FORM OF CONTINGENT VALUE RIGHTS AGREEMENT
THIS CONTINGENT VALUE RIGHTS AGREEMENT, dated as of [__], 2020 (this Agreement), is entered into by and between AcelRx Pharmaceuticals, Inc., a Delaware corporation (Parent), and Computershare Inc., a Delaware corporation, as Rights Agent (the Rights Agent).
WHEREAS, Parent, Consolidation Merger Sub, Inc., a Delaware corporation and a wholly-owned indirect subsidiary of Parent (Merger Sub), and Tetraphase Pharmaceuticals, Inc., a Delaware corporation (including in its capacity as the surviving corporation in the Merger, the Company), have entered into an Agreement and Plan of Merger dated as of March 15, 2020 (as amended or supplemented from time to time pursuant to the terms thereof, the Merger Agreement), pursuant to which, at the Effective Time (as defined in the Merger Agreement, the Effective Time), Merger Sub will merge with and into Company (the Merger), with the Company continuing as the surviving corporation and as a wholly owned indirect subsidiary of Parent;
WHEREAS, pursuant to the Merger Agreement, Parent has agreed to provide to the Companys stockholders the right to receive contingent value rights as hereinafter described; and
WHEREAS, the Rights Agent is willing to act in connection with the issuance, transfer, exchange and payment of such contingent value rights as provided herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements herein, Parent and the Rights Agent hereby agree as follows:
1.1. Definitions. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement. As used in this Agreement, the following terms shall have the following meanings:
Acting Holders means, at the time of determination, Holders of at least 40% of the outstanding CVRs as set forth on the CVR Register.
Affiliate means, with respect to any specified Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person; control means the ownership, directly or indirectly, of more than 50% of the voting securities entitled to vote for the directors (or similar officials) of a Person or the possession, by contract or otherwise, of the authority to direct the management and policies of a Person.
Calendar Quarter means each period of three consecutive months commencing on January 1, April 1, July 1 and October 1 of each calendar year.
Calendar Year means the period of four consecutive Calendar Quarters beginning on January 1 and ending on December 31 of each calendar year.
Change of Control means (i) a sale or other disposition of all or substantially all of the assets of either Parent or the Company on a consolidated basis (other than to any direct or indirect wholly owned subsidiary of Parent), (ii) a merger or consolidation involving either Parent or the Company in which Parent or the Company, respectively, is not the surviving entity, and (iii) any other transaction involving either