Document:

Unassociated Document

     

    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
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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.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    (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 

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    indemnifying
      person shall have approved the terms of such settlement; provided that such
      consent shall not be unreasonably withheld.  No indemnifying person
      shall, without the prior written consent of the indemnified person, effect
      any
      settlement of any pending or threatened proceeding in respect of which any
      indemnified person is or could have been a party and indemnification could
      have
      been sought hereunder by such indemnified person, unless such settlement
      includes an unconditional release of such indemnified person from all liability
      on claims that are the subject matter of such proceeding.

     

    (iv)  If
      the
      indemnification provided for in this Section 2(g) is unavailable to or
      insufficient to hold harmless an indemnified person under subsection (i) or
      (ii)
      above in respect of any losses, claims, damages or liabilities (or actions
      or
      proceedings in respect thereof) referred to therein, then each indemnifying
      person shall contribute to the amount paid or payable by such indemnified person
      as a result of such losses, claims, damages or liabilities (or actions in
      respect thereof) in such proportion as is appropriate to reflect the relative
      fault of the Company, on the one hand, and the applicable Investor, as well
      as
      any other Selling Stockholders under such registration statement, on the other,
      in connection with the statements or omissions or other matters which resulted
      in such losses, claims, damages or liabilities (or actions in respect thereof),
      as well as any other relevant equitable considerations.  The relative
      fault shall be determined by reference to, among other things, in the case
      of an
      untrue statement, whether the untrue statement relates to information supplied
      by the Company, on the one hand, or an Investor or other Selling Stockholder,
      on
      the other hand, and the parties’ relative intent, knowledge, access to
      information and opportunity to correct or prevent such untrue
      statement.  The Company and each Investor, severally but not jointly,
      agree that it would not be just and equitable if contribution pursuant to this
      subsection (iv) were determined by pro rata allocation (even if the Investor
      and
      other Selling Stockholders were treated as one entity for such purpose) or
      by
      any other method of allocation which does not take into account the equitable
      considerations referred to above in this subsection (iv).  The amount
      paid or payable by an indemnified person as a result of the losses, claims,
      damages or liabilities (or actions in respect thereof) referred to above in
      this
      subsection (iv) shall be deemed to include any legal or other expenses
      reasonably incurred by such indemnified person in connection with investigating
      or defending any such action or claim.  Notwithstanding the provisions
      of this subsection (iv), each Investor shall not be required to contribute
      any
      amount in excess of the amount by which the amount received by such Investor
      from the sale of the Registrable Securities to which such loss relates exceeds
      the amount of any damages which such Investor has otherwise been required to
      pay
      by reason of such untrue statement.  No person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Securities Act)
      shall be entitled to contribution from any person who was not guilty of such
      fraudulent misrepresentation.  Each Investor’s obligations in this
      subsection to contribute shall be in proportion to its sale of Registrable
      Securities to which such loss relates and shall not be joint with any other
      Selling Stockholders.

     

    (v)  The
      parties to this Agreement hereby acknowledge that they are sophisticated
      business persons who were represented by counsel during the negotiations
      regarding the provisions hereof, including, without limitation, the provisions
      of this Section 2(g), and are fully informed regarding said
      provisions.  They further acknowledge that the provisions of this
      Section 2(g) fairly allocate the risks in light of the ability of the parties
      to
      investigate the Company and its business in order to assure that adequate
      disclosure is made in the Registration Statement as required by the

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    Securities
      Act and the Exchange Act.  The parties are advised that federal or
      state public policy as interpreted by the courts in certain jurisdictions may
      be
      contrary to certain of the provisions of this Section 2(g), and the parties
      hereto hereby expressly waive and relinquish any right or ability to assert
      such
      public policy as a defense to a claim under this Section 2(g) and further agree
      not to attempt to assert any such defense.

     

    (h)  Termination
      of Conditions and Obligations.  The conditions precedent imposed
      by Section 2 upon the transferability of the Shares shall cease and terminate
      as
      to any particular number of the Shares when such Shares shall have been
      effectively registered under the Securities Act and sold or otherwise disposed
      of in accordance with the intended method of disposition set forth in the
      Registration Statement covering such Shares, at the time such Shares are
      eligible for sale pursuant to Rule 144(k) or at such time as an opinion of
      counsel reasonably satisfactory to the Company shall have been rendered to
      the
      effect that such conditions are not necessary in order to comply with the
      Securities Act.

     

    (i)  Information
      Available.  So long as the Registration Statement is effective
      covering the resale of Registrable Securities owned by any Investors, the
      Company will furnish to such Investors, upon the reasonable request of any
      Investor, an adequate number of copies of the prospectuses to supply to any
      other party requiring such prospectuses; and upon the reasonable request of
      such
      Investor, the President or the Chief Financial Officer of the Company (or an
      appropriate designee thereof) will meet with such Investor or a representative
      thereof at the Company’s headquarters to discuss all information relevant for
      disclosure in the Registration Statement covering the Registrable Securities
      and
      will otherwise cooperate with any Investor conducting an investigation for
      the
      purpose of reducing or eliminating such Investor’s exposure to liability under
      the Securities Act, including, the reasonable production of information at
      the
      Company’s headquarters; provided, that the Company shall not be required to
      disclose any confidential information to or meet at its headquarters with any
      Investor until and unless the Investor shall have entered into a confidentiality
      agreement in form and substance reasonably satisfactory to the Company with
      the
      Company with respect thereto.

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    3.           Notices.  All
      notices, requests, consents and other communications hereunder shall be in
      writing, shall be mailed (a) if within the United States by first-class
      registered or certified airmail, or nationally recognized overnight express
      courier, postage prepaid, or by facsimile, or (b) if delivered from outside
      the
      United States, by International Federal Express or facsimile, and shall be
      deemed given and received (i) if delivered by first-class registered or
      certified mail, three business days after so mailed, (ii) if delivered by
      nationally recognized overnight carrier, one business day after so mailed,
      (iii)
      if delivered by International Federal Express, two business days after so
      mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt
      and shall be delivered as addressed as follows:

     

    (A)   
if
      to the Company,
      to:

     

     
      Neurologix, Inc.

     
      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.

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

    6.           Severability.  In
      case any provision contained in this Agreement should be invalid, illegal or
      unenforceable in any respect, the validity, legality and enforceability of
      the
      remaining provisions contained herein shall not in any way be affected or
      impaired thereby.

     

    7.           Prior
      Agreements.  This Agreement constitutes the entire agreement
      between the parties and supersedes any prior understandings or agreements
      (including without limitation oral agreements) concerning the registration
      rights of the Investors.

     

    8.           Headings.  The
      headings of the various sections of this Agreement have been inserted for
      convenience of reference only and shall not be deemed to be part of this
      Agreement.

     

    9.           Transfer
      of Rights.  All covenants and agreements contained in this
      Agreement by or on behalf of any of the parties hereto shall bind and inure
      to
      the benefit of the respective successors and assigns of the parties hereto
      (including without limitation transferees of any Shares), whether so expressed
      or not; provided, however, that rights conferred to the Investors may be
      transferred to a transferee of Shares only if the Company has been given written
      notice thereof, such transfer complies with the requirements of applicable
      law
      and the NASD and the SEC and such transferee is (i) a partner or retired partner
      of any Investor which is a partnership; (ii) a member or retired member of
      any
      Investor which is a limited liability company or (iii) any purchaser of Shares
      from an Investor representing at least five percent (5%) of the Purchased
      Shares.

     

    10.           Independent
      Nature of Investors’ Obligations and Rights.  The obligations of
      each Investor under this Agreement are several and not joint with the
      obligations of any other Investor, and no Investor shall be responsible in
      any
      way for the performance of the obligations of any other Investor under this
      Agreement.  Nothing contained herein or in any other document, and no
      action taken by any Investor pursuant thereto, shall be deemed to constitute
      the
      Investors as a partnership, an association, a joint venture or any other kind
      of
      entity, or create a presumption that the Investors are in any way acting in
      concert or as a group with respect to such obligations or the transactions
      contemplated by this Agreement.  Each Investor shall be entitled to
      independently protect and enforce its rights, including without limitation,
      the
      rights arising out of this Agreement or out of the other related documents,
      and
      it shall not be necessary for any other Investor to be joined as an additional
      party in any proceeding for such purpose.  Each Investor has been
      represented by its own separate legal counsel in their review and negotiation
      of
      this Agreement.

     

    11.           Counterparts.  This
      Agreement may be executed in two or more counterparts, each of which shall
      constitute an original, but all of which, when taken together, shall constitute
      but one instrument, and shall become effective when one or more counterparts
      have been signed by each party hereto and delivered to the other
      parties.

     

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first above written.

     

     

    NEUROLOGIX,
      INC.

    
       

      
        
          	
                  By:

                	
                  /s/
                    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

            

    

     

     

    
      
        
          15Unassociated Document

    Exhibit
      10.3

    

    THIS
      WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE
      SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, OR
      HYPOTHECATED UNLESS AND UNTIL (I) REGISTERED UNDER THE ACT OR, (II) THE
      TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT AND AN OPINION OF COUNSEL
      IN A FORM REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES HAS BEEN
      RENDERED.

    

    

    WARRANT

    TO
      PURCHASE COMMON STOCK

    OF

    NEUROLOGIX,
      INC.

    

    (void
      after November 19, 2014)

    

    

    No.
      W-____

    

    THIS
      CERTIFIES THAT, for value received, ____________________ or its registered
      assigns (the “Holder”), from and after the date hereof, and
      subject to the terms and conditions herein set forth, is entitled to purchase
      from Neurologix, Inc., a Delaware corporation (the “Company”),
      at any time before 5:00 p.m. New York City time on November 19, 2014 (the
“Termination Date”), _____________ shares (the “Warrant
      Shares”) of the Company’s common stock, par value $0.001 per share (the
“Common Stock”), at a price per share equal to the Warrant
      Price (as defined below) upon exercise of this Warrant pursuant to Section
      5
      hereof.  The number of Warrant Shares is subject to adjustment under
      Section 2.

    

    1.           Definitions.  As
      used in this Warrant, the following terms have the definitions ascribed to
      them
      below:

    

    
      	
            	
              (a)

            	
              “Cash
                Shares” shall have the meaning ascribed to them in Section
                5(a).

            

    

     

    
      	
            	
              (b)

            	
              “Issuance
                Date” means November 19,
                2007.

            

    

     

    
      	
            	
              (c)

            	
              “Offering
                Warrants” shall have the meaning ascribed to the term in Section
                8.

            

    

     

    
      	
            	
              (d)

            	
              “Person”
                means any individual, corporation, partnership, limited liability
                company,
                trust, incorporated or unincorporated association, joint venture,
                joint
                stock company, governmental authority or other entity of any kind,
                and
                shall include any successor (by merger or otherwise) of such
                entity.

            

    

     

    
      	
            	
              (e)

            	
              “Registration
                Rights Agreement” means that certain Registration Rights
                Agreement dated as of November 19, 2007, by and among the Company,
                the
                initial Holder of this Warrant, Corriente Master Fund, L.P.,
                DaimlerChrysler Corporation Master Retirement Trust and certain funds
                managed by ProMed Asset Management
                LLC.

            

    

     

    
      	
            	
              (f)

            	
              “Subscription
                Agreement” means that certain Stock and Warrant Subscription
                Agreement dated as of November 19, 2007 between the Company and the
                initial Holder of this Warrant.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

       

    

    
      	
            	
              (g)

            	
              “Warrant
                Price” means $1.39 per share subject to adjustment under Section
                2.

            

    

     

    2.           Adjustments
      and Notices.  The Warrant Price and/or the Warrant Shares shall be
      subject to adjustment from time to time in accordance with this Section
      2.  The Warrant Price and/or the Warrant Shares shall be adjusted to
      reflect all of the following events that occur on or after the Issuance
      Date.

    

    (a)           Subdivision,
      Stock Dividends or Combinations.  In case the Company shall at any
      time subdivide the outstanding shares of the Common Stock or shall issue a
      stock
      dividend with respect to the Common Stock, the Warrant Price in effect
      immediately prior to such subdivision or the issuance of such dividend shall
      be
      proportionately decreased, and the number of Warrant Shares for which this
      Warrant may be exercised immediately prior to such subdivision or the issuance
      of such dividend shall be proportionately increased.   In case
      the Company shall at any time combine the outstanding shares of the Common
      Stock, the Warrant Price in effect immediately prior to such combination shall
      be proportionately increased, and the number of Warrant Shares for which this
      Warrant may be exercised immediately prior to such combination shall be
      proportionately decreased.  In each of the foregoing cases, the
      adjustment shall be effective at the close of business on the date of such
      subdivision, dividend or combination, as the case may be.

     

    (b)           Reclassification,
      Exchange, Substitution, In-Kind Distribution.  Upon any
      reclassification (other than a change in par value or from par value to no
      par
      value or from no par value to par value or as a result of a stock dividend
      or
      subdivision, split-up or combination of shares covered in clause (a) above),
      exchange, substitution or other event that results in a change of the number
      and/or class of the securities issuable upon exercise or conversion of this
      Warrant or upon the payment of a dividend in securities or property other than
      shares of the Common Stock, the Holder shall be entitled to receive, upon
      exercise of this Warrant, the number and kind of securities and property that
      the Holder would have received if this Warrant had been exercised immediately
      before the record date for such reclassification, exchange, substitution, or
      other event or immediately prior to the record date for such
      dividend.  The Company or its successor shall promptly issue to the
      Holder a new warrant for such new securities or other property.  The
      new warrant shall provide for adjustments which shall be as nearly equivalent
      as
      may be practicable to the adjustments provided for in this Section 2 including,
      without limitation, adjustments to the Warrant Price and to the number of
      securities or property issuable upon exercise or conversion of the new warrant.
      The provisions of this Section 2(b) shall similarly apply to successive
      reclassifications, exchanges, substitutions, or other events and successive
      dividends.

     

    (c)           Reorganization,
      Merger etc. In case of any merger or consolidation of the Company (where the
      Company is not the surviving Person or where there is a change in or
      distribution with respect to the Common Stock), or sale, transfer or lease
      (but
      not including a transfer or lease by pledge or mortgage to a bona fide lender)
      of all or substantially all of the assets of the Company, the Company, or such
      successor or purchasing corporation, as the case may be, shall, as a condition
      to closing any such reorganization, merger or sale, duly execute and deliver
      to
      the Holder hereof a new warrant so that the Holder shall have the right to
      receive, at a total purchase price not to exceed that payable upon the exercise
      or conversion of the unexercised portion of this Warrant, and in lieu of the
      Warrant Shares theretofore issuable upon exercise or conversion of this Warrant,
      the kind and amount of shares of stock, 

     

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

     

    other
      securities, money and property that would have been receivable upon such
      reorganization, merger or sale by the Holder with respect to the Warrant Shares
      if this Warrant had been exercised immediately before the consummation of such
      transaction.  Such new warrant shall provide for adjustments that
      shall be as nearly equivalent as may be practicable to the adjustments provided
      for in this Section 2.  The provisions of this subparagraph (c) shall
      similarly apply to successive transactions of the type described in this
      subparagraph (c).

     

    (d)           Adjustment
      for Issuance of Shares of Common Stock Below Warrant Price.  If
      the Company shall issue, or be deemed to issue (as provided below), any
      additional shares of Common Stock other than Excluded Stock, as defined below
      (“Additional Shares of Common Stock”), for a consideration per share less than
      $1.16 (excluding
      subdivisions, stock dividends, combinations, reclassifications and
      reorganizations which are covered in Sections 2(a), 2(b) and 2(c) above), the
      Warrant Price shall be reduced concurrent with each such issuance to a price
      calculated as follows:

     

    Adjusted
      Warrant Price =      (Outstanding Stock x Warrant
      Price) + Additional Stock Consideration

            Outstanding
      Stock + No. of Additional Shares of Common Stock

     

    As
      used
      herein:

     

    “Additional
      Stock Consideration” means the consideration received by the Company upon the
      issuance of the Additional Shares of Common Stock.

     

    “Convertible
      Securities” means any evidence of indebtedness, shares or securities, in each
      case convertible into or exchange for Additional Shares of Common
      Stock.

     

    “Excluded
      Stock” means (a) securities issued, or deemed issued (as provided below), to
      directors, officers, employees or consultants of the Company or a subsidiary
      of
      the Company in connection with their service as directors of the Company or
      a
      subsidiary of the Company, their employment by the Company or a subsidiary
      of
      the Company or their retention as consultants by the Company or a subsidiary
      of
      the Company under stock option plans of the Company; (b) shares of Common Stock
      issuable upon exercise of warrants outstanding as of the Issuance Date; (c)
      shares of Common Stock issued, or deemed issued (as provided below), pursuant
      to
      a merger, consolidation or stock or asset acquisition approved by the Company’s
      Board of Directors; (d) the issuance, or deemed issuance, of securities of
      the
      Company for any purpose and in any amount as approved by the holders of Offering
      Warrants exercisable for seventy (70%) percent of the Warrant Shares issuable
      upon exercise of the then outstanding Offering Warrants; (e) shares issued,
      or
      deemed issued, to persons or entities in connection with a strategic
      partnership, joint venture or other similar agreement with the Company, provided
      such issuances are primarily for other than equity financing purposes and are
      approved by a two-thirds majority of the members of the Board of Directors;
      (f)
      shares issued, or deemed issued, pursuant to any equipment leasing arrangement
      or debt financing from a bank or similar institution approved by a two-thirds
      majority of the members of the Board of Directors; provided such financing
      is
      primarily for non-equity financing purposes; (g) shares of Common Stock issued
      or issuable upon exercise of the Offering Warrants; and (h) shares of Common
      Stock issued or issuable upon conversion of the Series C Convertible Preferred
      Stock or the Series D Convertible Preferred Stock.

    

    “No.
      of
      Additional Shares of Common Stock” means the number of units of Additional
      Shares of Common Stock issued in connection with the issuance of the
      same.

     

    “Options”
      means rights, options or warrants to subscribe for, purchase or otherwise
      acquire shares of Common Stock or Convertible Securities.

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

     

    “Outstanding
      Stock” means the total number of shares of Common Stock outstanding plus the
      total number of shares of Common Stock issuable upon conversion or exercise
      of
      outstanding Convertible Securities (including this Warrant, all other warrants
      and any Options) immediately prior to the issuance of the Additional Shares
      of
      Common Stock; provided that the number of shares of Common Stock
      outstanding at any given time shall not include shares owned or held by or
      for
      the account of the Company.

     

    No
      adjustment in the Warrant Price need be made if such adjustment would result
      in
      a change in the Warrant Price of less than $0.001.  Any such
      adjustment which is not made shall be carried forward and shall be made at
      the
      time of and together with any subsequent adjustment which, on a cumulative
      basis, amounts to an adjustment of $0.001 or more in the Warrant
      Price.  No adjustment in the Warrant Price of this Warrant shall be
      made in respect of the issuance of Additional Shares of Common Stock unless
      the
      consideration per share for such Additional Shares of Common Stock issued or
      deemed to be issued (as provided below) by the Company is less than the Warrant
      Price then in effect on the date of, and immediately prior to, such issue,
      for
      this Warrant.

    

    For
      purposes of making any adjustment required under this Section 2(d), the
      consideration received by the Company for any issue or sale of securities shall
      (a) to the extent that it consists of cash be computed as the amount of cash
      received by the Company without deduction of any underwriting or similar
      commissions, compensation or concessions paid or allowed by the Company in
      connection with such issue or sale, (b) to the extent that it consists of
      property other than cash, be computed at the fair market value of that property
      as determined in good faith by the Board of Directors, and (c) if Additional
      Shares of Common Stock, Convertible Securities or rights or Options are issued
      or sold together with other securities or other assets of the Company for a
      consideration which covers both, be computed (as provided in clauses (a) and
      (b)
      above) as the portion of the consideration so received that may be reasonably
      determined in good faith by the Board of Directors to be allocable to such
      Additional Shares of Common Stock, Convertible Securities or rights or
      Options.

     

    If
      the
      holders of seventy percent (70%) in interest of the Offering Warrants shall,
      in
      good faith, disagree with any determination made by the Board of Directors
      of
      the Company of the fair market value of any property (including without
      limitation any securities other than shares of Common Stock) pursuant to the
      Offering Warrants (such holders hereinafter referred to as the “Requesting
      Holders”), and such disagreement is in respect of property valued by the Board
      of Directors of the Company at more than $500,000, then the Requesting Holders
      may by written notice to the Company (an “Appraisal Notice”), given within 15
      days after notice to the holders of the Offering Warrants following such
      determination, elect to contest such determination; provided, however, that
      the
      holders of the Offering Warrants may not seek appraisal or any determination
      of
      fair market value to the extent that the Company has received a fairness opinion
      or other appraisal from an independent appraiser selected by the Board of
      Directors of the Company in connection with the transaction giving rise to
      such
      determination.  Within 15 days after an Appraisal Notice, the Company
      shall engage an Appraiser (as defined below) to make an independent
      determination of such fair market value (the “Appraiser’s Determination”), and
      to deliver to the Company and the holder of this Warrant a report describing
      its
      methodology and results in reasonable detail within 15 days of such
      engagement.  The Company and the holder of this Warrant shall be
      afforded reasonable opportunities to discuss the appraisal with the
      Appraiser.  The Appraiser’s Determination shall be final and binding
      on the Company and the holder of this Warrant, absent manifest
      error.  The costs of conducting an appraisal, including all fees and
      expenses of the Appraiser, shall be borne one half by the Requesting Holders
      (among the Requesting Holders, pro rata according to the number of shares
      issuable upon exercise of outstanding Offering Warrants that are held by the
      Requesting Holders) and one half by the Company.  “Appraiser” means an
      independent appraiser chosen by the Board of Directors of the Company with
      the
      consent of the Requesting Holder with the greatest number of Shares issuable
      upon exercise of the Offering Warrants, which consent shall not be unreasonably
      withheld or delayed.

     

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

     

    For
      purposes of the adjustment required under this Section 2(d), if at any time
      or
      from time to time after the Issuance Date, the Company issues or sells any
      Options or Convertible Securities, then in each case the Company shall be deemed
      to have issued at the time of the issuance of such Options or Convertible
      Securities the maximum number of Additional Shares of Common Stock (as set
      forth
      in the instruments relating thereto, giving effect to any provision contained
      therein for a subsequent upward adjustment of such number other than any
      provision requiring anti-dilution adjustments (based on price,
      recapitalizations, mergers, reorganizations or otherwise), which such
      anti-dilution provisions shall only result in upward adjustments upon the
      triggering of such anti-dilution adjustment) issuable upon exercise or
      conversion thereof and to have received as consideration for the issuance of
      such shares of Common Stock an amount equal to the total amount of
      consideration, if any, received by the Company for the issuance of such Options
      or Convertible Securities plus, in the case of such Options, the minimum amounts
      of consideration, if any (as set forth in the instruments relating thereto,
      giving effect to any provision contained therein for a subsequent downward
      adjustment of such consideration), payable to the Company upon the exercise
      of
      such Options  and, in the case of Convertible Securities, the minimum
      amounts of consideration, if any, payable to the Company upon the subsequent
      conversion of any such Convertible Security (other than by cancellation of
      liabilities or obligations evidenced by such Convertible
      Securities).  No further adjustment of the Warrant Price, adjusted
      upon the issuance of such Options or Convertible Securities, shall be made
      as a
      result of the actual issuance of Additional Shares of Common Stock on the
      exercise of any such Options or the conversion of any such Convertible
      Securities.  If any such Options or the conversion privilege
      represented by any such Convertible Securities shall expire without having
      been
      exercised, the Warrant Price adjusted upon the issuance of such Options or
      Convertible Securities or upon the triggering of any anti-dilution adjustments
      (based on price, recapitalization, mergers reorganizations or otherwise)
      thereunder shall be readjusted to the Warrant Price which would have been in
      effect had an adjustment been made on the basis that the only Additional Shares
      of Common Stock so issued were the Additional Shares of Common Stock, if any,
      actually issued or sold for the consideration received by the Company for the
      granting of all such Options, whether or not exercised, plus the consideration
      received for issuing or selling the Convertible Securities actually converted
      plus the consideration, if any, actually received by the Company (other than
      by
      cancellation of liabilities or obligations evidenced by such Convertible
      Securities) on the conversion of such Convertible Securities.  Upon
      the happening of any of the following events, namely, if the purchase price
      provided for in any Option, the additional consideration, if any, payable upon
      the conversion or exchange of any Convertible Securities, or the rate at which
      Convertible Securities are convertible into or exchangeable for Common Stock
      shall change at any time (including, but not limited to, changes under or by
      reason of provisions designed to protect against dilution), the Warrant Price
      in
      effect at the time of such event shall forthwith be readjusted to the Warrant
      Price which would have been in effect at such time had such Options or
      Convertible Securities still outstanding provided for such changed purchase
      price, additional consideration or conversion rate, as the case may be, at
      the
      time initially granted, issued or sold, but only if as a result of such
      adjustment the Warrant Price then in effect after any adjustment hereunder
      is
      thereby reduced; and on the termination of any such Option or any such right
      to
      convert or exchange such Convertible Securities, the Warrant Price then in
      effect hereunder shall forthwith be increased to the Warrant Price which would
      have been in effect at the time of such termination had such Option or
      Convertible Securities, to the extent outstanding immediately prior to such
      termination, never been issued.

     

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

     

    (e)           Certificate
      of Adjustment.  In each case of an adjustment or readjustment of
      the Warrant Price, the Company, at its own expense, shall cause its Chief
      Financial Officer (or equivalent officer of the Company) to compute such
      adjustment or readjustment in accordance with the provisions hereof and prepare
      a certificate showing such adjustment or readjustment, and shall mail such
      certificate, by first class mail, postage prepaid, to the Holder.  The
      certificate shall set forth such adjustment or readjustment, showing in detail
      the facts upon which such adjustment or readjustment is based.  No
      adjustment of the Warrant Price shall be required to be made unless it would
      result in an increase or decrease of at least one cent, but any adjustments
      not
      made because of this sentence shall be carried forward and taken into account
      in
      any subsequent adjustment otherwise required hereunder.

     

    (f)           No
      Impairment.  The Company shall not, by amendment of its
      certificate of incorporation, by-laws or other organizational documents, or
      through a reorganization, transfer of assets, consolidation, merger,
      dissolution, issue, or sale of securities or any other voluntary action, avoid
      or seek to avoid the observance or performance of any of the terms to be
      observed or performed under this Warrant by the Company, but shall subject
      to
      Section 8 at all times in good faith assist in carrying out all of the
      provisions of this Section 2 and in taking all such action as may be necessary
      or appropriate to protect the Holder’s rights under this Section 2 against
      impairment.

     

    (g)           Fractional
      Shares.  No fractional shares shall be issuable upon exercise or
      conversion of the Warrant and the number of shares to be issued shall be rounded
      down to the nearest whole share.  If a fractional share interest
      arises upon any exercise or conversion of the Warrant, the Company shall
      eliminate such fractional share interest by paying the Holder an amount computed
      by multiplying the fractional interest by the fair market value of a full
      share.

     

    3.           No
      Shareholder Rights.  This Warrant, by itself, as distinguished
      from any shares purchased hereunder, shall not entitle the Holder to any of
      the
      rights of a shareholder of the Company.

    

    4.           Reservation
      of Stock.  The Company will reserve from its authorized and
      unissued stock a sufficient number of shares to provide for the issuance of
      the
      Warrant Shares upon the exercise of this Warrant.  Issuance of this
      Warrant shall constitute full authority to the Company’s officers who are
      charged with the duty of executing stock certificates to execute and issue
      the
      necessary certificates for the Warrant Shares issuable upon the exercise of
      this
      Warrant.

    

    5.           Exercise
      of Warrant.

    

    (a)           This
      Warrant may be exercised by the Holder hereof, in whole or in part, at any
      time
      prior to the Termination Date, at the election of the Holder hereof (with the
      notice of exercise substantially in the form attached hereto as Attachment
      1 duly completed and executed for an exercise under this Section 5(a)) (the
      “Notice”), by the surrender of this Warrant at the principal
      office of the Company or transfer agent and the payment to the Company, by
      certified or bank check, or by wire transfer to an account designated by the
      Company, of an amount equal to the then applicable Warrant Price multiplied
      by
      the number of Warrant Shares then being purchased (Warrant Shares issued upon
      such an exercise described in this Section 5(a), “Cash
      Shares”).  This Warrant shall be deemed to have been
      exercised immediately prior to the close of business on the date of its
      surrender for exercise as provided above, and the person entitled to receive
      the
      Warrant Shares issuable upon such exercise shall be treated for all purposes
      as
      the holder of such shares of record as of the close of business on such
      date.  As promptly as practicable after such date, the Company shall
      issue and deliver to the person or persons entitled to receive the same a
      certificate or certificates for the number of full Warrant Shares issuable
      upon
      such exercise.

     

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

     

    (b)           At
      any time prior to the Termination Date, in lieu of exercising this Warrant
      for
      cash, the Holder may elect to receive shares equal to the value of this Warrant
      (or the portion thereof being exercised) by surrender of this Warrant at the
      principal office of the Company together with notice of such election
      substantially in the form attached hereto as Attachment 1 duly completed
      and executed for an exercise
      under this Section 5(b) (a “Net
      Exercise”).  The Company shall issue to a Holder who Net
      Exercises a number of Warrant Shares computed using the following
      formula:

     

    Y
      (A -
      B)

    X
      =                  A

     

    Where

     

    
      	
               

            	
              X
                =

            	
              The
                number of Warrant Shares to be issued to the
                Holder.

            

    

     

    
      	
               

            	
              Y
                =

            	
              The
                number of Warrant Shares set forth in the
                Notice.

            

    

     

    
      	
               

            	
              A
                =

            	
              The
                fair market value of one (1) Warrant Share (at the date of such
                calculation).

            

    

     

    
      
        	
                 

              	
                B =

              	
                The
                  Warrant Price (as adjusted to the date of such
                  calculation).

              

      

       

    

    For
      purposes of this Section 5, the fair market value of a Warrant Share shall
      mean:

    
       

      
        	
                 

              	
                (i)

              	
                
                  If
                    traded on a securities exchange, the Nasdaq National Market,
                    Nasdaq
                    SmallCap Market or other market or over-the-counter system, the
                    fair
                    market value of the Common Stock shall be deemed to be the average
                    of the
                    closing prices of the Common Stock on the principal such U.S.
                    exchange or
                    market by trading volume (or if not traded on a U.S. exchange
                    or market,
                    the principal exchange or market by trading volume) over the
                    thirty
                    trading days immediately prior to the determination date;
                    or

                

              

      

       

    

    
      	
               

            	
              (ii)

            	
              If
                there is no public market for the Common Stock, the fair market value
                shall be the price per Warrant Share that the Company could obtain
                from a
                willing buyer for Warrant Shares sold by the Company from authorized
                but
                unissued Warrant Shares, as such prices shall be determined in good
                faith
                by the Company’s Board of
                Directors.

            

    

    

    (c)           Notwithstanding
      anything to the contrary contained herein, to the extent this Warrant is not
      previously exercised, and if the fair market value of one Warrant Share is
      greater than the Warrant Price then in effect, this Warrant shall be deemed
      automatically exercised pursuant to Section 5(b) above (even if not surrendered)
      immediately before the Termination Date.  To the extent this Warrant
      or any portion thereof is deemed automatically exercised pursuant to this
      Section 5(c), the Company agrees to promptly notify the Holder of the
      number of Warrant Shares, if any, the Holder is to receive by reason of such
      automatic exercise, which number shall be determined in accordance with Section
      5(b).

     

    6.           Transfer
      of Warrant.  This Warrant may be transferred or assigned by the
      Holder hereof as a whole or in part, provided that prior to such transfer the
      transferor provides to the Company, at the Company’s request, an opinion of
      counsel satisfactory to the Company that such transfer does not require
      registration under the Securities Act.

     

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

     

    7.           Legends.  Upon
      issuance, the certificate or certificates evidencing any Warrant Shares shall
      bear legends as set forth in the Subscription Agreement.

    

    8.           Subscription
      Agreement. This Warrant is one of a number of warrants (the
“Offering Warrants”) issued pursuant to the Subscription
      Agreement, and the Warrant Shares shall be entitled to the rights conferred
      thereon under the Subscription Agreement and under the Registration Rights
      Agreement.  Any term of the Warrant and each other Offering Warrant
      may be amended and the observance of any term may be waived by the Company
      and
      the holders in-interest of at least seventy percent (70%) of the then
      outstanding Offering Warrants, and any such amendment or waiver shall be binding
      upon all holders of Offering Warrants.

    

    9.           Termination.  This
      Warrant shall terminate at 5:00 p.m. New York City time on the Termination
      Date.

    

    10.         Miscellaneous.  This
      Warrant shall be governed by the laws of the State of New York, as such laws
      are
      applied to contracts to be entered into and performed entirely in New York
      by
      New York residents. The headings in this Warrant are for purposes of convenience
      and reference only, and shall not be deemed to constitute a part
      hereof.  Subject to the provisions of Section 8 hereof, neither this
      Warrant nor any term hereof may be changed or waived orally, but only by an
      instrument in writing signed by the Company and the
      Holder.  All notices and other communications from the Company to the
      Holder of this Warrant shall be delivered personally or by facsimile
      transmission or mailed by first class mail, postage prepaid, to the address
      or
      facsimile number furnished to the Company in writing by the last Holder of
      this
      Warrant who shall have furnished an address or facsimile number to the Company
      in writing, and if mailed shall be deemed given three days after deposit in
      the
      United States mail.  Upon receipt of evidence satisfactory to the
      Company of the ownership of and the loss, theft, destruction or mutilation
      of
      any Warrant and, in the case of any such loss, theft or destruction, upon
      receipt of indemnity or security satisfactory to the Company or, in the case
      of
      any such mutilation, upon surrender and cancellation of such Warrant, the
      Company will make and deliver, in lieu of such lost, stolen, destroyed or
      mutilated Warrant, a new Warrant of like tenor and representing the right to
      purchase the same aggregate number of shares of Common Stock.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    
      	
              ISSUED:

            	
              November
                19, 2007

            

    

    
 

    
      	
              NEUROLOGIX,
                INC.

            

    

    

    

    
      	
              By:__________________________________

            

    

     

     

    
      	
              Name:________________________________

            

    

    
 

    
      	
              Title:_________________________________

            

    

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    Attachment
      1

    
 

    NOTICE
      OF
      EXERCISE

    

    TO:           NEUROLOGIX,
      INC.

    

    
      	
              1.  

            	
              The
                undersigned hereby:

            

    

    

    
      	
              q  

            	
              elects
                to purchase     shares of Common Stock of the
                Company pursuant to Section 5(a) of the attached Warrant, and tenders
                herewith payment of the purchase price of such shares in full,
                or

            

    

    

    
      	
              q  

            	
              elects
                to exercise its net issuance rights pursuant to Section 5(b) of the
                attached Warrant with respect to     shares of
                Common Stock (such number being “Y” in the formula in such
                Section).

            

    

    

    
      	
              2.

            	
              Please
                issue a certificate or certificates representing said Warrant Shares
                in
                the name of the undersigned or in such other name as is specified
                below:

            

    

    

    ______________________________

    (Name
      in
      which certificate(s) are to be issued)

    

    _______________________________

    (Address)

    

    

    

    
      	 	
               

              

              ________________________________

              (Name
                of Warrant Holder)

               

              By:_____________________________

              
 

              Title:____________________________

              
 

              Date
                signed: ______________________

            

    

    

     

    

      -10-

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