Document:

Form of Subscription Escrow Agreement

 Exhibit 10.5 
  
 SUBSCRIPTION ESCROW AGREEMENT 
  
 ESCROW AGREEMENT, dated as of
                            , 2004, (the “Agreement”) by and among Paladin Realty Income
Properties, Inc., a Maryland corporation (the “Company”), and Deutsche Bank Trust Company Americas, a New York banking corporation, a wholly-owned subsidiary of Deutsche Bank AG, as escrow agent (the “Escrow Agent”). 

 
 WHEREAS, the Company has filed a Registration Statement on Form S-11
(Registration No. 333-113863) with the Securities and Exchange Commission (the “SEC”) to commence an initial public offering (the “Offering”) of up to 35,000,000 shares of common stock (“Shares”), at $10.00 per share
for sale to the public with a minimum offering of $2,000,000 in Shares, exclusive of subscriptions received from residents of the State of Pennsylvania (such amount, the “Minimum Amount” and such offering, the “Minimum Offering”)
through Prospect Financial Advisors, LLC, the dealer manager for the offering (the “Dealer Manager”), and the broker-dealers participating in the offering (the “Participating Dealers”);  
  
 WHEREAS, the Escrow Agent agrees to maintain an Escrow Account (as defined
below) for the deposit of the subscriber’s subscription funds raised in the Offering together with any earnings thereon (the “Escrow Property”) in accordance with the terms of this Agreement; and 
  
 WHEREAS, the Company and the Dealer Manager have entered into a Dealer
Manager Agreement dated                         , 2004 pursuant to which the Company shall require the Dealer Manager and any
Participating Dealers to comply with certain procedures relating to the Dealer Manager and the Participating Dealers contained herein; 
  
 NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by each of the parties hereto, the parties
hereto, intending to be legally bound, do hereby agree as follows: 
  
 Section 1. Appointment of the Escrow Agent. The Company hereby appoints Deutsche Bank Trust Company Americas as escrow agent in accordance with the terms and conditions set forth herein, and the Escrow Agent hereby accepts such
appointment. 
  
 Section 2. Proceeds to be Escrowed;
Subscription Documents to be Escrowed. 
  
 (a)
A sample copy of the subscription agreement to be executed by each subscriber for Shares in the Offering is attached as Exhibit A (the “Subscription Agreement”). Pursuant to the terms of the Dealer Manager Agreement, the Dealer
Manager or the Participating Dealers who receive subscriptions for shares will, on behalf of such persons subscribing to purchase Shares, remit funds (“Investor Funds”) representing the purchase price in the form of funds wired to the
Escrow Agent pursuant to the wire transfer instructions attached hereto as Exhibit B in favor of, “Paladin Realty Income Properties, Inc.” or “Paladin REIT” (collectively 

 “Instruments of Payment”) for deposit into the Escrow Account. All such funds received from
subscribers in payment for the Shares so delivered to the Escrow Agent by the Dealer Manager or the Participating Dealers shall be retained in escrow by the Escrow Agent in a separate deposit account (the “Escrow Account”) upon the terms
and conditions hereinafter set forth and invested as stated below. Such Instruments of Payment received from residents of the State of Pennsylvania shall be placed in a separate deposit sub-account of the Escrow Account entitled “Deutsche Bank
Trust Company Americas, as Escrow Agent for Pennsylvania residents (Paladin Realty Income Properties, Inc.)” (the “Pennsylvania Account”). The Escrow Agent shall have no duty to solicit the Investor Funds from subscribers. 

 
 (b) The Escrow Property shall be held by the Escrow Agent
in the Escrow Account until such funds are either disbursed to the Company in accordance with Section 4(a) hereof or returned to the subscribers in accordance with Section 4(b) hereof. 
  
 (c) Pursuant to the terms of the Dealer Manager Agreement, the Dealer Manager and the Participating Dealers
will deliver to the Escrow Agent the executed Subscription Agreements and other documents executed by subscribers in connection with subscribing for Shares (collectively, the Subscription Documents”) concurrently with the Instruments of Payment
relating to such subscriptions. The Escrow Agent shall deliver to Phoenix American Financial Services, Inc. on a daily basis a report listing the Instruments of Payment received from the Dealer Manager and Participating Dealers on that date. Within
one (1) day of receipt of Subscription Documents for any subscriber, the Escrow Agent shall cause such Subscription Documents to be delivered to Phoenix American Financial Services, Inc. 
  
 Section 3. Identity of Subscribers. The Dealer Manager or the Participating Dealers shall furnish to the Escrow Agent
with each delivery of funds, as provided in Section 2 hereof, a list of the persons who have paid money for the purchase of Shares showing the name, address, tax identification number, state of residence, amount of Shares subscribed for, and the
amount of money paid. The information comprising the identity of investors shall be provided to the Escrow Agent in the format set forth in the List of Investors attached as Exhibit C. All proceeds so deposited shall remain the
property of the subscriber and shall not be subject to any liens or charges by the Company, or the Escrow Agent, until released to the Company as hereinafter provided. 
  
 Section 4. Disbursement of Escrow Property. The Escrow Agent shall notify the Company on a weekly basis (and more
frequently if requested by the Company) of the amount of funds in the Escrow Account as well as the activity in the Escrow Account since the last report. The Escrow Property shall be disbursed as follows: 
  
 (a) If payments of the Minimum Amount or more for Shares are
obtained on or prior to the date that is one year after the effective date of the Registration Statement (the “Minimum Offering Expiration Date”) and the Company has delivered a written notice (the “Minimum Offering Notice”)
attached as Exhibit D, signed jointly by two Authorized Persons (as defined in Section 12(q)) of the Company, stating that it has received and accepted Subscription Agreements for the Minimum Amount of Shares, thereafter the Escrow Agent
shall pay out the Escrow Property when and as directed by any Authorized Person of the 
  

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 Company. Regardless of any payout of Escrow Account, funds in the Pennsylvania Account shall not be paid
to the Company until such time as the Company notifies the Escrow Agent in writing that it has received and accepted total subscription proceeds equal to or exceeding $19,250,000. 
  
 (i) Notwithstanding the foregoing, if the Escrow Agent is not in receipt of evidence of subscriptions
accepted and Instruments of Payment totaling or exceeding $19,250,000 on or before the close of business on such date that is 120 days after commencement of the Offering (the “Initial Pennsylvania Escrow Period”), then the Company will
notify the Pennsylvania investors within 10 calendar days after the end of the Initial Pennsylvania Escrow Period that they have a right to have their investment returned to them. If a Pennsylvania investor requests a return of such funds within 10
days of receipt of the notification, the Company shall deliver to the Escrow Agent a letter (a form of which is attached hereto as Exhibit E) instructing the Escrow Agent to remit the funds to the Pennsylvania investor and the funds will be
returned to such investor within 15 calendar days after receipt by the Company of the Pennsylvania investor’s request so long as the Company gives written notice to the Escrow Agent within 5 days of its receipt of such Pennsylvania
investor’s request. 
  
 (ii) The
subscription proceeds of Pennsylvania Investors who do not request the return of their investment within the Initial Pennsylvania Escrow Period shall remain in the Pennsylvania Account for successive 120 day escrow periods (each a “Successive
Escrow Period”), each commencing automatically upon the termination of the prior Successive Escrow Period, and the Company and the Escrow Agent shall follow the notification and payment procedure set forth in Section 4(a)(i) above with respect
to the Initial Escrow Period for each Successive Escrow Period until the occurrence of the earlier of (i) the termination of this Agreement or (ii) the Company has notified the Escrow Agent in writing that it has received and accepted subscriptions
and Instruments of Payment totaling $19,250,000 and the Escrow Agent has disbursed the Pennsylvania Account on the terms specified herein. 
  
 (iii) Interest will not accrue nor be payable to Pennsylvania Investors for the Initial Pennsylvania Escrow Period. Interest will accrue
commencing with the start of the first Successive Escrow Period after the Initial Pennsylvania Escrow Period and will be payable with the return if any of Pennsylvania investor funds at the end each Successive Escrow Period. In the event that a
Pennsylvania subscriber fails to remit an executed Form W-9 to the Escrow Agent prior to the date the Escrow Agent returns the Pennsylvania subscriber’s funds, the Escrow Agent will be required to withhold a portion of the earnings attributable
to those Pennsylvania subscribers at the applicable rate in accordance with Section 3406 of the Internal Revenue Code of 1986, as amended. 
  
 (iv) If the Minimum Offering has not been achieved by the Minimum Offering Expiration Date, Pennsylvania investors’ funds will be
distributed with all other funds as provided in (b) below. 
  
 (b) If the Escrow Agent does not receive the Minimum Offering notice within one (1) business day of the Minimum Offering Expiration Date, the Escrow Agent shall promptly, in any event within ten business days
following the Minimum Offering Expiration 
  

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 Date by check refund to each investor at the address appearing on the List of Investors, or at such other
address as shall be furnished to the Escrow Agent by the Company in writing, all sums paid by the investor pursuant to his Subscription Agreement for Shares, together with the interest accrued on such funds in the Escrow Account, and shall then
notify the Company in writing of such refunds. The Company agrees to use its best efforts to obtain an executed IRS Form W-9 from each subscriber prior to the Minimum Offering Expiration Date if the Escrow Agent is not in receipt of evidence that
subscriptions for the Minimum Amount have been accepted at the close of business on the date which is one month before the Minimum Offering Expiration Date. In the event that a subscriber fails to remit an executed Form W-9 to the Escrow Agent prior
to the date the Escrow Agent returns the subscriber’s funds, the Escrow Agent will be required to withhold a portion of the earnings attributable to those subscribers at the applicable rate in accordance with Section 3406 of the Internal
Revenue Code of 1986, as amended. 
  
 (c) Upon
the termination of the Escrow Agreement any remaining Escrow Property shall be forwarded to the Company in accordance with the Company’s written directions. 
  
 Section 5. Investment of the Escrow Property. Prior to the disbursement of Escrow Property in accordance with the
provisions of Section 4 hereof, at the written direction of an Authorized Person (as hereinafter defined) the Escrow Agent shall invest and reinvest all of the Escrow Property in any of the following investments: 
  
 (1) Money Market or Mutual Funds registered under the
Investment Act of 1940; 
  
 (2) direct
obligations of, or obligations fully guaranteed as to principal and interest by, the United States or any agency or instrumentality thereof, provided such obligations are backed by the full faith and credit of the United States; or 
  
 (3) other short term investments as selected by an
Authorized Person (as hereinafter defined) from time to time. 
  
 The Escrow Agent shall have no obligation to invest or reinvest the Escrow Property if deposited with the Escrow Agent after noon (E.S.T.) on such day of deposit. Instructions received after noon (E.S.T.) will be treated as if received on
the following business day. The Escrow Agent shall have no responsibility for any investment losses resulting from the investment, reinvestment or liquidation of the Escrow Property. Any interest or other income received on such investment and
reinvestment of the Escrow Property shall become part of the Escrow Property and any losses incurred on such investment and reinvestment of the Escrow Property shall be debited against the Escrow Property. 
  
 If a selection is not made and a written direction not given to the Escrow
Agent, the Escrow Property shall remain uninvested with no liability for interest thereon. 
  
 It is agreed and understood that the Escrow Agent may earn fees associated with the investments outlined above in accordance with the terms of such investments. Notwithstanding the foregoing, the Escrow Agent shall
have the power to sell or liquidate the 
  

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 foregoing investments whenever the Escrow Agent shall be required to release all or any portion of the Escrow Property
pursuant to Section 5 hereof. In no event shall the Escrow Agent be deemed an investment manager or adviser in respect of any selection of investments hereunder. It is understood and agreed that the Escrow Agent or its affiliates are permitted to
receive additional compensation that could be deemed to be in the Escrow Agent’s economic self-interest for (1) serving as investment adviser, administrator, shareholder servicing agent, custodian or sub-custodian with respect to certain of the
investments, (2) using affiliates to effect transactions in certain investments and (3) effecting transactions in investments. 
  
 Section 6. Term of Escrow. This Agreement shall be effective as of the date the Registration Statement is declared effective by the SEC as such
date is promptly notified to the Escrow Agent by the Company in writing. Unless otherwise provided in this Agreement, final termination of this Agreement shall occur on (1) the date that the Company and the Escrow Agent shall mutually agree in
writing to terminate this Agreement or (2) after termination of this Offering, the date on which all funds held in the Escrow Account have been distributed in accordance with the terms hereof in each case. 
  
 The provisions of Sections 8, 10 and 11 shall survive the termination of this
Escrow Agreement and the earlier resignation or removal of the Escrow Agent. 
  
 Section 7. Issuance of Certificates. Until the terms of the Escrow Agreement with respect to Shares have been met and the funds hereunder received from subscriptions for Shares have been released to the
Company, the Company may not issue any certificates or other evidence of Shares, except Subscription Agreements. 
  
 Section 8. Compensation of the Escrow Agent. As compensation for serving as the Escrow Agent hereunder, the Escrow Agent shall receive from the
Company the fees, charges and reimbursement of expenses as agreed to between the Company and Escrow Agent on Schedule A attached hereto. The Company shall reimburse the Escrow Agent on demand for all loss, liability, damage, disbursements, advances
or expenses paid or incurred by it which the Company is obligated to pay or indemnify the Escrow Agent for pursuant to the terms hereof in the administration of its duties hereunder, including, but not limited to, all counsel, advisors’ and
agents’ fees and disbursements and all taxes or other governmental charges. The obligations contained in this Section 8 shall survive the termination of this Escrow Agreement and the resignation or removal of the Escrow Agent. 
  
 Section 9. Resignation of the Escrow Agent. The Escrow Agent may
resign and be discharged from its duties hereunder at any time by giving thirty (30) calendar days’ prior written notice of such resignation to the Company. The Company may remove the Escrow Agent at any time by giving thirty (30) calendar
days’ prior written notice to the Escrow Agent. Upon such notice, a successor escrow agent shall be appointed by the Company who shall provide written notice of such to the resigning the Escrow Agent. Such successor escrow agent shall become
the escrow agent hereunder upon the resignation or removal date specified in such notice. If the Company is unable to agree upon a successor escrow agent within thirty (30) days after such notice, the Escrow Agent may, in its sole discretion,
deliver the Escrow Property to the Company at the address provided herein or may apply to a court of competent jurisdiction 
  

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 for the appointment of a successor escrow agent or for other appropriate relief. The costs and expenses (including its
attorneys’ fees and expenses) incurred by the Escrow Agent in connection with such proceeding shall be paid by the Company. Upon receipt of the identity of the successor escrow agent, the Escrow Agent shall deliver the Escrow Property then held
hereunder to the successor Escrow Agent, less the Escrow Agent’s fees, costs and expenses or other obligations owed to the Escrow Agent to be paid from any interest earned in respect of the Escrow Property, or hold any interest earned in
respect of the Escrow Property (or any portion thereof), pending distribution, until all such fees, costs and expenses or other obligations are paid. Upon its resignation and delivery of the Escrow Property as set forth in this Section 9, the Escrow
Agent shall be discharged of and from any and all further obligations arising in connection with the Escrow Property or this Agreement. 
  
 Section 10. Indemnification of the Escrow Agent. The Company shall indemnify, defend and hold harmless the Escrow Agent and its officers,
directors, employees, representatives and agents, from and against and reimburse the Escrow Agent for any and all claims, expenses, obligations, liabilities, losses, damages, injuries (to person, property, or natural resources), penalties, stamp or
other similar taxes, actions, suits, judgments, reasonable costs and expenses (including reasonable attorney’s fees and expenses) of whatever kind or nature regardless of their merit, demanded, asserted or claimed against the Escrow Agent
directly or indirectly relating to, or arising from, claims against the Escrow Agent by reason of its participation in the transactions contemplated hereby, including without limitation all reasonable costs required to be associated with claims for
damages to persons or property, and reasonable attorneys’ and consultants’ fees and expenses and court costs except to the extent caused by the Escrow Agent’s gross negligence or willful misconduct. The provisions of this Section 10
shall survive the termination of this Agreement or the earlier resignation or removal of the Escrow Agent. 
  
 Section 11. The Escrow Agent. 
  
 (a) The duties, responsibilities and obligations of the Escrow Agent shall be limited to those expressly set forth herein and no duties,
responsibilities or obligations shall be inferred or implied against the Escrow Agent. The Escrow Agent shall not be subject to, nor required to comply with, any other agreement to which the Company is a party, even though reference thereto may be
made herein, or to comply with any direction or instruction (other than those contained herein or delivered in accordance with this Escrow Agreement) from the Company or an entity acting on its behalf. The Escrow Agent shall not be required to
expend or risk any of its own funds or otherwise incur any liability, financial or otherwise, in the performance of any of its duties hereunder. 
  
 (b) The Escrow Property shall be held by the Escrow Agent either directly or through the Federal Reserve/Treasury Book-Entry System for
United States and federal agency securities (the “Book-Entry System”), The Depository Trust Company, a clearing agency registered with the Securities and Exchange Commission (“DTC”), or through any other clearing agency or
similar system (a “Clearing Agency”). The Escrow Agent shall have no responsibility and shall not be liable for ascertaining or acting upon any calls, conversions, exchange offers, tenders, interest rates changes, or similar matters
relating to securities held at 
  

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 DTC or with any Clearing Agency unless the Escrow Agent shall have received actual and timely notice of
the same, nor shall the Escrow Agent have any responsibility or liability for the actions or omissions to act of the Book-Entry System, DTC or any Clearing Agency. 
  
 (c) If at any time the Escrow Agent is served with any judicial or administrative order, judgment, decree,
writ or other form of judicial or administrative process which in any way affects the Escrow Property (including but not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of the
Escrow Property), the Escrow Agent is authorized to comply therewith in any manner it or legal counsel of its own choosing deems appropriate; and if the Escrow Agent complies with any such judicial or administrative order, judgment, decree, writ or
other form of judicial or administrative process, the Escrow Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order, judgment, decree, writ or process may be subsequently modified or vacated or
otherwise determined to have been without legal force or effect. 
  
 (d) The Escrow Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder in the absence of gross
negligence or willful misconduct on its part. In no event shall the Escrow Agent be liable (i) for acting in accordance with or conclusively relying upon any instruction, notice, demand, certificate or document from the Company or any entity acting
on behalf of the Company, (ii) for any indirect, consequential, punitive or special damages, regardless of the form of action and whether or not any such damages were foreseeable or contemplated, (iii) for the acts or omissions of its nominees,
correspondents, designees, agents, subagents or subcustodians, (iv) for the investment or reinvestment of any cash held by it hereunder, in each case in good faith, in accordance with the terms hereof, including without limitation any liability for
any delays (not resulting from its gross negligence or willful misconduct) in the investment or reinvestment of the Escrow Property, or any loss of interest or income incident to any such delays, or (v) for an amount in excess of the value of the
Escrow Property, valued as of the date of deposit, but only to the extent of direct money damages. 
  
 (e) The Escrow Agent may consult with legal counsel of its own choosing at the expense of the Company as to any matter relating to this
Escrow Agreement, and the Escrow Agent shall not incur any liability in acting in good faith in accordance with any advice from such counsel. If such expenses are to be billed to the Company, the Company will be informed of such expenses before they
are incurred; provided, however, that failure to provide such notice will not affect the Company’s payment obligations hereunder. 
  
 (f) The Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of the Escrow Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, civil unrest, local or
national disturbance or disaster, any act of terrorism or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility). 
  

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 (g) The Escrow Agent shall be entitled to conclusively rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it hereunder without being required to determine the authenticity or the correctness of any fact stated therein or the propriety or validity or the service thereof. The Escrow
Agent may act in conclusive reliance upon any instrument or signature believed by it to be genuine and may assume that any person purporting to give receipt or advice to make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so. 
  
 (h)
The Escrow Agent shall not be responsible in any respect for the form, execution, validity, value or genuineness of documents or securities deposited hereunder, or for any description therein, or for the identity, authority or rights of persons
executing or delivering or purporting to execute or deliver any such document, security or endorsement. The Escrow Agent shall not be called upon to advise any party as to the wisdom in selling or retaining or taking or refraining from any action
with respect to any securities or other property deposited hereunder. 
  
 (i) The Escrow Agent shall not be under any duty to give the Escrow Property held by it hereunder any greater degree of care than it gives its own similar property and shall not be required to invest any funds held
hereunder except as directed in this Escrow Agreement. Uninvested funds held hereunder shall not earn or accrue interest. 
  
 (j) At any time the Escrow Agent may request an instruction in writing in English from the Company and may, at its own option, include in
such request the course of action it proposes to take and the date on which it proposes to act, regarding any matter arising in connection with its duties and obligations hereunder. The Escrow Agent shall not be liable for acting in accordance with
such a proposal on or after the date specified therein, provided that the specified date shall be at least three (3) business days after the Company receives the Escrow Agent’s request for instructions and its proposed course of action, and
provided further that, prior to so acting, the Escrow Agent has not received the written instructions requested. 
  
 (k) When the Escrow Agent acts on any information, instructions, communications, (including, but not limited to, communications with
respect to the delivery of securities or the wire transfer of funds) sent by telex, facsimile, email or other form of electronic or data transmission, the Escrow Agent, absent gross negligence, shall not be responsible or liable in the event such
communication is not an authorized or authentic communication of the Company or is not in the form the Company sent or intended to send (whether due to fraud, distortion or otherwise). The Company shall indemnify the Escrow Agent against any loss,
liability, claim or expense (including legal fees and expenses) it may incur with its acting in accordance with any such communication. 
  
 (l) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other communication received by the Escrow
Agent hereunder, the Escrow Agent may, in its sole discretion, refrain from taking any action other than to retain possession of the Escrow Property, unless the Escrow Agent receives written instructions, signed by the Company which eliminates such
ambiguity or uncertainty. 
  

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 (m) In the event of any dispute between or conflicting claims among the Company and any
other person or entity with respect to any Escrow Property, the Escrow Agent shall be entitled, in its sole discretion, to refuse to comply with any and all claims, demands or instructions with respect to such Escrow Property so long as such dispute
or conflict shall continue, and the Escrow Agent shall not be or become liable in any way to the Company or any other person for failure or refusal to comply with such conflicting claims, demands or instructions. The Escrow Agent shall be entitled
to refuse to act until, in its sole discretion, either (i) such conflicting or adverse claims or demands shall have been determined by a final order, judgment or decree of a court of competent jurisdiction, which order, judgment or decree is not
subject to appeal, or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to the Escrow Agent or (ii) the Escrow Agent shall have received security or an indemnity satisfactory to it sufficient to hold it
harmless from and against any and all losses which it may incur by reason of so acting. Any court order, judgment or decree shall be accompanied by a legal opinion by counsel for the presenting party, satisfactory to the Escrow Agent, to the effect
that said order, judgment or decree represents a final adjudication of the rights of the parties by a court of competent jurisdiction, and that the time for appeal from such order, judgment or decree has expired without an appeal having been filed
with such court. The Escrow Agent shall act on such court order and legal opinions without further question. The Escrow Agent may, in addition, elect, in its sole discretion, to commence an interpleader action or seek other judicial relief or orders
as it may deem, in its sole discretion, necessary. The costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with such proceeding shall be paid by, and shall be deemed an obligation of, the Company.

  
 (n) The Escrow Agent shall have no
responsibility for the contents of any writing of the arbitrators or any third party contemplated herein as a means to resolve disputes and may conclusively rely without any liability upon the contents thereof. 
  
 (o) The Escrow Agent does not have any interest in the
Escrow Property deposited hereunder but is serving as escrow holder only and having only possession thereof. The Company shall pay or reimburse the Escrow Agent upon request for any transfer taxes or other taxes relating to the Escrow Property
incurred in connection herewith and shall indemnify and hold harmless the Escrow Agent from any amounts that it is obligated to pay in the way of such taxes. Any payments of income from this Escrow Account shall be subject to withholding regulations
then in force with respect to United States taxes. The Company will provide the Escrow Agent with appropriate W-9 forms for tax identification number certifications, or W-8 forms for non resident alien certifications. This paragraph shall survive
notwithstanding any termination of this Escrow Agreement or the resignation or removal of the Escrow Agent. 
  
 (p) The Escrow Agent shall provide to the Company weekly statements identifying transactions, transfers or holdings of Escrow Property and
each such statement shall be deemed to be correct and final upon receipt thereof by the Company unless the Escrow Agent is notified in writing, by the Company, to the contrary within thirty (30) business days of the date of such statement.

  
 Section 12. Miscellaneous. 
  

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 (a) This Agreement embodies the entire agreement and understanding among the parties
relating to the subject matter hereof. 
  
 (b)
This Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to the principles of conflict of laws. 
  

(c) Each of the parties hereto hereby irrevocably consents to the jurisdiction of the courts of the State of New York and of any
Federal Court located in the Borough of Manhattan in such State in connection with any action, suit or other proceeding arising out of or relating to this Agreement or any action taken or omitted hereunder, and waives any claim of forum non
conveniens and any objections as to laying of venue. Each party further waives personal service of any summons, complaint or other process and agrees that service thereof may be made by certified or registered mail directed to such person at such
person’s address for purposes of notices hereunder. 
  
 (d) All notices and other communications under this Agreement shall be in writing in English and shall be deemed given when delivered personally, on the next Business Day after delivery to a recognized overnight
courier or mailed first class (postage prepaid) or when sent by facsimile to the parties (which facsimile copy shall be followed, in the case of notices or other communications sent to the Escrow Agent, by delivery of the original) at the following
addresses (or to such other address as a party may have specified by notice given to the other parties pursuant to this provision): 
  
 If to the Company, to: 
  
 Paladin Realty Income Properties, Inc. 
 10880 Wilshire Boulevard, Suite 1400 
 Los Angeles, California 90024 
 Facsimile: (310) 575-3258 
 Attention: Michael B. Lenard 
  
 with a copy to: 
  
 King & Spalding LLP 
 191 Peachtree Street 
 Atlanta, Georgia 30303 
 Facsimile: 404-572-5148 
 Attention: Scott J. Arnold 
  
 If to the Escrow Agent, to: 
  
 Deutsche Bank Trust Company Americas 
 60 Wall Street, 27th Floor 
 Mail Stop: NYC60-2710 
 New York, New York 10005 
  

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 Facsimile: (212) 797-8623 
 Attention: Manager, Escrow Team 
  
 If the Dealer Manager, to: 
  
 Prospect Financial Advisors, LLC 
 11355 West Olympic Boulevard 
 Suite 220 
 Los Angeles, CA 90064 
 Facsimile: (310) 479-7736 
 Attention: Brooke Buckley 
  
 If to Phoenix American Financial Services, Inc., to: 
  
 Phoenix American Financial Services, Inc. 
 2401 Kerner Boulevard 
 San Rafael, California 94901 
 Facsimile: (415) 485-4553 
 Attention: Anne Rabbitt 
  
 (e) The headings of the Sections of this Agreement have been inserted for convenience and shall not modify, define, limit or expand the
express provisions of this Agreement. 
  
 (f)
This Agreement and the rights and obligations hereunder of parties hereto may not be assigned except with the prior written consent of the other parties hereto. This Agreement shall be binding upon and inure to the benefit of each party’s
respective successors and permitted assigns. Except as expressly provided herein, no other person shall acquire or have any rights under or by virtue of this Agreement. This Agreement is intended to be for the sole benefit of the parties hereto, and
(subject to the provisions of this Section 10(f)) their respective successors and assigns, and none of the provisions of this Agreement are intended to be, nor shall they be construed to be, for the benefit of any third person. 
  
 (g) This Agreement may not be amended, supplemented or
otherwise modified without the prior written consent of the parties hereto. 
  
 (h) The Escrow Agent makes no representation as to the validity, value, genuineness or the collectability of any security or other document or instrument held by or delivered to it. 
  
 (i) The Escrow Agent shall not be called upon to advise any
party as to the wisdom in selling or retaining or taking or refraining from any action with respect to any securities or other property deposited hereunder. 
  
 (j) Any payments of income from the Escrow Property shall be subject to withholding regulations then in force with respect to United
States taxes. The Company will 
  

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 provide the Escrow Agent with its Employer Identification Number for use by the Escrow Agent if
necessary. It is understood that the Escrow Agent shall be responsible for income reporting only with respect to income earned on the Escrow Property and will not be responsible for any other reporting. 
  
 (k) This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. 
  
 (l) The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of any such right or remedy
shall not preclude or inhibit the exercise of any additional rights or remedies. The waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy. 
  
 (m) The Company hereby represents and warrants (i) that this
Escrow Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (ii) that the execution, delivery and performance of this Escrow Agreement by the Company does not and will
not violate any applicable law or regulation. 
  
 (n) The invalidity, illegality or unenforceability of any provision of this Escrow Agreement shall in no way affect the validity, legality or enforceability of any other provision; and if any provision is held to be unenforceable as a
matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect. 
  
 (o) No printed or other material in any language, including prospectuses, notices, reports, and promotional material which mentions
“Bankers Trust Company”, “Deutsche Bank Trust Company Americas” or “Deutsche Bank AG” or any of their respective affiliates by name or the rights, powers, or duties of the Escrow Agent under this Escrow Agreement shall
be issued by any other parties hereto, or on such party’s behalf, without the prior written consent of the Escrow Agent. 
  
 (p) For purposes of this Agreement, “Business Day” shall mean any day that is not a Saturday or Sunday or a day on which banks
are required or permitted by law or executive order to be closed in the City of New York. 
  
 (q) For purposes of sending and receiving instructions or directions hereunder, all such instructions or directions shall be, and the
Escrow Agent may conclusively rely upon such instructions or directions, delivered, and executed by representatives of the Company designated on Scheduled I attached hereto and made a part hereof (each such representative, an “Authorized
Person”) which such designation shall include specimen signatures of such representatives, as such Schedule B may be updated from time to time. 
  

 12 

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

			
	PALADIN REALTY INCOME PROPERTIES, INC.
		
	By:	 	 
	 	 	Name:
	 	 	Title:

  

			
	 DEUTSCHE BANK TRUST COMPANY AMERICAS, as Escrow Agent

		
	By:	 	 
	 	 	Name:
	 	 	Title:

  

 13 

 Schedule A 
  

[To be filed by amendment.] 

 Schedule B 
  

Authorized Representatives of Paladin Realty Income Properties, Inc. 
  

					
	 Name

	 	 Title

	 	 Specimen Signature

	 James R. Worms
	 	President, Chief Executive Officer and Director	 	 
	 	 	 	 	

	 Michael B. Lenard
	 	Executive Vice President, Secretary, Counselor and Director	 	 
	 	 	 	 	

	 John A. Gerson
	 	Executive Vice President, Chief Financial Officer and Director	 	 
	 	 	 	 	

	 Scot E. Hadley
	 	Controller	 	 
	 	 	 	 	

 Exhibit A 
  

Subscription Agreement 

 Exhibit B 
  

Wire Transfer Instructions 

 
Exhibit C 
  
 List of Investors 
  
 Pursuant to the Escrow Agreement dated                      by and between
                    , (the “Company”), and Deutsche Bank Trust Company Americas (the “Escrow Agent”), the Company hereby
certifies that the following Investors have paid the following amounts of money for the purchase of
                                 (the “Shares”), and the money has been
deposited with the Escrow Agent: 
  

	1.	Name of Subscriber 

	 	Mailing Address 

	 	State of Residence 

	    	Tax Identification Number 

	    	Amount of Shares subscribed for 

	    	Amount of money paid and deposited with Escrow Agent 

  

	2.	Name of Subscriber 

	    	Mailing Address 

	    	State of Residence 

	    	Tax Identification Number 

	    	Amount of Shares subscribed for 

	    	Amount of money paid and deposited with Escrow Agent 

 Exhibit D 
  

Minimum Offering Notice 
  
 [Company Letterhead] 
  
 [DATE] 
  
 Deutsche Bank Trust Company Americas 
 60 Wall St. 27th 
 Floor Mail Stop: NYC60-2710 
 New York, New York 10005 
 Attention: Escrow Team 
 Telecopy: (212) 797-8623 
  
 You are hereby notified that the Company has received and accepted Subscription Agreements for the Minimum Amount of Shares. You are further notified that all conditions
precedent to the issuance by the Company of this Minimum Offering Notice, under the Escrow Agreement or any other agreement, have been met. We therefore direct Deutsche Bank Trust Company Americas, as Escrow Agent, to distribute the Escrow Property
in the following manner: 
  
 [Insert Wire Instructions] 
  
 Sincerely, 
  
 Authorized Person 
  

 Print Name 
  
 Authorized Person 
  

Print Name 

 Exhibit E 
  

Pennsylvania Escrow Return Notice 
  
 [Company Letterhead] 
  
 [DATE] 
  
 Deutsche Bank Trust Company Americas 
 60 Wall St. 27th Floor 
 Mail Stop: NYC60-2710 
 New York, New York 10005 
 Attention: Escrow Team 
 Telecopy: (212) 797-8623 
  
 You are hereby
notified that the Company has received a request by the Pennsylvania investor listed below to return any funds and interest attributable thereon to the investor pursuant to Section 4(a)(iii) of the Escrow Agreement included in the “Deutsche
Bank Trust Company Americas, as Escrow Agent for Pennsylvania residents (Paladin Realty income Properties, Inc.)” escrow account (the “Individual Pennsylvania Investor Funds”). We therefore direct Deutsche Bank Trust Company Americas,
as Escrow Agent, to return to the Pennsylvania investor listed below the Individual Pennsylvania Investor Funds in the following manner within 15 days after             , the date on which
the Pennsylvania investor requested return of such funds: 
  
 Name of Pennsylvania
Subscriber 
 Mailing Address Tax 
 Identification Number

  
 [Insert Wire Instructions] 
  

					
	Sincerely,	  	 	  	 
			
	Authorized Person	  	 	  	Authorized Person
			
	 	  	 	  	 
	Print Name	  	 	  	Print NamePrepared by R.R. Donnelley Financial -- Investor Rights Agreement

 Exhibit 10.1 
  
 AMENDED AND RESTATED 
  
 INVESTOR RIGHTS AGREEMENT 
  
 This Amended and Restated Investor Rights Agreement (this “Agreement”) is made as of July 30, 2004 by and among Conor Medsystems, Inc., a
Delaware corporation (the “Company”) and the investors listed on Schedule A attached hereto (each individually referred to as an “Investor” and collectively the “Investors”). 
  
 WHEREAS, the Company and certain of the Investors have previously entered
into an Amended and Restated Investor Rights Agreement dated August 7, 2003, as amended on October 24, 2003 (the “Prior Agreement”); 
  
 WHEREAS, the Company is proposing to issue shares of Series E Preferred Stock pursuant to that certain Series E Preferred Stock Purchase Agreement dated
as of the date hereof (the “Series E Agreement”); and 
  
 WHEREAS, in order to induce certain of the Investors to purchase the shares of Series E Preferred Stock pursuant to the Series E Agreement, the Company and those Investors’ party to the Prior Agreement have agreed to amend and restate
the Prior Agreement in its entirety as set forth herein. 
  
 NOW
THEREFORE, the parties agree as follows: 
  
 1. Information
Rights. 
  
 1.1 Financial Information.
Subject to the terms below, the Company will provide to such Investor the following information: 
  
 (a) So long as an Investor holds at least 200,000 shares of the Company’s Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock, Series D Preferred Stock and/or Series E Preferred Stock (collectively, the “Preferred Stock”)(or of the Common Stock issued upon conversion of such Preferred Stock, or any combination thereof), as soon as practicable,
but in any event within ninety (90) days after the end of each fiscal year of the Company, audited-consolidated balance sheets, and statement of operations and cash flow for such fiscal year; provided that such financial statements may be delivered
not later than 120 days after the end of any fiscal year upon a resolution of a majority of the Board of Directors. Such year-end financial reports shall be in reasonable detail, shall be prepared in accordance with generally accepted accounting
principals (“GAAP”), audited and certified by independent public accountants selected by the Company; 
  
 (b) so long as an Investor holds at least 500,000 shares of the Company’s Preferred Stock (or of the Common Stock issued upon
conversion of such Preferred Stock, or any combination thereof), within forty-five (45) days of the end of each fiscal quarter, unaudited 

  

 1 

 
statements of operations and cash flow and balance sheet for and as of the end of such quarter, in reasonable detail and prepared in accordance with GAAP,
subject to year end audit adjustments and the absence of footnotes; 
  
 (c) So long as an Investor holds at least 500,000 shares of the Company’s Preferred Stock (or of Common Stock issued upon conversion of such Preferred Stock, or any combination thereof), within thirty (30) days
of the end of each month, an unaudited income statement and schedule as to the sources and applications of funds and an unaudited balance sheet for and as of the end of such month, in reasonable detail; and 
  
 (d) So long as an Investor holds at least 500,000 shares of
the Company’s Preferred Stock (or of the Common Stock issued upon conversion of such Preferred Stock, or any combination thereof), within thirty (30) days prior to the end of each Company fiscal year, an annual operating plan for the next
fiscal year containing a revenue, expense and cash flow forecast, which plan shall have been approved by the Board of Directors, and each amendment to that plan adopted by the Board of Directors. 
  
 (e) For purposes of Section 1.1, “Investor” shall
include any person, corporation or other entity which directly or indirectly controls, or is controlled by, or is in common control with the Investor including any affiliated fund and any general partner of the Investor. 
  
 1.2 Nondisclosure. 
  
 (a) Each Investor agrees not to use Confidential Information
(as hereinafter defined) of the Company for its own use or for any purpose except to evaluate and enforce its equity investment in the Company. Except as permitted under Section 1.2(b) below, each Investor agrees to use its best efforts not to
disclose such Confidential Information to any third parties. Each Investor shall undertake to treat such Confidential Information in a manner consistent with the treatment of its own information of such proprietary nature and agrees that it shall
protect the confidentiality of and use reasonable best efforts to prevent disclosure of the Confidential Information to prevent it from falling into the public domain or the possession of unauthorized persons. For purposes of this Section,
“Confidential Information” means any proprietary information, technical data, or know-how, including, but not limited to, the Company’s research, products, software, services, development, inventions, processes, designs, drawings,
engineering, marketing, or finances, disclosed by the Company either directly or indirectly in writing, orally or by drawings or inspection of parts or equipment. 
  
 (b) Confidential Information does not include information, technical data or know-how which (i) is in the
Investor’s possession at the time of disclosure as shown by Investor’s files and records immediately prior to the time of disclosure; (ii) before or after it has been disclosed to the Investor, it is part of the public knowledge or
literature, not as a result of any action or inaction of the Investor; or (iii) is approved for release by written authorization of Company. The provisions of Section 1.2(a) shall not apply (i) to the extent that an Investor is required to disclose
Confidential Information pursuant to any law, statute, rule or regulation or any order of any court or jurisdiction 

  

 2 

 
process or pursuant to any direction, request or requirement (whether or not having the force of law but if not having the force of law being of a type with
which institutional investors in the relevant jurisdiction are accustomed to comply) of any self-regulating organization or any governmental, fiscal, monetary or other authority; (ii) to the disclosure of Confidential Information to any other holder
of the Company’s Preferred Stock; (iii) to the disclosure of Confidential Information to an Investor’s employees, partners, counsel, accountants or other professional advisors (provided that such persons agree to maintain the
confidentiality of the disclosed Confidential Information to the same extent as provided herein); (iv) to the extent that an Investor needs to disclose Confidential Information for the protection of any of such Investor’s rights or interest
against the Company, whether under this Agreement or otherwise; or (v) to the disclosure of Confidential Information to a prospective transferee of securities which agrees to be bound by the provisions of this Section 1.2 in connection with the
receipt of such Confidential Information. The Company recognizes that certain of the Investors or their affiliates are engaged in the business of providing venture capital financing and management advice to companies in which they invest (the
“Venture Investors”), and that in their business the Venture Investors may seek to invest in and/or provide advice to companies that may be competitive to the Company. Accordingly, notwithstanding anything to the contrary in this
Agreement, the Company understands and agrees that nothing in this Agreement will restrict the Venture Investors from investing or participating in the management of any business or entity which competes or may compete, directly or indirectly, with
the Company so long as such Venture Investor does not disclose any Confidential Information to such business or entity in violation hereof. The Company further agrees that, provided a Venture Investor does not disclose Confidential Information to a
third-party in violation hereof, such Venture Investor shall be free to use in its business any information it has obtained or will obtain from the Company. 
  
 Notwithstanding anything to the contrary, those Investors affiliated with the persons or entities set forth on Schedule B hereto shall not be bound
by the terms of this Section 1.2 pursuant to this Agreement, but shall, and continue to, be bound by the terms of those Confidential Disclosure Agreements entered into prior to the date hereof between the Company and such Investor or an Affiliate
(as defined below) of such Investor. 
  
 1.3
Termination of Covenants. The rights set forth in Section 1.1 shall terminate and be of no further force or effect upon the closing of a Qualified IPO (as defined below). 
  
 2. Registration Rights. 
  
 2.1 Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings: 

 
 (a) “Commission” or “SEC”
shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. 
  
 (b) “Holder” shall mean the Investor holding Registrable Securities or securities convertible into Registrable Securities
and any person holding such securities to whom the rights under this Section 2 have been transferred in accordance with Section 2.11 hereof. 
  

 3 

 (c) “Initiating Holders” shall mean any Holder or Holders who in the
aggregate hold at least 30% of the Registrable Securities. 
  
 (d) “Qualified IPO” shall mean the Corporation’s sale of its Common Stock in a firm commitment, underwritten public offering pursuant to a registration statement under the Securities Act with
gross proceeds to the Corporation of at least $30 million, provided the sale price to the public per share of Common Stock is not less than $3.60 per share (as adjusted for stock splits, etc.) and the offering is lead managed by a nationally
recognized investment bank. 
  
 (e)
“Registrable Securities” means (i) the Common Stock issuable upon conversion of the Preferred Stock, (ii) any other shares of Common Stock acquired by any Investor from time to time and (iii) any Common Stock of the Company issued
or issuable with respect to, or in exchange for or in replacement of the Common Stock issued or issuable pursuant to clauses (i) or (ii) upon any stock split, stock dividend, recapitalization, or similar event; provided however that shares of Common
Stock or other securities shall not be treated as Registrable Securities for the purposes of Section 2.3 hereof if they have been sold (A) to or through a broker or dealer or underwriter in a public distribution or a public securities transaction,
or (B) in a transaction exempt from the prospectus delivery requirements of the Securities Act so that all transfer restrictions and legends with respect thereto are removed upon the consummation of such sale. 
  
 (f) The terms “register,”
“registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such
registration statement. 
  
 (g)
“Registration Expenses” shall mean all expenses, except as otherwise stated below, incurred by the Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation, all registration, qualification and filing
fees, printing expenses, accounting fees and expenses (including, without limitation, accounting fees and expenses relating to comfort letters), escrow fees, fees and disbursements of counsel for the Company (including fees and disbursements of one
counsel for the selling Holders), blue sky fees and expenses, 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). 
  
 (h) “Restricted
Securities” shall mean the securities of the Company required to bear the legend referring to the Securities Act set forth in the Company’s Series A Preferred Stock Subscription Agreements, dated as of February 7, 2000 (the
“Series A Agreement”), the Company’s Series B Stock Subscription Agreements, as amended and dated as of November 9, 2000 through August 9, 2001 (the “Series B Agreement”), the Company’s Series C Preferred Stock Purchase
Agreement, dated as of May 20, 2002 (the “Series C Agreement”), the Series D Preferred Stock Purchase Agreement, dated as of August 7, 2003, as amended on October 24, 2003 (the “Series D Agreement”) and the Series E Agreement.

  

 4 

 (i) “Securities Act” shall mean the Securities Act of 1933, as amended,
or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 
  
 (j) “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock transfer taxes, if any,
applicable to the securities registered by the Holders. 
  
 2.2 Requested Registration. 
  
 (a) Request for Registration. Commencing on the earlier of July 30, 2007 or six (6) months after the effective date of the Company’s first firm commitment underwritten public offering of its Common Stock
under the Securities Act, in case the Company shall receive from Initiating Holders a written request that the Company effect a registration, qualification or compliance of Registrable Securities held by such Initiating Holders with an expected
aggregate offering price to the public of at least $10,000,000, the Company will (i) within ten (10) days of the receipt by the Company of such notice, give written notice of the proposed registration, qualification or compliance to all other
Holders and (ii) as soon as practicable, use its best efforts to effect such registration, qualification or compliance (including, without limitation, appropriate qualification under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within twenty
(20) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to take any action to effect any such registration, qualification or compliance pursuant to this Section
2.2(a): 
  
 (i) During the period starting with
the date thirty (30) days prior to the Company’s good faith estimate of the date of filing of, and ending on the date six (6) months immediately following the effective date of, any registration statement pertaining to securities of the Company
(other than a registration of securities in a Rule 145 transaction, with respect to an employee benefit plan or with respect to the Company’s first registered public offering of its stock), provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration statement to become effective; 
  
 (ii) After the Company has effected two registrations pursuant to this Section 2.2(a), and such registrations have been declared or
ordered effective; 
  
 (iii) For a period not to
exceed 90 days when the Company’s Board of Directors, in its good faith judgment with advice of counsel, reasonably determines and delivers a certificate signed by a duly authorized officer of the Company stating that the filing thereof at the
time requested, or the offering of Registrable Securities pursuant thereto, would materially and adversely affect (a) the Company’s ability to consummate a pending transaction that is material to the business of the Company and its subsidiaries
taken as a whole or (b) (w) a pending or scheduled public 

  

 5 

 
offering of the Company’s securities, (x) an acquisition, merger, recapitalization, consolidation, reorganization or similar transaction by or of the
Company, (y) pre-existing and continuing negotiations, discussions or pending proposals with respect to any of the transactions described in clause (x) of this sentence, or (z) the financial condition of the Company in view of the disclosure of any
pending or threatened litigation, claim, assessment or governmental investigation which may be required thereby; and the failure to disclose any material information with respect to the foregoing clauses (w) through (z) would cause a violation of
the Securities Act or the Securities Exchange Act of 1934, as amended; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period. 
  
 (b) Underwriting. In the event that a registration pursuant to this Section 2.2 is for a registered
public offering involving an underwriting, the Company shall so advise the Holders as part of the notice given pursuant to Section 2.2(a). In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon
such Holder’s participation in the underwriting arrangements required by this Section 2.2, and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent requested shall be limited to the extent provided
herein. 
  
 The Company shall (together with all
Holders proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company and reasonably acceptable to a majority of
the Holders proposing to distribute their securities through such underwriting. Notwithstanding any other provision of this Section 2.2, if the managing underwriter advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Company shall so advise all Holders proposing to distribute their securities and the number of shares of Registrable Securities that may be included in the registration and underwriting
shall be allocated among all Holders thereof, including the Initiating Holders, proposing to distribute their securities in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by such Holders at the time of
filing the registration statement; provided, however, that the number of shares of Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. No
Registrable Securities excluded from the underwriting by reason of the underwriter’s marketing limitation shall be included in such registration. To facilitate the allocation of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. 
  
 If any Holder of Registrable Securities disapproves of the terms of the underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company, the managing underwriter and the Initiating Holders. The Registrable Securities and/or other securities so withdrawn shall also be withdrawn from registration, and such Registrable Securities shall not be transferred
in a public distribution prior to 180 days after the effective date of such registration, or such other shorter period of time as the underwriters may require. 
  

 6 

 (c) The Company shall not be required to pay any Registration Expenses if, as a result of
the withdrawal of a request for registration by Initiating Holders, the registration statement does not become effective, unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration. If the
Company is not required to pay any Registration Expenses, then the Holders requesting registration shall bear such Registration Expenses on the basis of the number of their shares so included in the registration request. Notwithstanding the
foregoing, however, if at the time of the withdrawal the Holders have learned of a material adverse change in the business or operations of the Company after such request for registration, then the Holders shall not be required to pay any of said
Registration Expenses or to forfeit the right to one demand registration. 
  
 2.3 Company Registration. 
  
 (a) Notice of Registration. If at any time or from time to time the Company shall determine to register any of its securities, either for its own account or the account of a security holder or holders, other
than (i) a registration relating solely to employee benefit plans, (ii) a registration relating solely to a Commission Rule 145 transaction, (iii) a registration relating to the initial underwritten public offering of the Company’s securities
pursuant to a registration statement filed under the Securities Act or (iv) a registration pursuant to Section 2.2 hereof, the Company will: 
  
 (i) promptly give to each Holder written notice thereof; and 
  
 (ii) include in such registration (and any related qualification under blue sky laws or other compliance),
and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within twenty (20) days after receipt of such written notice from the Company, by any Holder of Registrable Securities.

  
 (b) Underwriting. If the registration
of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 2.3(a). In such event the right of any Holder to
registration pursuant to Section 2.3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of Registrable Securities in the underwriting to the extent provided herein. 
  
 All Holders proposing to distribute their securities
through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company. Notwithstanding any other provision of this Section 2.3,
if the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit (or completely exclude) the Registrable Securities and other securities to be
distributed through such underwriting. The Company shall so advise all Holders distributing their securities through such underwriting of such limitation and the number of shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities 

  

 7 

 
held by such Holders at the time of filing the registration statement. In no event will shares of any other selling shareholder 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. For purposes of the preceding
sentence concerning apportionment, for any selling shareholder that is a Holder of Registrable Securities and that is a partnership or corporation, the partners, retired partners, shareholders and affiliates (as defined in Rule 405 under the
Securities Act, each an “Affiliate”) 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 Registrable Securities owned by all such related entities and individuals. To facilitate the allocation of shares in
accordance with the above provisions, the Company may round the number of shares allocated to any Holder or holder to the nearest 100 shares. 
  
 If any Holder or holder disapproves of the terms of any such underwriting, such Holder or holder may elect to withdraw therefrom by
written notice to the Company and the managing underwriter. Any securities excluded or withdrawn from such underwriting shall be withdrawn from such registration, and shall not be transferred in a public distribution prior to ninety (90) days after
the effective date of the registration statement relating thereto, or such other shorter period of time as the underwriters may require. 
  
 (c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it
under this Section 2.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.5 hereof. 
  
 2.4
Registration on Form S-3. 
  
 (a) If any
Holder or Holders of the Registrable Securities request that the Company file a registration statement on Form S-3 (or any successor form to Form S-3), or any similar short-term registration statement, for a public offering of Registrable
Securities, the reasonably anticipated aggregate price to the public of which, net of underwriting discounts and commissions, would exceed $1,000,000 and the Company is a registrant entitled to use Form S-3 to register the Registrable Securities for
such an offering, the Company shall promptly provide each Holder written notice thereof and shall use its best efforts to cause such Registrable Securities to be registered on such form for the offering and to cause such Registrable Securities to be
qualified in such jurisdictions as the Holder or Holders may reasonably request. After the Company’s first public offering of its securities, the Company will use its best efforts to qualify for Form S-3 registration or a similar short-form
registration. The provisions of Sections 2.2(b) and 2.2(c) shall be applicable to each registration initiated under this Section 2.4. 
  
 (b) Notwithstanding the foregoing, the Company shall not be obligated to take any action pursuant to this Section 2.4: (i) in any
particular jurisdiction in which the Company would 

  

 8 

 
be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already
subject to service in such jurisdiction and except as may be required by the Securities Act; (ii) if the Company, within ten (10) days of the receipt of the request to file such registration by such Holder, gives notice of its bona fide intention to
effect the filing of a registration statement with the Commission within sixty (60) days of receipt of such request (other than with respect to a registration statement relating to a Rule 145 transaction, or an offering solely with respect to an
employee benefit plan) provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; (iii) during the period starting with the date sixty (60) days prior to the
Company’s good faith estimate of the date of filing of, and ending on the date six (6) months immediately following, the effective date of any registration statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; (iv) for a period not
to exceed 90 days when the Board of Directors, in its good faith judgment with advice of counsel, reasonably determines and delivers a certificate signed by a duly authorized officer of the Company stating that the filing thereof at the time
requested, or the offering of Registrable Securities pursuant thereto, would materially and adversely affect (1) the Company’s ability to consummate a pending transaction that is material to the business of the Company and its subsidiaries
taken as a whole or (2) (w) a pending or scheduled public offering of the Company’s securities, (x) an acquisition, merger, recapitalization, consolidation, reorganization or similar transaction by or of the Company, (y) pre-existing and
continuing negotiations, discussions or pending proposals with respect to any of the transactions described in clause (x) of this sentence, or (z) the financial condition of the Company in view of the disclosure of any pending or threatened
litigation, claim, assessment or governmental investigation which may be required thereby; and the failure to disclose any material information with respect to the foregoing clauses (w) through (z) would cause a violation of the Securities Act or
the Securities Exchange Act of 1934, as amended; 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 (2) registrations on Form S-3 for the Holders pursuant to this Section 2.4. 
  
 2.5 Expenses of Registration. All Registration Expenses incurred in connection with registrations pursuant to Sections 2.2, 2.3 and
2.4 shall be borne by the Company. All Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the holders of securities included in such registration pro rata with the Company and among each other on the basis
of the number of shares so registered. 
  

 9 

 2.6 Registration Procedures. In the case of each registration, qualification or
compliance effected by the Company pursuant to this Section 2, the Company will keep each Holder advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof. At its expense the Company
will: 
  
 (a) Prepare and file with the
Commission a registration statement with respect to such securities and use its best efforts to cause such registration statement to become and remain effective for at least one hundred twenty (120) days or until the distribution described in the
Registration Statement has been completed; provided, however, that (i) such 120-day period shall be extended for a period of time equal to the period the Holder refrains from selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in the case of any registration of Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed basis, such 120-day period shall be
extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold, provided that Rule 415, or any successor rule under the Securities Act, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Securities Act governing the obligation to file a post-effective amendment permit, in lieu of filing a post-effective amendment which (I) includes any prospectus required by Section 10(a)(3) of the
Securities Act or (II) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the incorporation by reference of information required to be included in (I) and (II) above to
be contained in periodic reports filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, in the registration statement; 
  
 (b) Prepare and file with the Commission 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. 
  
 (c) Furnish to the Holders participating in such
registration and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such underwriters may reasonably request in
order to facilitate the public offering of such securities. 
  
 (d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdiction as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. 
  
 (e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. 
  
 (f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or 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 at the request of any such Holder, 

  

 10 

 
prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading
or incomplete in the light of the circumstances then existing. 
  
 (g) Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed. 
  
 (h) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration. 
  
 (i) In the event of any underwritten public offering, cooperate with the selling Holders, the underwriters
participating in the offering and their counsel in any due diligence investigation reasonably requested by the selling Holders or the underwriters in connection therewith, and participate, to the extent reasonably requested by the managing
underwriter for the offering or the selling Holder, in efforts to sell the Registrable Securities under the offering (including, without limitation, participating in “roadshow” meetings with prospective investors) that would be customary
for underwritten primary offerings of a comparable amount of equity securities by the Company. 
  
 2.7 Delay of Registration. 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. 
  
 2.8 Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 2:

  
 (a) To the extent permitted by law, the
Company will indemnify each selling Holder, each of its officers, directors, partners and legal counsel, and each person controlling such Holder within the meaning of Section 15 of the Securities Exchange Act of 1934, as amended (the “1934
Act”), with respect to which registration, qualification or compliance has been effected pursuant to this Section 2, and each underwriter, if any, and each person who controls any underwriter within the meaning of Section 15 of the 1934 Act,
against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), joint or several, including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any
violation by the Company of the Securities Act, the 1934 Act or any rule or regulation promulgated under the Securities Act or the 1934 Act applicable to the Company in connection with any such registration, qualification or compliance, and the
Company will reimburse each such Holder, each of 

  

 11 

 
its officers, directors, partners, and legal counsel and each person controlling such Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder, controlling person or underwriter and stated to be specifically for use therein. 
  
 (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 being effected, indemnify the Company, each of its directors, officers, and legal counsel, each underwriter, if any, of the Company’s securities covered by such a registration statement,
each person who controls the Company or such underwriter within the meaning of Section 15 of the 1934 Act, and each other Holder, each of its officers, directors, partners and legal counsel and each person controlling such Holder within the meaning
of Section 15 of the 1934 Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the
Company, such Holders, such directors, officers, partners, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by an instrument duly executed by such Holder and stated to be specifically for use therein. Notwithstanding the foregoing, the aggregate maximum liability of each Holder under this
Section 2.8(b) and Section 2.8(d) below shall be limited in an amount equal to the net proceeds to such Holder of Registrable Securities sold in such offering. A Holder will not be required to enter into any agreement or undertaking in connection
with any registration under this Section 2 providing for any indemnification or contribution on the part of such Holder greater than the Holder’s obligations under this Section 2.8(b). 
  
 (c) Each party entitled to indemnification under this
Section 2.8 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party’s expense, and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its obligations under this 

  

 12 

 
Section 2 unless the failure to give such notice is materially prejudicial to an Indemnifying Party’s ability to defend such action and provided
further, that the Indemnifying Party shall not assume the defense for matters as to which there is a conflict of interest or separate and different defenses but shall bear the expense of such defense nevertheless. 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. 
  
 (d) If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense 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 statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue or 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. Notwithstanding the foregoing, the aggregate maximum liability of each Holder under Section 2.8(b) and this Section 2.8(d) shall be
limited in an amount equal to the net proceeds to such Holder of Registrable Securities sold in such offering. 
  
 (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. 
  
 (f) The obligations of the Company and Holders under this Section 2.8 shall survive the completion of any
offering of Registrable Securities in a registration statement under this Section 2, and otherwise. 
  
 2.9 Information by Holder. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this
Section 2 with respect to the Registrable Securities of any selling Holder that such holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder’s Registrable Securities. 
  

 13 

 2.10 Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to: 
  
 (a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after ninety (90) days after the effective date of the first registration statement filed by the Company for the
offering of its securities to the general public; 
  
 (b) take such action, including the voluntary registration of its Common Stock under Section 12 of the 1934 Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken
as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective; 
  
 (c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the 1934 Act; and 
  
 (d) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Securities Act and the 1934 Act (at any time
after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form. 
  
 2.11 Transfer of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to Sections 2.2, 2.3 and 2.4 may be assigned by a Holder in whole or in part (i) to any partner or retired partner of
any Holder that is a partnership or limited liability company, (ii) to any Affiliate, (iii) to any immediate family member or trust for the benefit of any individual Holder and (iv) in connection with the transfer of not less than 100,000 shares of
Registrable Securities; provided in each case that the Company is given prior written notice thereof; and provided further that the transferee or assignee of such rights assumes the obligations of a shareholder under this Agreement. 
  
 2.12 Standoff Agreement. Each Holder agrees, in
connection with the Company’s initial public offering of the Company’s securities, upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed one hundred eighty (180) days) (the “Lock-up Period”) from the effective date of such registration as may be requested by the underwriters; provided, however, that (i) all holders of 1% or more of the then issued and
outstanding shares of capital stock of the Company and all officers, directors and employees of the Company then holding Common Stock of the Company enter into the same agreement; and (ii) if and when any person identified in clause (i) is released,
in whole or in part, from such agreement (whether or not 

  

 14 

 
such release is contemplated at the time of the offering), the Holder shall be concurrently released on a pro rata basis based on the number of shares held
by such person and the Holder. Each Holder agrees to sign any document or enter into any agreement with the Company, an underwriter, or any affiliate of the underwriter, reflecting the foregoing. Notwithstanding anything to the foregoing in this
Section 2.12, during the Lock-up Period, if a Holder is a partnership, such Holder may make distributions of the Company’s securities to such Holder’s general or limited partners, provided that, as a condition precedent to such transfer,
such distributee executes a written acknowledgement that it has taken such securities subject to the restrictions and provisions of this Agreement and the Series A Agreement, Series B Agreement, Series C Agreement, Series D Agreement and/or Series E
Agreement, as applicable. 
  
 2.13 Termination
of Registration Rights. A Holder shall not be entitled to exercise any right provided for in this Section 2 after the earlier of (i) five (5) years following the closing of a Qualified IPO or (ii) that date following the Qualified IPO upon which
such Holder holds less than 1% of the then issued and outstanding shares of capital stock of the Company and such shares may be immediately sold under Rule 144(k) during any 90 day period. 
  
 3. Investors Right of First Refusal. 
  
 3.1 The Company hereby grants to each Investor who is also a
purchaser of Series E Preferred Stock pursuant to the Series E Agreement the right of first refusal to purchase up to its Pro Rata Share (as defined below) of New Securities (as defined below) which the Company may, from time to time, propose to
sell and issue. An Investor’s Pro Rata Share, for purposes of this right of first refusal, is the ratio that the sum of the number of shares of Common Stock then held by such Investor and the number of shares of Common Stock issuable upon
conversion of the Preferred Stock then held by such Investor bears to the sum of the total number of shares of Common Stock then outstanding and the number of shares of Common Stock issuable upon conversion of the then outstanding Preferred Stock.
For purposes hereof, the term “New Securities” shall mean any shares of capital stock of the Company including Common Stock and Preferred Stock, whether now authorized or not, rights, options or warrants to purchase said shares of Common
Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible into said shares of Common Stock or Preferred Stock. Notwithstanding the foregoing, “New Securities” does not include (i) securities
offered to the public generally pursuant to a registration statement or pursuant to Regulation A under the Securities Act, (ii) securities issued pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially
all of the assets or other reorganization whereby the Company or its shareholders own not less than fifty-one percent (51%) of the voting power of the surviving or successor corporation, as approved by a majority of the Board of Directors (including
a majority of the Board of Directors elected solely by the holders of Preferred Stock), (iii) shares of the Company’s Common Stock or securities convertible into Common Stock, or options or warrants exercisable for or convertible into Common
Stock or securities convertible into Common Stock issued to employees and officers of, and consultants, customers, vendors and 

  

 15 

 
equipment lessors to, the Company, pursuant to any arrangement approved by the Board of Directors (including a majority of the Board of Directors elected
solely by the holders of Preferred Stock), (iv) shares of the Company’s Common Stock or securities convertible into Common Stock, or options or warrants exercisable for or convertible into Common Stock or securities convertible into Common
Stock issued to any director of the Company pursuant to any arrangement approved by a majority of the disinterested members of the Board of Directors of the Company, (v) stock issued in connection with any joint venture transaction or strategic
development agreement between the Company and any third party, which agreement has been approved by the Board of Directors of the Company (including a majority of the Board of Directors elected solely by the holders of Preferred Stock), (vi) shares
of Common Stock issued in connection with any stock split or stock dividend of or on the Common Stock or shares of Preferred Stock issued in connection with any stock split or stock dividend of or on the Preferred Stock, (vii) shares of Series E
Preferred Stock sold pursuant to the terms of the Series E Agreement, (viii) shares of Series D Preferred Stock issuable upon exercise of warrants issued in connection with the Company’s Series D Preferred Stock financing transaction, (ix)
shares of Series C Preferred Stock issuable upon exercise of warrants issued in connection with the Company’s Series C Preferred Stock financing transaction, and (x) shares of Common Stock issuable upon the exercise of warrants issued issued in
connection with the Company’s Series C Preferred Stock financing transaction. 
  
 3.2 In the event the Company proposes to undertake an issuance of New Securities, it shall give each Investor written notice of its
intention, describing the type of New Securities, and the price and terms upon which the Company proposes to issue the same. Each Investor shall have fifteen (15) days from the date of receipt of any such notice to agree to purchase up to its
respective Pro Rata Share of such New Securities plus up to the Pro Rata Share of any Investor which does not elect to purchase its Pro Rata Share (a “Nonacquiring Investor”) of such New Securities for the price and upon the terms
specified in the notice by giving written notice to the Company and stating therein the maximum quantity of New Securities it will agree to purchase; provided, however, that the Affiliates of any Nonacquiring Investor shall be given the first
opportunity to purchase such Nonacquiring Investor’s pro rata share of New Securities. If the Affiliates of any Nonacquiring Investor do not elect to purchase such Nonacquiring Investors Pro Rata Share, the Pro Rata Share of, such Nonacquiring
Investor shall be allocated among the Investors desiring to purchase such New Securities as nearly as possible in accordance with the Pro Rata Shares of such Investors. 
  
 3.3 In the event an Investor fails to exercise its right of first refusal to purchase its Pro Rata Share of
such New Securities or the Pro Rata Share of any Nonacquiring Investor within said fifteen (15) day period, the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered
thereby shall be closed, if at all, within sixty (60) days from the date of said agreement) to sell the New Securities not elected to be purchased by Investors at the price and upon the terms no more favorable to the purchasers of such securities
than specified in the Company’s notice. In the event the Company has not sold the New Securities or entered into an agreement to sell the New Securities within said ninety (90) day period (or sold and issued New Securities in accordance with
the foregoing within sixty (60) days from the date of said agreement), the Company shall not thereafter issue or sell any New Securities, without 

  

 16 

 
first offering such securities in the manner provided in this Section 3. Whether or not such New Securities are so sold, the sale of any other New Securities
by the Company shall be subject to the terms and conditions of this Section. 
  
 3.4 The right of first refusal granted under this Agreement shall expire upon the first to occur of the following: (i) the closing of a Qualified IPO, (ii) a merger of the Company with or into any other corporation, a
reorganization of the Company or the sale of all or substantially all of the assets of the Company to any other person or entity, in a transaction in which the shareholders of the Company immediately before the transaction own immediately after the
transaction less than a majority of the outstanding voting securities of the surviving entity (or its parent) or (iii) as to an Investor if such Investor no longer holds 200,000 shares (including shares held by affiliates of such Investor) of
Preferred Stock and/or Common Stock issued upon conversion of the Preferred Stock (appropriately adjusted for consolidations, stock splits, recapitalizations, and the like). 
  
 3.5 The right of first refusal hereunder is not assignable except by each of such Investors to any
affiliated partnership, limited liability company or corporation or to a partner or retired partner or Affiliate of such Investor or of an affiliated partnership, limited liability company or corporation or pursuant to the transfer by gift, will or
intestate succession of any such partner or retired partner. 
  
 4. Covenants of the Company. The Company hereby covenants and agrees as follows: 
  
 4.1 Key Person Life Insurance. The Company will maintain or cause to be maintained, with financially sound and reputable insurers,
term life insurance on the lives of such officers and employees of the Company and in such amounts as the Board may from time to time designate including without limitation the policy on the life of John F. Shanley. Such policies shall be owned by
the Company and all benefits thereunder shall be payable to the Company. 
  
 4.2 Directors’ and Officers’ Liability Insurance. Unless and until otherwise determined by the Board of Directors, the Company shall maintain directors’ and officers’ liability insurance
acceptable to the Investors. 
  
 4.3 Employee
Vesting. Except as may otherwise be approved by the Board of Directors, from and after the date hereof the Company shall provide that all grants of options, restricted stock and other forms of incentive compensation granted to employees of the
Company vest over a 48 month period with 25% of such grant vesting on the first anniversary of the date of such grant with the remainder vesting in equal amounts over the succeeding 36 months. 
  
 4.4 Budgets Approval. Not later than 30 days prior to
the commencement of each fiscal year, prepare and submit to, and obtain the approval of a majority of the Board of Directors (including a majority of the directors elected solely by the holders of Preferred Stock) of, a business plan and monthly
operating budgets in detail for the upcoming fiscal year, including capital and operating expense budgets, cash flow projections and profit and loss projections, all itemized in reasonable detail (including itemization of provisions for
officers’ compensation). Review the budget 

  

 17 

 
and business plan periodically, and resubmit all changes therein and all material deviations therefrom to the Board of Directors. The Company shall not enter
into any activity not in the ordinary course of business and not envisioned by the budget and business plan, unless approved by the affirmative vote of a majority of the members of the Board of Directors (including a majority of the directors
elected solely by the holders of Preferred Stock). 
  
 4.5 Nondisclosure, Non-Competition Agreements. The Company shall cause each consultant and key employee of the Company to execute and deliver the Company’s standard Nondisclosure Assignment of Inventions and Non-Competition
Agreement. 
  
 5. Committees. 
  
 (a) There shall be established at all times during the term
of this Agreement a Compensation Committee of the Board of Directors (the “Compensation Committee”) which will consist of three members, one of whom shall be a director elected by the holders of Series C Preferred Stock and one of whom
shall be a director elected by the holders of Series D Preferred Stock. The Compensation Committee will make recommendations to the Board of Directors concerning the compensation of all senior employees and consultants of the Company (including
salary, bonus, equity participation and benefits). The compensation of senior employees and consultants shall be reviewed by the Compensation Committee on an annual basis, and the decision by a majority of the members of the Compensation Committee
will control the Committee’s actions.  
  
 (b) There shall be established at all times during the term of this Agreement an Audit Committee of the Board of Directors (the “Audit Committee”) which will consist of three members, one of whom shall be a director elected by the
holders of Series C Preferred Stock and one of whom shall be a director elected by the holders of Series D Preferred Stock. The Audit Committee will meet with the independent accountants of the Company and will discuss and review any issues arising
out of the annual audits of the Company by such independent accountants. All actions taken by the Audit Committee shall require the approval of a majority of such Committee. 
  
 6. Miscellaneous. 
  
 6.1 Waivers and Amendments. Except as otherwise provided herein, with the written consent of the Company and the Holders of a
majority in interest of the Registrable Securities (except in the case of the right of first refusal set forth in Section 3 hereof, which shall require a majority in interest of the then outstanding Series E Preferred Stock of the Company), the
obligations of the Company and the rights of the Investors under this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely), and with
the same consent, the Company, when authorized by resolution of its Board of Directors, may amend this Agreement or enter into a supplementary agreement for the purpose of adding any provisions of this Agreement; provided, however, that no such
waiver or supplemental agreement shall reduce the above percentage of Registrable Securities, the holders of which are required to consent to any waiver or supplemental agreement, without the consent of the 

  

 18 

 
record or beneficial holders of all of the Registrable Securities. Upon the effectuation of each such waiver, consent, agreement, amendment or modification,
the Company shall promptly give written notice thereof to the record holders of the Registrable Securities who have not previously consented thereto in writing. Neither this Agreement nor any provisions hereof may be changed, waived, discharged or
terminated orally, but only by a signed statement in writing. Any amendment, waiver or supplementary agreement effected in accordance with this paragraph shall be binding upon each Investor, each future Holder of Registrable Securities and the
Company. Notwithstanding the foregoing, purchasers of shares of Series E Preferred Stock pursuant to the Series E Agreement may be added as a party to this Agreement, without any further consent or approval of the Investors, as an Investor and shall
be bound by and entitled to the terms, benefits and conditions herein by the execution of this Agreement on a signature page to this Agreement. 
  
 6.2 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed
effectively given upon (i) personal delivery (including overnight courier service), (ii) the next business day after delivery by facsimile (with acknowledgement of good transaction by the receiving party) to the party to be notified or (iii) two
business day after deposit with the United States Post Office, by first class mail, postage prepaid, addressed: (a) if to the Stockholders, at the Stockholders’ address as set forth on the signature page, or at such other address as the
Stockholders shall have furnished to the Company in writing, or (b) if to the Company, at its current address or at such other address as the Company shall have furnished to the Stockholders in writing. 
  
 6.3 Descriptive Headings. The descriptive headings
herein have been inserted for convenience only and shall not be deemed to limit or otherwise affect the construction of any provisions hereof. 
  
 6.4 Governing Law. This Agreement shall be governed by and interpreted under the laws of the State of California. 
  
 6.5 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument, but only one of which need be produced. 
  
 6.6 Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 
  
 6.7 Successors and Assigns. Except as otherwise
expressly provided in this Agreement, this Agreement shall benefit and bind the successors, assigns, heirs, executors and administrators of the parties to this Agreement. 
  
 6.8 Entire Agreement. This Agreement constitutes the full and entire understanding and agreement
between the parties with regard to the subject matter of this Agreement and amends and restates the Prior Agreement in its entirety. This Agreement shall be effective upon 

  

 19 

 
the execution of this Agreement by the Company, the holders of a majority in interest of the Registrable Securities (other than the Series E Preferred
Stock), voting together as a combined class. 
  
 6.9 Separability; Severability. Unless expressly provided in this Agreement, the rights of each Investor under this Agreement are several rights, not rights jointly held with any other Investors. Any invalidity, illegality or
limitation on the enforceability of this Agreement with respect to any Investor shall not affect the validity, legality or enforceability of this Agreement with respect to the other Investors. If any provision of this Agreement is judicially
determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired. 
  
 6.10 Stock Splits. All references to numbers of shares in this Agreement shall be appropriately adjusted to reflect any stock
dividend, split, combination or other recapitalization of shares by the Company occurring after the date of this Agreement. 
  
 6.11 Aggregation. All shares held or acquired by affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement. 
  
 * * * * * 
  

 20 

 IN WITNESS WHEREOF, the parties have executed this Amended and Restated Investor Rights Agreement on the
day and year first set forth above. 
  

			
	CONOR MEDSYSTEMS, INC.
		
	By:	 	 /s/ Frank Litvack

	 	 	 Frank Litvack, Chairman

  

			
	INVESTOR
	
	 
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 SCHEDULE A 
  

Alan Saven, M.D. 
  
 Angelos, Georgia 
  
 Angelos, Georgia K.

  
 Aperture Capital, L.P. 
  
 Baum Family Revocable Trust UTA 2/21/1997 
  
 Bette O.Kramer Trust, dated 2/23/90 
  
 Bhambi, Brijesh 
  
 Bisson, Peter & Fay 
  
 Blumberg Life Science Master Fund LTD 
  
 Boennighausen, Roger P. 
  
 Brookside Capital Partners Fund, L.P. 
  
 Buchbinder, Maurice 
  
 Burns, James P. and Kelly E. 
  
 Calmedica Capital, L.P. 
  
 Cardinale, Richard 
  
 Coluccio, Christian 
  
 Cramer, Thomas and Wendy 
  
 Craton Capital, L.P.

  
 Dean Greenberg TTEE, Marilyn Greenberg TTEE 
 UA DTD 05/17/94 By Dean Greenberg Rev. Trust 
  
 Deitch, Laura 
  
 Depasqua, Robert J. 

 Easton Hunt Capital Partners, L.P. 
  
 Eigler Trust Dated 5/1/99 Neal Eigler and Anna 
 Sanders Eigler Trustees 
  
 Fabius AS 
  
 Felleti, Paul 
  
 Fischer, Duane A. 
  
 Flaherty, Peter A. 
  
 Friedman, Jack M. 
  
 Gerald & Myra S. Dorros
Revocable Trust 
  
 Gerber Family Trust 12/13/96 
  
 Gerrald B. Cramer Rev. Trust 
  
 Gordon, L. Stephen 
  
 Granuzzo, Michael Andrew 
  
 Griekspoor, Wilfred 
  
 H&Q Healthcare
Investors 
  
 H&Q Life Sciences Investors 
  
 Harabedian Family Investment Partnership 
  
 Hershner, Thomas L. 
  
 Highland Capital Partners VI Limited Partnership 
  

Highland Capital Partners VI-B Limited Partnership 
  
 Highland Entrepreneurs’ Fund VI Limited Partnership 
  
 Hillman, Bret 
  
 Hillman, Dale 
  
 Hillman, Scot T. 

 Hoegh Invest AS 
  
 James J. Shanley IRA, UTA Charles Schwab Inc. 
  
 Jay & Phyllis Schapira Family Trust 
  
 John E. Harris Revocable Living Trust 1997 
  
 Kalarickaz, Matthew Samuel 
  
 Kasim, Vali 
  
 Khederian, Robert P. 

 
 Knudsen, Ejnar A. 
  
 Krasney-McCarthy, Karen 
  
 Kurokawa, Barry 
  
 Latterman Family Limited Partnership 
  
 Leeb
Revocable Trust 
  
 Lehman Brothers FBO David B. Muskett 
  
 Lehman Brothers, Custodian FBO David B. Musket, SEP IRA 
  
 Lu, Yoh Chie 
  
 Margolis, MD, James R. 
  
 Maverick Fund II, LTD. 
  
 Maverick Fund USA, LTD. 
  
 Maverick Fund, L.D.C.

  
 McPherron, Matt 
  
 MedCapital, LLC 
  
 Medtrade AG 
  
 Michael Lambert Trust U/T/D 3/1/93 

 Micro Systems Engineering, Inc. 
  

Milani, Mark D. 
  
 Mormile, Andrea 
  
 Moss Forest Venture

  
 Murray, Daniel B. 
  
 Murray, Lilian Shackelford 
  
 Musket, David B. 
  
 Newman, Michele 
  
 NSV Partners II, L.P. 
  
 Nurkhanov, Rustam

  
 Panichi, Maurice 
  
 Pequot Healthcare Fund, L.P. 
  
 Pequot Healthcare Offshore Fund, Inc. 
  
 Pequot Navigator Offshore Fund, Inc. 
  
 Pequot Navigator Onshore Fund, L.P. 
  
 Pequot Scout Fund, L.P. 
  
 Perry, Andrew 
  
 Perry, Todd 
  
 Premium Series PCC Limited acting for and on 
 behalf of its cell C32 
  
 Premium Series PCC Limited acting for and on 
 behalf of its cell C33 
  
 ProMed Offshore Fund, Ltd. 
  
 ProMed Partners, L.P. 
  
 Radius Venture Partners II, LP 

 Rajat K. Gupta Family Irrevocable Trust 
  
 Raptor Global Portfolio Ltd. 
  
 Richard A. Schatz Revocable Trust 6/28/02 
  
 Rider, Ray L. 
  
 River Edge Partners 
  
 Robert L. Hess and
Rosemarie Hess Trustees FBO 
 The Hess Family Trust UAD 8/3/89 
  
 Rubanyi, Gabor 
  
 Rudick Asset Management, L.L.C. 
  
 Ryan, Donald
R. 
  
 Sargon Capital International Fund, Ltd. 
  
 Scharfer, Paul 
  
 Schmitt, Robert E. 
  
 Shanley, James J. 
  
 Share, Edward J. 
  
 Stafford Family Trust

  
 Subramaniam, Somu 
  
 The Greenberg Childrens Irrevocable Trust 
  
 The Larry Haimovitch 2000 Separate Property 
 Revocable Trust 
  
 Tierney Family Investors 
  
 TOP Medical B.V.

  
 Tudor BVI Global Portfolio, Ltd. 
  
 Tudor Proprietary Trading, L.L.C. 
  
 Veronica Sue Regan Revocable Trust 1/27/1999 

 Victor, Jonathan A. 
  
 Waite III, Donald C. 
  
 Walker, Peter B. 
  
 Westfield Life Science Fund
II LP 
  
 Westfield Life Sciences Fund I 
  
 Westfield Life Sciences Fund II 
  
 Westfield Life Sciences Fund LP 
  
 William D. Lautman and Wendy K. Lautman 
 JTWROS 
  
 William M. Kramer Trust, dated 9/11/92 
  
 Zeoli, Gregg

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