Document:

EX-10.6

 

Exhibit 10.6

REVOLVING NOTE

	 	 	 
	$100,000

	 	As of April 8, 2005
	

	 	Alexandria, Virginia

     Community Bankers Acquisition Corp., a Delaware corporation (the “Maker”) promises to pay to
the order of Community Bankers Acquisition, LLC (the “Payee”) the principal sum of One Hundred
Thousand Dollars ($100,000) lawful money of the United States of America or such lesser amount as
may have been advanced and be outstanding hereunder, on the terms and conditions described below.

     1. Principal. The principal balance of this Note shall be repayable on the later of
(i) June 30, 2005 or (ii) the date on which Maker consummates an initial public offering of its
securities.

     2. Interest. No interest shall accrue on the unpaid principal balance of this Note.

     3. Advancement of Funding. Maker shall have the right to request from Payee advances
wider this Note and Payee shall make advances under this Note, up to an aggregate amount funded at
any time of One Hundred Thousand and No/100 Dollars ($100,000.00).

     4. Application of Payments. All payments shall be applied first to payment in full of
any costs incurred in the collection of any sum due under this Note, including (without limitation)
reasonable attorneys’ fees, then to the payment in full of any late charges and finally to the
reduction of the unpaid principal balance of this Note.

     5. Events of Default. The following shall constitute Events of Default:

     (a)
Failure to Make Required Payments. Failure by Maker to pay the principal of
or accrued interest on this Note within five (5) business days following the date
when due.

     (b)
Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case
under the Federal Bankruptcy Code, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy. insolvency, reorganization,
rehabilitation or other similar law, or the consent by it to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Maker or for any substantial part of its
property, or the making by it of any assignment for the benefit of creditors, or the
failure of Maker generally to pay its debts as such debts become due, or the taking
of corporate action by Maker in furtherance of any of the foregoing.

     (c)
Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a
court having jurisdiction in the premises in respect of maker in an involuntary case
under the Federal Bankruptcy Code, as now or hereafter

 

 

constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, or appointing a receiver, liquidator, assignee, custodian
trustee, sequestrator (or similar official) of Maker or for any substantial part of
its property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of 60
consecutive days.

     6. Remedies.

     (a) Upon the occurrence of an Event of Default specified in Section 4(a), Payee
may, by written notice to Maker, declare this Note to be due and payable, whereupon
the principal amount of this Note, and all other amounts payable thereunder, shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are, hereby expressly waived, anything contained
herein or in the documents evidencing the same to the contrary notwithstanding.

     (b) Upon the occurrence of an Event of Default specified in Sections 4(b) and
4(c), the unpaid principal balance of, and all other sums payable with regard to
this Note shall automatically and immediately become due and payable, in all cases
without any action on the part of Payee.

     7. Waivers. Maker and all endorsers and guarantors of and sureties for, this Note
waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with
regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee
under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present
or future laws exempting any property, real or personal, or any part of the proceeds arising from
any sale of any such property, from attachment, levy or sale under execution, or providing for any
stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees
that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on
any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any
order desired by Payee.

     8. Unconditional Liability. Maker hereby waives all notices in connection with the
delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees
that its liability shall be unconditional, without regard to the liability of any other party, and
shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or
modification granted or consented to by Payee, and consents to any and all extensions of time,
renewals, waivers, or modifications that may be granted by Payee with respect to the payment or
other provisions of this Note, and agree that additional makers, endorsers, guarantors, or sureties
may become parties hereto without notice to them or affecting their liability hereunder.

     9. Notices. Any notice called for hereunder shall be deemed properly given if (i)
sent by certified mail, return receipt requested, (ii) personally delivered, (iii) dispatched by
any form of private or governmental express mail or delivery service providing receipted delivery,

 

 

(iv) sent by telefacsimile or (v) sent by email, to the following addresses or to such other
address as either party may designate by notice in accordance with this Section:

	 	 	 	 	 
	 

	 	If to Maker:
	 	Community Bankers Acquisition Corp.
	

	 	 	 	717 King Street
	

	 	 	 	Alexandria, Virginia 22314
	

	 	 	 	Attn: David Zalman, Chairman of the Board
	 
	 	 	 	 
	

	 	If to Payee:
	 	Community Bankers Acquisition LLC
	

	 	 	 	717 King Street
	

	 	 	 	Alexandria, Virginia 22314
	

	 	 	 	Attn: Gary A. Simanson, Manager

Notice shall be deemed given on the earlier of (i) actual receipt by the receiving party, (ii) the
date shown on a facsimile transmission confirmation, (iii) the date on which an email transmission
was received by the receiving party’s on-line access provider (iv) the date reflected on a signed
delivery receipt, or (vi) two (2) Business Days following tender of delivery or dispatch by express
mail or delivery service.

     10. Construction. This Note Shall be construed and enforced in accordance with the laws of the
State of Delaware.

     11. Severability. Any provision contained in this Note which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be
duly executed by its President the day and year first above written.

	 	 	 	 	 
	 	 	COMMUNITY BANKERS ACQUISITION CORP.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Gary A. Simanson
	

	 	 	 	President and Chief Executive Officerexv4w2

 

Exhibit 4.2

EXECUTION COPY

PRESTWICK PHARMACEUTICALS, INC.

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

     This Amended and Restated Investor Rights Agreement (the “Agreement”) is entered into
as of the 30th day of November, 2004 by and among Prestwick Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), and each of the persons and entities listed on
Exhibit A hereto (the “Investors”).

Recitals

     Whereas, certain of the Investors (the “Series A Investors”) are the holders of the
Company’s Series A-1 Preferred Stock and Series A-2 Preferred Stock (collectively, the “Series A
Stock”) issued pursuant to that certain Series A Preferred Stock and Warrant Purchase Agreement
dated as of February 26, 2003, as amended by First Amendment to Series A Preferred Stock and
Warrant Purchase Agreement dated as of November 24, 2003;

     Whereas, the Company and the Series A Investors are parties to the Investor Rights
Agreement dated as of February 26, 2003 (the “Prior Agreement”), pursuant to which the Series A
Investors obtained, among other rights and obligations, certain rights of registration, first
refusal and information;

     Whereas, certain of the Investors (the “Series B Investors”) are purchasing shares of
the Company’s Series B Preferred Stock (the “Series B Stock,” and together with the Series A Stock,
the “Preferred Stock”) pursuant to that certain Series B Preferred Stock Purchase Agreement of even
date herewith, as may be amended from time to time (the “Purchase Agreement”), and desire to obtain
certain rights of registration, first refusal and information, among other rights and obligations;

     Whereas, the obligations in the Purchase Agreement are conditioned upon the execution
and delivery of this Agreement; and

     Whereas, in connection with the consummation of the financing contemplated by the
Purchase Agreement, the parties desire to amend and restate the Prior Agreement in order to extend
the Series B Investors certain rights of registration, first refusal and information, among other
rights and obligations, as set forth below.

Agreement

     Now, Therefore, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree
hereto as follows:

 

 

Table Of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	SECTION 1.
	 	       GENERAL	 	 	2	 
	 
	 	 	 	 	 	 
	1.1
	 	Definitions	 	 	2	 
	 
	 	 	 	 	 	 
	SECTION 2.
	 	       REGISTRATION; RESTRICTIONS ON TRANSFER	 	 	4	 
	 
	 	 	 	 	 	 
	2.1
	 	Restrictions on Transfer	 	 	4	 
	 
	 	 	 	 	 	 
	2.2
	 	Demand Registration	 	 	5	 
	 
	 	 	 	 	 	 
	2.3
	 	Piggyback Registrations	 	 	7	 
	 
	 	 	 	 	 	 
	2.4
	 	Form S-3 Registration	 	 	8	 
	 
	 	 	 	 	 	 
	2.5
	 	Expenses of Registration	 	 	9	 
	 
	 	 	 	 	 	 
	2.6
	 	Obligations of the Company	 	 	9	 
	 
	 	 	 	 	 	 
	2.7
	 	Termination of Registration Rights	 	 	11	 
	 
	 	 	 	 	 	 
	2.8
	 	Delay of Registration; Furnishing Information	 	 	11	 
	 
	 	 	 	 	 	 
	2.9
	 	Indemnification	 	 	12	 
	 
	 	 	 	 	 	 
	2.10
	 	Assignment of Registration Rights	 	 	14	 
	 
	 	 	 	 	 	 
	2.11
	 	Amendment of Registration Rights	 	 	14	 
	 
	 	 	 	 	 	 
	2.12
	 	Limitation on Subsequent Registration Rights	 	 	14	 
	 
	 	 	 	 	 	 
	2.14
	 	Agreement to Furnish Information	 	 	15	 
	 
	 	 	 	 	 	 
	2.15
	 	Rule 144 Reporting	 	 	15	 
	 
	 	 	 	 	 	 
	SECTION 3.
	 	       COVENANTS OF THE COMPANY	 	 	15	 
	 
	 	 	 	 	 	 
	3.1
	 	Basic Financial Information and Reporting	 	 	16	 
	 
	 	 	 	 	 	 
	3.2
	 	Inspection Rights	 	 	16	 
	 
	 	 	 	 	 	 
	3.4
	 	Confidentiality of Records	 	 	17	 
	 
	 	 	 	 	 	 
	3.5
	 	Reservation of Common Stock	 	 	17	 
	 
	 	 	 	 	 	 
	3.6
	 	Key Person Insurance	 	 	17	 
	 
	 	 	 	 	 	 
	3.11
	 	Proprietary Information and Inventions Agreement	 	 	19	 
	 
	 	 	 	 	 	 
	3.12
	 	Vesting Schedules and Related Matters	 	 	19	 
	 
	 	 	 	 	 	 
	3.17
	 	Notice of Material Litigation, Defaults or Judgments	 	 	19	 
	 
	 	 	 	 	 	 
	3.18
	 	Compliance with Laws	 	 	20	 
	 
	 	 	 	 	 	 
	3.22
	 	Termination of Covenants	 	 	20	 
	 
	 	 	 	 	 	 
	SECTION 4.
	 	       RIGHTS OF FIRST REFUSAL	 	 	20	 
	 
	 	 	 	 	 	 
	4.1
	 	Subsequent Offerings	 	 	20	 

i.

 

Table Of Contents
(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	4.2
	 	Exercise of Rights	 	 	21	 
	 
	 	 	 	 	 	 
	4.3
	 	Issuance of Equity Securities to Other Persons	 	 	21	 
	 
	 	 	 	 	 	 
	4.4
	 	Termination and Waiver of Rights of First Refusal	 	 	21	 
	 
	 	 	 	 	 	 
	4.5
	 	Transfer of Rights of First Refusal	 	 	21	 
	 
	 	 	 	 	 	 
	4.6
	 	Excluded Securities	 	 	21	 
	 
	 	 	 	 	 	 
	SECTION 5.
	 	       MISCELLANEOUS	 	 	22	 
	 
	 	 	 	 	 	 
	5.1
	 	Governing Law	 	 	22	 
	 
	 	 	 	 	 	 
	5.2
	 	Successors and Assigns	 	 	22	 
	 
	 	 	 	 	 	 
	5.3
	 	Entire Agreement	 	 	22	 
	 
	 	 	 	 	 	 
	5.4
	 	Severability	 	 	22	 
	 
	 	 	 	 	 	 
	5.5
	 	Amendment and Waiver	 	 	23	 
	 
	 	 	 	 	 	 
	5.6
	 	Delays or Omissions	 	 	23	 
	 
	 	 	 	 	 	 
	5.7
	 	Notices	 	 	23	 
	 
	 	 	 	 	 	 
	5.8
	 	Attorneys’ Fees	 	 	23	 
	 
	 	 	 	 	 	 
	5.9
	 	Titles and Subtitles	 	 	23	 
	 
	 	 	 	 	 	 
	5.10
	 	Additional Investors	 	 	24	 
	 
	 	 	 	 	 	 
	5.11
	 	Counterparts	 	 	24	 
	 
	 	 	 	 	 	 
	5.12
	 	Aggregation of Stock	 	 	24	 
	 
	 	 	 	 	 	 
	5.13
	 	Pronouns	 	 	24	 
	 
	 	 	 	 	 	 

ii.

 

SECTION 1. GENERAL.

     1.1 Definitions. As used in this Agreement the following terms shall have the following
respective meanings:

          (a) “Certificate” means the Company’s Amended and Restated Certificate of Incorporation, as
filed with the Delaware Secretary of State on or about the date hereof.

          (b) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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

          (d) “Holder” means any person owning of record Registrable Securities that have not been sold
to the public or any assignee of record of such Registrable Securities in accordance with Section
2.10 hereof.

          (e) “Initial Offering” means the Company’s first firm commitment underwritten public offering
of its Common Stock registered under the Securities Act.

          (f) “Material Adverse Change” shall mean any event, matter, condition or circumstance which
(i) would materially impair the ability of the Company to perform or observe its obligations under
or in respect of this Agreement; (ii) affects the legality, validity, binding effect or
enforceability of this Agreement; or (iii) would involve a prospective material adverse change in
or affect the business, management, financial position, or results of operations of the Company.

          (g) “Major Investor” means an Investor (together with its affiliates) that owns not less than
3,500,000 shares of Registrable Securities (as adjusted for stock splits, combinations and the
like).

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

          (i) “Registrable Securities” means (a) Common Stock of the Company issuable or issued upon
conversion of the Shares, (b) Common Stock of the Company issuable or issued pursuant to securities
purchased by a Holder pursuant to Section 4 of this Agreement after the date hereof, (c) Common
Stock of the Company issuable or issued upon exercise of any warrants held by any Investor, and (d)
any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such above-described securities. Notwithstanding the
foregoing, Registrable Securities shall not include any securities (i) sold by a person to the
public either pursuant to a registration statement or Rule 144, (ii) sold in a private transaction
in which the transferor’s rights under Section 2 of

2.

 

this Agreement are not assigned or (iii) held by a Holder (together with its affiliates) if,
as reflected on the Company’s list of stockholders, such Holder (together with its affiliates)
holds less than 2% of the Company’s outstanding Common Stock (treating all shares of Preferred
Stock on an as converted basis), the Company has completed its Initial Offering and all shares of
Common Stock of the Company issuable or issued upon conversion of the Shares held by and issuable
to such Holder (and its affiliates) may be sold pursuant to Rule 144 during any 90 day period.

          (j) “Registrable Securities then outstanding” shall be the number of shares determined by
calculating the total number of shares of the Company’s Common Stock that are Registrable
Securities and either (a) are then issued and outstanding or (b) are issuable pursuant to then
exercisable or convertible securities.

          (k) “Registration Expenses” shall mean all expenses incurred by the Company in complying with
Sections 2.2, 2.3 and 2.4 hereof, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, reasonable fees and
disbursements not to exceed Twenty Five Thousand Dollars ($25,000) of a single special counsel for
the Holders, blue sky fees and expenses and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of regular employees of the
Company which shall be paid in any event by the Company).

          (l) “Rights Investor” means an Investor (together with its affiliates) that owns not less than
500,000 shares of Registrable Securities (as adjusted for stock splits, combinations and the like).

          (m) “SEC” or “Commission” means the Securities and Exchange Commission.

          (n) “Securities Act” shall mean the Securities Act of 1933, as amended.

          (o) “Selling Expenses” shall mean all underwriting discounts and selling commissions
applicable to the sale.

          (p) “Shares” shall mean the Preferred Stock held by the Investors and their permitted assigns.

          (q) “Special Registration Statement” shall mean a registration statement relating to (i) any
employee benefit plan, (ii) any corporate reorganization or transaction under Rule 145 of the
Securities Act, including any registration statements related to the issuance or resale of
securities issued in such a transaction, or (iii) a registration related to stock issued upon
conversion of debt securities.

3.

 

SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.

     2.1 Restrictions on Transfer.

          (a) Each Holder agrees not to make any disposition of all or any portion of the Shares or
Registrable Securities unless and until:

               (i) There is then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such registration statement;
or

               (ii) (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B)
such Holder shall have notified the Company of the proposed disposition and shall have furnished
the Company with a detailed statement of the circumstances surrounding the proposed disposition,
and (C) if reasonably requested by the Company, such Holder shall have furnished the Company with
an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such shares under the Securities Act. It is agreed that the Company will
not require opinions of counsel for transactions made pursuant to Rule 144, except in unusual
circumstances.

          (b) Notwithstanding the provisions of subsection (a) above, no registration statement or
opinion of counsel shall be necessary for a transfer by a Holder which is (A) a partnership
transferring to its partners or former partners in accordance with partnership interests or to an
affiliate, (B) a corporation to its shareholders in accordance with their interest in the
corporation or to an affiliate, (C) a limited liability company to its members or former members in
accordance with their interest in the limited liability company or to an affiliate, or (D) to the
Holder’s family member or trust for the benefit of an individual Holder; provided that in each case
the transferee will agree in writing to be subject to the terms of this Agreement to the same
extent as if he were an original Holder hereunder.

          (c) Each certificate representing Shares or Registrable Securities shall be stamped or
otherwise imprinted with a legend substantially similar to the following (in addition to any legend
required under applicable state securities laws):

	 	 	 	 	 
	 

	 	THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
	 	 
	 
	 	 	 	 
	

	 	THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES

REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND

CONDITIONS OF A	 	 

4.

 

	 	 	 	 	 
	

	 	CERTAIN AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT BY AND
BETWEEN THE STOCKHOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT
MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY.	 	 

          (d) The Company shall be obligated to reissue promptly unlegended certificates at the request
of any Holder thereof if the Company has completed its Initial Offering and the Holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable
to the Company to the effect that the securities proposed to be disposed of may lawfully be so
disposed of without registration, qualification and legend.

          (e) Any legend endorsed on an instrument pursuant to applicable state securities laws and the
stop-transfer instructions with respect to such securities shall be removed upon receipt by the
Company of an order of the appropriate blue sky authority authorizing such removal.

     2.2 Demand Registration.

          (a) Subject to the conditions of this Section 2.2, if the Company shall receive a written
request from either (1) the Holders of at least fifty percent (50%) of the Registrable Securities
then outstanding held by all Investors, in the case of the Initial Offering, or (2) the Holders of
at least twenty five percent (25%) of the Registrable Securities then outstanding held by all
Investors, if the Initial Offering has been completed (collectively, the “Initiating Holders”) that
the Company file a registration statement under the Securities Act and (i) if the requested
registration is with respect to at least thirty three and one-third percent (33 1/3%) of the
Registrable Securities then outstanding held by all Investors or (ii) if the anticipated aggregate
offering price of such registration, net of underwriting discounts and commissions, would exceed
$15,000,000, then the Company shall, within thirty (30) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this Section 2.2, effect,
as expeditiously as reasonably possible, but in any event within ninety (90) days of the written
request, the registration under the Securities Act of all Registrable Securities that the Holders
request to be registered.

          (b) If the Initiating Holders intend to distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise the Company as a part of their request
made pursuant to this Section 2.2 or any request pursuant to Section 2.4 and the Company shall
include such information in the written notice referred to in Section 2.2(a) or Section 2.4(a), as
applicable. In such event, the right of any Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or underwriters selected for
such underwriting by the Company’s Board of Directors and approved by a majority in interest of the
Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the
Company). Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the
underwriter advises the Company that marketing factors require

5.

 

a limitation of the number of securities to be underwritten (including Registrable Securities)
then the Company shall so advise all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares that may be included in the underwriting
shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the
number of Registrable Securities held by all such Holders (including the Initiating Holders);
provided, however, that the number of shares of Registrable Securities to be included in such
underwriting and registration shall not be reduced unless all other securities of the Company are
first entirely excluded from the underwriting and registration. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the registration.

          (c) The Company shall not be required to effect a registration pursuant to this Section 2.2:

               (i) prior to the earlier of (A) the third anniversary of the date of this Agreement or (B) one
hundred eighty (180) days following the effective date of the registration statement pertaining to
the Initial Offering;

               (ii) after the Company has effected two registrations pursuant to this Section 2.2 and all
such registrations have been declared or ordered effective;

               (iii) during the period starting with the date of filing of, and ending on the date ninety
(90) days following the effective date of a non-Initial Offering registration statement pertaining
to a public offering, other than pursuant to a Special Registration Statement; provided that the
Company makes reasonable good faith efforts to cause such registration statement to become
effective;

               (iv) if within thirty (30) days of receipt of a written request from Initiating Holders
pursuant to Section 2.2(a), the Company gives notice to the Holders of the Company’s intention to
file a registration statement for a public offering, other than pursuant to a Special Registration
Statement, within sixty (60) days of the time of request;

               (v) if the Company shall furnish to Holders requesting a registration statement pursuant to
this Section 2.2, a certificate signed by the Chairman of the Board stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company
and its stockholders for such registration statement to be effected at such time, in which event
the Company shall have the right to defer such filing for a period of not more than ninety (90)
days after receipt of the request of the Initiating Holders; provided that such right to delay a
request shall be exercised by the Company not more than once in any twelve (12) month period;

               (vi) if the Initiating Holders propose to dispose of shares of Registrable Securities that may
be immediately registered on Form S-3; or

               (vii) in any particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to service of process in such
jurisdiction and except as may be required by the Securities Act.

6.

 

     2.3 Piggyback Registrations. The Company shall notify all Holders of Registrable Securities
in writing at least twenty (20) days prior to the filing of any registration statement under the
Securities Act for purposes of a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings of securities of the Company,
but excluding Special Registration Statements) and will afford each such Holder an opportunity to
include in such registration statement all or part of such Registrable Securities held by such
Holder. Each Holder desiring to include in any such registration statement all or any part of the
Registrable Securities held by it shall, within twenty (20) days after the above-described notice
from the Company, so notify the Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities by such Holder. If a Holder decides not to include all
of its Registrable Securities in any registration statement thereafter filed by the Company, such
Holder shall nevertheless continue to have the right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by the Company with
respect to offerings of its securities, all upon the terms and conditions set forth herein.

          (a) Underwriting. If the registration statement under which the Company gives notice under
this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of
Registrable Securities. In such event, the right of any such Holder to be included in a
registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s participation in
such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to
the extent provided herein. All Holders proposing to distribute their Registrable Securities
through such underwriting shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any
other provision of this Agreement, if the underwriter determines in good faith that marketing
factors require a limitation of the number of shares to be underwritten, the number of shares that
may be included in the underwriting shall be allocated, first, to the Company; second, to the
Holders on a pro rata basis based on the total number of Registrable Securities held by the
Holders; and third, to any stockholder of the Company (other than a Holder) on a pro rata basis.
No such reduction shall (i) reduce the securities being offered by the Company for its own account
to be included in the registration and underwriting, or (ii) reduce the amount of securities of the
selling Holders included in the registration below thirty percent (30%) of the total amount of
securities included in such registration, unless such offering is the Initial Offering and such
registration does not include shares of any other selling stockholders, in which event any or all
of the Registrable Securities of the Holders may be excluded in accordance with the immediately
preceding sentence. In no event will shares of any other selling stockholder be included in such
registration which would reduce the number of shares which may be included by Holders without the
written consent of Holders of not less than sixty seven percent (67%) of the Registrable Securities
proposed to be sold in the offering. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from such underwriting
shall be excluded and withdrawn from the registration; provided, however, that if, by the
withdrawal of such securities a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all

7.

 

Holders who have included Registrable Securities in the registration the right to include
additional Registrable Securities on a pro rata basis based on the total number of Registrable
Securities held by such Holders. For any Holder which is a partnership, limited liability company
or corporation, the partners, retired partners, members, retired members and stockholders of such
Holder, or the estates and family members of any such partners or retired partners or members or
retired members, and any trusts for the benefit of any of the foregoing persons shall be deemed to
be a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be based upon
the aggregate amount of shares carrying registration rights owned by all entities and individuals
included in such “Holder,” as defined in this sentence.

          (b) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 2.3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the Company in accordance
with Section 2.5 hereof.

     2.4 Form S-3 Registration. After the Company has qualified for the use of Form S–3, in case
the Company shall receive from the Holders of at least ten percent (10%) of the then-outstanding
Registrable Securities a written request or requests that the Company effect a registration on Form
S-3 (or any successor to Form S-3) or any similar short-form registration statement and any related
qualification or compliance under applicable state securities laws with respect to all or a part of
the Registrable Securities owned by such Holder or Holders, the Company will:

          (a) promptly give written notice of the proposed registration, and any related qualification
or compliance, to all other Holders of Registrable Securities; and

          (b) as soon as practicable, effect such registration and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale and distribution of
all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given within fifteen (15)
days after receipt of such written notice from the Company; provided, however, that the Company
shall not be obligated to effect any such registration, qualification or compliance pursuant to
this Section 2.4:

               (i) if Form S-3 is not available for such offering by the Holders, or

               (ii) if the Holders, together with the holders of any other securities of the Company to be
included in such registration, propose to sell Registrable Securities and such other securities (if
any) at an aggregate price to the public of less than Three Million Dollars ($3,000,000), or

               (iii) if within thirty (30) days of receipt of a written request from any Holder or Holders
pursuant to this Section 2.4, the Company gives notice to such Holder or Holders of the Company’s
intention to commence a public offering within sixty (60) days, other than pursuant to a Special
Registration Statement;

8.

 

               (iv) if the Company shall furnish to the Holders a certificate signed by the Chairman of the
Board of Directors of the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its stockholders for such Form
S-3 registration to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more than ninety (90)
days after receipt of the request of the Holder or Holders under this Section 2.4; provided,
however, that such right to delay a request shall be exercised by the Company not more than once in
any twelve (12) month period, or

               (v) if the Company has, within the twelve (12) month period preceding the date of such
request, already effected two (2) registrations on Form S-3 for the Holders pursuant to this
Section 2.4, or

               (vi) in any particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such registration,
qualification or compliance.

          (c) Subject to the foregoing, the Company shall file a Form S-3 registration statement
covering the Registrable Securities and other securities so requested to be registered as soon as
practicable after receipt of the request or requests of the Holders. The Holders shall be entitled
to an unlimited number of registrations under this Section 2.4 and registrations effected pursuant
to this Section 2.4 shall not be counted as demands for registration or registrations effected
pursuant to Section 2.2.

     2.5 Expenses of Registration. Except as specifically provided herein, all Registration
Expenses incurred in connection with any registration, qualification or compliance pursuant to
Section 2.2 or any registration under Section 2.3 or Section 2.4 herein shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be
borne by the holders of the securities so registered pro rata on the basis of the number of shares
so registered. The Company shall not, however, be required to pay for expenses of any registration
proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been subsequently
withdrawn by the Initiating Holders unless (a) the withdrawal is based upon material adverse
information concerning the Company of which the Initiating Holders were not aware at the time of
such request or (b) the Holders of a majority of Registrable Securities agree to forfeit their
right to one requested registration pursuant to Section 2.2, as applicable, in which event such
right shall be forfeited by all Holders. If the Holders are required to pay the Registration
Expenses, such expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares for which
registration was requested. If the Company is required to pay the Registration Expenses of a
withdrawn offering pursuant to clause (a) above, then the Holders shall not forfeit their rights
pursuant to Section 2.2 to a demand registration.

     2.6 Obligations of the Company. Whenever required to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably possible:

          (a) Prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use all reasonable efforts to cause such registration statement to

9.

 

become effective, and, upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement effective for up to one hundred
twenty (120) days or, if earlier, until the Holder or Holders have completed the distribution
related thereto; provided, however, that at any time, upon written notice to the participating
Holders and for a period not to exceed thirty (30) days thereafter (the “Suspension Period”), the
Company may suspend the use or effectiveness of any registration statement (and the Initiating
Holders hereby agree not to offer or sell any Registrable Securities pursuant to such registration
statement during the Suspension Period) if the Company reasonably believes that the Company may, in
the absence of such delay or suspension hereunder, be required under state or federal securities
laws to disclose any corporate development the disclosure of which could reasonably be expected to
have a material adverse effect upon the Company, its stockholders, a potentially significant
transaction or event involving the Company, or any negotiations, discussions, or proposals directly
relating thereto. In the event that the Company shall exercise its right to delay or suspend the
filing or effectiveness of a registration hereunder, the applicable time period during which the
registration statement is to remain effective shall be extended by a period of time equal to the
duration of the Suspension Period. The Company may extend the Suspension Period for an additional
consecutive sixty (60) days with the consent of the holders of at least sixty seven percent (67%)
of the Registrable Securities registered under the applicable registration statement, which consent
shall not be unreasonably withheld. If so directed by the Company, all Holders registering shares
under such registration statement shall use their best efforts to deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such Holders’ possession,
of the prospectus relating to such Registrable Securities current at the time of receipt of such
notice.

          (b) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement for the period set forth in subsection (a)
above.

          (c) Furnish to the Holders such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition of Registrable Securities owned
by them.

          (d) Use its reasonable efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.

          (e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Holder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.

10.

 

          (f) Notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing. The Company will use reasonable efforts to amend or
supplement such prospectus in order to cause such prospectus not to include any untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances then existing.

          (g) Cause all such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which similar securities issued by the Company are then listed; provided
that in the case of a registration effected pursuant to Section 2.2 above, which registration
constitutes the Initial Offering, the Registrable Securities shall be listed on a national
securities exchange or the NASDAQ National Market System.

          (h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the
effective date of such registration.

          (i) Use its reasonable efforts to furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold through underwriters, (i)
an opinion, dated as of such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date,
from the independent certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters.

     2.7 Termination of Registration Rights. All registration rights granted under this Section 2
shall terminate and be of no further force and effect five (5) years after the date of the
Company’s Initial Offering. In addition, a Holder’s registration rights shall expire if (a) the
Company has completed its Initial Offering and is subject to the provisions of the Exchange Act,
and (b) all Registrable Securities held by and issuable to such Holder (and its affiliates,
partners, former partners, members and former members) may be sold under Rule 144 during any ninety
(90) day period.

2.8 Delay of Registration; Furnishing Information.

          (a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 2.

          (b) It shall be a condition precedent to the obligations of the Company to take any action
pursuant to Sections 2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them and

11.

 

the intended method of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.

     2.9 Indemnification. In the event any Registrable Securities are included in a registration
statement under Sections 2.2, 2.3 or 2.4:

          (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder,
the partners, members, officers and directors of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities
law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state
securities law in connection with the offering covered by such registration statement; and the
Company will reimburse each such Holder, partner, member, officer, director, underwriter or
controlling person for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this Section 2.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the
Company be liable in any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection with such
registration by such Holder, partner, member, officer, director, underwriter or controlling person
of such Holder.

          (b) To the extent permitted by law, each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration qualifications or compliance is
being effected, severally and not jointly, indemnify and hold harmless the Company, each of its
directors, its officers and each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under such registration
statement or any of such other Holder’s partners, directors or officers or any person who controls
such Holder, against any losses, claims, damages or liabilities (joint or several) to which the
Company or any such director, officer, controlling person, underwriter or other such Holder, or
partner, director, member, officer or controlling person of such other Holder may become subject
under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any
of the following statements: (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement or incorporated reference therein, including any
preliminary prospectus or final prospectus contained therein or any

12.

 

amendments or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the Securities Act
(collectively, a “Holder Violation”), in each case to the extent (and only to the extent) that such
Holder Violation occurs in reliance upon and in conformity with written information furnished by
such Holder under an instrument duly executed by such Holder and stated to be specifically for use
in connection with such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer, controlling person,
underwriter or other Holder, or partner, member, officer, director or controlling person of such
other Holder in connection with investigating or defending any such loss, claim, damage, liability
or action if it is judicially determined that there was such a Holder Violation; provided, however,
that the indemnity agreement contained in this Section 2.9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably withheld; provided
further, that in no event shall any indemnity under this Section 2.9 exceed the net proceeds from
the offering received by such Holder.

          (c) Promptly after receipt by an indemnified party under this Section 2.9 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 2.9,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing interests between such

indemnified party and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action, if materially prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section 2.9, but the
omission so to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this Section 2.9.

          (d) If the indemnification provided for in this Section 2.9 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages
or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the Violation(s) or Holder
Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of the indemnified
party shall be determined by a court of law by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to state a

13.

 

material fact relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such Holder.

          (e) The obligations of the Company and Holders under this Section 2.9 shall survive completion
of any offering of Registrable Securities in a registration statement and the termination of this
Agreement. No indemnifying party, in the defense of any such claim or litigation, shall, except
with the consent of each indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect to such claim or
litigation.

     2.10 Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or
assignee of Registrable Securities which (a) is a subsidiary, parent, general partner, limited
partner, retired partner, member or retired member, or stockholder of a Holder, (b) is a Holder’s
family member or trust for the benefit of an individual Holder, (c) acquires at least 50,000 shares
of Registrable Securities (as adjusted for stock splits and combinations), or (d) is an entity
affiliated by common control (or other related entity) with such Holder; provided, however, (i) the
transferor shall, within ten (10) days after such transfer, furnish to the Company written notice
of the name and address of such transferee or assignee and the securities with respect to which
such registration rights are being assigned and (ii) such transferee shall agree to be subject to
all restrictions set forth in this Agreement.

     2.11 Amendment of Registration Rights. Any provision of this Section 2 may be amended and the
observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Holders of at
least sixty seven percent (67%) of the Registrable Securities then outstanding; provided, that any
amendment or waiver of this Section 2 that adversely changes the rights or obligations of any
holder of Registrable Securities under this Section 2 in a manner that is different from the
changes imposed on the other holders of Registrable Securities shall also require the written
consent of such holder of Registrable Securities. Any amendment or waiver effected in accordance
with this Section 2.11 shall be binding upon each Holder and the Company. By acceptance of any
benefits under this Section 2, Holders of Registrable Securities hereby agree to be bound by the
provisions hereunder.

     2.12 Limitation on Subsequent Registration Rights. Other than as provided in Section 5.10,
after the date of this Agreement, the Company shall not, without the prior written consent of the
Investors holding at least sixty seven percent (67%) of the Registrable Securities then outstanding
held by all Investors, enter into any agreement with any holder or prospective holder of any
securities of the Company that would grant such holder registration rights pari passu or senior to
those granted to the Investors hereunder, other than the right to a Special Registration Statement.

     2.13 “Market Stand-Off” Agreement. Each Holder hereby agrees, if so requested by the Company
and the representative of the underwriters of Common Stock (or other securities) of

14.

 

the Company (the “Underwriter Representative”), that such Holder shall not sell, transfer,
make any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale with respect to any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the registration) for
a period specified by the representative of the underwriters of Common Stock (or other securities)
of the Company not to exceed one hundred eighty (180) days following the effective date of a
registration statement of the Company filed under the Securities Act; provided that all officers
and directors of the Company and holders of at least one percent (1%) of the Company’s voting
securities enter into similar agreements (collectively, the “Similar Agreements”), and provided,
further, that if the Underwriter Representative shortens or waives these restrictions set forth in
any of the Similar Agreements, the restrictions on the Holders shall be similarly shortened or
waived on a pro rata basis.

     2.14 Agreement to Furnish Information. Each Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company or the underwriter that are consistent
with the Holder’s obligations under Section 2.13 or that are necessary to give further effect
thereto. In addition, if requested by the Company or the representative of the underwriters of
Common Stock (or other securities) of the Company, each Holder shall provide, within ten (10) days
of such request, such information as may be required by the Company or such representative in
connection with the completion of any public offering of the Company’s securities pursuant to a
registration statement filed under the Securities Act. The obligations described in Section 2.13
and this Section 2.14 shall not apply to a registration effected on a Special Registration
Statement. The Company may impose stop-transfer instructions with respect to the shares of Common
Stock (or other securities) subject to the foregoing restriction until the end of said one hundred
eighty (180) day period. Each Holder agrees that any transferee of any shares of Registrable
Securities shall be bound by Sections 2.13 and 2.14. The underwriters of the Company’s stock are
intended third party beneficiaries of Sections 2.13 and 2.14 and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.

     2.15 Rule 144 Reporting. With a view to making available to the Holders the benefits of
certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to
the public without registration, the Company agrees to use its best efforts to:

          (a) Make and keep public information available, as those terms are understood and defined in
SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times
after the effective date of the first registration filed by the Company for an offering of its
securities to the general public;

          (b) File with the SEC, in a timely manner, all reports and other documents required of the
Company under the Exchange Act; and

          (c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon
request: a written statement by the Company as to its compliance with the reporting requirements
of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has become
subject to such reporting requirements); a copy of the most recent annual or quarterly report of
the Company filed with the Commission; and such other reports and

15.

 

documents as a Holder may reasonably request in connection with availing itself of any rule or
regulation of the SEC allowing it to sell any such securities without registration.

SECTION 3. COVENANTS OF THE COMPANY.

     3.1 Basic Financial Information and Reporting.

          (a) The Company will maintain true books and records of account in which full and correct
entries will be made of all its business transactions pursuant to a system of accounting
established and administered in accordance with generally accepted accounting principles
consistently applied (except as noted therein), and will set aside on its books all such proper
accruals and reserves as shall be required under generally accepted accounting principles
consistently applied.

          (b) The Company will furnish each Major Investor, as soon as practicable after the end of each
fiscal year of the Company, and in any event within one hundred twenty (120) days thereafter, a
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 generally
accepted accounting principles consistently applied (except as noted therein) and setting forth in
each case in comparative form the figures for the previous fiscal year, all in reasonable detail.
Such financial statements shall be audited and accompanied by a report and opinion thereon by
independent public accountants of national standing selected by the Company’s Board of Directors.

          (c) The Company will furnish each Major Investor, as soon as practicable after the end of the
first, second and third quarterly accounting periods in each fiscal year of the Company, and in any
event within forty five (45) days thereafter, (i) a 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 generally
accepted accounting principles consistently applied (except as noted therein), with the exception
that no notes need be attached to such statements and year-end audit adjustments may not have been
made, and (ii) a list of milestones achieved by the Company during such quarter.

          (d) The Company will furnish each Major Investor: (i) at least thirty (30) days prior to the
beginning of each fiscal year an annual budget and operating plans for such fiscal year, including
such other information reasonably requested by a Major Investor (and as soon as available, any
subsequent written revisions thereto); and (ii) as soon as practicable after the end of each month,
and in any event within thirty (30) days thereafter, a balance sheet of the Company as of the end
of each such month, and a statement of income and a statement of cash flows of the Company for such
month and for the current fiscal year to date, including a comparison to plan figures for such
period, prepared in accordance with generally accepted accounting principles consistently applied
(except as noted thereon), with the exception that no notes need be attached to such statements and
year-end audit adjustments may not have been made.

16.

 

     3.2 Inspection Rights. Each Major Investor shall have the right to visit and inspect any of
the facilities, assets and properties of the Company or any of its subsidiaries, including its
corporate and financial books, records and accounts, during normal business hours following
reasonable notice by such Investor, and to discuss the affairs, finances and accounts of the
Company or any of its subsidiaries with its officers and management, and to review such information
as is reasonably requested all at such reasonable times and as often as may be reasonably
requested; provided, however, that the Company shall not be obligated under this Section 3.2 with
respect to a competitor of the Company or with respect to information which the Board of Directors
determines in good faith is confidential or attorney-client privileged and should not, therefore,
be disclosed.

     3.3 Observer Rights. If and for so long as any Major Investor does not have (or does not have
the contractual right to designate) a representative on the Company’s Board of Directors, such
Major Investor shall be permitted to select one representative (a “Representative”) to attend in a
nonvoting observer capacity all meetings of the Company’s Board of Directors. In this respect, the
Company shall give each Representative copies of all notices, minutes, consents and other material
that it provides to its directors and each Representative may participate in discussions of matters
brought to the Company’s Board of Directors; provided, however, that the Company reserves the right
to exclude any Representative from access to any material or meeting or portion thereof if the
Company believes upon advice of counsel that such exclusion is reasonably necessary to preserve the
attorney-client privilege.

     3.4 Confidentiality of Records. Each Investor agrees to use the same degree of care as such
Investor uses to protect its own confidential information, and in no event less than reasonable
care, to keep confidential any information furnished by the Company that the Company identifies as
being confidential or proprietary (so long as such information is not in the public domain), except
that such Investor may disclose such proprietary or confidential information (a) to any partner,
subsidiary, parent, member, affiliate, legal, financial or other advisor of such Investor for the
purpose of evaluating its investment in the Company as long as such partner, subsidiary, parent,
member, affiliate or advisor is advised of the confidentiality provisions of this Section 3.4; (b)
at such time as it enters the public domain through no fault of such Investor; (c) that is
communicated to it free of any obligation of confidentiality; (d) that is developed by such
Investor or its agents independently of and without reference to any confidential information
communicated by the Company; or (e) if required to do so by law.

     3.5 Reservation of Common Stock. The Company will at all times reserve and keep available,
solely for issuance and delivery upon the conversion of the Shares, all Common Stock issuable from
time to time upon such conversion.

     3.6 Key Person Insurance. The Company will use its commercially reasonable efforts to
maintain in full force and effect term life insurance in the amount of two million ($2,000,000)
dollars on the life of Dr. Kathleen Clarence-Smith; naming the Company as beneficiary.

     3.7 Directors’ and Officers’ Liability and Indemnification. The Certificate and Bylaws shall
provide (a) for elimination of the liability of directors and officers to the maximum

17.

 

extent permitted by law and (b) for indemnification of directors and officers for acts on
behalf of the Company to the maximum extent permitted by law.

     3.8 D&O Liability Insurance. The Company shall maintain in full force and effect directors
and officers liability insurance coverage in an amount satisfactory to the Board of Directors.

     3.9 Reimbursement and Compensation of Directors. Unless otherwise determined by the Company’s
Board of Directors, the Board of Directors shall hold regular meetings of the Board of Directors at
least quarterly. The Company will reimburse the Investors for reasonable expenses of such
Investors’ nominees incurred in attending meetings of the Board of Directors as a director. The
Company will grant nonstatutory stock options to non-founding, non-management members of the Board
of Directors in amounts to be determined by the Board of Directors.

     3.10 Board Approval of Certain Transactions. The Company will not do any of the following
unless previously approved by the Board of Directors, including the affirmative vote of at least a
majority of the directors designated by the holders of the Shares:

          (a) Loan or advance any funds to the Company’s employees in excess of $25,000 (other than in
the ordinary course of business as part of travel advances or salary);

          (b) Guaranty any indebtedness in excess of $50,000 (other than in the ordinary course of
business);

          (c) Pledge, mortgage or create a security interest in all or substantially all of the assets
of the Company, or permit any subsidiary to pledge, mortgage or create a security interest in all
or substantially all of the assets of such subsidiary or the Company;

          (d) Remove, destroy, lease, transfer, assign, sell or license any intellectual property of the
Company or any subsidiary (other than in the ordinary course of business);

          (e) Acquire all or substantially all of the business, stock, intellectual property or assets
of any other entity;

          (f) Own, or permit any subsidiary to own, any stock or other securities of any subsidiary of
the Company or other entity, unless it is wholly-owned;

          (g) Sell any shares owned by the Company in any subsidiary;

          (h) Approve equity issuances under the Company’s 2003 Equity Incentive Plan, or materially
modify such plan, or approve equity issuances outside of such plan;

          (i) Enter into any transaction or amend any agreement or lease with any director, officer,
employee or stockholder, member of the family of any such person, or any corporation, partnership,
trust or other entity in which any such person, or member of the family of any such person, is a
director, officer, trustee, partner or holder of more than 5% of the outstanding capital stock
thereof;

18.

 

          (j) Make any material change in the Company’s current business (which is defined as the
licensing, development, marketing and sale of drugs for the treatment of central nervous system
disorders); or

          (k) Enter into any strategic alliance (including joint ventures, manufacturing, marketing or
distribution arrangements and technology transfer or development arrangements).

     3.11 Proprietary Information and Inventions Agreement. The Company shall require all
employees now and hereafter employed to execute and deliver a proprietary information and
inventions agreement substantially in the form attached to the Purchase Agreement. Additionally,
the Company shall include in its agreements with consultants provisions preserving the confidential
nature of the Company’s proprietary information and securing for the Company the assignment of, or
license rights to, inventions arising from the activities of the consultant, consistent in each
case with the services to be provided by the consultant and applicable practices within the
specialty pharmaceuticals industry.

     3.12 Vesting Schedules and Related Matters. All stock options granted by the Company to
officers and other employees after the date of this Agreement shall provide for (a) vesting over
four (4) years, with twenty-five percent (25%) of the shares subject to each option vesting one (1)
year after the date of grant and the remaining shares vesting in equal monthly installments
thereafter over the following three (3) years, such that all shares shall be fully vested four
years after the date of grant and (b) the acceleration provisions set forth in the 2003 Equity
Incentive Plan, unless an alternative vesting schedule and/ or acceleration is approved by the
Board of Directors, including the affirmative vote of a majority of the directors appointed by the
holders of Preferred Stock. The Company shall not amend any provision of its 2003 Equity Incentive
Plan regarding treatment of options upon a Corporate Transaction (as defined therein) and treatment
of options of a former employee who renders service to a competitor without approval by the Board
of Directors, including the affirmative vote of a majority of the directors appointed by the
holders of Preferred Stock. In addition, all stock options granted by the Company which permit the
exercise of unvested shares shall provide the Company with the option to repurchase at the lower of
cost or fair market value any unvested shares upon termination of the option holder’s relationship
with the Company.

     3.13 Independent Appraisal. Within 90 days of the date of this Agreement, the Company will
engage an independent appraiser that is familiar with the AICPA Practice Aid to establish the fair
market value of the Company’s Common Stock as of December 2002 and January 2003.

     3.14 Audit of Financial Statements. The Company shall use commercially reasonable efforts to
ensure that by no later than April 30, 2005, the financial statements of the Company for the fiscal
years ended December 31, 2002, 2003 and 2004 respectively will be audited, accompanied by a report
and opinion thereon by independent accountants of national standing selected by the Company’s Board
of Directors, and delivered to the Major Investors.

     3.15 Right of First Refusal and Co-Sale Agreement. The Company shall not issue any shares of
Common Stock to any person or entity which, after such issuance, would hold a number of shares of
Common Stock equal to or greater than five percent (5%) of all outstanding

19.

 

shares of Common Stock without first amending the Amended and Restated Right of First Refusal
and Co-Sale Agreement of even date herewith in order to add such person or entity as a party
thereto and a “Founder” thereunder.

     3.16 Insurance. The Company shall maintain, in full force and effect and in such amounts and
forms as are acceptable to the Board of Directors, commercial general liability insurance and all
other reasonably appropriate insurance coverage.

     3.17 Notice of Material Litigation, Defaults or Judgments. The Company shall promptly notify
each Major Investor in writing of (a) any suits, actions, claims, investigations by governmental
authorities or legal, administrative, arbitration or mediation proceedings filed against the
Company; (b) any default declared with respect to any material obligation of the Company; (c) any
material judgment entered against the Company; and (d) any other event; so long as, in the good
faith judgment of the Board, any of the foregoing would be reasonably likely to have a Material
Adverse Change.

     3.18 Compliance with Laws. The Company shall not violate any provision of its Amended and
Restated Certificate of Incorporation or Bylaws or of any judgment, order, writ, or decree entered
against the Company, and the Company shall use commercially reasonable efforts to not violate any
instrument or contract to which it is a party or by which it is bound or any provision of federal
or state statute, rule or regulation applicable to the Company; provided, however, that any action
approved or ratified by the Board of Directors where the Board of Directors has been advised by
executive officers or counsel to the Company as to the nature of such violation relative to this
Section 3.18 shall not constitute a breach hereof.

     3.19 Payment of Taxes. The Company will promptly pay all lawful taxes imposed on the income,
profits, property or business of the Company when due and payable, provided, however, that any such
tax need not be paid if the Company chooses, in good faith, to contest the validity of the tax by
appropriate proceedings and if the Company shall set aside on its books adequate reserves with
respect thereto.

     3.20 Preservation of Assets. The Company shall take all commercially reasonable steps to
ensure the protection and preservation of its property and assets, including, but not limited to,
patents, patent applications, trademarks, copyrights and trade secrets.

     3.21 Assistance in Maintaining VCOC Status. The Company shall, at the request of Pequot, take
all commercially reasonable steps necessary to assist Pequot in maintaining Pequot’s status as a
“venture capital operating company,” as such term is defined in the Employee Retirement Income
Security Act of 1974, as amended form time to time.

     3.22 Termination of Covenants. All covenants of the Company contained in Section 3 of this
Agreement (other than the covenants contained in Sections 3.4, 3.7, 3.8, 3.9, 3.11 and 3.21) shall
expire and terminate as to each Investor upon the earlier of (a) the effective date of the
registration statement pertaining to the Initial Offering, which results in all outstanding
Preferred Stock being converted into Common Stock or (b) upon an “Asset Transfer” or “Acquisition,”
each as defined in the Certificate.

20.

 

SECTION 4. RIGHTS OF FIRST REFUSAL.

     4.1 Subsequent Offerings. Subject to applicable securities laws, each Rights Investor shall
have a right of first refusal to purchase up to its pro rata share of all Equity Securities, as
defined below, that the Company may, from time to time, propose to sell and issue after the date of
this Agreement, other than the Equity Securities excluded by Section 4.6 hereof. Each Rights
Investor’s pro rata share is equal to the ratio of (a) the number of shares of the Company’s Common
Stock (including all shares of Common Stock issued or issuable upon conversion of the Shares) of
which such Investor is deemed to be a holder immediately prior to the issuance of such Equity
Securities to (b) the total number of shares of the Company’s outstanding Common Stock (including
all shares of Common Stock issued or issuable upon conversion of the Shares or upon the exercise of
any outstanding warrants or options) immediately prior to the issuance of the Equity Securities.
The term “Equity Securities” shall mean (i) any Common Stock, Preferred Stock or other security of
the Company, (ii) any security convertible, with or without consideration, into any Common Stock,
Preferred Stock or other security (including any option to purchase such a convertible security),
(iii) any security carrying any warrant or right to subscribe to or purchase any Common Stock,
Preferred Stock or other security or (iv) any such warrant or right.

     4.2 Exercise of Rights. If the Company proposes to issue any Equity Securities, it shall give
each Investor written notice of its intention, describing the Equity Securities, the price and the
terms and conditions upon which the Company proposes to issue the same. Each Investor shall have
twenty (20) days from the giving of such notice to agree to purchase up to its pro rata share of
the Equity Securities for the price and upon the terms and conditions specified in the notice by
giving written notice to the Company and stating therein the quantity of Equity Securities to be
purchased. Notwithstanding the foregoing, the Company shall not be required to offer or sell such
Equity Securities to any Investor who would cause the Company to be in violation of applicable
federal securities laws by virtue of such offer or sale.

     4.3 Issuance of Equity Securities to Other Persons. If not all of the Investors elect to
purchase their pro rata share of the Equity Securities, then the Company shall promptly notify in
writing the Investors who do so elect and shall offer such Investors the right to acquire such
unsubscribed shares. Each such Investor shall have ten (10) days after receipt of such notice to
notify the Company of its election to purchase up to its pro rata portion of the unsubscribed
shares. Such process shall be repeated until the participating Investors either purchase all of
the unsubscribed shares or decline to do so. If the Investors fail to exercise in full the rights
of first refusal, the Company shall have ninety (90) days thereafter to sell the Equity Securities
in respect of which the Investor’s rights were not exercised, at a price and upon general terms and
conditions materially no more favorable to the purchasers thereof than specified in the Company’s
notice to the Investors pursuant to Section 4.2 hereof. If the Company has not sold such Equity
Securities within ninety (90) days of the notice provided pursuant to Section 4.2, the Company
shall not thereafter issue or sell any Equity Securities, without first offering such securities to
the Investors in the manner provided above.

     4.4 Termination and Waiver of Rights of First Refusal. The rights of first refusal
established by this Section 4 shall not apply to, and shall terminate upon the earlier of (a) the
effective date of the registration statement pertaining to the Company’s Initial Offering or (b) the

21.

 

closing of an “Asset Transfer” or “Acquisition,” each as defined in the Certificate.
The rights of first refusal established by this Section 4 may be amended, or any provision thereof
may be waived with the written consent of Investors holding at least sixty seven percent (67%) of
the Registrable Securities held by all Investors, or as permitted by Section 5.5.

     4.5 Transfer of Rights of First Refusal. The rights of first refusal of each Investor under
this Section 4 may be transferred to the same parties, subject to the same restrictions, as any
transfer of registration rights pursuant to Section 2.10.

     4.6 Excluded Securities. The rights of first refusal established by this Section 4 shall have
no application to any of the following Equity Securities:

          (a) any Equity Securities that would be excluded from the definition of “Additional Shares of
Common Stock” (as defined in the Certificate, as such may be amended from time to time in
accordance with the terms thereof);

          (b) shares of Common Stock or Preferred Stock issued in connection with any stock split, stock
dividend, recapitalization or the like by the Company;

          (c) any Equity Securities that are issued by the Company pursuant to a registration statement
filed under the Securities Act; and

          (d) any Equity Securities issued by the Company pursuant to the terms of the Purchase
Agreement.

SECTION 5. MISCELLANEOUS.

     5.1 Governing Law. This Agreement shall be governed by and construed under the laws of the
State of Delaware in all respects as such laws are applied to agreements among Delaware residents
entered into and to be performed entirely within Delaware. The parties agree that any action
brought by either party under or in relation to this Agreement, including without limitation to
interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to
and does hereby submit to the jurisdiction and venue of any state or federal court located in New
Castle County, Delaware.

     5.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the parties hereto and the successors,
assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit
of and be enforceable by each person who shall be a holder of Registrable Securities from time to
time; provided, however, that prior to the receipt by the Company of adequate written notice of the
transfer of any Registrable Securities specifying the full name and address of the transferee, the
Company may deem and treat the person listed as the holder of such shares in its records as the
absolute owner and holder of such shares for all purposes.

     5.3 Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the Purchase
Agreement and the other documents delivered pursuant thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof and no

22.

 

party shall be liable or bound to any other in any manner by any oral or written
representations, warranties, covenants and agreements except as specifically set forth herein and
therein. Each party expressly represents and warrants that it is not relying on any oral or
written representations, warranties, covenants or agreements outside of this Agreement.

     5.4 Severability. In the event one or more of the provisions of this Agreement should, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provisions of this Agreement, and this
Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

5.5 Amendment and Waiver.

          (a) Except as otherwise expressly provided, this Agreement may be amended or modified only
upon the written consent of the Company and the holders of at least sixty seven percent (67%) of
the then-outstanding Registrable Securities; and provided, that any amendment, modification or
waiver of this Agreement that adversely changes the rights or obligations of any holder of
Registrable Securities under this Agreement in a manner that is different from the changes imposed
on the other holders of Registrable Securities shall also require the written consent of such
holder of Registrable Securities.

          (b) Except as otherwise expressly provided, the obligations of the Company and the rights of
the Holders under this Agreement may be waived only with the written consent of the holders of at
least sixty seven percent (67%) of the then-outstanding Registrable Securities; and provided, that
any amendment, modification or waiver of this Agreement that adversely changes the rights or
obligations of any holder of Registrable Securities under this Agreement in a manner that is
different from the changes imposed on the other holders of Registrable Securities shall also
require the written consent of such holder of Registrable Securities (except that this proviso
shall not apply with respect to any waiver obtained pursuant to the provisions of Section 4.4
above).

          (c) For the purposes of determining the number of Holders or Investors entitled to vote or
exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record
holders of its stock as maintained by or on behalf of the Company.

     5.6 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power,
or remedy accruing to any party, upon any breach, default or noncompliance by another party under
this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. It is further agreed that any waiver,
permit, consent, or approval of any kind or character on any party’s part of any breach, default or
noncompliance under the Agreement or any waiver on such party’s part of any provisions or
conditions of this Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this Agreement, by law, or
otherwise afforded to any party, shall be cumulative and not alternative.

23.

 

     5.7 Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if
not, then on the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the party to be notified at the address as set forth
on the signature pages hereof or Exhibit A hereto or at such other address as such party may
designate by ten (10) days advance written notice to the other parties hereto.

     5.8 Attorneys’ Fees. In the event that any suit or action is instituted to enforce any
provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from
the losing party all fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such reasonable fees and expenses
of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses
of appeals.

     5.9 Titles and Subtitles. The titles of the sections and subsections of this Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.

     5.10 Additional Investors. Notwithstanding anything to the contrary contained herein, if the
Company shall issue additional shares of its Preferred Stock pursuant to the Purchase Agreement,
any purchaser of such shares of Preferred Stock shall become a party to this Agreement by executing
and delivering an additional counterpart signature page to this Agreement and shall be deemed an
“Investor,” a “Holder” and a party hereunder. Notwithstanding anything to the contrary contained
herein, if the Company shall issue Equity Securities in accordance with Article IV, Sections
C.6.(h)(v)(D) or (E) of the Certificate, any purchaser of such Equity Securities may become a party
to this Agreement, at the Company’s discretion, by executing and delivering an additional
counterpart signature page to this Agreement and shall be deemed an “Investor,” a “Holder” and a
party hereunder.

     5.11 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.

     5.12 Aggregation of Stock. All shares of Registrable Securities held or acquired by
affiliated entities or persons or persons or entities under common management or control shall be
aggregated together for the purpose of determining the availability of any rights under this
Agreement.

     5.13 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to
refer to the masculine, feminine or neutral, singular or plural, as the identity of the parties
hereto may require.

     5.14 Amendment and Restatement of the Prior Agreement. The Prior Agreement is hereby amended
in its entirety and restated herein. Such amendment and restatement is effective upon the execution of the Agreement by the Company and the holders of more than
sixty-six and two-thirds percent (66-2/3%) of the Registrable Securities (as defined in the Prior

24.

 

Agreement) outstanding on the date hereof. Upon such execution, all provisions of, rights granted
and covenants made in the Prior Agreement are hereby waived, released and superseded in their
entirety and shall have no further force or effect, including, without limitation, all rights of
first refusal and any notice period associated therewith otherwise applicable to the transactions
contemplated by the Purchase Agreement.

[Signature Pages Follow]

25.

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Investor Rights Agreement as of the date set forth in the first paragraph hereof.

COMPANY:

Prestwick Pharmaceuticals, Inc.

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 	 
	Name:	 	 
	Title:	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

INVESTORS:

PEQUOT PRIVATE EQUITY FUND III, L.P.

By: Pequot Capital Management, Inc.,

Its Investment Manager

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 	 
	

	 	Aryeh Davis, General Counsel	 	 

PEQUOT OFFSHORE PRIVATE EQUITY PARTNERS III, L.P.

By: Pequot Capital Management, Inc.,

Its Investment Manager

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 	 
	

	 	Aryeh Davis, General Counsel	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

BIOTECHNOLOGY DEVELOPMENT FUND II, L.P.

By: BioAsia Management, LLC, General Partner

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:
	Managing Member	 	 

BIOTECHNOLOGY DEVELOPMENT FUND IV, L.P.

By: BioAsia Management, LLC, General Partner

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	Title:
	Managing Member	 	 

BIOTECHNOLOGY DEVELOPMENT FUND IV AFFILIATES, L.P.

By: BioAsia Management, LLC, General Partner

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	Title:
	Managing Member	 	 

BIOASIA CROSSOVER FUND, L.P.

By: BioAsia Investments IV, LLC, General Partner

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	Title:
	Managing Member	 	 

BAVP, L.P.

By: BA Venture Partners VI, LLC, General Partner

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:
	 	Managing Director	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

GC&H Investments, LLC

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 
	

	John L. Cardoza	 	 
	

	Managing Member	 	 

WS Investment Company, LLC 2003A

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

SOFINNOVA VENTURE PARTNERS V, LP

	 	 	 
	By:

	 	Sofinnova Management V, LLC
	

	 	its General Partner

	 	 	 
	Jim Healy, M.D., Ph.D.

	 	 

SOFINNOVA VENTURE AFFILIATES V, LP

	 	 	 
	By:

	 	Sofinnova Management V, LLC
	

	 	its General Partner

	 	 	 
	Jim Healy, M.D., Ph.D.

	 	 

SOFINNOVA VENTURE PRINCIPALS V, LP

	 	 	 
	By:

	 	Sofinnova Management V, LLC
	

	 	its General Partner

	 	 	 
	Jim Healy, M.D., Ph.D.

	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

ATLAS FUND V

	 	 	 
	Atlas Venture Fund V, L.P.
	Atlas Venture Parallel Fund V-A, C.V.
	Atlas Venture Parallel Fund V-B, C.V.
	Atlas Venture Entrepreneurs’ Fund V, L.P.
	By:

	 	Atlas Venture Associates V, L.P.
	

	 	their general partner
	By:

	 	Atlas Venture Associates V, Inc.
	

	 	its general partner

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 
	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	 	Vice President	 	 

ATLAS FUND VI

	 	 	 
	Atlas Venture Fund VI, L.P.
	Atlas Venture Entrepreneurs’ Fund VI, L.P.
	By:

	 	Atlas Venture Associates VI, L.P.
	

	 	their general partner
	By:

	 	Atlas Venture Associates VI, Inc.
	

	 	its general partner

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 
	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	 	Vice President	 	 

	 	 	 
	ATLAS VENTURE FUND VI GmbH & Co. KG
	By:

	 	Atlas Venture Associates VI, L.P.
	

	 	its managing limited partner
	By:

	 	Atlas Venture Associates VI, Inc.
	

	 	its general partner

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 
	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	 	Vice President	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

CNF INVESTMENTS, LLC

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 

MERIDIAN VERWALTUNGS GMBH

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 

	 	 	 
	ALANA R. DAVIDSON

	 	 

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

LOMBARD ODIER DARIER HENTSCH & CIE

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 	 
	Name:
	 	 	 	 
	

	 	 	 	 
	Title:
	 	 	 	 
	

	 	 	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

NIF VENTURES, CO., LTD.

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 	 
	Name:
	 	 	 	 
	

	 	 	 	 
	Title:
	 	 	 	 
	

	 	 	 	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

	 	 
	STEPHEN X. GRAHAM
	 

	 	 
	JERALYNN R. GRAHAM
	 

CROSSHILL GEORGETOWN CAPITAL, L.P.

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 
	

	 	Stephen X. Graham, Principal	 	 

	 	 
	STUART YARBROUGH
	 

	 	 
	JEAN-LUC BEJOT
	 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

EXHIBIT A

SCHEDULE OF INVESTORS

Pequot Private Equity Fund III, L.P.

Pequot Offshore Private Equity Fund III, L.P.

c/o Pequot Capital Management, Inc.

500 Nyala Farm Road

Westport, CT 06880

Attn: Aryeh Davis/Carlos Rodrigues

Fax: (203) 429-2400

With copy to:

Morrison & Foerster LLP

755 Page Mill Road

Palo Alto, CA 94304

Attn: Paul “Chip” L. Lion III

Fax: (650) 494-0792

Biotechnology Development Fund II, L.P.

Biotechnology Development Fund IV, L.P.

Biotechnology Development Fund IV

Affiliates, L.P.

BioAsia Crossover Fund, L.P.

575 High Street, Suite 201

Palo Alto, CA 94301

Attn: Edgar G. Engleman, M.D.

Sofinnova Venture Partners V, LP

Sofinnova Venture Affiliates V, LP

Sofinnova Venture Principals V, LP

140 Geary Street, 10th Floor

San Francisco, CA 94108

Attn: Jim Healy, M.D., Ph.D.

Atlas Venture Fund V, L.P.

Atlas Venture Parallel Fund V-A, C.V.

Atlas Venture Parallel Fund V-B, C.V.

Atlas Venture Entrepreneurs’ Fund V, L.P.

Atlas Venture Fund VI, L.P.

Atlas Venture Entrepreneurs’ Fund VI, L.P.

Atlas Venture Fund VI GmbH & Co. KG

890 Winter Street

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

EXHIBIT A

 

 

Waltham, MA 02451

Attn: General Counsel

BAVP, L.P.

950 Tower Lane, Suite 700

Foster City, CA 94404

Attn: Louis Bock

GC&H Investments, LLC

One Maritime Plaza, 20th Floor

Suite 2000

San Francisco, CA 94111

Attn: John L. Cardoza, Esq.

WS Investment Company, LLC 2003A

650 Page Mill Road

Palo Alto, CA 94304

Attn: David J. Saul, Esq.

CNF Investments, LLC

7500 Old Georgetown Road

Bethesda, MD 20814

Attn: Robert J. Flanagan, Manager

Meridian Verwaltungs GMBH

D-40191 Dusseldorf

Henkel Str. 67

Alana R. Davidson

3705 Ingomar Street, NW

Washington, DC 20015

Stephen X. Graham and Jeralynn R. Graham Tenants by the Entirety

1000 Wilson Blvd. – Suite 1850

Arlington, VA 22209

CrossHill Georgetown Capital, L.P.

1000 Wilson Boulevard, Suite 1850

Arlington, VA 22209

Attn: Stephen X. Graham

Fax: (703) 526-1340

Lombard Odier Darier Hentsch & Cie

c/o Tania PLAGE — Lombard Odier Darier Hentsch Fund Managers SA

Rue de l’Arquebuse 22 — 1204 Geneva

Fax: +41 22 709 29 20

NIF Ventures., Co., Ltd.

Venture Capital Investment Limited

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

EXHIBIT A

 

 

Partnership NIF Japan-USA-Europe Bridge Fund

Venture Capital Investment Limited Partnership NIF Global Fund

1-2-1, Chuo-ku, Kyobashi, Tokyo, Japan

Attn: Goro Takeda

Fax: 81-3-5201-1518

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

EXHIBIT A

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