Exhibit 10.3
 
REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into
effective as of this ___ day of May, 2007 (the “Effective Date”) between
Modigene Inc. (f/k/a LDG, Inc.), a Nevada corporation (the “Company”), and the
parties set forth on the signature page and Exhibit A hereto (each a “Purchaser”
and collectively the “Purchasers”).
 
RECITALS:
 
WHEREAS, the Company and Modigene Inc., a Delaware corporation (“Modigene”),
have entered into an Agreement and Plan of Merger and Reorganization, pursuant
to which a newly organized, wholly-owned subsidiary of the Company has merged
with and into Modigene, with Modigene remaining as the surviving entity and a
wholly-owned subsidiary of the Company (the “Merger”);
 
WHEREAS, as a condition to the consummation of the Merger, and to provide the
capital required by Modigene for working capital and other purposes, the Company
has offered in compliance with Rule 506 of Regulation D of the Securities Act of
1933, as amended (the “Securities Act”), and available prospectus exemptions in
Canada, to accredited investors in a private placement transaction (the
“Offering”), an aggregate of [________] units (the “Units”) of the Company’s
securities, at the purchase price of $1.50 per Unit (“Purchase Price”), each
Unit consisting of one share of the Company’s common stock, par value $0.00001
per share (“Common Stock”), and a warrant (the “Investor Warrants”) to purchase
one-quarter, or 25%, of a share of Common Stock for five years at the exercise
price of $2.50 per whole share of Common Stock;
 
WHEREAS, the initial closing of the Offering and the Merger have taken place on
the Effective Date; and
 
WHEREAS, the Purchasers, in connection with their purchase of Units in the
Offering, have executed and delivered separate Subscription Agreements
(collectively, the “Subscription Agreements”) and Investor Questionnaires (the
“Investor Questionnaires”), each memorializing the Purchasers’ agreement to
purchase and the Company’s agreement to sell the number of Units set forth
therein at the Purchase Price, and this Agreement, pursuant to which the Company
will provide certain registration rights related to the shares of Common Stock
underlying the Units, including “piggyback” registration rights with respect to
the shares of Common Stock issuable upon exercise of the Investor Warrants, on
the terms set forth herein (the Subscription Agreements, Investor
Questionnaires, and Registration Rights Agreements are collectively referred to
as the “Transaction Documents”).

NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants, and conditions set forth herein, the parties mutually
agree as follows:
 
1. Certain Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
 
“Approved Market” means the NASD Over-The-Counter Bulletin Board, the Nasdaq
Stock Market, the New York Stock Exchange, Inc. or the American Stock Exchange,
Inc.
 

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“Blackout Period” means, with respect to a registration, a period, in each case
commencing on the day immediately after the Company notifies the Purchasers that
they are required, because of the occurrence of an event of the kind described
in Section 4(f) hereof, to suspend offers and sales of Registrable Common Shares
during which the Company, in the good faith judgment of its board of directors,
determines (because of the existence of, or in anticipation of, any acquisition,
financing activity, or other transaction involving the Company, or the
unavailability for reasons beyond the Company’s control of any required
financial statements, disclosure of information which is in its best interest
not to publicly disclose, or any other event or condition of similar
significance to the Company) that the registration and distribution of the
Registrable Common Shares to be covered by such Registration Statement, if any,
would be seriously detrimental to the Company and its stockholders and ending on
the earlier of (1) the date upon which the material non-public information
commencing the Blackout Period is disclosed to the public or ceases to be
material and (2) such time as the Company notifies the selling Holders that the
Company will no longer delay such filing of the Registration Statement,
recommence taking steps to make such Registration Statement effective, or allow
sales pursuant to such Registration Statement to resume; provided, that (a) the
Company shall limit its use of Blackout Periods, in the aggregate, to 30 Trading
Days in any 12-month period and (b) no Blackout Period may commence sooner than
60 days after the end of a prior Blackout Period.
 
“Business Day” means any day of the year, other than a Saturday, Sunday, or
other day on which the Commission is required or authorized to close.
 
“Commission” means the U. S. Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
 
“Common Stock” means the common stock, par value $0.00001 per share, of the
Company and any and all shares of capital stock or other equity securities of:
(i) the Company which are added to or exchanged or substituted for the Common
Stock by reason of the declaration of any stock dividend or stock split, the
issuance of any distribution or the reclassification, readjustment,
recapitalization or other such modification of the capital structure of the
Company; and (ii) any other corporation, now or hereafter organized under the
laws of any state or other governmental authority, with which the Company is
merged, which results from any consolidation or reorganization to which the
Company is a party, or to which is sold all or substantially all of the shares
or assets of the Company, if immediately after such merger, consolidation,
reorganization or sale, the Company or the stockholders of the Company own
equity securities having in the aggregate more than 50% of the total voting
power of such other corporation.
 
“Effective Date” means the date set forth in the preamble to this Agreement.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
 

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“Family Member” means (a) with respect to any individual, such individual’s
spouse, any descendants (whether natural or adopted), any trust all of the
beneficial interests of which are owned by any of such individuals or by any of
such individuals together with any organization described in Section 501(c)(3)
of the Internal Revenue Code of 1986, as amended, the estate of any such
individual, and any corporation, association, partnership or limited liability
company all of the equity interests of which are owned by those above described
individuals, trusts or organizations and (b) with respect to any trust, the
owners of the beneficial interests of such trust.
 
“Holder” means each Purchaser or any of such Purchaser’s respective successors
and Permitted Assigns who acquire rights in accordance with this Agreement with
respect to any Registrable Securities directly or indirectly from a Purchaser or
from any Permitted Assignee.
 
“Investor Warrants” mean the warrants issued in connection with the Purchasers’
purchase of Units in the Offering.
 
“Majority Holders” means at any time Holders representing a majority of the
Registrable Securities.
 
“Permitted Assignee” means (a) with respect to a partnership, its partners or
former partners in accordance with their partnership interests, (b) with respect
to a corporation, its stockholders in accordance with their interest in the
corporation, (c) with respect to a limited liability company, its members or
former members in accordance with their interest in the limited liability
company, (d) with respect to an individual party, any Family Member of such
party, (e) an entity that is controlled by, controls, or is under common control
with a transferor, or (f) a party to this Agreement.
 
“Piggyback Common Share Registration” means, in any registration of Common Stock
as set forth in Section 3(b)(i), the ability of holders of Common Stock to
include Registrable Common Shares in such registration.
 
“Piggyback Registration” means, in any registration of Common Stock referenced
in Section 3(b), the right of each Holder to include the Registrable Securities
of such Holder in such registration.
 
“Piggyback Warrant Share Registration” means, in any registration of Common
Stock as set forth in Section 3(b)(ii), the ability of holders of the Investor
Warrants, or Common Stock issued upon exercise of the Investor Warrants, to
include Registrable Warrant Shares in such registration.
 
The terms “register,” “registered,” and “registration” refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
 
“Registrable Common Shares” means the shares of Common Stock issued or issuable
to each Purchaser in connection with such Purchaser’s purchase of Units pursuant
to the Subscription Agreements (and not including the shares of Common Stock
issuable on exercise of the Investor Warrants issued to the Purchasers in
connection with their purchase of Units) but excluding (i) any Registrable
Common Shares that have been publicly sold or may be sold immediately without
registration under the Securities Act either pursuant to Rule 144 of the
Securities Act or otherwise; (ii) any Registrable Common Shares sold by a person
in a transaction pursuant to a registration statement filed under the Securities
Act, or (iii) any Registrable Common Shares that are at the time subject to an
effective registration statement under the Securities Act.
 

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“Registrable Securities” means the Registrable Common Shares together with the
Registrable Warrant Shares.
 
“Registrable Warrant Shares” means the shares of Common Stock issued or issuable
to each Purchaser on exercise of the Investor Warrants issued to the Purchasers
in connection with their purchase of Units but excluding (i) any Registrable
Warrant Shares that have been publicly sold or may be sold immediately without
registration under the Securities Act either pursuant to Rule 144 of the
Securities Act or otherwise; (ii) any Registrable Warrant Shares sold by a
person in a transaction pursuant to a registration statement filed under the
Securities Act, or (iii) any Registrable Warrant Shares that are at the time
subject to an effective registration statement under the Securities Act.
 
“Registration Default Date” means the date that is 180 days after the
Registration Filing Date.
 
“Registration Default Period” means the period following the Registration
Default Date during which any Registration Event occurs and is continuing.
 
“Registration Event” means the occurrence of any of the following events:
 
(a) the Company fails to file with the Commission the Registration Statement on
or before the Registration Filing Date;
 
(b) the Registration Statement is not declared effective by the Commission on or
before the Registration Default Date;
 
(c) after the SEC Effective Date, sales cannot be made pursuant to the
Registration Statement for any reason (including without limitation by reason of
a stop order, or the Company’s failure to update the Registration Statement)
except as excused pursuant to Section 3(a); or
 
(d) the Common Stock generally or the Registrable Common Shares specifically are
not listed or included for quotation on an Approved Market, or trading of the
Common Stock is suspended or halted on the Approved Market, which at the time
constitutes the principal market for the Common Stock, for more than two full,
consecutive Trading Days; provided, however, a Registration Event shall not be
deemed to occur if all or substantially all trading in equity securities
(including the Common Stock) is suspended or halted on the Approved Market for
any length of time.
 
“Registration Filing Date” means the date that is 120 days after the Effective
Date.
 

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“Registration Statement” means the registration statement that the Company is
required to file pursuant to this Agreement to register the Registrable Common
Shares.
 
“Rule 144” means Rule 144 promulgated by the Commission under the Securities
Act.
 
“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute promulgated in replacement thereof, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
 
“SEC Effective Date” means the date the Registration Statement is declared
effective by the Commission.
 
“Subscription Agreement” means each of the Subscription Agreements, each dated
as of the date hereof, between the Company and the Purchaser named therein
setting forth the terms and conditions of the Company’s offer of Units and the
purchase of Units by the Purchaser that is party to such Subscription
Agreements.
 
“Trading Day” means any day on which the national securities exchange, the
Nasdaq Stock Market, the NASD Over-The-Counter Bulletin Board or such other
securities market or quotation system, which at the time constitutes the
principal securities market for the Common Stock, is open for general trading of
securities.
 
“Units” has the meaning given it in the second recital of this Agreement.
 
2. Term. This Agreement shall continue in full force and effect for a period of
two years from the Effective Date, unless terminated sooner hereunder.
 
3. Registration.
 
(a) Registration on Form SB-2. Not later than the Registration Filing Date, the
Company shall file with the Commission a Registration Statement on Form SB-2, or
other applicable form, relating to the resale by the Holders of all of the
Registrable Common Shares, and the Company shall use its best efforts to cause
such Registration Statement to be declared effective prior to the Registration
Default Date; provided, that the Company shall not be obligated to effect any
such registration, qualification, or compliance pursuant to this Section, or
keep such registration effective pursuant to the terms hereunder in any
particular jurisdiction in which the Company would be required to qualify to do
business as a foreign corporation or as a dealer in securities under the
securities or blue sky laws of such jurisdiction or to execute a general consent
to service of process in effecting such registration, qualification or
compliance, in each case where it has not already done so.
 
(b) Piggyback Registration.
 
(i) Piggyback Common Share Registration. If the Company shall determine to
register for sale for cash any of its Common Stock, for its own account or for
the account of others (other than the Holders), other than (i) a registration
relating solely to employee benefit plans or securities issued or issuable to
employees, consultants (to the extent the securities owned or to be owned by
such consultants could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (ii) a registration relating solely to
a Commission Rule 145 transaction, a registration on Form S-4 in connection with
a merger, acquisition, divestiture, reorganization, or similar event, the
Company shall promptly give to the Holders written notice thereof (and in no
event shall such notice be given less than 20 calendar days prior to the filing
of such registration statement), and shall, subject to Section 3(c), include as
a Piggyback Registration all of the Registrable Common Shares specified in a
written request delivered by the Holder thereof within 10 calendar days after
receipt of such written notice from the Company. However, the Company may,
without the consent of the Holders, withdraw such registration statement prior
to its becoming effective if the Company or such other stockholders have elected
to abandon the proposal to register the securities proposed to be registered
thereby.
 

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(ii) Piggyback Warrant Share Registration. If after the SEC Effective Date, the
Company shall determine to register for sale for cash any of its Common Stock,
for its own account or for the account of others (other than the Holders), other
than (i) a registration relating solely to employee benefit plans or securities
issued or issuable to employees, consultants (to the extent the securities owned
or to be owned by such consultants could be registered on Form S-8) or any of
their Family Members (including a registration on Form S-8) or (ii) a
registration relating solely to a Commission Rule 145 transaction, a
registration on Form S-4 in connection with a merger, acquisition, divestiture,
reorganization, or similar event, the Company shall promptly give to the Holders
written notice thereof (and in no event shall such notice be given less than 20
calendar days prior to the filing of such registration statement), and shall,
subject to Section 3(c), include as a Piggyback Registration all of the
Registrable Warrant Shares specified in a written request delivered by the
Holder thereof within 10 calendar days after receipt of such written notice from
the Company. However, the Company may, without the consent of the Holders,
withdraw such registration statement prior to its becoming effective if the
Company or such other stockholders have elected to abandon the proposal to
register the securities proposed to be registered thereby.

(c) Underwriting. If a Piggyback Registration is for a registered public
offering that is to be made by an underwriting, the Company shall so advise the
Holders of the Registrable Common Shares and the Registrable Warrant Shares
eligible for inclusion in such Registration Statement pursuant to Sections
3(b)(i) and (ii), respectively. In that event, the right of any Holder to
Piggyback Registration shall be conditioned upon such Holder’s participation in
such underwriting and the inclusion of such Holder’s Registrable Common Shares
or the Holder’s Registrable Warrant Shares in the underwriting to the extent
provided herein. All Holders proposing to sell any of their Registrable
Securities through such underwriting shall (together with the Company and any
other stockholders of the Company selling their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter selected for such underwriting by the Company or the selling
stockholders, as applicable. Notwithstanding any other provision of this
Section, if the underwriter or the Company determines that marketing factors
require a limitation on the number of shares of Common Stock or the amount of
other securities to be underwritten, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting. The Company
shall so advise all Holders (except those Holders who failed to timely elect to
include their Registrable Securities through such underwriting or have indicated
to the Company their decision not to do so), and indicate to each such Holder
the number of shares of Registrable Securities that may be included in the
registration and underwriting, if any. The number of shares of Registrable
Securities to be included in such registration and underwriting shall be
allocated among such Holders as follows:
 

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(i) If the Piggyback Registration was initiated by the Company, the number of
shares that may be included in the registration and underwriting shall be
allocated first to the Company and then, subject to obligations and commitments
existing as of the date hereof, to all selling stockholders, including the
Holders, who have requested to sell in the registration on a pro rata basis
according to the number of shares requested to be included therein; and
 
(ii) If the Piggyback Registration was initiated by the exercise of demand
registration rights by a stockholder or stockholders of the Company (other than
the Holders), then the number of shares that may be included in the registration
and underwriting shall be allocated first to such selling stockholders who
exercised such demand and then, subject to obligations and commitments existing
as of the date hereof, to all other selling stockholders, including the Holders,
who have requested to sell in the registration, on a pro rata basis according to
the number of shares requested to be included.
 
No Registrable Securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw his or her Registrable Securities therefrom by delivering a
written notice to the Company and the underwriter. The Registrable Securities so
withdrawn from such underwriting shall also be withdrawn from such registration;
provided, however, that, if by the withdrawal of such Registrable Securities, a
greater number of Registrable Securities held by other Holders may be included
in such registration (up to the maximum of any limitation imposed by the
underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities pursuant to the terms and limitations set forth herein in
the same proportion used above in determining the underwriter limitation.
 
(d) Other Registrations. Before the SEC Effective Date, the Company will not,
without the prior written consent of the Majority Holders, file any other
registration statement with the Commission or request the acceleration of any
other registration statement filed with the Commission, and during any time
subsequent to the SEC Effective Date when the Registration Statement for any
reason is not available for use by any Holder for the resale of any Registrable
Common Shares, the Company shall not, without the prior written consent of the
Majority Holders, file any other registration statement or any amendment thereto
with the Commission under the Securities Act or request the acceleration of the
effectiveness of any other registration statement previously filed with the
Commission, other than (i) any registration statement on Form S-8 or Form S-4
and (ii) any registration statement or amendment which the Company is required
to file or as to which the Company is required to request acceleration pursuant
to any obligation in effect on the date of execution and delivery of this
Agreement.
 

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(e) Occurrence of Registration Event. If a Registration Event occurs, then the
Company will make payments to each Holder (a “Qualified Purchaser”), as partial
liquidated damages for the minimum amount of damages to the Qualified Purchaser
by reason thereof, and not as a penalty, at a rate equal to 1.25% of the
Purchase Price per share of Registrable Common Shares then held by each
Qualified Purchaser for each full period of 30 days of the Registration Default
Period (which shall be pro rated for any period less than 30 days); provided,
however, if a Registration Event occurs (or is continuing) on a date more than
one-year after the Qualified Purchaser acquired the Registrable Common Shares
(and thus the one-year holding period under Rule 144(d) has elapsed), liquidated
damages shall be paid only with respect to that portion of the Qualified
Purchaser’s Registrable Common Shares that cannot then be immediately resold in
reliance on Rule 144. Notwithstanding the foregoing, the maximum amount of
liquidated damages that may be paid to any Qualified Purchaser pursuant to this
Section 3(e) shall be an amount equal to 12.5% of the Purchase Price per share
of Registrable Common Shares held by such Qualified Purchaser at the time of the
first occurrence of the Registration Events. Each such payment shall be due and
payable within five days after the end of each full 30-day period of the
Registration Default Period until the termination of the Registration Default
Period and within five days after such termination. Such payments shall
constitute the Qualified Purchaser’s exclusive remedy for such events. The
Registration Default Period shall terminate upon (i) the filing of the
Registration Statement in the case of clause (a) of the definition of
Registration Event, (ii) the SEC Effective Date in the case of clause (b) of the
definition of Registration Event, (iii) the ability of the Qualified Purchaser
to effect sales pursuant to the Registration Statement in the case of clause (c)
of the definition of Registration Event, (iv) the listing or inclusion and/or
trading of the Common Stock on an Approved Market, as the case may be, in the
case of clause (d) of the definition of Registration Event, and (v) in the case
of the events described in clauses (b) and (c) of the definition of Registration
Event, the earlier termination of the Registration Default Period. The amounts
payable as partial liquidated damages pursuant to this Section 3(e) shall be
payable in lawful money of the United States. Amounts payable as liquidated
damages to each Qualified Purchaser hereunder with respect to each share of
Registrable Common Shares shall cease when the Qualified Purchaser no longer
holds such Registrable Common Shares or all such Registrable Common Shares can
be immediately sold by the Qualified Purchaser in reliance on Rule 144(k).
 
4. Registration Procedures for Registrable Common Shares. The Company will keep
each Holder reasonably advised as to the filing and effectiveness of the
Registration Statement. At its expense with respect to the Registration
Statement, the Company will:
 
(a) prepare and file with the Commission with respect to the Registrable Common
Shares, a Registration Statement on Form SB-2, or any other form for which the
Company then qualifies or which counsel for the Company shall deem appropriate
and which form shall be available for the sale of the Registrable Common Shares
in accordance with the intended methods of distribution thereof, and use its
commercially reasonable efforts to cause such Registration Statement to become
effective and shall remain effective for a period of two years or for such
shorter period ending on the earlier to occur of (i) the sale of all Registrable
Common Shares and (ii) the availability under Rule 144(k) for the Holder to sell
the Registrable Common Shares (the “Effectiveness Period”);
 

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(b) if the Registration Statement is subject to review by the Commission,
promptly respond to all comments and diligently pursue resolution of any
comments to the satisfaction of the Commission;
 
(c) prepare and file with the Commission such amendments and supplements to such
Registration Statement as may be necessary to keep such Registration Statement
effective during the Effectiveness Period;
 
(d) furnish, without charge, to each Holder of Registrable Common Shares covered
by such Registration Statement (i) a reasonable number of copies of such
Registration Statement (including any exhibits thereto other than exhibits
incorporated by reference), each amendment and supplement thereto as such Holder
may reasonably request, (ii) such number of copies of the prospectus included in
such Registration Statement (including each preliminary prospectus and any other
prospectus filed under Rule 424 under the Securities Act) as such Holders may
reasonably request, in conformity with the requirements of the Securities Act,
and (iii) such other documents as such Holder may require to consummate the
disposition of the Registrable Common Shares owned by such Holder, but only
during the Effectiveness Period;
 
(e) use its commercially reasonable best efforts to register or qualify such
registration under such other applicable securities or blue sky laws of such
jurisdictions as any Holder of Registrable Common Shares covered by such
Registration Statement reasonably requests and as may be necessary for the
marketability of the Registrable Common Shares (such request to be made by the
time the applicable Registration Statement is deemed effective by the
Commission) and do any and all other acts and things necessary to enable such
Holder to consummate the disposition in such jurisdictions of the Registrable
Common Shares owned by such Holder; provided, that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph, (ii) subject
itself to taxation in any such jurisdiction, or (iii) consent to general service
of process in any such jurisdiction.
 
(f) as promptly as practicable after becoming aware of such event, notify each
Holder of Registrable Common Shares, the disposition of which requires delivery
of a prospectus relating thereto under the Securities Act, of the happening of
any event, which comes to the Company’s attention, that will after the
occurrence of such event cause the prospectus included in such Registration
Statement, if not amended or supplemented, to contain an untrue statement of a
material fact or an omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and the
Company shall promptly thereafter prepare and furnish to such Holder a
supplement or amendment to such prospectus (or prepare and file appropriate
reports under the Exchange Act) so that, as thereafter delivered to the
purchasers of such Registrable Common Shares, such prospectus shall not contain
an 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 not
misleading, unless suspension of the use of such prospectus otherwise is
authorized herein or in the event of a Blackout Period, in which case no
supplement or amendment need be furnished (or Exchange Act filing made) until
the termination of such suspension or Blackout Period;
 

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(g) comply, and continue to comply during the Effectiveness Period, in all
material respects with the Securities Act and the Exchange Act and with all
applicable rules and regulations of the Commission with respect to the
disposition of all securities covered by such Registration Statement;
 
(h) as promptly as practicable after becoming aware of such event, notify each
Holder of Registrable Common Shares being offered or sold pursuant to the
Registration Statement of the issuance by the Commission of any stop order or
other suspension of effectiveness of the Registration Statement;
 
(i) use its best efforts to cause all the Registrable Common Shares covered by
the Registration Statement to be quoted on the NASD OTC Bulletin Board or such
other principal securities market on which securities of the same class or
series issued by the Company are then listed or traded;
 
(j) provide a transfer agent and registrar, which may be a single entity, for
the shares of Common Stock at all times;
 
(k) cooperate with the Holders of Registrable Common Shares being offered
pursuant to the Registration Statement to issue and deliver, or cause its
transfer agent to issue and deliver, certificates representing Registrable
Common Shares to be offered pursuant to the Registration Statement within a
reasonable time after the delivery of certificates representing the Registrable
Common Shares to the transfer agent or the Company, as applicable, and enable
such certificates to be in such denominations or amounts as the Holders may
reasonably request and registered in such names as the Holders may request;
 
(l) during the Effectiveness Period, refrain from bidding for or purchasing any
Common Stock or any right to purchase Common Stock or attempting to induce any
person to purchase any such security or right if such bid, purchase or attempt
would in any way limit the right of the Holders to sell Registrable Common
Shares by reason of the limitations set forth in Regulation M under the Exchange
Act; and
 
(m) take all other reasonable actions necessary to expedite and facilitate the
disposition by the Holders of the Registrable Common Shares pursuant to the
Registration Statement.
 
5. Suspension of Offers and Sales. Each Holder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 4(f) hereof or of the commencement of a Blackout Period, such Holder
shall discontinue the disposition of Registrable Common Shares included in the
Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4(f) hereof or notice
of the end of the Blackout Period, and, if so directed by the Company, such
Holder shall deliver to the Company (at the Company’s expense) all copies
(including, without limitation, any and all drafts), other than permanent file
copies, then in such Holder’s possession, of the prospectus covering such
Registrable Common Shares current at the time of receipt of such notice.
 

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6. Registration Expenses. The Company shall pay all expenses in connection with
any registration obligation provided herein, including, without limitation, all
registration, filing, stock exchange fees, printing expenses, all fees and
expenses of complying with securities or blue sky laws, and the fees and
disbursements of counsel for the Company and of its independent accountants;
provided, that, in any underwritten registration, each party shall pay for its
own underwriting discounts and commissions and transfer taxes. Except as
provided in this Section and Section 9, the Company shall not be responsible for
the expenses of any attorney or other advisor employed by a Holder.
 
7. Assignment of Rights. No Holder may assign its rights under this Agreement to
any party without the prior written consent of the Company; provided, however,
that any Holder may assign its rights under this Agreement without such consent
to a Permitted Assignee as long as (a) such transfer or assignment is effected
in accordance with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement; and (c) such
Holder notifies the Company in writing of such transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
Registrable Common Shares with respect to which such rights are being
transferred or assigned.
 
8. Information by Holder. Holders included in any registration shall furnish to
the Company such information as the Company may reasonably request in writing
regarding such Holders and the distribution proposed by such Holders.
 
9. Indemnification.
 
(a) In the event of the offer and sale of Registrable Securities under the
Securities Act, the Company shall, and hereby does, indemnify and hold harmless,
to the fullest extent permitted by law, each Holder, its directors, officers,
partners, each other person who participates as an underwriter in the offering
or sale of such securities, and each other person, if any, who controls or is
under common control with such Holder or any such underwriter within the meaning
of Section 15 of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, and expenses to which the Holder or any such
director, officer, partner or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in any registration statement prepared
and filed by the Company under which Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any omission to state therein a material fact required to be stated or necessary
to make the statements therein in light of the circumstances in which they were
made not misleading, and the Company shall reimburse the Holder, and each such
director, officer, partner, underwriter and controlling person for any legal or
any other expenses reasonably incurred by them in connection with investigating,
defending or settling any such loss, claim, damage, liability, action or
proceeding; provided, that, the Company shall not be liable in any such case (i)
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement in or omission from such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company through an instrument duly executed by or on behalf of such
Holder specifically stating that it is for use in the preparation thereof or
(ii) if the person asserting any such loss, claim, damage, liability (or action
or proceeding in respect thereof) who purchased the Registrable Securities that
are the subject thereof did not receive a copy of an amended preliminary
prospectus or the final prospectus (or the final prospectus as amended or
supplemented) at or prior to the written confirmation of the sale of such
Registrable Securities to such person because of the failure of such Holder or
underwriter to so provide such amended preliminary or final prospectus and the
untrue statement or omission of a material fact made in such preliminary
prospectus was corrected in the amended preliminary or final prospectus (or the
final prospectus as amended or supplemented). Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Holders, or any such director, officer, partner, underwriter or controlling
person and shall survive the transfer of such shares by the Holder.
 

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(b) As a condition to including Registrable Securities in any registration
statement filed pursuant to this Agreement, each Holder agrees to be bound by
the terms of this Section 9 and to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, its directors and officers, and each other
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director or officer or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) that arises out of or is based upon
an untrue statement in or omission from such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
by the Holder through an instrument duly executed by or on behalf of the Holder
specifically stating that it is for use in the preparation thereof, and such
Holder shall reimburse the Company, and each such director, officer, and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating, defending, or settling any such loss, claim,
damage, liability, action, or proceeding; provided, however, that such indemnity
agreement found in this Section 9 shall in no event exceed the net proceeds from
the Offering received by such Holder. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer by any Holder of such shares.
 
(c) Promptly after receipt by an indemnified party of notice of the commencement
of any action or proceeding involving a claim referred to in this Section
(including any governmental action), such indemnified party shall, if a claim in
respect thereof is to be made against an indemnifying party, give written notice
to the indemnifying party of the commencement of such action; provided that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Section, except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel to such indemnified party a
conflict of interest between such indemnified and indemnifying parties may exist
or the indemnified party may have defenses not available to the indemnifying
party in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof, unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defenses thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of investigation. Neither an
indemnified nor an indemnifying party shall be liable for any settlement of any
action or proceeding effected without its consent. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement, which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or litigation.
Notwithstanding anything to the contrary set forth herein, and without limiting
any of the rights set forth above, in any event any party shall have the right
to retain, at its own expense, counsel with respect to the defense of a claim.
 

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(d) If an indemnifying party does or is not permitted to assume the defense of
an action pursuant to Sections 9(c) or in the case of the expense reimbursement
obligation set forth in Sections 9(a) and (b), the indemnification required by
Sections 9(a) and 9(b) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills received or
expenses, losses, damages, or liabilities are incurred.
 
(e) If the indemnification provided for in Section 9(a) or 9(b) is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall (i) contribute to the amount paid or payable by such indemnified party as
a result of such loss, liability, claim, damage or expense as is appropriate to
reflect the proportionate relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying party or the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate relative
fault of the indemnifying party and the indemnified party, but also the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent misrepresentation.
 
(f) Other Indemnification. Indemnification similar to that specified in this
Section (with appropriate modifications) shall be given by the Company and each
Holder of Registrable Securities with respect to any required registration or
other qualification of securities under any federal or state law or regulation
or governmental authority other than the Securities Act.
 

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10. Rule 144. For a period of at least 24 months following the Effective Date,
the Company will use its commercially reasonable best efforts to timely file all
reports required to be filed by the Company after the date hereof under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder, and if the Company is not required to file reports
pursuant to such sections, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell shares of Common Stock under Rule 144.
 
11. Independent Nature of Each Purchaser’s Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and each Purchaser shall not be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. Nothing contained herein and no action taken by
any Purchaser pursuant hereto, shall be deemed to constitute such 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 or as
a group with respect to such obligations or the transactions contemplated by
this Agreement. Each Purchaser shall be entitled to independently 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.
 
12. Miscellaneous.
 
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and the United States of
America, both substantive and remedial, without regard to Delaware conflicts of
law principles. Any judicial proceeding brought against either of the parties to
this Agreement or any dispute arising out of this Agreement or any matter
related hereto shall be brought in the courts of the State of New York, New York
County, or in the United States District Court for the Southern District of New
York and, by its execution and delivery of this Agreement, each party to this
Agreement accepts the jurisdiction of such courts. The foregoing consent to
jurisdiction shall not be deemed to confer rights on any person other than the
parties to this Agreement.
 
(b) Remedies. In the event of a breach by the Company or by a Holder of any of
their respective 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, shall 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 not assert
or shall waive the defense that a remedy at law would be adequate.
 
(c) Successors and Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
Permitted Assigns, executors and administrators of the parties hereto. In the
event the Company merges with, or is otherwise acquired by, a direct or indirect
subsidiary of a publicly traded company, the Company shall condition the merger
or acquisition on the assumption by such parent company of the Company’s
obligations under this Agreement.
 

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(d) 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 of this Agreement, 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.
 
(e) Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
 
(f) Notices, etc. All notices or other communications which are required or
permitted under this Agreement shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, by electronic mail, or by courier or overnight carrier, to the persons
at the addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
 
If to the Company to:

Modigene Inc.
8000 Towers Crescent Drive
Suite 1300
Vienna, VA 22182
Attention: Shai Novik, President
Facsimile: (703) 288-0070
 
with copy to:

Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP
333 West Wacker Drive, Suite 2700
Chicago, IL 60606
Attn: Gretchen Trofa, Esq.
Facsimile: (312) 984-3150

After May 28, 2007:

Barack Ferrazzano Kirschbaum & Nagelberg LLP
200 West Madison Street, Suite 3900
Chicago, IL 60606
Attn: Gretchen Trofa, Esq.
Facsimile: (312) 984-3150

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If to the Purchasers:  

To each Purchaser at the address set forth on Exhibit A

or at such other address as any party shall have furnished to the other parties
in writing.
 
(g) Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any Holder, upon any breach or default of the Company under
this Agreement, shall impair any such right, power or remedy of such Holder nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default thereunder occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any Holder of any
breach or default under this Agreement, or any waiver on the part of any Holder
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
 
(h) Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument. In the
event that any signature is delivered by facsimile transmission, 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 signature page were an original thereof.
 
(i) Severability. In the case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
 
(j) Amendments. The provisions of this Agreement may be amended at any time and
from time to time, and particular provisions of this Agreement may be waived,
with and only with an agreement or consent in writing signed by the Company and
the Majority Holders. The Purchasers acknowledge that by the operation of this
Section, the Majority Holders may have the right and power to diminish or
eliminate all rights of the Purchasers under this Agreement.
 
(k) Limitation on Subsequent Registration Rights. After the date of this
Agreement, the Company shall not, without the prior written consent of the
Majority Holders, enter into any agreement with any holder or prospective holder
of any securities of the Company that would grant such holder registration
rights senior to those granted to the Holders hereunder.
 
[SIGNATURE PAGES FOLLOW]
 

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This Registration Rights Agreement is hereby executed as of the date first above
written.
 

       
COMPANY:
     
MODIGENE, INC.
 
   
   
    By:       Name:  

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Shai Novik   Its: President

 
[SIGNATURE PAGE OF PURCHASER FOLLOWS]
 

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This Registration Rights Agreement is hereby executed as of the date first above
written.
 

       
PURCHASER (Individual)
     

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(Print Name)
         
PURCHASER (Entity)
 
   
   
    By:        

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Name:
     

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(Print Name)
 
Its:
     

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(Print Title)

 

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