Exhibit 10.2
 
 
REGISTRATION RIGHTS AGREEMENT
 
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
 
 
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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 S-4, S-8 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
 
 
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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.
 
 
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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.
  One Bridge Plaza
  Fort Lee, NJ 07024
  Attention: Marc Panoff
  Fax: (201) 592-0366
 
(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.
 
 
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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]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 
 
NEUROLOGIX, INC.
 
By:
/s/ Marc Panoff

 
Name:  Marc Panoff

 
Title: Chief Financial Officer

 
 
GENERAL ELECTRIC PENSION TRUST
 
By: GE Asset Management Incorporated, its Investment Manager
 
By:
/s/ Daniel L. Furman

 
Name:  Daniel L. Furman

 
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/ Steve Sovany

 
Name: Steve Sovany

 
Title:  Vice President

 
 
PROMED PARTNERS LP
 
By:
/s/ Barry Kurokawa

 
Name:  Barry Kurokawa

 
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/ James Haddaway

 
Name: James Haddaway

 
Title:  Member

 
 
NEUROLOGIX, INC.
 
By:
/s/ John E. Mordock

 
Name:  John E. Mordock

 
Title: President & Chief Executive Officer

 
 
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