Document:

Investment Agreement

 Exhibit 10.1
 
 INVESTMENT
AGREEMENT
 
 Between
 CORAUTUS GENETICS INC.
 and
 BOSTON SCIENTIFIC CORPORATION
 
 
 
  
 Dated as of July
30, 2003

  TABLE OF CONTENTS
 

		Page
	ARTICLE I
	 	 
	DEFINITIONS
	 	 
	SECTION 1.01. Certain Defined Terms	2  
	SECTION 1.02. Additional Definitions	5  
	 	 
	 	 
	ARTICLE II
	 	 
	EQUITY INVESTMENT; SUBLICENSE
	 	 
	SECTION 2.01. Subscription for Preferred Stock; Patent Sublicense Agreement	5  
	SECTION 2.02. The Closing	6  
	 	 
	 	 
	ARTICLE III
	 	 
	REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
	 	 
	SECTION 3.01. Organization, Authority and Qualification of the Company	8  
	SECTION 3.02. Subsidiaries	8  
	SECTION 3.03. Capital Stock of the Company	8  
	SECTION 3.04. Authority and Qualification of the Company	9  
	SECTION 3.05. No Conflict	10
	SECTION 3.06. Governmental Consents and Approvals	10
	SECTION 3.07. Absence of Certain Changes or Events; Conduct in Ordinary Course	10
	SECTION 3.08. SEC Filings; Financial Statements	10
	SECTION 3.09. Litigation	12
	SECTION 3.10. Compliance with Laws	12
	SECTION 3.11. Material Contracts	12
	SECTION 3.12. Assets	13
	SECTION 3.13. Brokers	13
	SECTION 3.14. Employment and Benefits Matters	14
	SECTION 3.15. Insurance	14
	SECTION 3.16. Regulatory Compliance	14
	SECTION 3.17. Absence of Undisclosed Liabilities	14
	SECTION 3.18. Full Disclosure	14
	SECTION 3.19. Clinical Trials; Product Data	15
	SECTION 3.20. American Stock Exchange	15

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	ARTICLE IV	 
	 	 
	REPRESENTATIONS AND WARRANTIES
OF THE INVESTOR
	 	 
	SECTION 4.01. Organization and Authority of the Investor	16
	SECTION 4.02. No Conflict	16
	SECTION 4.03. Governmental Consents and Approvals	16
	SECTION 4.04. Brokers	16
	SECTION 4.05. Investment Intent	16
	SECTION 4.06. Legends	17
	 	 
	 	 
	ARTICLE V
	 	 
	COVENANTS AND AGREEMENTS
	 	 
	SECTION 5.01. Conduct of Business	17
	SECTION 5.02. Governmental Proceedings	17
	SECTION 5.03. Listing	17
	SECTION 5.04. Insurance	17
	 	 
	 	 
	ARTICLE VI
	 	 
	USE OF PROCEEDS	 
	 	 
	SECTION 6.01. CSEMC License	18
	 	 
	 	 
	ARTICLE VII
	 	 
	CONDITIONS PRECEDENT
	 	 
	SECTION 7.01. Conditions to the Investor’s Obligations	18
	SECTION 7.02. Conditions to the Company’s Obligations	19
	 	 
	 	 
	ARTICLE VIII
	 	 
	INDEMNIFICATION
	 	 
	SECTION 8.01. Survival of Representations, Warranties and Indemnities	19
	SECTION 8.02. Indemnification by the Company	20
	SECTION 8.03. Indemnification by the Investor	20
	SECTION 8.04. Treatment for Tax Purposes	20
	SECTION 8.05. Limitations on Indemnification	20

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	ARTICLE IX
	 	 
	TERMINATION
	 	 
	SECTION 9.01. Termination	21
	SECTION 9.02. Effect of Termination	21
	 	 
	 	 
	ARTICLE X
	 	 
	CONFIDENTIALITY
	 	 
	SECTION 10.01. Confidentiality	21
	SECTION 10.02. Release from Restrictions	22
	SECTION 10.03. Public Announcements and Publications	22
	 	 
	 	 
	ARTICLE XI
	 	 
	GENERAL PROVISIONS
	 	 
	SECTION 11.01. Further Action	22
	SECTION 11.02. Expenses	23
	SECTION 11.03. Notices	23
	SECTION 11.04. Interpretation and Rules of Construction	24
	SECTION 11.05. Severability	24
	SECTION 11.06. Entire Agreement	25
	SECTION 11.07. Assignment	25
	SECTION 11.08. No Third Party Beneficiaries	25
	SECTION 11.09. Amendment	25
	SECTION 11.10. No Waiver	25
	SECTION 11.11. Dispute Resolution	25
	SECTION 11.12. Governing Law	26
	SECTION 11.13. Counterparts	26
	SECTION 11.14. Waiver of Jury Trial	26
	SECTION 11.15. Construction; Interpretation	26
	SECTION 11.16. Specific Performance	26

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  EXHIBITS AND SCHEDULES

		
	Exhibit A	Form of Investor Rights Agreement
	Exhibit B	Form of Loan Agreement
	Exhibit C	Form of Patent Sublicense Agreement
	Exhibit D	Form of Development Agreement
	Exhibit E	Form of Distribution Agreement
	Exhibit F	Form of Certificate of Designation
	Exhibit G	Form of Opinion of Counsel to the Company

 Disclosure Schedule
 iv

                     INVESTMENT AGREEMENT, dated as of July 30, 2003 (the “Signing
Date”), between CORAUTUS GENETICS INC., a Delaware corporation (the “Company”), and BOSTON SCIENTIFIC CORPORATION, a Delaware corporation (the “Investor”, each a “Party” and together with
the Company, the “Parties”).
                    WHEREAS, the Investor is engaged in the
business of developing, manufacturing and marketing, among other things, biomedical technology used to treat cardiac and vascular disease;
                    WHEREAS, the Company wishes to pursue the development and distribution of drugs or products that use VEGF-2 for
the treatment of the heart or peripheral vascular system (the “Products”);
                    WHEREAS, the Investor is willing to subscribe for capital stock of the Company to provide funding to the Company
for purposes of such development and to acquire an ownership interest in the Company;
                    WHEREAS, on the Closing Date, the Parties are entering into an Investor Rights Agreement, substantially in the
form of Exhibit A, to provide, among other things, for certain rights of the Investor in connection with its interest in the Company (the “Investor Rights Agreement”);
                    WHEREAS, the Investor is willing to provide additional funding to the Company to develop the Products by
extending credit to the Company, upon the terms and subject to the conditions set forth in the Loan Agreement, substantially in the form of Exhibit B, to be entered into by the Company and the Investor on the Closing Date (the “Loan
Agreement”);
                    WHEREAS, the willingness of the Investor to make an equity investment
in the Company is premised upon, among other matters, an agreement by the Company to grant, or to cause its wholly-owned subsidiary VGI to grant, to the Investor an exclusive sublicense under U.S. Patent No. 6,121,246, among other matters, in
accordance with and pursuant to the Company’s rights under the license agreement between Caritas St. Elizabeth’s Medical Center of Boston, Inc., formerly St. Elizabeth’s Medical Center of Boston, Inc. (“CSEMC”), and
VGI, dated as of February 10, 1999 (the “CSEMC License”), through the execution and delivery to the Investor of a sublicense agreement, substantially in the form of Exhibit C (the “Patent Sublicense
Agreement”); and
                    WHEREAS, on the Closing Date, the Company and the Investor will
also be entering into (i) a Development Agreement (the “Development Agreement”) substantially in the form of Exhibit D, whereby the Company and the Investor provide for, among other things, development of the Products and
(ii) a Distribution Agreement (the “Distribution Agreement”) substantially in the form of Exhibit E, pursuant to which, among other things, the Investor shall be the exclusive worldwide distributor of the Products (this
Agreement, the Investor Rights Agreement, the Loan Agreement, the Development Agreement, the Patent Sublicense Agreement and the Distribution Agreement are hereinafter collectively referred to as the “Transaction
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  Documents”), all of which are a material consideration in the willingness of the Investor to provide the funding contemplated by this Agreement;
                    NOW, THEREFORE, in consideration of the premises and the mutual representations and warranties, agreements and
covenants hereinafter set forth, the Parties hereby agree as follows:
 ARTICLE I
 DEFINITIONS
                    SECTION 1.01. Certain Defined Terms.   For purposes of this Agreement:
                    ”Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or
before any Governmental Authority.
                    ”AE” means any adverse event (within the
meaning of applicable FDA regulations, and including, without limitation, any unfavorable and unintended sign (including, without limitation, an abnormal laboratory finding), exacerbation of a pre-existing condition, intercurrent illness, drug
interaction, significant worsening of a disease under investigation or treatment, significant failure of expected pharmacological or biological action, or symptom or disease temporally associated with the use of a drug or other product of the
Company, whether or not considered to be related to such drug or product), which event is associated with the use of such drug or product (i) in clinical investigation; or (ii) by a patient once such drug or product has been approved, whether or not
such event is considered to be drug-related.
                    ”Affiliate” means, with
respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.
                    ”Agreement” or “this Agreement” means this Agreement and includes the Exhibits
and the Disclosure Schedule, and all amendments hereto made in accordance with the provisions of Section 11.09.
                    ”Board of Directors” means the board of directors of the Company.
                    ”Business Day” means any day that is not a Saturday, a Sunday or any other day on which banks
are required or authorized by Law to be closed in The City of New York.
                    ”Capital
Lease Obligation” means any obligation owed by a Person as lessee under leases that have been or should be, in accordance with U.S. GAAP, recorded as capital leases.
                    ”Common Stock” means the common stock of the Company, par value $0.001 per share.
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                     ”Confidential Information” means all nonpublic
proprietary information and materials (whether or not patentable), disclosed by a Disclosing Party to a Receiving Party, irrespective of the manner in which the Disclosing Party disclosed such information to the Receiving Party, in furtherance of
this Agreement, including, without limitation, substances, formulations, techniques, methodologies, equipment, data, reports, correspondence, know-how, manufacturing documentation, financial information and sources of supply.
                    ”control” (including the terms “controlled by” and “under common
control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the
affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract, credit arrangement or otherwise.
                    ”Disclosing Party” means a Party disclosing Confidential Information.
                    ”Disclosure Schedule” means the Disclosure Schedule attached hereto, dated as of the date
hereof and forming a part of this Agreement.
                    ”Encumbrance” means any
security interest, pledge, hypothecation, mortgage, lien (including, without limitation, environmental and Tax liens) or other encumbrance.
                    ”ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.
                    ”FDA”
means the United States Food and Drug Administration.
                    ”Governmental
Authority” means any United States or non-United States federal, national, supranational, state, provincial, local, or similar government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body.
                    ”Governmental Order” means any order, writ,
judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
                    ”Law” means any United States or non-United States federal, national, supranational, state,
provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law.
                    ”Material Adverse Effect” means any circumstance, change or effect that, individually or in the
aggregate with all other circumstances, changes or effects: (a) is or is reasonably likely to be materially adverse to the business, assets, operations, results of operations, prospects, liabilities (including, without limitation, contingent
liabilities) or the financial condition of the Company and its Subsidiaries, taken as a whole or (b) is reasonably likely to materially adversely effect the ability of the Company to consummate the transactions contemplated by this Agreement
and the other Transaction Documents.
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                     ”Person” means any individual, partnership, firm,
corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
                    ”Plan” means any (a) employee benefit plans (as defined in
Section 3(3) of ERISA) and all bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and all
employment, termination, severance or other contracts or agreements to which the Company or any Subsidiary is a party, with respect to which the Company or any Subsidiary has any obligation, or which is maintained, contributed to or sponsored by the
Company or any Subsidiary for the benefit of any current or former employee, officer or director of the Company or any Subsidiary, (b) employee benefit plan for which the Company or any Subsidiary could incur liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated, or (c) plan in respect of which the Company or any Subsidiary could incur liability under Section 4212(c) of ERISA.
                    ”Receiving Party” means a Party receiving Confidential Information.
                    ”Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability
company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such limited liability company, partnership, or joint
venture or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.
                    ”Tax” or “Taxes” means all income, gross
receipts, gains, sales, use, employment, franchise, profits, excise, property, value added and other taxes, fees, stamp taxes and duties, assessments or charges of any kind, together with any interest and penalties, additions to tax or additional
amounts imposed by any taxing authority with respect thereto.
                    ”U.S. GAAP”
means United States generally accepted accounting principles applied on a consistent basis.
                    ”VEGF-2” means the Human Genome Sciences angiogenic agent licensed to and being further
developed and modified by the Company, sometimes referred to as Vascular Endothelial Growth Factor 2 plasmid DNA, and any modifications or improvements thereto.
                     ”VGI” means Vascular Genetics Inc., a Delaware corporation.
 4

                      SECTION 1.02.  Additional Definitions. The following
terms have the meanings set forth in the Sections set forth below:

	Definition 	 	Location 
	 	 	 
	“Assets”	 	3.12 
	“AMEX”	 	3.20 
	“Certificate of Designation”	 	2.01(a)
	“Closing”	 	2.02(a)
	“Closing Date”	 	2.02(a)
	“Company”	 	Preamble
	“Company Financial Statements”	 	3.08(b)
	“Company Indemnified Party”	 	8.03 
	“Company SEC Reports”	 	3.08(a)
	“Development Agreement”	 	Recitals
	“Distribution Agreement”	 	Recitals
	“Exchange Act”	 	3.08(a)
	“Investor”	 	Preamble
	“Investor Indemnified Party”	 	8.02 
	“Investor Rights Agreement”	 	Recitals
	“Loan Agreement”	 	Recitals
	“Loss”	 	8.02 
	“Material Contracts”	 	3.11(a)
	“Notice of Disagreement”	 	11.11 
	“Parties”	 	Preamble
	“Party”	 	Preamble
	“Patent Sublicense Agreement”	 	Recitals
	“Preferred Stock”	 	3.03 
	“Products”	 	Recitals
	“Reference Statement Date”	 	3.08(c)
	“SEC”	 	3.08(a)
	“Securities Act”	 	3.08(a)
	“CSEMC”	 	Recitals
	“CSEMC License”	 	Recitals
	“Series D Preferred Stock”	 	2.01(a)
	“Signing Date”	 	Preamble
	“Threshold Amount”	 	8.05 
	“Transaction Documents”	 	Recitals

 ARTICLE II
 EQUITY INVESTMENT; SUBLICENSE
                     SECTION 2.01.  Subscription for Preferred Stock; Patent Sublicense Agreement. (a) Upon the
basis of the representations and warranties set forth in this Agreement and subject to the terms and conditions set forth herein, (i) the Investor agrees to subscribe for, and the
 5

  Company agrees to issue and sell to the Investor, 1,385,377 shares of Series D Convertible Preferred Stock of the Company, par value $0.001 per share (the “Series D Preferred
Stock”), having the designations, rights and preferences set forth in the Certificate of Designation attached as Exhibit F (the “Certificate of Designation”), and (ii) VGI shall execute and deliver the Patent
Sublicense Agreement to the Investor.
                     (b)
       Consideration. In consideration for the issuance to the Investor of the shares of Series D Preferred Stock, the Investor shall pay $9,000,000 (Nine Million Dollars), to the Company at the Closing. In
consideration of the rights to be granted to Investor under the Patent Sublicense Agreement, the Investor shall pay $1,000,000 (One Million Dollars), to VGI at the Closing.
                     SECTION 2.02.  The Closing. (a) Subject to the terms and conditions of this Agreement, the
closing of the transactions contemplated by Section 2.01 of this Agreement shall take place at a closing (the “Closing”) to be held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York at 10:00 A.M.
(New York City time) on the second Business Day following the satisfaction or waiver of all conditions to the obligations of the parties set forth in Article VII, or at such other time and place that the Company and the Investor shall agree (the
“Closing Date”).
                     (b)
       Closing Deliveries of the Company. At the Closing, the Company shall deliver or cause to be delivered to the Investor:

	 	          (i)                  the Transaction Documents, duly executed by the Company
or VGI, as appropriate;

 

	 	          (ii)                 a true and complete copy, certified by the Secretary of
the Company, of the resolutions duly and validly adopted by the Board of Directors evidencing its authorization of the execution and delivery of the Transaction Documents, the consummation of the transactions contemplated thereby and the filing of
the Certificate of Designation with the Secretary of State of the State of Delaware, accompanied by the certification of the Secretary of the Company as to the names and signatures of the officers of the Company authorized to sign the Transaction
Documents and the other documents to be delivered thereunder;

 

	 	          (iii)                 the opinion of the Company’s outside counsel,
dated as of the Closing Date, substantially in the form set forth in Exhibit G;

 

	 	          (iv)                 a copy of (A) the restated certificate of incorporation
of the Company, as amended, certified by the Secretary of State of the State of Delaware, as of a date not earlier than three Business Days prior to the Closing Date and accompanied by a certificate of the Secretary of the Company, dated as of the
Closing Date, stating that no amendments, other than the filing of the Certificate of Designation, have been made to such restated certificate of incorporation since such date, and (B) the by-laws of the Company, certified by the Secretary of the
Company;

 
 6

	 	          (v)                 a good standing certificate for the Company issued by
the Secretary of State of the State of Delaware, dated as of a date not earlier than five (5) Business Days prior to the Closing Date;

 

	 	          (vi)                 certificates evidencing the shares of Series D
Preferred Stock issued and sold by the Company to the Investor pursuant to this Agreement, duly and properly registered in the name of the Investor (or its designee);

 

	 	          (vii)                 the certificate, dated as of the Closing Date,
contemplated by Section 7.01(a);

 

	 	          (viii)                a receipt for the $9,000,000 paid by the Investor in
consideration of the subscription of shares of Series D Preferred Stock; and

 

	 	          (ix)                   a receipt for the $1,000,000 paid by the
Investor in consideration of the Patent Sublicense Agreement.

 
                     (c)
       Closing Deliveries of the Investor. At the Closing Date, the Investor shall deliver or cause to be delivered to the Company:

	 	          (i)         the sum of $9,000,000 and $1,000,000, by wire transfer of immediately available funds to a bank account
of the Company and VGI, respectively, in the United States designated in writing by the Company not less than two (2) Business Days prior to the Closing Date;

 

	 	          (ii)         the Transaction Documents, duly executed by the Investor;

 

	 	          (iii)        a receipt acknowledging delivery of the certificates representing shares of Series D Preferred Stock;
and

 

	 	          (iv)        the certificate, dated the Closing Date, contemplated by Section 7.02(a).

 ARTICLE III
 REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
                     As an inducement to the Investor to enter into this Agreement and the other Transaction Documents, the
Company hereby represents and warrants to the Investor as of the date hereof and as of the Closing Date (except for such representations and warranties as are expressly made as of another date) as follows (it being understood that for purposes of
the Disclosure Schedule, matters that are disclosed in one Section of the Disclosure Schedule are considered to be disclosed in another Section of the Disclosure Schedule to the extent that the Disclosure Schedule contains cross-references that make
the relevance of such information to such other Section reasonably apparent):
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                      SECTION 3.01.  Organization, Authority and Qualification
of the Company. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware and has all necessary corporate power and authority to own, operate or lease the properties and assets now
owned, operated or leased by it and to carry on its business as it has been and is currently conducted. The Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by
it or the operation of its business makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not (a) materially adversely affect the ability of the Company to carry out its obligations under, and
to consummate the transactions contemplated by this Agreement and the other Transaction Documents or (b) otherwise have a Material Adverse Effect. True and correct copies of the Company’s restated certificate of incorporation, and by-laws, each
as amended to the date hereof, are attached hereto as Section 3.01 of the Disclosure Schedule.
                     SECTION 3.02.  Subsidiaries. (a) Other than Urogen Acquisition Corporation and VGI, there are
no other corporations, partnerships, joint ventures, associations or other entities in which the Company or any Subsidiary thereof owns, of record or beneficially, any direct or indirect equity or other interest or any right (contingent or
otherwise) to acquire the same. Neither the Company nor either of its two Subsidiaries is a member of (nor is any part of their business conducted through) any partnership nor is the Company or either Subsidiary a participant in any joint venture or
similar arrangement.
                     (b)        Each of the
Company’s two Subsidiaries: (i) is duly organized, validly existing and in good standing under the Laws of the State of Delaware, (ii) has all necessary power and authority to own, operate or lease the properties and assets owned, operated or
leased by such Subsidiary and to carry on its business as it has been and is currently conducted by such Subsidiary and (iii) is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or
leased by it or the operation of its business makes such licensing or qualification necessary.
                     (c)        All corporate actions taken by VGI have been duly
authorized, and VGI has not taken any action that in any respect conflicts with, constitutes a default under or results in a violation of any provision of its certificate of incorporation or by-laws, excluding any such action that would not have a
Material Adverse Effect. True and complete copies of the certificate of incorporation and by-laws, in each case as in effect on the date hereof, of VGI have been delivered by the Company to the Investor.
                     (d)        The minute books of VGI made available to the Investor are
the only minute books of VGI and contain an accurate summary of all meetings of directors (or committees thereof) and stockholders or actions by written consent.
                     SECTION 3.03.  Capital Stock of the Company. The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock and 5,000,000 shares of preferred stock of the Company (“Preferred Stock”) (of which Preferred Stock there are designated 40,000 shares of Series A Preferred Stock, 13,000 shares of
Series B Preferred Stock, 17,000 shares of Series C Preferred Stock and 1,400,000 shares of Series D Preferred Stock). As of the Signing Date, (a) 9,871,685 shares of Common Stock are issued and outstanding,
 8

  (b) 2,031,178 shares of Common Stock are reserved for issuance pursuant to outstanding options granted pursuant to the Company’s 1995 Stock Plan, 1995 Directors Option Plan, 1999
Stock Plan, and 2002 Stock Plan, (c) 565,209 shares of Common Stock are reserved for issuance upon the exercise of outstanding warrants in the amounts and at the exercise prices disclosed on Section 3.03 of the Disclosure Schedule, (d) 2,000 shares
of Series C Preferred Stock are issued and outstanding, and no other shares of Preferred Stock are outstanding, (e) 556,903 shares of Common Stock are reserved for issuance to the former stockholders of VGI to indemnify such stockholders against
certain losses as set forth in an Agreement and Plan of Reorganization dated September 12, 2002, as amended, between the Company and VGI, (f) sufficient shares of Common Stock are reserved for issuance upon the conversion of the Series D Preferred
Stock and the conversion of the notes under the Loan Agreement. No shares of capital stock of the Company are held in its treasury. All of the outstanding shares of the Company’s capital stock are duly and validly issued, fully paid and
nonassessable. None of the issued and outstanding shares of capital stock of the Company was issued in violation of any preemptive rights. Except as set forth in the first sentence of this Section or in Section 3.03 of the Disclosure Schedule, there
are no options, warrants, subscriptions, calls, convertible securities or other rights, agreements, arrangements or commitments relating to the capital stock of the Company or obligating the Company to issue or sell any shares of capital stock of,
or any other equity interest in, the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or make any investment (in the form of a loan,
capital contribution or otherwise) in, any other Person. The shares of Series D Preferred Stock to be issued and sold pursuant to this Agreement have been duly and validly authorized by the Company, and, at the Closing, the shares of Series D
Preferred Stock will have been duly and validly issued, fully paid and non-assessable, and the issuance of such shares shall not be subject to preemptive or other similar rights. The shares of Common Stock into which the Series D Preferred Stock and
notes under the Loan Agreement are convertible, if and when issued, will be duly and validly issued, fully paid and non-assessable, and the issuance of such shares shall not subject to any preemptive or similar rights. There are no voting trusts,
stockholder agreements, proxies or other agreements or understanding in effect with respect to the voting or transfer of any of the Company’s capital stock, except as described on Section 3.03 of the Disclosure Schedule. There are no accrued
and unpaid dividends on any capital stock of the Company.
                     SECTION 3.04.
 Authority and Qualification of the Company. (a) The Company has all necessary corporate power and authority to enter into the Transaction Documents, to carry out its obligations thereunder and to consummate the transactions contemplated
thereby. The execution and delivery by the Company of the Transaction Documents, the performance by the Company of its obligations thereunder and the consummation by the Company of the transactions contemplated thereby have been duly authorized by
all requisite action on the part of the Company. Each Transaction Document has been, or upon its execution shall be, duly executed and delivered by the Company, and (assuming due execution and delivery thereof by each other party thereto, if
applicable) each Transaction Document constitutes, or upon its execution shall constitute, the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights and remedies generally, and (ii) the effect of general equitable principles, regardless of whether asserted in a
proceeding in equity or at law.
 9

                      (b)        All corporate
actions taken by the Company have been duly authorized, and the Company has not taken any action that in any respect conflicts with, constitutes a default under or results in a violation of any provision of its restated certificate of incorporation
or by-laws, excluding any such action that would not have a Material Adverse Effect.
                    (c)        The minute books of the Company made available to the
Investor are the only minute books of the Company and contain an accurate summary of all meetings of the Board of Directors (or committees thereof) and stockholders or actions by written consent.
                     SECTION 3.05.   No Conflict. Except as provided in Section 3.05 of the Disclosure
Schedule, the execution, delivery and performance by the Company of the Transaction Documents does not (a) violate, conflict with or result in the breach of any provision of its restated certificate of incorporation or by-laws, (b) conflict with or
violate any Law or Governmental Order applicable to the Company, or any of its assets, properties or businesses, or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the properties as
assets of the Company pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Company is a party or by which any of assets or properties is
bound or affected, except, with respect to clause (c), for any such conflicts, violations, breaches, defaults or other occurrences that have not had, and would not be reasonably expected to have, individually or in the aggregate, a Material Adverse
Effect.
                     SECTION 3.06.   Governmental Consents and Approvals. The
execution, delivery and performance of the Transaction Documents by the Company does not require any consent, approval, authorization or other order of, action by, filing with or notification to, any Governmental Authority other than (a) any
approval of, filing with or notification to the American Stock Exchange, (b) the filing of the Certificate of Designation with the Secretary of State of Delaware, (c) such registrations, filings and authorizations as may be required under federal
securities laws, and (d) the regulatory approvals contemplated by the Development Agreement and Distribution Agreement in connection with clinical trials and commercialization of the Products and the Injection Catheters (as defined in such
agreements). 
                     SECTION 3.07.   Absence of Certain Changes or Events;
Conduct in Ordinary Course. Except as set forth in Section 3.07 of the Disclosure Schedule, since the Reference Statement Date, the business of the Company has been conducted in the ordinary course, in a manner consistent with past practices and
there has been no Material Adverse Effect.
                     SECTION 3.08.   SEC Filings;
Financial Statements.  (a)  The Company has filed all forms, reports and documents required to be filed by it with the Securities and Exchange Commission (the “SEC”). The Company heretofore has delivered to
Investor, in the form filed with the SEC, (i) its Annual Report on Form 10-K for the fiscal year ended December 31, 2002, (ii) its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003, (iii) all proxy statements relating to
the Company’s meetings of stockholders (whether annual or special) held since January 1, 2003 and (iv) all other forms, reports and other registration statements
 10

  (other than Quarterly Reports on Form 10-Q not referred to in clause (ii) above) filed by the Company with the SEC since January 1, 2003 (the forms, reports and other documents
referred to in clauses (i), (ii), (iii) and (iv) above being, collectively, the “Company SEC Reports”). As of their respective filings dates, the Company SEC Reports (x) were prepared in accordance with either the requirements of
the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be, and the rules and regulations promulgated thereunder, and
(y) did not, at the time they were filed, or, if amended, as of the date of such amendment, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary of the Company is required to file any form, report or other document with the SEC.
                     (b)       Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the Company SEC Reports (the “Company Financial Statements”) was prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of the
Company and its consolidated Subsidiaries as at the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments which would not have had, and
would not have, a Material Adverse Effect). The Company maintains systems of internal accounting controls that are, in all material respects, typical for companies of its size and in its industry and sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. GAAP and to maintain asset
accountability, (iii) access to its assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for its assets is compared with its existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as specifically disclosed in the notes to the Company Financial Statements, there are no material special or non-recurring items of income or expense during the periods covered by
the Company Financial Statements and the balance sheets included in the Company Financial Statements do not reflect any writeup or revaluation increasing the book value of any assets.
                     (c)        Except as and to the extent set forth on the consolidated
balance sheet of the Company and the consolidated Subsidiaries as of March 31, 2003, including the notes thereto (the “Reference Statement Date”) or in Section 3.08(c) of the Disclosure Schedule, neither the Company nor any
Subsidiary has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except for liabilities and obligations incurred in the ordinary course of business consistent with past practice which have not had and
would not reasonably be expected to have a Material Adverse Effect.
                     (d)
       As of the date of this Agreement, the Company has heretofore furnished to the Investor complete and correct copies of (i) all agreements, documents and other instruments not yet filed by the Company with the
SEC but that are currently in effect and that the Company expects to file with the SEC after the date of this Agreement and (ii) all amendments and
 11

  modifications that have not been filed by the Company with the SEC to all agreements, documents and other instruments that previously had been filed by the Company with the SEC and are
currently in effect.
                     SECTION 3.09.  Litigation.   Except
as set forth on Section 3.09 of the Disclosure Schedule, there is no Action pending (or, to the knowledge of the Company, threatened) by or against the Company or either of its two Subsidiaries. Neither the Company nor either of its two Subsidiaries
is subject to any Governmental Order (nor, to the knowledge of the Company, are there any Governmental Orders threatened to be imposed by any Governmental Authority) which has resulted or would reasonably be expected to have a Material Adverse
Effect.
                     SECTION 3.10.  Compliance with Laws.   Except as
set forth in Section 3.10 of the Disclosure Schedule and except as would not reasonably be expected to have a Material Adverse Effect, (a) the Company and its Subsidiaries have conducted and continue to conduct their business in all respects in
accordance with all Laws and Governmental Orders applicable to the Company and such Subsidiaries, and (b) neither the Company nor any Subsidiary is in violation of any such Law or Governmental Order.
                     SECTION 3.11.  Material Contracts.  (a)  Section 3.11(a) of the
Disclosure Schedule lists each of the following contracts and agreements (including, without limitation, oral agreements) of the Company (such contracts and agreements, together with all contracts, agreements, leases and subleases concerning the
use, occupancy, management or operation of any leased real property listed in Section 3.12(b) of the Disclosure Schedule being “Material Contracts”):

	 	          (i)         each contract, agreement, invoice, purchase order and other arrangement for the purchase or lease of personal
property, with any supplier or for the furnishing of services to the Company under the terms of which the Company (A) is likely to pay or otherwise give consideration of more than $150,000 in the aggregate during the calendar year ended December 31,
2003, or (B) is likely to pay or otherwise give consideration of more than $200,000 in the aggregate over the remaining term of such contract;

 

	 	          (ii)         all contracts with clinical investigators or clinical sites;

 

	 	          (iii)        all distributor, agency, sales promotion, market research and development agreements to which the Company is
a party;

 

	 	          (iv)        each contract, agreement, invoice, sales order and other arrangement, for the sale of personal property or
for the furnishing of services by the Company which (A) is likely to involve consideration of more than $50,000 in the aggregate during the calendar year ended December 31, 2003, or (B) is likely to involve consideration of more than $100,000 in the
aggregate over the remaining term of the contract;

 

	 	          (v)        all contracts and agreements under which the Company has incurred, or has agreed to incur, indebtedness or
Capital Lease Obligations of more than $100,000;

 

	 	          (vi)        all contracts and agreements with any Governmental Authority;

 
 12

	 	          (vii)         all contracts and agreements that limit or purport to limit the ability of the Company to compete in any
line of business or with any Person or in any geographic area or during any period of time;

 

	 	          (viii)        all warrant agreements, and all other contracts and agreements between or among the Company and any holder
of more than five percent (5%) of the Common Stock of the Company;

 

	 	          (ix)        any agreement providing for the guarantee by the Company or either of its Subsidiaries;

 

	 	          (x)        any licenses of intellectual property to or from any Person, except for any commercial off-the-shelf software
license, label licenses, “shrink wrap” or “click through” licenses or any other similar publicly available end user license agreements; or

 

	 	          (xi)
        any agreement containing registration rights with respect to any of its securities or pursuant to which the Company may be obligated to register any
securities.

                     (b)        Except as
set forth in Section 3.11(b) of the Disclosure Schedule, (i) the Company is not in breach of, or default under, any Material Contract, (ii) to the knowledge of the Company no other party to any Material Contract is in breach thereof or default
thereunder, and (iii) the Company has not received any notice of termination, cancellation, breach or default under any Material Contract.
                     (c)        The Company has made available to the Investor true and
complete copies of all written Material Contracts.
                     SECTION
3.12.  Assets.   (a)   Except as disclosed in Section 3.12(a) of the Disclosure Schedule, the Company (directly or through its subsidiary VGI) owns, lease or has the legal right to use all the properties and
assets used or intended to be used in the conduct of the business of the Company or otherwise owned, leased or used by the Company (collectively, the “Assets”).
                     (b)        Attached on Section 3.12(b) of the Disclosure Schedule is a
list of all leases (other than personal property leases for which the Company is obligated to pay less than $20,000 in the calendar year ended December 31, 2003 and likely to pay less than $20,000 in each subsequent calendar year) to which the
Company or either of its Subsidiaries is bound.
                     (c)
       The Assets, together with the leases referred to on Section 3.12(b) of the Disclosure Schedule, constitute all the properties, assets and rights forming a part of, used or held in, and all such properties,
assets and rights as are necessary in the conduct of, the business of the Company.
                     SECTION 3.13.  Brokers.  Except as provided in Section 3.13 of the Disclosure
Schedule, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by the Transaction Documents based upon arrangements made by or on behalf of the
Company.
 13

                      SECTION 3.14.  Employment and Benefits
Matters.  (a)  None of the Plans is subject to Title IV of ERISA or Section 412 of the Code, nor does the Company or any Subsidiary contribute to any “multiemployer plan” as defined in Section 3(37) of ERISA. The
Company has performed all material obligations required to be performed by it under, is not in any material respect in default under or in material violation of, and has no knowledge of any material default or violation by any party to, any
Plan.
                     (b)        Except as set forth on Section
3.14(b) of the Disclosure Schedule, all directors, officers, management employees, technical and professional employees and consultants of the Company are under written obligation to the Company to maintain in confidence all confidential or
proprietary information acquired by them in the course of their employment and to assign to the Company all inventions made by them within the scope of their employment during such employment and for a reasonable period (as determined by the Board
of Directors in good faith) thereafter.
                     SECTION
3.15.  Insurance.  Section 3.15 of the Disclosure Schedule sets forth, with respect to each insurance policy under which the Company or any Subsidiary has been an insured, a named insured or otherwise the principal
beneficiary of coverage at any time within the past three years, the following information, in each case as of the date of this Agreement: (a) the names of the insurer, the principal insured and each named insured, (b) the policy number, (c) the
period, scope and amount of coverage and (d) the premium charged. All material insurable risks of the Company and its Subsidiaries in respect of the businesses of each are covered by such insurance policies, and the types and amounts of coverage
provided therein are usual and customary when compared to those of other companies of substantially similar size in the context of the businesses and operations in which the Company and the Subsidiaries are engaged.
                     SECTION 3.16.  Regulatory Compliance.   Each product or drug related to VEGF-2
that is tested or created by the Company is being tested or created in compliance with all material requirements of applicable Law. As of the date of this Agreement, the Company is not testing anything other than VEGF-2 or products or drugs related
thereto. Except as disclosed in Section 3.16 of the Disclosure Schedule, the Company has not received any notice from the FDA or any other Governmental Authority alleging any violation by the Company of any Law relating to VEGF-2. Except as
disclosed in Section 3.16 of the Disclosure Schedule, the Company has not received any written notice that the FDA or any other Governmental Authority has threatened to investigate or suspend any research activities, pre-clinical programs or
clinical trials being conducted by the Company relating to VEGF-2. 
                     SECTION
3.17.  Absence of Undisclosed Liabilities.   There are no liabilities of the Company or either of its Subsidiaries of any nature (whether absolute, accrued, contingent or otherwise) other than (a) those liabilities
reflected or reserved against on the March 31, 2003 balance sheet that is set forth in the Company SEC Reports, including the notes thereto, (b) those liabilities set forth in Section 3.17 of the Disclosure Schedule and (c) liabilities which would
not reasonably be expected to have a Material Adverse Effect.
                     SECTION
3.18.  Full Disclosure.  No representation or warranty of the Company in this Agreement, nor any statement or certificate furnished or to be furnished by the Company
 14

  to the Investor pursuant to this Agreement, or in connection with the transactions contemplated thereby, contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements contained herein or therein not misleading. The Company is not aware of any facts pertaining to the Company, its Subsidiaries or their business which would reasonably be expected to materially affect adversely
any of them and which have not been disclosed in this Agreement, the Disclosure Schedule or the Company Financial Statements or otherwise disclosed to the Investor by the Company in writing.
                    SECTION 3.19.   Clinical Trials; Product Data. (a)   Except as disclosed in
Section 3.19 of the Disclosure Schedule, the Company has provided the Investor with all protocols for all clinical studies that the Company has sponsored with respect to VEGF-2 and has made available to the Investor all summary data material to
clinical studies generated in the course of such clinical studies. The Company has notified the Investor of all AE’s, of which Company is aware, in connection with such clinical studies of VEGF-2 and has made available to the Investor the
results of its investigation thereof. To the Company’s knowledge, the clinical sites and clinical investigations for VEGF-2 have abided by the protocols of all clinical sites that the Company has sponsored. To the Company’s knowledge, no
participant has withdrawn from any such clinical studies of VEGF-2, and the Company has not been advised that any clinical investigation or clinical site wishes to withdraw from any such clinical study. The information provided by the Company to the
Investor concerning the Products accurately reflects, in all material respects, their specifications and characteristics.
                     (b)         Except as set forth in Section 3.19 of the Disclosure
Schedule, the clinical, pre-clinical, safety and other studies and tests conducted by or on behalf of or sponsored by the Company or its agents or in which the Company’s product candidates under development have participated, were and, if still
pending, are, to the Company’s knowledge, being conducted in accordance with medical and scientific research procedures. The Company and, to the Company’s knowledge, its agents have operated within, and currently are in compliance with,
all applicable rules, regulations and policies of the FDA and other applicable foreign authorities. Except as set forth in Section 3.19 of the Disclosure Schedule, neither the Company nor, to the Company’s knowledge, its agents have
received any notices or other correspondence from the FDA, other foreign authority, or any other governmental entity requiring the termination, suspension, or modification of any clinical, pre-clinical, safety or other studies or tests.

                    SECTION 3.20.   American Stock Exchange.   Except as disclosed in
Section 3.20 of the Disclosure Schedule, the Company represents that it is in compliance with all the applicable requirements of the rules and regulations of the American Stock Exchange (“AMEX”). Attached as Section 3.20 of the
Disclosure Schedule are copies of all correspondence between the Company and AMEX in the last twelve months.
 ARTICLE IV
 REPRESENTATIONS AND WARRANTIES
OF THE INVESTOR
                     The Investor hereby represents and warrants to the Company as follows:
 15

                      SECTION 4.01.   Organization and Authority of the
Investor.  The Investor is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware and has all necessary corporate power and authority to enter into the Transaction Documents, to
carry out its obligations thereunder and to consummate the transactions contemplated thereby. The execution and delivery by the Investor of the Transaction Documents, the performance by the Investor of its obligations thereunder and the consummation
by the Investor of the transactions contemplated thereby have been duly authorized by all requisite corporate action on the part of the Investor. Each Transaction Document has been, or upon its execution shall be, duly executed and delivered by the
Investor, and (assuming due execution and delivery thereof by each other party thereto, if applicable) each Transaction Document constitutes, or upon its execution, shall constitute, the legal, valid and binding obligations of the Investor,
enforceable against the Investor in accordance with its terms, subject to (a) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium, and other similar Laws relating to or affecting creditors’ rights and remedies
generally, and (b) the effect of general equitable principles, regardless of whether asserted in a proceeding in equity or at law.
                     SECTION 4.02.    No Conflict.  The execution, delivery and performance by the
Investor of the Transaction Documents do not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation or the by-laws of the Investor, (b) conflict with or violate any Law or Governmental Order
applicable to the Investor or any of its assets, properties or businesses or (c) conflict with, or result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument or arrangement to which the Investor is a party, which, in the case of this clause (c), would adversely affect the ability of the Investor to carry out its obligations under, and to consummate the transactions contemplated by, the
Transaction Documents.
                     SECTION 4.03.    Governmental Consents and
Approvals.  The execution, delivery and performance by the Investor of the Transaction Documents does not require any consent, approval, authorization or other order of, action by, filing with, or notification to any Governmental
Authority other than the regulatory approvals contemplated by the Development Agreement and Distribution Agreement in connection with clinical trials and commercialization of the Products and the Injection Catheters (as defined in such
agreements).
                     SECTION 4.04.   Brokers.   No broker, finder
or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by the Transaction Documents based upon arrangements made by or on behalf of the Investor.

                    SECTION 4.05.   Investment Intent.  The Investor is acquiring the
Series D Preferred Stock of the Company for its own account solely for the purpose of investment and not as a nominee or agent and not with a view to, or for offer or sale in connection with, any distribution thereof.
 16

                      SECTION 4.06.   Legends.  The
Investor understands that, until such time as the Series D Preferred Stock and the Common Stock into which it is convertible may be sold under an effective registration statement under the Securities Act, or an exemption under the Securities
Act and applicable state securities Laws, the Series D Preferred Stock and the Common Stock into which it is convertible will bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of
the certificates for such securities):

		
	 	            “The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the
“Securities Act”), or under the securities Laws of any other jurisdiction. These securities have been acquired for investment and not with a view to, or in connection with, the distribution thereof. The securities may not be
offered, sold, pledged, transferred or assigned in the absence of an effective registration statement for the securities under the Securities Act and applicable state securities Laws, unless sold pursuant to an exemption under the Securities Act and
applicable state securities Laws.”

 
 ARTICLE V
 COVENANTS AND AGREEMENTS
                     SECTION 5.01.   Conduct of Business.  As and from the date hereof until the
earlier of the Closing Date and the date that this Agreement is terminated in accordance with its terms, the Company shall refrain from taking any action that would be inconsistent with the Certificate of Designation or the Investor Rights Agreement
were such agreements in effect on the date hereof.
                     SECTION 5.02.
  Governmental Proceedings.  Each of the Parties shall promptly advise the other of the existence of the commencement of any Action or the existence of any Governmental Order, in each case of which such Party is or becomes
aware, which Action would reasonably be expected to affect the legality, validity or enforceability of this Agreement or any other Transaction Document or the consummation of any of the transactions contemplated by this Agreement or
thereby.
                     SECTION 5.03.   Listing.  The Company shall use
its reasonable best efforts to obtain approval for the listing on the AMEX (or such other national securities exchange as the Common Stock may be listed) of Common Stock into which the Series D Preferred Stock and the notes issued under the Loan
Agreement are convertible, and the Company shall cooperate with the Investor with respect to such listing.
                     SECTION 5.04.   Insurance.  Within 60 days after Closing, the Company shall
obtain comprehensive general liability insurance, including products liability, with a minimum liability coverage limit of ten million dollars ($10,000,000) per occurrence, naming the Investor as an additional insured and shall provide the Investor
with a copy of a certificate of insurance evidencing compliance with this Section. Such certificate of insurance shall also provide the Investor with thirty (30) days’ prior written notice of cancellation, modification or
termination.
 17

  ARTICLE VI
 USE OF PROCEEDS
                     SECTION 6.01.   CSEMC License.  (a)  In consideration of the
$1,000,000 to be paid by Investor at the Closing for the Patent Sublicense Agreement, so long as the Investor and its Sublicensees (as defined in the Patent Sublicense Agreement) remain in material compliance with the terms of the Patent Sublicense
Agreement and the Sublicensees’ respective sublicense agreements, as applicable, the Company shall use its best efforts to keep the CSEMC License in full force and effect and shall apply a portion of such consideration towards such purpose as
necessary or appropriate.
                     (b)         Research
and Development.  The Company shall apply the $9,000,000 to be paid at Closing for the subscription of Series D Preferred Stock and all proceeds from the notes issued under the Loan Agreement, toward the performance of its obligations
under the Development Agreement and the Distribution Agreement, to obtain the insurance contemplated by Section 5.04 and for general corporate purposes.
 ARTICLE VII
 CONDITIONS PRECEDENT
                     SECTION 7.01.
  Conditions to the Investor’s Obligations.  The obligations of the Investor to consummate the transactions contemplated by Article II are subject to the satisfaction, or waiver by the Investor, on the Closing Date,
of each of the following conditions:

		
	 	          (a)          Representations and Warranties; Covenants and Agreements.  The representations and
warranties of the Company contained in this Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing with the same force and effect as if made as of the
Closing, other than such representations and warranties as are made as of another date, which shall be true and correct in all material respects as of such date (provided, however, that if any portion of any representation or warranty
is already qualified by materiality, for purposes of determining whether this Section 7.01(a) has been satisfied with respect to such portion of such representation or warranty, such portion of such representation or warranty as so qualified must be
true and correct in all respects), and the covenants and agreements contained in this Agreement to be complied with by the Company on or before the Closing shall have been complied with in all material respects, and the Investor shall have received
a certificate of the Company to such effect signed by a duly authorized officer thereof;

 

		
	 	          (b)          No Proceedings.  No Governmental Order shall be in effect, and no Action shall be
pending, in each case against the Company or the Investor, seeking to restrain the consummation of the transactions contemplated by the Transaction Documents;

 
 18

		
	 	          (c)          No Insolvency Event.  Neither the Company nor either of its Subsidiaries has made a
general assignment for the benefit of creditors, nor has any proceeding been instituted by or against the Company, the Company or any Subsidiary seeking to adjudicate any of them a bankrupt or insolvent, or seeking liquidation, winding up or
reorganization, arrangement, adjustment, protection, relief or composition of its debts under any Law relating to bankruptcy, insolvency or reorganization; and

 

		
	 	          (d)          Consents.  The Company shall have received all consents referred to in
Section 3.06.

 
                     SECTION 7.02.    Conditions to
the Company’s Obligations.  The obligations of the Company to consummate the transactions contemplated by Article II are subject to the satisfaction, or waiver by the Company, on the Closing Date, of each of the following
conditions:

		
	 	          (a)          Representations and Warranties; Covenants and Agreements.  The representations and
warranties of the Investor contained in this Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing, with the same force and effect as if made as of the
Closing Date, other than such representations and warranties as are made as of another date, which shall be true and correct in all material respects as of such date (provided, however, that if any portion of any representation or
warranty is already qualified by materiality, for purposes of determining whether this Section 7.02(a) has been satisfied with respect to such portion of such representation or warranty, such portion of such representation or warranty as so
qualified must be true and correct in all respects), and the covenants and agreements contained in this Agreement to be complied with by the Investor on or before the Closing shall have been complied with in all material respects, and the Company
shall have received a certificate from the Investor to such effect signed by a duly authorized officer thereof; and

 

		
	 	          (b)          No Proceedings.  No Governmental Order shall be in effect, and no Action shall be
pending, in each case against the Company or the Investor, seeking to restrain the consummation of the transactions contemplated by the Transaction Documents.

 
 ARTICLE
VIII
 INDEMNIFICATION
                     SECTION 8.01.   Survival of Representations, Warranties and
Indemnities.  (a)  Unless this Agreement is earlier terminated pursuant to Article IX, the representations, warranties and indemnities of the Company contained in this Agreement shall survive the Closing Date and remain
in full force and effect until the second anniversary of the Closing Date; provided, however, that Sections 3.03 and 3.13 shall survive indefinitely. Neither the period of survival nor the liability of the Company with respect to
its representations, warranties and indemnities shall be reduced by any investigation made at any time by or on behalf of the Investor. If written notice of a claim has been given prior to the expiration of the applicable representations, warranties
and indemnities by the Investor to the Company, then the relevant
 19

  representations, warranties and indemnities shall survive as to such claim, until such claim has been finally resolved.
                    (b)         Unless this Agreement is earlier terminated pursuant to
Article IX, the representations, warranties and indemnities of the Investor contained in this Agreement shall survive the Closing Date and remain in full force and effect until the second anniversary thereof; provided, however,
that Section 4.04 shall survive indefinitely. Neither the period of survival nor the liability of the Investor with respect to the Investor’s representations, warranties and indemnities shall be reduced by any investigation made at any time by
or on behalf of the Company.
                     SECTION 8.02.   Indemnification by the
Company. The Investor and its Affiliates, officers, directors, employees, agents, successors and assigns (each, an “Investor Indemnified Party”) shall be indemnified and held harmless by the Company for and against any and all
liabilities, losses, damages, claims, costs and expenses, interest, awards, judgments and penalties (including, without limitation, reasonable attorneys’ and consultants’ fees and expenses) actually suffered or incurred by them (including,
without limitation, any Action brought or otherwise initiated by any of them) (hereinafter a “Loss”), arising out of or resulting from the breach of any representation or warranty, covenant or agreement made by the Company contained
in this Agreement. To the extent that the undertakings of the Company set forth in this Section 8.02 may be unenforceable, the Company shall contribute the maximum amount that it is permitted to contribute under applicable Law to the payment
and satisfaction of all Losses incurred by the Investor Indemnified Parties.
                     SECTION
8.03.  Indemnification by the Investor. The Company and its Affiliates, officers, directors, employees, agents, successors and assigns (each a “Company Indemnified Party”) shall be indemnified and held harmless by
the Investor for and against any and all Losses arising out of or resulting from the breach of any representation or warranty, covenant or agreement made by the Investor contained in this Agreement. To the extent that the Investor’s
undertakings set forth in this Section 8.03 may be unenforceable, the Investor shall contribute the maximum amount that it is permitted to contribute under applicable Law to the payment and satisfaction of all Losses incurred by the Company
Indemnified Parties.
                     SECTION 8.04.  Treatment for Tax Purposes. To
the extent permitted by Law, the Parties agree, solely for Tax purposes, to treat all payments made under this Article VIII, under any other indemnity provision contained in this Agreement, and for any misrepresentations or breach of warranties
or covenants, as adjustments to the consideration paid by the Investor under Article II for all Tax purposes, except to the extent the Law of a particular jurisdiction provides otherwise.
                     SECTION 8.05.  Limitations on Indemnification. The indemnification obligations of the
Company and the Investor for breach of representation or warranty pursuant to Section 8.02 and Section 8.03, respectively, shall not be effective unless the aggregate dollar amount of all Losses that would otherwise be indemnifiable pursuant thereto
exceeds $1,000,000 (“Threshold Amount”), at which time the indemnification obligations shall be effective as to all Losses, including the Threshold Amount; provided, however, that the Threshold Amount shall not apply
to any Losses arising out of or relating to Section 3.03. The indemnification
 20

  obligations of the Company and the Investor pursuant to Section 8.02 and 8.03, respectively, shall be effective only until the dollar amount paid in respect of Losses under such Section
aggregates to $10,000,000 and no indemnification pursuant to such provisions shall be payable thereafter.
 ARTICLE IX
 TERMINATION
                     SECTION 9.01.
  Termination.  This Agreement may be terminated at any time prior to the Closing:

		
	 	          (a)         by either the Company or the Investor if the Closing shall not have occurred by August 1, 2003;
provided, however, that the right to terminate this Agreement under this Section 9.01(a) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur on or prior to such date;
	 	 
	 	          (b)         by either the Investor or the Company in the event that any Governmental Authority shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable;
or
	 	 
	 	          (c)         by the mutual written consent of the Company and the Investor.

 
                     SECTION 9.02.  Effect of Termination.  In the event of termination of this
Agreement as provided in Section 9.01, all further obligations of the Parties under this Agreement shall terminate, except for those set forth in Articles VIII, IX, X and XI (other than Section 11.01) and that nothing herein shall
relieve either party from liability for any breach of this Agreement.
 ARTICLE X
 CONFIDENTIALITY
                     SECTION 10.01.  Confidentiality.  The Receiving Party shall maintain
Confidential Information in confidence, and shall not disclose, divulge or otherwise communicate such Confidential Information to others, or use it for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this
Agreement. The Receiving Party hereby shall exercise every reasonable precaution to prevent and restrain the unauthorized disclosure of such Confidential Information by any of its directors, officers, employees, consultants, subcontractors, or
agents. Upon termination of this Agreement, or as soon as practicable following the Closing, each Party hereby shall return to the other Party, upon demand, all Confidential Information in its possession or, upon demand, to destroy such 

21

  Confidential Information and provide a certificate to the other Party of such destruction signed by an officer of the destroying Party.
                     SECTION 10.02.   Release from Restrictions.  The provisions of Section 10.01
shall not apply to any information disclosed hereunder that:

		
	 	          (a)         is lawfully disclosed to the Receiving Party by an independent, unaffiliated third party rightfully in
possession of the Confidential Information and under no confidentiality or fiduciary obligation not to make disclosure;
	 	 
	 	          (b)         becomes published or generally known to the public through no fault or omission on the part of the Receiving
Party;
	 	 
	 	          (c)         is developed independently by the Receiving Party without access to the Confidential Information of the
Disclosing Party;
	 	 
	 	          (d)         is legally required to be disclosed to the FDA; provided, however, the Receiving Party shall
continue to treat such information as confidential pursuant to Section 10.01 unless and until such information becomes published or generally known to the public through no fault or omission on the part of the Receiving Party; or
	 	 
	 	          (e)         a Party is legally compelled to disclose; provided, however, that the Receiving Party shall
provide prompt written notice of such requirement to the Disclosing Party so that the Disclosing Party may seek a protective order or other remedy or waive compliance with Section 10.01; and provided further that if such protective
order or other remedy is not obtained or the Disclosing Party waives compliance with Section 10.01, the Receiving Party shall be permitted to furnish only that portion of such Confidential Information that is legally required to be provided and the
Receiving Party shall exercise its reasonable best efforts to obtain assurances that confidential treatment shall be accorded such information.

 
                    SECTION 10.03.   Public Announcements and Publications.  Except as required by
Law or by the requirements of any securities exchange on which the securities of a Party hereto are listed, no Party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the
transactions contemplated hereby or otherwise communicate with any news media in respect of this Agreement or the transactions contemplated hereby without the prior written consent of the other Party. The Parties shall cooperate as to the timing and
contents of any such press release or public announcement.
 ARTICLE XI
 GENERAL PROVISIONS
                     SECTION 11.01.  Further Action.  Each of the Parties shall use commercially
reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Law, and to execute and deliver such 
 22

  documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated hereby.
                     SECTION 11.02.  Expenses.  Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the Party
incurring such costs and expenses.
                     SECTION
11.03.  Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made by delivery in person, by an internationally recognized overnight courier service,
by telecopy or registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this
Section 11.03):

			
	(a)	if to the Company:	 
	 	 	 
	 	Corautus Genetics Inc.	 
	 	430 Tenth Street, NW	 
	 	Suite S-204	 
	 	Atlanta, GA 30318	 
	 	Telecopy:  (404) 526-6218	 
	 	Attention:  Chief Executive Officer	 
	 	 	 
	 	with a copy to:	 
	 	 	 
	 	McKenna Long & Aldridge LLP	 
	 	303 Peachtree Street, Suite 5300	 
	 	Atlanta, GA 30308	 
	 	Telecopy:  (404) 527-4198	 
	 	Attention:  Robert E. Tritt	 
	 	 	 
	(b)	if to the Investor:	 
	 	 	 
	 	Boston Scientific Corporation	 
	 	One Boston Scientific Place	 
	 	Natick, MA 01760-1537	 
	 	Telecopy:  (508) 650 8956	 
	 	Attention:  General Counsel	 
	 	 	 
	 	with a copy to:	 
	 	 	 
	 	Shearman & Sterling	 
	 	599 Lexington Ave.	 
	 	New York, New York 10022-6069	 
	 	Telecopy:  (212) 848-7179	 
	 	Attention:  Clare O’Brien, Esq.	 

 23

                      Any notice, if mailed and properly addressed with postage prepaid
or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when the confirmation of transmission thereof is received by the
transmitter.
                     SECTION 11.04.  Interpretation and Rules of
Construction.  In this Agreement, except to the extent that the context otherwise requires:

		
	 	          (a)         when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to
an Article or Section of, or a Schedule to, this Agreement unless otherwise indicated;

 

		
	 	          (b)         the table of contents and headings in this Agreement are for reference purposes only and do not affect in any
way the meaning or interpretation of this Agreement;

 

		
	 	          (c)         whenever the words “include”, “includes” or “including” are used in this
Agreement, they are deemed to be followed by the words “without limitation”;

 

		
	 	          (d)         the words “hereof”, “herein” and “hereunder” and words of similar import, when
used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

 

		
	 	           (e)         all terms defined in this Agreement have such defined meanings when used in any certificate or other
document made or delivered pursuant hereto, unless otherwise defined therein;
	 	 
	 	          (f)         the definitions contained in this Agreement are applicable to the singular as well as the plural forms of
such terms;

 

		
	 	          (g)         any Law defined or referred to herein or in any agreement or instrument that is referred to herein means such
Law or statute as from time to time amended, modified or supplemented, including by succession of comparable successor Laws;

 

		
	 	          (h)         references to a Person are also to its permitted successors and assigns;

 

		
	 	          (i)         the use of “or” is not intended to be exclusive unless expressly indicated otherwise;
and

 

		
	 	          (j)         all references to currency, monetary values and dollars shall mean United States (U.S.) dollars and all
payments hereunder shall be made in United States dollars.

 
                     SECTION 11.05.  Severability.  If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good

24

  faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated by this
Agreement are consummated as originally contemplated to the greatest extent possible.
                    SECTION   11.06.  Entire Agreement.  The Transaction Documents
constitute the entire agreement of the Parties with respect to the subject matter thereof and supersede all prior agreements and undertakings, both written and oral, among the Parties with respect to the subject matter hereof and thereof.

                    SECTION   11.07.   Assignment.  This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. Neither Party may assign this Agreement without the prior written consent of the other Party. No assignment by either Party permitted
hereunder shall relieve the applicable Party of its then-existing obligations under this Agreement.
                     SECTION   11.08.   No Third Party Beneficiaries.  This Agreement
shall be binding upon and inure solely to the benefit of the Parties and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever.
                     SECTION   11.09.  
Amendment.  This Agreement may not be amended or modified except by an instrument in writing signed by authorized representatives of the Company and the Investor.
                     SECTION   11.10.   No Waiver.  The delay or failure of either Party
to enforce at any time for any period the provisions of or any rights deriving from this Agreement shall not be construed to be a waiver of such provisions or rights or the right of such Party thereafter to enforce such provisions.

                    SECTION   11.11.   Dispute Resolution.  Except to the
limited extent necessary to (i) avoid expiration of a claim, (ii) comply with deadlines under applicable Law, or (iii) obtain interim relief, including injunctive relief, to preserve the status quo or prevent irreparable harm, neither
Party shall file an action or institute legal proceedings with respect to any dispute, controversy, or claim arising out of this Agreement or the validity, interpretation, breach or termination thereof, including claims seeking redress or asserting
rights under any Law, until:
                     (a)         the
aggrieved Party has given the other Party written notice (“Notice of Disagreement”), in accordance with Section 11.03 of this Agreement, of its grievance setting forth the basis for such dispute and the remedy
desired;
                     (b)         the other Party has failed to
provide a prompt and effective remedy (in the view of the aggrieved Party);
                     (c)
        the aggrieved Party has requested in writing senior executives for both Parties to promptly meet and discuss the matter detailed in the Notice of Disagreement in order to consider informal and amicable
means of resolution; and
 25

                      (d)         (i) the senior
executives for both Parties have met at least three times and have not been able to resolve the dispute to the mutual satisfaction of the Parties or (ii) more than sixty (60) Business Days have passed since the date of the Notice of
Disagreement.
                     SECTION   11.12.   Governing
Law.  This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York. The Parties unconditionally and irrevocably agree and consent to the exclusive jurisdiction of the federal and state courts
located in the Borough of Manhattan, State of New York and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and further
agree not to commence any such action, suit or proceeding except in any such court.
                     SECTION   11.13.   Counterparts.  This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.
                     SECTION   11.14.   Waiver of Jury Trial.  Each of the Company and the
Investor hereby knowingly, voluntarily and irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any course of conduct,
course of dealing or statements (whether oral or written) or actions of the Company or the Investor in the negotiation, administration, performance or enforcement thereof.
                     SECTION   11.15.   Construction; Interpretation.  The Parties have
participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
                     SECTION   11.16.   Specific Performance.  The Parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
 [Signature Page Follows]
 26

                      IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed as of the date first written above.

				
	 	CORAUTUS GENETICS INC.
	 	 	 	 
	 	By:	/s/ RICHARD E. OTTO
	 	 	

	 	 	 Name:	 Richard E. Otto
	 	 	 Title:	 Chief Executive Officer
	 	 	 	 
	 	BOSTON SCIENTIFIC CORPORATION
	 	 	 	 
	 	By:	/s/ LAWRENCE C. BEST
	 	 	

	 	 	 Name:	 Lawrence C. Best
	 	 	 Title:	 Senior Vice President & Chief Financial Officer

  Exhibit A
 Form of Investor Rights Agreement

  Exhibit B
 Form of Loan Agreement

  Exhibit C
 Form of Patent Sublicense Agreement

  Exhibit D
 Form of Development Agreement

  Exhibit E
 Form of Distribution Agreement

  Exhibit F
 Form of Certificate of Designation

  Exhibit G
 Form of Opinion of Counsel to the CompanyInvestor Rights Agreement

  Exhibit 10.2
 
 INVESTOR RIGHTS AGREEMENT

 Between
 CORAUTUS GENETICS INC.
 and
 BOSTON SCIENTIFIC CORPORATION
  
 Dated as of July 30, 2003

  TABLE OF CONTENTS
 Page

			
	ARTICLE I
	 	 	 
	DEFINITIONS
	 	 	 
	SECTION 1.01	Certain Defined Terms	1
	SECTION 1.02	Other Defined Terms	3
	 	 	 
	ARTICLE II
	 	 	 
	PRE-EMPTIVE RIGHT
	SECTION 2.01	Pre-emptive Right	4
	 	 	 
	ARTICLE III
	 	 	 
	REGISTRATION RIGHTS
	 	 	 
	SECTION 3.01	Demand Registration	5
	SECTION 3.02	Selection of Underwriter(s)	5
	SECTION 3.03	Priority in Requested Registration	6
	SECTION 3.04	Limits on Demand Registrations	6
	SECTION 3.05	Withdrawal	6
	SECTION 3.06	Shelf Registration	6
	SECTION 3.07	Effective Registration Statement	7
	SECTION 3.08	Piggyback Registration	7
	SECTION 3.09	Allocation of Securities Included in a Public Offering	8
	SECTION 3.10	Obligations of the Company	8
	SECTION 3.11	Expenses of Registration	13
	SECTION 3.12	Indemnification	14
	SECTION 3.13	Assignment of Registration Rights	18
	ARTICLE IV
	 	 	 
	ADDITIONAL AGREEMENTS
	 	 	 
	SECTION 4.01	Delivery of Information	18
	 	 	 
	ARTICLE V
	 	 	 
	BOARD OBSERVATION RIGHTS
	 	 	 
	SECTION 5.01	Board Observation Rights	19

 i

			
	ARTICLE VI
	 	 	 
	TERMINATION
	 	 	 
	SECTION 6.01	Termination	19
	 	 	 
	ARTICLE VII
	 	 	 
	MISCELLANEOUS
	 	 	 
	SECTION 7.01	Further Action	20
	SECTION 7.02	Expenses	20
	SECTION 7.03	Notices	20
	SECTION 7.04	Interpretation and Rules of Construction	21
	SECTION 7.05	Public Announcements	22
	SECTION 7.06	Severability	22
	SECTION 7.07	Entire Agreement	22
	SECTION 7.08	Remedies	22
	SECTION 7.09	Assignment	23
	SECTION 7.10	Successors and Assigns	23
	SECTION 7.11	Governing Law	23
	SECTION 7.12	Counterparts	23

 Exhibit - A List of Agreements Relating to Registration Rights
 ii

                                  INVESTOR RIGHTS AGREEMENT, dated
as of July 30, 2003, between Corautus Genetics Inc., a Delaware corporation (the “Company”), and BOSTON SCIENTIFIC CORPORATION, a Delaware corporation (the “Investor”).
W I T N E S S E T H :
                                 WHEREAS, the parties have entered
into an Investment Agreement, dated as of July 30, 2003 (the “Investment Agreement”), pursuant to which the Investor has agreed, among other things, to subscribe for and purchase Series D Convertible Preferred Stock of the Company,
par value $0.001 per share, (the “Series D Preferred Stock”) of the Company, and having the designations, rights and preferences set forth in the Certificate of Designations (as defined in the Investment Agreement), including,
among other matters, the right of the holder of the Series D Preferred Stock to convert such capital stock into common stock (“Common Stock”) of the Company, par value under $0.001 per share, (such shares issuable upon conversion of
the Series D Preferred Stock, the “Preferred Conversion Shares”).
                                 WHEREAS, the parties and Vascular
Genetics Inc., a wholly owned subsidiary of the Company, have entered into a Loan Agreement, dated as of July 30, 2003 (the “Loan Agreement”), pursuant to which the Investor has agreed, among other things, to subscribe for and
purchase senior convertible promissory notes (the “Notes”) of the Company, having the rights set forth in the Notes, including, among other matters, the right of the holder of the Notes to convert, in certain circumstances, such
Notes into Common Stock (such shares issuable upon conversion of the Notes, the “Note Conversion Shares”).
                                 WHEREAS, the parties desire to
enter into this Agreement to govern certain of their rights, duties and obligations in connection with the shares of the capital stock of the Company to be held by the Investor and any permitted transferees.
                                 NOW, THEREFORE, in consideration
of the premises and the covenants hereinafter contained and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, it is agreed as follows:
 ARTICLE I
 DEFINITIONS
                                  SECTION
1.01      Certain Defined Terms.  As used in this Agreement, the following terms shall have the following meanings:

		
	 	            ”Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, such specified Person.

 

		
	 	            ”Board” means the board of directors of the Company.

 1

		
	 	            ”Business Day” means any day that is not a Saturday, a Sunday or any other day on which banks are required or authorized by Law
to be closed in the City of New York.

 

		
	 	            ”control” (including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without
limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.

 

		
	 	            ”Equity Securities” means any equity or equity-linked securities of the Company, including any securities convertible into,
exercisable or exchangeable for, any Common Stock or preferred stock of the Company.

 

		
	 	            ”Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

		
	 	            ”Governmental Authority” means any United States or non-United States federal, national, supranational, state, provincial,
local, or similar government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

 

		
	 	            ”Law” means any other United States or non-United States federal, national, supranational, state, provincial, local or similar
statute, law, ordinance, regulation, rule, code, order, requirement or rule of law.

 

		
	 	            ”Person” means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity,
as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

 

		
	 	            ”Preliminary Prospectus” shall mean any preliminary Prospectus or preliminary Prospectus supplement that may be included in any
Registration Statement.

 

		
	 	            ”Private Placement” shall mean any offering or placement of securities of the Company in a transaction that is exempt from the
registration requirements of the Securities Act.

 

		
	 	            ”Prospectus” shall mean the Prospectus included in any Registration Statement (including, without limitation, a prospectus that
includes information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance on Rule 430A under the Securities Act), as amended or supplemented by any Prospectus supplement, with respect to the terms of
the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.

 

		
	 	            ”Public Offering” shall mean the offer of shares of Common Stock or securities convertible into or exchangeable for Common
Stock on a broadly-distributed basis, not limited to sophisticated investors (except for qualified institutional buyers pursuant to 

 
 2

		
	 	 Rule 144A under the Securities Act), pursuant to a firm-commitment or best-efforts underwriting or purchase arrangement.

 

		
	 	            ”register”, “registered” and “registration” refer to a registration effected by preparing and
filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

 

		
	 	            ”Registrable Securities” means at any time (a) the Preferred Conversion Shares, (b) the Note Conversion Shares, and (c)
any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the
Preferred Conversion Shares or the Note Conversion Shares. For purposes of this Agreement, any Registrable Securities shall cease to be Registrable Securities (i) when they have been registered under the Securities Act (the registration statement in
connection therewith having been declared effective) and disposed of pursuant to such effective registration statement, (ii) when they are sold by a Person in a transaction in which the rights and obligations under the provisions of this Agreement
are not assigned, (iii) when they have been sold or distributed pursuant to Rule 144 (including Rule 144(k)) or (iv) when all such Registrable Securities held by such holder may be sold or distributed without registration pursuant to Rule
144(k).

 

		
	 	            ”Registration Statement” shall mean any registration statement of the Company under the Securities Act that covers any of the
Registrable Securities, including the prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in
such Registration Statement.

 

		
	 	            ”Rule 144” means Rule 144 promulgated under the Securities Act or any successor rule thereto.

 

		
	 	            ”SEC” means the Securities and Exchange Commission.

 

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

 

		
	 	            ”Transaction Documents” shall have the meaning ascribed thereto in the Investment Agreement.

 

                                SECTION
1.02     Other Defined Terms.  The following terms shall have the meanings defined for such terms in the Sections set forth below:

				
	 	Term	 	Section
		 	 	 
	 	AMEX	 	3.10(c)(14)	 
	 	Blackout Period	 	3.10(b)	 
	 	Common Stock	 	Recitals	 
	 	Company	 	Preamble	 

 3

				
	 	Term	 	Section
	 	 	 	 
	 	Company Indemnified Person	 	3.12(b)
	 	Demand	 	3.01
	 	Existing Agreements	 	3.09
	 	Existing Holders	 	3.08
	 	indemnifying parties	 	3.12(c)
	 	Investment Agreement	 	Recitals
	 	Investor	 	Preamble
	 	Investor Indemnified Person	 	3.12(a)
	 	Investor Representative	 	5.01
	 	Issue Notice	 	2.01(b)
	 	Loan Agreement	 	Recitals
	 	Losses	 	3.12(a)
	 	Maximum Number	 	3.08
	 	Note(s)	 	Recitals
	 	Note Conversion Shares	 	Recitals
	 	Preferred Conversion Shares	 	Recitals
	 	Proceeding(s)	 	3.12(c)
	 	Registration Expenses	 	3.11(a)
	 	Right of First Offer	 	2.01(a)
	 	Seller(s)	 	3.09(a)
	 	Series D Preferred Stock	 	Recitals

 ARTICLE II
 PRE-EMPTIVE RIGHT
                                 SECTION 2.01
     Pre-emptive Right.  (a)  Subject to the terms and conditions of this Section 2.01, the Company hereby grants to the Investor a right of first offer (the “Right of First
Offer”) to subscribe for its pro rata share of Equity Securities issued in any Private Placement. The Investor’s pro rata share, for purposes of this Right of First Offer, is the ratio of the number of shares of Common Stock owned by
the Investor immediately prior to the issuance of the Equity Securities, assuming full conversion of the Series D Preferred Stock, conversion into Common Stock of all Notes issued or issuable under the Loan Agreement and exercise of all other
outstanding rights, options and warrants to acquire Common Stock held by the Investor, to the total number of shares of Common Stock outstanding immediately prior to the issuance of the Equity Securities plus all shares of Common Stock issuable upon
conversion, redemption, exchange, exercise of, or as a dividend declared as of the time of measurement with respect to, any shares of preferred stock, options, warrants, debentures and other securities or any subscription rights.

		
	 	            (b)  Each time the Company proposes to effect a Private Placement, the Company shall first make an offer of such Equity Securities to
the Investor in accordance with the following provisions:

 
 4

  

		
	 	          (i)           The Company shall deliver a notice (an “Issue Notice”) to the Investor
stating (A) its bona fide intention to offer such Equity Securities, (B) a description of such Equity Securities, (C) the number (or the formula for determining the number) of such Equity Securities to be offered and (D) the pricing mechanism and
other terms upon which it proposes to offer such Equity Securities.

 

		
	 	 
	 	          (ii)           By written notice to the Company within five (5) Business Days after receipt by the
Investor of an Issue Notice, the Investor may elect to subscribe for all or a part of, its pro rata share of the Equity Securities, applying the same pricing mechanism and upon the other terms as specified in the Issue Notice and stating therein the
quantity (or the formula as specified in the Issue Notice, if applicable) of Equity Securities to be purchased.

 
           (c)
          If the Investor does not elect to subscribe for all of the Equity Securities that the Investor is entitled to subscribe for pursuant to Section 2.01(b)(ii), the Company may, during the one
hundred twenty (120) day period following the expiration of the five (5) Business Day period provided in Section 2.01(b)(ii), offer the remaining unsubscribed portion of such Equity Securities to any Person or Persons at a price, and upon terms that
are not materially different than those specified in the Issue Notice. If the Company does not enter into an agreement for the sale of the Equity Securities within such period, or if such agreement is not consummated within one hundred twenty (120)
days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Equity Securities shall not be offered unless first re-offered to the Investor in accordance herewith.
 ARTICLE III 

 REGISTRATION RIGHTS
           SECTION  3.01           
Demand Registration.   If at any time after the first year anniversary of this Agreement the Investor shall request the Company in writing (each, a “Demand”) to register under the Securities Act a specified number of
Registrable Securities, the Company shall use commercially reasonable best efforts to effect the registration under the Securities Act of the Registrable Securities which the Company has been so requested to register as soon as reasonably
practicable so as to permit the sale thereof, and in connection therewith shall prepare and file a Registration Statement with the SEC under the Securities Act to effect such registration; provided, that each such request shall (a) specify
the number of shares of Registrable Securities intended to be offered and sold, (b) describe the nature or method of the proposed offer and sale thereof and (c) contain the undertaking of the Investor to provide all such information and materials
and take all such action as may be required in order to permit the Company to comply with all applicable requirements of the SEC and to obtain any desired acceleration of the effective date of such Registration Statement.
           SECTION  3.02           Selection of Underwriter(s).  If the registration pursuant to Section
3.01 relates to an underwritten offering, the managing or lead underwriter(s) shall be an
 5

  underwriter(s) of nationally recognized standing selected by the Investor, which shall be reasonably acceptable to the Company; provided, if the foregoing is inconsistent with
any agreement that is in effect between the Company and an underwriter on the date hereof (but not as such agreement may be hereafter amended), then the Investor shall have the right to select the co-lead manager.
           SECTION  3.03            Priority in Requested Registration.  If a registration pursuant to
Section 3.01 involves an underwritten offering, and the managing or lead underwriter(s) shall advise the Investor in writing (a copy of which shall be provided to the Company by the Investor) that, in its or their reasonable commercial judgment, the
number of Registrable Securities requested to be included in such registration by the Investor, the Company and any other Person exceeds the number which can be sold in such offering within a price range acceptable to the Investor, the Company shall
include in such registration the number of securities that the Company is so advised can be sold in such offering, as follows: (i) first, the Registrable Securities proposed to be included by the Investor, (ii) second, the Registrable Securities
requested by the Company, unless otherwise provided in an agreement between the Company and another Person(s), and (iii) third, the Registrable Securities of any other Person(s) proposed to be included in such registration, in accordance, as to the
priorities among such other Person(s), with the rights contained in the respective agreements into which such Person(s) and the Company have entered.
           SECTION  3.04            Limits on Demand Registrations.  The Company shall not be required to
effect any registration pursuant to Section 3.01 or 3.06 after two Demands requested by the Investor pursuant to Section 3.01 and/or 3.06 shall have been effected.
           SECTION  3.05             Withdrawal.  The Investor shall have the right to request withdrawal
of any Registration Statement filed with the SEC pursuant to Section 3.01 or Section 3.06 (and the Company shall so withdraw such Registration Statement) so long as such Registration Statement has not become effective, provided that, in such
case, the Investor shall pay all related out-of-pocket Registration Expenses (as defined below in Section 3.11(a)) reasonably incurred by the Company unless a Registration Statement shall be effected pursuant to Section 3.01 or Section 3.06 within
270 days after such withdrawal.
           SECTION  3.06             Shelf
Registration.   If at any time after the first year anniversary of this Agreement the Investor shall request to the Company in writing, the Company shall use commercially reasonable best efforts to file and cause to be declared
effective a “shelf” Registration Statement on any appropriate form pursuant to Rule 415 (or similar rule that may be adopted by the SEC) under the Securities Act for Registrable Securities, which form shall be available for the sale of the
Registrable Securities in accordance with the intended method or methods of distribution thereof. The Company agrees to use commercially reasonable best efforts to keep such Registration Statement continuously effective and usable for resale of
Registrable Securities, for a period of twenty-four months from the date on which the SEC declares such Registration Statement effective or such shorter period which will terminate at such time as the Investor has sold all the Registrable Securities
covered by such Registration Statement; provided, however, that the Company may elect that such Registration Statement not be filed or usable during any Blackout Period (as defined in Section 3.10(b)). The Investor shall
 6

  be entitled to a total of one “shelf” registration pursuant to this Section 3.06, which shall count as one Demand for purposes of the limitations on Demands set forth in
Section 3.04.
           SECTION  3.07             Effective Registration
Statement.   A registration requested pursuant to Section 3.01 or 3.06 shall not be deemed to be effected if (a) a Registration Statement with respect thereto shall not have become effective under the Securities Act and remained
effective for at least 90 days or until the completion of the distribution of the Registrable Securities thereunder, whichever is earlier (including, without limitation, because of a withdrawal of such Registration Statement by the Investor prior to
the effectiveness thereof pursuant to Section 3.05 hereof), (b) after it has become effective, such registration is interfered with for any reason by any stop order, injunction or other order or requirement of the SEC or any other Governmental
Authority, or as a result of the initiation of any proceeding for such a stop order by the SEC through no fault of the Investor and the result of such interference is to prevent the Investor from disposing of such Registrable Securities proposed to
be sold in accordance with the intended methods of disposition, (c) the Company exercises its rights under Section 3.10(b), and the result is a delay in the proposed distribution of any Registrable Securities and the Investor determines not to sell
such Registrable Securities pursuant to such registration as a result of such delay, or (d) the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with any underwritten offering shall not
be satisfied or waived with the consent of the Investor.
           SECTION  3.08            
Piggyback Registration.   Beginning on the date of this Agreement, if the Company proposes to register any shares of Common Stock for itself or any of its stockholders (the stockholders at such time being the “Existing
Holders”) under the Securities Act on a Registration Statement on Form S-1, Form S-2 or Form S-3 (or an equivalent general registration form then in effect), the Company shall give written notice of such proposal at least 15 days before the
anticipated filing date, which notice shall include the intended method of distribution of such shares, to the Investor. Such notice shall specify at a minimum the number of shares of Common Stock proposed to be registered, the proposed filing date
of such Registration Statement, any proposed means of distribution of such shares and the proposed managing underwriter, if any. Subject to Section 3.09, upon the written request of the Investor, given within 10 days after the receipt of any such
written notice by facsimile confirmed by mail (which request shall specify the Registrable Securities intended to be disposed of by the Investor), the Company will use commercially reasonable best efforts to include in the Registration Statement the
Registrable Securities referred to in the Investor’s request; provided, however, that if such Registration Statement relates to a Public Offering, then any participation in such Public Offering by the Investor shall be on substantially
the same terms as the Company’s (or its other stockholders’) participation therein; and provided further that the amount of Registrable Securities to be included in any such Public Offering shall not exceed the maximum number which
the managing underwriter of such Public Offering considers in its reasonable commercial judgment to be appropriate based on market conditions and other relevant factors (the “Maximum Number”). The Investor agrees not to sell any of
the Registrable Securities that may be registered pursuant to this Section 3.08 for a period of one year after the date of this Agreement. The Investor shall have the right to withdraw a request to include Registrable Securities in any Public
Offering pursuant to this Section 3.08 by giving written notice to the Company of its election to withdraw such request at least five business days prior to the proposed effective date of such Registration Statement.
 7

            SECTION  3.09             Allocation of Securities Included in a
Public Offering.    (a)   If the lead managing underwriter for any Public Offering to be effected pursuant to Section 3.08 of this Agreement shall advise the Company and the Investor (each, a “Seller” and,
collectively, the “Sellers”) in writing that the number of shares of Common Stock sought to be included in such Public Offering (including those sought to be offered by the Company, those sought to be offered by the Sellers and
those sought to be offered by Existing Holders) is more than the Maximum Number, the shares of Common Stock to be included in such Public Offering shall be allocated pursuant to the following procedures: First, the Company shall be entitled to
include all of the securities that it has proposed to include, and second, to the extent that any other securities may be included without exceeding the Maximum Number, and subject to rights of any holders of the Company’s Securities under the
agreements listed on Exhibit A (the “Existing Agreements”), the Investor shall be entitled to participate in that registration on a basis no less favorable than that of any other holder of the Company’s securities.

	 	            (b)         Notwithstanding anything to the contrary in Section 3.08 and Section 3.09(a), the Investor shall
be entitled to participate in a Public Offering effected by the Company pursuant to a request under an Existing Agreement only to the extent that the terms of such Existing Agreement permits the Investor to so participate. The Company agrees that in
any modification or amendment of an Existing Agreement, the rights of the Investor as granted under this Agreement will not be adversely affected, and that registration rights granted by the Company under any future registration rights agreement
that the Company may enter into will be on a basis no more favorable than the rights granted to the Investor herein, unless the Company also grants equivalent rights to the Investor at the time of such other agreement.

          SECTION  3.10            Obligations of the Company.   (a)   Whenever the
Company is required by the provisions of this Agreement to use commercially reasonable best efforts to effect the registration of any Common Stock under the Securities Act, the Company shall (i) prepare and, as soon as reasonably possible and in any
event within 45 days following receipt of a notice from the Investor to that effect, file with the SEC a Registration Statement with respect to such Registrable Securities, and shall use commercially reasonable best efforts to cause such
Registration Statement to become effective and to remain effective until the sale of all of the shares of Registrable Securities so registered or, in the case of a “shelf” registration statement filed pursuant to Section 3.06, for the
period specified in that Section; (ii) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be reasonably necessary to make and to keep such Registration
Statement effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities proposed to be registered pursuant to such Registration Statement until the sale of all of the shares of
Registrable Securities so registered or, in the case of a “shelf” registration statement filed pursuant to Section 3.06, for the period specified in that Section; and (iii) take all such other action either necessary or desirable to permit
the shares of Registrable Securities held by the Investor to be registered and disposed of in accordance with the method of disposition described herein.

	 	            (b)        Notwithstanding the foregoing, if the Company shall furnish to the Investor a certificate signed
by its Chairman, Chief Executive Officer or Chief Financial Officer stating that filing a Registration Statement or maintaining effectiveness of a current

 
 8

	 	 
	 	Registration Statement would have a material adverse effect on the Company or its stockholders in relation to any material financing, acquisition or other corporate transaction, and the Company has determined in good
faith that such disclosure is not in the best interests of the Company and its shareholders, the Company shall be entitled to postpone filing or suspend the use by the Investor of the Registration Statement for a reasonable period of time, but not
in excess of 60 consecutive calendar days (a “Blackout Period”). The Company shall be entitled to exercise such suspension rights more than one time in any calendar year; provided that such exercise shall not prevent the
Investor from being entitled to at least 240 days of effective registration rights per year and that no suspension period may commence if it is less than 30 calendar days from the prior such suspension period.

 

	 	          (c)     In connection with any Registration Statement, the following provisions shall apply:

 

	 	          (1)     The Company shall furnish to the Investor, prior to the filing thereof with the SEC, a copy of any Registration Statement,
and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein and shall afford the Investor, the managing underwriters, and their respective counsel, if any, a reasonable opportunity within a reasonable time
period to review and comment on copies of all such documents (including a reasonable opportunity to review copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed.

	 	          (2)     The Company shall take such action as may be necessary so that: (i) any Registration Statement and any amendment thereto
and any Prospectus forming part thereof and any amendment or supplement thereto (and each report or other document incorporated therein by reference) complies in all material respects with the Securities Act and the Exchange Act and the respective
rules and regulations thereunder, (ii) any Registration Statement and any amendment thereto does not, when it becomes effective, contain 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, and (iii) any Prospectus forming part of any Registration Statement, and any amendment or supplement to such Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

	 	          (3)     The Company shall advise the Investor and, if requested by the Investor, confirm such advice in writing of:

	 	 
	 	                 (i)           when a Registration Statement and
any amendment thereto has been filed with the SEC and when the Registration Statement or any post-effective amendment thereto has become effective;

	 	 
	 	                 (ii)           any request by the SEC for amendments
or supplements to the Registration Statement or the Prospectus included therein or for additional information;

 9

	 	                 (iii)         the issuance by the SEC of any stop order
suspending effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;

 

	 	                 (iv)         the receipt by the Company of any notification
with respect to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the initiation of any proceeding for such purpose; and

 

	 	                 (v)         the happening of any event that requires the
making of any changes in the Registration Statement or the Prospectus so that, as of such date, the Registration Statement and the Prospectus do not contain an untrue statement of a material fact and do not omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading (which advice shall be accompanied by an instruction to suspend the use of the
Prospectus relating to such Registrable Securities until the requisite changes have been made).

 

	 	          (4)      The Company shall use commercially reasonable best efforts to prevent the issuance, and if issued to obtain the
withdrawal, of any order suspending the effectiveness of the Registration Statement relating to such Registrable Securities at the earliest possible time.

 

	 	          (5)      The Company shall furnish to the Investor with respect to the Registration Statement relating to such Registrable
Securities, without charge, such number of copies of such Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and all reports, other documents and exhibits (including those incorporated by
reference) as the Investor shall reasonably request.

 

	 	          (6)      The Company shall furnish to the Investor such number of copies of any Prospectus (including any preliminary Prospectus
and any amended or supplemented Prospectus) relating to such Registrable Securities, in conformity with the requirements of the Securities Act, as the Investor may reasonably request in order to effect the offering and sale of the shares of such
Registrable Securities to be offered and sold, but only while the Company shall be required under the provisions hereof to cause the Registration Statement to remain effective, and the Company consents (except during a Blackout Period or event
contemplated by Section 3.10(c)(3)(iii)-(v)) to the use of the Prospectus or any amendment or supplement thereto by the Investor in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment
or supplement thereto.

 

	 	          (7)      Prior to any offering of Registrable Securities pursuant to any Registration Statement, the Company shall use commercially
reasonable best efforts to register or qualify the Registrable Securities covered by such Registration Statement under the securities or blue sky Laws of such states as the Investor shall reasonably request, maintain any such registration or
qualification current until the earlier of the sale of the Registrable Securities so registered or 90 days subsequent to the effective date of the Registration Statement, and do any and all other acts and things either reasonably 

 
 10

	 	 
	 	necessary  or advisable to enable the Investor to consummate the public sale or other disposition of the Registrable Securities in jurisdictions where the Investor desires to effect such sales or other
disposition; provided that the Company shall not be required to take any action that would subject it to the general jurisdiction of the courts of any jurisdiction in which it is not so subject or to qualify as a foreign corporation in any
jurisdiction where the Company is not so qualified.

 

	 	          (8)     In connection with any offering of Registrable Securities registered pursuant to this Agreement, the Company shall
(x) furnish the Investor, at the Company’s expense, on a timely basis with certificates free of any restrictive legends representing ownership of the Registrable Securities being sold in such denominations and registered in such names as
the Investor shall request and (y) instruct the transfer agent and registrar of the Registrable Securities to release any stop transfer orders with respect to the Registrable Securities and to cooperate with the Investor and its underwriters
(if any).

 

	 	          (9)      Upon the occurrence of any event contemplated by Section 3.10(c)(3)(iii)-(v) above, the Company shall promptly prepare a
post-effective amendment to any Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. If the Company notifies the
Investor of the occurrence of any Blackout Period or any event contemplated by Section 3.10(c)(3)(iii)-(v) above, the Investor shall suspend the use of the Prospectus, for a period not to exceed sixty calendar days in accordance with Section
3.10(b), until the requisite changes to the Prospectus have been made.

 

	 	          (10)     To make generally available to the Company’s security holders, including the Investor, as soon as practicable an
earning statement covering the twelve-month period ending on the first anniversary of the effective date of the Registration Statement that satisfies the provisions of Section 11(a) of the Securities Act and the rules and regulations of the SEC
thereunder.

 

	 	          (11)      The Company shall, if requested, promptly include or incorporate in a Prospectus supplement or post-effective amendment
to a Registration Statement, such information as the managing underwriters administering an underwritten offering of the Registrable Securities registered thereunder reasonably request to be included therein and to which the Company does not
reasonably object and shall make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after they are notified of the matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.

 

	 	          (12)      If requested, the Company shall enter into an underwriting agreement with an investment banking firm or firms (in the
case of a registration pursuant to Section 3.01 or 3.06 selected by the Investor) containing representations, warranties, indemnities and agreements then customarily included by an issuer in underwriting agreements with

 11

	 	 
	 	respect to secondary underwritten distributions, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures substantially identical
to those set forth in Section 3.12 (or such other provisions and procedures acceptable to the managing underwriters, if any) with respect to all parties to be indemnified pursuant to Section 3.12 and take all such other actions as are reasonably
requested by the managing underwriters for such underwritten offering in order to expedite or facilitate the registration or the disposition of such Registrable Securities.

 

	 	          (13)     In the event the Investor proposes to conduct an underwritten Public Offering, then the Company shall: (i) make
reasonably available for inspection by the Investor and its counsel, any underwriter participating in any distribution pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Investor or any such
underwriter, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries as shall be reasonably necessary to enable them to conduct a “reasonable” investigation for purposes of
Section 11(a) of the Securities Act; (ii) cause the Company’s officers, directors and employees to make reasonably available for inspection all relevant information reasonably requested by the Investor or any such underwriter,
attorney, accountant or agent in connection with any such Registration Statement, in each case, as is customary for similar due diligence examinations; provided that any information that is designated in writing by the Company, in good faith,
as confidential at the time of delivery of such information shall be kept confidential by the Investor, such underwriter, or any such, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by
Law, or such information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality; (iii) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions
(in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any), addressed to the Investor and the underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by the Investor and underwriters (it being agreed that the matters to be covered by such opinion or written statement by such counsel delivered in connection with such opinions shall
include in customary form, without limitation, as of the date of the opinion and as of the effective date of the Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from such Registration Statement
and the Prospectus included therein, as then amended or supplemented, including the documents incorporated by reference therein, of an untrue statement of a material fact or the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading); (iv) obtain “cold comfort” letters and updates thereof from the independent public accountants of the Company (and, if necessary, any other independent public accountants of
any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to the Investor and the underwriters, if any,
in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with primary underwritten offerings; and (v) deliver such documents and certificates as may be reasonably requested by the
Investor and the

 
 12

	 	 
	 	managing underwriters, if any, and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The foregoing actions set forth in clauses (iii), (iv) and (v)
of this Section 3.10(c)(13) shall be performed at each closing under any underwritten offering to the extent required thereunder.

 

	 	          (14)      The Company will use commercially reasonable best efforts to cause such Registrable Securities to be admitted for
quotation on the American Stock Exchange (“AMEX”) or other stock exchange or trading system on which the Common Stock primarily trades on or prior to the effective date of any Registration Statement hereunder.

 

	 	          (15)     The Company shall use commercially reasonable best efforts to take all other steps reasonably necessary to effect the
registration, offering and sale of the Registrable Securities covered by a Registration Statement contemplated hereby and enter into any other customary agreements and take such other actions, including participation of senior management in
“roadshows” as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities, and the Company shall secure the participation of its senior management for such purposes.

	 	          (16)      The Company shall, at the reasonable request of the Investor, hold periodic meetings with representatives of the Investor
to report on the market for the Company’s securities and opportunities for the Investor to effect sales of such Registrable Securities.

 

	 	          (d)   With a view to making available the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the
Registrable Securities to the public without registration, the Company agrees to:

 

	 	          (1)   Make and keep public information available, as those terms are understood and defined in and interpreted under Rule 144, at all
times;

 

	 	          (2)  During such time as the Investor holds Registrable Securities, furnish to the Investor upon request: (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents of the Company as the Investor may reasonably
request in availing itself of any rule or regulation of the SEC allowing the Investor to sell any such securities without registration.

 
                      SECTION 3.11         Expenses of
Registration.   (a)   Except as provided in subsection (b) of this Section, all fees and expenses incident to the registration and sale of Registrable Securities shall be borne by the Company whether or not a Registration
Statement is filed or becomes effective, including, without limitation, (i) all registration, qualification and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the AMEX and
(B) fees and expenses of compliance with state securities or blue sky Laws (including, without limitation, fees and disbursements of counsel for the Company or the underwriters, or both, in connection with blue sky qualifications of the
Registrable Securities)), (ii) messenger and delivery expenses, word processing, duplicating and printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a
 13

  form eligible for deposit with The Depository Trust Company, and the relevant fees and expenses of the Company’s transfer agent, printing Preliminary Prospectuses, Prospectuses,
Prospectus supplements, including those delivered to or for the account of the Investor as provided in this Agreement, and printing or preparing any underwriting agreement, agreement among underwriters and related syndicate or selling group
agreements, pricing agreements and blue sky memoranda), (iii) fees and disbursements of counsel for the Company, (iv) fees and disbursements of all independent certified public accountants for the Company (including, without limitation, the expenses
of any “comfort letters” required by or incident to such performance), (v) the fees and expenses of any “qualified independent underwriter” or other independent appraiser participating in an offering pursuant to Section 3 of Rule
2720 of the Conduct Rules of the NASD (unless such qualified independent underwriter is required as a result of an affiliation between an underwriter selected by the Investor and the Investor, in which case such fees and expenses will be borne by
the Investor), (vi) Securities Act liability insurance, if the Company so desires such insurance, (vii) all out-of-pocket expenses of the Company (including, without limitation, expenses incurred by the Company, its officers, directors, employees
and agents performing legal or accounting duties or preparing or participating in “roadshow” presentations or of any public relations, investor relations or other consultants or advisors retained by the Company in connection with any
roadshow, including travel and lodging expenses of such roadshows), and (viii) the fees and expenses incurred in connection with the quotation or listing of shares of Common Stock on any securities exchange or automated securities quotation system.
The fees and expenses set forth in this Section 3.11(a) are collectively referred to as “Registration Expenses”.  (b) The Investor shall pay all underwriting discounts and commissions or broker’s commissions incurred in
connection with the sale or other disposition of Registrable Securities for or on behalf of the Investor’s account as well as the fees and expenses of the Investor’s counsel.  (c) The Investor shall pay all out-of-pocket Registration
Expenses reasonably incurred by the Company unless a Registration Statement shall be effected pursuant to Section 3.01 or 3.06 within 270 days after a withdrawal as provided in Section 3.05.
                    SECTION 3.12     Indemnification.  (a)   Indemnification
by the Company.  The Company shall, without limitation as to time, indemnify and hold harmless, to the fullest extent permitted by Law, the Investor and any underwriter participating in the distribution, their respective officers,
directors, partners and agents and employees of each of them, each Person who controls the Investor or any such underwriter (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and the officers, directors,
partners, agents and employees of each such controlling Person (individually, an “Investor Indemnified Person”) from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of
investigating, preparing to defend, defending and appearing as a third-party witness and attorneys’ fees and disbursements) and expenses, including any amounts paid in respect of any settlements (collectively, “Losses”), joint
or several, without duplication, as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or form of prospectus, or in any amendment or supplements
thereto or in any Preliminary Prospectus, or arising out of or based upon, in the case of the Registration Statement or any amendments thereto, any omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, and, in the case of the Prospectus or form of prospectus, or in any amendments or supplements thereto, or in any Preliminary Prospectus, any omission or alleged omission of a 
 14

  material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading except, in either
case, (i) to the extent, but only to the extent, that such untrue or alleged untrue statement or omission or alleged omission has been made therein in reliance upon and in conformity with information furnished in writing to the Company by such
Investor Indemnified Person expressly for use therein and (ii) if the Person asserting any such Losses who purchased the Registrable Securities which are the subject thereof did not receive a copy of an amended Preliminary Prospectus or the final
Prospectus (or the final Prospectus as amended or supplemented) at or prior to the written confirmation of the sale of such Registrable Securities to such Person (if it is determined that the Company has provided such Preliminary Prospectus and it
was the responsibility of such Investor Indemnified Person to provide such Person with a current copy of the Prospectus or amended or supplemented Prospectus, as the case may be) and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact made in such Preliminary Prospectus was corrected in the amended Preliminary Prospectus or the final Prospectus (or the final Prospectus as amended and supplemented).

		
	 	          (b)   Indemnification by Investor.   In connection with any Registration Statement in which the Investor as a holder of
Registrable Securities is participating, the Investor shall severally but not jointly, without limitation as to time, indemnify and hold harmless, to the fullest extent permitted by Law, the Company, any underwriter participating in the distribution
and their respective directors, officers, agents and employees, each Person who controls the Company or any such underwriter (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers,
agents or employees of such controlling Person (individually, a “Company Indemnified Person”), from and against any and all Losses, as incurred, arising out of or based upon (i) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, Prospectus, or form of prospectus, or in any amendment or supplement thereto or in any Preliminary Prospectus, or arising out of or based upon, in the case of the Registration Statement or any amendments
thereto, any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and, in the case of the Prospectus, or form of prospectus, or in any amendments or supplements
thereto, or in any Preliminary Prospectus, any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading,
in either case, to the extent, but only to the extent, that such untrue or alleged untrue statement or omission or alleged omission has been made therein in reliance upon and in conformity with information furnished in writing to the Company by the
Investor expressly for use therein or (ii) the failure of the Investor (if it is determined that it was the responsibility of the Investor) at or prior to the written confirmation of the sale of the Registrable Securities to send or deliver a copy
of an amended Preliminary Prospectus or the final Prospectus (or the final Prospectus as amended or supplemented) to the Person asserting any such Losses who purchased the Registrable Securities which are the subject thereof and the untrue statement
or alleged untrue statement or omission or alleged omission of a material fact made in such Preliminary Prospectus was corrected in the amended Preliminary Prospectus or the final Prospectus (or the final Prospectus as amended and
supplemented).

 
 15

		
	 	          (c)   Conduct of Indemnification Proceedings. Each Indemnified Person shall give prompt notice to the party or parties from which such
indemnity is sought (the “indemnifying parties”) of the commencement of any action or proceeding (including any governmental investigation) (collectively “Proceedings” and individually a
“Proceeding”) with respect to which such Indemnified Person seeks indemnification or contribution pursuant hereto; provided, however, that the failure so to notify the indemnifying parties shall not relieve the
indemnifying parties from any obligation or liability except to the extent that the indemnifying party was otherwise unaware of such Proceeding and the indemnifying parties shall have been materially prejudiced by such failure. The indemnifying
parties shall have the right, exercisable by giving written notice to an Indemnified Person promptly after the receipt of written notice from such Indemnified Person of such Proceeding, to assume, at the indemnifying parties’ expense, the
defense of any such proceeding, with counsel reasonably satisfactory to such Indemnified Person and shall pay as incurred the fees and disbursements of such counsel related to such Proceeding; provided, however, that an Indemnified
Person or Indemnified Persons (if more than one such Indemnified Person is named in any Proceeding) shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person or Indemnified Persons unless: (i) the indemnifying party or parties agree to pay such fees and expenses; or (ii) the indemnifying parties fail promptly to assume the defense of such
Proceeding or fail promptly to employ counsel reasonably satisfactory to such Indemnified Person or Indemnified Persons; or (iii) the named parties to any such action (including any impleaded parties) include both an Indemnified Person and the
indemnifying party, and the Indemnified Person or Indemnified Persons shall have been advised by counsel that there may be a conflict between the positions of the indemnifying party or an Affiliate of the indemnifying party and such Indemnified
Person or Indemnified Persons in conducting the defense of such action or proceeding or that there may be legal defenses available to such Indemnified Person or Indemnified Persons different from or in addition to those available to the indemnifying
party or such Affiliate, in which case, if such Indemnified Person or Indemnified Persons notifies the indemnifying parties in writing that it elects to employ separate counsel at the expense of the indemnifying parties, the indemnifying parties
shall not have the right to assume the defense thereof and such counsel shall be at the expense of the indemnifying parties, it being understood, however, that the indemnifying parties shall not, in connection with any one such Proceeding or
separate but substantially similar or related Proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (together
with appropriate local counsel) at any time for such Indemnified Person or Indemnified Persons. Whether or not such defense is assumed by the indemnifying parties, such indemnifying parties or Indemnified Person or Indemnified Persons will not be
subject to any liability for any settlement made without its or their consent (but such consent will not be unreasonably withheld). No indemnifying party shall be liable for any settlement of any such action or proceeding effected without its
written consent, but if settled with its written consent each indemnifying party jointly and severally agrees, subject to the exception and limitations set forth above, to indemnify and hold harmless each Indemnified Person from and against any loss
or liability by reason of such 

 
 16

		
	 	 
	 	settlement. No indemnification provided for in Section 3.12(a) or 3.12(b) shall be available to any party who shall fail to give notice as provided in this Section 3.12(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure to give such notice, but the failure to give such notice shall not relieve the indemnifying party or parties from any liability which
it or they may have to an Indemnified Person otherwise than on account of the provisions of Section 3.12(a) or 3.12(b). No indemnifying party shall, without the consent of the Indemnified Person, consent to entry of any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Person of a release from all liability in respect of such claim or litigation.

 

		
	 	          (d)   Contribution.   If the indemnification provided for in this Section 3.12 is unavailable to an Indemnified Person or is
insufficient to hold such Indemnified Person harmless for any Losses in respect to which this Section 3.12 would otherwise apply by its terms, except by reasons of Section 3.12(a)(i) or (ii) hereof or the failure of the Indemnified Person to give
notice as required in Section 3.12(c) hereof (provided that the indemnifying party was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure to give such notice), then each applicable
indemnifying party, in lieu of indemnifying such Indemnified Person, shall have an obligation to contribute to the amount paid or payable by such Indemnified Person as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and such Indemnified Person, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.
The amount paid or payable by a party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any Proceeding, to the extent such party would have been indemnified for such
expenses if the indemnification provided for in Section 3.12(a) or Section 3.12(b) were available to such party. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 3.12(d) were determined by pro
rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to above. 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.

 

		
	 	          (e)   Remedies Cumulative.  The indemnity, contribution and expense reimbursement obligations under this Section 3.12 shall be in
addition to any liability each indemnifying party may otherwise have and shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Indemnified Person.

 

		
	 	          (f)   Underwriting Agreement Controls.  In the event of any conflict between the indemnification and contribution terms as herein
set forth and as set forth in any underwriting agreement entered pursuant hereto, the underwriting agreement shall control.

 
 17

		
	 	          (g)   Survival. The obligations of the Company and the Investor under this Section 3.12 shall survive the completion of any offering of
Registrable Securities in a Registration Statement.

 
                     SECTION
3.13     Assignment of Registration Rights.  The registration rights set forth in this Agreement shall be transferable or assignable by the Investor, in whole or in part and from time to time;
provided that each transferee agrees in writing to be subject to all the terms and conditions of this Agreement and provided further that the transferees can only exercise a Demand if they independently or together with the Investor
and/or other transferees, satisfy the conditions and limits in Sections 3.01 through Section 3.06. The Investor shall notify the Company of any such transfer. No assignment by the Investor of its registration rights under this Agreement will have
the effect of increasing the aggregate number of Demand obligations of the Company. The Investor shall not assign the registration rights to more than two parties in the aggregate.
 ARTICLE
IV
 ADDITIONAL AGREEMENTS
                       SECTION 4.01         Delivery of
Information.    The Company shall deliver the following information to the Investor:

	 	            (a)            If the Company is not subject to Section 13 or Section 15(d) of the Exchange
Act, as soon as practicable after the end of each fiscal year of the Company after the date this Agreement, and in any event within 90 days after the end of such period, an annual report (including an audited consolidated balance sheet of the
Company, as at the end of such fiscal year, and a statement of income and a statement of cash flows of the Company, for such year, all prepared in accordance with United States generally accepted accounting principles and setting forth in each case
in comparative form the figures for the previous fiscal year, all in reasonable detail) accompanied by a report and opinion thereon by a firm of independent public accountants.

 

		
	 	            (b)   If the Company is not subject to Section 13 or Section 15(d) of the Exchange Act, as soon as practicable after the end of the
first, second and third quarterly accounting periods after the date of this Agreement in each fiscal year of the Company, and in any event, within 45 days after the end of such periods, an unaudited consolidated balance sheet of the Company as of
the end of each such quarterly period, and a statement of income and a statement of cash flows of the Company for such period and for the current fiscal year to date, prepared in accordance with United States generally accepted accounting principles
and setting forth in each case in comparative form the figures for the comparable periods in the previous fiscal year, all in reasonable detail, subject to year-end audit adjustments and the addition of and any changes to any notes
thereto.

 

		
	 	            (c)   Copies of all reports or other communications (financial or other) furnished to: (i) all shareholders (which will be provided in
the same manner as to all other shareholders), (ii) the Board (as provided in Section 5.01), and (iii) such additional

 
 18

		
	 	information concerning the business and financial condition as the Investor may reasonably request from time to time, subject to the Investor entering into a confidentiality agreement with the Company that is in a
customary form.

 
 ARTICLE V
 BOARD OBSERVATION RIGHTS
                     SECTION 5.01        Board Observation Rights. The Investor shall
appoint one individual by written notice to the Company (the “Investor Representative”), which representative may be removed and replaced by the Investor from time to time, to participate in all meetings of the Board. The Company
shall give the Investor Representative notice of each meeting of the Board at the same time and in the same manner as notice is given to the directors, and the Company shall permit the Investor Representative to attend all meetings in the same
manner as, the directors of the Board participate. The Investor Representative shall have the right to participate in all discussions and deliberations of the Board to the same extent as the directors, except that he or she shall not have the right
to vote upon any matter before the Board. The Investor Representative shall receive all written materials and other information (including without limitation copies of meeting minutes) given to directors in connection with such meetings at the same
time such materials and information are given to the directors. If the Company proposes to take any action by written consent in lieu of a meeting of the Board, the Company shall give written notice thereof to the Investor Representative at the same
time and in the same manner as is given to the directors of the effective date of such consent describing in reasonable detail the nature and substance of such action. The Investor Representative shall have the same observer rights as are set forth
above with respect to any of the Company’s subsidiaries with respect to which a substantial number of the Company’s directors serve as directors. The Company will pay all reasonable and necessary expenses in connection with the Investor
Representative observing the meetings of the Board in the same manner and subject to the same limits as the Company from time to time establishes for expense reimbursement for its directors. The Company shall to the maximum extent permitted (a) by
the Company’s (or its subsidiaries, if applicable) certificate of incorporation or the by-laws or (b) by Law, indemnify and provide liability insurance to the Investor Representative in the same manner provided to the directors.
 ARTICLE VI
 TERMINATION
                     SECTION 6.01       Termination.   Article II, IV and V
of this Agreement shall terminate when the Investor has transferred to an unaffiliated third party the greater of (a) one-half of the number of shares of Common Stock acquired by the Investor pursuant to the Transaction Documents at or prior to the
date of such disposition, and (b) such number of shares of Common Stock as shall leave the Investor with less than five percent of the outstanding shares of Common Stock (calculated on a fully-diluted basis), including in the case of both (a) and
(b),
 19

  Preferred Conversion Shares and Note Conversion Shares. Section 3.12 and the last sentence of Section 5.01 shall survive any termination of this Agreement.
 ARTICLE VII
 MISCELLANEOUS
                     SECTION 7.01       Further Action.  Each of the
parties shall use commercially reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Law, and to execute and deliver such documents and other
papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated by this Agreement.
                     SECTION 7.02       Expenses.  Except as otherwise
specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement
shall be paid by the party incurring such costs and expenses.
                     SECTION
7.03       Notices.  All notices, requests, claims, demands and other communications hereunder (but not including the delivery of information pursuant to Sections 4.01 and 5.01) shall be in writing
and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by telecopy or registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7.03):

	                    (a)	if to the Company:
		
	 	Corautus Genetics Inc.
	 	430 Tenth Street, NW
	 	Suite S-204
	 	Atlanta, GA 30318
	 	Telecopy: (404) 526-6218
	 	Attention: Chief Executive Officer

 20

		
	 	with a copy (which shall not constitute notice) to:
	 	 
	 	McKenna Long & Aldridge LLP
	 	303 Peachtree Street, Suite 5300
	 	Atlanta, GA 30308
	 	Telecopy: (404) 527-4198
	 	Attention: Robert E. Tritt

 

	                    (b)	 if to the Investor:
	 	 
	 	Boston Scientific Corporation
	 	One Boston Scientific Place
	 	Natick, MA 01760-1537
	 	Telecopy: (508) 650 8956
	 	Attention: General Counsel
	 	 
	 	with a copy (which shall not constitute notice) to:
	 	 
	 	Shearman & Sterling LLP
	 	599 Lexington Ave.
	 	New York, New York 10022-6069
	 	Telecopy: (212) 848-7179
	 	Attention: Clare O’Brien, Esq.

                     Any notice, if mailed and properly addresses with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; and notice, if transmitted by facsimile, shall be deemed given when the confirmation of transmission thereof is received by the transmitter.
                     SECTION 7.04       Interpretation and Rules of Construction. In
this Agreement, except to the extent that the context otherwise requires:

	 	          (a)   when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or a
Schedule to, this Agreement unless otherwise expressly indicated;

 

	 	          (b)  the Section headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this
Agreement;

 

	 	          (c)   whenever the words “include”, “includes” or “including” are used in this Agreement, they are deemed to be
followed by the words “without limitation”;

 

	 	          (d)   the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, refer
to this Agreement as a whole and not to any particular provision of this Agreement;

 
 21

	 	          (e)   all terms defined in this Agreement have such defined meanings when used in any certificate or other document made or delivered pursuant
hereto, unless otherwise defined therein;

 

	 	          (f)   the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

 

	 	          (g)   any Law defined or referred to herein or in any agreement or instrument that is referred to herein means such Law or statute as from time to
time amended, modified or supplemented, including by succession of comparable successor Laws;

 

	 	          (h)   the use of “or” is not intended to be exclusive unless expressly indicated otherwise; and

 

	 	          (i)  all references to currency, monetary values and dollars shall mean United States (U.S.) dollars and all payments hereunder shall be made in
United States dollars.

 
                     SECTION 7.05
       Public Announcements.   No party shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated by this Agreement or
otherwise communicate with any news media without the prior written consent of the other party in respect of this Agreement or the transactions contemplated by this Agreement, and the parties shall cooperate as to the timing and contents of any such
press release or public announcement.
                     SECTION 7.06
       Severability.   If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner
in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.
                     SECTION 7.07        Entire Agreement.   The
Transaction Documents constitute the entire agreement of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, among the parties with respect to the subject
matter hereof and thereof.
                     SECTION 7.08
       Remedies.   In the event of a breach by any party of any of its obligations under this Agreement, the other party, in addition to being entitled to exercise all rights provided herein or
granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and the Investor agree that monetary damages would not be adequate compensation for any loss incurred by reason
of a breach by the Company or the Investor, as the case may be, of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, the Company or the Investor, as
the case may be, shall waive the defense
 22

  that a remedy at law would be adequate. No failure or delay on the part of the Company or the Investor in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
                     SECTION 7.09        Assignment.   This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign this Agreement without the prior written consent of the other party; provided, however, that the
Investor may assign registration rights in accordance with Section 3.13, the assignor shall however remain liable for any obligation in connection with a registration which was effected under this Agreement for such assignor.
                     SECTION 7.10       Successors and Assigns.   Except as
otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any shares of Registrable Securities). Nothing in
this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
                     SECTION
7.11       Governing Law.   This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York. The parties unconditionally and irrevocably agree and consent
to the exclusive jurisdiction of the courts located in the State of New York and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and further agree not to commence any such action, suit or proceeding except in any such court.
                     SECTION 7.12       Counterparts.   This Agreement may
be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.
 23

           IN WITNESS WHEREOF, each of the parties has executed, or has caused to be executed by its duly authorized representative, this
Agreement as of the date first written above.

				
	 	CORAUTUS GENETICS INC.
	 	 	 	 
	 	 	 	 
	 	By:	/s/  RICHARD E. OTTO
	 	 	 
 
	 	 	Name:	Richard E. Otto
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	BOSTON SCIENTIFIC CORPORATION
	 	 	 	 
	 	 	 	 
	 	By:	/s/  LAWRENCE C. BEST
	 	 	 
 
	 	 	Name:	Lawrence C. Best
	 	 	Title:	Senior Vice President & Chief Financial Officer

 24

  Exhibit A
 List of Agreements relating to Registration Rights

		
	1.	Investor Rights Agreement between Urogen Corp. Baxter Healthcare Corporation, Ivor Royston, Paul Quadros and Robert Sobol, dated July 8, 1998, as amended by the First Amendment to Investor Rights
Agreement.
	 	 
	2.	Registration Rights Agreement between Genstar Therapeutics Corporation and certain holders dated May 15, 2000.
	 	 
	3.	Warrants agreement with SCO Financial, dated October 18, 2001.
	 	 
	4.	Warrant agreement with Lyon & Lyon, dated May 8, 2002.
	 	 
	5.	Two warrant agreements with CEOCast, Inc., dated June 19, 2002.

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