversion of the InterMune Note (and shares of Common Stock issuable upon conversion of such shares of Preferred Stock); and (c) shares of Series C-1 Preferred Stock or Ontario Class C-1 Exchangeable Shares issuable upon exercise of warrants outstanding as of the date hereof (and shares of Common Stock issuable upon conversion and/or exchange of such shares of Preferred Stock or Preferred Exchangeable Shares);

“Investors” has the meaning ascribed thereto in the preamble hereof;

“Ontario Articles of Incorporation” means the articles of incorporation of Targanta Ontario, as amended and restated from time to time;

“Ontario Class B Exchangeable Shares” means Class B Exchangeable Preferred Shares in the share capital of Targanta Ontario;

“Ontario Class C Exchangeable Shares” means Class C Preferred Exchangeable Shares in the share capital of Targanta Ontario;

“Ontario Class C-1 Exchangeable Shares” means Class C-1 Preferred Exchangeable Shares in the share capital of Targanta Ontario;

“Ontario Class C-2 Exchangeable Shares” means Class C-2 Preferred Exchangeable Shares in the share capital of Targanta Ontario;

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“Ontario Class C-3 Exchangeable Shares” means Class C-3 Preferred Exchangeable Shares in the share capital of Targanta Ontario;

“Ontario Common Exchangeable Shares” means Common Exchangeable Shares in the share capital of Targanta Ontario;

“Preferred Exchangeable Shares” means, collectively, the Class A Exchangeable Shares, the Class B Exchangeable Shares and the Class C Exchangeable Shares;

“Preferred Stock” means, collectively, the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock;

“Principal Shareholders Agreement” means the Amended and Restated Agreement among Principal Shareholders, by and among Targanta U.S., the Canadian Corporations, certain of the shareholders of such corporations, and the other parties thereto, dated as of the date hereof;

“Québec Articles of Incorporation” means the articles of incorporation of Targanta Québec, as amended and restated from time to time;

“Québec Class A Exchangeable Shares” means Class A Preferred Exchangeable Shares in the share capital of Targanta Québec;

“Québec Class B Exchangeable Shares” means Class B Preferred Exchangeable Shares in the share capital of Targanta Québec;

“Québec Common Exchangeable Shares” means Common Exchangeable Shares in the share capital of Targanta Québec;

“register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document;

“Registrable Securities” means: (i) any shares of Common Stock issued or issuable upon the conversion and/or exchange of the Investment Shares held by an Investor; (ii) any shares of Common Stock and any shares of Common Stock issued or issuable upon the conversion or exchange, directly or indirectly, of any securities acquired or received by Investors on or after the date hereof; and (iii) any share of Common Stock issued or issuable as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, Investment Shares; provided, however, that such shares of Common Stock shall no longer be deemed to be Registrable Securities when (x) such shares have been registered under the Act pursuant to an effective registration statement filed thereunder, (y) all such shares have been sold through a broker dealer in the public market in compliance with Regulation S or Rule 144 promulgated under the Act or (z) such shares are sold by an Investor in a transaction in which such Holder’s rights under this Agreement are not assigned to the purchaser of the Registrable Securities being sold. Whenever reference is made in this Agreement to a request or consent of Investors, Initiating Holders or Holders, as the case may be, holding a certain percentage of Registrable Securities, the determination of such percentage shall be calculated on a Fully Diluted, Converted and Exchanged Basis;

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“Registration Expenses” shall have the meaning ascribed thereto in subsection 5.4;

“SEC” means the U.S. Securities and Exchange Commission;

“Selling Expenses” shall have the meaning ascribed thereto in subsection 5.4;

“Series A Preferred Stock” means the Series A Preferred Stock, par value $0.0001 per share, of Targanta U.S.;

“Series B Preferred Stock” means the Series B Preferred Stock, par value $0.0001 per share, of Targanta U.S.;

“Series C Preferred Stock” means the Series C-1 Preferred Stock, the Series C-2 Preferred Stock and the Series C-3 Preferred Stock in the share capital of Targanta U.S.;

“Series C-1 Preferred Stock” means the Series C-1 Preferred Stock, par value $0.0001 per share, of Targanta U.S.;

“Series C-2 Preferred Stock” means the Series C-2 Preferred Stock, par value $0.0001 per share, of Targanta U.S.;

“Series C-3 Preferred Stock” means the Series C-3 Preferred Stock, par value $0.0001 per share, of Targanta U.S.;

“Targanta Ontario” has the meaning ascribed thereto in the preamble hereof;

“Targanta Québec” has the meaning ascribed thereto in the preamble hereof;

“Targanta U.S.” has the meaning ascribed thereto in the preamble hereof; and,

“Violation” shall has the meaning ascribed thereto in subsection 6.1.1.

2.1 If Targanta U.S. shall receive at any time after the date that is 180 days after the effective date of the Initial Offering a written request from the Holders of at least a majority of the Registrable Securities then outstanding (the “Initiating Holders”) that Targanta U.S. file a registration statement under the Act, provided the Registrable Securities as to which each registration is so requested have a proposed aggregate offering price to the public of at least US$30,000,000, then Targanta U.S. shall immediately upon receipt thereof, give written notice of such request to all Holders, and shall, subject to the limitations of this Section 2, use its commercially reasonable efforts to effect, as soon as practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered (subject to any limitations in this Agreement) in a written request received by Targanta U.S. within 30 days of the mailing of notice by Targanta U.S. pursuant to this subsection 2.1.

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2.2 If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise Targanta U.S., in writing, as a part of their written request made pursuant to this Section 2 and Targanta U.S. shall include such information in the written notice referred to in subsection 2.1. The underwriter will be selected by Targanta U.S. and shall be reasonably acceptable to the Initiating Holders holding at least 60% of the Registrable Securities to be sold in such offering. The right of any Holder to include its Registrable Securities in such registration shall be conditional upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with Targanta U.S. as provided in subsection 5.1.5) enter into an underwriting agreement in customary form, and reasonably acceptable to such Initiating Holders. A Holder may elect to include in such underwriting all or a part of the Registrable Securities it holds. Notwithstanding any other provision of this Section 2, if the underwriter advises Targanta U.S. that marketing factors require a limitation of the number of shares to be underwritten (including Registrable Securities), then Targanta U.S. shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of shares of Preferred Stock and Exchangeable Shares held by all such Holders (including the Initiating Holders). If all such shares are included in the underwritten offering, the number of additional shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of shares of Preferred Stock and Exchangeable Shares held by all such Holders (including the Initiating Holders). If all such shares are included in the underwritten offering, the number of additional shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of shares of Common Stock and Common Exchangeable Shares held by all such Holders (including the Initiating Holders); provided, however, in no event shall securities of the Holders be excluded unless all securities of all other shareholders and Targanta U.S. are first entirely excluded. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. Notwithstanding the foregoing, if Targanta U.S. shall furnish to Holders within 10 days of receipt of a written request for registration pursuant to this Section 2, a certificate signed by the chief executive officer of Targanta U.S. stating that in the good faith judgment of the Board of Directors of Targanta U.S. it would be contrary to the best interest of Targanta U.S. and the Canadian Corporations, taken as a whole, for such registration to be effected at such time, Targanta U.S. shall have the right to defer such filing for a period of not more than 120 days after receipt of the written request of the Initiating Holders, provided that such right to delay a written request shall be exercised by Targanta U.S. not more than once in any 12-month period.

2.3 Targanta U.S. shall not be required to effect a registration pursuant to subsection 2.1 if Targanta U.S. has effected three registrations pursuant to subsection 2.1, and such registrations have been declared or ordered effective.

2.4 In addition to the rights provided for in subsection 2.1, in the event the Investors own Registrable Securities at such time as Targanta U.S. shall have qualified for the use of Form S-3, the Investors shall have the right to request an unlimited number of, and Targanta U.S. shall file, additional registrations on Form S-3; provided, however, that Targanta U.S. shall not be obligated to file and cause to become effective any registration statement on Form S-3 (i) where

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the proposed aggregate offering price of the Registrable Securities to be sold is less than US$3,000,000 or (ii) if, within the calendar year of the request for registration on Form S-3 by the Investors pursuant to this subsection 2.4, Targanta U.S. has effected two such registrations, and such registrations have been declared or ordered effective. Whenever Targanta U.S. is required by this subsection 2.4 to effect the registration of the Registrable Securities, each of the procedures and requirements of subsections 2.1 and 2.2, including but not limited to the requirement that Targanta U.S. notify all Holders from whom notice has not been received and provide them with the opportunity to participate in the offering, shall apply to the registration under this subsection 2.4, provided, however, that the period of time in which such Holders are entitled to notify Targanta U.S. in writing of their intention to participate shall be 15 days instead of 30 days.

2.5 If, however, after the 12^th full calendar month after the effective date of the Initial Offering, Targanta U.S. is not eligible for the use of Form S-3 for secondary sales and the Investors shall thereafter make a request in writing to effect the registration under the Act of an offering of Registrable Securities pursuant to subsection 2.4, Targanta U.S. shall, as expeditiously as practicable, use its best efforts to effect the registration, on a form of general use under the Act, of all of the shares of Registrable Securities that Targanta U.S. has been requested to register and such registration shall be in addition to the number of registrations provided in subsection 2.3.

2.6 Targanta U.S. shall be entitled to include in any registration statement referred to in this Section 2, for sale in accordance with the method of disposition specified by the Initiating Holders, shares of Common Stock to be sold by Targanta U.S. for its own account, except as and to the extent that, in the reasonable opinion of the managing underwriter (if such method of disposition shall be an underwritten public offering), marketing factors require a limitation on the number of the Registrable Securities to be sold by and for the account of the Holders, in which case the shares of Common Stock to be sold by Targanta U.S. for its own account would be reduced first before any reductions of the Registrable Securities in the manner contemplated in subsection 2.2 of this Agreement. Except for registration statements on Forms S-4, S-8 or any successor thereto, Targanta U.S. will not file with the SEC any other registration statement with respect to its shares of Common Stock, whether for its own account or that of other shareholders, from the date of receipt of a written notice from Holders pursuant to this Section 2 until the completion of the period of distribution of the shares of Registrable Securities registered thereby.

2.7 Targanta U.S. shall not be required to effect a registration pursuant to this Section 2:

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2.8 Targanta U.S. will not complete an Initial Offering unless:

2.8.1 Targanta U.S. becomes a reporting issuer in Ontario at the time of the Initial Offering; or

2.8.2 prior to the time at which Targanta U.S. would otherwise be required to do so, Targanta U.S.:

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3.1 If Targanta U.S. proposes to register (including for this purpose a registration effected by Targanta U.S. for shareholders other than the Holders, whether under a registration right or otherwise) any of its stock or other securities under the Act (other than a registration relating solely to the sale of securities to participants in a Targanta U.S. stock option plan, a registration relating to a corporate reorganization or other transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only shares of Common Stock being registered are shares of Common Stock issuable upon conversion of debt securities that are also being registered), Targanta U.S. shall, at such time, promptly give each Holder written notice of such registration prior to the filing of the registration statement. Upon the written request of each Holder given within 15 days after receipt or deemed receipt of such notice by the Holder in accordance with subsection 8.10, Targanta U.S. shall, subject to the provisions of subsection 3.3, cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered.

3.2 Targanta U.S. shall have the right to terminate or withdraw any registration initiated by it under this Section 3 prior to the effectiveness of such registration, upon written notice to each Holder, whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by Targanta U.S. in accordance with subsections 5.4 and 5.5 hereof.

3.3 In connection with any offering involving an underwriting of shares being issued by Targanta U.S., Targanta U.S. shall not be required under this Section 3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between Targanta U.S. and the underwriters selected by it (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form and reasonably acceptable to such Holders with an underwriter or underwriters selected by Targanta U.S. If the total number of securities, including Registrable Securities, requested by shareholders to be included in such offering exceeds the number of securities sold other than by Targanta U.S. that the underwriters determine in their sole discretion is compatible with the success of the offering, then Targanta U.S. shall be required to include in the offering only that number of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering (the Registrable Securities so included to be apportioned pro rata among the selling Holders according to the total amount of Registrable Securities entitled to be included therein owned by each selling Holder in accordance with the inclusion procedure set forth in Section 2.2 mutatis mutandis or in such other

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proportions as shall mutually be agreed to by such selling Holders), but in no event shall (i) the number of Registrable Securities of the selling Holders included be reduced if any securities of other shareholders are included in the offering or (ii) any shares being sold by a shareholder exercising a registration right pursuant to Section 2 (for which Targanta U.S. has received notice pursuant to subsection 2.1 prior to it sending notice pursuant to subsection 3.1) be excluded from such offering pursuant to this subsection; provided, however, that in both events, unless the registration is with respect to the Initial Offering, in no event shall the number of Registrable Securities to be sold by the Holders be reduced below 25% of the total amount of the securities included in such registration. For purposes of the first parenthetical in the preceding sentence concerning apportionment, for any selling shareholder that is a Holder of Registrable Securities and that is a partnership or corporation, the partners, retired partners and shareholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of Registrable Securities owned by all such related entities and individuals.

4.1 After such time as Targanta U.S. has sold shares of Common Stock in an Initial Offering, Targanta U.S. agrees to comply with the Canadian Securities Laws so as to remain a reporting issuer in good standing in the provinces of Québec and Ontario and to take such other reasonable action as is necessary to enable the Holders to sell securities of Targanta U.S. to the public in Canada without resale restrictions under the Canadian Securities Laws for 90 days following the date of such Initial Offering in Canada.

5.1 Whenever required under this Agreement to effect the registration of any Registrable Securities, Targanta U.S. shall, as expeditiously as reasonably possible:

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5.2 Notwithstanding any provision hereof, the period of distribution of Registrable Securities 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.

5.3 It shall be a condition precedent to the obligations of Targanta U.S. to take any action pursuant to this Agreement with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to Targanta U.S. such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder’s Registrable Securities.

5.4 All expenses incurred by Targanta U.S. and its subsidiaries in complying with Sections 2, 3 and 4, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for Targanta U.S. and its subsidiaries, 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,

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Inc., transfer taxes, fees of transfer agents and registrars and reasonable fees and disbursements of one counsel for the sellers of Registrable Securities selected by the Investors, but excluding any Selling Expenses, are called “Registration Expenses.” All underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called “Selling Expenses.”

5.5 Targanta U.S. will pay all Registration Expenses in connection with each registration statement under Sections 2 or 3. All Selling Expenses in connection with each registration statement under Sections 2 or 3 shall be borne by the participating sellers in proportion to the number of shares sold by each, or by such participating sellers other than Targanta U.S. (except to the extent Targanta U.S. shall be a seller) as they may agree.

5.6 With a view to making available to the Holders the benefits of Rule 144 promulgated under the Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of Targanta U.S. to the public without registration or pursuant to a registration on Form F-3 or Form S-3, Targanta U.S. agrees to:

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6.1 In the event any Registrable Securities are included in a registration statement under this Agreement:

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7.1 Each of Targanta U.S. and the Canadian Corporations represents and warrants with respect to itself to the Investors as follows:

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8.1 The rights to cause Targanta U.S. to register Registrable Securities pursuant to this Agreement may be assigned (but only with all related obligations under this Agreement) by a Holder to a transferee or assignee of all or any part of such securities provided: (a) such transferee or assignee is a permitted transferee under the terms of the Principal Shareholders Agreement, (b) such transferee or assignee has acquired at least 25% of the Registrable Securities of the transferor or assignor, (c) Targanta U.S. is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned, and (d) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including without limitation the provisions of subsection 8.3 below.

8.2 From and after the date of this Agreement, Targanta U.S. and the Canadian Corporations shall not, without the prior written consent of the Holders collectively holding at least 60% of the Registrable Securities, enter into any binding agreement with any holder or prospective holder of any securities of Targanta U.S. or the Canadian Corporations that would grant such holder or prospective holder rights (a) to include such securities in any registration filed under Sections 2, 3 or 4 hereof (other than piggyback rights to Targanta U.S. registrations, provided that the Registrable Securities held by such holders must be excluded entirely before any Registrable Securities of any Holder may be excluded under subsection 3.3 from any registration) or (b) to demand registration of their securities, if such rights, in any respect, would conflict or be on a parity with or superior to the rights granted pursuant to this Agreement.

8.3 Each Holder hereby agrees, severally and not jointly, that upon the request of Targanta U.S. and the managing underwriter, it will not, without the prior written consent of the managing underwriter, during the period commencing on the effective date of the registration statement relating to the Initial Offering and ending on the date specified by Targanta U.S. and the managing underwriter (which period shall not exceed 180 days or such longer period, not to exceed 18 days after the expiration of the 180-day period, as the underwriters or Targanta U.S. shall request in order to facilitate compliance with NASD Rule 2711), directly or indirectly sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any Registrable Securities other than Registrable Securities included in the Initial Offering held by it at any time during such period, provided, however, that (a) each Holder shall only be bound by such lock-up for so long as all officers, directors and shareholders, other than the Holders, holding more than 1% of the voting shares on a Fully Diluted, Converted and Exchanged Basis of Targanta U.S. are bound by such agreements and (b) such agreements provide that any discretionary waiver or termination by Targanta U.S. or the underwriters of such shareholders’ obligations under this subsection 8.3 or any similar “Market Stand-Off’ Agreements relating to Targanta U.S.’s equity securities shall be applied to all such persons obligated under such agreements pro rata based on the number of shares of Common Stock, determined on a Fully Diluted, Converted and Exchanged Basis, held by such persons at such time. The making of any request for registration under Section 2 or 3 shall not be deemed a violation of this subsection 8.3.

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8.4 No Holder shall be entitled to exercise any right provided for in this Agreement after such time at which all Registrable Securities held by such Holder (and any affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) can be sold without restriction as to volume under Rule 144 of the Act.

8.5 In addition to any legend setting forth transfer restrictions under Canadian Securities Laws, each certificate representing shares in the capital of Targanta U.S. and the Canadian corporations shall, except if registered, 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 satisfactory to Targanta U.S. the securities represented thereby may be publicly sold without registration under the Act and any applicable state securities laws.

8.6 Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including permitted transferees of any shares of Registrable Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.7 This Agreement shall be governed by and interpreted and enforced in accordance with the laws applicable in the State of Delaware.

8.8 This Agreement may be executed in one or more counterparts and delivered by facsimile, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.9 The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.10 Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified, with a copy to its legal counsel, or upon delivery by confirmed facsimile transmission, internationally recognized overnight courier service, or five days after deposit with the Canadian or the United States Post Office, by registered or certified mail, postage prepaid and addressed to the party to be notified, with a copy to its legal counsel at the address or addresses indicated for such party on the signature page or Schedule A hereof, or at such other address as such party may designate by 10 days’ advance written notice to the other parties.

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8.11 The parties hereto hereby acknowledge that this Agreement has been entered into in an English version and will be entered into in a French version and hereby agree that the English version and the French version shall be of equivalent legal force and effect for all purposes, provided, however, that in the event of any conflict between the English and French versions, the English version of this Agreement shall govern to the extent permitted by applicable law. Targanta U.S. covenants that it will arrange within 90 days following the execution of this English version, for a French language version of this Agreement to be delivered to the parties hereto, together with an opinion from counsel, addressed to the parties hereto, stating that the French language version of this Agreement is in all material respects a complete and proper translation of the English language version and that the English and French versions of this Agreement are not susceptible of any materially different interpretations with respect to any material matter contained therein, upon receipt of which the parties to this Agreement hereby undertake to execute the French language version of this Agreement. All communications hereunder and under the French version hereof shall be sent in English.

8.12 If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

8.13 This Agreement (including the Schedule hereto) constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof and supersedes and replaces, from the date hereof, all prior agreements, understandings, negotiations and discussions, whether oral or written, among any or all of the parties pertaining thereto, including, without limitation, the 2005 Registration Rights Agreement, which is hereby amended and restated.

8.14 This Agreement may not be amended or modified without the written consent of Targanta U.S., the Canadian Corporations and Investors holding at least 60% of all of the outstanding Registrable Securities and no provision hereof may be waived without a written notice to Targanta U.S. and the Canadian Corporations signed by Investors holding at least 60% of all of the outstanding Registrable Securities. Sections 2.8 and 4.1 of this Agreement may not be amended or modified without the written consent of Targanta U.S., the Canadian Corporations and Investors holding at least 60% of all of the outstanding Registrable Securities that are Exchangeable Shares and such provisions may not be waived without a written notice to Targanta U.S. and the Canadian Corporations signed by Investors holding at least 60% of all of the outstanding Registrable Securities that are Exchangeable Shares. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder of any Registrable Securities, each future Holder of all such Registrable Securities, and Targanta U.S. and the Canadian Corporations.

8.15 If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

8.16 All shares of Registrable Securities held or acquired by affiliated entities or persons or any investment funds receiving investment management or advisory services from the same investment manager or an affiliate thereof shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

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[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first above written.

[Signature Page to Registration Rights Agreement]

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first above written.

[Signature Page to Registration Rights Agreement]

Schedule A – Investors

CAISSE DE DÉPÔT ET PLACEMENT DU QUEBEC

T²C²/BIO 2000, SOCIÉTÉ EN COMMANDITE

SEAFLOWER HEALTH VENTURES III, L.P.

SEAFLOWER HEALTH VENTURES III COMPANION FUND, L.P.

GENECHEM TECHNOLOGIES VENTURE FUND LP

CANADIAN MEDICAL DISCOVERIES FUND INC.

FONDS DE SOLIDARITÉ DES TRAVAILLEURS DU QUÉBEC (F.T.Q.)

DILIP MEHTA

WILLIAM W. CROUSE

THE VENGROWTH ADVANCED LIFE SCIENCES FUND INC.

THE VENGROWTH III INVESTMENT FUND INC.

INTERMUNE, INC.

J&L SHERBLOM FAMILY LLC

PHILIPPE VILLERS

INVESTISSEMENT QUÉBEC

SKYLINE VENTURE PARTNERS III, L.P.

SKYLINE VENTURE PARTNERS QUALIFIED PURCHASER FUND III, L.P.

SKYLINE VENTURE PARTNERS QUALIFIED PURCHASER FUND IV, L.P.

RADIUS VENTURE PARTNERS II, L.P.

RADIUS VENTURE PARTNERS III, L.P.

RADIUS VENTURE PARTNERS III QP, L.P.

ROBERT KHEDERIAN

BROOKSIDE CAPITAL PARTNERS FUND, L.P.

CADUCEUS PRIVATE INVESTMENTS III, LP

ORBIMED ASSOCIATES III, LP

MEDIPHASE VENTURE PARTNERS II LIMITED PARTNERSHIP

MEDIPHASE VENTURE PARTNERS II (ANNEX FUND) LIMITED PARTNERSHIP

MEDIPHASE VENTURE PARTNERS (DP & UP) LIMITED PARTNERSHIP

MEDIPHASE OFFSHORE MASTER FUND, L.P.

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Dates Referenced Herein

This ‘S-1’ Filing		Date		Other Filings
Filed on:		5/11/07		None on these Dates
		1/31/07
		12/23/05
				List all Filings

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2 Subsequent Filings that Reference this Filing

As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 7/09/07 SEC UPLOAD¶ 10/06/17 1:42K Targanta Therapeutics Corp. 6/06/07 SEC UPLOAD¶ 10/06/17 1:55K Targanta Therapeutics Corp.

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Filing Submission 0001193125-07-111369   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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