Exhibit 10.35

 
REGISTRATION RIGHTS AGREEMENT
 
This Registration Rights Agreement (this “Agreement”) is made and entered into
as of August 7, 2008, by and among Cytori Therapeutics, Inc., a Delaware
corporation (the “Company”), and the several purchasers signatory hereto (each a
“Purchaser” and collectively, the “Purchasers”).
 
This Agreement is made pursuant to the Securities Purchase Agreement, dated as
of the date hereof between the Company and each Purchaser (the “Purchase
Agreement”).
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each of the
Purchasers agree as follows:
 
1. Definitions.  Capitalized terms used and not otherwise defined herein that
are defined in the Purchase Agreement shall have the meanings given such terms
in the Purchase Agreement.  As used in this Agreement, the following terms shall
have the following meanings:
 
“Advice” shall have the meaning set forth in Section 6(d).
 
“Affiliate” means, with respect to any person, any other person which directly
or indirectly controls, is controlled by, or is under common control with, such
person.
 
“Agreement” shall have the meaning set forth in the Preamble.
 
“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.
 
“Closing” has the meaning set forth in the Purchase Agreement.
 
“Closing Date” has the meaning set forth in the Purchase Agreement.
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any securities into which such shares of common stock may hereinafter
be reclassified.
 
“Company” shall have the meaning set forth in the Preamble.
 
“Effective Date” means the date that the Registration Statement filed pursuant
to Section 2(a) is first declared effective by the Commission.
 
“Effectiveness Deadline” means, with respect to the Initial Registration
Statement or the New Registration Statement, the 90th calendar day following the
Closing Date (or, in the event the Commission reviews and has written comments
to the Initial Registration Statement or the New Registration Statement, the
120th calendar day following the Closing Date); provided, however, that if the
Company is notified by the Commission that the Initial Registration Statement
will not be reviewed or is no longer subject to further review and comments, the
Effectiveness Deadline as to such Registration Statement shall be the seventh
(7th) Trading Day following the date on which the Company is so notified if such
date precedes the dates otherwise required above; provided, further, that if the
Effectiveness
 

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Deadline falls on a Saturday, Sunday or other day that the Commission is closed
for business, the Effectiveness Deadline shall be extended to the next Business
Day on which the Commission is open for business.
 
“Effectiveness Period” shall have the meaning set forth in Section 2(b).
 
“Event” shall have the meaning set forth in Section 2(c).
 
“Event Date” shall have the meaning set forth in Section 2(c).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
 
“Filing Deadline” means, with respect to the Initial Registration Statement
required to be filed pursuant to Section 2(a), the 30th calendar day following
the Closing Date, provided, however, that if the Filing Deadline falls on a
Saturday, Sunday or other day that the Commission is closed for business, the
Filing Deadline shall be extended to the next business day on which the
Commission is open for business.
 
“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.
 
“Indemnified Party” shall have the meaning set forth in Section 5(c).
 
“Indemnifying Party” shall have the meaning set forth in Section 5(c).
 
“Initial Registration Statement” means the initial Registration Statement filed
pursuant to Section 2(a) of this Agreement.
 
“Liquidated Damages” shall have the meaning set forth in Section 2(c).
 
“Losses” shall have the meaning set forth in Section 5(a).
 
“New Registration Statement” shall have the meaning set forth in Section 2(a).
 
“Olympus Purchase Agreement” means that certain Common Stock Purchase Agreement,
dated as of August 7, 2008, by and between the Company and Olympus Corporation
(“Olympus”).
 
“Olympus Registrable Securities” means all of (i) the shares of Common Stock
issued to Olympus pursuant to the terms of the Olympus Purchase Agreement., (ii)
the shares of Common Stock issued or issuable upon exercise of the warrants
issued to Olympus pursuant to the terms of the Olympus Purchase Agreement, and
(iii) any securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing.
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Principal Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading, which, as of the Closing Date, shall
be the NASDAQ Global Market.
 

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“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
 
“Purchase Agreement” shall have the meaning set forth in the Recitals.
 
“Purchaser” or “Purchasers” shall have the meaning set forth in the Preamble.
 
“Registrable Securities” means all of (i) the Shares, (ii) the Warrant Shares,
and (iii) any securities issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to the
foregoing, provided, that the Holder has completed and delivered to the Company
a Selling Stockholder Questionnaire; and provided, further, that Shares and
Warrant Shares shall cease to be Registrable Securities upon the earliest to
occur of the following: (A) a sale pursuant to a Registration Statement or Rule
144 under the Securities Act (in which case, only such security sold shall cease
to be a Registrable Security); or (B) becoming eligible for sale without the
requirement for the Company to be in compliance with the current public
information required under Rule 144 and without volume or manner of sale
restrictions by Holders who are not Affiliates of the Company.
 
“Registration Statements” means any one or more registration statements of the
Company filed under the Securities Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement (including
without limitation the Initial Registration Statement, the New Registration
Statement and any Remainder Registration Statements), amendments and supplements
to such Registration Statements, including post-effective amendments, all
exhibits and all material incorporated by reference or deemed to be incorporated
by reference in such Registration Statements.
 
“Remainder Registration Statement” shall have the meaning set forth in Section
2(a).
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
"SEC Guidance" means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Commission staff and (ii) the
Securities Act.
 

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“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
“Selling Stockholder Questionnaire” means a questionnaire in the form attached
as Annex B hereto, or such other form of questionnaire as may reasonably be
adopted by the Company from time to time.
 
“Shares” means the shares of Common Stock issued or issuable to the Purchasers
pursuant to the Purchase Agreement.  For purposes of Section 2(a) hereof, the
term “Shares” shall also include the shares of Common Stock issued to Olympus
pursuant to the terms of the Olympus Purchase Agreement.
 
“Trading Day” means (i) a day on which the Common Stock is listed or quoted and
traded on its Principal Market (other than the OTC Bulletin Board), or (ii) if
the Common Stock is not listed on a Trading Market (other than the OTC Bulletin
Board), a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is
not quoted on any Trading Market, a day on which the Common Stock is quoted in
the over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC
(or any similar organization or agency succeeding to its functions of reporting
prices); provided, that in the event that the Common Stock is not listed or
quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a
Business Day.
 
“Trading Market” means whichever of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed
or quoted for trading on the date in question.
 
“Warrants” means the warrants issued pursuant to the Purchase Agreement.
 
“Warrant Shares” means the shares of Common Stock issued or issuable upon
exercise of the Warrants.  For purposes of Section 2(a) hereof, the term
“Warrant Shares” shall also include the shares of Common Stock issued or
issuable upon exercise of the warrants issued to Olympus pursuant to the terms
of the Olympus Purchase Agreement.
 
2. Registration.
 
(a) On or prior to the Filing Deadline, the Company shall prepare and file with
the Commission a Registration Statement covering the resale of all of the
Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 or, if Rule 415 is not available for offers and sales of the
Registrable Securities, by such other means of distribution of Registrable
Securities as the Holders may reasonably specify (the “Initial Registration
Statement”).  The Initial Registration Statement shall be on Form S-3 (except if
the Company is then ineligible to register for resale of the Registrable
Securities on Form S-3, in which case such registration shall be on such other
form available to register for resale of the Registrable Securities as a
secondary offering) subject to the provisions of Section 2(f) and shall contain
(except if otherwise required pursuant to written comments received from the
Commission upon a review of such Registration Statement) the “Plan of
Distribution” section attached hereto as Annex A.    Notwithstanding the
registration obligations set forth in this Section 2, in the event the
Commission informs the Company that all of the Registrable Securities (including
all of the Olympus Registrable Securities) cannot, as a result of the
application of Rule 415, be registered for resale as a secondary offering on a
single registration statement, the Company agrees to promptly (i) inform each of
the Holders
 

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thereof and use its commercially reasonable efforts to file amendments to the
Initial Registration Statement as required by the Commission and/or (ii)
withdraw the Initial Registration Statement and file a new registration
statement (a “New Registration Statement”), in either case covering the maximum
number of Registrable Securities permitted to be registered by the Commission,
on Form S-3 or such other form available to register for resale the Registrable
Securities as a secondary offering; provided, however, that prior to filing such
amendment or New Registration Statement, the Company shall be obligated to use
its commercially reasonable efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29. Notwithstanding any other provision of this
Agreement and subject to the payment of liquidated damages in Section 2(c), if
any SEC Guidance sets forth a limitation of the number of Registrable Securities
(including any Olympus Registrable Securities) permitted to be registered on a
particular Registration Statement as a secondary offering (and notwithstanding
that the Company used diligent efforts to advocate with the Commission for the
registration of all or a greater number of Registrable Securities (including any
Olympus Registrable Securities)), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable Securities
(including any Olympus Registrable Securities) to be registered on such
Registration Statement will first be reduced by Registrable Securities
(including any Olympus Registrable Securities) not acquired pursuant to the
Purchase Agreement or the Olympus Purchase Agreement (whether pursuant to
registration rights or otherwise), second by Registrable Securities (including
any Olympus Registrable Securities) represented by Warrant Shares (applied, in
the case that some Warrant Shares may be registered, to the Holders (including
Olympus) on a pro rata basis based on the total number of unregistered Warrant
Shares held by such Holders (including Olympus)) and third by Registrable
Securities (including any Olympus Registrable Securities) represented by Shares
(applied, in the case that some Shares may be registered, to the Holders
(including Olympus) on a pro rata basis based on the total number of
unregistered Shares held by such Holders (including Olympus), subject to a
determination by the Commission that certain Holders (including Olympus) must be
reduced first based on the number of Shares held by such Holders (including
Olympus)).  In the event the Company amends the Initial Registration Statement
or files a New Registration Statement, as the case may be, under clauses (i) or
(ii) above, the Company will use its commercially reasonable efforts to file
with the Commission, as promptly as allowed by Commission or SEC Guidance
provided to the Company or to registrants of securities in general, one or more
registration statements on Form S-3 or such other form available to register for
resale those Registrable Securities (including any Olympus Registrable
Securities) that were not registered for resale on the Initial Registration
Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statements”).
 
(b) The Company shall use its commercially reasonable efforts to cause each
Registration Statement to be declared effective by the Commission as soon as
practicable and, with respect to the Initial Registration Statement or the New
Registration Statement, as applicable, no later than the Effectiveness Deadline
(including filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act
within five (5) Business Days after the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such
Registration Statement will not be “reviewed,” or not be subject to further
review and the effectiveness of such Registration Statement may be accelerated),
and shall use its commercially reasonable efforts to keep each Registration
Statement continuously effective under the Securities Act until the earlier of
(i) such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holders or (ii) the date that all
Registrable Securities covered by such Registration Statement may be sold by
non-affiliates without volume or manner of sale restrictions under Rule 144,
without the requirement for the Company to be in compliance with the current
public information requirements under Rule 144, as determined by counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
reasonably acceptable to the Company’s transfer agent and the effected Holders
(the “Effectiveness Period”).  The Company shall request effectiveness of a
Registration
 

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Statement as of 5:00 p.m. New York City time on a Trading Day.  The Company
shall promptly notify the Holders via facsimile or electronic mail of a “.pdf”
format data file of the effectiveness of a Registration Statement within one (1)
business day of the Effective Date. The Company shall, by 9:30 a.m. New York
City time on the first Trading Day after the Effective Date, file a final
Prospectus with the Commission, as required by Rule 424(b).
 
(c)   If: (i) the Initial Registration Statement is not filed with the
Commission on or prior to the Filing Deadline, (ii) the Initial Registration
Statement or the New Registration Statement, as applicable, is not declared
effective by the Commission (or otherwise does not become effective) for any
reason on or prior to the Effectiveness Deadline or (iii) after its Effective
Date, (A) such Registration Statement ceases for any reason (including without
limitation by reason of a stop order, or the Company’s failure to update the
Registration Statement), to remain continuously effective as to all Registrable
Securities for which it is required to be effective or (B) the Holders are not
permitted to utilize the Prospectus therein to resell such Registrable
Securities, in the case of (A) and (B), for more than an aggregate of 30 Trading
Days (which need not be consecutive) during any 12 month period (other than
during an Allowable Grace Period (as defined in Section 2(e) of this
Agreement)), (iv) a Grace Period (as defined in Section 2(e) of this Agreement)
exceeds the length of an Allowable Grace Period, or (v) after the date six
months following the Closing Date, the Company fails to file with the SEC any
required reports under Section 13 or 15(d) of the 1934 Act such that it is not
in compliance with Rule 144(c)(1) as a result of which the Holders who are not
affiliates are unable to sell Registrable Securities without restriction under
Rule 144 (or any successor thereto) (any such failure or breach in clauses (i)
through (v) above being referred to as an “Event,” and, for purposes of clauses
(i), (ii) or (v), the date on which such Event occurs, or for purposes of clause
(iii), the date on which such 30 Trading Day period is exceeded, or for purposes
of clause (iv) the date on which such Allowable Grace Period is exceeded, being
referred to as an “Event Date”), then in lieu of any other rights the Holders
may have hereunder or under applicable law, on each such Event Date and on each
monthly anniversary of each such Event Date (if the applicable Event shall not
have been cured by such date) until the applicable Event is cured, the Company
shall pay to each Holder an amount in cash, as liquidated damages and not as a
penalty (“Liquidated Damages”), equal to 1.0% of the aggregate purchase price
paid by such Holder pursuant to the Purchase Agreement for any Registrable
Securities held by such Holder on the Event Date (which remedy shall be
exclusive of any other remedies available under this Agreement or under
applicable law).  The parties agree that (1) the Company will not be liable for
Liquidated Damages under this Agreement with respect to any Warrants or Warrant
Shares, (2) notwithstanding anything to the contrary herein or in the Purchase
Agreement, no Liquidated Damages shall be payable with respect to any period
after the expiration of the Effectiveness Period (it being understood that this
sentence shall not relieve the Company of any Liquidated Damages accruing prior
to the Effectiveness Period), and in no event shall, the aggregate amount of
Liquidated Damages payable to a Holder exceed, in the aggregate, twelve percent
(12%) of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement and (3) in no event shall the Company be liable in any 30-day
period for Liquidated Damages under this Agreement in excess of 1.0% of the
aggregate purchase price paid by the Holders pursuant to the Purchase
Agreement  If the Company fails to pay any Liquidated Damages pursuant to this
Section 2(c) in full within five (5) Business Days after the date payable, the
Company will pay interest thereon at a rate of 1.5% per month (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such Liquidated Damages are due until such amounts,
plus all such interest thereon, are paid in full.  The Liquidated Damages
pursuant to the terms hereof shall apply on a daily pro-rata basis for any
portion of a month prior to the cure of an Event, except in the case of the
first Event Date.  The Effectiveness Deadline for a Registration Statement shall
be extended without default or Liquidated Damages hereunder in the event that
the Company’s failure to obtain the effectiveness of the Registration Statement
on a timely basis results from (i) the failure of a Purchaser to timely provide
the Company with information requested by the Company and necessary to complete
the Registration Statement in accordance with the requirements of the Securities
Act (in which the Effectiveness Deadline would be
 

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extended with respect to Registrable Securities held by such Purchaser) or (ii)
events or circumstances that are not in any way attributable to the Company.
 
(d) Each Holder agrees to furnish to the Company a completed Selling Stockholder
Questionnaire not more than five (5) Trading Days following the date of this
Agreement. At least ten (10) Trading Days prior to the first anticipated filing
date of a Registration Statement for any registration under this Agreement, the
Company will notify each Holder of the information the Company requires from
that Holder other than the information contained in the Selling Stockholder
Questionnaire, if any, which shall be completed and delivered to the Company
promptly upon request and, in any event, within three (3) Trading Days prior to
the applicable anticipated filing date.  Each Holder further agrees that it
shall not be entitled to be named as a selling securityholder in the
Registration Statement or use the Prospectus for offers and resales of
Registrable Securities at any time, unless such Holder has returned to the
Company a completed and signed Selling Stockholder Questionnaire and a response
to any requests for further information as described in the previous sentence.
If a Holder of Registrable Securities returns a Selling Stockholder
Questionnaire or a request for further information, in either case, after its
respective deadline, the Company shall use its commercially reasonable efforts
at the expense of the Holder who failed to return the Selling Stockholder
Questionnaire or to respond for further information to take such actions as are
required to name such Holder as a selling security holder in the Registration
Statement or any pre-effective or post-effective amendment thereto and to
include (to the extent not theretofore included) in the Registration Statement
the Registrable Securities identified in such late Selling Stockholder
Questionnaire or request for further information. Each Holder acknowledges and
agrees that the information in the Selling Stockholder Questionnaire or request
for further information as described in this Section 2(d) will be used by the
Company in the preparation of the Registration Statement and hereby consents to
the inclusion of such information in the Registration Statement.
 
(e) Notwithstanding anything to the contrary herein, at any time after the
Registration Statement has been declared effective by the Commission, the
Company may delay the disclosure of material non-public information concerning
the Company if the disclosure of such information at the time is not, in the
good faith judgment of the Company, in the best interests of the Company (a
“Grace Period”); provided, however, the Company shall promptly (i) notify the
Holders in writing of the existence of material non-public information giving
rise to a Grace Period (provided that the Company shall not disclose the content
of such material non-public information to the Holders) or the need to file a
post-effective amendment, as applicable, and the date on which such Grace Period
will begin, and (ii) notify the Holders in writing of the date on which the
Grace Period ends; provided, further, that no single Grace Period shall exceed
twenty (20) consecutive days, and during any three hundred sixty-five (365) day
period, the aggregate of all Grace Periods shall not exceed an aggregate of
forty (40) days (each Grace Period complying with this provision being an
“Allowable Grace Period”).   For purposes of determining the length of a Grace
Period, the Grace Period shall be deemed to begin on and include the date the
Holders receive the notice referred to in clause (i) above and shall end on and
include the later of the date the Holders receive the notice referred to in
clause (ii) above and the date referred to in such notice; provided, however,
that no Grace Period shall be longer than an Allowable Grace
Period.    Notwithstanding anything to the contrary, the Company shall cause the
Transfer Agent to deliver unlegended Common Stock to a transferee of a Holder in
accordance with the terms of the Purchase Agreement in connection with any sale
of Registrable Securities with respect to which a Holder has entered into a
contract for sale prior to the Holder’s receipt of the notice of a Grace Period
and for which the Holder has not yet settled.
 
(f) In the event that Form S-3 is not  available for the registration of the
resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form reasonably
acceptable to the Holders and (ii) undertake to register the Registrable
Securities on Form S-3 promptly after such form is available, provided that the
Company
 

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shall maintain the effectiveness of the Registration Statement then in effect
until such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the Commission.
 
3. Registration Procedures
 
In connection with the Company's registration obligations hereunder, the Company
shall:
 
(a) Not less than five (5) Trading Days prior to the filing of a Registration
Statement and not less than one (1) Trading Day prior to the filing of any
related Prospectus or any amendment or supplement thereto (except for Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and any similar or successor reports), the Company shall, furnish to the
Holder copies of such Registration Statement, Prospectus or amendment or
supplement thereto, as proposed to be filed, which documents will be subject to
the review of such Holder (it being acknowledged and agreed that if a Holder
does not object to or comment on the aforementioned documents within such five
(5) Trading Day or one (1) Trading Day period, as the case may be, then the
Holder shall be deemed to have consented to and approved the use of such
documents).  The Company shall not file any Registration Statement or amendment
or supplement thereto in a form to which a Holder reasonably objects in good
faith, provided that, the Company is notified of such objection in writing
within the five (5) Trading Day or one (1) Trading Day period described above,
as applicable.
 
(b) (i)  Prepare and file with the Commission such amendments (including
post-effective amendments) and supplements, to each Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period (except during an Allowable Grace
Period); (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement (subject to the terms of this Agreement), and, as
so supplemented or amended, to be filed pursuant to Rule 424 (except during an
Allowable Grace Period); (iii) respond as promptly as reasonably practicable to
any comments received from the Commission with respect to each Registration
Statement or any amendment thereto and, as promptly as reasonably possible,
provide the Holders true and complete copies of all correspondence from and to
the Commission relating to such Registration Statement that pertains to the
Holders as “Selling Stockholders” but not any comments that would result in the
disclosure to the Holders of material and non-public information concerning the
Company; and (iv) comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable Securities
covered by a Registration Statement until such time as all of such Registrable
Securities shall have been disposed of (subject to the terms of this Agreement)
in accordance with the intended methods of disposition by the Holders thereof as
set forth in such Registration Statement as so amended or in such Prospectus as
so supplemented; provided, however, that each Purchaser shall be responsible for
the delivery of the Prospectus to the Persons to whom such Purchaser sells any
of the Shares or Warrant Shares (including in accordance with Rule 172 under the
Securities Act), and each Purchaser agrees to dispose of Registrable Securities
in compliance with the plan of distribution described in the Registration
Statement and otherwise in compliance with applicable federal and state
securities laws. In the case of amendments and supplements to a Registration
Statement which are required to be filed pursuant to this Agreement (including
pursuant to this Section 3(b)) by reason of the Company filing a report on Form
10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the
Company shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or supplements with the
Commission on the same day on which the Exchange Act report which created the
requirement for the Company to amend or supplement such Registration Statement
was filed.
 

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(c) Notify the Holders (which notice shall, pursuant to clauses (iii) through
(v) hereof, be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made) as promptly as reasonably
practicable (and, in the case of (i)(A) below, not less than two Trading Days
prior to such filing, in the case of (iii) and (iv) below, not more than one
Trading Day after such issuance or receipt, and in the case of (v) below, not
more than one Trading Day after the occurrence or existence of such development)
and (if requested by any such Person) confirm such notice in writing no later
than one Trading Day following the day (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment to a Registration Statement is
proposed to be filed; (B) when the Commission notifies the Company whether there
will be a “review” of such Registration Statement and whenever the Commission
comments in writing on any Registration Statement (in which case the Company
shall provide to each of the Holders true and complete copies of all comments
that pertain to the Holders as a “Selling Stockholder” or to the “Plan of
Distribution” and all written responses thereto, but not information that the
Company believes would constitute material and non-public information); and (C)
with respect to each Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information that pertains
to the Holders as “Selling Stockholders” or the “Plan of Distribution”; (iii) of
the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus, form of prospectus or supplement thereto, in
light of the circumstances under which they were made), not misleading.
 
(d) Use commercially reasonable efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as practicable.
 
(e) If requested by a Holder, furnish to such Holder, without charge, at least
one conformed copy of each Registration Statement and each amendment thereto and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on
the Commission’s EDGAR system.
 
(f) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities
 

--------------------------------------------------------------------------------

 
covered by each Registration Statement; provided, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified, subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general consent to
service of process in any such jurisdiction.
 
(g) If requested by the Holders, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to the Registration
Statement, which certificates shall be free, to the extent permitted by the
Purchase Agreement and under law, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holders may reasonably request.
 
(h) Following the occurrence of any event contemplated by Section 3(c)(iii)-(v),
as promptly as reasonably practicable (taking into account the Company’s good
faith assessment of any adverse consequences to the Company and its stockholders
of the premature disclosure of such event), prepare a supplement or amendment,
including a post-effective amendment, to the affected Registration Statements or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus, form of prospectus or supplement thereto, in light
of the circumstances under which they were made), not misleading.
 
(i) The Company may require each selling Holder to furnish to the Company a
certified statement as to (i) the number of shares of Common Stock beneficially
owned by such Holder and any Affiliate thereof, (ii) any Financial Industry
Regulatory Authority (“FINRA”) affiliations, (iii) any natural persons who have
the power to vote or dispose of the Common Stock and (iv) any other information
as may be requested by the Commission, FINRA or any state securities commission.
During any periods that the Company is unable to meet its obligations hereunder
with respect to the registration of Registrable Securities because any Holder
fails to furnish such information within three Trading Days of the Company’s
request, any Liquidated Damages that are accruing at such time as to such Holder
only shall be tolled and any Event that may otherwise occur solely because of
such delay shall be suspended as to such Holder only, until such information is
delivered to the Company.
 
(j) The Company shall cooperate with any registered broker through which a
Holder proposes to resell its Registrable Securities in effecting a filing with
FINRA pursuant to NASD Rule 2710 as requested by any such Holder and the Company
shall pay the filing fee required for the first such filing within two (2)
Business Days of the request therefore.
 
4. Registration Expenses.  All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions and all legal fees
and expenses of legal counsel for any Holder) shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement.  The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for
trading, (B) with respect to compliance with applicable state securities or Blue
Sky laws (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by
the Holders) and (C) if not previously paid by the Company in connection with an
Issuer Filing, with respect to any filing that may be required to be made by any
broker through which a Holder intends to make sales of Registrable Securities
with FINRA
 

--------------------------------------------------------------------------------

 
pursuant to the NASD Rule 2710, so long as the broker is receiving no more than
a customary brokerage commission in connection with such sale, (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the Holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement.  In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.  In no event shall the Company be
responsible for any underwriting, broker or similar fees or commissions of any
Holder or, except to the extent provided for in the Transaction Documents, any
legal fees or other costs of the Holders.
 
5. Indemnification.
 
(a) Indemnification by the Company.  The Company shall, notwithstanding any
termination of this Agreement, indemnify, defend and hold harmless each Holder,
the officers, directors, agents, partners, members, managers, stockholders,
Affiliates and employees of each of them, each Person who controls any such
Holder (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) and the officers, directors, partners, members, managers,
stockholders, agents and employees of each such controlling Person, to the
fullest extent permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable
costs of preparation and investigation and reasonable attorneys' fees) and
expenses (collectively, “Losses”), as incurred, that arise out of or are based
upon any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading, except to the
extent, but only to the extent, that (A) such untrue statements, alleged untrue
statements, omissions or alleged omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and approved by such Holder expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that each Holder has
approved Annex A hereto for this purpose), (B) in the case of an occurrence of
an event of the type specified in Section 3(c)(iii)-(v), related to the use by a
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the receipt by such Holder of the Advice contemplated and defined in Section
6(d) below, but only if and to the extent that following the receipt of the
Advice the misstatement or omission giving rise to such Loss would have been
corrected or (C) any such Losses arise out of the Purchaser’s (or any other
indemnified Person’s) failure to send or give a copy of the Prospectus or
supplement (as then amended or supplemented), if required, to the Persons
asserting an untrue statement or alleged untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such Prospectus or supplement.  The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware.  Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on
 

--------------------------------------------------------------------------------

 
behalf of an Indemnified Party (as defined in Section 5(c)) and shall survive
the transfer of the Registrable Securities by the Holders.
 
(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, arising
out of or are based upon any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus, or any form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading (i) to the extent, but only to the extent, that such untrue
statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein or
(ii) to the extent, but only to the extent, that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and approved by such Holder expressly for use in a
Registration Statement (it being understood that the Holder has approved Annex A
hereto for this purpose), such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (iii) in the case of an occurrence of an
event of the type specified in Section 3(c)(iii)-(v), to the extent, but only to
the extent, related to the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(d).  In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
 
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all reasonable fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have materially
and adversely prejudiced the Indemnifying Party.
 
An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest exists if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party); provided, that
the Indemnifying Party shall not be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all
 

--------------------------------------------------------------------------------

 
Indemnified Parties.  The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld, delayed or conditioned.  No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
 
Subject to the terms of this Agreement, all fees and expenses of the Indemnified
Party (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such Proceeding in a manner
not inconsistent with this Section 5(c)) shall be paid to the Indemnified Party,
as incurred, within twenty Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is finally
judicially determined to not be entitled to indemnification hereunder). The
failure to deliver written notice to the Indemnifying Party within a reasonable
time of the commencement of any such action shall not relieve such Indemnifying
Party of any liability to the Indemnified Party under this Section 5, except to
the extent that the Indemnifying Party is materially and adversely prejudiced in
its ability to defend such action.
 
(d) Contribution.  If a claim for indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission.  The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in this Agreement,
any reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section 5(d) was available to such party in accordance with its terms.
 
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute, in the aggregate, any amount in excess of the amount
by which the net proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.  No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
 
The indemnity and contribution agreements contained in this Section 5 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties and are not in diminution or limitation of the
indemnification provisions under the Purchase Agreement.
 

--------------------------------------------------------------------------------

 
6. Miscellaneous.
 
(a) Remedies.  In the event of a breach by the Company or by a Holder of any of
their obligations under this Agreement, each Holder or the Company, as the case
may be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.  The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
 
(b) No Piggyback on Registrations; Prohibit on Filing Other Registration
Statements.  Except and to the extent required pursuant to agreements or
arrangements identified in Schedule 3.1(y) to the Purchase Agreement, neither
the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in a
Registration Statement other than the Registrable Securities and the Olympus
Registrable Securities and the Company shall not prior to the Effective Date
enter into any agreement providing any such right to any of its security
holders. The Company shall not, from the date hereof until the date that is 30
days after the Effective Date of the Initial Registration Statement, prepare and
file with the Commission a registration statement relating to an offering for
its own account under the Securities Act of any of its equity securities, other
than (i) a registration statement on Form S-8, (ii) in connection with an
acquisition, on Form S-4 or (iii) a registration statement to register for
resale securities issued by the Company pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the
Company, provided that any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in
securities.  For the avoidance of doubt, the Company shall not be prohibited
from preparing and filing with the Commission a registration statement relating
to an offering of Common Stock by existing stockholders of the Company under the
Securities Act pursuant to the terms of registration rights held by such
stockholder or from filing amendments to registration statements filed prior to
the date of this Agreement.
 
(c) Compliance.  Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it
(unless an exemption therefrom is available) in connection with sales of
Registrable Securities pursuant to the Registration Statement and shall sell the
Registrable Securities only in accordance with a method of distribution
described in the Registration Statement
 
(d) Discontinued Disposition.  By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c)(iii)-(v), such
Holder will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until it is advised in writing (the “Advice”) by
the Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed.    The Company may provide appropriate
stop orders to enforce the provisions of this paragraph.
 
(e) No Inconsistent Agreements.  Neither the Company nor any of its Subsidiaries
has entered, as of the date hereof, nor shall the Company or any of its
Subsidiaries, on or after the date hereof, enter into any agreement with respect
to its securities, that would have the effect of impairing the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
 

--------------------------------------------------------------------------------

 
(f) Amendments and Waivers.  The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, or
waived unless the same shall be in writing and signed by the Company and Holders
holding at least two-thirds of the then outstanding Registrable Securities,
provided that any party may give a waiver as to itself.  Notwithstanding the
foregoing,  a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of all of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
 
(g) Notices.  Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be delivered as set forth in the
Purchase Agreement.
 
(h) Successors and Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder.  Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.  The Company may not assign its rights (except by merger or
in connection with another entity acquiring all or substantially all of the
Company’s assets) or obligations hereunder without the prior written consent of
all the Holders of the then outstanding Registrable Securities.  Each Holder may
assign its respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.
 
(i) Execution and Counterparts.  This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature were the original thereof.
 
(j) Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.
 
(k) Cumulative Remedies.  Except as provided in Section 2(c) with respect to
Liquidated Damages, the remedies provided herein are cumulative and not
exclusive of any other remedies provided by law.
 
(l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their good faith reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction.  It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 

--------------------------------------------------------------------------------

 
(m) Headings.  The headings in this Agreement are for convenience only and shall
not limit or otherwise affect  the meaning hereof.
 
(n) Independent Nature of Purchasers’ Obligations and Rights.  The obligations
of each Purchaser under this Agreement are several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder.  The decision of each Purchaser to purchase the Shares
pursuant to the Transaction Documents has been made independently of any other
Purchaser. Nothing contained herein or in any other agreement or document
delivered at any closing, and no action taken by any Purchaser pursuant hereto
or thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement.  Each
Purchaser acknowledges that no other Purchaser has acted as agent for such
Purchaser in connection with making its investment hereunder and that no
Purchaser will be acting as agent of such Purchaser in connection with
monitoring its investment in the Shares and Warrants or enforcing its rights
under the Transaction Documents. Each Purchaser shall be entitled to protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any Proceeding for such purpose.  The Company
acknowledges that each of the Purchasers has been provided with the same
Registration Rights Agreement for the purpose of closing a transaction with
multiple Purchasers and not because it was required or requested to do so by any
Purchaser.
 
 

--------------------------------------------------------------------------------

 
 

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
 
CYTORI THERAPEUTICS, INC.

By:  /s/ Christopher J. Calhoun    
Name:  Christopher J. Calhoun
Title:  CEO
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
 
 
SIGNATURE PAGES OF HOLDERS TO FOLLOW]
 
 

 

 
 

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

 

 
NAME OF INVESTING ENTITY: 
 
TRUK International Fund, LP
 
AUTHORIZED SIGNATORY

 
                                        /s/ Michael Fein        

     By: Atoll Asset Management, LLC      Name:  Michael Fein      Title:
 Principal

 
 

      ADDRESS FOR NOTICE    
 
Street:  1 East 52nd Street, 6th Floor   City/State/Zip:   New York, New York 
10022   Attention:  Michael Fein            Tel.:  212-888-2224        Fax: 
212-888-0334        E-mail:  mfein@ramcapital.com            

 
 

--------------------------------------------------------------------------------

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

 

 
NAME OF INVESTING ENTITY
 
TRUK Opportunity Fund, LLC
 
AUTHORIZED SIGNATORY

 
                                        /s/ Michael Fein        

     By: Atoll Asset Management, LLC      Name:  Michael Fein      Title:
 Principal

 
 

      ADDRESS FOR NOTICE    
 
Street:  1 East 52nd Street, 6th Floor   City/State/Zip:   New York, New York 
10022   Attention:  Michael Fein            Tel.:  212-888-2224        Fax: 
212-888-0334        E-mail:  mfein@ramcapital.com            

 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Hudson Bay Overseas Fund Ltd.
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Yoav Roth              Name:  Yoav Roth      Title:  Principal and
Portfolio Manager

 
 

  ADDRESS FOR NOTICE       c/o Hudson Bay Capital LP   Street:  120 Broadway,
40th Fl   City/State/Zip:   New York, New York  10271   Attention:  Yoav Roth  
     Tel:  212-571-1244        Fax:  212-571-1279        E-mail: 
investments@hudsonbaycapital.com                

 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Hudson Bay Fund LP
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Yoav Roth              Name:  Yoav Roth      Title:  Principal and
Portfolio Manager

 
 

  ADDRESS FOR NOTICE       c/o Hudson Bay Capital   Street:  120 Broadway, 40th
Floor   City/State/Zip:   New York, New York  10271    Attention:  Yoav Roth    
   Tel.:  212-571-1244        Fax.:  212-571-1279        E-mail: 
investments@hudsonbaycapital.com                

 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
HK Partners L.P.
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Ronald B. Haave              Name:  Ronald B. Haave      Title:
 Managing Partner

 
 

  ADDRESS FOR NOTICE       Street:  148 Hardesty Rd.   City/State/Zip: 
 Stamford, CT  06903        Tel.:  203-322-4504        Fax:  203-468-8388      
 E-mail:  ron@haave.com    

 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Brian W. Matthews
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Brian W. Matthews              Name:        Title:  

 
 

  ADDRESS FOR NOTICE       Street:   City/State/Zip:        Tel.:         Fax: 
       E-mail:                 

 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Iroquois Master Fund Ltd.
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Joshua Silverman              Name:  Joshua Silverman      Title:
 Authorized Signatory

 
 

  ADDRESS FOR NOTICE       Street:   City/State/Zip:        Tel.:         Fax: 
       E-mail:                 

 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Gagnon 1999 Grandchildren's Trust STS 2/1/99 Maureen Drew TTEE
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Maureen Drew              Name:  Maureen Drew      Title: Trustee

 
 

      ADDRESS FOR NOTICE       c/o  Gagnon Securities       Street:   1370 6th
Avenue 24th   City/State/Zip: New York, NY  10019       Attention: Susan Grant  
     Tel.: 212-554-5000        Fax:  212-265-6417        Email: 
susan@gagnonsec.com

 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Lois Gagnon
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Lois Gagnon              Name:  Lois Gagnon      Title: Self

 
 

      ADDRESS FOR NOTICE       c/o  Gagnon Securities       Street:   1370 6th
Avenue 24th   City/State/Zip: New York, NY  10019       Attention: Susan Grant  
     Tel.: 212-554-5000        Fax:  212-265-6417        Email: 
susan@gagnonsec.com

 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Gagnon Investment Associates Master Fund
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Neil Gagnon              Name:  Neil Gagnon      Title: Managing
Member

 
 

      ADDRESS FOR NOTICE       c/o  Gagnon Securities       Street:   1370
Avenue of the Americas   City/State/Zip: New York, NY  10019       Attention:
Susan Grant        Tel.: 212-554-5000        Fax:  212-265-6417        Email: 
susan@gagnonsec.com

 
 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Neil Gagnon
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Neil Gagnon              Name:  Neil Gagnon      Title: Self

 
 

      ADDRESS FOR NOTICE       c/o  Gagnon Securities       Street:   1370 6th
Avenue 24th   City/State/Zip: New York, NY  10019       Attention: Susan Grant  
     Tel.: 212-554-5000        Fax:  212-265-6417        Email: 
susan@gagnonsec.com

 
 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
The Lois & Neil Gagnon Foundation
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Neil Gagnon              Name:  Neil Gagnon      Title: President

 
 

      ADDRESS FOR NOTICE       c/o  Gagnon Securities       Street:   1370 6th
Avenue 24th   City/State/Zip: New York, NY  10019       Attention: Susan Grant  
     Tel.: 212-554-5000        Fax:  212-265-6417        Email: 
susan@gagnonsec.com

 
 
 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Gagnon Family Partnership
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Neil Gagnon              Name:  Neil Gagnon      Title: Partner

 
 
 

      ADDRESS FOR NOTICE       c/o  Gagnon Securities       Street:   1370 6th
Avenue   City/State/Zip: New York, NY  10019       Attention: Susan Grant      
 Tel.: 212-554-5000        Fax:  212-265-6417        Email:  susan@gagnonsec.com

 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Fallen Angel Partnership
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Neil Gagnon              Name:  Neil Gagnon      Title: Partner

 
 

      ADDRESS FOR NOTICE       c/o  Gagnon Securities       Street:   1370 6th
Avenue 24th Floor   City/State/Zip: New York, NY  10019       Attention: Susan
Grant        Tel.: 212-554-5000        Fax:  212-265-6417        Email: 
susan@gagnonsec.com

 
 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Darwin Partnership
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Neil Gagnon              Name:  Neil Gagnon      Title: Managing
Member

 
 

      ADDRESS FOR NOTICE       c/o  Gagnon Securities       Street:   1370 6th
Avenue   City/State/Zip: New York, NY  10019       Attention: Susan Grant      
 Tel.: 212-554-5000        Fax:  212-265-6417        Email:  susan@gagnonsec.com

 
 
 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Superius Securities MPP
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ A.C. Hudgins              Name:  A.C. Hudgins      Title:  

 
 

      ADDRESS FOR NOTICE       Street:  94 Grand Ave   City/State/Zip: 
Englewood, NJ  07631        Tel.:  201-568-8800        Fax:  201-568-9392      
 E-mail:  achudgins@gmail.com    

 
 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Diamond Opportunity Fund, LLC
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Richard Marks              Name:  Richard Marks      Title:
 Managing Director

 
 

  ADDRESS FOR NOTICE       Street:  500 Skokie Blvd. Suite 300  
City/State/Zip:  Northbrook, IL  60062        Tel.:  847-559-1002        Fax: 
847-919-4410        E-mail:  rmarks@diamondgroup.us.com        

 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
Jennison Health Sciences Fund
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ David Chan          Name:  David Chan      Title:  Managing
Director of Jennison and Portfolio Manager to the Fund

 
 

  ADDRESS FOR NOTICE       Street:    City/State/Zip:         Tel.:       
 Fax:         E-mail:         

 
 

--------------------------------------------------------------------------------

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

 
NAME OF INVESTING ENTITY
 
UBS O'Connor
 
AUTHORIZED SIGNATORY

 
                                       

     By: /s/ Jeffrey F. Putnam      Name:  Jeffrey F. Putnam      Title:
 Executive Director

 
 

  ADDRESS FOR NOTICE       Street:    City/State/Zip:         Tel.:       
 Fax:         E-mail:         

 
 

--------------------------------------------------------------------------------

 

 
Annex A
 
PLAN OF DISTRIBUTION

We are registering the Common Stock issued to the selling stockholders and
issuable upon exercise of warrants issued to the selling stockholders to permit
the resale of these shares of Common Stock by the holders of the Common Stock
from time to time after the date of this prospectus.  We will not receive any of
the proceeds from the sale by the selling stockholders of the Common Stock.  We
will bear all fees and expenses incident to our obligation to register the
Common Stock.

The selling stockholders may sell all or a portion of the Common Stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents.  If the Common Stock
is sold through underwriters or broker-dealers, the selling stockholders will be
responsible for underwriting discounts or commissions or agent's
commissions.  The Common Stock may be sold on any national securities exchange
or quotation service on which the securities may be listed or quoted at the time
of sale, in the over-the-counter market or in transactions otherwise than on
these exchanges or systems or in the over-the-counter market and in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions.  The selling stockholders may use any one or more of the following
methods when selling shares:
 
·  
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 
·  
block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

 
·  
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 
·  
an exchange distribution in accordance with the rules of the applicable
exchange;

 
·  
privately negotiated transactions;

 
·  
settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;

 
·  
broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

 
·  
through the writing or settlement of options or other hedging transactions,
whether such options are listed on an options exchange or otherwise;

 
·  
a combination of any such methods of sale; and

 
·  
any other method permitted pursuant to applicable law.

 
The selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act, as
permitted by that rule, or Section 4(1) under the Securities Act, if available,
rather than under this prospectus, provided that they meet the criteria and
conform to the requirements of those provisions.
 

--------------------------------------------------------------------------------

 
Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. If the selling stockholders effect such
transactions by selling Common Stock to or through underwriters, broker-dealers
or agents, such underwriters, broker-dealers or agents may receive commissions
in the form of discounts, concessions or commissions from the selling
stockholders or commissions from purchasers of the Common Stock for whom they
may act as agent or to whom they may sell as principal. Such commissions will be
in amounts to be negotiated, but, except as set forth in a supplement to this
Prospectus, in the case of an agency transaction will not be in excess of a
customary brokerage commission in compliance with NASD Rule 2440; and in the
case of a principal transaction a markup or markdown in compliance with NASD
IM-2440.
 
In connection with sales of the Common Stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the Common
Stock in the course of hedging in positions they assume.  The selling
stockholders may also sell Common Stock short and if such short sale shall take
place after the date that this Registration Statement is declared effective by
the Commission, the selling stockholders may deliver Common Stock covered by
this prospectus to close out short positions and to return borrowed shares in
connection with such short sales.  The selling stockholders may also loan or
pledge Common Stock to broker-dealers that in turn may sell such shares, to the
extent permitted by applicable law. The selling stockholders may also enter into
option or other transactions with broker-dealers or other financial institutions
or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction). Notwithstanding the foregoing, the selling stockholders have been
advised that they may not use shares registered on this registration statement
to cover short sales of our Common Stock made prior to the date the registration
statement, of which this prospectus forms a part, has been declared effective by
the SEC.
 
The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the Common Stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the Common Stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this
prospectus.  The selling stockholders also may transfer and donate the Common
Stock in other circumstances in which case the transferees, donees, pledgees or
other successors in interest will be the selling beneficial owners for purposes
of this prospectus.
 
The selling stockholders and any broker-dealer or agents participating in the
distribution of the Common Stock may be deemed to be “underwriters” within the
meaning of Section 2(11) of the Securities Act in connection with such
sales.  In such event, any commissions paid, or any discounts or concessions
allowed to, any such broker-dealer or agent and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Selling Stockholders who are "underwriters"
within the meaning of Section 2(11) of the Securities Act will be subject to the
applicable prospectus delivery requirements of the Securities Act and may be
subject to certain statutory liabilities of, including but not limited to,
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities
Exchange Act of 1934, as amended, or the Exchange Act.
 
Each selling stockholder has informed the Company that it is not a registered
broker-dealer and does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.  Upon
the Company being notified in writing by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common
Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act,
 

--------------------------------------------------------------------------------

 
disclosing (i) the name of each such selling stockholder and of the
participating broker-dealer(s), (ii) the number of shares involved, (iii) the
price at which such the Common Stock was sold, (iv) the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable, (v)
that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, and (vi)
other facts material to the transaction.  In no event shall any broker-dealer
receive fees, commissions and markups, which, in the aggregate, would exceed
eight percent (8%).
 
Under the securities laws of some states, the Common Stock may be sold in such
states only through registered or licensed brokers or dealers.  In addition, in
some states the Common Stock may not be sold unless such shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.
 
There can be no assurance that any selling stockholder will sell any or all of
the Common Stock registered pursuant to the shelf registration statement, of
which this prospectus forms a part.
 
Each selling stockholder and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, to the extent applicable, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the Common Stock by the
selling stockholder and any other participating person.  To the extent
applicable, Regulation M may also restrict the ability of any person engaged in
the distribution of the Common Stock to engage in market-making activities with
respect to the Common Stock.  All of the foregoing may affect the marketability
of the Common Stock and the ability of any person or entity to engage in
market-making activities with respect to the Common Stock.
 
We will pay all expenses of the registration of the Common Stock pursuant to the
registration rights agreement, including, without limitation, Securities and
Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, that each selling stockholder will pay
all underwriting discounts and selling commissions, if any and any related legal
expenses incurred by it.  We will indemnify the selling stockholders against
certain liabilities, including some liabilities under the Securities Act, in
accordance with the registration rights agreement, or the selling stockholders
will be entitled to contribution.  We may be indemnified by the selling
stockholders against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us by
the selling stockholders specifically for use in this prospectus, in accordance
with the related registration rights agreements, or we may be entitled to
contribution.
 
 

--------------------------------------------------------------------------------

Annex B
 
CYTORI THERAPEUTICS, INC.

SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE

The undersigned holder of common stock, par value $0.001 per share, of Cytori
Therapeutics, Inc., a Delaware corporation (the “Company”), issued pursuant to a
certain Securities Purchase Agreement by and among the Company and the
Purchasers named therein, dated as of August 7, 2008, understands that the
Company intends to file with the Securities and Exchange Commission a
registration statement on Form S-3 (the “Resale Registration Statement”) for the
registration and the resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the Registrable Securities in accordance with
the terms of a certain Registration Rights Agreement by and among the Company
and the Purchasers named therein, dated as of August 7, 2008 (the
“Agreement”).  All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement.

In order to sell or otherwise dispose of any Registrable Securities pursuant to
the Resale Registration Statement, a holder of Registrable Securities generally
will be required to be named as a selling stockholder in the related prospectus
or a supplement thereto (as so supplemented, the “Prospectus”), deliver the
Prospectus to purchasers of Registrable Securities (including pursuant to Rule
172 under the Securities Act) and be bound by the provisions of the Agreement
(including certain indemnification provisions, as described below).  Holders
must complete and deliver this Notice and Questionnaire in order to be named as
selling stockholders in the Prospectus.  Holders of Registrable Securities who
do not complete, execute and return this Notice and Questionnaire within five
(5)Trading Days following the date of the Agreement (1) will not be named as
selling stockholders in the Resale Registration Statement or the Prospectus and
(2) may not use the Prospectus for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling stockholder in
the Resale Registration Statement and the Prospectus.  Holders of Registrable
Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not named as a selling stockholder in the Resale
Registration Statement and the Prospectus.
NOTICE
 
The undersigned holder (the “Selling Stockholder”) of Registrable Securities
hereby gives notice to the Company of its intention to sell or otherwise dispose
of Registrable Securities owned by it and listed below in Item (3), unless
otherwise specified in Item (3), pursuant to the Resale Registration
Statement.  The undersigned, by signing and returning this Notice and
Questionnaire, understands and agrees that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Agreement.

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:

 
QUESTIONNAIRE

 
 
 
1.  Name.

 
 
(a)
Full Legal Name of Selling Stockholder:

 

              ________________________________________________________________________________________
 

 
 

--------------------------------------------------------------------------------

 
 
(b)
Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:

 

              ________________________________________________________________________________________
 

 
(c)
Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):

 

            ________________________________________________________________________________________ 
 
 

 
2.  Address for Notices to Selling Stockholder:

 

              ________________________________________________________________________________________
              ________________________________________________________________________________________
              ________________________________________________________________________________________
Telephone:    ________________________________________________________________________________________
Fax:    ________________________________________________________________________________________
Contact
Person:    ________________________________________________________________________________________
E-mail address of Contact
Person:________________________________________________

 

 
 
3.  Beneficial Ownership of Registrable Securities Issuable Pursuant to the
Purchase Agreement:

 
 
(a)
Type and Number of Registrable Securities beneficially owned and issued pursuant
to the Agreement:

 

              ________________________________________________________________________________________
              ________________________________________________________________________________________
              ________________________________________________________________________________________
 

 
 
(b)
Number of shares of Common Stock to be registered pursuant to this Notice for
resale:

 

              ________________________________________________________________________________________
              ________________________________________________________________________________________
              ________________________________________________________________________________________
 

 
 
4.  Broker-Dealer Status:

 
 
(a)
Are you a broker-dealer?

 
Yes                         No   
 

--------------------------------------------------------------------------------

 
 
 
(b)
If “yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?

 
Yes                         No   
 
Note:
If no, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

 
 
(c)
Are you an affiliate of a broker-dealer?

 
Yes                         No   
 
Note:
If yes, provide a narrative explanation below:

 

               ________________________________________________________________________________________
               ________________________________________________________________________________________
               ________________________________________________________________________________________

 
 
(c)
If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of
the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the
Registrable Securities?

 
Yes                         No   
 
Note:
If no, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

 
 
5.  Beneficial Ownership of Other Securities of the Company Owned by the Selling
Stockholder.

 
Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
 
 
Type and amount of other securities beneficially owned:

 
 
_______________________________________________________________________________

 
 
_______________________________________________________________________________

 
6.  Relationships with the Company:
 
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
 
 
State any exceptions here:

 

              ________________________________________________________________________________________
              ________________________________________________________________________________________
 

 
 

--------------------------------------------------------------------------------

 
 
7.  Plan of Distribution:

 
The undersigned has reviewed the form of Plan of Distribution attached as Annex
A to the Registration Rights Agreement, and hereby confirms that, except as set
forth below, the information contained therein regarding the undersigned and its
plan of distribution is correct and complete.
 
 
State any exceptions here:

 

              ________________________________________________________________________________________
              ________________________________________________________________________________________
 

 
 
***********

 
 
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the effective date of any applicable Resale Registration
Statement. All notices hereunder and pursuant to the Agreement shall be made in
writing, by hand delivery, confirmed or facsimile transmission, first-class mail
or air courier guaranteeing overnight delivery at the address set forth
below.  In the absence of any such notification, the Company shall be entitled
to continue to rely on the accuracy of the information in this Notice and
Questionnaire.
 
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (7) above and the inclusion
of such information in the Resale Registration Statement and the
Prospectus.  The undersigned understands that such information will be relied
upon by the Company in connection with the preparation or amendment of any such
Registration Statement and the Prospectus.
 
By signing below, the undersigned acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the provisions of the
Exchange Act and the rules and regulations thereunder, particularly Regulation M
in connection with any offering of Registrable Securities pursuant to the Resale
Registration Statement.  The undersigned also acknowledges that it understands
that the answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and
any amendments or supplements thereto filed with the Commission pursuant to the
Securities Act.
 
The undersigned hereby acknowledges and is advised of the following
Interpretation A.65 of the July 1997 SEC Manual of Publicly Available Telephone
Interpretations regarding short selling:
 
“An Issuer filed a Form S-3 registration statement for a secondary offering of
common stock which is not yet effective.  One of the selling stockholders wanted
to do a short sale of common stock “against the box” and cover the short sale
with registered shares after the effective date.  The issuer was advised that
the short sale could not be made before the registration statement become
effective, because the shares underlying the short sale are deemed to be sold at
the time such sale is made.  There would, therefore, be a violation of Section 5
if the shares were effectively sold prior to the effective date.”
 

--------------------------------------------------------------------------------

 
By returning this Questionnaire, the undersigned will be deemed to be aware of
the foregoing interpretation.
 
I confirm that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Questionnaire) are correct.
 
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
 
Dated:    _______________________                           Beneficial
Owner:     __________________________________                                                                    

By:  ______________________________________________                                                                       
Name:  ____________________________________
Title:  _____________________________________

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

David W. Stadinski 
Piper Jaffray & Co.
150 East 42nd Street, 35th Fl.
New York, NY 10017
Tel:  212-284-9572
Fax:  212-658-9604
Email:  david.w.stadinski@pjc.com

 

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