AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
AMENDMENT
TO
Amendment,
dated as of April 28, 2008 (this “Amendment”), by and among
Neurologix, Inc., a Delaware corporation (the “Company”), General Electric
Pension Trust (“GE”),
Chrysler LLC Master Retirement Trust (“Chrysler”), certain funds
managed by ProMed Asset Management LLC (collectively, “ProMed”) and Corriente Master
Fund, L.P. (“Corriente”
and together with GE, Chrysler and ProMed, collectively, the “Investors”).
WHEREAS, the Company and the
Investors are parties to that certain Registration Rights Agreement, dated as of
November 19, 2007 (the “Registration Agreement”),
which provides for certain registration rights, relating to the Registrable
Securities held by the Investors, as more fully specified in the Registration
Agreement;
WHEREAS, the Company has
authorized the issuance and sale of 142,857 shares of the Series D Preferred
Stock and 1,077,586 warrants to purchase Common Stock (such warrants, together
with such shares of Series D Preferred Stock, being herewith called the “Additional Securities”)
pursuant to the terms and conditions of that certain Stock and Warrant
Subscription Agreement (the “New Series D Agreement”), dated as
of even date herewith, by and between the Company, Corriente and, solely with
respect to Article V, GE; and
WHEREAS, the consummation of
the purchase and sale of the Additional Securities is contingent upon the
execution and delivery by the requisite percentage in interest of the Investors
of this Amendment to provide for certain additional registration rights as set
forth herein.
NOW, THEREFORE, the Company
and the parties signatory hereto agree as follows:
1. Unless
otherwise specifically provided herein, all terms used and capitalized in this
Amendment, but which are not defined herein, shall be deemed to have the
respective meanings set forth in the Registration Agreement.
2. Section
2(a) of the Registration Agreement is hereby amended by adding a new paragraph
(vii) as follows:
“(vii)
(t) At
any time during the Special Registration Period (as defined below), an Investor
or Investors holding at least five percent (5%) of the outstanding shares of
Series D Preferred Stock may request, in writing, the Company to register, and
the Company shall use its reasonable best efforts to register, under the
Securities Act all or any portion of the Registrable Securities held by such
requesting Investor or Investors for sale in the manner specified in such notice
(the “Special Demand
Notice”), provided that the reasonably anticipated aggregate price to the
public of such sale shall exceed $1,000,000. No demand may be made
under this paragraph (vii) during a S-3 Eligibility Period. Upon
proper request, the Company shall prepare and file with the SEC a Demand
Registration Statement (utilizing Rule 415 under the Securities Act if so
requested) to register the Registrable Securities referred to in the Special
Demand Notice. The Company shall be required to effect only one (1)
registration statement pursuant to a request under this paragraph (vii); provided, however that, if the
number of Registrable Securities requested by a requesting Investor or Investors
to be included in the Demand Registration Statement is reduced by twenty-five
percent (25%) or more pursuant to Section 2(a)(v) hereof, the Company shall be
required to effect one additional Demand Registration Statement if so requested
in accordance with this clause (t). The demand rights under this
paragraph (vii) shall be in addition to the demand rights set forth in
paragraphs (i) and (ii) of this Section 2(a).
(u) For
the purposes hereof, the “Special Registration Period”
shall mean the period starting on the earlier of (i) the date on which the
Company shall have completed its submission to the Food and Drug Administration
of final data relating to both its Phase 1 clinical trial for epilepsy and its
Phase 2 clinical trial for Xxxxxxxxx’x disease or (ii) April 28,
2010, and ending on a date which shall be nine (9) months following the date
first to occur specified in clause (i) or (ii) above.
(v) Notwithstanding
the foregoing, the Company may delay or suspend the preparation and/or filing of
a Demand Registration Statement pursuant to this paragraph (vii) if, the Company
had filed a registration statement for its own account prior to the Company’s
receipt of the Special Demand Notice, or the Company receives board approval and
executes a letter of intent with a registered broker/dealer to serve as the lead
underwriter in an underwritten offering of the Company’s equity securities for
aggregate gross proceeds to the Company of at least $20,000,000. The
Company shall provide notice to the requesting Investor or Investors of any such
suspension or delay (a “Company
Suspension”) within ten (10) days of its receipt of a Special Demand
Notice. The Company shall not be permitted to declare more than one
(1) Company Suspension. In the event of a Company Suspension, an
Investor or Investors, holding the requisite percentage of Series D Preferred
Stock, may request registration under this paragraph (vii) effective at any time
after the earlier of (i) the termination of the underwriter’s engagement or (ii)
the end of the sixth (6th) month following the occurrence of the Company
Suspension; provided, however, that, if a
registration statement for the Company’s underwritten offering is declared
effective during such six (6) month period, an Investor or Investors shall not
be permitted to request registration under this paragraph (vii) before the
expiration of any lock-up period restricting the sale of Registrable Securities
that such Investor or Investors shall have agreed to with the lead
underwriter.
(w) Any
Investor (a “Rule 415
Investor”) who (i) requests to have its Registrable Securities included
on a Demand Registration Statement, under Section 2(a)(vii), that utilizes Rule
415 (or any similar rule or regulation of the SEC) under the Securities Act and
(ii) is required by the SEC, acting pursuant to said Rule 415, to decrease (the
“Rule 415 Decrease”) the number of
shares sold in such Demand Registration Statement (the “Rule 415 Shares”) may request,
in writing, the Company to register, and the Company shall use its reasonable
best efforts to register, under the Securities Act all or any portion of the
Rule 415 Shares held by such Rule 415 Investor for sale provided that the
reasonably anticipated aggregate price to the public of such sale shall exceed
$1,000,000. No request may be made under this paragraph (vii)(w)
during a S-3 Eligibility Period. As long as Rule 415 Shares remain
outstanding, there shall be no limit on the number of times a Rule 415 Investor
may request, and the Company shall be required to register, such Rule 415
Shares, subject, however to the provisions of paragraph (x) below.
(x) The
Company shall not be required to file a registration statement pursuant to
Section 2(a)(vii)(w) above prior to the earlier of the first business day
following (1) the second anniversary of any then effective Demand Registration
Statement or (2) the sixtieth (60th) day after all Registrable Securities
registered under any then effective Demand Registration Statement have been sold
or otherwise transferred by the holder thereof. The Company shall not
be obligated to file, cause to be filed or effect any Demand Registration
Statement pursuant to Section 2(a)(vii)(w) above if it has been advised by the
SEC that such registration statement will not be declared effective due to
prohibitions set forth in the federal securities laws or the SEC’s
interpretations thereof.
(y) If
a Demand Registration Statement that is filed pursuant to Section 2(a)(vii)(t)
or Section 2(a)(vii)(w) is not declared effective within 150 days (the “150 Day Period”) following the
Company’s receipt of appropriate notice from the Investor or the Investors, the
Company shall pay to each holder of Registrable Securities which is
participating in such Demand Registration Statement, in cash as liquidated
damages and not as a penalty, an amount equal to 1% (the “Liquidated Damages”) of the
sum of (1) the Total Purchase Price (as defined in the Series D Subscription
Agreement) paid by such holder plus (2) the Total Purchase Price (as defined in
the Series C Subscription Agreement) paid by such holder plus (3) the Total
Purchase Price (as defined in the New Series D Agreement) paid by such holder,
following the expiration of the 150 Day Period and for each 30 day period (pro
rated for a part thereof) after the expiration of the 150 Day Period until such
Demand Registration Statement is declared effective; provided, however, in no event
shall the aggregate of the Liquidated Damages paid to all holders under this
Section 2(a)(vii)(y) exceed $1,000,000.
(z) The
Liquidated Damages shall not accrue a result of (1) a Demand Registration
Statement that is not declared effective due to the occurrence of an event that
constitutes force
majeure, (2) a Demand Registration Statement that is not declared
effective due to comments from the SEC in respect of, or directly related to,
one or more Requesting Holders or Investors that is selling shares in the Demand
Registration Statement, in which case the Company shall consult with the
applicable holder with respect to such comments and use its reasonable efforts
to promptly respond to the SEC with respect to such comments in order to have
such Demand Registration Statement declared effective, (3) a decrease in the
number of Registrable Securities as a result of a Rule 415 Decrease (or any
similar rule or regulation of the SEC) or (4) the Company not being permitted
pursuant to Section 2(a)(vii) to file a Demand Registration Statement required
pursuant to Section 2(a)(vii)(t) above.”
3. Section
2(a) (iii) of the Registration Agreement is hereby amended by adding a reference
to paragraph (vii) in the first sentence thereof as follows:
“(iii)
Following receipt of any notice under paragraphs (i), (ii) or (vii) of this
Section 2(a)...”.
4. Section
2(a) (iv) of the Registration Agreement is hereby amended by adding a reference
to paragraph (vii) in the second line of the first sentence thereof as
follows:
“...and when the Company is required
by the provisions of paragraphs (i), (ii) or (vii) of this Section 2(a) to
register...”.
5. Section
2(a) (iv) (x) of the Registration Agreement is hereby amended by adding a
reference to paragraph (vii) in the eighth line thereof as follows:
“...as
provided for in (i), (ii) or (vii) of this Section 2(a), a Demand Registration
Statement or a Shelf...”.
6. Section
2(b) of the Registration Agreement is hereby amended by deleting the word
“other” prior to “security holders” and inserting a parenthetical clause to
paragraph (i) in the third line of the first sentence thereof as
follows:
“...for
the account of security holders (other than the Investors) or
both...”.
7. This
Amendment will become effective upon the execution hereof by the Company and
Investors holding at least fifty percent (50%) in interest of the
Investors. Except as amended hereby, the Registration Agreement, and
the terms and provisions thereof, shall remain in full force and
effect.
8. This
Amendment may be executed in one or more counterparts, each of which shall
constitute an original. This Amendment, to the extent signed and
delivered by means of a facsimile machine or other electronic transmission,
shall be treated in all manner and respects and for all purposes as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in
person.
[Signature
page follows.]
IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed as of the day and
year first above written.
NEUROLOGIX,
INC.
By: /s/ Xxxx X.
Mordock______________
Name:
Xxxx X. Xxxxxxx
Title:
President and Chief Executive Officer
By: /s/ Xxxx X.
Panoff________________
Name:
Xxxx X. Xxxxxx
Title:
Chief Financial Officer, Treasurer and Secretary
CORRIENTE
MASTER FUND, L.P.
By
Corriente Capital Management, L.P
Its
managing general partner
By
Corriente Advisors, LLC
Its
General Partner
By: /s/ Xxxxx
Haddaway______________
Name:
Xxxxx Xxxxxxxx
Title:
CFO
GENERAL ELECTRIC PENSION TRUST
By: GE Asset Management
Incorporated,
its
Investment Manager
By: /s/ Xxxxxx X.
Furman______________
Name:
Xxxxxx X. Xxxxxx
Title:
Vice President
CHRYSLER
LLC MASTER RETIREMENT TRUST
By:
State Street Bank and Trust Company
as
Trustee of the Chrysler LLC Master Retirement Trust
By: /s/ Xxxxx
Sovany_________________
Name:
Xxxxx Xxxxxx
Title:
Vice President
PROMED
PARTNERS LP
By: /s/ Xxxxx
Kurokawa_______________
Name:
Xxxxx Xxxxxxxx
Title:
Managing Director