Exhibit 10.1


 


POWER-ONE,
INC.


 


REGISTRATION
RIGHTS AGREEMENT


 


Dated as of May 8,
2009


 


 

















 


TABLE
OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1.

  	
  Certain Defined Terms

  	
  1

  
	
  SECTION 1.2.

  	
  Other Capitalized Terms

  	
  1

  
	
  SECTION 1.3.

  	
  Effectiveness of this Agreement

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II REGISTRATION RIGHTS

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1.

  	
  Piggyback Registrations

  	
  1

  
	
  SECTION 2.2.

  	
  Demand Registration

  	
  3

  
	
  SECTION 2.3.

  	
  Exceptions to the Company’s Obligations

  	
  6

  
	
  SECTION 2.4.

  	
  Registration Procedures

  	
  9

  
	
  SECTION 2.5.

  	
  Information Supplied

  	
  13

  
	
  SECTION 2.6.

  	
  Expenses

  	
  13

  
	
  SECTION 2.7.

  	
  Restrictions on Disposition

  	
  13

  
	
  SECTION 2.8.

  	
  Indemnification

  	
  13

  
	
  SECTION 2.9.

  	
  Required Reports

  	
  16

  
	
  SECTION 2.10.

  	
  Selection of Counsel

  	
  16

  
	
  SECTION 2.11.

  	
  Market Standoff Agreement

  	
  16

  
	
  SECTION 2.12.

  	
  No Inconsistent Agreements

  	
  17

  
	
  SECTION 2.13.

  	
  Termination of Registration Rights

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE III MISCELLANEOUS

  	
  18

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1.

  	
  Expenses

  	
  18

  
	
  SECTION 3.2.

  	
  Successors and Assigns; Assignment

  	
  18

  
	
  SECTION 3.3.

  	
  No Third Party Beneficiaries

  	
  18

  
	
  SECTION 3.4.

  	
  Entire Agreement

  	
  18

  
	
  SECTION 3.5.

  	
  Severability

  	
  18

  
	
  SECTION 3.6.

  	
  Amendment and Waiver

  	
  18

  
	
  SECTION 3.7.

  	
  Delays or Omissions

  	
  19

  
	
  SECTION 3.8.

  	
  Notices

  	
  19

  
	
  SECTION 3.9.

  	
  Interpretation

  	
  19

  
	
  SECTION 3.10.

  	
  Governing Law; Jurisdiction; Waiver of Jury Trial

  	
  20

  
	
  SECTION 3.11.

  	
  Specific Performance

  	
  20

  
	
  SECTION 3.12.

  	
  Counterparts

  	
  20

  



 


i

















 


REGISTRATION
RIGHTS AGREEMENT


 


THIS REGISTRATION RIGHTS
AGREEMENT (this “Agreement”) is entered as of May 8, 2009, among
Power-One, Inc. a Delaware corporation (together with any other issuer of
Registrable Securities, the “Company”), Silver Lake Sumeru Fund, L.P., a
Delaware limited partnership (“SLS”), and Silver Lake Technology
Investors Sumeru, L.P. (together with their respective Permitted Transferees,
the “Investor Stockholders”).


 


RECITALS


 


WHEREAS, the Company, SLS
and Silver Lake Technology Investors Sumeru, L.P. have entered into a
Securities Purchase Agreement, dated as of April 23, 2009 (the “Purchase
Agreement”), pursuant to which the Investor Stockholders have agreed to
purchase (i) an aggregate of 23,625 shares (the “Purchased Shares”)
of the Company’s Series A Preferred Stock (as defined below) initially
convertible into 17,500,000 shares of the Company’s Common Stock (as defined
below); (ii) Warrants (as defined below) initially exercisable for
8,700,000 Warrant Shares (as defined below); and (iii) Notes (as defined
below) initially convertible into 26,944,444 shares of the Company’s Common
Stock (as defined below); and


 


WHEREAS, the parties
hereto desire to enter into certain arrangements relating to the Company, the
Purchased Shares, the Warrant Shares, the Notes and the Conversion Shares (as
defined below).


 


NOW, THEREFORE, in
consideration of the foregoing recitals and of the mutual promises hereinafter
set forth, the parties hereto agree as follows:


 


ARTICLE
I



DEFINITIONS


 


SECTION 1.1.        Certain Defined Terms. 
Certain terms used herein shall have the meanings given to them in Exhibit A.


 


SECTION 1.2.        Other Capitalized Terms.  Capitalized
terms used but not defined herein or in Exhibit A shall have the
meanings given to them in the Purchase Agreement.


 


SECTION 1.3.        Effectiveness of this Agreement.  Notwithstanding
any other provision to the contrary in this Agreement, this Agreement shall not
take effect until the Closing, and in the event the Purchase Agreement is
terminated prior to the Closing having occurred, this Agreement shall be void ab initio.


 


ARTICLE
II



REGISTRATION RIGHTS


 


SECTION 2.1.        Piggyback Registrations.  If the Company proposes to register Equity
Securities under the Securities Act (other than a registration on Form S-4
or Form S-8, or any 


 

















 


successor or other forms
promulgated for similar purposes, and other than demand registrations pursuant
to Section 2.2) involving the offering of such Equity Securities at any
time on or after the last day of the Restricted Period (the “Restricted
Period Termination Date”), whether or not for sale for its own account, in
a manner which would permit registration of Registrable Securities the same
class of such Equity Securities for sale to the public under the Securities
Act, it will, at each such time, give prompt written or telephonic notice (a “Piggyback
Offering Notice”) to the Holders (excluding Holders of Hedging Common
Stock) of:  its intention to do so, the
form on which the Company expects to effect such registration (e.g., Form S-1, Form S-3, Form S-3ASR), the
anticipated filing date with the SEC of such registration statement, the
anticipated date that the registration statement will be declared or otherwise
become effective, whether the offering is to be underwritten, in the case of Form S-3
or Form S-3ASR, the anticipated date and time that the offering will be
made.  The registration rights provided
for in this Section 2.1 are in addition to, and not in lieu of,
registrations made upon the demand of any Holder in accordance with Section 2.2.


 


(a)           Form S-1.  If the Company indicates in the Piggyback
Offering Notice that it intends to effect a registration pursuant to Form S-1,
upon the written request of any Holder (which request shall specify the
Registrable Securities intended to be registered by such Holder), made within
ten (10) days after the receipt of any such notice but in no event later
than two (2) Business Days prior to the date the Form S-1 is filed
with the SEC, the Company will, subject to the conditions set forth in Section 2.3
and the provision of the information specified in Section 2.5, use
reasonable best efforts to effect the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register
by the Holders thereof.


 


(b)           Form S-3.  If the Company indicates in the Piggyback
Offering Notice that it intends to effect a registration pursuant to Form S-3,
upon the written request of any Holder (which request shall specify the
Registrable Securities intended to be registered by such Holder), made within
seven (7) days after the receipt of any such notice, notifying the Company
whether any Holders intend to include within the Form S-3 or any
Prospectus included therein Registrable Securities, the Company will, subject
to the conditions set forth in Section 2.3 and the provision of the
information specified in Section 2.5, use 
reasonable best efforts to effect the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register by the Holders thereof.


 


(c)           Form S-3ASR.  If the Company indicates in the Piggyback
Offering Notice that it intends to effect a registration pursuant to Form S-3ASR,
upon the written request of any Holder (which request shall specify the
Registrable Securities intended to be registered by such Holder), made within
seven (7) days after the receipt of any such notice, prior to the date and
time of the offering as specified in the Company’s notice, notifying the
Company whether any Holders intend to include within such Form S-3ASR or
any Prospectus included therein Registrable Securities, the Company will,
subject to the conditions set forth in Section 2.3 and the provision of
the information specified in Section 2.5, use  reasonable best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the Holders thereof.


 


(d)           Right to Withdraw.  If a registration pursuant to this Section 2.1
involves an underwritten offering, any Holder requesting to be included in such
registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not 


 


2

















 


to register all or any
part of such Holder’s Registrable Securities in connection with such
registration.


 


(e)           Conversion into Registrable Securities.  Nothing in this Section 2.1 shall limit
the right of any Holder to request the registration of the Registrable
Securities issuable upon (i) conversion of the Series A Preferred
Stock or Junior Convertible Preferred Stock by such Holder (subject to such
conversion occurring prior to the completion of the sale of the underlying
Registrable Securities prior to such registration), (ii) exercise of the
Warrants by such Holder (subject to such exercise occurring prior to the
completion of the sale of the underlying Registrable Securities prior to such
registration) or (iii) conversion of the Notes by such Holder (subject to
such conversion occurring prior to the completion of the sale of the underlying
Registrable Securities prior to such registration), notwithstanding the fact
that at the time of the request such Holder holds Series A Preferred
Stock, Junior Convertible Preferred Stock, Warrants or Notes, as the case may
be, and not the underlying Common Stock.


 


SECTION 2.2.                Demand
Registration.


 


(a)           General.


 


(i)            Subject to the provisions of this Section 2.2(a),
upon the written request (a “Demand Notice”) of holders holding at least
35% of the aggregate Registrable Securities then held by the Holders
(collectively the “Demand Party”) (assuming conversion of all
outstanding shares of Series A Preferred Stock, Junior Convertible
Preferred Stock and Notes into Conversion Shares and exercise of all
outstanding Warrants into Warrant Shares) requesting that the Company effect
the registration under the Securities Act of all or part of such Demand Party’s
Registrable Securities, which Registrable Securities will be offered for sale
on or after the Restricted Period Termination Date, and specifying the amount
and intended methods of disposition thereof, including pursuant to a shelf
registration statement utilizing Rule 415 of the Securities Act (or its
successor provision) (a “Shelf Registration”), thereupon the Company
will promptly give written notice of such requested registration to each of the
other Holders and thereupon will, as expeditiously as reasonably practicable
(and in any event no later than 45 days after the date of the Demand
Notice), file and use its  commercially
reasonable efforts to cause to be declared effective under the Securities Act a
registration statement to effect the registration under the Securities Act of
the following, provided that, notwithstanding the foregoing: (x) to
the extent a Demand Notice is delivered not less than 45 days prior to the
Restricted Period Termination Date requesting a Shelf Registration, the Company
shall use its  reasonable best efforts to
cause such registration statement to become effective no later than the
Restricted Period Termination Date, and (y) under no circumstances under
this Section 2.2(a) (including the foregoing clause (x)) shall the
Company be required to file any registration statement prior to the date that
is 45 days prior to the Restricted Period Termination Date:


 


(1)           such Registrable Securities which the
Company has been so requested to register by the Demand Party under the Demand
Notice; and


 


(2)           the Registrable Securities of Holders
which the Company has been requested to register by written request to the
Company by the Holders within ten (10) 


 


3

















 


days after the giving of
such written notice by the Company to the Holders (which request shall specify
the amount and intended methods of disposition of such securities).


 


all to the extent
necessary to permit the disposition (in accordance with the intended method
thereof as aforesaid) of the Registrable Securities and such other securities
so to be registered.


 


(ii)           Nothing in this Section 2.2
shall limit the right of any Holder to request the registration of the
Registrable Securities issuable upon (i) conversion of the Series A
Preferred Stock and Junior Convertible Preferred Stock by such Holder (subject
to such conversion occurring prior to the completion of the sale of the
underlying Registrable Securities prior to such registration), (ii) exercise
of the Warrants by such Holder (subject to such exercise occurring prior to the
completion of the sale of the underlying Registrable Securities prior to such
registration) or (iii) conversion of the Notes by such Holder (subject to
such conversion occurring prior to the completion of the sale of the underlying
Registrable Securities prior to such registration), notwithstanding the fact
that at the time of the request such Holder holds Series A Preferred
Stock, Junior Convertible Preferred Stock, Warrants or Notes, as the case may
be, and not the underlying Common Stock.


 


(b)           Shelf Take-Downs.  Any of the Holders whose Registrable
Securities have been registered pursuant to a Shelf Registration may initiate
an offering or sale of Registrable Securities pursuant to such Shelf
Registration (each, a “Shelf Take-Down”) and, except as set forth in
this Section 2.2(b) with respect to Marketed Underwritten Offerings
(as defined below in Section 2.4(q)), such Holder shall not be required to
permit the offer and sale of Registrable Securities by other Holders in
connection with such Shelf Take-Down.  If
the initiating Holders so elect by written request to the Company, a Shelf
Take-Down may be in the form of an underwritten offering (an “Underwritten
Shelf Take-Down”), and the Company shall, if so requested, file and effect
an amendment or supplement of the Shelf Registration for such purpose as soon
as practicable.  Only the Demand Party
shall have the right to initiate an Underwritten Shelf Take-Down that is a Marketed
Underwritten Offering, and any such Underwritten Shelf Take-Down that is a
Marketed Underwritten Offering shall be deemed to be a registration pursuant to
Section 2.2(a), and the Company shall provide notice to the other Holders
of such registration in accordance with the provisions of Section 2.2(a).


 


(c)           Effective Registration Statement.  A registration requested pursuant to this Section 2.2
will not be deemed to have been effected unless: (i) it has been declared
effective by the SEC or has otherwise become effective under the Securities
Act, or (ii) it has been filed with the SEC but abandoned or withdrawn at
the request of the Demand Party prior to effectiveness, other than an
abandonment or withdrawal requested because of: (A) the stock price of the
Company’s Common Stock falling 15% or more since the delivery of a request for
registration pursuant to this Section 2.2 (provided that such
registration shall be deemed to have been effected, unless (x) the Holders
participating in the registration reimburse the Company for Registration
Expenses incurred or payable by the Company up until the receipt of notice of
an abandonment or withdrawal pursuant to this clause (A) and for the
withdrawal of the registration statement, and (y) a Demand Party has not
previously requested abandonment or withdrawal of a registration pursuant to
this clause (A) (it being understood that an abandonment or
withdrawal pursuant to this clause (A) may be made only once)), (B) the
delivery of a postponement notice pursuant to Section 2.3(b)(iv), (C) a
material adverse change in the Company’s and its Subsidiaries’ prospects,
business, operations, properties, 


 


4

















 


assets, liabilities,
financial condition or results of operations, taken as a whole, which became
known to the Holders or the public after the delivery of a request for
registration pursuant to this Section 2.2, or (D) the discovery of
materially adverse, non-public information concerning the Company and its
Subsidiaries, taken as a whole.


 


(d)           Selection of Underwriters.  If a requested registration pursuant to this Section 2.2
involves an underwritten offering, the investment bankers, underwriters and
managers for such registration shall be selected by the Holders of a majority
of the Registrable Securities which the Company has been requested to register;
provided, however, that such selection of investment bankers,
underwriters and managers shall be subject to the reasonable approval by the
Company.


 


(e)           Priority in Demand Registrations;
Right to Abandon or Withdraw.  If a
requested registration pursuant to this Section 2.2 involves an
underwritten offering and the managing underwriter advises the Company in
writing that, in its opinion, the number of Equity Securities (including
Registrable Securities) to be included in such registration as contemplated by
the Holders and the Company would be likely to exceed the largest number of
Equity Securities that can be sold without having an adverse effect on the
success of such offering, including any impact on the selling price or the
number of Equity Securities that can be sold (the “Maximum Offering Size”),
then the Company shall include in such registration (i) first, 100%
of the Registrable Securities requested to be included in such registration by
the Demand Party and other Holders of Registrable Securities who have requested
that their Registrable Securities be included up to the Maximum Offering Size
(such Registrable Securities allocated, if necessary for the offering not to
exceed the Maximum Offering Size, pro rata among the Demand Party and the other
Holders of Registrable Securities so requested to be included in such
registration by each) and (ii) second, to the extent the managing
underwriter believes additional securities can be sold in the offering without
exceeding the Maximum Offering Size, the securities the Company proposes to
sell up to the number of securities that, in the opinion of such managing
underwriter, can be sold without exceeding the Maximum Offering Size.  Notwithstanding the foregoing, if the
managing underwriter of any underwritten offering shall advise the Holders
participating in a registration pursuant to this
Section 2.2 that the Registrable Securities covered
by the registration statement cannot be sold in such offering within a price
range acceptable to the Demand Party or that all of the Registrable Securities
requested to be included in a registration by a Demand Party pursuant to this Section 2.2
cannot be sold in the manner requested, then the Demand Party shall have the
right to notify the Company that it has determined that the registration
statement be abandoned or withdrawn, in which event the Company shall abandon
or withdraw such registration statement; it  being  understood
that in the event the Demand Party exercises its right set forth in this
sentence, the Company shall remain liable for any Registration Expenses
pursuant to Section 2.6 and that the abandonment or withdrawal of the
registration statement shall nevertheless constitute a registration for
purposes of Section 2.3(b)(i) unless the Demand Party elects to pay
(or reimburse the Company for) such Registration Expenses, in which case such
registration statement shall not constitute a registration for purposes of Section 2.3(b)(i).


 


(f)            Minimum Offering Size.  Any underwritten sale pursuant to a Shelf
Registration pursuant to this Section 2.2 must be for a number of
Registrable Securities which, based on the good faith determination of the
Holders, will result in gross proceeds of at least $25 million in the case
of any Marketed Underwritten Offering or $10 million in the case of any
other underwritten offering.


 


5
















 


(g)           Method of Disposition.  Subject to Section 2.7, each Holder of Registrable Securities may,
pursuant to the registration statement covering such Registrable Securities,
from time to time, sell, transfer or otherwise dispose of any or all of such
Holder’s shares of Registrable Securities on any stock exchange, market or
trading facility on which the Registrable Securities are traded or in private
transactions.  Each Holder of Registrable
Securities may use any method, or combination of methods, of disposing of such
Registrable Securities or interests therein by any method, or combination of
methods, permitted pursuant to applicable law, including, without limitation,
short sales entered into after the effective date of the registration statement
covering such Registrable Securities and through the writing or settlement of
options or other hedging transactions, whether through an options exchange or
otherwise.  For the avoidance of doubt,
to the extent permitted by applicable law, each Holder may, in connection with
the sale of Registrable Securities or interests in Registrable Securities,
enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn, to the extent so permitted, engage in short
sales of the Common Stock in the course of hedging the positions they assume,
and each Holder may also sell shares of Common Stock short and deliver these
securities to close out such Holder’s short positions, or loan or pledge the
Common Stock to broker-dealers that in turn may sell these securities.  Each Holder 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 Registrable Securities
offered by the applicable registration statement, which Registrable Securities,
to the extent they may be included on such registration statement and the
required information has been timely provided to the Company in accordance
herewith and is appropriately reflected therein, such broker-dealer or other
financial institution may resell pursuant to the applicable registration
statement.  Each Holder may, to the
extent permitted by applicable law, enter into derivative transactions with
third parties, or sell securities not covered by an applicable registration
statement to third parties in privately negotiated transactions.  To the extent they may be included on such
registration statement and the required information has been timely provided to
the Company in accordance herewith and is appropriately reflected therein, in
connection with those derivatives, such third parties may sell securities
covered by the applicable registration statement, including in short sale transactions.  If the foregoing applies, the third party may
use securities pledged by the Holder or borrowed from the Holder or others to
settle those sales or to close out any related open borrowings of securities, and
may use securities received from the Holders in settlement of those derivatives
to close out any related open borrowings of securities.  In each of the foregoing cases, the third
party in the transactions described in this Section 2.2(g) will be an
underwriter subject to the provisions of Section 2.2(d), and the Holders
seeking to include such transactions  in
the applicable registration statement and the Company will comply with the same
procedures as are applicable to a Shelf Take-Down in preparing the necessary
amendment or supplement to such registration statement.  In addition, for avoidance of doubt, the
Holders of Hedging Common Stock will be subject to the provisions of Section 2.11


 


SECTION 2.3.        Exceptions to the Company’s
Obligations.


 


(a)           Notwithstanding anything in Section 2.1
to the contrary:


 


(i)            if, at any time after giving a
Piggyback Offering Notice, the Company shall determine for any reason not to
proceed with the proposed registration of the securities to be sold by it, the
Company may, at its election, give written notice of such determination to the
Holders and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection 


 


6

















 


with such registration
(but not from its obligation to pay the Registration Expenses in connection
therewith); and


 


(ii)           if a registration pursuant to Section 2.1
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number of Equity Securities (including
Registrable Securities requested to be included in such registration) to be
included in such registration as contemplated by the Company and the Holders
would be likely to exceed the Maximum Offering Size, then the Company shall
include in such registration (a) first, 100% of the securities the
Company proposes to sell, and (b) second, to the extent of the
amount of Registrable Securities requested to be included in such registration
which, in the opinion of such managing underwriter can be sold without
exceeding the Maximum Offering Size, the amount of Registrable Securities which
the Holders have requested to be included in such registration, such amount to
be allocated pro rata among all requesting Holders and all other Persons
entitled to registration rights, on the basis of the relative amount of
Registrable Securities then held by each such Person (provided that any
such amount thereby allocated to any such Person that exceeds such Person’s
request shall be reallocated among the remaining requesting Persons in a like
manner to the extent practicable).


 


(b)           Notwithstanding anything in Section 2.2
to the contrary:


 


(i)            in no event shall the Company be
required to effect more than (x) six (6) registrations pursuant
to Section 2.2(a) or (y) four (4) Marketed
Underwritten Offerings;


 


(ii)           in no event shall the Company be
obligated to prepare and file (x) any such registration statement or (y) any
prospectus supplement thereto relating to a Marketed
Underwritten Offering, in each case with respect to Registrable Securities with
a market value (based on then current trading prices) of less than
$25 million, provided that this Section 2.2(b)(ii) shall
not apply to any request to file a Shelf Registration Statement pursuant to Section 2.2(a) that
includes the registration of all Conversion Shares;


 


(iii)          the Company shall not be obligated to (x) file
a registration statement under Section 2.2(a) within a period of 90
days after the effective date of any other registration statement, (1) for
which the Holders exercised their rights pursuant Section 2.1 to include
Registrable Securities, provided that the Company and the underwriters
did not substantially limit the number of Registrable Securities that such
Holder was permitted to include in such registration statement or (2) which
the Company filed or effected pursuant to Section 2.2(a) or (y) effect
more than one Marketed Underwritten Offering pursuant to Section 2.2 in
any 180-day period;


 


(iv)          if the Company receives a request for
registration pursuant to Section 2.2, at a time when (A) the Company
has commenced, or has a bona fide intention to commence, a public securities
offering transaction, (B) registration of the Registrable Securities
would, in the good faith judgment of the executive officers of the Company
(after consultation with counsel), impede, delay or otherwise interfere with
any pending or
contemplated material acquisition, corporate reorganization or similar material
transaction, or (C) non-public material information not otherwise then
required by Law to be publicly disclosed regarding the Company exists, the
immediate disclosure of which would in the good faith judgment of the Chief
Executive Officer, Chief Financial Officer or General Counsel of the Company be
disadvantageous in any material


 


7

















 


respect
to the Company (clauses (A), (B) and (C), a “Material Pending
Event”), then the Company may postpone the filing (but not the preparation)
of a registration statement requested pursuant to Section 2.2 for a period
not to exceed 60 consecutive calendar days (or, if longer, the period of the
applicable market standoff agreement pursuant to Section 2.11) from the
date of a Demand Notice upon providing the Demand Party with written notice of
such postponement (which notice need not include a statement of the reason for
such postponement); provided that the Company shall at all times in good
faith use reasonable best efforts to cause any registration statement required
by Section 2.2 to be filed as soon as reasonably practicable thereafter; provided,
further, that the Company shall postpone the filing of a registration
statement pursuant to this Section 2.3(b)(iv) for no more than
90 days in the aggregate in any twelve-month period in respect of all
requested registrations; provided, however, that in the event
that the Company exercises its right to redeem the Notes pursuant to Section 3.04
of the Indenture or to require conversion of the Series A Preferred Stock
pursuant to Section 5(c) of the Certificate of Designation of the
Preferred Stock, then the Company may not postpone (or continue any
postponement of) (including any deemed postponement pursuant to Section 2.11(a))
the filing of a registration statement at any time during the period commencing
on the delivery of the notice of redemption or mandatory conversions as
applicable, and ending 120 days thereafter unless and to the extent Section 2.11(b) is
applicable; and provided, further, that the Company shall make
prompt and adequate disclosure of any material information required to be
disclosed from time to time in accordance with Law and Nasdaq rules.  Each Holder shall keep confidential any
communications received by it from the Company regarding the postponement
pursuant to this Section 2.3(b)(iv) (including the fact of the
postponement), except as required by Law. 
In the event that the Company gives the Holders the notice specified in
this Section 2.3(b)(iv), the Demand Party shall have the right, within 15
days after receipt thereof, to withdraw its request under Section 2.2, in
which case such request shall not be counted as a demand for purposes of Section 2.2
or for purposes of the limitations set forth in Section 2.3(b)(i);


 


(v)           if the Company receives a request for
registration pursuant to Section 2.2, at a time when there is a Material
Pending Event, then the Company may suspend sales under a shelf registration
statement, or a registration statement pursuant to which Registrable Securities
are not immediately sold after the effectiveness thereof, for a period not to
exceed 60 days (or, if longer, the period of the applicable market standoff
agreement pursuant to Section 2.11) in any 90-day period upon providing
the Holders with written notice of such suspension (which notice shall include
a statement of the reason for such suspension); provided, that the
Company shall suspend the filing of a registration statement pursuant to this Section 2.3(b)(v) for
no more than 90 days in the aggregate in any twelve-month period and three
(3) times in any twelve-month period respect of all requested
registrations; provided, however, that in the event that the
Company exercises its right to redeem the Notes pursuant to Section 3.04
of the Indenture or to require conversion of the Series A Preferred Stock
pursuant to Section 5(c) of the Certificate of Designation of the
Preferred Stock, then the Company may not postpone (or continue any
postponement of) (including any deemed postponement pursuant to Section 2.11(a))
the filing of a registration statement at any time during the period commencing
on the delivery of the notice of redemption or mandatory conversions as
applicable, and ending 120 days thereafter unless and to the extent Section 2.11(b) is
applicable; and provided  further that the Company shall make
prompt and adequate disclosure of any material information required to be
disclosed from time to time in accordance with Law and Nasdaq rules.  Upon receipt of a notice from the Company in
accordance with the terms of this Section 2.3(b)(v), each Holder agrees
not to sell or offer to sell any Registrable Securities pursuant to such shelf
registration statement until the Company notifies such Holder that the shelf
registration statement 


 


8

















 


may be used (which notice
the Company shall promptly provide following the termination of the event or
circumstance giving rise to such suspension). 
Each Holder shall keep confidential any communications received by it
from the Company regarding the suspension of sales pursuant to this Section 2.3(b)(v) (including
the fact of the suspension), except as required by Law; and


 


(vi)          in no event shall the Company be
obligated to prepare and file in connection with any Shelf Take-Down any
post-effective amendment to a Shelf Registration or any prospectus supplement with respect to such
Shelf Take-Down unless the Holders requesting such filing expect in good faith
to sell Registrable Securities in connection therewith for an aggregate gross
sales price of at least $10 million.


 


(c)           Notwithstanding anything in Section 2.1
or Section 2.2 to the contrary:


 


(i)            At such time as all of the
Registrable Securities (or such securities that would be Registrable Securities
but for the proviso immediately following clause (C) of the definition thereof)
beneficially owned by a Holder (together with those of its Affiliates)
constitute less than 5% of the outstanding Common Stock and can be sold without
restriction under Rule 144 under the Securities Act, the Company shall not
be required to effect any registrations, Shelf Take-Downs or Underwritten Shelf
Take-Downs of any kind for such Holder pursuant to Section 2.1 or Section 2.2
(but the Company shall be required to maintain the effectiveness of any shelf
registration statement that is in effect at such time as required by Section 2.4(b) for
six additional months following such date); and


 


(ii)           if any registration involves an
underwritten offering, all Holders requesting to participate in any
registration in connection with an underwritten offering hereunder must sell
its Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled to approve such arrangements
(with such differences, including any with respect to indemnification and
liability insurance, as may be customary or appropriate in combined primary and
secondary offerings) and completes and executes all reasonable questionnaires,
powers of attorney, underwriting agreements, hold-back agreement letters (also
customarily referred to as lock-up letters) and other documents customarily
required under the terms of such underwriting arrangements; provided, however, that to
the extent such Holder is obligated under the terms of the underwriting
arrangements to (i) make representations and warranties other than
generally as to his, her or its respective (A) execution, delivery and
performance of such underwriting agreement and the agreements contemplated
thereby, (B) individual ownership of the Registrable Securities being sold
pursuant to such underwriting agreement and (C) information provided by
such Holder in writing specifically for inclusion in the Prospectus and (ii) agree
to provide indemnification for any liability arising out of a breach of any
such representations or warranties of such Holder that would exceed the total
proceeds received by such Holder for the sale of such Registrable Securities
pursuant to such underwriting agreement, then such Holder, to the extent he,
she or it determined not to enter into such underwriting agreement, shall not
be obligated to enter into a lock-up agreement contemplated by Section 2.11.


 


SECTION 2.4.        Registration Procedures.  If
and whenever the Company is required to effect a registration of any
Registrable Securities as provided in this Agreement, subject to the
limitations set forth in Section 2.3, the Company will:


 


9

















 


(a)           promptly prepare and file with the
SEC a registration statement with respect to such Registrable Securities and
use  reasonable best efforts to cause a
registration statement with respect to a demand registration pursuant to Section 2.2
to be filed (in the case of a registration pursuant to Form S-3ASR), or
become effective (in the case of any registration other than pursuant to Form S-3ASR)
as promptly as practicable;


 


(b)           prepare and file with the SEC such
amendments and supplements to such registration statement (including Exchange
Act documents incorporated by reference into the registration statement) and
the Prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period not in excess of 90 days (or such
longer period as may be requested by the Holders in the event of a shelf
registration statement) and to comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all securities covered
by such registration statement during such period in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement; provided that before filing a registration
statement or prospectus or any amendments or supplements thereto in accordance
with Section 2.4(a) or this Section 2.4(b) to
the extent that doing so will not materially interfere with the timing of the
offering:  (i) the
Company will furnish to counsel selected
pursuant to Section 2.10 copies of all documents
proposed to be filed, and (ii) such documents will be subject to the
review of such counsel reasonably in advance of any filing to permit a
reasonable opportunity to review and comment in light of the circumstances;


 


(c)           use 
reasonable best efforts to comply with all applicable securities laws in
the United States and register or qualify such Registrable Securities covered
by such registration in such jurisdictions in the United States as each seller
shall reasonably request, and do any and all other acts and things which may be
reasonably necessary to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller, except
that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction where,
but for the requirements of this Section 2.4(c), it would not be obligated
to, subject itself to taxation in any such jurisdiction or to consent to
general service of process in any such jurisdiction;


 


(d)           promptly furnish to each seller of
such Registrable Securities such number of copies of such registration statement
and of each amendment and supplement thereto (in each case including all
exhibits filed therewith, including any documents incorporated by reference),
such number of copies of the Prospectus included in such registration statement
(including each preliminary prospectus and summary prospectus), in conformity
with the requirements of the Securities Act, and such other similar documents
as such seller may reasonably request necessary to facilitate the disposition
of the Registrable Securities by such seller;


 


(e)           notify each seller of any such
Registrable Securities covered by such registration statement promptly if the
Company becomes aware that the Prospectus included in such registration
statement, as then in effect, or the registration statement includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing and, prepare and furnish to such
seller a reasonable number of copies of an amended or supplemental prospectus
as may be necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus shall not include an untrue statement
of a material fact or omit to state a material 


 


10

















 


fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;


 


(f)            otherwise use commercially
reasonable efforts to comply with all applicable rules and regulations of
the SEC, and make available to its security holders, as soon as reasonably
practicable (but not more than 18 months) after the effective date of the
registration statement, an earnings statement which shall satisfy the
provisions of Section 11(a) of the Securities Act;


 


(g)           (i) use  reasonable best efforts to list such
Registrable Securities on the Exchange on which the Common Stock is then listed
(if such Registrable Securities are not already so listed and if such listing
is then permitted under the rules of such Exchange) to the extent
required; and (ii) use  reasonable
best efforts to provide for a transfer agent and registrar for such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;


 


(h)           in connection with an underwritten
offering pursuant to a demand registration pursuant to Section 2.2,
promptly enter into an underwriting agreement in customary form, which may include
indemnification provisions in favor of underwriters and other Persons in
addition to, or in substitution for, the provisions of Section 2.8, and
take such other actions as the managing underwriters reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities;


 


(i)            in connection with an underwritten offering
pursuant to a demand registration pursuant to Section 2.2,
promptly obtain a “cold comfort” letter or letters from the Company’s
independent public accounts in customary form and covering matters of the type
customarily covered by “cold comfort” letters provided to sellers of securities
as the seller or sellers of a majority of shares of such Registrable Securities
shall reasonably request;


 


(j)            promptly make available for
inspection by any seller of such Registrable Securities covered by such
registration statement, by any underwriter participating in any disposition to
be effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by any such seller or any such underwriter,
all pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company’s officers, directors
and employees to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with the “due
diligence” of such seller or such underwriter with respect to such registration
statement, subject to the execution of a mutually acceptable confidentiality
agreement;


 


(k)           promptly notify counsel (selected
pursuant to Section 2.10) for the Holders of Registrable Securities
included in such registration statement and the managing underwriter or agent
and confirm such notice in writing (i) when the registration statement, or
any post-effective amendment to the registration statement, shall have become
effective, or any supplement to the Prospectus and any amendments to the
Prospectus shall have been filed (other than in the case of a registration pursuant
to Form S-3ASR), (ii) of the receipt of any comments from the SEC, (iii) of
any request by the SEC to amend the registration statement or amend or
supplement the Prospectus or for additional information, and (iv) of the
issuance by the SEC of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the use of any


 


11

















 


Prospectus, or of the
suspension of the qualification of the registration statement for offering or
sale in any jurisdiction, or of the institution or threatening of any
proceedings for any of such purposes;


 


(l)            use 
reasonable best efforts to prevent the issuance of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any Prospectus and, if any such order is
issued, to obtain the withdrawal of any such order as soon as practicable;


 


(m)          (i) if requested by the managing
underwriter or agent or any Holder of Registrable Securities covered by the
registration statement, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter or agent
or such Holder reasonably requests to be included therein, including, with
respect to the number of Registrable Securities being sold by such Holder to
such underwriter or agent, the purchase price being paid therefor by such
underwriter or agent; and (ii) make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment;


 


(n)           cooperate with the Holders of
Registrable Securities covered by the registration statement and the managing
underwriter or agent, if any, to facilitate the timely preparation and delivery
of certificates (not bearing any restrictive legends) representing securities
to be sold under the registration statement, and enable such securities to be
in such denominations and registered in such names as the managing underwriter
or agent, if any, or such Holders may reasonably request;


 


(o)           in connection with an underwritten
offering pursuant to a demand registration pursuant to Section 2.2,
promptly obtain for delivery to the Holders of Registrable Securities being
registered and to the underwriter or agent an opinion or opinions from counsel
for the Company in customary form and scope for sellers of securities;


 


(p)           cooperate with each seller of
Registrable Securities and each underwriter or agent participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;


 


(q)           use 
reasonable best efforts to make available certain of the executive
officers of the Company (which in any event shall include the Company’s chief
executive officer) for a five (5) Business Day period to participate and
to cooperate with the Holders of Registrable Securities and any underwriters in
any “road shows” or other selling efforts, in each case in the United States,
that may be reasonably be requested upon reasonable notice thereof by the
Holders in connection with a firm commitment underwritten offering for the
Registrable Securities with a minimum sales price of $25 million with
respect to a registration statement effected pursuant to Section 2.2 (an
underwritten offering contemplated by this Section 2.4(q), a “Marketed
Underwritten Offering”); provided that to the extent such Marketed
Underwritten Offering is for Registrable Securities having a minimum sales
price of not less than $50 million, such five (5) Business Day period
may be extended to eight (8) Business Days, solely in the case of such
Marketed Underwritten Offering, upon reasonable request of the Holders of such
Registrable Securities.


 


12

















 


SECTION 2.5.        Information Supplied.  It
shall be a condition precedent to the obligations of the Company to take any
action to register the Registrable Securities held by any Holder as to which
any registration is being effected that such Holder shall furnish the Company
with such information regarding such Holder that is pertinent to the disclosure
requirements relating to the registration and the distribution of such
securities as the Company may from time to time reasonably request.  Each Holder agrees to promptly furnish to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not misleading.


 


SECTION 2.6.        Expenses.  Except as provided herein, the Company will
pay all Registration Expenses in connection with registrations of Registrable
Securities requested pursuant to Section 2.1 or Section 2.2;
provided, however, that the Company shall not be obligated to pay the
Registration Expenses in more than eight (8) Underwritten Offerings (which
shall in no event include more than four (4) Marketed Underwritten
Offerings).  To the extent the Holders
engage in more than eight (8) Underwritten Offerings, the Holders shall
pay all Registration Expenses with respect to such Underwritten Offerings and
the Company will have no obligation to pay any such Registration Expenses.  Each Holder shall pay all underwriting
discounts and commissions, broker fees and commissions, and transfer taxes, if
any, relating to the sale or disposition of such Holder’s Registrable
Securities pursuant to any registration statement.


 


SECTION 2.7.        Restrictions on Disposition. 
Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.4(e), Section 2.4(k)(iii) or
Section 2.4(k)(iv), such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 2.4(e) or written notice from the Company
that the registration statement is again effective and no amendment or
supplement is needed.  In the event that
the Company shall give any such notice, the period referred to in Section 2.4(b) shall
be extended by the number of days during the period from and including the date
of the giving of such notice pursuant to Section 2.4(e) and to and
including the date when each seller of Registrable Securities covered by such
registration statement shall have receive the copies of the supplemented and
amended Prospectus contemplated by Section 2.4(e).


 


SECTION 2.8.        Indemnification.


 


(a)           Indemnification by the Company.   In the event of any registration of any
securities of the Company under the Securities Act pursuant to Section 2.1
or Section 2.2, to the fullest extent permitted by law, the Company will
indemnify and hold harmless each Holder, each Affiliate of such Holder and
their respective directors and officers, members or general and limited
partners (and the directors, officers, employees, affiliates and each Person
who controls such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) (hereinafter referred to
as a “Controlling Person”) of any of the foregoing), and each
underwriter, if any, and each person who controls within the meaning of Section 15
of the Securities Act any underwriter (collectively, the “Seller Indemnified
Parties”), against all claims, losses, damages and liabilities, joint or
several, actions or proceedings (whether commenced or threatened in writing) in
respect thereof (“Claims”) and expenses arising out of or based on: (i) 
any untrue statement or alleged untrue statement of a material fact contained
in a registration statement (or any amendment


 


13

















 


or supplement thereto),
including all documents incorporated therein by reference, or any omission or
alleged omission therefrom of a material fact, in each case, necessary in order
to make the statements therein not misleading, in light of the circumstances
under which they were made, (ii) any untrue statement or alleged untrue
statement of a material fact contained in a Prospectus (or any amendment or
supplement thereto), including all documents incorporated therein by reference,
or any omission or alleged omission therefrom of a material fact, in each case,
necessary in order to make the statements therein not misleading, in light of
the circumstances under which they were made, or (iii) any untrue
statement or alleged untrue statement of a material fact contained in any
Issuer Free Writing Prospectus prepared by it or authorized by it in writing
for use by such Holder (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or any omission or alleged
omission therefrom of a material fact, in each case, necessary in order to make
the statements therein not misleading, in light of the circumstances under
which they were made, and the Company will reimburse each such Seller
Indemnified Party for any reasonable fees and disbursements of counsel and any
other reasonable out-of-pocket expenses incurred in connection with
investigating and defending or settling any such Claim; provided that
the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability, or action arises out of or is based on any
untrue statement or alleged untrue statement or omission or alleged omission by
such Holder or underwriter but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission is made in such
registration statement, Prospectus, or Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder and stated to be specifically for use
therein; and provided, further that, the indemnity agreement
contained in this Section 2.8(a) shall not apply to amounts paid in
settlement of any such Claim if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld or delayed);
and provided, further, that the Company will not be liable to any
Seller Indemnified Parties pursuant to this Section 2.8(a) to the
extent that any Claims for which such Seller Indemnified Party seeking
indemnification relates to a sale of Registrable Securities in violation of Section 2.3(b)(v).


 


(b)           Indemnification by the Holders.  To the fullest extent permitted by law, each
Holder will, if Registrable Securities held by such Holder are included in the
registration statement or Prospectus, indemnify and hold harmless the Company,
all other Holders or any prospective underwriter, as the case may be, and any
of their respective Affiliates, directors, officers and Controlling Persons
(collectively, the “Company Indemnified Parties”), against all Claims
and expenses arising out of or based on: 
(i) any untrue statement or alleged untrue statement of a material
fact contained in a registration statement (or any amendment or supplement
thereto), including all documents incorporated therein by reference, or any
omission or alleged omission therefrom of a material fact, in each case,
necessary in order to make the statements therein not misleading, in light of
the circumstances under which they were made, (ii)  any untrue statement
or alleged untrue statement of a material fact contained in a Prospectus (or
any amendment or supplement thereto), including all documents incorporated
therein by reference, or any omission or alleged omission therefrom of a
material fact, in each case, necessary in order to make the statements therein
not misleading, in light of the circumstances under which they were made, or (iii) any
untrue statement or alleged untrue statement of a material fact contained in
any Issuer Free Writing Prospectus (or any amendment or supplement thereto),
including all documents incorporated therein by reference, or any omission or
alleged omission therefrom of a material fact, in each case, necessary in order
to make the statements therein not misleading, in light of the circumstances
under which they were made, and the Holder will reimburse each such Company
Indemnified Party for any


 


14

















 


reasonable fees and
disbursements of counsel and any other reasonable expenses incurred in
connection with investigating and defending or settling any such Claim, in each
case to the extent, but only to the extent that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, Prospectus, or Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder and stated to be specifically for use
therein; and provided that the indemnity agreement contained in this Section 2.8(b) shall
not apply to amounts paid in settlement of any such Claim if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld or delayed); and provided, further, that in
the absence of fraud by such Holder, the liability of each selling Holder of
Registrable Securities hereunder shall be limited to the net proceeds received
by such selling Holder from the sale of Registrable Securities covered by such
registration statement.


 


(c)           Notification of Claims.  Promptly after receipt by a Person entitled
to indemnification pursuant to Section 2.8 (an “Indemnified Party”)
hereunder of written notice of the commencement of any action or proceeding
with respect to which a claim for indemnification may be made pursuant to this Section 2.8,
such Indemnified Party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action or proceeding; provided that the failure of
the Indemnified Party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 2.8, except to
the extent that the indemnifying party is prejudiced in any material respect by
such failure to give notice.  In case any
such action or proceeding is brought against an Indemnified Party, unless in
such Indemnified Party’s reasonable judgment, based upon advice of counsel, a
conflict of interest between such indemnified and indemnifying parties may
exist in respect of such action or proceeding (in which case the Indemnified
Party shall have the right to assume or continue its own defense and the
indemnifying party shall be liable for any reasonable expenses therefor (but in
no event will bear the expenses for more than one firm of counsel for all
Indemnified Parties in each jurisdiction who shall, with respect to Seller
Indemnified Parties, be approved by the majority of the participating Holders
in the registration in respect of which such indemnification is sought), the
indemnifying party will be entitled to participate in and to assume the defense
thereof (at its expense), jointly with any other indemnifying party similarly
notified to the extent that it may wish, 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 will not be liable to such Indemnified Party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation and shall have no
liability for any settlement made by the Indemnified Party without the consent
of the indemnifying party, such consent not to be unreasonably withheld.  No indemnifying party will settle any action
or proceeding or consent to the entry of any judgment without the prior written
consent of the Indemnified Party, unless such settlement or judgment (i) includes
as an unconditional term thereof the giving by the claimant or plaintiff of a
release to such Indemnified Party from all liability in respect of such action
or proceeding and (ii) does not involve the imposition of equitable
remedies or the imposition of any obligations on such Indemnified Party and
does not otherwise adversely affect such Indemnified Party, other than as a
result of the imposition of financial obligations for which such Indemnified
Party will be indemnified hereunder.  An
Indemnified Party may not settle any action or proceeding or the entry of any judgment
without the prior written consent of the indemnifying party.


 


15
















 


(d)           Contribution.  (i) If the indemnification provided for
in this Section 2.8 from the indemnifying party is unavailable to an
Indemnified Party hereunder in respect of any Claim or expenses referred to
herein, then the 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 Claim or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and Indemnified Party in
connection with the actions which resulted in such Claim or expenses, 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 to state a material fact, has been 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. 
The amount paid or payable by a party under this Section 2.8(d) as
a result of the Claim and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with any action or proceeding; and (ii) the parties hereto
agree that it would not be just and equitable if contribution pursuant to this Section 2.8(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in Section 2.8(d)(i).  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.


 


(e)           Non-Exclusive Remedy.  The obligations of the parties under this Section 2.8
shall be in addition to any liability which any party may otherwise have to any
other party.


 


SECTION 2.9.        Required
Reports. For so long as the Company is subject to the reporting
requirements of Section 13 or 15 of the Exchange Act, the Company
covenants that it will use  reasonable
best efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act, and it will take such further action as
any Holder may reasonably request, all to the extent required from time to time
to enable such Holder to sell shares of Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144, or (ii) any similar rule or
regulation hereafter adopted by the SEC. 
Upon the request of any Holder pursuant to the immediately preceding
sentence, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.


 


SECTION 2.10.      Selection
of Counsel.  In connection with any registration of Registrable
Securities pursuant to Section 2.1 and Section 2.2, the Holders of a
majority of the Registrable Securities covered by any such registration may
select one counsel to represent all Holders of Registrable Securities covered
by such registration; provided, however, that in the event that
the counsel selected as provided above is also acting as counsel to the Company
in connection with such registration, a majority of the remaining Holders shall
be entitled to select one additional counsel to represent all such remaining
Holders.


 


SECTION 2.11.      Market
Standoff Agreement.


 


(a)           Subject to the proviso in Section 2.3(c)(ii),
in connection with any underwritten public offering, each Holder who holds
Registrable Securities and who was offered or waived the opportunity to include
Registrable Securities in such offering pursuant to Section 2.1 or 


 


16

















 


Section 2.2 will
agree upon the request of the managing underwriter with respect to such
offering not to effect any public sale or distribution, including any sale
pursuant to Rule 144 under the Securities Act, of any Equity Security of
the Company during the 14-day period prior to, and for the 90 days after (plus
any Booster Period), the effective date of the registration statement for such
offering (or such lesser period as the managing underwriters may require or
permit), except for such Equity Securities to be included in such offering; provided
that all of the Company’s executive officers and all of the members of the
Company’s Board (other than the Appointed Directors and Nominated Directors, as
each term is defined in the Purchase Agreement) are restricted in the same
manner and for the same duration; provided, further, that such
agreement by a Holder hereunder in any offering pursuant to Section 2.1 in
which such Holder did not participate shall be treated as a postponement and a
suspension for purposes of Sections 2.3(b)(iv) and 2.3(b)(v),
respectively, if at any time during the 12-month period ending on the date such
restrictions commenced such Holder was already subject to any restrictions due
to execution of an agreement in accordance with this Section 11(a) with
respect to an offering pursuant to Section 2.1 in which such Holder did
not participate; and provided, further, that the obligations set
forth in this Section 2.11 shall not apply to any Holder who was
substantially limited in the number of Registrable Securities that such Holder
could sell in the offering pursuant to Section 2.2(e) or Section 2.3(a)(ii) and
did not otherwise sell Registrable Securities in such offering.  This Section 2.11(a) will not apply
to any Contingent Underwriting.


 


(b)           If the Company exercises its right to
redeem the Notes pursuant to Section 3.04(a) of the Indenture (a “Section 3.04(a) Redemption”)
at a time when no shares of Series A Preferred Stock are outstanding then,
if the Company enters into a Contingent Underwriting, each Holder will agree
upon the request of the managing underwriter with respect to such offering not
to effect any public sale or distribution, including any sale pursuant to Rule 144
under the Securities Act, of any Equity Security of the Company requested by
such underwriter (but in no event more than 5 Business Days prior delivery to
the Holders of a notice of redemption for such Section 3.04(a) Redemption)
and ending on the earlier of 90 days after (plus any Booster Period) the
effective date of the registration statement for such offering (or such lesser
period as the managing underwriter may require or permit); provided that no
such request may only be made (i) if the aggregate principal amount of
Notes to be called in a Section 3.04(a) Redemption is less than $5
million or (ii) to the extent that the limitations on a Holder’s ability
to effect a public sale or distribution described above would commence no
sooner than 120 days of the Company delivering a notice of conversion pursuant
to Section 5(c) of the Certificate of Designation of the Preferred
Stock, and may only  be requested if all
of the Company’s executive officers and members of the Company’s Board (other
than the Appointed Directors and Nominated Directors, as each term is defined
in the Purchase Agreement) are restricted in the same manner and for the same
duration; and, provided, further, that the Company may exercise
its right pursuant to this Section 2.11(b) in connection with only
one Contingent Underwriting.


 


SECTION 2.12.      No
Inconsistent Agreements.  The Company
represents and warrants that it is not a party to a Contract which conflicts
with the exercise of the rights granted to the Holders of Registrable
Securities in this ARTICLE II.


 


SECTION 2.13.      Termination
of Registration Rights.  The rights and obligations of any Holder
under this ARTICLE II shall terminate (other than Section 2.6, Section 2.8
and Section 2.13) at such time as such Holder ceases to hold any
Registrable Securities


 


17

















 


ARTICLE
III



MISCELLANEOUS


 


SECTION 3.1.        Expenses. 
Except as otherwise provided herein (and except as provided in the Purchase
Agreement), all expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses.


 


SECTION 3.2.        Successors
and Assigns; Assignment.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, permitted assigns, heirs, executors and administrators of
the parties hereto.  This Agreement may
not be assigned without the prior written consent of the other parties, except
that this Agreement (i) may be assigned by a Holder so long as the Person
to whom it is being assigned agrees to be bound under this Agreement as a
Holder hereunder and delivers a counterpart signature page to this
Agreement to the Company and (ii) shall be assigned by the Company in the
event of any merger, consolidation or other transaction upon consummation of
which the issuer of the Common Stock is an entity other than the Company (such
entity, the “Survivor”) to such Survivor, and the Company shall not
enter into any such transaction unless and until the Survivor assumes all
rights and obligations of the Company hereunder pursuant to a written agreement
for the benefit of the Holders (it being understood that if the Survivor is the
issuer of the Common Stock and such assumption of the rights and obligations of
the Company hereunder occurs by operation of law, that such Survivor shall not
be required to execute a written agreement for the benefit of the Holders).


 


SECTION 3.3.        No
Third Party Beneficiaries.  Except as specifically provided in Section 2.8
(with respect to which the Indemnified Parties named therein shall be express,
intended third party beneficiaries of such provision), this Agreement is not
intended, and shall not be deemed, to confer any rights or remedies upon any
Person other than the parties hereto or otherwise create any third party
beneficiary hereto.


 


SECTION 3.4.        Entire
Agreement.  This Agreement and the other agreements or documents
referred to herein, constitute the full and entire understanding and agreement
among the parties with respect to the subject matter hereof and supersede any
prior understandings, agreements or representations by or among the parties,
written or oral, that may have related to the subject matter hereof in any way.


 


SECTION 3.5.        Severability.  In 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.


 


SECTION 3.6.        Amendment
and Waiver.  No amendment, waiver or other modification of, or consent
under, any provision of this Agreement shall be effective against the Company,
unless it is approved in writing by the Company, and no amendment, waiver or
other modification of, or consent under, any provision of this Agreement shall
be effective against any Holder, unless it is approved in writing by Holders
holding a majority of the Registrable Securities.  No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof nor of any other agreement or provision herein
contained.


 


18

















 


SECTION 3.7.        Delays
or Omissions.  It is agreed that no
delay or omission to exercise any right, power or remedy accruing to any party,
upon any breach, default or noncompliance by another party under this
Agreement, shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring.  It is further agreed that any waiver, permit,
consent or approval of any kind or character on an Holder’s part of any breach,
default or noncompliance under this Agreement or any waiver on such party’s
part of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such
writing.  All remedies, either
under this Agreement, by law, or otherwise afforded to any party, shall be
cumulative and not alternative.


 


SECTION 3.8.        Notices. 
Except as otherwise provided herein, all notices required or permitted
hereunder shall be in writing and shall be deemed effectively given and
received: (a) upon personal delivery to the party to be notified; (b) when
sent by confirmed facsimile or e-mail if sent during normal business hours of
the recipient, if not, then on the next business day; or (c) one (1) business
day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt.  All notices to a Holder shall be delivered to
the address of such Holder set forth on the signature page of such Holder
hereto (or such other address as such Holder may designate by like notice to
the Company hereunder).  All notices to
the Company shall be delivered to:


 


 


Power-One, Inc.


740
Calle Plano


Camarillo,
California


Attention:  Tina Mcknight, Esq.


Facsimile:  (805) 383-5898


 


with a
copy to (which shall not constitute notice):


 


Gibson,
Dunn & Crutcher LLP


333
South Grand Avenue


Los
Angeles, CA  90071-3197


Attn:  Jennifer Bellah Maguire, Esq.


Facsimile:  (213) 229-6986


 


SECTION 3.9.        Interpretation. 
The words “hereof”, “herein” and “hereunder” and words of like import used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
When reference is made in this Agreement to an Article or a
Section, such reference shall be to an Article or Section of this
Agreement, unless otherwise indicated. 
The table of contents, table of defined terms and headings contained in
this Agreement are for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.  The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any
party.  Whenever the context may require,
any pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural, and vice versa.  Any reference
to any federal, state, local or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated


 


19

















 


thereunder, unless the context requires otherwise, and
shall include all amendments of the same and any successor or replacement
statutes and regulations as of the Closing Date.  All references to agreements shall mean such
agreement as may be amended or otherwise modified from time to time.  Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without
limitation.”


 


SECTION 3.10.      Governing
Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed
in all respects by the Laws of the State of New York. Any disagreement, issue,
dispute, claim, demand or controversy arising out of or relating to this
Agreement (each, a “Dispute”) shall be brought in the United States
District Court for the Southern District of New York in New York, New York or
any New York State court sitting in New York, New York, so long as one of such
courts shall have subject matter jurisdiction over such Dispute.  Each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such Dispute and irrevocably waives, to the fullest extent permitted by Law, any objection that
it may now or hereafter have to the laying of the venue of any such Dispute in
any such court and that any such Dispute which is brought in any such court has
been brought in an inconvenient forum. Process in any such Dispute may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 3.8
shall be deemed effective service of process on such party.


 


(b)           EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.


 


SECTION 3.11.      Specific
Performance.  The parties hereto agree that the obligations imposed on
them in this Agreement are special, unique and of an extraordinary character,
and that, in the event of breach by any party, damages would not be an adequate
remedy and each of the other parties shall be entitled to specific performance
and injunctive and other equitable relief in addition to any other remedy to
which it may be entitled, at law or in equity; and the parties hereto further
agree to waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other equitable relief.


 


SECTION 3.12.      Counterparts. 
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one
instrument.


 


 [Remainder of Page Intentionally Left
Blank.]


 


20

















 


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


 


	
   

  	
  POWER-ONE,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard J. Thompson

  
	
   

  	
   

  	
  Name:

  	
   Richard J. Thompson

  
	
   

  	
   

  	
  Title:

  	
   President and Chief Executive Officer

  



 


[Signature
Page to Registration Rights Agreement]


 

















 


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


 


	
   

  	
  SILVER LAKE SUMERU
  FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   SILVER LAKE TECHNOLOGY  ASSOCIATES SUMERU, L.P., its  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   SLTA SUMERU (GP), L.L.C., its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   SILVER LAKE GROUP, L.L.C., managing member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Kyle T. Ryland

  
	
   

  	
   

  	
  Name:

  	
  Kyle
  T. Ryland

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  



 


[Signature
Page to Registration Rights Agreement]


 

















 


	
   

  	
  SILVER LAKE TECHNOLOGY
  INVESTORS SUMERU, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   SILVER LAKE TECHNOLOGY ASSOCIATES SUMERU,
  L.P., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   SLTA SUMERU (GP), L.L.C., its general
  partner

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
   SILVER LAKE GROUP, L.L.C., managing member

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
    /s/ Kyle T. Ryland

  	 

	
   

  	
   

  	
  Name:

  	
  Kyle
  T. Ryland

  	 

	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  	 




 


[Signature
Page to Registration Rights Agreement]


 

















 


By executing this
Registration Rights Agreement, the undersigned is agreeing to the rights and
obligations of a “Holder” hereunder.


 


	
   

  	
  HOLDER

  
	
   

  	
   

  
	
   

  	
  Name of Holder:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
							



 
















 


EXHIBIT A


 


“Affiliate” means,
with respect to any Person, any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with, such specified Person.


 


 “Booster Period” means such additional
period as may be requested by the Company or an underwriter to accommodate
regulatory restrictions on (i) the publication or other distribution of
research reports and (ii) analyst recommendations and opinions, including
the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4),
or any successor provisions or amendments thereto.


 


“Business Day”
means any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by law to be closed in New York.


 


“Capital Stock”
means any and all shares of capital stock of the Company, including without
limitation, any and all shares of Common Stock, Series A Preferred Stock
and Junior Convertible Preferred Stock.


 


“Certificate of
Designation” means the Certificate of Designation with respect to the Series A
Preferred Stock, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms thereof.


 


“Common Stock”
means the Common Stock, par value $0.001 per share, of the Company and any
securities issued in respect thereof, or in substitution therefor, in
connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.


 


“Contingent
Underwriting” means a standby underwriting arrangement entered into by the
Company in connection with and as to which the sole use of proceeds is to
provide net proceeds potentially equal to at least $5 million in order to
finance the Company’s redemption of Notes pursuant to Section 3.04(a) of
the Indenture.


 


“control” or “controlled
by” have the meaning set forth in Rule 12b-2 of the Exchange Act.


 


“Conversion Shares”
means the Series A Preferred Stock Conversion Shares, the Junior
Convertible Preferred Stock Conversion Shares and the Notes Conversion Shares.


 


“Equity Securities”
means any and all shares of Capital Stock of the Company, securities of the
Company convertible into, or exchangeable or exercisable for, such shares, and
options, warrants or other rights to acquire such shares (including the Notes,
shares of Series A Preferred Stock, shares of Junior Convertible Preferred
Stock, the Conversion Shares, Warrants and the Warrant Shares).


 


“Exchange” means Nasdaq or the New York
Stock Exchange, as the case may be.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.


 


A-1

















 


“FINRA” means the
Financial Industry Regulatory Authority.


 


“Form S-1”
means a registration statement on Form S-1 under the Securities Act, or
any successor form thereto.


 


“Form S-3”
means a registration statement on Form S-3 (other than on Form S-3ASR)
under the Securities Act, or any successor form thereto.


 


“Form S-3ASR”
means an “automatic shelf” registration statement on Form S-3 filed by a
Well-Known Seasoned Issuer.


 


“Form S-4”
means a registration statement on Form S-4 under the Securities Act, or
any successor form thereto.


 


“Form S-8”
means a registration statement on Form S-8 under the Securities Act, or
any successor form thereto.


 


“Hedging Contract”
means a derivative contract of a type described in the incoming letter referred
to in Securities Exchange Commission no-action interpretive letter dated October 9,
2003 issued to Goldman, Sachs & Co. (the “Interpretive Letter”), entered into
between a Holder and a financial intermediary (a “Hedging Contract Counterparty”)
and referencing the Series A Preferred Stock, Junior Convertible Preferred
Stock or the Common Stock.


 


“Holder” means any
Investor Stockholder that beneficially owns any Registrable Securities and any
of their respective assignees pursuant to the terms hereof.


 


“incur” means,
directly or indirectly, to incur, refinance, create, assume, guarantee or
otherwise become liable.


 


“Indenture” means
the Indenture, dated as of May 8, 2009, between the Company and The Bank
of New York Mellon Trust Company, N.A.,
as trustee, as amended and supplemented from time to time in accordance
with its terms.


 


“Issuer Free Writing
Prospectus” shall have the meaning set forth in Rule 433 of the
Securities Act.


 


“Junior Convertible
Preferred Stock” means the shares of junior convertible preferred stock,
par value $.001 per share, of the Company designated Series B Junior
Convertible Preferred Stock and Series C Junior Convertible Preferred
Stock and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization, (other than the Conversion Shares issuable upon
conversion thereof as contemplated by the Junior Convertible Preferred Stock
Certificate of Designation).


 


“Junior Convertible
Preferred Stock Certificate of Designation” means the Certificates of
Designation with respect to the Junior Convertible Preferred Stock, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.


 


A-2

















 


“Nasdaq” means the
NASDAQ Global Market, or any successor thereto.


 


“NASD” means the
National Association of Securities Dealers, Inc.


 


“Notes” means the
Convertible Senior Notes due 2019 of the Company issued pursuant to the
Indenture and any securities issued upon conversion or in respect thereof, or
in substitution therefor, in connection with any stock split, dividend or
combination, or any reclassification, recapitalization, merger, consolidation,
exchange or other similar reorganization (other than the Notes Conversion
Shares issued upon conversion thereof as contemplated by the Indenture).


 


“Notes Conversion
Shares” means the shares of Common Stock that may be issued upon the
conversion of the Notes as provided for in the Indenture.


 


“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, governmental authority or other entity.


 


“Preferred Stock
Conversion Shares” means the shares of Common Stock that may be issued upon
the conversion of the Series A Preferred Stock as provided for in the
Certificate of Designation.


 


“Prospectus” means
the prospectus included in any registration statement, including any
preliminary prospectus, any final prospectus and any such prospectus as amended
or supplemented by any prospectus supplement, including any such prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a registration statement, and by all other
amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all materials incorporated by reference
therein.


 


“Registrable
Securities” means (i) the Notes, the Series A Preferred Stock,
and the Junior Convertible Preferred Stock, (ii) the Conversion Shares
held by any Holder or issuable upon the conversion of Series A Preferred
Stock, Junior Convertible Preferred Stock or Notes held by the Holders, (iii) the
Warrant Shares held by any Holder or issuable upon the exercise of Warrants
held by the Holders, (iv) additional shares of Common Stock held by any
Holder that were acquired pursuant to Section 5.7 of the Purchase
Agreement or upon the conversion, exchange or exercise of any Equity Securities
acquired pursuant to Section 5.7 of the Purchase Agreement, (v) the
Common Stock being sold short (the “Hedging Common Stock”) to hedge the
exposure of a Hedging Contract Counterparty (as defined in “Hedging Contract”
above) to the Hedging Contract to which such Hedging Contract Counterparty is a
party, as contemplated in the Interpretive Letter (as defined in “Hedging
Contract” above) and (vi) any Common Stock or other securities which may
be issued, converted, exchanged or distributed in respect thereof, or in
substitution therefor, in connection with any stock split, dividend or
combination, or any recapitalization, reclassification, merger, consolidation,
exchange or other similar reorganization with respect to the Registrable
Securities described in clauses (i), (ii), (iii) and (iv). As to any
particular Registrable Securities, once issued, such Registrable Securities
shall cease to be Registrable Securities when (A) a registration statement
with respect to the sale by the Holder of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (B) such securities
shall have been distributed to the public pursuant to Rule 144, or 


 


A-3

















 


(C) such securities
shall have ceased to be outstanding,; provided that Securities will
cease to be Registrable Securities at such time as  a Holder and its Affiliates beneficially own
less than 10% of the outstanding Common Stock, neither such Holder nor any of
its Affiliates is or has in the prior 6 months been an Affiliate of the Company
(as reasonably determined in good faith by such Holder; provided that
for this purpose a Holder or its Affiliate will conclusively be deemed an
Affiliate of the Company if it is entitled to nominate or designate a member of
the Company’s Board of Directors) and all of the Registrable Securities
beneficially owned by such Holder (together with those of its Affiliates) can
be sold without restriction under Rule 144 under the Securities Act.  For purposes of this Agreement, any required
calculation of the amount of, or percentage of, Registrable Securities shall be
based on the number of shares of Common Stock which are Registrable Securities,
including shares issuable upon the conversion, exchange or exercise of any
security convertible, exchangeable or exercisable into Common Stock (including
the Series A Preferred Stock, the Junior Convertible Preferred Stock, the
Warrants and the Notes).


 


“Registration Expenses”
means any and all reasonable, documented expenses incident to performance of or
compliance with ARTICLE II, including (i) all SEC and securities exchange,
FINRA or NASD registration and filing fees (including, if applicable, the fees
and expenses of any “qualified independent underwriter,” as such term is
defined in Section 2720 of the bylaws of the NASD, and of its counsel), (ii) all
reasonable, documented fees and expenses of complying with securities or blue
sky laws (including fees and disbursements of counsel for the underwriters in
connection with blue sky qualifications of the Registrable Securities and any
escrow fees), (iii) all printing, messenger and delivery expenses, (iv) all
reasonable, documented fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange, (v) the
fees and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits and/or “cold comfort”
letters required by or incident to such performance and compliance, (vi) the
reasonable, documented fees and disbursements of counsel selected pursuant to Section 2.10
not to exceed $50,000 in connection with any registered offering, (vii) any
fees and disbursements of underwriters customarily paid by the issuers,
including liability insurance if the Company so desires, and (viii) the
reasonable expenses incurred by the Company or any underwriters in connection
with any “road show” undertaken pursuant to Section 2.1 or Section 2.4(q).


 


“Restricted Period”
shall mean the period of time from the Closing Date on the Restricted Period
Termination Date (as defined in the Purchase Agreement).


 


“Rule 144”
means Rule 144 under the Securities Act (or any successor rule).


 


“SEC” means the
U.S. Securities and Exchange Commission or any other federal agency then
administering the Securities Act or the Exchange Act and other federal
securities laws.


 


“Securities Act”
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.


 


“Series A
Preferred Stock” means the shares of preferred stock, par value $.001 per
share, of the Company designated Series A Convertible Preferred
Stock,  and any securities issued in
respect thereof, or in substitution therefor, in connection with any stock
split, dividend or combination, or any reclassification, recapitalization,
merger, consolidation, exchange or other similar 


 


A-4

















 


reorganization, (other
than the Junior Convertible Preferred Stock and Conversion Shares issued upon
conversion thereof as contemplated by the Certificate of Designation).


 


“Transfer” means,
directly or indirectly, to sell, transfer, assign, pledge, encumber,
hypothecate or similarly dispose of, either voluntarily or involuntarily, or to
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation
or similar disposition of, any shares of Equity Securities beneficially owned
by a Person or any interest in any shares of Equity Securities Beneficially
Owned by a Person.  For purposes of
clarity, a conversion of the shares of Series A Preferred Stock, Junior
Convertible Preferred Stock or Notes into Conversion Shares is not a Transfer.


 


“Underwritten Offering”
means any Marketed Underwritten Offering, Underwritten Shelf Take-Down or other
underwritten offering pursuant to Section 2.2.


 


“Warrants” means
the warrants issued by the Company pursuant to the Purchase Agreement and any
securities issued in respect thereof, or in substitution therefor, in
connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other similar
reorganization (other than the Warrant Shares upon exercise thereof).


 


“Warrant Shares”
means the shares of Common Stock that may be issued upon the exercise of the
Warrants.


 


“Well-Known Seasoned
Issuer” has the meaning set forth in Rule 405 under the Securities
Act.


 


A-5