REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
THIS
REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made as of
November 19, 2007 by and among Neurologix, Inc., a Delaware corporation (the
“Company”), General Electric Pension Trust
(“GE”), DaimlerChrysler Corporation Master Retirement Trust
(“DaimlerChrysler”), certain funds managed by ProMed Asset
Management LLC (collectively, “ProMed”) and Corriente Master
Fund, L.P. (“Corriente” and together with GE, DaimlerChrysler
and ProMed, the “Investors”). Capitalized terms used
herein, but not otherwise defined, shall have the meanings set forth in the
Series D Subscription Agreement (as defined below).
WHEREAS,
the Company, GE, Daimler Chrysler and ProMed are parties to the Stock and
Warrant Subscription Agreement (the “Series C Subscription
Agreement”), dated as of May 10, 2006, pursuant to which GE, Daimler
Chrysler and ProMed purchased shares of Series C Preferred Stock and received
certain registration rights in connection therewith;
WHEREAS,
GE and Corriente are purchasing shares of Series D Preferred Stock pursuant
to
the Stock and Warrant Subscription Agreement (the “Series D Subscription
Agreement”), dated as of even date herewith, among the Company, GE,
Corriente and the other parties named therein;
WHEREAS,
in connection with the transactions contemplated by the Series D Subscription
Agreement, the Company and the Investors have agreed that all the Investors
should execute a single agreement to provide for the registration rights set
forth herein, thereby replacing the registration rights previously granted
by
the Company to certain of the Investors under the Series C Subscription
Agreement; and
NOW,
THEREFORE, in consideration of the premises and of the mutual provisions,
agreements and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
1. Series
C Subscription Agreement Amendment. Pursuant to Section 6.2 of
the Series C Subscription Agreement, the Company, GE, Daimler Chrysler and
ProMed hereby amend the Series C Subscription Agreement by deleting Section
3.9
thereof in its entirety.
2. Registration
of the Shares; Compliance with the Securities Act.
(a) Registration
Upon Request.
(i)
(x) At
any time after the Closing Date, until such time at which the Company is
eligible to file and maintain the effectiveness of, a registration statement
on
Form S-3 or any successor form thereto for a public offering of shares held
by
the Investors (such period of S-3 eligibility, the “S-3 Eligibility
Period”), upon the written request of the holders of at least fifty
percent (50%) of the Registrable Securities (the “Requesting
Holders”), the Company shall use its reasonable best efforts to
register under the Securities Act of 1933, as amended (the “Securities
1
Act”)
all or any portion of the Registrable Securities (as defined below) held by
the
Requesting Holders for sale in the manner specified in such notice, provided
that the reasonably anticipated aggregate price to the public of such offering
shall exceed $1,000,000. At any time other than an S-3 Eligibility
Period or in the event the Company ceases to be S-3 eligible following the
S-3
Eligibility Period, the Company shall prepare a registration statement (a
“Demand Registration Statement”) on Form S-1, Form SB-1 or such
other appropriate or available registration form of the Securities and Exchange
Commission (“SEC”), utilizing Rule 415 under the Securities Act
if so requested, with respect to any Demand Registration
Statement. The Company shall not be required to effect more than
three Demand Registration Statements in the aggregate, provided,
however that if the number of shares requested by any Requesting Holder
to be included in all prior Demand Registration Statements has been 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 (x), provided, further, that
in
the case of any such reduction, the Company shall not be required to effect
more
than four (4) Demand Registration Statements in the aggregate.
(y) For
the purposes of this Agreement, “Registrable Securities” shall
mean (i) shares of the Common Stock issuable upon conversion of the Series
C
Preferred and the Series D Preferred Stock (the “Conversion
Shares”), and (ii) shares of Common Stock issuable upon exercise of
warrants issued to the Investors (the “Warrant Shares” and
together with the Conversion Shares, the “Shares”), provided
that such securities shall cease to be Registrable Securities when (i) a
registration statement registering such Registrable Securities under the
Securities Act has been declared or becomes effective and such Registrable
Securities have been sold or otherwise transferred by the holder thereof
pursuant to such effective registration statement; (ii) such Registrable
Securities are sold pursuant to Rule 144 under circumstances in which any legend
borne by such Registrable Securities relating to restrictions on the
transferability thereof, under the Securities Act or otherwise, is removed
by
the Company; or (iii) such Registrable Securities shall cease to be
outstanding. Registrable Securities shall not include the shares of
Preferred Stock purchased by the Investors (the “Purchased
Shares”) or the warrants issued to the Investors to purchase the Common
Stock. In participating in any registration pursuant to this Section
2, each Investor agrees to convert to Common Stock any and all Purchased Shares
to be sold by such Investor prior to or in connection with any sale pursuant
to
the applicable Registration Statement.
(ii) During
the S-3 Eligibility Period, upon the request of an Investor or Investors holding
Registrable Securities, the Company shall use its reasonable best efforts to
prepare a registration statement (a “Shelf Registration
Statement”) on Form S-3 or any successor form thereto to register under
the Securities Act (utilizing Rule 415, if so requested), for public sale in
accordance with the method of disposition specified in such notice, the number
of Registrable Securities specified in such notice provided that the value
of
such Registrable Securities is at least $500,000. There shall be no
limit on the number of Shelf Registration Statements that the Investors may
require the Company to effect pursuant to this Section 2; provided, however,
that no Investor shall have the right to demand, on more than two occasions,
a
Shelf Registration Statement with respect to Registrable Securities that are
eligible to be sold pursuant to paragraph (k) of Rule 144 under the Securities
Act.
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(iii) Following
receipt of any notice under paragraph (i) or (ii) above, the Company shall
immediately notify all Investors from whom notice has not been received and
such
Investors shall then be entitled within twenty (20) days thereafter to request
the Company to include in the requested registration all or any portion of
their
Registrable Securities. The Company may also register for sale for
its own account or that of other security holders such additional shares of
the
Company’s capital stock as it shall desire, subject to paragraph (v)
below.
(iv) In
connection with any registration pursuant to this Section 2(a), if and when
the
Company is required by the provisions of paragraphs (i) or (ii) to register
Registrable Securities, the Company shall:
(x) subject to
receipt of necessary information from the Investors after prompt request from
the Company to the Investors to provide such information (provided that failure
on the part of one Investor to provide the necessary information requested
shall
not relieve the Company from its obligation to use reasonable best efforts
with
respect to complying Investors), prepare and file with the SEC, within
forty-five (45) days (sixty (60) days in the case of a Demand Registration
Statement) after receiving appropriate notice from the relevant Requesting
Holders or the Investors as provided for in (i) or (ii) above, a Demand
Registration Statement or a Shelf Registration Statement, as appropriate, to
enable the resale of the Registrable Securities by the Requesting Holders or
the
Investors; provided, that if the terms of the underwriting agreement executed
in
connection with any registration pursuant to Section 2(a) or 2(b) prohibit
the
Company from filing any Demand Registration Statement or Shelf Registration
Statement, as the case may be, the Company shall have the right to delay such
filing for the required period, which period shall not exceed ninety (90)
days;
(y) use its
reasonable best efforts (provided that failure on the part of one Investor
to
provide the necessary information requested shall not relieve the Company from
its obligation to use reasonable best efforts with respect to complying
Investors), to cause the Demand Registration Statement or Shelf Registration
Statement, as the case may be, to become effective as promptly as practicable
after the initial filing thereof with the SEC (the date such registration
statement is initially declared effective by the SEC, the “Effective
Date”), such efforts to include, without limiting the generality of the
foregoing, preparing and filing with the SEC in such period any financial
statements that are required to be filed prior to the effectiveness of such
registration statement; and
(z) use its
reasonable best efforts to prepare and file with the SEC such amendments and
supplements to such Demand Registration Statement or Shelf Registration
Statement, as appropriate, and the prospectus used in connection therewith
as
may be
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necessary
to
keep
such Demand Registration Statement or Shelf Registration Statement, as
appropriate, current, effective and free from any material misstatement or
omission to state a material fact for a period not exceeding, with respect
to
each Investor’s Registrable Securities purchased hereunder, the earliest of (x)
the date on which such Investor may sell all Registrable Securities then held
by
the Investor without restriction by the volume limitations of Rule 144(e) of
the
Securities Act, (y) the second anniversary of the effective date of such Demand
Registration Statement or Shelf Registration Statement, as appropriate, or
(z)
the date on which there cease to be any Registrable Securities
outstanding.
(v) In
connection with any registration pursuant to this Section 2(a), the Investors
may elect to sell Registrable Securities in an underwritten offering in
accordance with the conditions set forth in this paragraph (v). In
any such underwritten offering, the investment bank that will manage the
offering will be selected by, and the underwriting arrangements with respect
thereto will be approved by, the Investors holding a majority of the Registrable
Securities to be sold pursuant to such offering, subject, in each case, to
the
consent of the Company, which consent will not be unreasonably
withheld. No Investor may participate in any underwritten offering
hereunder unless such Investor (x) agrees to sell such Investor’s Registrable
Securities on the basis provided in any underwriting arrangements approved
pursuant hereto and (y) completes and executes all other customary
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting
arrangements. In the case of any such underwritten offering, if the
managing underwriter for such offering advises the Company in writing that
in
their good faith opinion the amount of securities requested to be included
therein exceeds the amount of securities that can be sold in such offering
such
that the inclusion of such Registrable Securities would adversely affect
marketing of the securities to be sold pursuant to the offering, the Registrable
Securities held by Investors who elect to participate in such offering and
other
holders of the Company’s securities exercising similar demand registration
rights shall have priority over any securities to be sold by the Company or
any
additional holders of the Company’s securities, and the number of shares to be
included by the Investors and such other holders exercising similar demand
registration rights shall be reduced pro rata on the basis of the percentage
of
the then outstanding Registrable Securities held by each such Investor and
the
registrable securities held by all other holders exercising similar demand
registration rights. The Company shall not be obligated to arrange
for more than two underwritten offerings pursuant to a Shelf Registration
Statement.
(vi) If
the
majority of the Requesting Holders or the Investors participating in a
registration pursuant to this Section 2(a) determine, prior to the effectiveness
of the Demand Registration Statement or the Shelf Registration Statement, as
the
case may be, not to sell Registrable Securities pursuant to such registration
statement, such Requesting Holders or the Investors shall provide written notice
to the Company and the Company shall cease all efforts in connection with such
registration statement; provided, however, that, except where such notice of
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withdrawal
is provided within thirty (30) days of the occurrence of an event or
circumstance that results, or could reasonably be expected to result, in a
Material Adverse Effect, such Requesting Holders or the Investors shall bear
the
costs and expenses incurred prior to such withdrawal and such Requesting Holders
or requesting Investors shall pay in full to the Company, within thirty (30)
days after presentation of an invoice by the Company therefor, all reasonable
costs and expenses incurred by the Company in connection with such withdrawal,
provided, however, that to the extent that the Company and other holders
exercising similar registration demand registration rights include any shares
of
Common Stock in such registration, the Company and such other holders shall
pay
their pro rata share of any such expenses, on the basis of the shares being
offered thereby.
(b) Piggyback
Registration.
(i) If
the
Company at any time proposes to register any of its equity securities under
the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both on any registration form (other than
Forms X-0, X-0 or another form not available for registering the Shares for
sale
to the public) which permits the inclusion of Registrable Securities held by
any
Investor (a “Piggyback Registration”), then each such time the
Company will give written notice to all Investors of its intention so to
do. Upon the written request of any such Investor, received by the
Company within twenty (20) days after the giving of any such notice by the
Company, to register any of such Investor’s Registrable Securities, the Company
will use its reasonable best efforts to cause the Registrable Securities as
to
which registration shall have been so requested to be included in the securities
to be covered by the registration statement proposed to be filed by the Company,
all to the extent requisite to permit the sale or other disposition by the
holder of such Registrable Securities so registered.
(ii) The
Company shall have the right to select the managing underwriter(s) for any
underwritten Piggyback Registration. All Investors proposing to sell
their Registrable Securities in such underwritten offering shall (together
with
the Company) enter into an underwriting agreement in customary
form. If such proposed Piggyback Registration is an underwritten
offering and the managing underwriter for such offering advises the Company
that
the securities requested to be included therein exceed the amount of securities
that can be sold in such offering such that the inclusion of such Registrable
Securities would adversely affect marketing of the securities to be sold by
the
Company, any securities to be sold by the Company shall have priority over
any
Registrable Securities held by Investors, and the number of shares to be
included by any Investor and other holders of the Company’s securities
exercising similar piggyback registration rights as the Investors shall be
reduced pro rata on the basis of the percentage of the then outstanding
Registrable Securities held by each such Investor and all such other holders
exercising similar piggyback registration rights. Notwithstanding the
provisions of this Section 2, the Company shall have the right at any time
after
it shall have given written notice to the Investors pursuant to this Section
2
(irrespective of whether a written request for inclusion of any such securities
shall have been made) to elect not to file any such proposed registration
statement, or to withdraw the same after filing, but prior to
effectiveness.
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(c) Registration
Procedures and Other Matters. If and when the Company is required
by the provisions of paragraphs (a) or (b) to register Registrable Securities,
the Company shall use its reasonable best efforts to:
(i) furnish
to the Investors with respect to the Registrable Securities registered under
any
registration statement filed by the Company pursuant to Sections 2(a) or (b)
hereof (a “Registration Statement”) such number of copies of
the Registration Statement, prospectuses and preliminary prospectuses in
conformity with the requirements of the Securities Act and such other documents
as the Investors may reasonably request, in order to facilitate the public
sale
or other disposition of all or any of the Registrable Securities by the
Investors;
(ii) file
documents required for compliance with blue sky laws in states specified in
writing by any Investor and use its reasonable best efforts to maintain such
blue sky qualifications during the period the Company is required to maintain
the effectiveness of such Demand Registration Statement or Shelf Registration
Statement, as appropriate, pursuant to Section 2(a) hereof; provided, however,
that the Company shall not be required to qualify to do business or consent
to
service of process in any jurisdiction in which it is not now so qualified
or
has not so consented;
(iii) bear
all
reasonable expenses in connection with the procedures in this Section 2 and
the
registration of the Registrable Securities pursuant to the Registration
Statement;
(iv) advise
the Investors promptly after it shall receive notice or obtain knowledge of
the
issuance of any stop order by the SEC delaying or suspending the effectiveness
of the Registration Statement or of the initiation or threat of any proceeding
for that purpose; and promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal at the earliest possible
moment if such stop order should be issued; and
(v) provide
a
“Plan of Distribution” section of the Registration Statement substantially in a
form reasonably acceptable to the Investors (subject to the comments of the
SEC).
(d) The
Company understands that the Investors disclaim any classification as an
underwriter; provided, however, that the fact of any Investor being classified
as an underwriter by the SEC shall not relieve the Company of any obligations
it
has hereunder.
(e) Within
three (3) business days of the effective date of the Registration Statement,
the
Company shall advise its transfer agent that the Registrable Securities covered
by such Registration Statement are subject to an effective registration
statement and can be reissued free of restrictive legend upon notice of a sale
by an Investor and confirmation by such Investor that it has complied with
the
prospectus delivery requirements; provided that the Company has not advised
the
transfer agent orally or in writing that such Registration Statement has been
suspended; provided, further, that in the event the Company’s transfer agent
requires an opinion of counsel to the Company for any such reissuance, the
Company shall cause its counsel to issue an opinion to the transfer agent
stating the foregoing within three business days after any such request for
an
opinion by the transfer agent.
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(f) Transfer
of Shares After Registration; Suspension.
(i) Each
Investor, severally and not jointly, agrees that it will not effect any
disposition of the Shares or its right to purchase the Shares that would
constitute a sale within the meaning of the Securities Act except as
contemplated in Sections 2(a) and (b) or as otherwise permitted by law, and
that
it will promptly notify the Company of any material changes in the information
set forth in the Registration Statement regarding the Investor or its plan
of
distribution.
(ii) Except
in
the event that Section 2(b) or paragraph (iii) below applies, the Company shall
(x) if deemed necessary by the Company, prepare and file from time to time
with
the SEC a post-effective amendment to the Registration Statement or a supplement
to the related prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document so that
such Registration Statement will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and so that, as thereafter
delivered to purchasers of the Registrable Securities being sold thereunder,
such prospectus will not contain any untrue statement of a material fact or
omit
to state a material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances under which they were made,
not misleading; (y) provide the Investors copies of any documents filed pursuant
to clause (x) above; and (z) inform each Investor that the Company has complied
with its obligations in clause (x) above (or that, if the Company has filed
a
post effective amendment to the Registration Statement which has not yet been
declared effective, the Company will notify the Investor to that effect, will
use its reasonable best efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify the
Investor pursuant to clause (x) above when the amendment has become
effective).
(iii) Except
to
the extent that Section 2(b) applies, and subject to paragraph (iv) below,
in
the event (w) of any request by the SEC or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to a Registration Statement or related
prospectus or for additional information; (x) of the issuance by the SEC or
any
other federal or state governmental authority of any stop order suspending
the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose; (y) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; or (z) of any
event or circumstance which, upon the advice of its counsel, necessitates the
making of any changes in the Registration Statement or prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of the Registration Statement, it will not contain any untrue
statement of a
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material
fact or any omission to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading, and that in the case
of
the prospectus, it will not contain any untrue statement of a material fact
or
any omission to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; then the Company shall deliver a notice in writing
to
each Investor (the “Suspension Notice”) to the effect of the
foregoing and, upon receipt of such Suspension Notice, the Investor will refrain
from selling any Shares pursuant to the Registration Statement (a
“Suspension”) until the Investor’s receipt of copies of a
supplemented or amended prospectus prepared and filed by the Company, or until
the Investor is advised in writing by the Company that the current prospectus
may be used, and the Investor has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in any such prospectus. In the event of any Suspension, the Company
will use its reasonable best efforts to cause the use of the prospectus so
suspended to be resumed within thirty (30) days after delivery of a Suspension
Notice to the Investors. In addition to and without limiting any
other remedies (including, without limitation, remedies available under
applicable law or in equity) available to the Investors, each Investor shall
be
entitled to specific performance in the event that the Company fails to comply
with the provisions of this Section 2(f)(iii).
(iv) The
Company may require each Investor participating in any registration to furnish
to the Company such information regarding such Investor as required under
applicable law and such Investor’s intended method of distribution of such
Registrable Securities as the Company may from time to time reasonably request
in writing. Each such Investor agrees to promptly notify the Company
of any inaccuracy or change in information previously furnished by such Investor
to the Company or of the occurrence of any event in either case as a result
of
which any prospectus relating to such registration contains or would contain
an
untrue statement of a material fact regarding such Investor or such Investor’s
intended method of distribution of such Registrable Securities or omits to
state
any material fact regarding such Investor or such Investor’s intended method of
distribution of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish information so required
so
that such prospectus shall not contain, with respect to such Investor or the
distribution of such Registrable Securities, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
then
existing.
(v) Notwithstanding
the foregoing paragraphs of this Section 2(f), the Investors shall not be
prohibited from selling Shares covered by a Registration Statement initiated
pursuant to Section 2(a) as a result of Suspensions on more than two occasions
of not more than 30 days each in any twelve (12) month period, unless, in the
good faith judgment of the Company’s Board of Directors, upon the advice of
counsel, the sale of Registrable Securities under the Registration Statement
in
reliance on this Section 2(f)(v) would be reasonably likely to cause a violation
of the Securities Act, the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) or other applicable law.
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(vi) Provided
that a Suspension is not then in effect, any Investor may sell Registrable
Securities under the Registration Statement, provided that it arranges for
delivery of a current prospectus to the transferee of such Registrable
Securities in compliance with applicable law. Upon receipt of a
request therefor, the Company has agreed to provide an adequate number of
current prospectuses to the Investors and to supply copies to any other parties
requiring such prospectuses.
(g) Indemnification. For
the purpose of this Section 2(g):
(x) the
term “Selling Stockholder” shall include each Investor and any
affiliate of such Investor;
(y) the
term “Registration Statement” shall include the prospectus in
the form filed as part of the Registration Statement at the time of
effectiveness (or, in the case of an underwritten offering, at the time
immediately prior to the pricing of the offering), and each exhibit, supplement
(including any free writing prospectus as defined under Rule 405 of the
Securities Act) or amendment included in or relating to such Registration
Statement; and
(z) the
term “untrue statement” shall include any untrue statement or
alleged untrue statement of a material fact, or any omission or alleged omission
to state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(i) The
Company agrees to indemnify and hold harmless each Selling Stockholder from
and
against any losses, claims, damages or liabilities to which such Selling
Stockholder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, (x) any breach of the
representations or warranties of the Company contained in this Section 2 or
failure to comply with the covenants and agreements of the Company contained
in
this Section 2, (y) any untrue statement contained in the Registration
Statement, as amended at the time of effectiveness, or (z) any failure by the
Company to fulfill any undertaking included in the Registration Statement as
amended at the time of effectiveness. The Company will reimburse such
Selling Stockholder for any reasonable legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that the Company shall not be liable
in
any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon, any untrue statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Selling Stockholder specifically for
use
in preparation of the Registration Statement or the failure of such Selling
Stockholder to comply with its covenants and agreements contained in this
Section 2 respecting the sale of the Registrable Securities or any untrue
statement in any prospectus that is corrected in any subsequent prospectus
that
was delivered to the Selling Stockholder prior to the pertinent sale or sales
by
the Selling Stockholder. The Company shall reimburse each Selling
Stockholder for the amounts provided for herein on demand as such expenses
are
incurred.
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(ii) Each
Investor, severally but not jointly, agrees to indemnify and hold harmless
the
Company (and each person, if any, who controls the Company within the meaning
of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or
are
based upon, (x) any failure to comply with the covenants and agreements
contained in this Section 2 respecting sale of the Registrable Securities,
or
(y) any untrue statement contained in the Registration Statement if such untrue
statement was made in reliance upon and in conformity with written information
furnished by or on behalf of such Investor specifically for use in preparation
of the Registration Statement. Such Investor will reimburse the
Company (or such officer, director or controlling person, as the case may be)
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim; provided
that such Investor’s obligation to indemnify the Company shall be limited to the
amount received by such Investor from the sale of the Registrable Securities
giving rise to such obligation.
(iii) Promptly
after receipt by any indemnified person of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 2(g), such indemnified person
shall
notify the indemnifying person in writing of such claim or of the commencement
of such action, but the omission to so notify the indemnifying person will
not
relieve such indemnifying person from any liability which it may have to any
indemnified person under this Section 2(g), except to the extent that such
omission materially and adversely affects the indemnifying person’s ability to
defend such action. Subject to the provisions hereinafter stated, in
case any such action shall be brought against an indemnified person, the
indemnifying person shall be entitled to participate therein, and, to the extent
that it shall elect by written notice delivered to the indemnified person
promptly after receiving the aforesaid notice from such indemnified person,
shall be entitled to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make
it
inappropriate, in the opinion of counsel to the indemnified person, for the
same
counsel to represent both the indemnified person and such indemnifying person
or
any affiliate or associate thereof, the indemnified person shall be entitled
to
retain its own counsel at the reasonable expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the
fees
and expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any
indemnifying person be liable in respect of any amounts paid in settlement
of
any action unless the
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indemnifying
person shall have approved the terms of such settlement; provided that such
consent shall not be unreasonably withheld. No indemnifying person
shall, without the prior written consent of the indemnified person, effect
any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could
have
been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.
(iv) If
the
indemnification provided for in this Section 2(g) is unavailable to or
insufficient to hold harmless an indemnified person under subsection (i) or
(ii)
above in respect of any losses, claims, damages or liabilities (or actions
or
proceedings in respect thereof) referred to therein, then each indemnifying
person shall contribute to the amount paid or payable by such indemnified person
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company, on the one hand, and the applicable Investor, as well
as
any other Selling Stockholders under such registration statement, on the other,
in connection with the statements or omissions or other matters which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case
of an
untrue statement, whether the untrue statement relates to information supplied
by the Company, on the one hand, or an Investor or other Selling Stockholder,
on
the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement. The Company and each Investor, severally but not jointly,
agree that it would not be just and equitable if contribution pursuant to this
subsection (iv) were determined by pro rata allocation (even if the Investor
and
other Selling Stockholders were treated as one entity for such purpose) or
by
any other method of allocation which does not take into account the equitable
considerations referred to above in this subsection (iv). The amount
paid or payable by an indemnified person as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in
this
subsection (iv) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified person in connection with investigating
or defending any such action or claim. Notwithstanding the provisions
of this subsection (iv), each Investor shall not be required to contribute
any
amount in excess of the amount by which the amount received by such Investor
from the sale of the Registrable Securities to which such loss relates exceeds
the amount of any damages which such Investor has otherwise been required to
pay
by reason of such untrue statement. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Each Investor’s obligations in this
subsection to contribute shall be in proportion to its sale of Registrable
Securities to which such loss relates and shall not be joint with any other
Selling Stockholders.
(v) The
parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations
regarding the provisions hereof, including, without limitation, the provisions
of this Section 2(g), and are fully informed regarding said
provisions. They further acknowledge that the provisions of this
Section 2(g) fairly allocate the risks in light of the ability of the parties
to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement as required by the
11
Securities
Act and the Exchange Act. The parties are advised that federal or
state public policy as interpreted by the courts in certain jurisdictions may
be
contrary to certain of the provisions of this Section 2(g), and the parties
hereto hereby expressly waive and relinquish any right or ability to assert
such
public policy as a defense to a claim under this Section 2(g) and further agree
not to attempt to assert any such defense.
(h) Termination
of Conditions and Obligations. The conditions precedent imposed
by Section 2 upon the transferability of the Shares shall cease and terminate
as
to any particular number of the Shares when such Shares shall have been
effectively registered under the Securities Act and sold or otherwise disposed
of in accordance with the intended method of disposition set forth in the
Registration Statement covering such Shares, at the time such Shares are
eligible for sale pursuant to Rule 144(k) or at such time as an opinion of
counsel reasonably satisfactory to the Company shall have been rendered to
the
effect that such conditions are not necessary in order to comply with the
Securities Act.
(i) Information
Available. So long as the Registration Statement is effective
covering the resale of Registrable Securities owned by any Investors, the
Company will furnish to such Investors, upon the reasonable request of any
Investor, an adequate number of copies of the prospectuses to supply to any
other party requiring such prospectuses; and upon the reasonable request of
such
Investor, the President or the Chief Financial Officer of the Company (or an
appropriate designee thereof) will meet with such Investor or a representative
thereof at the Company’s headquarters to discuss all information relevant for
disclosure in the Registration Statement covering the Registrable Securities
and
will otherwise cooperate with any Investor conducting an investigation for
the
purpose of reducing or eliminating such Investor’s exposure to liability under
the Securities Act, including, the reasonable production of information at
the
Company’s headquarters; provided, that the Company shall not be required to
disclose any confidential information to or meet at its headquarters with any
Investor until and unless the Investor shall have entered into a confidentiality
agreement in form and substance reasonably satisfactory to the Company with
the
Company with respect thereto.
12
3. Notices. All
notices, requests, consents and other communications hereunder shall be in
writing, shall be mailed (a) if within the United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile, or (b) if delivered from outside
the
United States, by International Federal Express or facsimile, and shall be
deemed given and received (i) if delivered by first-class registered or
certified mail, three business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed,
(iii)
if delivered by International Federal Express, two business days after so
mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt
and shall be delivered as addressed as follows:
(A)
if
to the Company,
to:
Neurologix, Inc.
Xxx Xxxxxx Xxxxx
Xxxx Xxx, XX 00000
Attention: Xxxx Xxxxxx
Fax: (000) 000-0000
(B) if
to the Investors, at their respective addresses on Exhibit A hereto,
or at such other address or addresses as may have been furnished to the Company
in writing, with a copy to: counsel set forth on Exhibit A
hereto.
4. Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial;
Currency. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without regard
to
the choice of law principles thereof. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State
of
New York located in New York County and the United States District Court for
the
Southern District of New York for the purpose of any suit, action, proceeding
or
judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding
and
to the laying of venue in such court. Each party hereto irrevocably
waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any
such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST
A
TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS
THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
5. Changes. This
Agreement may not be modified, waived or amended except pursuant to an
instrument in writing signed by the Company and at least fifty percent (50%)
in
interest of the Investors; provided that any Investor may waive by
written consent any provision that is intended for its benefit;
providedfurther, however, that any such modification,
waiver or amendment that adversely and disproportionately affects any Investor
shall require the prior consent of such Investor. The parties
hereto acknowledge and agree that any purchaser of the Series D Preferred Stock
acquiring shares thereof at the Second Closing shall be designated as an
Investor and shall become a party to this Agreement, by joinder, as at such
Second Closing.
13
6. Severability. In
case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
7. Prior
Agreements. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
(including without limitation oral agreements) concerning the registration
rights of the Investors.
8. Headings. The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.
9. Transfer
of Rights. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure
to
the benefit of the respective successors and assigns of the parties hereto
(including without limitation transferees of any Shares), whether so expressed
or not; provided, however, that rights conferred to the Investors may be
transferred to a transferee of Shares only if the Company has been given written
notice thereof, such transfer complies with the requirements of applicable
law
and the NASD and the SEC and such transferee is (i) a partner or retired partner
of any Investor which is a partnership; (ii) a member or retired member of
any
Investor which is a limited liability company or (iii) any purchaser of Shares
from an Investor representing at least five percent (5%) of the Purchased
Shares.
10. Independent
Nature of Investors’ Obligations and Rights. The obligations of
each Investor under this Agreement are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in
any
way for the performance of the obligations of any other Investor under this
Agreement. Nothing contained herein or in any other document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute
the
Investors as a partnership, an association, a joint venture or any other kind
of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation,
the
rights arising out of this Agreement or out of the other related documents,
and
it shall not be necessary for any other Investor to be joined as an additional
party in any proceeding for such purpose. Each Investor has been
represented by its own separate legal counsel in their review and negotiation
of
this Agreement.
11. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other
parties.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
14
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
NEUROLOGIX,
INC.
|
By:
|
/s/
Xxxx Xxxxxx
|
|
|
Name: Xxxx
Xxxxxx
|
|
|
Title:
Chief Financial Officer
|
GENERAL
ELECTRIC PENSION TRUST
By:
GE
Asset Management Incorporated, its Investment Manager
|
By:
|
/s/
Xxxxxx X. Xxxxxx
|
|
|
Name: Xxxxxx
X. Xxxxxx
|
|
|
Title:
Vice President
|
DAIMLERCHRYSLER
CORPORATION MASTER RETIREMENT TRUST
By: State
Street Bank and Trust Company as Trustee of the DaimlerChrysler Corporation
Master
Retirement Trust
|
By:
|
/s/
Xxxxx Xxxxxx
|
|
|
Name:
Xxxxx Xxxxxx
|
|
|
Title: Vice
President
|
PROMED
PARTNERS LP
|
By:
|
/s/
Xxxxx Xxxxxxxx
|
|
|
Name: Xxxxx
Xxxxxxxx
|
|
|
Title:
Managing Director
|
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 Xxxxxxxx
|
|
|
Name:
Xxxxx Xxxxxxxx
|
|
|
Title: Member
|
NEUROLOGIX,
INC.
|
By:
|
/s/
Xxxx X. Xxxxxxx
|
|
|
Name: Xxxx
X. Xxxxxxx
|
|
|
Title:
President & Chief Executive
Officer
|
15
