Document:

exv4w1

Exhibit 4.1

Execution Version

NUPATHE INC.

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

          THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the “Agreement”) is entered into as of
July 8, 2008, by and among NuPathe Inc., a Delaware corporation (the “Company”), those persons
identified on Exhibit A hereto (the “Existing Holders”), and the investors identified on
Exhibit B hereto (the “Investors,” and together with the Existing Holders and such other
parties who may become parties hereto pursuant to the terms hereof, the “Parties” and individually,
each a “Party”).

BACKGROUND

          WHEREAS, the Company and the Existing Holders are parties to that certain Investor Rights
Agreement, dated as of August 31, 2006, (the “Prior Agreement”);

          WHEREAS, each of the Existing Holders owns the number of shares of Series A Preferred Stock
listed beside the name of such Existing Holder on Exhibit A hereto;

          WHEREAS, the Investors are purchasing or acquiring from the Company up to 40,322,580 shares of
the Company’s Series B Preferred Stock pursuant to the terms of that certain Series B Preferred
Stock Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), by and among the
Company and the Investors; and

          WHEREAS, as a condition to entering into the Purchase Agreement, the Investors and Existing
Holders have requested that the Company extend to each of the Parties registration rights,
information rights and certain other rights 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 Company and the
Existing Holders hereby agree that the Prior Agreement is amended, restated and superseded in its
entirety by this Agreement, and the parties hereto, intending to be legally bound, agree as
follows:

1. General.

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

          “Adversely Affected Holder” has the meaning set forth in Section 5.3 hereof.

          “Affiliate” means any person who is an “affiliate” as defined in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act.

          “Agreement” has the meaning set forth in the Preamble.

          “BioAdvance” has the meaning set forth in Section 3.2 hereof.

          “Board” means the Board of Directors of the Company.

 

          “Budget” has the meaning set forth in Section 3.1(b)(iv) hereof.

          “Certificate” means the Third Amended and Restated Certificate of Incorporation of the Company
filed with the Secretary of State of the State of Delaware on July 7, 2008, as the same may be
amended and restated from time to time.

          “CEO” means the Company’s Chief Executive Officer.

          “Common Stock” means the shares of the Company’s Common Stock, $0.001 par value per share.

          “Company” has the meaning set forth in the Preamble.

          “Compensation Committee” has the meaning set forth in Section 3.6(b) hereof.

          “Confidential Information” has the meaning set forth in Section 3.3 hereof.

          “Demand Request” has the meaning set forth in Section 2.2(a) hereof.

          “Disclosing Party” has the meaning set forth in Section 3.3 hereof.

          “Electing Investor” has the meaning set forth in Section 4.3 hereof.

          “Equity Securities” means (i) any Common Stock, Preferred Stock or other class of capital
stock of the Company, (ii) any security convertible, with or without consideration, into any Common
Stock, Preferred Stock or other class of capital stock of the Company, (iii) any security carrying
any warrant or right to subscribe for or purchase shares of any class of capital stock of the
Company, and (iv) any warrant, right, option or other derivative security which provides the right
to subscribe for or purchase (i), (ii), or (iii) above.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any rules or
regulations promulgated thereunder, all as the same is in effect from time to time.

          “Existing Holders” has the meaning set forth in the Preamble.

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

          “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.

          “Indemnitees” has the meaning set forth in Section 3.13(a) hereof.

          “Initial Tranche Closing” shall have the meaning ascribed to such term in the Purchase
Agreement.

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

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          “Initial Notice” has the meaning set forth in Section 4.2 hereof

          “Initiating Holders” has the meaning set forth in Section 2.2(a) hereof.

          “Investors” has the meaning set forth in the Preamble.

          “Issue” or “Issuance” in any of its forms, means to sell, grant or otherwise issue in any
manner or any agreement or commitment to do any of the foregoing.

          “Liquidation Event” shall have the meaning ascribed to such term in the Certificate.

          “Majority Holders” has the meaning set forth in Section 3.1(b)(ii) hereof.

          “Non-electing Investor” has the meaning set forth in Section 4.3 hereof.

          “Party” and “Parties” have the meanings set forth in the Preamble.

          “Person” means any individual, corporation, partnership, firm, joint venture, association,
limited liability company, limited liability partnership, joint-stock company, trust,
unincorporated organization or governmental entity.

          “Preemptive Investor” and “Preemptive Investors” have the meanings set forth in Section
4.1 hereof.

          “Preemptive Over-Allotment” has the meaning set forth in Section 4.3 hereof.

          “Preemptive Pro Rata Share” has the meaning set forth in Section 4.3 hereof.

          “Preferred Shares” means shares of Series A Preferred Stock and Series B Preferred Stock
issued to and held by the Investors and Existing Holders, as the case may be, and their permitted
assigns.

          “Preferred Stock” means, collectively, the Series A Preferred Stock and Series B Preferred
Stock.

          “Prior Agreement” has the meaning set forth in the Background section of this Agreement.

          “Purchase Agreement” has the meaning set forth in the Background section of this Agreement.

          “Qualified Investor” means a Holder that is an “accredited investor” within the meaning of
Rule 501(a) under the Securities Act.

          “Qualified Public Offering” means an underwritten public offering on a firm commitment basis
pursuant to an effective registration statement (other than on Form S-4 or S-8 or any
successor forms thereto) filed pursuant to the Securities Act, covering the offer and sale of
Common Stock for the account of the Company in which the Company, together with any other
participants in the offering, actually receives gross proceeds equal to or greater than $40,000,000
(calculated before deducting underwriters’ discounts and commissions and other offering expenses),
and in which the public offering price per share of Common Stock (calculated before deducting
underwriters’ discounts and commissions) is not less than three (3) times the original purchase
price per share of the Series B

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Preferred Stock of $0.93 per share (as appropriately adjusted to
reflect the occurrence of any Extraordinary Common Stock Event (as defined in the Certificate)).

          “Register,” “registered,” and “registration” each means 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.

          “Registrable Securities” means (a) Common Stock issued or issuable upon conversion of the
Preferred Shares, and (b) 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
sold by a person to the public either pursuant to a registration statement declared effective
pursuant to the Securities Act or under Rule 144 promulgated under the Securities Act (“Rule 144”)
or sold in a private transaction in which the transferor’s rights under Section 2 of this
Agreement are not assigned.

          “Registration Expenses” means all expenses (other than Selling Expenses, as defined herein)
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 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).

          “Requested Shares” has the meaning set forth in Section 2.2(a) hereof.

          “Rule 145” has the meaning set forth in Section 2.3 hereof.

          “SEC” or “Commission” means the Securities and Exchange Commission.

          “Securities Act” means the Securities Act of 1933, as amended, and any rules or regulations
promulgated thereunder, all as the same is in effect from time to time.

          “Securities Act Legend” has the meaning set forth in Section 2.1(b) hereof.

          “Selling Expenses” means all underwriting discounts, selling commissions and similar discounts
relating to underwriters or commissions related to sales, in each case, applicable to the sale of
Registrable Securities.

          “Series A Preferred Stock” means the Company’s Series A Preferred Stock, par value $0.001 per
share held by the Existing Holders and their permitted assigns.

          “Series A Recipients” has the meaning set forth in Section 3.1(b) hereof.

          “Series B Preferred Stock” means the Company’s Series B Preferred Stock, par value $0.001 per
share held by the Investors and their permitted assigns.

          “Series B Recipients” has the meaning set forth in Section 3.1(b) hereof.

          “Stockholders Agreement” means that certain Amended and Restated Stockholders Agreement, dated
as of the date hereof, by and among the Company and the other parties named therein.

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          “Subsidiaries” means with respect to any Person (including the Company), any corporation,
partnership, limited liability company, association or other business entity of which is controlled
by (as defined in Rule 405 of the General Rules and Regulations under the Securities Act) such
Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries
of such Person.

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 such Holder’s
Preferred 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) 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, (B) if reasonably requested by the Company, and at the Company’s expense, 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, (C) such disposition complies with the terms of the Stockholders Agreement, and (D) in the
event of a transfer in advance of the Company’s Qualified Public Offering, the transferee has
agreed in writing to be bound by the terms of this Agreement.

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

          (b) Each certificate representing Preferred Shares or Registrable Securities shall (unless
otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a
legend (the “Securities Act 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 PURSUANT TO
AND IN ACCORDANCE WITH THE TERMS OF THE COMPANY’S AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT DATED AS OF JULY 8, 2008 BY AND AMONG THE COMPANY
AND THE PARTIES NAMED THEREIN, AS MAY BE AMENDED FROM TIME TO TIME. A COPY
OF THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT IS

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ON FILE AT THE
PRINCIPAL OFFICES OF THE COMPANY AND MAY BE OBTAINED UPON WRITTEN REQUEST TO
THE SECRETARY OF THE COMPANY.

          (c) The Company shall be obligated to reissue promptly certificates not bearing the Securities
Act Legend at the request of any holder thereof if 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 or legend. The Company shall not require an opinion of counsel and
shall promptly reissue unlegended certificates in connection with the disposition of securities for
distributions by partnerships and limited liability companies in accordance with the partnership or
limited liability company operating agreements relative thereto and exactly in accordance with each
partner’s percentage interest in such entity, provided, however, that legends shall remain on the
certificates representing distributed shares unless they are eligible for sale under Rule 144.

          (d) Notwithstanding any other provision of this Agreement, no transfer or disposition may be
made pursuant to this Agreement unless such transfer or disposition complies with applicable
federal and state securities laws, including, without limitation, the Securities Act.

          (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 (the “Demand Request”) from
the Holders owning at least 66 2⁄3% of the
then outstanding Preferred Stock (the “Initiating Holders”) that the Company file a registration
statement under the Securities Act for the sale of the Registrable Securities (the “Requested
Shares”), then the Company shall, within fifteen (15) days after the receipt thereof, give written
notice of such request to all holders of Preferred Shares, and subject to the limitations of this
Section 2.2, use reasonable best efforts to effect the registration under the Securities
Act of all of the Requested Shares owned by the Initiating Holders and all Registrable Securities
owned by any other Holder owning Preferred Shares which notifies the Company in writing, within
thirty (30) days after receipt of the Company’s notice contemplated by this paragraph, that it
intends to participate in the demand registration contemplated herein (such notification to include
the number of Registrable Securities sought to be included and the intended method or methods of
distribution for such Registrable Securities), subject to and in accordance with the terms,
conditions, procedures and limitations contained in this Agreement.

          (b) If the Initiating Holders intend to distribute the Registrable Securities covered by their
Demand 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 by a
majority in interest of the Initiating Holders. All such selections shall be subject to the
reasonable approval of the Company, which approval will not be unreasonably withheld, conditioned
or delayed. Notwithstanding any other provision of this Section 2.2 or Section
2.4, if the underwriter advises the Company that marketing factors require a

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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 and registration shall be
allocated among the Holders on a pro rata basis based on the number of Registrable Securities held
by all such Holders (including the Initiating Holders). The number of shares of Registrable
Securities to be included in any underwriting and registration covered by this Section 2.2
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 any
underwriting pursuant to this Section 2.2(b) shall be withdrawn from the registration.

          (c) Notwithstanding the foregoing, if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by the CEO of the
Company stating that in the good faith judgment of the Board, it would be materially detrimental to
the Company and its stockholders for such registration statement to be filed because such action
(i) would require premature disclosure of material information that the Company has a bona fide
business purpose for preserving as confidential or (ii) would render the Company unable to comply
with requirements under the Securities Act or Exchange Act, the Company shall have the right to
defer taking action with respect to such filing for a period of not more than one hundred and
twenty (120) days after receipt of the request of the Initiating Holders; provided, however, that
the Company may not utilize this right more than once in any twelve (12)-month period.

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

               (i) at any time prior to the earlier of (A) one hundred eighty (180) days after the Company’s
Initial Offering or (B) July 8, 2012;

               (ii) during the period starting with the date thirty (30) days prior to the filing of, and
ending on a date one hundred twenty (120) days after the effective date of a registration subject
to Section 2.3 hereof; provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration to become effective;

               (iii) after the Company has effected two (2) registrations initiated by the Holders pursuant
to this Section 2.2, and such registrations have been declared or ordered effective; or

               (iv) unless the Registrable Securities proposed to be included in the registration have an
aggregate offering price of at least Five Million Dollars ($5,000,000).

     2.3. Piggyback Registrations.

          (a) If, at any time or from time to time, the Company proposes to file a registration
statement under the Securities Act for its own account or for the account of any of its
stockholders, including, but not limited to, a registration statement relating to a secondary
offering of securities of the
Company, but excluding (i) a registration statement on Form S-4 relating solely to a
transaction under Rule 145 of the Securities Act (“Rule 145”), (ii) a registration statement on
Form S-1 or S-8 relating to employee stock option or purchase plans, or (iii) a registration
statement on any successor to such Forms S-1, S-4 and S-8, then the Company shall notify all
Holders in writing at least thirty (30) days prior to the filing of any such registration 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

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writing. Such notice shall state the number of Registrable Securities which such Holder requests
to be included in such registration and 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.

          (b) 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. 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 and reasonably approved by a majority in
interest of the Holders participating in such registration pursuant to this Section 2.3.
No Holder shall be required in any such underwriting agreement to make any representations or
warranties to or agreements with the Company or the underwriters other than customary
representations, warranties or agreements regarding such holders’ title to Registrable Securities
and any written information provided by the Holder to the Company expressly for inclusion in the
related registration statement. Notwithstanding any other provision of this Agreement, if a
managing 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 excluded from the
underwriting shall be first allocated fully among persons not contractually entitled to
registration rights under this Agreement on a pro rata basis, and second, among the Holders on a
pro rata basis based on the total number of Registrable Securities held by such Holders. 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 twenty five (25%) 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 stockholder, 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 stockholder (other than a Holder) 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 a majority 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 no later than ten (10) business days prior to the effective date of the
registration statement, after which the Holders’ commitment shall become irrevocable. Any
Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration. For any Holder that is a partnership or corporation, the partners, retired
partners and stockholders of such Holder, or the estates and family members of any such partners
and retired partners 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.

          (c) Right to Terminate Registration. Notwithstanding the foregoing, the Company shall
have the right to terminate or withdraw any registration initiated by it 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.

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     2.4. Form S-3 Registration. In case the Company shall receive from any Holder or
Holders of 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 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 thirty (30) 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 (or any successor or similar form) is not available for such offering by the
Holders;

               (ii) if the Holders propose to sell Registrable Securities at an aggregate price to the public
of less than Two Million Dollars ($2,000,000);

               (iii) if within thirty (30) days after receipt of a written request from the Holders pursuant
to Section 2.4, the Company gives notice to the Holders of the Company’s intention to make
a public offering within ninety (90) days; provided, that, at such time as the offering is
abandoned or becomes unlikely to be completed within such ninety (90) day period, the Company shall
proceed with the registration in accordance with this Section 2.4;

               (iv) if the Company shall furnish to the Holders a certificate signed by the CEO stating that
in the good faith judgment of the Board, it would be materially detrimental to the Company and its
stockholders for such registration statement to be filed because such action (i) would require
premature disclosure of material information that the Company has a bona fide business purpose for
preserving as confidential or (ii) would render the Company unable to comply with requirements
under the Securities Act or Exchange Act, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than ninety (90) days after receipt of the
request of the Initiating Holders; provided, however, that the Company may not utilize this right
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 registrations on Form S-3 for the Holders pursuant to this
Section 2.4.

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. 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

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Expenses incurred in connection with any
registrations pursuant to this Agreement, shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.

     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 its reasonable best efforts to cause such registration statement to become
effective and keep such registration statement effective for up to ninety (90) days (or two hundred
seventy (270) days if the registration statement is on Form S-3) or, if earlier, until the Holder
or Holders have completed the distribution related thereto;

          (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 paragraph (a)
above;

          (c) Prior to the filing with the SEC, furnish to the Holders drafts of such registration
statements, amendments and supplements thereto prior to filing such with the SEC giving the holders
an opportunity to comment on the parts of such documents relating to them and their holdings;

          (d) Furnish to the Holders copies of all correspondence with the SEC related to the filing of
any registration statement, including all comment letters received from the SEC and Company
responses thereto;

          (e) 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;

          (f) Use its reasonable best 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 in any such states or
jurisdictions;

          (g) 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;

          (h) 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; and

          (i) Use its best 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

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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. This Agreement and the rights and
obligations set forth herein shall terminate upon the earlier to occur of (a) the written agreement
of the Company and the Holders holding a majority of the Registrable Securities then outstanding;
(b) three (3) years following the closing of a Qualified Public Offering; (c) such date that all
shares of Registrable Securities may immediately be sold pursuant to Rule 144 without regard to
volume limitations; or (d) a Liquidation Event.

     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
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, directors, officers 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, 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, state or other 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”): (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 or other securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state or other securities
law in connection with the offering covered by such registration statement; and the Company will
pay as incurred to each such Holder, partner, officer, director, underwriter or controlling person
any legal or other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, including amounts paid in settlement
thereof. The indemnification
agreement contained in this Section 2.9(a) shall not apply to (i) any amounts paid in
settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the written consent of the Company, which consent shall not be unreasonably withheld,
conditioned or delayed (ii) to the extent that any such Violation arises out of or is based upon
written information furnished expressly for use in connection with such registration by such
indemnified party.

          (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 qualification or compliance is

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being effected, indemnify and hold harmless the Company, each of its directors, its officers, its
employees 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,
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 thereof) arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such 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 pay as incurred any reasonable legal or other expenses incurred by the Company or
any such director, officer, controlling person, underwriter or other Holder, or partner, 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 finally adjudicated by a court of
competent jurisdiction that there was such a 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
written 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; provided,
however, that the failure to give prompt notice shall not: (i) limit the indemnification
obligations of the indemnifying party hereunder except to the extent that the delay in giving, or
failure to give, prompt notice prejudices the ability of the indemnifying party to defend against
such action, or (ii) relieve the indemnifying party of any liability that it may have to any
indemnified party otherwise than under this Section 2.9. 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 notified, to assume and control 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, in
the opinion of counsel to the indemnified 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.

          (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) 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 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

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from the offering
received by such Holder. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.9(d) were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable consideration referred
to in this paragraph.

          (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 of Preferred
Stock to a permitted transferee or permitted assignee of Registrable Securities which (a) is a
principal, officer, retired principal, or retired officer of such holder, or (b) any transferee
(other than a competitor of the Company), so long as such transferee shall agree in writing to be
subject to all restrictions, terms and conditions set forth in this Agreement and the Stockholders
Agreement; provided, however, that (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 transfer complies with the terms of this Agreement, the Certificate, the Stockholders
Agreement and any other applicable federal or state securities laws.

     2.11. Amendment of Registration Rights. Subject to Section 5.3 of this
Agreement, 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 66 2⁄3% of the
then outstanding Registrable Securities held by all Holders. Any provision of this Section
2 and the observance thereof may be waived (either generally or in a particular instance and
either retroactively or prospectively) by any party so waiving in writing. Any amendment effected
in accordance with this Section 2.11 shall be binding upon each Holder and the Company and
any waiver effected pursuant to the immediately preceding sentence shall be binding upon such
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. After the date of this Agreement,
the Company shall not, without the prior written consent of the holders of at least 66 2⁄3% of the
then outstanding Preferred Stock (on an as-converted basis and including any shares of Common Stock
into which the Preferred Stock are converted), enter into any agreement with any holder or
prospective holder of any securities of the Company, other than the holders of the Preferred Stock,
that would grant such holder registration rights pari passu or senior to those granted to the
Holders hereunder.

     2.13. “Market Stand-Off” Agreement; Agreement to Furnish Information.

          (a) In connection with the Company’s Initial Offering, if requested by the Company or the
managing underwriter, each Holder and each holder of greater than 1% of the outstanding Common
Stock agrees not to sell, transfer, agree or contract to sell, make any short sale of, loan, grant
any option or warrant for the purchase of, enter into any swap, hedging or other similar
transaction with the same economic effect as a sale or otherwise dispose of any Registrable
Securities (other than those included in the public offering or acquired in the public offering or
aftermarket, if any) without the prior written consent of the Company or the underwriters for such
period of time (not to exceed one hundred eighty (180) days) as may be requested by the Company or
the managing underwriter. The foregoing provisions

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of this Section 2.13 shall not apply to
the sale of any shares to an underwriter pursuant to an underwriting agreement or to shares
acquired by a Holder in open market transactions after completion of the Initial Offering and shall
be applicable to Holders only if all directors and executive officers of the Company enter into
similar agreements, and if any of the provisions of such agreements are waived or terminated with
respect to any of such persons or if any such person is released from such agreement, the foregoing
provisions shall be waived or terminated with respect to each Holder to the same extent on a pro
rata basis

          (b) Each Holder agrees to execute and deliver such other agreements as may be reasonably
requested by the Company or the underwriter which are consistent with the foregoing or which 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 this Section 2.13 shall not apply to a registration relating
solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated
in the future, or a registration relating solely to a Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. 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.

     2.14. 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 that it will use its reasonable best efforts
to:

          (a) make and keep public information available, as those terms are understood and defined in
Rule 144 or any similar or analogous rule promulgated under the Securities Act at all times after
the Company is subject to the reporting requirements of the Exchange Act;

          (b) file with the SEC, in a timely manner, all reports and other documents required of the
Company under the Exchange Act when and if the Company becomes subject to the reporting
requirements thereunder; 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
Rule 144 under the Securities Act and the Exchange Act (at any time after the Company has become
subject to such reporting requirements); a copy of the most recent annual or quarterly report so
filed of the Company; and such other reports and documents as a Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing it to sell any such securities
without registration.

3. Covenants of the Company.

     3.1. Basic Financial Information and Reporting.

          (a) The Company and its Subsidiaries (if any) shall maintain books and records of account that
are accurate in all material respects in which complete entries shall be made pursuant to a system
of accounting established and administered in accordance with generally accepted accounting
principles consistently applied, and shall set aside on their books all such proper accruals and
reserves as shall be required under generally accepted accounting principles consistently applied.

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          (b) For so long as no less than 5% of the Series A Preferred Stock is issued and outstanding,
the Company will furnish to each holder of Series A Preferred Stock (“Series A Recipients”) the
following information, and for so long as no less than 5% of the Series B Preferred Stock is issued
and outstanding, the Company will furnish to each holder of Series B Preferred Stock (“Series B
Recipients”) the following information:

               (i) As soon as practicable after the end of each fiscal year of the Company, and in any event
within seventy five (75) days thereafter, the Company shall furnish to the Series A Recipients and
Series B Recipients, as applicable, an un-audited consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such fiscal year, and an un-audited consolidated statement of
operations and a consolidated statement of cash flows of the Company and its Subsidiaries, for such
year, all in reasonable detail.

               (ii) As soon as practicable after the end of each fiscal year of the Company, and in any event
within one hundred eighty (180) days thereafter, the Company shall furnish to the Series A
Recipients and Series B Recipients, as applicable, a consolidated balance sheet of the Company and
its Subsidiaries, as at the end of such fiscal year, and a consolidated statement of operations and
a consolidated statement of cash flows of the Company and its Subsidiaries, for such year, all
prepared in accordance with generally accepted accounting principles consistently applied 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 accompanied by a report and opinion thereon
by a firm of independent public accountants of national standing or such other independent public
accounting firm selected by the Board and approved by the holders of at least 66 2⁄3% of the then
outstanding Preferred Stock (on an as-converted basis and including any shares of Common Stock into
which the Preferred Stock are converted) (the “Majority Holders”).

               (iii) As soon as practicable after the end of each month and after the end of the first,
second and third quarterly accounting periods in each fiscal year of the Company and its
Subsidiaries, and in any event within thirty (30) days thereafter, an un-audited consolidated
balance sheet, consolidated statement of income and a consolidated statement of cash flows for such
monthly or quarterly period, as applicable, and for the current fiscal year to date, including a
comparison of the current fiscal year to date to the Company’s annual budget with any variances
between such figures so listed, prepared in accordance with generally accepted accounting
principles, with the exception that no notes need be attached to such statements and year-end audit
adjustments may not have been made.

               (iv) At least thirty (30) days prior to the beginning of each fiscal year, an annual budget,
including projected income, cash flow and balance sheet statements on at least a quarterly basis
for the ensuing fiscal year, and operating plans, including a brief qualitative description of the
Company’s plan by the CEO in support of the annual budget of the Company and its Subsidiaries for
such fiscal year (and as soon as reasonably practicable, any subsequent revisions thereto) (the
“Budget”). The Budget shall be approved by the Board no later than ten (10) days prior to the
beginning of the next fiscal year.

               (v) Within five (5) business days after an executive officer of the Company or its
Subsidiaries, as the case may be, has knowledge of: (i) the occurrence of a default hereunder, or
under any material agreement of the Company or its Subsidiaries, including without limitation any
loan or financing agreement, (ii) the commencement of any legal proceeding against the Company, or
(iii) any effect, condition, event, or circumstance that has resulted in a material and adverse
effect on the business, properties, assets, condition (financial or otherwise), results of
operations or liabilities of the Company or its Subsidiaries, a statement from the CEO describing
such occurrence and management’s anticipated response.

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               (vi) Other financial and other information of the Company and its Subsidiaries as a Series A
Recipient or Series B Recipient, as applicable, may reasonably request from time to time.

               (vii) Within five (5) business days after the date of filing or delivery, copies of all
materials of whatsoever nature filed or delivered by the Company or its Subsidiaries thereof (i)
with the Commission and (ii) with any national or foreign securities exchange or quotation bureau.

          (c) In the event the Company or its Subsidiaries fails to timely provide each Series A
Recipient and Series B Recipient, as applicable, with the information and reports required by this
Section 3.1, the Majority Holders may, thirty (30) days after providing written notice of
such failure to the Company and its Subsidiaries, during which period the Company shall have the
opportunity to cure such deficiency, request that the accounting firm of its choice audit the
Company and its Subsidiaries, at the Company’s expense, in order to produce such reports in a
manner satisfactory to the holders of Preferred Stock, in their reasonable discretion. The Company
and its Subsidiaries shall cooperate in any such audit.

     3.2. Inspection Rights. Any stockholder that holds at least One Million (1,000,000)
shares of Preferred Stock of the Company, and Biotechnology Greenhouse Corporation of Southeastern
Pennsylvania d/b/a BioAdvance (“BioAdvance”) so long as BioAdvance is a stockholder of the Company,
shall have the right, during normal business hours and upon reasonable prior notice, to visit and
inspect any of the properties of the Company or any of its Subsidiaries (including books of
account, reports and other papers), to make extracts therefrom, and to discuss the affairs,
finances and accounts of the Company or any of its Subsidiaries with their officers, employees and
accountants (and by this provision the Company and its Subsidiaries authorizes their accountants to
discuss such finances and affairs with such stockholder representatives), 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 and its Subsidiaries shall not be
obligated under this Section 3.2 with respect to a competitor of the Company or its
Subsidiaries or with respect to information which the Board determines in good faith is
confidential and should not, therefore, be disclosed.

     3.3. Confidentiality of Records. Except as contemplated by this Agreement or as
otherwise required by law (including applicable securities laws) or regulatory authority, or by any
listing or trading agreement to which a party is subject, each Party agrees that it will use its
reasonable best efforts to keep confidential and not disclose, divulge or use for any purpose other
than to monitor its investment in the Company any confidential or proprietary information
(“Confidential Information”) which such Party obtains from the Company; provided, however, that the
Parties may disclose Confidential Information to their respective general partners, limited
partners, members or legal or financial advisors in accordance with normal reporting practices.
“Confidential Information” shall not include the following: (a) information that is now in, or
hereafter enters, the public domain through no fault of the Party; (b) information that previously
was known by the Party independently of the Company; (c) information that is independently
developed by the Party; (d) information that is disclosed with the written approval of the Company;
or (e) information that is received from a third party without a duty of confidentiality.
Notwithstanding the foregoing, in the event that any party (the “Disclosing Party”) is
required by applicable law (including, without limitation, the Freedom of Information Act, 5 U.S.C.
Section 552, as amended from time to time), regulatory authority or any listing or trading
agreement to disclose any Confidential Information, the Disclosing Party shall notify the Company
prior to making such disclosure and shall use its commercially reasonable efforts to give the
Company an opportunity (as is reasonable under the circumstances and at the Company’s expense) to
comment on such disclosure and, in the Company’s discretion, so that the Company may seek an
appropriate protective order or
waive compliance with the provisions of this Agreement. The
Disclosing Party warrants that it will cooperate fully with the Company in seeking any such
protective orders. If, in the absence of a protective order or

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the receipt of a waiver hereunder,
the Disclosing Party is, nonetheless, in the reasonable opinion of its counsel, compelled to
disclose Confidential Information or else violate applicable law, regulatory requirement or
contractual covenants, or stand liable for contempt or suffer other censure or penalty, the
Disclosing Party may disclose such information pursuant to such requirement without liability
hereunder. Any Party that is bound by the terms of any other confidentiality or non-disclosure
agreement between the Company and such Party that contains terms that are more restrictive than
those set forth in this Section 3.3 shall continue to be bound by the terms of such other
agreement.

     3.4. Reservation of Common Stock. The Company and its stockholders shall take any and
all action necessary to reserve for issuance the number of shares of Common Stock into which all of
the Preferred Shares then outstanding or, in the case of the Series B Preferred Stock, to be sold
or issued pursuant to the Purchase Agreement, are convertible, and shall take such further action
from time to time thereafter to increase the number of shares of Common Stock reserved for issuance
as required by any increase in the number of shares of Common Stock into which the Preferred Shares
may then be converted.

     3.5. Proprietary Information and Inventions Agreement. The Company and its
Subsidiaries shall require (i) all of their officers and employees to execute and deliver a
proprietary information and inventions assignment and (ii) all of their directors and consultants
to execute and deliver a confidential information agreement, each in a form reasonably acceptable
to the Company and the Investors.

     3.6. Board of Directors. The number of directors constituting the entire Board shall
be seven (7), subject to increase or decrease in accordance with the terms of the Certificate and
the Stockholders Agreement.

          (a) Neither the Company nor any of its Subsidiaries shall without the approval of the
Compensation Committee of the Board (the “Compensation Committee”), (i) hire any family member of a
Company employee; or (ii) authorize or enter into any material transactions with any of its
directors or management employees, as the case may be, or such director’s or employee’s immediate
family.

     3.7. Real Property Holding Corporation. The Company covenants that it will operate in
a manner such that it will not become a “United States real property holding corporation” as that
term is defined in Section 897(c)(2) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.

     3.8. Termination of Covenants. Except for the covenants set forth in Sections
3.4, 3.8 and 3.11, all covenants of the Company and its Subsidiaries
contained in Section 3 of this Agreement shall expire and terminate as to the Investors
upon the effective date of the registration statement pertaining to the first Qualified Public
Offering.

     3.9. Restrictive Agreements. Neither the Company nor any of its Subsidiaries will,
without the approval of a majority of the directors serving on the Board enter into or become
obligated under any
agreement or contract (excluding sales agreements executed in the ordinary course of business)
including, without limitation, any loan agreement, promissory note (or other evidence of
indebtedness), mortgage, security agreement or lease, which by its terms prevents or restricts the
Company or its Subsidiaries from performing its obligations under this Agreement.

     3.10. Option Vesting. All stock options and other equity awards issued after the date
hereof to employees, directors, consultants and other service providers will be subject to vesting
as determined by the Compensation Committee; provided, except as may be determined otherwise by the
Compensation Committee, that all stock options and other equity awards shall vest over a period of
at least four (4)

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years. If options are exercised prior to vesting due to reverse vesting
agreements with certain employees, the terms of any repurchase option upon termination of
employment or service of the shareholder will also be determined by the Compensation Committee.

     3.11. Directors’ Liability and Indemnification; D&O Insurance.

          (a) The Company’s Certificate shall provide for elimination of the liability of directors to
the maximum extent permitted by Delaware law and the Company’s Certificate and Bylaws shall provide
for indemnification of directors for acts on behalf of the Company to the maximum extent permitted
by law. In addition, the Company shall enter into and use its best efforts to at all times
maintain indemnification contracts substantially in the form attached as Exhibit C hereto
with each of its directors to indemnify such directors to the maximum extent permissible under
Delaware law.

          (b) The Company has in effect and shall maintain a Directors’ and Officers’ insurance policy
on the Directors and Officers of the Company in an aggregate amount of at least Five Million
Dollars ($5,000,000). The Company will provide a copy of the insurance certificate regarding the
insurance described in this Section 3.12(b) to any Investor upon its request.

     3.12. Key Person Life Insurance. The Company has in effect and shall maintain key man
insurance in the amount of $2,000,000 each on the lives of Jane Hollingsworth and Terri Sebree,
with the proceeds of such insurance policies payable to the Company.

     3.13. Indemnification.

          (a) The Company and its Subsidiaries, jointly and severally, hereby agree to hold harmless and
indemnify the Investors, Existing Holders and their respective direct and indirect subsidiaries,
Affiliates and corporations, and each of their partners, officers, directors, employees,
stockholders, agents, and representatives (collectively, referred to as the “Indemnitees”) against
any and all expenses (including attorneys’ fees), damages, judgments, fines, amounts paid in
settlements, or any other amounts that an Indemnitee incurs as a result of any claim or claims made
against it in connection with any threatened, pending or completed action, suit, arbitration,
investigation or other proceeding arising out of, or relating to the Indemnitee’s performance of
its obligations or the exercise of its rights in accordance with the terms of this Agreement;
provided, however, that no Indemnitee shall be entitled to be held harmless or indemnified by the
Company for acts, conduct or omissions by any Indemnitee involving gross negligence, intentional
misconduct or knowing and culpable violation of the law.

          (b) The Company or its Subsidiaries shall reimburse, promptly following request therefor, all
reasonable expenses incurred by an Indemnitee in connection with any threatened, pending or
completed action, suit, arbitration, investigation or other proceeding arising out of, or relating
to, the Indemnitees’ actions in connection with any transaction undertaken in connection with this
Agreement, but only to the extent permitted under Section 3.13(a) above.

          (c) The Company’s and its Subsidiaries’ indemnity obligations set forth above are subject to
the Indemnitees providing prompt written notice of a claim. The Company and its Subsidiaries shall
control the defense of any such action and, at its discretion, may enter into a stipulation of
discontinuance or settlement thereof; provided that the Company and its Subsidiaries may not
discontinue any action or settle any claim in a manner that does not unconditionally release the
Indemnitee or requires an admission by an Indemnitee or payment by an Indemnitee without such
Indemnitee’s prior written approval. The Indemnitees shall, at the Company’s and its Subsidiaries’
expense and reasonable request, cooperate with the Company and its Subsidiaries in any such defense
and shall make available to the Company and its Subsidiaries at the Company’s and its Subsidiaries’
expense all those persons,

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documents (excluding attorney/client or attorney work product materials)
reasonably required by the Company and its Subsidiaries in the defense of any such action. The
Indemnitees may, at their expense, assist in such defense.

4. Preemptive Rights on Issuances of New Securities by the Company.

     4.1. Subsequent Offerings. Each holder of Preferred Stock (each a “Preemptive
Investor” and collectively, the “Preemptive Investors”) shall have the right to purchase Equity
Securities 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 4.7 hereof, pursuant
to the terms of this Section 4.

     4.2. Notice of Issue. If the Company proposes to issue any Equity Securities, then
the Company shall give the Preemptive Investors written notice of its intentions, which notice
shall describe the Equity Securities, the amount of Equity Securities the Company proposes to
issue, and the price, terms and conditions upon which the Company proposes to issue such Equity
Securities and shall offer such Equity Securities to the Preemptive Investors pursuant to the terms
of this Section 4 (the “Initial Notice”).

     4.3. Exercise of Preemptive Rights. The Preemptive Investors shall have thirty (30)
days from their receipt of such Initial Notice to agree to purchase in the aggregate all, or any
portion thereof, of the Equity Securities being offered. Each Preemptive Investor shall have the
right to purchase such Preemptive Investor’s pro rata share, based on the ratio of (i) the number
shares of Equity Securities held by such Preemptive Investor, to (ii) the total number of shares of
Equity Securities held by all of the Preemptive Investors (the “Preemptive Pro Rata Share”). If a
Preemptive Investor (the “Electing Investor”) elects to purchase its full Preemptive Pro Rata
Share, then such Electing Investor shall have a right of over-allotment such that if any other
Preemptive Investor (the “Non-electing Investor”) fails to purchase its Preemptive Pro Rata Share,
such Electing Investor may purchase, on a pro rata basis with other Electing Investors, the
Non-electing Investor’s Preemptive Pro Rata Share (the “Preemptive Over-Allotment”). Each
Preemptive Investor shall indicate its agreement to purchase such Investor’s Preemptive Pro-Rata
Share or such Preemptive Investor’s Preemptive Over-Allotment, if any, by giving written notice to
the Company and stating therein the quantity of Equity Securities to be purchased. If requested by
the Company, such notice shall be accompanied by a representation letter certifying that such
Preemptive Investor is a Qualified Investor.

     4.4. Issuance of Equity Securities to Other Persons. If the Preemptive Investors do
not elect to purchase all of the Equity Securities offered, then the Company shall have ninety (90)
days thereafter to sell the Equity Securities with respect to which the Preemptive Investors’
rights were not exercised, at a price and upon general terms and conditions not materially more
favorable to the purchasers thereof than specified in the Initial Notice; provided that in no event
shall the price be less than 100% of the price proposed in the Initial Notice. If the Company has
not sold such Equity Securities within such ninety (90) day period, the Company shall not
thereafter issue or sell any Equity Securities, without first offering such securities to the
Investors in the manner provided in this Section 4.

     4.5. Termination and Waiver of Preemptive Rights. The preemptive rights established
by this Section 4 shall not apply to, and with respect to issuances by the Company shall
terminate upon, the consummation of a Qualified Public Offering. The preemptive rights established
by this Section 4 may be amended, or any provision waived, with the written consent of the
Majority Holders or as permitted by Section 5.3.

-19-

 

     4.6. Transfer of Preemptive Rights. The preemptive rights of each Preemptive 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.

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

          (a) Common Stock Issuable upon conversion of any of the Preferred Stock, or as a dividend or
distribution on the Preferred Stock;

          (b) securities Issued upon the conversion of any debenture, warrant, option, or other
convertible security outstanding as of the date hereof;

          (c) Common Stock Issuable upon a stock split, stock dividend, or any subdivision of shares of
Common Stock;

          (d) Common Stock (or options to purchase such shares of Common Stock) Issued or Issuable to
employees or directors of, or consultants to, the Company not to exceed 8,800,000 shares of Common
Stock, or options to acquire Common Stock, pursuant to an equity incentive plan approved by the
Board;

          (e) shares of Common Stock or Common Stock Equivalents (as defined in the Certificate) Issued
or Issuable to commercial financing sources and equipment lessors pursuant to a debt financing,
equipment leasing or real property leasing transaction approved by the Board;

          (f) shares of Series B Preferred Stock issued pursuant to the Purchase Agreement;

          (g) shares of Common Stock or Common Stock Equivalents (as defined in the Certificate) Issued
or Issuable in connection with strategic transactions involving the Corporation and which have been
approved by the Board, provided the primary purpose of such Issuance is not to raise capital and
such Issuances in the aggregate do not exceed 10% of the outstanding Common Stock as of the date
hereof (after giving effect to the issuance of the Series B Preferred Stock pursuant to the
Purchase Agreement on a fully diluted basis, and

          (h) Issuances of equity securities in connection with a Qualified Public Offering.

5. Miscellaneous.

     5.1. Specific Performance. The parties hereto hereby declare that it is impossible to
measure in money the damages which will accrue to a party hereto or to their heirs, personal
representatives, successors or assigns by reason of the failure of a party to perform any of the
obligations under this Agreement and agree that the terms of this Agreement shall be specifically
enforceable. If any party hereto or such party’s heirs, personal representatives, or assigns
institutes any action or proceeding to specifically enforce the provisions hereof, any person
against whom such action or proceeding is brought hereby waives the claim or defense therein that
such party or such personal representative has an adequate
remedy at law, and such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.

     5.2. Governing Law. This Agreement and the rights of the parties hereto, shall be
governed by and construed in accordance with the laws of the State of Delaware without regard to
the conflicts of law principles of any jurisdiction. No suit, action or proceeding with respect to
this Agreement may be

-20-

 

brought in any court or before any similar authority other than in a court of competent
jurisdiction in the State of Delaware and the parties hereby submit to the exclusive jurisdiction
of such courts for the purpose of such suit, proceeding or judgment. Each of the parties hereto
hereby irrevocably waives any right which it may have had to bring such an action in any other
court, domestic or foreign, or before any similar domestic or foreign authority and agrees not to
claim or plead the same. Each of the parties hereto hereby irrevocably and unconditionally waives
trial by jury in any legal action or proceeding in relation to this Agreement and for any
counterclaim therein.

     5.3. Amendment and Waiver. This Agreement may not be altered, amended or modified at
any time, unless such alteration, amendment or modification is first approved by (x) the holders of
at least 66 2⁄3% of the then outstanding Registrable Securities and (y) the Company; provided,
however, that if any amendment would materially and adversely impair the rights or increase the
obligations of a Holder (each, an “Adversely Affected Holder”), such amendment shall not be
effective as to any Adversely Affected Holder unless consented to by those Adversely Affected
Holders holding Equity Securities which constitute a majority of the Registrable Securities held by
all Adversely Affected Holders. Any amendment or waiver so effected shall be binding upon the
Company, each of the parties hereto and any assignee of any such party. No waiver of any breach of
this Agreement extended by any party hereto to any other party shall be construed as a waiver of
any rights or remedies of any other party hereto or with respect to any subsequent breach.

     5.4. Survival. The representations, warranties, covenants, and agreements made herein
shall survive any investigation made by any Holder and the closing of the transactions contemplated
hereby.

     5.5. Severability. If any provision of this Agreement is held to be invalid, illegal,
or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

     5.6. Delays or Omissions. It is agreed that no delay or omission to exercise any
right, power, or remedy accruing to any party hereto, upon any breach, default or noncompliance of
any 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 part of any party hereto of
any breach, default or noncompliance under this 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 the parties hereto, shall be cumulative and not alternative.

     5.7. Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the successors and permitted
assigns of the parties hereto; provided, however, that prior to the receipt by the Company of
adequate written notice of the transfer of any Registrable Securities permitted under this
Agreement 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, including the payment of dividends or any redemption price.

     5.8. 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 telex or facsimile if sent during normal business hours of the recipient; if not,
then on the next business day, (c) three (3) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, (d) one (1) day after deposit with a nationally
recognized overnight courier,

-21-

 

specifying next day delivery, with written verification of receipt, (e) when sent by
electronic mail, upon confirmation of receipt by the recipient via electronic mail. All
communications shall be sent to the party to be notified at the address as set forth on the
signature pages hereof or Exhibits A-B hereto or at such other address as such party may
designate by ten (10) days advance written notice to the other parties hereto.

     5.9. Right to Conduct Activities. The Company and each Investor hereby acknowledge
that some or all of the Investors are professional investment funds or holding companies and, as
such, hold investments in numerous portfolio companies, some of which may be competitive with the
Company’s business. No Investor shall be liable to the Company or to other Investors for any claim
arising out of, or based upon, (a) the holding of securities by the Investor in any entity
competitive with the Company, or (b) actions taken by any partner, officer or other representative
of any Investor to assist any such competitive company, whether or not such action was taken as a
board member of such competitive company or otherwise, and whether or not such action has a
detrimental effect on the Company, so long as no confidential information of the Company is used or
disclosed by such Investor in connection with any such competitive activities.

     5.10. 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.

     5.11. Counterparts; Execution by Facsimile Signature. 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. This Agreement may be executed by facsimile signature(s) which shall be
binding on the party delivering same, to be followed by delivery of originally executed signature
pages.

     5.12. Termination. Except as otherwise set forth herein, all agreements and covenants
contained herein shall terminate automatically and without further action by any Party hereto upon
the first date on which none of the Investors and Existing Holders (and their transferees or
assignees to whom registration rights hereunder are transferable pursuant to Section 2.10)
continue to hold any Registrable Securities.

     5.13. Entire Agreement. This Agreement and each of the Exhibits hereto, the Purchase
Agreement and each of the Exhibits and Schedules thereto, and the Stockholders Agreement and each
of the Exhibits thereto constitute the full and entire understanding and agreement between the
parties hereto with regard to the subject matter hereof and thereof and no party hereto shall be
liable or bound to any other party hereto in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein and therein.

[SIGNATURES ON FOLLOWING PAGES]

-22-

 

          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:

NUPATHE INC.

 	 
	 	By:  	/s/  Jane H. Hollingsworth
 	 
	 	 	Name:  	Jane H. Hollingsworth 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

- Amended and Restated Investor Rights Agreement Signature Pages -

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	SR ONE, LIMITED

 	 
	 	By:  	/s/  Philip L. Smith
 	 
	 	 	Name:  	Philip L. Smith 	 
	 	 	Title:  	General Partner 	 
	 

-
Amended and Restated Investor Rights Agreement Signature Pages -

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	QUAKER BIOVENTURES II, L.P.

 	 
	 	By:  	QUAKER BIOVENTURES CAPITAL II, L.P.,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	QUAKER BIOVENTURES CAPITAL II, LLC,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	/s/  Richard S. Kollender
 	 
	 	 	Name:  	Richard S. Kollender 	 
	 	 	Title:  	Vice President 	 
	 

- Amended and Restated Investor Rights Agreement Signature Pages -

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	BIOADVANCE VENTURES, L.P.

 	 
	 	By:  	BioAdvance GP I, L.P.
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	Quaker BioAdvance Management, L.P.
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	Quaker BioVentures Management, LLC,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	/s/  Richard S. Kollender
 	 
	 	 	Name:  	Richard S. Kollender 	 
	 	 	Title:  	Vice President 	 
	 

- Amended and Restated Investor Rights Agreement Signature Pages -

 

 

	 	 	 	 	 
	 	BIRCHMERE VENTURES III L.P.

 	 
	 	By:  	BV3 Management LP, general partner
 	 
	 	 	 
	 	By:  	BV3 LLC, general partner
 	 
	 	 	 
	 	By:  	BV3GP Investors, LLC, Managing Member
 	 
	 	 	 
	 	By:  	Bay City Capital LLC, Manager
 	 
	 	 	 
	 	By:  	/s/  Jeanne Cunicelli
 	 
	 	 	Jeanne Cunicelli 	 
	 	 	Authorized Signatory 	 
	 
	 
	 	BIRCHMERE VENTURES III TSIB L.P.

 	 
	 	By:  	BV3 Management LP, general partner
 	 
	 	 	 
	 	By:  	BV3 LLC, general partner
 	 
	 	 	 
	 	By:  	BV3GP Investors, LLC, Managing Member
 	 
	 	 	 
	 	By:  	Bay City Capital LLC, Manager
 	 
	 	 	 
	 	By:  	/s/  Jeanne Cunicelli
 	 
	 	 	Jeanne Cunicelli 	 
	 	 	Authorized Signatory 	 
	 

- Amended and Restated Investor Rights Agreement Signature Pages -

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	SAFEGUARD DELAWARE, INC.

 	 
	 	By:  	/s/  Stephen T. Zarrilli
 	 
	 	 	Name:  	Stephen T. Zarrilli 	 
	 	 	Title:  	   Vice President and Treasurer 	 
	 

- Amended and Restated Investor Rights Agreement Signature Pages -

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	BATTELLE VENTURES, LP

 	 
	 	By:  	BVP GP, LLC, its General Partner
 	 
	 	 	 
	 	By:  	/s/  Rakefet Rasdin
 	 
	 	 	Name:  	Rakefet Rasdin 	 
	 	 	Title:  	General Partner 	 
	 
	 	INNOVATION VALLEY PARTNERS, LP

 	 
	 	By:  	IVP GP, LLC, its General Partner
 	 
	 	 	 
	 	By:  	/s/  Rakefet Rasdin
 	 
	 	 	Name:  	Rakefet Rasdin 	 
	 	 	Title:  	General Partner 	 
	 

- Amended and Restated Investor Rights Agreement Signature Pages -

 

 

	 	 	 	 	 
	 	BIOTECHNOLOGY GREENHOUSE 

CORPORATION OF SOUTHEASTERN 

PENNSYLVANIA D/B/A BIOADVANCE

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

- Amended and Restated Investor Rights Agreement Signature Pages -

 

 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/  Jane H. Hollingsworth
 	 
	 	 	Jane H. Hollingsworth 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/  John Climax
 	 
	 	 	John Climax, Ph.D. 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/  Ronan Lambe
 	 
	 	 	Ronan Lambe, Ph.D. 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/  Mark W. Pierce
 	 
	 	 	Mark W. Pierce, M.D., Ph.D. 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/  Suzanne M. Hanlon
 	 
	 	 	Suzanne M. Hanlon 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/  Ezra Felker
 	 
	 	 	Ezra Felker 	 
	 	 	 	 
	 

- Amended and Restated Investor Rights Agreement Signature Pages -

 

 

EXHIBIT A

Existing Holders

	 	 	 	 	 	 	 	 	 
	 	 	Shares of Series A	 	Shares of Common
	Existing Holders	 	Preferred Stock	 	Stock
	Safeguard Delaware, Inc.
	 	 	5,376,344	 	 	 	—	 
	Birchmere Ventures III, L.P.
	 	 	2,293,907	 	 	 	—	 
	Birchmere Ventures III TSIB,
L.P.
	 	 	1,290,323	 	 	 	—	 
	BioAdvance Ventures, L.P.
	 	 	1,792,115	 	 	 	—	 
	Battelle Ventures, LP
	 	 	2,274,194	 	 	 	—	 
	Innovation Valley Partners, LP
	 	 	413,978	 	 	 	—	 
	Biotechnology Greenhouse
Corporation of Southeastern
Pennsylvania D/B/A BioAdvance
	 	 	988,261	 	 	 	—	 
	Ben Franklin Technology
Partners of Southeastern
Pennsylvania
	 	 	374,268	 	 	 	—	 
	John Climax, Ph.D.
	 	 	987,724	 	 	 	—	 
	Ronan Lambe, Ph.D.
	 	 	987,724	 	 	 	—	 
	Jane H. Hollingsworth
	 	 	143,668	 	 	 	1,628,000	 
	Ezra Felker
	 	 	—	 	 	 	60,000	 
	Suzanne M. Hanlon
	 	 	—	 	 	 	140,000	 

 

 

EXHIBIT B

Investors

Name and Address

SR One, Limited

161 Washington Street, Suite 500

Conshohocken, PA 19428

Attention:       General Partner

Telephone:      (610) 567 1000

Facsimile:       (610) 567 1039

with a copy to:

Pepper Hamilton LLP

3000 Two Logan Square

Eighteenth and Arch Streets

Philadelphia, PA 19103

Attention:      Christopher S. Miller, Esquire

Telephone:     (610) 640-7837

Facsimile:      (267) 200-0854

Email:            millerc@pepperlaw.com

Quaker BioVentures II, L.P.

Cira Centre

2929 Arch Street

Philadelphia, PA 19104-2868

Attention:      Vice President

Telephone:     (215) 988-6800

Facsimile:      (215) 988-6801

with a copy to:

Pepper Hamilton LLP

3000 Two Logan Square

Eighteenth and Arch Streets

Philadelphia, PA 19103

Attention:      Christopher S. Miller, Esquire

Telephone:     (610) 640-7837

Facsimile:      (267) 200-0854

Email:            millerc@pepperlaw.com

Safeguard Delaware, Inc.

1 1105 N. Market St.

Suite 1300

Wilmington, DE 19801

 

 

Attention: Stephen T. Zarrilli

with a copy to:

Safeguard Delaware, Inc.

435 Devon Park Drive

Building 800

Wayne, PA 19087

Attention: Steven J. Feder

Senior Vice President and General Counsel

Fax: 610-293-0601

Birchmere Ventures III, L.P.

One North Shore Center

Suite 201, 12 Federal Street

Pittsburgh, PA 15212

Attention:

Facsimile: (412) 322-3226

Birchmere Ventures III TSIB, L.P.

One North Shore Center

Suite 201, 12 Federal Street

Pittsburgh, PA 15212

Attention:

Facsimile: (412) 322-3226

BioAdvance Ventures, L.P.

Cira Centre

2929 Arch Street

Philadelphia, PA 19104-2868

Attention:

Telephone: (215) 988-6800

Facsimile: (215) 988-6801

with a copy to:

Pepper Hamilton LLP

3000 Two Logan Square

Eighteenth and Arch Streets

Philadelphia, PA 19103

Attention:      Christopher S. Miller, Esquire

Telephone:      (610) 640-7837

Facsimile:      (267) 200-0854

Email:            millerc@pepperlaw.com

Battelle Ventures, LP

103 Carnegie Center, Suite 100

Princeton, NJ 08540

Attention: Tracy Warren, General Partner

 

 

Facsimile No: (609) 921-8703

Innovation Valley Partners, LP

103 Carnegie Center, Suite 100

Princeton, NJ 08540

Attention: Tracy Warren, General Partner

Facsimile No: (609) 921-8703

Biotechnology Greenhouse Corporation of

Southeastern Pennsylvania D/B/A

BioAdvance

John Climax, Ph.D.

[Address]

Ronan Lambe, Ph.D.

[Address]

Jane H. Hollingsworth

[Address]

Ezra Felker

[Address]

Mark W. Pierce, M.D., Ph.D.

[Address]

Suzanne M. Hanlon

[Address]

 

 

EXHIBIT C

Form of Indemnification Agreement

 

 

DIRECTOR INDEMNIFICATION AGREEMENT

NUPATHE INC.

     THIS DIRECTOR INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of July 8, 2008, by and
among NuPathe Inc., a Delaware corporation (the “Company”), and the Director of the Company who is
a signatory hereto (the “Indemnitee”).

RECITALS:

     A. The Indemnitee has been elected to serve as a Director of the Company and the Company
wishes such Indemnitee to serve in such capacity.

     B. Section 145 of the General Corporation Law of the State of Delaware, under which law the
Company is organized, empowers corporations to indemnify a person serving as a director, officer,
employee or agent of the corporation and a person who serves at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust, or
other enterprise, and said Section 145 and the Bylaws of the Company (the “Bylaws”) specify that
the indemnification set forth in said Section 145 and in the Bylaws, respectively, shall not be
deemed exclusive of any other rights to which those seeking indemnification may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

     C. The Board of Directors has determined that contractual indemnification as set forth herein
is not only reasonable and prudent but necessary to promote the best interests of the Company and
its stockholders.

     D. The Company desires and has requested the Indemnitee to serve or continue to serve as a
Director of the Company free from undue concern for claims for damages arising out of or related to
such services to the Company.

     E. The Indemnitee is willing to serve, or to continue to serve, the Company, only on the
condition that the Company furnish the indemnity provided for herein.

     NOW, THEREFORE, in consideration of the Indemnitee’s continued service as a Director of the
Company, the parties hereto agree as follows:

1. Agreement to Serve. The Indemnitee shall serve and/or continue to serve as a director
of the Company, at the will of the Company at the election of its stockholders, in the capacity
such Indemnitee currently serves, so long as such Indemnitee is duly appointed or elected and
qualified in accordance with the applicable provisions of the Bylaws of the Company or until such
time as such Indemnitee tenders a resignation in writing; provided, however, that nothing contained
in this Agreement is intended to create any right to continued employment, if any, by such
Indemnitee in any capacity.

 

 

2. Indemnity.

     (a) The Company will indemnify the Indemnitee, the Indemnitee’s executors, administrators or
assigns, for any Expenses (as defined below), which such Indemnitee is or becomes legally obligated
to pay in connection with any Proceeding (as defined below); provided, that in each such case such
Indemnitee has acted in good faith and in a manner, which such Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, and, in the case of a criminal proceeding,
in addition, had no reasonable cause to believe that the conduct at issue was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that such Indemnitee did not act in good faith and in a manner which such Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company, or, with respect
to any criminal action or proceeding, had reasonable cause to believe that the conduct at issue was
unlawful.

     (b) As used in this Agreement the term “Proceeding” shall include any threatened, pending or
completed claim, action, suit or proceeding, whether brought by or in the right of the Company or
by a third party or otherwise and whether of a civil, criminal, administrative or investigative
nature, in which the Indemnitee may be or may have been involved as a party or otherwise, by reason
of the fact that such Indemnitee is or was a director or officer of the Company, by reason of any
actual or alleged error or misstatement or misleading statement or omission made or suffered by
such Indemnitee, by reason of any action taken by or any inaction on the part of the Indemnitee
while acting as such director or officer, or by reason of the fact that such Indemnitee was serving
at the request of the Company as a director, trustee, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.

     (c) For purposes of this Agreement the term “subsidiary” means any corporation of which more
than 50% of the outstanding voting securities are owned directly or indirectly by the Company, by
the Company and one or more other subsidiaries or by one or more other subsidiaries.

     (d) As used in this Agreement, the term “other enterprise” shall include (without limitation)
employee benefit plans and administrative committees thereof, and the term “fines” shall include
(without limitation) any excise tax assessed with respect to any employee benefit plan.

     (e) References to “serving at the request of the Company” shall include any service as a
director, officer, employee or agent of the Company which imposes duties on, or involves services
by, such director, officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries, and if the Indemnitee acted in good faith and in a manner such
Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an
employee benefit plan, such Indemnitee shall be deemed to have acted in a manner “not opposed to
the best interests of the Company” as referred to above.

3. Expenses. As used in this Agreement, the term “Expenses” shall include, without
limitation, damages, judgments, fines, penalties, settlements and costs, attorneys’ fees and
disbursements and costs of attachment or similar bonds, investigations, and any expenses of
establishing a right to indemnification under this Agreement.

2

 

4. Subrogation. In the event that the Company pays any Expenses under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.

5. Exclusions. Notwithstanding the foregoing, the Company shall not be liable under this
Agreement to pay any Expenses in connection with any Proceeding:

     (a) to the extent that payment of such Expenses is actually made to the Indemnitee under a
valid, enforceable and collectible insurance policy;

     (b) to the extent that the Indemnitee is indemnified and actually paid other than pursuant to
this Agreement;

     (c) in connection with a judicial action by or in the right of the Company, in respect of any
claim, issue or matter as to which the Indemnitee shall have been adjudged to be liable to the
Company unless and only to the extent that the Court of Chancery of the State of Delaware or the
court in which such Proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, the Indemnitee is
fairly and reasonably entitled to indemnity for such Expenses as such court shall deem proper;

     (d) if it is proved by final judgment in a court of law or other final adjudication that the
Indemnitee had in fact gained any personal profit or advantage to which the Indemnitee was not
legally entitled;

     (e) for a disgorgement of profits made from the purchase and sale by the Indemnitee of
securities pursuant to Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any state statutory law or common law;

     (f) if it is proved by final judgement in a court of law or other final adjudication that the
Indemnitee breached the duty of loyalty owed to the Company or its stockholders, acted in bad
faith, failed to act where such failure to act was in bad faith, or engaged in intentional
misconduct or knowing violation of the law; or

     (g) for any Expenses which the Company is prohibited by applicable law from paying as
indemnity.

6. Indemnification of Expenses of Successful Party. Notwithstanding any other provision of
this Agreement, to the extent that the Indemnitee has been successful on the merits or otherwise in
defense of any Proceeding or in defense of any claim, issue or matter therein, including dismissal
without prejudice, such Indemnitee shall be indemnified against any and all Expenses actually and
reasonably incurred in connection therewith.

7. Partial Indemnification. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of Expenses, but not, however,
for the total amount thereof, the Company shall nevertheless indemnify such Indemnitee for the
portion of such Expenses to which the Indemnitee is entitled.

3

 

8. Advance of Expenses. Expenses incurred by the Indemnitee in connection with any
Proceeding shall be paid by the Company in advance of the final disposition thereof upon request of
such Indemnitee that the Company pay such Expenses. The Indemnitee hereby undertakes to repay to
the Company the amount of any Expenses theretofore paid by the Company to the extent that it is
ultimately determined that such Expenses were not reasonable or that such Indemnitee is not
entitled to indemnification therefor. The advances to be made hereunder shall be paid by the
Company to or on behalf of the Indemnitee within 30 days following delivery of a written request
therefor by such Indemnitee to the Company.

9. Approval of Payment of Expenses. No payment of Expenses for which indemnity shall be
sought under this Agreement, other than those in respect of judgments and verdicts actually
rendered, shall be incurred without the prior consent of the Company, which consent shall not be
unreasonably withheld.

10. Notice of Claim. The Indemnitee, as a condition precedent to any indemnification under
this Agreement, shall give to the Company notice in writing as soon as reasonably practicable of
any Proceeding for which indemnity will or could be sought under this Agreement. Notice to the
Company shall be given at its principal office and shall be directed to the Secretary of the
Company (or such other address as the Company shall designate in writing to the Indemnitee); notice
shall be deemed given on the earlier of the date of receipt or the seventh day after it is sent by
properly addressed, prepaid registered or certified mail, return receipt requested. In addition,
the Indemnitee shall give the Company such information and cooperation as it may reasonably require
and as shall be within such Indemnitee’s power.

11. Changes in Law/Amendments. The entitlement to payment hereunder of the Indemnitee
shall not be affected or diminished by any amendment, termination or repeal of the General
Corporation Law of the State of Delaware or the Bylaws of the Company with respect to any
Proceeding arising out of or relating to any actions, transactions or facts occurring prior to the
final adoption of any such amendment, termination or repeal.

12. Enforcement. In the event that the Company shall fail or refuse to make payment of any
amounts due the Indemnitee under Section 2 hereof within the time periods provided in Section 8,
the parties shall then engage in arbitration in the city of Philadelphia, Pennsylvania in
accordance with the commercial arbitration rules then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected by the Company and
one by Indemnitee, and the third of whom shall be selected by the other two arbitrators. Each
arbitrator selected as provided herein is required to be serving or to have served as a director or
an executive officer of a corporation whose shares of common stock, during at least one year of
such service, were quoted in the Nasdaq National Market System or listed on the New York Stock
Exchange. It is expressly understood and agreed by the parties that a party may compel arbitration
pursuant to this Section 12 through an action for specific performance and any award entered by the
arbitrators shall be final, binding and nonappealable and judgment may be entered thereon by either
party in accordance with applicable law in any court of competent jurisdiction. The arbitrators
shall have no authority to modify any provision of this Agreement or to award a remedy for dispute
involving this Agreement other than a benefit specifically provided under or by virtue of the
Agreement. If the Indemnitee prevails on at least one material issue which is the subject of such
arbitration, the Company shall be responsible for all of the fees

4

 

of the American Arbitration Association and the arbitrators and any expense relating to the conduct
of the arbitration (including reasonable attorneys’ fees and expenses). Otherwise, each party
shall be responsible for its own expenses relating to the conduct of the arbitration (including
reasonable attorneys’ fees and expenses) and shall equally share the fees of the American
Arbitration Association.

13. Counterparts. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one instrument.

14. Indemnification Hereunder Not Exclusive. Nothing herein shall be deemed to diminish or
otherwise restrict the Indemnitee’s right to indemnification under any provision of the Certificate
of Incorporation, as may be amended or restated from time to time or the Bylaws of the Company and
amendments thereto or under law.

15. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.

16. Saving Clause. Wherever there is conflict between any provision of this Agreement and
any applicable present or future statute, law or regulation contrary to which the Company and the
Indemnitee have no legal right to contract, the latter shall prevail, but in such event the
affected provisions of this Agreement shall be curtailed and restricted only to the extent
necessary to bring them within applicable legal requirements.

17. Coverage. The provisions of this Agreement shall apply with respect to the
Indemnitee’s service as a Director of the Company prior to the date of this Agreement (if any) and
with respect to all periods of such service after the date of this Agreement, even though such
Indemnitee may have ceased to be a Director of the Company and shall inure to the benefit of the
heirs, executors and administrators of such Indemnitee.

18. Survival of Agreement. For purposes of this Agreement, any reference to the “Company”
shall include, in addition to the resulting or surviving corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to indemnify its directors,
officers, employees or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as such person would have with
respect to such constituent corporation if its separate existence had continued.

[Signature Page to Follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this Director Indemnification Agreement to
be duly executed and signed as of the day and year first above written.

	 	 	 	 	 	 	 

	 	 	NUPATHE INC.:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Jane H. Hollingsworth
	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 

INDEMNITEE:exv4w2

Exhibit 4.2

PREFERRED STOCK WARRANT

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN
COMPLIANCE WITH RULE 144 UNDER SAID ACT WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
OR AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION.

WARRANT TO PURCHASE 134,408 SHARES OF SERIES A PREFERRED STOCK

Dated: March 29th, 2007

THIS CERTIFIES THAT, for value received, Oxford Finance Corporation, (“Holder”) is entitled to
subscribe for and purchase 134,408 shares of the fully paid and nonassessable Series A Preferred
Stock (the “Shares” or the “Preferred Stock”) of NuPathe, Inc., a Delaware corporation (the
“Company”), at the Warrant Price (as hereinafter defined), subject to the provisions and upon the
terms and conditions hereinafter set forth. As used herein, the term “Series A Preferred Stock”
shall mean the Company’s presently authorized Series A Preferred Stock, and any stock into which
such Series A Preferred Stock may hereafter be exchanged.

1. Warrant Price. The Warrant Price shall be 93/100 ($0.93) per share, subject to further
adjustment upon the occurrence of certain events as provided in Section 7 below.

2. Conditions to Exercise. The purchase right represented by this Warrant may be exercised
at any time, or from time to time, in whole or in part during the term commencing on the date
hereof and ending on the later of:

	 	(a)	 	5:00 P.M. Eastern Standard time on the 7th anniversary of the date
of this Warrant Agreement; and
	 
	 	(b)	 	five (5) years after the closing of the Company’s initial public offering of
its Common Stock (“IPO”) effected pursuant to a Registration Statement on Form S-1 (or
its successor) filed under the Securities Act of 1933, as amended (the “Act”), but in
no event later than 10th anniversary of this Warrant Agreement;

provided, however, that in the event of an “Acquisition” as defined in Section 3(e)(iv),
this Warrant shall terminate at an earlier date pursuant to the terms of Section 3(e)(i)-(iii), as
applicable.

     In the event that, although the Company shall have given notice of a transaction pursuant to
subparagraph (b) hereof, the transaction does not close within 60 days of the day specified by the
Company, unless otherwise elected by the Holder any exercise of the Warrant subsequent to the
giving of such notice shall be rescinded and the Warrant shall again be exercisable until
terminated in accordance with this Section 2.

3. Method of Exercise; Payment; Issuance of Shares; Issuance of New Warrant.

	 	(a)	 	Cash Exercise. Subject to Section 2 hereof, the purchase right
represented by this Warrant may be exercised by the Holder hereof, in whole or in part,
by the surrender of this Warrant (with a duly executed Notice of Exercise in the form
attached hereto) at the

Page 1 of 11

 

PREFERRED STOCK WARRANT

	 	 	 	principal office of the Company (as set forth in Section 19
below) and by payment to the Company, by check, of an amount equal to the then
applicable Warrant Price per share multiplied by the number of shares then being
purchased. In the event of any exercise of the rights represented by this Warrant,
certificates for the shares of stock so purchased shall be in the name of, and
delivered to, the Holder hereof, or as such Holder may direct (subject to the terms of
transfer contained herein and upon payment by such Holder hereof of any applicable
transfer taxes). Such delivery shall be made within 10 days after exercise of the
Warrant and at the Company’s expense and, unless this Warrant has been fully exercised
or expired, a new Warrant having terms and conditions substantially identical to this
Warrant and representing the portion of the Shares, if any, with respect to which this
Warrant shall not have been exercised, shall also be issued to the Holder hereof within
10 days after exercise of the Warrant.
	 
	 	(b)	 	Net Issue Exercise. In lieu of exercising this Warrant pursuant to
Section 3(a), Holder may elect to receive shares equal to the value of this Warrant (or
of any portion thereof remaining unexercised) by surrender of this Warrant at the
principal office of the Company together with notice of such election, in which event
the Company shall issue to Holder the number of shares of the Company’s Series A
Preferred Stock computed using the following formula:

	 	 	 	 	 	 	 

	 

	 	X =
	 	Y (A-B)	 	 
	 

	 	 	 	 

A
	 	 

	 	 	 	Where X = the number of shares of Series A Preferred Stock to be issued to Holder.
	 
	 	 	 	Y = the number of shares of Series A Preferred Stock purchasable under this Warrant
(at the date of such calculation).
	 
	 	 	 	A = the Fair Market Value of one share of the Company’s Series A Preferred Stock (at
the date of such calculation).
	 
	 	 	 	B = Warrant Exercise Price (as adjusted to the date of such calculation).
	 
	 	(c)	 	Fair Market Value. For purposes of this Section 3, the “Fair Market
Value” of one share of the Company’s Series A Preferred Stock shall mean:

	 	(i)	 	If the Common Stock is traded on Nasdaq or other
over-the-counter system or on an exchange, the per share Fair Market Value for
the Series A Preferred Stock will be the average of the closing bid and asked
prices of the Common Stock quoted in the Over-The-Counter Market Summary or the
closing price quoted on any exchange on which the Common Stock is listed,
whichever is applicable, as published in the Western Edition of The Wall Street
Journal for the ten (10) trading days prior to the date of determination of
Fair Market Value multiplied by the number of shares of Common Stock into which
each share of Series A Preferred Stock is then convertible; or
	 
	 	(ii)	 	In the event of an exercise in connection with a merger,
acquisition or other consolidation in which the Company is not the surviving
entity, the per share Fair
Market Value for the Series A Preferred Stock shall be the value to be
received per share of Series A Preferred Stock by all Holders of the Series
_A Preferred Stock in such transaction as determined by the Board of
Directors; or

Page 2 of 11

 

PREFERRED STOCK WARRANT

	 	(iii)	 	In any other instance, the per share Fair Market Value for the
Series A Preferred Stock shall be as determined in good faith by the Company’s
Board of Directors unless Holder elects to have such fair market value
determined by an appraiser, which election must be made by Holder within ten
(10) business days of the date the Company notifies Holder of the fair market
value as determined by its Board of Directors. In the event of such an
appraisal, the cost thereof shall be borne by the Holder unless such appraisal
results in a fair market value in excess of 115% of that determined by the
Company’s Board of Directors, in which event the Company shall bear the cost of
such appraisal.

       In the event of 3(c)(ii) or 3(c)(iii), above, the Company’s Board of Directors
shall prepare a certificate, to be signed by an authorized Officer of the Company,
setting forth in reasonable detail the basis for and method of determination of the
per share Fair Market Value of the Series A Preferred Stock. The Board will also
certify to the Holder that this per share Fair Market Value will be applicable to
all holders of the Company’s Series A Preferred Stock. Such certification must be
made to Holder at least thirty (30) business days prior to the proposed effective
date of the merger, consolidation, sale, or other triggering event as defined in
3(c)(ii) and 3(c)(iii).

	 	(d)	 	Automatic Exercise. To the extent this Warrant is not previously
exercised, and if the Fair Market Value of one share of the Company’s Series A
Preferred Stock is greater than the Warrant Price then in effect, this Warrant shall be
automatically exercised in accordance with Sections 3(b) and 3(c) hereof (even if not
surrendered) immediately before its expiration. To the extent this Warrant or any
portion thereof is deemed automatically exercised pursuant to this Section 3(d), the
Company agrees to promptly notify the Holder of the number of Shares, if any, the
Holder is to receive by reason of such automatic exercise.
	 
	 	(e)	 	Treatment of Warrant Upon Acquisition of Company.

	 	(i)	 	Upon the written request of the Company, Holder agrees that, in
the event of an Acquisition (as defined below) in which the sole consideration
is cash, either (a) Holder shall exercise its conversion or purchase right
under this Warrant and such exercise will be deemed effective immediately prior
to the consummation of such Acquisition or (b) if Holder elects not to exercise
the Warrant, this Warrant will expire upon the consummation of such
Acquisition. The Company shall provide the Holder with written notice of its
request relating to the foregoing (together with such reasonable information as
the Holder may request in connection with such contemplated Acquisition giving
rise to such notice), which is to be delivered to Holder not less than 10 days
prior to the closing of the proposed Acquisition.
	 
	 	(ii)	 	Upon written request of the Company, Holder agrees that, in the
event of a stock for stock Acquisition of the Company by a publicly traded
acquirer , Company may require the Warrant to be deemed automatically exercised
and the Holder shall participate in the Acquisition as a holder of the Shares
(or other securities
issuable upon exercise of the Warrant) on the same terms as other holders of
the same class of securities of the Company.

Page 3 of 11

 

PREFERRED STOCK WARRANT

	 	(iii)	 	Upon the closing of any Acquisition other than those particularly described
in subsections (i) or (ii) above, the successor entity shall assume the
obligations of the Warrant, and the Warrant shall be exercisable for the same
securities, cash, and property as would be payable for the Shares issuable upon
exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The
Warrant Price and/or number of Shares shall be adjusted accordingly.
	 
	 	(iv)	 	For the purpose of this Warrant, “Acquisition” means any sale,
license, or other disposition of all or substantially all of the assets of the
Company, or any reorganization, consolidation, or merger of the Company where
the holders of the Company’s securities before the transaction beneficially own
less than 50% of the outstanding voting securities of the surviving entity
after the transaction, other than in connection with an initial public
offering.

4. Representations and Warranties of Holder and Restrictions on Transfer Imposed by the
Securities Act of 1933.

	 	(a)	 	Representations and Warranties by Holder. The Holder represents and
warrants to the Company with respect to this purchase as follows:

	 	(i)	 	The statements made in this Section 4 are true and correct on
the date hereof and shall be true and correct in all material respects upon the
exercise of the purchase right represented by this Warrant under the terms set
forth in Section 3 hereof.
	 
	 	(ii)	 	The Holder has substantial experience in evaluating and
investing in private placement transactions of securities of companies similar
to the Company so that the Holder is capable of evaluating the merits and risks
of its investment in the Company and has the capacity to protect its interests.
	 
	 	(iii)	 	The Holder is acquiring the Warrant and the Shares of Series A
Preferred Stock issuable upon exercise of the Warrant (collectively the
“Securities”) for investment for its own account and not with a view to, or for
resale in connection with, any distribution thereof. The Holder does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person with
respect to the Securities. The Holder understands that the Securities have not
been registered under the Securities Act of 1933, as amended (the “Act”) by
reason of a specific exemption from the registration provisions of the Act,
which depends upon, among other things, the bona fide nature of the investment
intent as expressed herein. In this connection, the Holder understands that, in
the view of the Securities and Exchange Commission (the “SEC”), the statutory
basis for such exemption may be unavailable if this representation was
predicated solely upon a present intention to hold the Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities or
for a period of one year or any other fixed period in the future.
	 
	 	(iv)	 	The Holder is an “accredited investor” within the meaning of
Regulation D under the Act.

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PREFERRED STOCK WARRANT

	 	(v)	 	The Holder acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or an exemption from
such registration is available. The Holder is aware of the provisions of Rule
144 promulgated under the Act (“Rule 144”) which permits limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions, including, in case the securities have been held for more
than one but less than two years, the existence of a public market for the
shares, the availability of certain public information about the Company, the
resale occurring not less than one year after a party has purchased and paid
for the security to be sold, the sale being through a “broker’s transaction” or
in a transaction directly with a “market maker” (as provided by Rule 144(f))
and the number of shares or other securities being sold during any three-month
period not exceeding specified limitations.
	 
	 	(vi)	 	The Holder further understands that at the time the Holder
wishes to sell the Securities there may be no public market upon which such a
sale may be effected, and that even if such a public market exists, the Company
may not be satisfying the current public information requirements of Rule 144,
and that in such event, the Holder may be precluded from selling the Securities
under Rule 144 unless a) a one-year minimum holding period has been satisfied
and b) the Holder was not at the time of the sale nor at any time during the
three-month period prior to such sale an affiliate of the Company.
	 
	 	(vii)	 	The Holder has had an opportunity to discuss the Company’s
business, management and financial affairs with its management and an
opportunity to review the Company’s facilities. The Holder understands that
such discussions, as well as the written information issued by the Company,
were intended to describe the aspects of the Company’s business and prospects
which it believes to be material but were not necessarily a thorough or
exhaustive description.

	 	(b)	 	Legends. Each certificate representing the Securities shall be
endorsed with the following legend:
	 
	 	 	 	THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT, A “NO ACTION” LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF
RULE 144 OF THE SECURITIES AND EXCHANGE COMMISSION, OR (IF REASONABLY REQUIRED BY
THE COMPANY) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
	 
	 	 	 	The Company need not enter into its stock register a transfer of Securities unless
the conditions specified in the foregoing legend are satisfied. The Company may also
instruct its transfer agent not to register the transfer of any of the Shares unless
the conditions specified in the foregoing legend are satisfied.
	 
	 	(c)	 	Removal of Legend and Transfer Restrictions. The legend relating to the
Act endorsed on a certificate pursuant to Section 4(b) of this Warrant and the stop
transfer instructions

Page 5 of 11

 

PREFERRED STOCK WARRANT

	 	 	 	with respect to the Securities represented by such certificate shall be removed upon
request of the Holder and the Company shall issue a certificate without such legend
to the Holder of the Securities if at such time the restrictions on the transfer of
the applicable security shall have terminated.

5. Condition of Transfer or Exercise of Warrant. It shall be a condition to any transfer
or exercise of this Warrant that at the time of such transfer or exercise, the Holder shall provide
the Company with a representation in writing that the Holder or transferee is acquiring this
Warrant and the shares of Series A Preferred Stock to be issued upon exercise, in compliance with
applicable federal and state securities laws by the Holder and the transferee. As a further
condition to any transfer of this Warrant or any or all of the shares of Series A Preferred Stock
issuable upon exercise of this Warrant, other than a transfer registered under the Act, the Company
must have received a legal opinion, in form and substance satisfactory to the Company and its
counsel, reciting the pertinent circumstances surrounding the proposed transfer and stating that
such transfer is exempt from the registration and prospectus delivery requirements of the Act.
Notwithstanding the foregoing, this Warrant or such shares of Series A Preferred Stock or Common
Stock may, as to such federal laws, be offered, sold or otherwise disposed of in accordance with
Rule 144 or 144A under the Act, provided that the Company shall have been furnished with such
information as the Company may reasonably request to provide a reasonable assurance that the
provisions of Rule 144 or 144A have been satisfied. Each certificate representing this Warrant or
the shares of Series A Preferred Stock thus transferred (except a transfer pursuant to Rule 144 or
144A) shall bear a legend as to the applicable restrictions on transferability in order to ensure
compliance with such laws, unless in the aforesaid opinion of counsel for the holder, such legend
is not required in order to ensure compliance with such laws. The Company may issue stop transfer
instructions to its transfer agent in connection with such restrictions. Neither any restrictions
of any legend described in this Warrant nor the requirements of this Section 5 shall apply to any
transfer of, or grant of a security interest in, this Warrant (or the Series Preferred or Common
Stock obtainable upon exercise thereof) or any part hereof to the parent company of the Holder or
any affiliate of the Holder [under control of the parent company of the Holder]; provided,
however, in any such transfer, if applicable, the transferee shall on the Company’s request
agree in writing to be bound by the terms of this Warrant as if an original holder hereof.

6. Stock Fully Paid; Reservation of Shares. All Shares which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be fully paid and
nonassessable, and free from all taxes, liens, preemptive rights and charges with respect to the
issue thereof. During the period within which the rights represented by this Warrant may be
exercised, the Company will use reasonable efforts to have authorized, and reserved for issuance
upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of
its Series A Preferred Stock to provide for the exercise of the rights represented by this Warrant.

7. (a) Adjustment for Certain Events. In the event of changes in the outstanding Series A
Preferred Stock by reason of stock dividends, stock splits, reverse splits, subdivisions,
split-ups, recapitalizations, reclassifications, mergers, consolidations, combinations or exchanges
of shares, separations, reorganizations, liquidations, or the like, the number and class of shares
available under the Warrant in the aggregate and the Warrant Price shall be correspondingly
adjusted, as appropriate, by the Board of Directors of the Company. The adjustment shall be such as
will give the Holder of this Warrant upon exercise for the same aggregate Warrant Price the total
number, class and kind of shares as it would have owned had the Warrant been exercised prior to the
event and had it continued to hold such shares until after the event requiring adjustment.

     (b) Other Antidilution Protections. Additional antidilution rights applicable to the
Series A Preferred Stock purchasable hereunder are as set forth in the Certificate of
Incorporation. Such

Page 6 of 11

 

PREFERRED STOCK WARRANT

antidilution rights shall not be restated, amended, modified or waived in any manner that is
adverse to the Holder hereof and different from other holders of Series A Preferred Stock without
the Holder’s written consent. The Company shall promptly provide the Holder with any restatement,
amendment, modification or waiver of the Certification of Incorporation.

8. Notice of Adjustments. Whenever any Warrant Price shall be adjusted pursuant to Section
7 hereof, the Company shall prepare a certificate signed by its chief financial officer setting
forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated, and the Warrant Price and number of shares issuable
upon exercise of the Warrant after giving effect to such adjustment, and shall cause copies of such
certificate to be mailed (by certified or registered mail, return receipt required, postage
prepaid) within 30 days of such adjustment to the Holder of this Warrant as set forth in Section 18
hereof.

9. Transferability of Warrant. This Warrant is transferable on the books of the Company at
its principal office by the registered Holder hereof upon surrender of this Warrant properly
endorsed, subject to compliance with Section 5 and applicable federal and state securities laws.
The Company shall issue and deliver to the transferee a new Warrant representing the Warrant so
transferred. Upon any partial transfer, the Company will issue and deliver to Holder a new Warrant
with respect to the Warrant not so transferred. Holder shall not have any right to transfer any
portion of this Warrant to any direct competitor of the Company unless the Company is a public
company.

10. (a) Registration Rights. The Company grants registration rights to the Holder of this
Warrant for any Common Stock of the Company obtained upon conversion of the Series A Preferred
Stock, comparable to the registration rights granted to the investors in that certain Investor
Rights Agreement dated as of August 31, 2006, (the “Registration Rights Agreement”), with the
following exceptions and clarifications: (1) The Holder will have not have the right to demand
registration, but can otherwise participate in any registration demanded by others; (2) the Holder
will be subject to the same provisions regarding indemnification as contained in the Registration
Rights Agreement; and (3) the registration rights are freely assignable by the Holder of this
Warrant in connection with a permitted transfer of this Warrant or the Shares.

     (b) “Market Stand-Off” Agreement. Holder hereby agrees that following the effective
date of the first registration statement of the Company covering common stock (or other securities)
to be sold on behalf of the Company in an underwritten public offering, it will not, to the extent
requested by the Company and any underwriter, sell or otherwise transfer or dispose of (other than
to designees or transferees who agree to be similarly bound) any of the Shares at any time during
such period as requested by the Company and the underwriter of such offering; provided, however,
that all officers and directors of the Company who hold securities of the Company or options to
acquire securities of the Company and all other persons with registration rights enter into similar
agreements.

11. No Fractional Shares. No fractional share of Preferred Stock will be issued in
connection with any exercise hereunder, but in lieu of such fractional share the Company shall make
a cash payment therefor upon the basis of the Warrant Price then in effect.

12. Charges, Taxes and Expenses. Issuance of certificates for shares of Series A Preferred
Stock upon the exercise of this Warrant shall be made without charge to the Holder for any United
States or state of the United States documentary stamp tax or other incidental expense with respect
to the issuance of such certificate, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the Holder.

Page 7 of 11

 

PREFERRED STOCK WARRANT

13. No Shareholder Rights Until Exercise. This Warrant does not entitle the Holder
hereof to any voting rights or other rights as a shareholder of the Company prior to the exercise
hereof.

14. Registry of Warrant. The Company shall maintain a registry showing the name and
address of the registered Holder of this Warrant. This Warrant may be surrendered for exchange or
exercise, in accordance with its terms, at such office or agency of the Company, and the Company
and Holder shall be entitled to rely in all respects, prior to written notice to the contrary, upon
such registry.

15. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and, in the case of loss, theft, or destruction, of indemnity reasonably satisfactory to
it, and, if mutilated, upon surrender and cancellation of this Warrant, the Company will execute
and deliver a new Warrant, having terms and conditions substantially identical to this Warrant, in
lieu hereof.

16. Recovery of Litigation Costs. If any legal action or other proceeding is brought for
the enforcement of this Warrant, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this Warrant, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs
incurred in that action or proceeding, in addition to any other relief to which it or they may be
entitled.

17. Miscellaneous.

	 	(a)	 	Issue Date. The provisions of this Warrant shall be construed and
shall be given effect in all respect as if it had been issued and delivered by the
Company on the date hereof.
	 
	 	(b)	 	Successors. This Warrant shall be binding upon any successors or
assigns of the Company.
	 
	 	(c)	 	Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
	 
	 	(d)	 	Headings. The headings used in this Warrant are used for convenience
only and are not to be considered in construing or interpreting this Warrant.
	 
	 	(e)	 	Saturdays, Sundays, Holidays. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein shall be
a Saturday or a Sunday or shall be a legal holiday in the Commonwealth of Virginia,
then such action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.
	 
	 	(f)	 	Severability. The invalidity or unenforceability of any provision of
this Warrant in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction, or affect any other provision of this
Warrant, which shall remain in full force and effect.
	 
	 	(g)	 	Entire Agreement; Modification. This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter contained in it and
supersedes all prior and contemporaneous agreements, representations, and undertakings
of the parties, whether oral or written, with respect to such subject matter.

18. No Impairment. The Company shall not by any action including, without limitation,
amending its articles or certificate of incorporation or by-laws, any reorganization, transfer of
assets, consolidation,

Page 8 of 11

 

PREFERRED STOCK WARRANT

merger, share exchange dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the Warrants or impair
the ability of the Holder(s) to realize upon the intended economic value hereof, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary to protect the rights of the Holder(s) hereof against impairment.
Without limiting the generality of the foregoing, the Company will (a) not increase the par value
of any shares of Common Stock issuable upon the exercise of the Warrants above the amount payable
therefor upon such exercise, (b) take all such commercially reasonable action as may be necessary
in order that the Company may validly issue fully paid and nonassessable shares of Preferred Stock
upon the exercise of the Warrant (and Common Stock issued upon conversion of such Preferred Stock),
(c) take commercially reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under the Warrants and (d) not reclassify or convert common
stock.

19. Addresses. Any notice required or permitted hereunder shall be in writing and shall be
mailed by overnight courier, registered or certified mail, return receipt required, and postage
pre-paid, or otherwise delivered by hand or by messenger, addressed as set forth below, or at such
other address as the Company or the Holder hereof shall have furnished to the other party.

	 	 	 	 	 

	 

	 	If to the Company:
	 	NuPathe, Inc.
	 

	 	 	 	375 East Elm Street, Suite 110
	 

	 	 	 	Conshohocken, PA 19428
	 

	 	 	 	Attn: General Counsel
	 
	 	 	 	 
	 

	 	If to the Holder:
	 	Oxford Finance Corporation
	 

	 	 	 	133 N. Fairfax Street
	 

	 	 	 	Alexandria, VA 22314
	 

	 	 	 	Attn:                                                                     

Page 9 of 11

 

PREFERRED STOCK WARRANT

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto
duly authorized.

Dated as of March 29th, 2007.

	 	 	 	 	 
	 	 	 
	By:  	/s/ J.H. Hollingsworth
 	 
	 	Name:  	J.H. Hollingsworth 	 
	 	Title:  	CEO 	 
	 

Page 10 of 11

 

PREFERRED STOCK WARRANT

NOTICE OF EXERCISE

	 	 	 	 	 

	TO:

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

1. The undersigned Warrantholder (“Holder”) elects to acquire shares of the Series A Preferred
Stock (the “Preferred Stock”) of NuPathe, Inc., a Delaware corporation (the “Company”),
pursuant to the terms of the Stock Purchase Warrant dated ___, (the “Warrant”).

2. The Holder exercises its rights under the Warrant as set forth below:

	 	(  )	 	 The Holder elects to purchase ______ shares of Series A
Preferred Stock as provided in Section 3(a), (c) and tenders herewith a check
in the amount of $___ as payment of the purchase price.
	 
	 	(  )	 	 The Holder elects to convert the purchase rights into shares
of Series A Preferred Stock as provided in Section 3(b), (c) of the Warrant.

3. The Holder surrenders the Warrant with this Notice of Exercise.

4. The Holder represents that it is acquiring the aforesaid shares of Series A Preferred Stock for
investment and not with a view to, or for resale in connection with, distribution and that the
Holder has no present intention of distributing or reselling the shares, all except in compliance
with all applicable federal and state securities laws.

5. Please issue a certificate representing the shares of the Series A Preferred Stock in the name
of the Holder or in such other name as is specified below:

	 	 	 	 	 	 	 

	 

	 	Name:
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Taxpayer I.D.:
	 	 

	 	 
	 

	 	 	 	 	 

	 

	 	Oxford Finance Corporation	 	 
	 
	 	 	 	 
	By:

	 	 

	 	 
	 
	 	 	 	 
	Name:

	 	 

	 	 
	 
	 	 	 	 
	Title:

	 	 

	 	 
	 
	 	 	 	 
	Date:

	 	 

	 	 

Page 11 of 11

 

THE WARRANT AMENDED HEREBY WAS ORIGINALLY ISSUED ON MARCH 29, 2007, AND NEITHER THE WARRANT
NOR THIS AMENDMENT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS AND THE OTHER
RESTRICTIONS ON TRANSFER SET FORTH IN THE WARRANT.

FIRST AMENDMENT TO PREFERRED STOCK WARRANT

          THIS FIRST AMENDMENT TO PREFERRED STOCK WARRANT (this “Amendment”), dated as of May 6,
2010, by and between NUPATHE INC., a Delaware corporation (the “Company”), and Oxford
Finance Corporation (“Holder”).

RECITALS

          A. The Company issued to Holder that certain Preferred Stock Warrant, dated March 29, 2007,
entitling Holder, subject to the provisions of such warrant, to purchase 134,408 fully paid and
nonassessable shares of Series A Preferred Stock of the Company, par value $0.001 per share, at an
exercise price of $0.93 per share (the “Warrant”).

          B. The Company and Holder desire to amend the Warrant as set forth herein.

          NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in
consideration of the mutual covenants contained herein, hereby agree as follows:

1. Warrant Amendment. Section 7(c) is hereby added to the Warrant as follows:

“(c) Adjustment for Conversion of Series A Preferred Stock.
If all of the outstanding shares of Series A Preferred Stock are
converted into Common Stock of the Company in accordance with the
terms of the Certificate of Incorporation of the Company, as amended
from time to time, then, effective upon such conversion, (i) this
Warrant shall be exercisable for such number of shares of Common
Stock as is equal to the number of shares of Common Stock that each
share of Series A Preferred Stock was converted into, multiplied by
the number of shares of Series A Preferred Stock subject to this
Warrant immediately prior to such conversion, (ii) the Warrant Price
shall be the Warrant Price in effect immediately prior to such
conversion divided by the number of shares of Common Stock into
which each share of Series A Preferred Stock was converted, and
(iii) all references in this Warrant to “Preferred Stock” and
“Series A Preferred Stock” shall thereafter be deemed to refer to
“Common Stock.”

1

 

2. Effectiveness of Amendment. Upon execution hereof by both parties hereto, the Amendment
shall be deemed to be effective without any further action of either party hereto and the Warrant
shall automatically be read as if the amendment set forth in Section 1 were a part thereof.
All other terms in the Warrant shall remain in full force and effect; provided that to the extent
that any term in the Warrant would be inconsistent with the actions taken hereunder, such term
shall be deemed to be modified so as to be consistent with the modification of terms set forth
above.

3. General Matters.

	 	3.1.	 	Contents of Amendment. This Amendment, together with the Warrant, sets forth
the entire understanding of the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior agreements or understandings among the parties
regarding those matters.
	 
	 	3.2.	 	Amendment, parties hereto in Interest, Etc. This Amendment may be amended,
modified or supplemented only by a written instrument duly executed by each of the parties
hereto. This Amendment shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, legal representatives, successors and permitted
assigns of the parties hereto. Nothing in this Amendment shall confer any rights upon any
entity other than the parties hereto and their respective heirs, legal representatives,
successors and assigns.
	 
	 	3.3.	 	Counterparts. This Amendment may be executed in two or more counterparts, each
of which shall be binding as of the date first written above, and, when delivered, all of
which shall constitute one and the same instrument. A facsimile signature or
electronically scanned copy of a signature shall constitute and shall be deemed to be
sufficient evidence of a party hereto’s execution of this Amendment, without necessity of
further proof. Each such copy shall be deemed an original, and it shall not be necessary
in making proof of this Amendment to produce or account for more than one such counterpart.
	 
	 	3.4.	 	Governing Law. This Amendment shall be construed and interpreted in accordance
with the internal laws of the Commonwealth of Virginia without regard to any choice of law
or conflict of law, choice of forum or provision, rule or principle (whether of the
Commonwealth of Virginia or any other jurisdiction) that might otherwise refer construction
or interpretation of this Amendment to the substantive law of another jurisdiction.

[Signature Page Follows on Next Page]

2

 

          IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first written above.

	 	 	 	 	 
	 	NUPATHE INC.

 	 
	 	By:  	/s/  Keith A. Goldan
 	 
	 	 	Name:  	Keith A. Goldan 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	OXFORD FINANCE CORPORATION

 	 
	 	By:  	/s/  T. A. Lex
 	 
	 	 	Name:  	T. A. Lex 	 
	 	 	Title:  	COO 	 
	 

3

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