Exhibit 10.2


 


Execution Copy


 


COGNITION
THERAPEUTICS, INC.


 





 



 


THIRD
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


 





 



 


March 20, 2014


 






     


     


    

 


TABLE OF CONTENTS 

(continued)


 


TABLE
OF CONTENTS


 





	 	 	 	Page
	 	 	 	 
	1.	Definitions	1
	 	 	 	 
	2.	Registration Rights	4
	 	 	 	 
	 	2.1.	Demand Registration	4
	 	2.2.	Company Registration	6
	 	2.3.	Underwriting Requirements	6
	 	2.4.	Obligations of the Company	8
	 	2.5.	Furnish Information	9
	 	2.6.	Expenses of Registration	9
	 	2.7.	Delay of Registration	10
	 	2.8.	Indemnification	10
	 	2.9.	Reports Under Exchange Act	12
	 	2.10.	Limitations on Subsequent Registration
    Rights	13
	 	2.11.	“Market Standoff’ Agreement	13
	 	2.12.	Restrictions on Transfer	13
	 	2.13.	Termination of Registration Rights	15
	 	 	 	 
	3.	Information Rights	15
	 	 	 	 
	 	3.1.	Delivery of Financial Statements	15
	 	3.2.	Inspection	16
	 	3.3.	Termination of Information Rights	17
	 	3.4.	Confidentiality	17
	 	 	 	 
	4.	Rights to Future Stock
    Issuances	17
	 	 	 	 
	 	4.1.	Right of First Offer	17
	 	4.2.	Termination; Waiver	18
	 	 	 	 
	5.	Additional Covenants	19
	 	 	 	 
	 	5.1.	Employee Stock	19
	 	5.2.	Qualified Small Business Stock	20
	 	5.3.	Board Matters; Director Compensation	20
	 	5.4.	Successor Indemnification	20
	 	5.5.	Termination of Covenants	20
	 	 	 	 
	6.	Miscellaneous	20
	 	 	 	 
	 	6.1.	Successors and Assigns; Assignment
    of Rights	20
	 	6.2.	Governing Law	21
	 	6.3.	Counterparts; Electronic Transmission	21
	 	6.4.	Titles and Subtitles	21
	 	6.5.	Notices	21
	 	6.6.	Amendments and Waivers	22



 






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TABLE OF CONTENTS 

(continued)


 


	 	6.7.	Severability	22
	 	6.8.	Aggregation of Stock	22
	 	6.9.	Additional Investors	23
	 	6.10.	Entire Agreement	23
	 	6.11.	Delays or Omissions	23
	 	6.12.	Acknowledgment	23
	 	6.13.	Dispute Resolution	23
	 	6.14.	WAIVER OF JURY TRIAL	23



 


SCHEDULE


 


	Schedule A	Schedule of Investors



 






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COGNITION
THERAPEUTICS, INC.


 


THIRD
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


 


THIS THIRD AMENDED AND RESTATED INVESTORS’
RIGHTS AGREEMENT is made as of the 20th day of March, 2014, by and among Cognition Therapeutics, Inc., a Delaware corporation (the
 “Company”), and each of the investors listed on Schedule A hereto, each of whom is referred to in this Agreement as
an “Investor” and any Additional Purchaser (as defined in the Purchase Agreement) that becomes a party to this Agreement
in accordance with Section 6.9.


 


RECITALS


 


The Company and certain of the Investors are parties
to a Second Amended and Restated Investors’ Rights Agreement, dated as of December 5, 2011 (the “Rights Agreement”).


 


The Company and certain of the Investors are purchasing
shares of the Company’s Series  B Convertible Preferred Stock, par value $.001 per share (the “Series B Preferred
Stock”), pursuant to the Series B Preferred Stock Purchase Agreement of even date herewith (the “Purchase Agreement”).


 


In order to induce the Company to enter into the
Purchase Agreement and to induce the Investors to invest funds in the Company pursuant to the Purchase Agreement, the Company and the
undersigned Investors, which include the holders of at least 60% of the Registrable Securities (as set forth in the Rights Agreement),
hereby agree to enter into this Agreement in order to amend and restate the Rights Agreement in accordance with Section 6.6 of the
Rights Agreement and to govern the rights of the Investors to cause the Company to register shares of Common Stock issuable to the Investors
upon conversion of the Company’s Series A Convertible Preferred Stock, par value $.001 per share (the “Series A
Preferred Stock”), Series A-1 Convertible Preferred Stock, par value $.001 per share (the “Series A-1 Preferred
Stock”), Series A-2 Convertible Preferred Stock, par value $.001 per share (the “Series A-2 Preferred Stock”),
and Series B Preferred Stock (together with the Series A Preferred Stock , Series A-1 Preferred Stock and Series A-2
Preferred Stock, the “Preferred Stock”), to receive certain information from the Company, and to participate in future equity
offerings by the Company, and to govern certain other matters as set forth in this Agreement.


 


NOW, THEREFORE, the parties, intending to be legally
bound, hereby agree as follows:


 


1.             Definitions.
For purposes of this Agreement:


 


“Affiliate” means, with respect
to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such
Person, including, without limitation, any general partner, managing member, officer or director of such Person or any venture capital
fund now or hereafter existing that is controlled by any such Person, or any partner or retired partner of any Person that is a partnership,
or any member or former member of any Person that is a limited liability company, or solely in the case of Ogden CAP Associates, LLC
(“Ogden”): (a) with respect to which investment discretion is exercised by one or more


 






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general partners or managing members of, or shares the same management
company with, Ogden; or (b) any employee of Ogden or Ogden’s Affiliate who holds (or will by virtue of an immediately succeeding
transfer will hold) at least 100,000 shares of Preferred Stock (subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization affecting such shares).


 


“Common Stock” means shares
of the Company’s common stock, par value $.001 per share.


 


“Damages” means any loss, damage,
or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal
or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon (a) any
untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any
preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (b) an omission or alleged
omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading;
or (c) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act,
the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or
any state securities law.


 


“Derivative Securities” means
any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including
options and warrants.


 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules  and regulations promulgated thereunder.


 


“Excluded Registration” means
(a) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock
purchase, or similar plan; (b) a registration relating to an SEC Rule 145 transaction; (c) a registration on any form
that does not include substantially the same information as would be required to be included in a registration statement covering the
sale of the Registrable Securities; or (d) a registration in which the only Common Stock being registered is Common Stock issuable
upon conversion of debt securities that are also being registered.


 


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


 


“Form S-2” means such
form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently
adopted by the SEC.


 


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


 






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“GAAP” means generally accepted
accounting principles in the United States.


 


“Holder” means any holder of
Registrable Securities who is a party to this Agreement.


 


“Immediate Family Member” means
a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother- in-law, sister-in-law, including adoptive relationships, of a natural person referred to herein.


 


“Initiating Holders” means,
collectively, Holders who properly initiate a registration request under this Agreement.


 


“IPO” means the Company’s
first underwritten public offering of its Common Stock pursuant to a registration statement filed with the SEC under the Securities Act.


 


“Key Employee” means any executive-level
employee (including division director and vice president-level positions) as well as any employee who, either alone or in concert with
others, develops, invents, programs, or designs any Company Intellectual Property (as defined in the Purchase Agreement).


 


“Major Investor” means any
Investor that, individually or together with such Investor’s Affiliates, holds shares representing an investment of at least $100,000
in the Preferred Stock.


 


“New Securities” means, collectively,
equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity
securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity
securities.


 


“Person” means any individual,
corporation, partnership, trust, limited liability company, association or other entity.


 


“Preferred Director” means
any director of the Company that the holders of record of the Preferred Stock are entitled to elect pursuant to the Certificate (as defined
in Section 5.4).


 


“Registrable Securities” means
(a) the Common Stock issuable or issued upon conversion of the Preferred Stock; (b) any Common Stock, or any Common Stock issued
or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, acquired by the Investors
after the date hereof; and (c) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or
other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares
referenced in clause (a) or (b) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction
in which the applicable rights under this Agreement are not assigned pursuant to Section 6.1, and excluding for purposes of Section 2
any shares for which registration rights have terminated pursuant to Section 2.13.


 


“Registrable Securities then outstanding”
means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and


 






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the number of shares of Common Stock issuable (directly or indirectly)
pursuant to then exercisable and/or convertible securities that are Registrable Securities.


 


“Restricted Securities” means
the securities of the Company required to bear the legend set forth in Section 2.12(a).


 


“Right of First Refusal and Co-Sale Agreement”
means the Third Amended and Restated Right of First Refusal and Co-Sale Agreement among the Company, the Investors and certain other
stockholders of the Company, dated as of the date of the Initial Closing (as defined in the Purchase Agreement).


 


“SEC” means the Securities
and Exchange Commission.


 


“SEC Rule 144” means Rule 144
promulgated by the SEC under the Securities Act.


 


“SEC Rule 144(k)” means
Rule 144(k) promulgated by the SEC under the Securities Act.


 


“SEC Rule 145” means Rule 145
promulgated by the SEC under the Securities Act.


 


“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Selling Expenses” means all
underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and
disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel (as defined in Section 2.6)
borne and paid by the Company as provided in Section 2.6.


 


“Stock Plan” means the Company’s
Amended and Restated 2007 Equity Incentive Plan, as amended from time to time.


 


“Voting Agreement” means the
Third Amended and Restated Voting Agreement among the Company, the Investors and certain other stockholders of the Company, dated as
of the date of the Initial Closing.


 


2.            
  Registration Rights. The Company covenants and agrees as follows:


 


2.1.           Demand
Registration.


 


(a)         If
at any time after the earlier of (i) five years after the date of this Agreement and (ii) 180 days after the effective date
of the registration statement for the IPO, the Company receives a request from Holders of at least 20% of the Registrable Securities
then outstanding that the Company file a Form S-1 registration statement covering the registration of at least 20% of the Registrable
Securities then outstanding (or a proportionately lower percentage if the anticipated aggregate offering price, net of Selling Expenses,
would exceed $5,000,000), then the Company shall (A) within 10 days after the date such request is given, give notice thereof (the
“Demand Notice”) to all Holders other than the Initiating Holders; and (B) as soon as practicable, and in any
event within 60 days after the date such request is given by the 


 






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Initiating Holders, file a Form S-1 registration statement under
the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable
Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the
Company within 20 days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c), 2.1(d),
2.l(f) and 2.3.


 


(b)         If
at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders of at least
10% of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to the Registrable
Securities then outstanding of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $1,000,000,
then the Company shall (i) within 10 days after the date such request is given, give a Demand Notice to all Holders other than the
Initiating Holders; and (ii) as soon as practicable, and in any event within 45 days after the date such request is given by the
Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested
to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within 20 days
of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.l(c), 2.l(e), 2.l(f) and 2.3.


 


(c)         Notwithstanding
the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate
signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors
it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or
remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would
(1) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company;
(2) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential;
or (3) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have
the right to defer taking action with respect to such filing for a period of not more. than 180 days after the request of the Initiating
Holders is given; provided, however, that the Company may not invoke this right more than once in any 12-month period; and provided further
that the Company shall not register any securities for its own account or that of any other stockholder during such 180-day period other
than an Excluded Registration.


 


(d)         The
Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a): (i) during
the period that is 60 days before the Company’s good faith estimate of the date of filing of, and ending on a date that is 180
days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially
reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two registrations
pursuant to Section 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that
may be immediately registered on Form S-3 pursuant to a request made in accordance with Section 2.l(b).


 






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(e)         The
Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b): (i) during
the period that is 30 days before the Company’s good faith estimate of the date of filing of, and ending on a date that is 90 days
after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially
reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has effected two registrations
pursuant to Section 2.1 (b) within the 12-month period immediately preceding the date of such request.


 


(f)          A
registration shall not be counted as “effected” for purposes of Sections 2.l(d) and 2. l(e) until such time as
the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for
such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement
pursuant to Section 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes
of Sections 2.1(d) and 2.1(e). Solely for purposes of Sections 2.1(d) and 2.1(e), a registration shall not be counted as “effected”
if, as a result of an exercise of the underwriter’s cutback provisions in Section 2.3(a), fewer than 100% of the total number
of Registrable Securities that Holders have requested to be included in such registration statement are actually included.


 


2.2.          Company
Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders
other than the Holders) any of its Common Stock or other securities under the Securities Act in connection with the public offering of
such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder
notice of such registration. Upon the request of each Holder given within 20 days after such notice is given by the Company, the Company
shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder
has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable
Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company
in accordance with Section 2.6.


 


2.3.          Underwriting
Requirements.


 


(a)         If,
pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means
of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1, and the Company shall
include such information in the Demand Notice. The underwriters will be selected by the Company and shall be reasonably acceptable to
a majority in interest of the Initiating Holders (based on the relative number of Registrable Securities owned by the Initiating Holders
that are included in such registration). In such event, the right of any Holder to include such Holder’s Registrable Securities
in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in Section 2.4(e)) enter into an underwriting agreement in customary
form with the underwriters 


 






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selected for such underwriting. Notwithstanding any other provision of this Section 2.3, if the underwriters
advise the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then
the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and
the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities,
including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder
or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable
Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters
may round the number of shares allocated to any Holder to the nearest 100 shares.


 


(b)            In
connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2, the
Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept
the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters
in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities,
including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold
(other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering,
then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities,
which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters
determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable
Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to)
the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all
such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters
may round the number of shares allocated to any Holder to the nearest 100 shares.


 


(c)            For
purposes of the provision in Section 2.3(a) or 2.3(b)  concerning apportionment, for any selling Holder that is a partnership,
limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of
such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any
trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata
reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned
by all Persons included in such “selling Holder,” as defined in this sentence. Notwithstanding the foregoing (including,
without limitation, Sections 2.3(a) and (b)), the number of Registrable Securities included in such registration and underwriting
shall not be reduced below 30% of the securities included in such registration unless such offering is the IPO, in which case the selling
stockholders may be excluded entirely if the underwriters make the determination described above and no securities other than those of
the Company are included in 


 



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such registration. No Registrable Securities or other securities excluded from the underwriting by reason
of this Section 2.3 shall be included in such registration statement.


 


(d)            Without
limiting the generality of the foregoing, in the event that the underwriters in any offering under Section 2.1 or 2.2 request approval
of a modification of the provisions set forth in Section 2.1, 2.2 or 2.3 from the Investors, the Investors’ approval of such
modification shall not be unreasonably withheld.


 


2.4.            Obligations
of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:


 


(a)            prepare
and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts
to cause such registration statement to become effective and, upon the request of the Holders of at least 60% of the Registrable Securities
registered thereunder, keep such registration statement effective for a period of up to 120 days or, if earlier, until the distribution
contemplated in the registration statement has been completed; provided, however, that (i) such 120-day period shall be extended
for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities)
of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable
Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC
rules, such 120-day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities
are sold;


 


(b)            prepare
and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such
registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered
by such registration statement;


 


(c)            furnish
to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act,
and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;


 


(d)            use
its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities
or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be
required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the
Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;


 


(e)            in
the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary
form, with the underwriters of such offering;


 



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(f)            use
commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national
securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by
the Company are then listed;


 


(g)            provide
a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of such registration;


 


(h)            promptly
make available for inspection by the selling Holders, any underwriter participating in any disposition pursuant to such registration
statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, subject
to reasonable confidentiality obligations, all financial and other records, pertinent corporate documents, and properties of the Company,
and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy
of the information in such registration statement and to conduct appropriate due diligence in connection therewith;


 


(i)            notify
each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared
effective or a supplement to any prospectus forming a part of such registration statement has been filed; and


 


(j)            after
such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement
such registration statement or prospectus.


 


2.5.            Furnish
Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2
with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to
effect the registration of such Holder’s Registrable Securities.


 


2.6.            Expenses
of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications
pursuant to this Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees
and disbursements of counsel for the Company; and the reasonable fees and disbursements of one counsel for the selling Holders (“Selling
Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay
for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn
at the request of the Holders of at least 60% of the Registrable Securities to be registered (in which case all selling Holders shall
bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration),
unless the Holders of at least 60% of the Registrable Securities agree to forfeit their right to one registration pursuant to Section 2.l(a) or
2.l(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse 


 



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change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn
the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses
and shall not forfeit their right to one registration pursuant to Section 2.l(a) or 2.l(b). All Selling Expenses relating to
Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the
number of Registrable Securities registered on their behalf.


 


2.7.            Delay
of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration
pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of
this Section 2.


 


2.8.            Indemnification.
If any Registrable Securities are included in a registration statement under this Section 2:


 


(a)            To
the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors,
and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities
Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act
or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned
Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding
from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall
not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company,
which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of
or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of
any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.


 


(b)            To
the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of
its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within
the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act),
any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder,
against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance
upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with
such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses
reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such
expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to
amounts paid in settlement of any such claim or proceeding if 


 



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such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of
indemnity or contribution under Sections 2.8(b) and 2.8(d)  exceed the proceeds from the offering received by such Holder (net
of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.


 


(c)            Promptly
after receipt by an indemnified party under this Section  2.8 of notice of the commencement of any action (including any governmental
action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is
to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof.
The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate
jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory
to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure
to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying
party of any liability to the indemnified party under this Section 2.8, to the extent that such failure materially prejudices the
indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under this Section 2.8.


 


(d)            To
provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party
otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially
determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8
provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party
hereto for which indemnification is provided under this Section 2.8, then, and in each such case, such parties will contribute to
the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such
proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection
with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect
any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged
omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however,
that, in any such case, (A) no Holder will be required to contribute any amount in excess of the public offering price of all such 


 



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Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (B) no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant
to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the
proceeds from the offering received by such Holder (net of any Selling Expenses) paid by such Holder), except in the case of willful
misconduct or fraud by such Holder.


 


(e)            Notwithstanding
the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.


 


(f)            Unless
otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of
the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration
under this Section 2, and otherwise shall survive the termination of this Agreement.


 


2.9.            Reports
Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation
of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company shall:


 


(a)            make
and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times
after the effective date of the registration statement filed by the Company for the IPO;


 


(b)            use
commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and


 


(c)            furnish
to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written
statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after 90 days after the
effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time
after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company; and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration
(at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3
(at any time after the Company so qualifies to use such form).


 



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2.10.            Limitations
on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent
of the Holders of at least 60% of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective
holder of any securities of the Company which would give such holder or prospective holder any registration rights; provided that this
limitation shall not apply to any additional Investor who becomes a party to this Agreement in accordance with Section 6.9.


 


2.11.            “Market
Standoff” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter,
during the period commencing on the date of the final prospectus relating to the registration by the Company for its own behalf of shares
of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1, Form S-2,
or Form S-3, and ending on the date specified by the Company and the managing underwriter (such period not to exceed (a) 180
days in the case of the IPO, which period may be extended upon the request of the managing underwriter, to the extent required by any
NASD rules, for an additional period of up to 15 days if the Company issues or proposes to issue an earnings or other public release
within 15 days of the expiration of the 180-day lockup period, or (b) 90 days in the case of any registration other than the IPO,
which period may be extended upon the request of the managing underwriter, to the extent required by any NASD rules, for an additional
period of up to 15 days if the Company issues or proposes to issue an earnings or other public release within 15 days of the expiration
of the 90-day lockup period), (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock,
whether such shares or any such securities are then owned by the Holder or are thereafter acquired, or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities,
whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities,
in cash, or otherwise. The foregoing provisions of this Section 2.11 shall not apply to the sale of any shares to an underwriter
pursuant to an underwriting agreement, and shall be applicable to the Holders only if all officers, directors and all stockholders individually
owning more than one percent of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of
all outstanding Preferred Stock) are subject to the same restrictions. The underwriters in connection with such registration are intended
third party beneficiaries of this Section 2.11 and shall have the right, power, and authority to enforce the provisions hereof as
though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters
in connection with such registration that are consistent with this Section 2.11 or that are necessary to give further effect thereto.
Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall
apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements.


 


2.12.            Restrictions
on Transfer. The Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company
shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer,
except upon the conditions specified in this Agreement, which 


 



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conditions are intended to ensure compliance with the provisions of the
Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Stock and the Registrable
Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified
in this Agreement.


 


(a)            Each
certificate or instrument representing (i) the Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities
issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization,
merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Section  2.12(b)) be stamped or
otherwise imprinted with a legend substantially in the following form:


 


“THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.


 


THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF AN INVESTORS’ RIGHTS AGREEMENT BETWEEN THE COMPANYAND THE STOCKHOLDER, AS MAY BE AMENDED
FROM TIME TO TIME, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.”


 


The Holders consent to the Company making a notation
in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer
set forth in this Section 2.12.


 


(b)            The
holder of each certificate representing Restricted Securities, by acceptance thereof, agrees to comply in all respects with the provisions
of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration
statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder’s
intention to effect such sale, pledge, or transfer. Each such notice shall describe the manner and circumstances of the proposed sale,
pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense
by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company,
addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act;
(ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted
Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto;
or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer
of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities
shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder
to the Company. The Company will not require such a legal opinion or “no action” letter (A) in any transaction in compliance
with SEC Rule 144 or (B) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such
Holder for no consideration; 


 



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provided that each transferee agrees in writing to be subject to the terms of this Section 2.12. Each
certificate or instrument evidencing the Restricted Securities transferred as above provided shall bear, except if such transfer is made
pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Section 2.12(a), except that such certificate shall
not bear such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order
to establish compliance with any provisions of the Securities Act.


 


2.13.            Termination
of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration
pursuant to Section 2.1 or Section 2.2 shall terminate upon the earliest to occur of:


 


(a)            the
closing of a Deemed Liquidation Event, as such term is defined in the Certificate; and


 


(b)            as
to particular Registrable Securities owned by such Holder, when such Registrable Securities could be sold without restriction under SEC
Rule 144(k); and


 


(c)            the
four-year anniversary of the IPO.


 


3.            Information
Rights.


 


3.1.            Delivery
of Financial Statements.


 


(a)            The
Company shall deliver to each Major Investor, in a format specified by Golden Seeds LLC, or any successor entity thereto:


 


(i)            as
soon as practicable, but in any event within 90 days after the end of each fiscal year of the Company, (A) a balance sheet as of
the end of such year, (B)  statements of income and of cash flows for such year, and a comparison between (1) the actual amounts
as of and for such fiscal year and (2) the comparable amounts for the prior year and as included in the Budget (as defined in Section 3.1(v))
for such year, with an explanation of any material differences between such amounts and a schedule as to the sources and applications
of funds for such year, and (C) a statement of stockholders’ equity as of the end of such year, all such financial statements
audited and certified by independent public accountants of nationally recognized standing selected by the Company, copies of which shall
also be provided to ClearMomentum, Inc. (“ClearMomentum”) or any successor thereof, as specified by Golden Seeds
LLC and subject to Section 3.4;


 


(ii)            as
soon as practicable, but in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Company,
(A) unaudited statements of income and of cash flows for such fiscal quarter, and a comparison between (1) the actual amounts
as of and for such fiscal quarter and (2) the comparable amounts for such fiscal quarter as included in the Budget for the applicable
fiscal year and (B) an unaudited balance sheet and a statement of stockholders’ equity as of the end of such fiscal quarter,
all prepared in accordance with GAAP (except that such financial statements may (A) be subject to normal year-end audit adjustments
and (B) not contain all notes thereto that may be required in accordance with GAAP), copies of which shall also be provided to ClearMomentum
or any 


 



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successor thereof, as specified by Golden Seeds LLC or any successor entity thereto and subject to Section 3.4;


 


(iii)            such
other information relating to the financial condition, business, prospects, or corporate affairs of the Company as determined by the
Board of Directors;


 


(iv)            as
soon as practicable, but in any event within 45 days of the end of each month, (A) an unaudited income statement and statement of
cash flows for such month, and a comparison between (1) the actual amounts as of and for such month and (2) the comparable
amounts for such month as included in the Budget for the applicable fiscal year and (B) an unaudited balance sheet and statement
of stockholders’ equity as of the end of such month, all prepared in accordance with GAAP (except that such financial statements
may (A) be subject to normal year-end audit adjustments and (B) not contain all notes thereto that may be required in accordance
with GAAP);


 


(v)            as
soon as practicable, but in any event 30 days before the end of each fiscal year, a budget and business plan for the next fiscal year
(collectively, the “Budget”), which shall include, without limitation, forecasts of the Company’s revenues,
expenses and cash position on a month-to-month basis, balance sheets, income statements, and statements of cash flow for such months
and, promptly after prepared, any other budgets or revised budgets prepared by the Company; and


 


(vi)            as
soon as practicable, but in any event within 45 days of the end of each month, and upon the final closing under the Purchase Agreement
and upon each closing of future financings by the Company, the Company’s capitalization table in a format specified by Golden Seeds
LLC or any successor entity thereto, a copy of which shall also be provided to ClearMomentum or any successor thereof, as specified by
Golden Seeds LLC or any successor entity thereto and subject to Section 3.4.


 


(b)            If,
for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period
the financial statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements
of the Company and all such consolidated subsidiaries.


 


(c)            Notwithstanding
anything else in this Section 3.1 to the contrary, the Company may cease providing the information set forth in this Section 3.1
during the period starting with the date 60 days before the Company’s good-faith estimate of the date of filing of a registration
statement if it reasonably concludes it must do so to comply with the SEC rules  applicable to such registration statement and related
offering; provided that the Company’s covenants under this Section 3.1 shall be reinstated at such time as the Company is
no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.


 


3.2.            Inspection.
The Company shall permit each Major Investor (provided that such Major Investor is not a competitor of the Company), at such Major
Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and 


 



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discuss
the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably
requested by the Major Investor upon reasonable advance notice.


 


3.3.            Termination
of Information Rights. The covenants set forth in Sections 3.1 and 3.2 shall terminate and be of no further force or effect (a) immediately
before the consummation of the IPO, (b) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or
15(d) of the Exchange Act, or (c) upon a Deemed Liquidation Event, as such term is defined in the Certificate, whichever event
occurs first.


 


3.4.            Confidentiality.
Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than
to monitor its investment in the Company) any confidential information obtained from the Company (including notice of the Company’s
intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in
general (other than as a result of a breach of this Section 3.4 by such Investor), (b) is or has been independently developed
or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed
to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided,
however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals
to the extent necessary to obtain their services in connection with monitoring its investment in the Company, if such professionals agree
to be bound by the provisions of this Section 3.4; (ii) to any prospective purchaser of any Registrable Securities from such
Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 3.4; (iii) to any existing or
prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business,
if such prospective purchaser agrees to be bound by the provisions of this Section 3.4; or (iv) as may otherwise be required
by law, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent
of any such required disclosure. For the avoidance of doubt, each Investor shall be responsible for any breach of this Section 3.4
by any other Person to which it is permitted to disclose any Confidential Information pursuant to this Section 3.4.


 


4.            Rights
to Future Stock Issuances.


 


4.1.            Right
of First Offer. Subject to the terms and conditions of this Section 4.1 and applicable securities laws, if the Company proposes
to offer or sell any New Securities, the Company shall first offer such New Securities to each Investor.


 


(a)            The
Company shall give notice (the “Offer Notice”) to each Investor, stating (i) its bona fide intention to offer
such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which
it proposes to offer such New Securities.


 


(b)            By
notification to the Company within 20 days after the Offer . Notice is given, each Investor may elect to purchase or otherwise acquire,
at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that
the Common Stock issued and held, or issuable (directly or indirectly) upon


 



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conversion and/or exercise, as applicable, of the Preferred
Stock and any other Derivative Securities then held, by such Investor bears to the total Common Stock of the Company then issued and
outstanding (assuming full conversion and/or exercise, as applicable, of all the Preferred Stock and other Derivative Securities, and
the full issuance of all shares reserved for issuance under the Stock Plan). At the expiration of such 20-day period, the Company shall
promptly notify each Investor that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Investor”)
of any other Investor’s failure to do likewise. During the 10-day period commencing after the Company has given such notice, each
Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified
above, up to that portion of the New Securities for which Investors were entitled to subscribe but that were not subscribed for by the
Investors which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion
and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Investor
bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the
Preferred Stock and any other Derivative Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed
shares. The closing of any sale pursuant to this Section  4.1(b) shall occur within the later of 90 days of the date that the
Offer Notice is given and the date of initial sale of New Securities pursuant to Section 4.1(c).


 


(c)            If
all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section 4.1(b), the
Company may, during the 90-day period following the expiration of the periods provided in Section 4.1(b), offer and sell the remaining
unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the
offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities
within such period, or if such agreement is not consummated within 60 days of the execution thereof, the right provided hereunder shall
be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investors in accordance with this
Section 4.1.


 


(d)            The
right of first offer in this Section 4.1 shall not be applicable to (i) Exempted Securities (as defined in the Certificate);
(ii) shares of Common Stock issued in the IPO; and (iii) the issuance of shares of the Series B Preferred Stock to Additional
Purchasers pursuant to Section 1.2 of the Purchase Agreement.


 


4.2.            Termination;
Waiver.


 


(a)            The
covenants set forth in Section 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation
of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) 
of the Exchange Act, or (iii) upon a Deemed Liquidation Event, as such term is defined in the Certificate, whichever event occurs
first and, as to each Investor, in accordance with Section 4.1(e).


 


(b)            Except
with respect to Pittsburgh Life Sciences Greenhouse and Innovations Works, Inc., the covenants set forth in Section 4.1 shall
terminate and be of no further force or effect with respect to any Investor who is not a Fully Exercising Investor and


 



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such non-Fully
Exercising Investor shall never again be afforded such pre-emptive rights with respect to any New Securities. The provisions of Section 4.1
shall not terminate with respect to Pittsburgh Life Sciences Greenhouse and Innovations Works, Inc. notwithstanding any failure
of Pittsburgh Life Sciences Greenhouse or Innovations Works, Inc., as applicable, to be a Fully Exercising Investor.


 


(c)            The
right of first offer set forth in Section 4.1 may be waived as to all Investors upon the written agreement of the holders of at
least 60% of the Preferred Stock held by all Investors.


 


5.            Additional
Covenants.


 


5.1.            Employee
Stock. Unless otherwise approved by either (x) the Board of Directors, including both Preferred Directors or (y) the Compensation
Committee provided that a Preferred Director is a member thereof, stock options under the Stock Plan to purchase shares of the Company’s
capital stock granted to employees and consultants of the Company after the date hereof shall vest as provided in this Section 5.1.
In the case of employees and consultants who join the Company after December 17, 2010, such stock options shall vest over a four-year
period, with the first 12.5% of the shares underlying such stock options vesting following six months of continued employment or service,
and the remaining shares vesting in equal monthly installments over the following 42 months. In the case of employees and consultants
of the Company employed or engaged by the Company as of December 17, 2010, such stock options shall vest over a four-year period,
with the shares underlying such stock options vesting in equal monthly installments beginning on the first day of the month following
the grant date. Upon issuance of any shares under the Stock Plan, the Company will require the holders to enter into the Voting Agreement
and the Right of First Refusal and Co-Sale Agreement. In addition, unless otherwise approved by the Board of Directors, including both
Preferred Directors, the Company shall have the right to repurchase vested shares at cost upon termination of employment of a holder
of restricted stock. Without limiting the generality of the foregoing, upon a Deemed Liquidation Event, as such term is defined in the
Certificate, all options to purchase capital stock of the Company held by employees and Key Holders (as defined in the Voting Agreement)
will vest as specified by the Board of Directors of the Company (or as may be approved by the stockholders of the Company to the extent
such approval is required), which may approve the acceleration of the vesting of such options under the respective option agreements
between the Company and the Key Employees; provided that such accelerated vesting does not give rise to adverse tax consequences for
the Company, including, without limitation, the lack of deductibility of compensation payments.


 


5.2.            Qualified
Small Business Stock. The Company shall use commercially reasonable efforts to cause the shares of the Preferred Stock issued pursuant
to the Purchase Agreement, the Series A-1 Preferred Stock Purchase Agreement dated as of December 17, 2010 among the Company
and each of the investors listed on Schedule A thereto and the Series A-2 Preferred Stock Purchase Agreement dated as of December 5,
2011 among the Company and each of the investors listed on Schedule A thereto, as well as any shares into which such shares are converted,
within the meaning of Section 1202(f) of the Internal Revenue Code (the “Code”), to constitute “qualified
small business stock” as defined in Section 1202(c) of the Code; provided, however, that such requirement shall not be
applicable if the Board of Directors of the


 



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Company determines, in its good-faith business judgment,
that such qualification is inconsistent with the best interests of the Company. The Company shall submit to its stockholders (including
the Investors) and to the Internal Revenue Service any reports that may be required under Section 1202(d)(1)(C) of the Code
and the regulations promulgated thereunder. In addition, within twenty (20) business days after any Investor’s written request
therefor, the Company shall, at its option, either (a) deliver to such Investor a written statement indicating whether (and what
portion of) such Investor’s interest in the Company constitutes “qualified small business stock” as defined in Section 1202(c) of
the Code, or (b) deliver to such Investor such factual information in the Company’s possession as is reasonably necessary
to enable such Investor to determine whether (and what portion of) such Investor’s interest in the Company constitutes “qualified
small business stock” as defined in Section 1202(c) of the Code.


 


5.3.            Board
Matters; Director Compensation. Until otherwise determined by the vote of a majority of the directors then in office, the Board of
Directors shall meet at least monthly alternating between in-person meetings and conference calls. The Company shall reimburse the nonemployee
directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection
with attending meetings of the Board of Directors.


 


5.4.            Successor
Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not
the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall
be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of
members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s
By-Laws, its Amended and Restated Certificate of Incorporation, as amended from time to time (the “Certificate”),
or elsewhere, as the case may be. Additionally, the Company shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by
written agreement to expressly assume the Company’s obligations with respect to indemnification of members of the Board of Directors.


 


5.5.            Termination
of Covenants. The covenants set forth in this Section 5, except for Section 5.4, shall terminate and be of no further force
or effect (a) immediately before the consummation of the IPO, (b) when the Company first becomes subject to the periodic reporting
requirements of Section 12(g) or 15(d) of the Exchange Act, or (c) upon a Deemed Liquidation Event, as such term
is defined in the Certificate, whichever event occurs first.


 


6.            Miscellaneous.


 


6.1.            Successors
and Assigns; Assignment of Rights. The rights under this Agreement may be assigned (but only with all related obligations) by any
of the Investors to any of their respective Affiliates or any transferee who holds (or will by virtue of an immediately succeeding transfer
will hold) at least 10% of any series of the then outstanding shares of the Preferred Stock; provided, however, that (a) the Company
is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable
Securities with respect to which such rights are being transferred; and (b) such



 



    20


     


    




 


transferee agrees in a written instrument delivered
to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Section 2.11.
The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees
of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or
their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided herein. Golden Seeds LLC (and any successor-in-interest thereof whether by consolidation, merger or otherwise)
is an intended third party beneficiary of this Agreement and the parties acknowledge and agree that Golden Seeds LLC (and any successor-in-interest),
as an intended third party beneficiary, has an independent and right to enforce the terms of this Agreement.


 


6.2.            Governing
Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law.


 


6.3.            Counterparts;
Electronic Transmission. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. A facsimile or electronic transmission of a scanned copy of a signed
counterpart signature page hereto shall be deemed to be an originally executed copy for purposes of this Agreement.


 


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


 


6.5.            Notices.
All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively
given upon the earlier of actual receipt or (a) personal delivery to the party to be notified, (b) when sent, if sent by confirmed
electronic mail or facsimile transmission during normal business hours of the recipient, and if not sent during normal business hours,
then on the recipient’s next business day, (c) five days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one business day after the business day of deposit with a nationally recognized overnight courier,
freight prepaid, specifying next business day delivery, with written verification of receipt. All communications to be sent to the Investors
shall be sent at their addresses as set forth on Schedule A hereto, or to such email address, facsimile number or address as subsequently
modified by written notice given in accordance with this Section 6.5. All communications to be sent to the Company shall be sent
to the address set forth below in this Section 6.5, or to such email address, facsimile number or address as subsequently modified
by written notice given in accordance with this Section 6.5:


 



    21


     


    




Cognition Therapeutics, Inc.


2403 Sidney Street, Suite 261


Pittsburgh, PA 15203


Attention: Chief Executive Officer and President


Facsimile: (412) 481-2216


 


With a copy to:


 


Duane Morris LLP


30 South 17th Street


Philadelphia, PA 19103-4196


Attention: Kathleen M. Shay


Facsimile: 215-689-4382


 


6.6.            Amendments
and Waivers. Except as set forth in Section 4.2(c), any term of this Agreement may be amended and the observance of any term
of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the
written consent of the Company and the holders of at least 60% of the Registrable Securities then outstanding; and provided further that
any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding
the foregoing, this Agreement may not be amended or terminated and the observance of any term hereof may not be waived with respect to
any Investor without the written consent of such Investor, unless such amendment, termination, or waiver applies to all Investors in
the same fashion (it being agreed that, subject to Section 4.2(c), a waiver of the provisions of Section 4 with respect to
a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding
the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction). The Company
shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing
to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this Section 6.6 shall
be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term,
condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing
waiver of any such term, condition, or provision. Notwithstanding the foregoing, Schedule A hereto may be amended by the Company
from time to time to add or modify information regarding Investors without the consent of the other parties hereto.


 


6.7.            Severability.
In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid,
illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent
permitted by law.


 


6.8.            Aggregation
of Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any
manner they deem appropriate.


 



    22


     


    




6.9.            Additional
Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of the Series B
Preferred Stock after the date hereof, any purchaser of such shares of the Series B Preferred Stock may become a party to this Agreement
by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor”
for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such additional
Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor”
hereunder.


 


6.10.            Entire
Agreement. This Agreement amends and restates the Rights Agreement. This Agreement (including any Schedules hereto) constitutes the
full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral
agreement relating to the subject matter hereof existing between the parties is expressly canceled.


 


6.11.            Delays
or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach
or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting
party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.


 


6.12.            Acknowledgment.
The Company acknowledges that the Investors are in the business of venture capital investing and therefore review the business plans
and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly
or indirectly with those of the Company. Nothing in this Agreement shall preclude or in any way restrict the Investors from investing
or participating in any particular enterprise whether or not such enterprise has products or services which compete with those of the
Company.


 


6.13.            Dispute
Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware
and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other
proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out
of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware,
and (c)  hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding,
any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from
attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action
or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.


 


6.14.            WAIVER
OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR


 



    23


     


    




ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION
DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.
EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH
PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.


 


[SIGNATURE
PAGE FOLLOWS]


 



    24


     


    




SCHEDULE
A


 


INVESTORS


 


Name and Address


 


Dean K. & Margo L. Allen Family Trust


25412 Nellie Gail Road


Laguna Hills, CA 92653-6307


Attn: Dean K. Allen, Trustee


 


Angel Capital Entrepreneur Fund 1, LLC


1430 Glencoe Drive


Arcadia, CA 91006


 


Audrey’s Kitchen L.P.


371 Pearce Mill Road


Wexford, PA 15090


Attn: Alicia McGinnis


 


Breedlove Family Limited 220 7th Avenue


Beaver Falls, PA 15010


Attn: Mark H. Breedlove


 


Howell A. Breedlove


2015 Blairmont Drive


Pittsburgh, PA 15241


 


CogRX-A, LLC


2119 S. Villa Drive


Gibsonia, PA 15044


Attn: Alan M. Breedlove


 


The Connors Family Trust


6085 Greenbrier Drive


Huntington Beach, CA 92648


 


Daniel H. Cosgriff Trust


1900 Preston Road


Box 267-304 Plano, TX 75093


 


Downing Family Trust


Dated October 27, 1993


4899 County Road 222


Durango, CO 81303


Attn: Michael R. Downing, Ph.D.


 



    A-1


     


    




Name and Address


 


Golden Seeds Advisors Fund LP


750 Lexington Avenue, 6th Floor


New York, NY 10022


Attn: Lauren Kane


 


Golden Seeds Cognition Therapeutics LLC


750 Lexington Avenue, 6th Floor


New York, NY 10022


Attn: Lauren Kane


 


Golden Seeds Advisors Fund 2 LP


750 Lexington Avenue, 6th Floor


New York, NY 10022


Attn: Lauren Kane


 


Golden Seeds Fund LP


750 Lexington Avenue, 6th Floor


New York, NY 10022


Attn: Lauren Kane


 


Golden Seeds Fund 2 LP


750 Lexington Avenue, 6th Floor


New York, NY 10022


Attn: Lauren Kane


 


Franz F. Hefti, Ph.D.


121 Boulderwood Drive


Bernardsville, NJ 07924


 


Innovation Works, Inc.


Suite 250


2000 Technology Drive


Pittsburgh, PA 15219


Attn: Deborah Walker


 


Johnson Family Trust


646 Vista Lane


Laguna Beach, CA 92651


Attn: Seth R. Johnson, Trustee


 



    A-2


     


    




Name and Address


 


R & B Kleiest Living Trust


Robert A. Kleist, Trustee


7 Cherbourg


Newport Beach, CA 92660


 


M5Invest Partners


764 Mt. Moro Road


Villanova, PA 19085


Attn: Howard Morgan


 


John M. Murphy


34022 Capistrano By The Sea


Dana Point, CA 92629-2937


 


Michael J. Napoli, Jr.


928 N. Croft Avenue #102


Los Angeles, CA 90069


 


Ogden CAP Associates, LLC


390 Park Avenue


New York, NY 10022


Attn: Robert Gailus


 


Pittsburgh Life Sciences Greenhouse


2425 Sidney Street


Pittsburgh, PA 15203


 


Molly B. Schmid


650 W. 9th Street


Claremont, CA 91711


 


Setzer Family Trust U/D/T 02-02-98


1483 Northridge Drive


Prescott, AZ 86301


Attn: Edwin P. Setzer, Trustee


 


Sudek Family Trust


25 Coronado Pointe


Laguna Niguel, CA 92677


Attn: Richard Sudek, Trustee


 



    A-3


     


    




Name and Address


 


TMC Investment Company, Inc.


TMC Investment Company, Inc.


c/o Stonewood Capital Management, Inc.


Three Gateway Center, 13 East


Pittsburgh, PA 15222


Attn: John H. Tippins


 


Eli Glezer


13 746 Durango Drive


Del Mar, CA 92014


 


PLSG Accelerator Fund, LLC


2425 Sidney Street


Pittsburgh, PA 15203


 


Paul M. Work


501 Marigold Ave.


Corona Del Mar, CA 92625-2408


 


David Schick


4126 Parva Ave.


Los Angeles, CA 90027


 


The Eastlack Family Living Trust


c/o Robert Eastlack, Trustee


5265 Amber View Pt.


San Diego, CA 92130


 


Richard and Anne Hallock Family Trust Dated


June 19, 1995


11500 San Vicente Blvd, #406


Los Angeles, CA 90049


 


Michael and Ella Doka Family Trust Dated


July 2nd, 1997


7 Endicott


Coto De Caza, CA 92679


 


Richard S. Falk, Jr.


6921 Neptune Place


La Jolla, CA 92037


 



    A-4


     


    




Name and Address


 


Gary Kostow


14820 Caminito Lorren


Del Mar, CA 92014


 


Frank and Rona Singer Family Trust


3552 Venture Drive


Huntington Beach, CA 92649


 


John Previs


2570 Windgate Road


Bethel Park, Pa 15102-2731


 


Susan Uchitelle And Benjamin Uchitelle, As


Joint Tenants With Right Of Survivorship


41 Crestwood Dr.


Clayton, MO 63105


 


Scott And Christina Worley, JTE


171 El Pueblo Way


Palm Beach, FL 33480


 


Donald R. Rady Trust dated November 26,


1992, Donald R. Rady, Trustor and Trustee


1919 Grand Ave., Suite 2f


San Diego CA 92109


 


Francis L. Sterling Trust dated 9/11/1997 as


Amended


65 Easton Lane


Moreland Hills, OH 44022


 


Deutsch Family Investment Partnership


2 Bridle Court


Oyster Bay Cove, New York 11771


 


Delta G. Corporation


22 Wedgewood Lane


Pittsburgh PA 15215


 


Kramer-Fabre Living Trust


2880 Torito Rd.


Santa Barbara, CA 93108


 



    A-5


     


    




 


IN WITNESS
WHEREOF, the parties have executed this Third Amended and Restated Investors’ Rights Agreement as of the date first written
above.


 


	 	 	COMPANY:
	 	 	 
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 
	 	 	 
	 	 	INVESTOR:
	 	 	 
	 	 	 
	 	 	By:	               
	 	 	Name:	 
	 	 	Title:	 




 


[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT]