Document:

exv4w2

Exhibit 4.2

Investor Rights Agreement

This Investor Rights Agreement (this “Agreement”) is made among (i) RUTGERS, THE STATE UNIVERSITY
OF NEW JERSEY (“RUTGERS”), (ii) XStream Systems, Inc. (“XStream Systems”), a Delaware corporation,
with its principal place of business at 3873 39th Square, Vero Beach, Florida 32960 and
(iii) Brian Mayo, Dr. William Mayo, Dr. William Mayo, as trustee of the Irrevocable Trust f/b/o
Zachary Mayo and Walter Helfrecht (collectively, the “Founding Shareholders”).

Recitals:

     A. Pursuant to the terms of that certain License Agreement between Rutgers and XStream Systems
dated as of Dec. 13, 2004, Rutgers was issued 73,500 shares (5% of 1,470,000 currently outstanding
shares) of XStream Systems’ Common Stock, par value $0.0001 per share (the “Common Stock”). All
shares of the Common Stock issued to Rutgers pursuant to such License Agreement are referred to in
this Agreement as the “Shares.”

     B. Rutgers, XStream Systems and the Founding Shareholders wish to promote their mutual
interests and the interests of XStream Systems by restricting the transfer of the Shares and by
imposing certain rights and obligations with respect to the Shares and the shares held by the
Founding Shareholders.

     NOW, THEREFORE, in consideration of the promises, agreements and covenants set forth in this
Agreement, and for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties to this Agreement, intending to be legally bound, hereby mutually
covenant, contract and agree as follows:

1. Covenants of XStream Systems and the Founding Shareholders.

     1.1 Information Rights. For so long as Rutgers owns any of the Shares, XStream
Systems shall provide Rutgers quarterly and annual financial reports (within forty-five (45) days
after the end of each quarter (except for the last quarter), in the case of the quarterly reports,
and within forty-five (45) days after the end of each year, in the case of the annual reports) and
any other materials provided to potential and/or current investors or shareholders of XStream
Systems.

     1.2 Rutgers Shall Have Rights Equivalent to the Founding Shareholders. For so long as
Rutgers owns any of the Shares, Rutgers’ rights with respect to Shares shall be at least as
favorable as the rights of the Founding Shareholders with respect to the shares of Common Stock of
XStream Systems held by the Founding Shareholders as of the date of this Agreement, or that of any
more senior security of XStream Systems that the Founding Shareholders may own during the term of
this Agreement; provided, however, the foregoing shall not apply to any senior security acquired by
a Founding Shareholder upon the conversion of a debt instrument for monies loaned to XStream
Systems or purchased or acquired by a Founding Shareholder from XStream Systems in connection with
a financing of XStream Systems provided that XStream Systems complied with the participation rights
of Rutgers set forth in Section 1.3 hereof.

     1.3 Participation Rights. Subject to the terms and conditions specified in this
Section 1.3, and applicable securities laws, in the event XStream Systems proposes to offer or sell
any New Securities to the Founding Shareholders or any immediate family members of a

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Founding Shareholder, XStream Systems shall offer a portion of such New Securities to Rutgers in
accordance with the following provisions of this Section 1.3. For purposes of this Agreement, the
term “New Securities” shall mean equity securities of XStream Systems, whether now authorized or
not, or rights, options, or warrants to purchase said equity securities, or securities of any type
whatsoever that are, or may become, convertible into or exchangeable into or exercisable for said
equity securities.

          (a) XStream Systems shall deliver a written notice, in accordance with the provisions of
Section 8.10 hereof, (the “Offer Notice”) to Rutgers stating (i) its bona fide intention to offer
such New Securities, (ii) the number or amount of such New Securities to be offered, and (iii) the
price and terms, if any, upon which it proposes to offer such New Securities.

          (b) By written notification received by XStream Systems, within twenty (20) calendar days
after mailing of the Offer Notice, Rutgers may elect to purchase or obtain, at the price and on the
terms specified in the Offer Notice, up to that portion of such New Securities which equals the
proportion that the number of shares of Common Stock issued and held by Rutgers (including any
shares of Common Stock issuable to Rutgers upon conversion of any securities convertible into, or
otherwise exercisable or exchangeable for, shares of Common Stock) bears to the total number of
shares of Common Stock of XStream Systems then outstanding (assuming full conversion and exercise
of all convertible or exercisable securities) (the portion of the New Securities which Rutgers has
the right to purchase is hereinafter referred to as its “Proportionate Share”).

          (c) If Rutgers does not elect to purchase its full Proportionate Share of such New Securities
referred to in the Offer Notice, XStream Systems may, during the one hundred twenty (120) day
period following the expiration of the period provided in Section 1.3(b) hereof, offer the
remaining unsubscribed portion of Rutgers’ Proportionate Share of such New Securities
(collectively, the “Refused Securities”) to any Founding Shareholder at a price not less than, and
upon terms no more favorable to the Founding Shareholders than, those specified in the Offer
Notice. If XStream Systems does not enter into an agreement for the sale of the New Securities
(including any Refused Securities) within such period, or if such agreement is not consummated
within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to
be revived and such New Securities shall not be offered to a Founding Shareholder unless reoffered
to Rutgers in accordance with this Section 1.3.

          (d) The right of first offer in this Section 1.3 shall not be applicable to (i) shares of
Common Stock issued or deemed issued to employees or directors of, or consultants to, XStream
Systems or any of its subsidiaries (including, without limitation, Founding Shareholders) pursuant
to any stock option plan approved by the Board of Directors of XStream Systems and outstanding on
the date hereof; (ii) the issuance of securities pursuant to the conversion or exercise of
convertible or exercisable securities outstanding on the date hereof; (iii) securities issued in
connection with any stock split or stock dividend of XStream Systems; (iv) the issuance of
securities in connection with a bona fide business acquisition of or by XStream Systems, whether by
merger, consolidation, sale of assets, sale or exchange of stock or otherwise; or (v) the issuance
of securities to any party other than a Founding Shareholder or any immediate family members of a
Founding Shareholder.

2.
Restrictions on Transfer; Legend.

     2.1 Transfers of Shares.

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          (a) Rutgers shall not Transfer all or any portion of its Shares unless and until (i) Rutgers
shall have complied with Section 2.2 of this Agreement, and (ii) if reasonably requested by XStream
Systems, furnished XStream Systems with an opinion of counsel, reasonably satisfactory to XStream
Systems, that the intended disposition does not violate the Securities Act of 1933, as amended (the
“Securities Act”), or any other federal or state securities law, or the rules and regulations
thereunder, and that the Shares may be transferred in reliance upon an applicable exemption from
the registration requirements of the Securities Act, and any other applicable securities laws.

          (b) The Founding Shareholders shall not Transfer all or any portion of their Shares unless and
until (i) the applicable Founding Shareholder shall have complied with Section 2.2 of this
Agreement, and (ii) if reasonably requested by XStream Systems, furnished XStream Systems with an
opinion of counsel, reasonably satisfactory to XStream Systems, that the intended disposition does
not violate the Securities Act, or any other federal or state securities law, or the rules and
regulations thereunder, and that the Shares may be transferred in reliance upon an applicable
exemption from the registration requirements of the Securities Act, and any other applicable
securities laws.

     2.2 Agreement Binding on Transferees. Each and every transferee or assignee of the
Shares shall be bound by and subject to all the terms and conditions of this Agreement. XStream
Systems shall require, as a condition precedent to the transfer, sale, gift, exchange, assignment,
pledge or other disposition (a “Transfer”) of any Shares, that the transferee agrees in writing to
be bound by, and subject to, the terms and conditions of this Agreement and to ensure that its
transferees of the Shares shall be likewise bound.

     2.3 Permitted Transfers. Notwithstanding anything in this Agreement to the contrary,
the following transfers shall not be prohibited by this Agreement and shall not otherwise be
subject to the terms of this Agreement, including without limitation Section 4.1: (i) a Founding
Shareholder’s Transfer to the Founding Shareholder’s spouse, children (including stepchildren and
adopted children), grandchildren, grandparents, parents or siblings or trust for the benefit of a
Founding Shareholder or such family members, and (ii) Rutgers’ Transfer of any or all of its Shares
to an Affiliate; provided, in each case, that the transferee will become subject to the terms of
this Agreement to the same extent as if he or she were the original party hereunder for purposes of
this Agreement.

     For purposes of the this Section 2.3, an “Affiliate” means with respect to a person or entity
a person or entity controlling, controlled by or under common control with, such person or entity.

     2.4 Legend. There will be imprinted or otherwise placed on certificates representing
the Shares the following restrictive legend (the “Legend”):

THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE IS RESTRICTED BY THAT CERTAIN INVESTOR RIGHTS AGREEMENT BY AND
AMONG XSTREAM SYSTEMS, INC., RUTGERS, THE STATE UNIVERSITY OF NEW JERSEY AND
CERTAIN OF ITS STOCKHOLDERS DATED AS OF DEC. 13, 2004, AS THE SAME MAY BE
AMENDED, A COPY OF WHICH AGREEMENT IS ON FILE AT XSTREAM SYSTEMS, INC.’S
PRINCIPAL OFFICE AND WILL BE PROVIDED TO A STOCKHOLDER UPON REQUEST AND WITHOUT

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CHARGE. ANY PERSON WHO WISHES TO BECOME THE OWNER OF THIS CERTIFICATE OR OF THE
SHARES WHICH IT REPRESENTS, OR TO OBTAIN ANY INTEREST IN SUCH CERTIFICATE OF
SHARES, SHALL AGREE TO BECOME BOUND BY THE PROVISIONS OF SUCH AGREEMENT.

     Rutgers and each of the Founding Shareholders agree that, during the term of this Agreement,
they will not remove, and will not permit to be removed (upon registration of transfer, reissuance
or otherwise), the Legend from any such certificate, unless such shares are freely tradable
without restriction under applicable securities laws.

3. Drag Along Rights.

     3.1 Sale of XStream Systems. If a party that is not an Affiliate (as defined below)
of XStream Systems (the “Offeror”) proposes to purchase all of the capital stock or substantially
all of the assets of XStream Systems (the “Offer”) in a single transaction or series of related
transactions and the Board of Directors and the Stockholders of XStream Systems holding a majority
of the outstanding capital stock (and otherwise in accordance with the Certificate of Incorporation
and Delaware General Corporation Law) (the “Approving Stockholders) agree to accept the Offer (a
“Sale of XStream Systems”), then Rutgers, upon receipt of a written notice from XStream Systems
that (a) certifies that the Board and the Approving Stockholders have agreed to the Sale and have
agreed to compel participation in such sale by Rutgers pursuant to this Section 3, and (b) setting
forth the terms of the Offer, which per share price shall be the same for Shares held by Rutgers as
for the Founding Stockholders and other Stockholders on an as-converted basis and in connection
with such Sale of XStream Systems the Founding Shareholders shall not receive any special payments,
bonuses or additional consideration from the purchaser of XStream Systems (outside of (i) the
consideration due and owing to the Founding Shareholders with respect to the Founding
Shareholder’s shares of XStream Systems, or (ii) market-rate, employment or consulting based
compensation due and payable to a Founding Shareholder for employment or consulting services
rendered by such Founding Shareholder to the third party purchaser of XStream Systems following the
consummation of such Sale of XStream Systems), including any incentive payments or other
consideration in order to secure their distributions to management or owners prior to closing,
shall consent to and raise no objections to the Offer and agrees and shall become obligated to (i)
vote all of its Shares in favor of, and use commercially reasonable efforts to
effect, the sale of substantially all of the assets of XStream Systems to the Offeror, or (ii)
sell all of its Shares to the Offeror, in both cases on the terms and conditions contained in the
Offer.

     “Affiliate” means any person directly or indirectly controlling, controlled by or under
direct or indirect common control with XStream Systems and shall also include any person who is a
director or beneficial owner of at least twenty percent (20%) of XStream Systems’ then outstanding
equity securities and any such person’s Family Members.

     3.2 Assurances. Rutgers will take all action reasonably requested by XStream
Systems in connection with the consummation of a Sale of XStream Systems, including, without
limitation, the waiver of all appraisal rights available to any such Investor under applicable law
(to the extent permitted by applicable law). The costs and expenses of XStream Systems in
connection with a Sale of XStream Systems shall be borne by XStream Systems or the third party
purchaser of XStream Systems. In the event the Sale of XStream Systems is structured as a stock
sale, each shareholder of XStream Systems (including Rutgers and the Founding

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Shareholders) shall be responsible for such shareholder’s own legal fees and expenses incurred in
connection with such Sale of XStream Systems.

     3.3 Liability. In connection with Sale of XStream Systems, Rutgers shall only be
required to provide representations, warranties or indemnities concerning its own valid ownership
of its Shares and its authority, power and right to enter into and consummate the transaction.
Furthermore, Rutgers’ liability for any misrepresentation, breach of warranty or indemnity
obligation of Rutgers (as limited pursuant to the preceding sentence) shall not exceed the total
purchase price received by Rutgers for its Shares.

4. Tag Along Rights.

     4.1 Sale of XStream Systems. If a Founding Shareholder proposes to sell (the
“Disposing Stockholder”) a number of shares that is more than twenty-five percent (25%) of the
outstanding shares owned by such Founding Shareholder as of the date of this Agreement (the shares
of XStream System that the Disposing Stockholder desires to sell are referred to herein as the
“Offered Securities”) to one or more third parties (a “Third Party”), then Rutgers shall have the
right (a “Tag Along Right”) to include its Proportionate Share (as defined below) of the Offered
Securities in such sale to such Third Party for the same consideration per share and otherwise on
the same terms as the Disposing Stockholder, and the number of Offered Securities to be sold by
the Disposing Stockholder to such Third Party shall be reduced by the number of shares Rutgers
elects to include pursuant to its Tag Along Right. Rutgers shall have the option to sell less than
its Proportionate Share of the Offered Securities it is permitted to sell pursuant to this Section
4.1. For purposes of this Agreement, the term “Proportionate Share” shall mean, with respect to
Rutgers, (x) the total number of shares of Common Stock then owned by Rutgers multiplied by (y) a
fraction, the numerator of which shall be the total number of Offered Securities and the
denominator of which shall be the sum of all shares of Common Stock owned by Rutgers and the
Disposing Stockholder. For the avoidance of doubt, if a Founding Shareholder owns 100 shares of
XStream Systems as of the date of this Agreement, then the tag-along rights in this Section 4.1
shall apply to any contemplated sale by such Founding Shareholder of more than 25 shares of
XStream Systems.

     If circumstances occur which give rise to the Tag Along Right, then the Disposing Stockholder
shall give written notice to Rutgers, providing the particulars of the proposed sale to the Third
Party and advising Rutgers of its Tag Along Rights. Rutgers may exercise its Tag Along Right by
written notice to XStream Systems and the Disposing Stockholder within fifteen (15) days of
delivery of the Disposing Stockholder’s notice, stating the number of Shares that the Investor
wishes to sell, up to the maximum permitted under this Section 4. If Rutgers delivers written
notice indicating that it wishes to sell, Rutgers shall be obligated to sell that number of Shares
specified in its written acceptance notice upon the same terms and conditions as the Disposing
Stockholder is selling to the Third Party.

          Example of Section 4.1. For illustrative purposes only, assume (i) the Disposing
Stockholder owns 500,000 shares of Common Stock and desires to sell 250,000 shares of Common Stock
to a Third Party, (ii) Rutgers owns 50,000 shares of Common Stock and (iii) no other stockholders
have Tag Along Rights.

Rutgers shall then be entitled to sell 22,727 shares of the Common Stock pursuant to
their Tag Along Right, determined as follows:

50,000 x 250,000/550,000 = 22,727

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The Disposing Stockholder shall be entitled to sell 227,273 of its shares of Common
Stock, determined as follows:

250,000
– 22,727 = 227,273

     Closing. Upon delivery of notice to XStream Systems and the Disposing Stockholder,
Rutgers shall tender the specified number of Shares, if any, at the same price applicable to the
Disposing Stockholder in the transaction. In each case, tender shall be made upon the same terms
and conditions applicable to the Disposing Stockholder in the transaction or, in the discretion of
the acquirer, upon payment of the purchase price in immediately available funds.

5. Failure to Deliver Stock.

     If Rutgers has become obligated to sell its Shares under this Agreement and fails to deliver
such Shares in accordance with this Agreement, the transferee may, in addition to all other
remedies he or she may have, send to Rutgers the purchase price for such Shares provided for under
this Agreement. Thereupon, XStream Systems, upon written notice to Rutgers, shall cancel on its
books the certificate(s) representing the Shares to be sold, and thereupon all of that Rutgers’
rights in and to such Shares shall terminate. The effecting of such sale in such manner shall not
relieve Rutgers of any of its obligations under this Agreement, including any obligation to
execute and deliver any documents that the transferee would otherwise have been entitled to
receive.

6. Right of First Refusal.

     6.1 Notice of Transfer. If Rutgers proposes to Transfer any Shares, then Rutgers
shall promptly give written notice (the “Notice”) simultaneously to XStream Systems at least
fifteen (15) days prior to the closing of such Transfer. The Notice shall describe in reasonable
detail the proposed Transfer, including, without limitation, the number of Shares to be
transferred (the “Offered Shares”), the nature of such Transfer, the consideration to be paid, and
the name and address of each prospective purchaser or transferee.

     6.2 XStream Systems’ Right of First Refusal. For a period of thirty (30) days
following receipt of any Notice described in Section 6.1, XStream Systems shall have the right to
purchase all or a portion of the Offered Shares on the same terms and conditions as set forth in
the Notice. XStream Systems’ purchase right shall be exercised by written notice signed by an
officer of XStream Systems (the “XStream Notice”) and delivered to Rutgers. XStream Systems shall
effect the purchase of such Offered Shares, including payment of the purchase price, not more than
five (5) business days after delivery of XStream Systems’ Notice, and at such time Rutgers shall
deliver to XStream Systems the certificate(s) representing the Offered Shares to be purchased by
XStream Systems, each certificate to be properly endorsed for transfer. The Offered Shares so
purchased shall thereupon be cancelled and cease to be issued and outstanding Shares of XStream
Systems.

7.
Termination, Waiver, Amendment.

     7.1 Termination. The term of this Agreement shall continue in full force and effect
from the date of this Agreement through the earliest of the following dates, on which date the term
of this Agreement shall terminate:

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          (a) the date of the closing of a fully underwritten, firm commitment public offering pursuant
to an effective registration statement under the Securities Act, covering the offer and sale of
Common Stock resulting in net proceeds to XStream Systems of at least $10,000,000;

          (b) the date of the closing of a Sale of XStream Systems, provided that the consideration to
be paid to Rutgers in any such transaction shall consist solely of cash or marketable securities;
or

          (c) the date as of which the parties to this Agreement terminate the term of this Agreement by
written consent of (i) the holders of at least fifty percent (50%) of the shares of common stock of
XStream Systems held by the Founding Shareholders as of the date of this Agreement and (ii)
Rutgers.

     7.2 Waiver. The provisions of this Agreement may be waived only by an instrument in
writing signed by (a) the holders of at least fifty percent (50%) of the shares of common stock of
XStream Systems held by the Founding Shareholders as of the date of this Agreement and (b) Rutgers.
No waivers of any breach of this Agreement extended by any party to this Agreement to any other
party shall be construed as a waiver of any rights or remedies of any other party to this Agreement
or with respect to any subsequent breach.

     7.3 Amendment. This Agreement may be amended or modified only by an instrument
in writing signed by (a) the holders of at least fifty percent (50%) of the shares of common stock
of XStream Systems held by the Founding Shareholders as of the date of this Agreement and (b)
Rutgers.

8. Piggy-back Registration Rights.

     8.1 If XStream Systems proposes to register its Common Stock under the Securities Act
(excluding (x) an initial public offering of the Common Stock resulting in net proceeds to XStream
Systems of at least $10,000,000, (y) a registration on Form S-8 or S-4 or any successor or similar
forms which includes substantially the same information as would be required to be included in a
registration statement covering the sale of the Common Stock, or (z) a registration relating to
Common Stock issuable upon exercise of employee stock options or in connection with any employee
benefit or similar plan of XStream Systems), whether or not for sale for its own account, XStream
Systems will each such time, subject to the provisions of this Section 8, give prompt written
notice to Rutgers at least twenty (20) days prior to the anticipated filing date of the
registration statement relating to such registration, which notice shall set forth Rutgers’ rights
under this Section 8 and shall offer Rutgers the opportunity to include in such registration
statement the number of shares of Common Stock held by Rutgers (the “Registrable Securities”) as
Rutgers may request (a “Piggyback Registration”). Upon the written request of Rutgers made within
fifteen (15) days after the receipt of notice from XStream Systems (which request shall specify the
number of Registrable Securities intended to be disposed of by Rutgers), XStream Systems will use
its best efforts to effect the registration under the Securities Act of all Registrable Securities
that XStream Systems has been so requested to register by Rutgers, to the extent requisite to
permit the disposition of the Registrable Securities. If, at any time, after giving written notice
of its intention to register Common Stock pursuant to this paragraph and prior to the effective
date of the registration statement filed in connection with such registration, XStream Systems
shall determine for any reason not to pursue such registration, XStream Systems shall give written
notice to Rutgers and, thereupon, shall be

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relieved of its obligation to register any Registrable Securities in connection with such
registration.

     8.2 If a Piggyback Registration involves an underwritten public offering of the Common Stock,
the number of shares of Registrable Securities requested to be included in such an underwriting by
Rutgers may be reduced (pro rata among Rutgers, the executive officers of XStream Systems,
the Founding Shareholders, and any other requesting securityholders who request
registration pursuant to piggy-back registration rights or other similar rights, based upon the
total number of shares so requested to be registered by such requesting holders) if and to the
extent that the managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by XStream Systems or the holders of securities
exercising demand registration rights.

     8.3 It shall be a condition precedent to the obligations of XStream Systems to take any action
pursuant to this Section 8 with respect to the Registrable Securities of Rutgers that Rutgers shall
furnish to XStream Systems such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as shall be required to effect the
registration of Rutgers’ Registrable Securities.

     8.4 In connection with any offering involving an underwriting of shares of Common Stock,
XStream Systems shall not be required to include any of Rutgers’ Registrable Securities in such
underwriting unless Rutgers accepts and becomes a party to the terms of the underwriting as agreed
upon between XStream Systems and the underwriters selected by XStream Systems (or such other
parties as provided herein).

     8.5 In the event any Registrable Securities are included in a registration statement under
this Section 8:

          (a) To the extent permitted by law, XStream Systems will indemnify and hold harmless Rutgers,
any underwriter (as defined in the Securities Act) in a registration pursuant to this Section 8 and
each person, if any, who controls Rutgers or the underwriter within the meaning of the Securities
Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) against any losses,
claims, damages, or liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a “Violation”): (i) any untrue
statement of a material fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) the
omission to state therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading; or (iii) any violation by XStream Systems of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law; and XStream Systems will pay to
Rutgers, the underwriter or controlling person, as incurred, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained herein shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of XStream Systems (which consent shall not be
unreasonably withheld), nor shall XStream Systems be liable to Rutgers, the underwriter or
controlling person for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation

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which occurs in reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by Rutgers, the underwriter or controlling person.

          (b) To the extent permitted by law, Rutgers will indemnify and hold harmless XStream Systems,
each of its directors, each of its officers who has signed the registration statement, each person,
if any, who controls XStream Systems within the meaning of the Securities Act, any underwriter for
XStream Systems in a registration pursuant to this Section 8, any other person selling securities
in such registration statement and any controlling person of any such underwriter or person,
against any losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with written information
furnished by Rutgers for use in connection with such registration; and Rutgers will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified
pursuant to this Section 8.5, in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement contained in this
Section 8.5 shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the written consent of Rutgers, which
written consent shall not be unreasonably withheld or delayed provided, further, however, in no
event shall the liability of Rutgers be greater in amount than the dollar amount of the proceeds
(net of all expense paid by Rutgers in connection with any claim relating to this Section 8.5(b)
and the amount of any damages Rutgers has otherwise been required to pay by reason of such untrue
statement or omission) received by Rutgers upon the sale of the Registrable Securities included in
the Registration Statement giving rise to such indemnification obligation.

          (c) Promptly after receipt by an indemnified party under this Section 8.5 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if
a claim in respect thereof is to be made against any indemnifying party under this Section 8.5,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses
to be paid by the indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such counsel in such
proceeding if counsel to such indemnified party is reasonably of such opinion. The failure to
deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section 8.5(c), but the
omission so to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this Section 8.5(c).

          (d) If the indemnification provided for in this Section 8.5 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying
such indemnified party hereunder, shall contribute to the amount paid or payable

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by such indemnified party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements or omissions that
resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable
considerations. Notwithstanding the foregoing or anything contained herein to the contrary, in no
event shall the contribution obligation of Rutgers be greater in amount than the dollar amount of
the proceeds (net of all expenses paid by Rutgers in connection with any claim relating to this
Section 8.5(d) and the amount of any damages Rutgers has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission) received by it upon
the sale of the Registrable Securities giving rise to such contribution obligation.

          (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in any underwriting agreement entered into in connection with any
underwritten public offering as provided above are in conflict with the foregoing provisions, the
provisions in the applicable underwriting agreement shall control.

          (f) The obligations of XStream Systems and Rutgers under this Section 8.5 shall survive the
completion of any offering of Registrable Securities in a registration statement under this Section
8, and otherwise.

          (g) In connection with an underwritten public offering of the Common Stock resulting in net
proceeds to XStream Systems of at least $10,000,000, and upon request of XStream Systems or the
underwriters managing such offering of XStream Systems’ securities, Rutgers agrees not to sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any
securities (other than those included in the registration or those acquired in open-market
acquisitions following XStream Systems’ initial public offering) without the prior written consent
of XStream Systems or such underwriters, as the case may be, for such period of time prior to and
after the effective date of such registration as may be requested by XStream Systems or such
managing underwriters and to execute an agreement reflecting the foregoing as may be requested by
the underwriters at the time of such public offering.

          (h) The obligations described in this Section 8.5(h) shall not apply to a registration
relating solely to employee benefit plans, or to a registration relating solely to a transaction
pursuant to Rule 145 under the Securities Act.

          (i) In order to enforce the foregoing covenants, XStream Systems may impose stop-transfer
instructions with respect to the securities of Rutgers.

     8.6 With respect to the registration, all fees, costs and expenses of and incidental to such
registration and public offering (as specified below) in connection therewith shall be borne by
XStream Systems, provided, however, that Rutgers shall bear its pro rata share of the underwriting
discount and commission and transfer taxes. The fees, costs and expenses of registration to be
borne by XStream Systems, as provided above, shall include, without limitation, all registration,
filing and NASD fees, printing expenses, fees and disbursements of counsel and accountants for
XStream Systems, and all legal fees and disbursements and other expenses of complying with state
securities or blue sky laws of any jurisdictions in which the securities to be offered are to be
registered and qualified. Fees and disbursements of counsel and accountants for Rutgers and any
other expenses incurred by Rutgers not expressly included above shall be borne by Rutgers.

10

 

9. Miscellaneous.

     9.1 No Fiduciary Relationship. Nothing in this Agreement shall create a partnership
or establish a relationship of principal and agent or any other relationship of a similar nature
between or among Rutgers and/or XStream Systems.

     9.2 Further Action. If and whenever any Shares are sold, Rutgers shall do all things
and execute and deliver all documents and make all transfers, and cause any transferee of the
Shares to do all things and execute and deliver all documents, as may be necessary on a timely
basis to consummate such sale consistent with this Agreement. Furthermore, Rutgers, the Founding
Shareholders and XStream Systems shall (a) do all things and execute and deliver all documents (on
a timely basis) to carry out the intentions of the parties set forth in this Agreement; (b) refrain
from taking any action inconsistent with this Agreement; and (c) act in good faith.

     9.3 Governing Law; Jurisdiction and Venue. THIS AGREEMENT SHALL BE INTERPRETED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD TO ITS
CONFLICTS OF LAW PROVISIONS. Except for the right of either party to apply to a court of
competent jurisdiction for a temporary restraining order, a preliminary injunction, or other
equitable relief to preserve the status quo or prevent irreparable harm, any and all claims,
disputes or controversies arising under, out of, or in connection with the Agreement which the
parties shall be unable to resolve within sixty (60) days shall be mediated in good faith. The
party raising such dispute shall promptly advise the other party of such claim, dispute or
controversy in a writing, which describes in reasonable detail the nature of such dispute. By not
later than five (5) business days after the recipient has received such notice of dispute, each
party shall have selected for itself a representative who shall have the authority to bind such
party, and shall additionally have advised the other party in writing of the name and title of such
representative. By not later than ten (10) business days after the date of such notice of
dispute, the party against whom the dispute shall be raised shall select a qualified mediation
firm in the New York City metropolitan area, and such representatives shall schedule
a date with such firm for a mediation hearing. The parties shall enter into good faith mediation
and shall share the costs equally. If the representatives of the parties have not been able to
resolve the dispute within thirty (30) days after such mediation hearing, the parties shall have
the right to pursue any other remedies legally available to resolve such dispute in either the
Courts of the State of New Jersey or in the United States District Court for the District of the
State of New Jersey, to whose jurisdiction for such purposes the parties each hereby irrevocably
consents and submits. Notwithstanding the foregoing, nothing in this Article shall be construed to
waive any rights or timely performance of any obligations existing under this Agreement.

     9.4 Specific Performance. Each of the parties to this Agreement acknowledges that all
other parties to this Agreement will be irreparably damaged in the event that the provisions of
this Agreement are not specifically enforced. Accordingly, should any dispute arise pursuant to
this Agreement, the parties agree that a decree of specific performance shall be an appropriate
remedy. Such remedy shall be cumulative and shall be in addition to any other remedies, which any
party may have at law or in equity.

     9.5 Headings. The headings contained in this Agreement are for convenience of
reference only and shall not limit or otherwise affect in any way the meaning or interpretation of
this Agreement.

11

 

     9.6 Severability. In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement,
and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had
never been contained in this Agreement.

     9.7 Successors. This Agreement shall inure to the benefit of and be binding upon the
parties to this Agreement and their respective heirs, successors, assigns, administrators,
executors and other legal representatives.

     9.8 Additional Shares. In the event that subsequent to the date of this Agreement
any shares of Common Stock or other securities are issued on, or in exchanged for, any of the
Shares by reason of any stock dividend, stock split, combination of shares, reclassification or the
like, such shares or securities shall be deemed to be Shares for purposes of this Agreement.

     9.9 Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed an original but all of which together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page of this Agreement by facsimile
shall be effective as delivery of a manually executed counterpart of this Agreement.

     9.10 Notices. Any notices required in connection with this Agreement shall be in
writing and shall be deemed effectively delivered (a) upon personal delivery to the party to be
notified; (b) when sent by confirmed facsimile if sent during normal business hours of the
recipient; if not, then on the next business day; (c) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (d) one day after
deposit with a nationally recognized overnight courier, specifying next-day delivery, with written
notification of receipt. All notices shall be addressed to the holder appearing on the books of
XStream Systems.

     9.11 Entire Agreement. This Agreement constitutes the full and entire understanding
and agreement between the parties with regard to the subjects of this Agreement and supersedes any
and all prior understandings and agreements, whether written or oral, with respect to such subject,
which shall have no further force or effect. No party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as specifically set
forth herein and therein.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

12

 

XStream Systems, Inc.

Investor Rights Agreement

Signature Page

     In Witness Whereof, the parties to this Agreement have executed this Agreement as of
the date first set forth above.

	 	 	 	 	 
	XStream Systems: 	 	 
	 
	 	 	 	 
	XStream Systems, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Brian T. Mayo
 

	 	 
	Name:

	 	Brian T. Mayo	 	 
	Its:

	 	President & CEO	 	 
	 
	 	 	 	 
	Rutgers, The State University of New Jersey 	 	 
	 
	 	 	 	 
	By:

	 	/s/ William T. Adams
 

	 	 
	Name:

	 	William T. Adams	 	 
	Its:

	 	Director, OCLTT	 	 
	 
	 	 	 	 
	Brian Mayo	 	 
	 
	 	 	 	 
	/s/ Brian Mayo	 	 
	 	 	 
	 
	 	 	 	 
	Dr. William Mayo	 	 
	 
	 	 	 	 
	/s/ William Mayo	 	 
	 	 	 

13

 

	 	 	 	 	 
	Dr. William Mayo, as trustee of the Irrevocable Trust f/b/o	 	 
	Zachary Mayo	 	 
	 
	 	 	 	 
	/s/ William Mayo	 	 
	 	 	 
	 
	 	 	 	 
	Walter Helfrecht	 	 
	 
	 	 	 	 
	/s/ Walter Helfrecht	 	 
	 	 	 

14exv4w3

Exhibit
4.3

EXECUTION COPY

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

Dated as of August 27, 2009

by and among

XStream Systems, Inc.

and

the Investors named herein

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	1.	 	Demand Registrations	 	 	2	 
	 

	 	(a)
	 	Requests for Registration
	 	 	2	 
	 

	 	(b)
	 	Short-Form Registrations
	 	 	2	 
	 

	 	(c)
	 	Number of Registrable Securities
	 	 	2	 
	 

	 	(d)
	 	Priority on Demand Registrations
	 	 	2	 
	 

	 	(e)
	 	Selection of Underwriters
	 	 	3	 
	 

	 	(f)
	 	Other Registration Rights
	 	 	3	 
	 
	2.	 	Piggyback Registrations	 	 	3	 
	 

	 	(a)
	 	Right to Piggyback
	 	 	3	 
	 

	 	(b)
	 	Priority on Primary Registrations
	 	 	3	 
	 

	 	(c)
	 	Priority on Secondary Registrations
	 	 	4	 
	 
	3.	 	Holdback Agreements	 	 	4	 
	 

	 	(a)
	 	General
	 	 	4	 
	 

	 	(b)
	 	Material Development Condition
	 	 	4	 
	 
	4.	 	Registration Procedures	 	 	5	 
	 

	 	(a)
	 	General
	 	 	6	 
	 
	5.	 	Registration Expenses	 	 	8	 
	 

	 	(a)
	 	Payment
	 	 	8	 
	 

	 	(b)
	 	Reimbursement
	 	 	8	 
	 
	6.	 	Indemnification	 	 	8	 
	 

	 	(a)
	 	Company
	 	 	8	 
	 

	 	(b)
	 	Holders
	 	 	9	 
	 

	 	(c)
	 	Notice
	 	 	10	 
	 

	 	(d)
	 	Survival
	 	 	10	 
	 
	7.	 	Participation in Underwritten Registrations	 	 	10	 
	 

	 	(a)
	 	General
	 	 	10	 
	 

	 	(b)
	 	Regulation M
	 	 	11	 
	 

	 	(c)
	 	Suspension
	 	 	11	 
	 
	8.	 	Current Public Information	 	 	11	 
	 
	9.	 	Termination of Rights Hereunder	 	 	11	 
	 
	10.	 	Definitions	 	 	11	 
	 
	11.	 	Miscellaneous	 	 	15	 
	 

	 	(a)
	 	No Inconsistent Agreements
	 	 	15	 
	 

	 	(b)
	 	Remedies
	 	 	15	 
	 

	 	(c)
	 	Amendments and Waivers
	 	 	15	 
	 

	 	(d)
	 	Successors and Assigns
	 	 	15	 

i

 

	 	 	 	 	 	 	 	 	 
	 

	 	(e)
	 	Severability
	 	 	15	 
	 

	 	(f)
	 	Counterparts and Gender References
	 	 	15	 
	 

	 	(g)
	 	Headings; Exhibits
	 	 	16	 
	 

	 	(h)
	 	Governing Law
	 	 	16	 
	 

	 	(i)
	 	Notices
	 	 	16	 
	 

	 	(j)
	 	Submission to Jurisdiction; Waiver of Jury Trial
	 	 	16	 
	 

	 	(k)
	 	Aggregation of Stock
	 	 	17	 
	 

	 	(l)
	 	Assignment of Registration Rights
	 	 	17	 
	 

	 	(m)
	 	Greenberg Traurig Represents the Company
	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	Schedules and Exhibits 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Schedule I	Investors	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Exhibit A	Form of Joinder Agreement	 	 	 	 

ii

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

     THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of
August 27, 2009 by and among XStream Systems, Inc., a Delaware corporation (the “Company”), and the
Persons named on Schedule I attached hereto as Investors (individually an “Investor” and
collectively the “Investors”).

RECITALS

     WHEREAS, pursuant to the Original Purchase Agreement, on the First Closing Date certain of the
Investors purchased shares of the Series A Preferred Stock (the “First Round Investors”);

     WHEREAS, pursuant to the Original Purchase Agreement, on the Second Closing Date certain of
the Investors purchased Series B Units (the “Second Round Investors”);

     WHEREAS, pursuant to the Original Purchase Agreement, on the Third Closing Date certain of the
Investors purchased additional Series B Units (the “Third Round Investors”);

     WHEREAS, pursuant to numerous Equity Participation Closings (as defined in the Original
Purchase Agreement), certain of the Investors purchased Series C Units (the “Series C Investors”);

     WHEREAS, pursuant to the Series D Preferred Stock Purchase Agreement dated as of the date of
this Agreement (the “Series D Purchase Agreement”), by and among the Company and the Investors
party thereto (the “Series D Investors”), the Series D Investors have purchased shares of the
Company’s Series D Redeemable Convertible Preferred Stock, $.0001 par value per share (the “Series
D Preferred Stock”), together with warrants to purchase shares of Common Stock;

     WHEREAS, the Company and the First Round Investors, the Second Round Investors, the Third
Round Investors and the Series C Investors are parties to that certain Registration Rights
Agreement, dated as of the First Closing Date, as amended by that certain First Amendment, dated as
of the Second Closing Date (the “Registration Rights Agreement”);

     WHEREAS, the Company, the First Round Investors, the Second Round Investors, the Third Round
Investors and the Series C Investors, desire to amend the Registration Rights Agreement to, among
other things, allow the Series D Investors who are not already parties to the Registration Rights
Agreement to become parties thereto and to include the Series D Preferred Stock and the Series D
Warrants as “Registrable Securities”;

     WHEREAS, the execution and delivery of this Agreement by the Company and the holders of at
least a majority of the Registrable Securities is a condition to the obligations of the Series D
Investors under the Series D Purchase Agreement.

-1-

 

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

     1. Demand Registrations.

          (a) Requests for Registration. At any time following the earlier of (i) the fifth
(5th) anniversary of the date hereof and (ii) six (6) months after the Company has
completed its initial public offering of Common Stock pursuant to a registration statement declared
effective under the Securities Act (the “Company’s IPO”), holders holding at least thirty percent
(30%) of the Registrable Securities (collectively, the “Thirty Percent Holders”) may request
registration under the Securities Act of all or a portion of their Registrable Securities (provided
that the aggregate offering price of the Registrable Securities to be registered is at least
$30,000,000) on Form S-1 or any similar long-form registration (“Long-Form Registration”) or, if
available, holders holding at least fifty percent (50%) of the Registrable Securities
(collectively, the “Majority Holders”) may, subject to Section 1(b), request registration
under the Securities Act of all or a portion of their Registrable Securities on Form S-3 or any
similar short-form registration (“Short-Form Registration”). All registrations requested pursuant
to this Section 1(a) and 1(b) are collectively referred to herein as “Demand
Registrations”. The Thirty Percent Holders shall be entitled to request two (2) Demand
Registrations under this Section 1(a). Any Demand Registration shall be an underwritten
registration if requested by the holders.

          (b) Short-Form Registrations. In addition to the Long-Form Registration provided pursuant
to Section 1(a), the Majority Holders shall be entitled to that number of Short-Form
Registrations as described below; provided that (i) the aggregate offering price of the Registrable
Securities to be registered is at least $1,000,000 for each registration and (ii) the Company shall
not be required to cause more than three (3) such Short-Form Registrations to become effective in
any twelve (12) month period. Demand Registrations shall be Short-Form Registrations whenever the
Company is permitted to use Form S-3 or any other similar short-form registration. After the
Company has become subject to the reporting requirements of the Exchange Act, the Company shall use
its commercially reasonable efforts to make Short-Form Registrations available for the sale of
Registrable Securities.

          (c) Number of Registrable Securities. Each request for a Demand Registration shall
specify the approximate number of Registrable Securities requested to be registered and the
anticipated per share price range for such offering. Within ten (10) days after receipt of any
request for a Demand Registration, the Company will give written notice of such requested
registration to all other holders of Registrable Securities and, subject to Section 1(d)
below, will include in such registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within fifteen (15) days after the
receipt of the Company’s notice. The Company will pay all Registration Expenses in connection with
any Demand Registration.

          (d) Priority on Demand Registrations. The Company will not include in any Demand
Registration any securities that are not Registrable Securities without the prior written consent
of the holders of a majority of the Registrable Securities included in such registration. If a
Demand Registration is an underwritten offering and the managing underwriters advise the

-2-

 

Company in writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering, exceeds the number
of Registrable Securities and other securities, if any, which can be sold therein without adversely
affecting the marketability of the offering, the Company will include in such registration, prior
to the inclusion of any securities that are not Registrable Securities, the number of Registrable
Securities requested to be included that in the opinion of such underwriters can be sold without
adversely affecting the marketability of the offering and within the price range of such offering,
pro rata among the respective holders of such Registrable Securities on the basis of the number of
shares of Registrable Securities that such holder has requested to be included in such
registration.

          (e) Selection of Underwriters. Holders of a majority of the Registrable Securities to be
included in a Demand Registration shall have the right to select the investment banker(s) and
managing underwriter(s) to administer an offering initiated as a Demand Registration, subject to
the Company’s approval which shall not be unreasonably withheld.

          (f) Other Registration Rights. The Company shall not grant to any Persons the right to
request the Company to register any equity securities of the Company, or any securities convertible
or exchangeable into or exercisable for such securities, without the prior written consent of the
holders of a majority of the Registrable Securities.

     2. Piggyback Registrations.

          (a) Right to Piggyback. Whenever the Company proposes to register any of its securities
under the Securities Act (other than pursuant to a Demand Registration, which shall be governed by
Section 1, or a registration on Form S-4 or Form S-8 or any successor or similar forms) and
the registration form to be used may be used for the registration of Registrable Securities (a
“Piggyback Registration”), whether or not for sale for its own account, the Company will give
prompt written notice to all holders of Registrable Securities of its intention to effect such a
registration and, subject to Sections 2(b) and 2(c), shall include in such
registration all Registrable Securities with respect to which .the Company has received
written requests for inclusion therein within fifteen (15) days after delivery of the Company’s
notice.

          (b) Priority on Primary Registrations. If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without adversely affecting the
marketability of such offering, then the Company will include in such registration (a) first, the
securities the Company proposes to sell, (b) second, the Registrable Securities requested to be
included in such registration, pro rata among the holders of such securities on the basis of the
number of securities so requested to be included therein owned by each such holder and (c) third,
other securities requested to be included in such registration, pro rata among the holders of such
securities on the basis of the number of securities so requested to be included therein owned by
each such holder. Notwithstanding the foregoing, the holders of Registrable Securities shall be
entitled to include in any primary registration of the Company’s securities at least thirty percent
(30%) of the aggregate amount of the securities registered in such registration; provided that this
sentence will not apply to the registration for the Company’s

-3-

 

IPO if no securities other than those sold on behalf of the Company and the holders of
Registrable Securities are included in such registration.

          (c) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten
secondary registration on behalf of holders of the Company’s securities other than holders of
Registrable Securities, and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability of the offering,
then the Company shall include in such registration (a) first, the securities requested to be
included therein by the holders requesting such registration and the Registrable Securities
requested to be included in such registration, pro rata among the holders of such securities on the
basis of the number of securities so requested to be included therein owned by each such holder and
(b) second, other securities requested to be included in such registration, pro rata among the
holders of such securities on the basis of the number of securities so requested to be included
therein owned by each such holder.

     3. Holdback Agreements.

          (a) General. The Company (i) shall not effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or exercisable for such
securities (except pursuant to registrations on Form S-8, Form S-4 or any successor forms), during
(A) with respect to the Company’s IPO, the one hundred eighty (180) day period beginning on the
effective date of the registration statement relating thereto (unless the managing underwriters
otherwise agree) and (B) with respect to any underwritten Demand Registration or any underwritten
Piggyback Registration, the ninety (90) day period beginning on the effective date of the
registration statement relating thereto, and (ii) shall use all commercially reasonable efforts to
cause each holder of its Common Stock, or any securities convertible into or exchangeable or
exercisable for Common Stock (on a fully-diluted basis), other than Common Stock or any such
securities purchased in the open market or pursuant to Rule 144 adopted by the Securities and
Exchange Commission (“SEC”) under the Securities Act (as such may be amended from time to time)
(“Rule 144”), to agree not to effect any public sale or distribution (including sales pursuant to
Rule 144) of any such securities during such period, in each case except as part of such
underwritten registration, and in each case unless the underwriters managing the registered public
offering otherwise agree.

          (b) Material Development Condition.

          (i) With respect to any registration statement filed or to be filed pursuant to a
Demand Registration or a Piggyback Registration, if the Board of Directors of the Company
determines in good faith that it would (because of the existence of any acquisition or
corporate reorganization or other transaction, financing activity or other development
involving the Company) be materially detrimental (a “Material Development Condition”) to the
Company for such a registration statement to be filed, to become effective or to be
maintained effective or for sales of Registrable Securities to continue pursuant to the
registration statement, the Company shall be entitled, upon the giving of a written notice
that a Material Development Condition has occurred (a “Delay

-4-

 

Notice”) from an officer of the Company to any holder included or to be included in
such registration statement,

          (1) to cause sales of Registrable Securities by such holder pursuant to such
registration statement to cease,

          (2) to cause such registration statement to be withdrawn and the effectiveness
of such registration statement terminated, or

          (3) in the event no such registration statement has yet been filed or declared
effective, to delay filing or effectiveness of any such registration statement
until, in the good faith judgment of the Company, such Material Development
Condition no longer exists (notice of which the Company shall promptly deliver to
any holder of Registrable Securities with respect to which any such registration
statement has been filed).

          (ii) Notwithstanding the foregoing provisions of this Section 3(b):

          (1) the Company agrees to make all necessary disclosure of the existence or
occurrence of the circumstances giving rise to a Material Development Condition as
promptly as is reasonably practicable and to use all commercially reasonable efforts
to minimize the duration of such cessation or delay, which period shall in no event
exceed sixty (60) consecutive days from the sending of its Delay Notice to a holder
or holders of Registrable Securities with respect to such Material Development
Condition;

          (2) in the event a registration statement is filed and subsequently withdrawn
by reason of any existing or anticipated Material Development Condition as
hereinbefore; provided that the Company shall cause a new registration statement
covering the same Registrable Securities as those covered by the original
registration statement to be filed with the SEC as soon as practicable after such
Material Development Condition expires or, if sooner, not later than the expiration
of such sixty (60) day period referred to in clause (1) above;

          (3) in the event the Company elects not to withdraw or terminate the
effectiveness of any such registration statement but to cause a holder or holders to
refrain from selling Registrable Securities for any period during the Registration
Period (as defined below), the Registration Period with respect to such holders and
such Registrable Securities shall be extended by the number of days during the
Registration Period that such holders are required to refrain from selling
Registrable Securities; and

          (4) the Company may only send or impose one (1) Delay Notice during any period
of twelve (12) consecutive months.

-5-

 

     4. Registration Procedures.

          (a) General. Whenever the holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company will use its
reasonable best efforts to effect the registration of such Registrable Securities in accordance
with the intended method of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:

          (i) prepare and file with the SEC a registration statement with respect to such
Registrable Securities and thereafter use its reasonable best efforts and take all necessary
action to cause such registration statement to become effective;

          (ii) prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of either (A) not less than six (6) months
(subject to extension pursuant to Section 7(c) below) or (B) such shorter period as
will terminate when all of the securities covered by such registration statement have been
disposed of in accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement (but in any event not before the expiration
of any longer period required under the Securities Act) (the “Registration Period”), and to
comply with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as all of such securities
have been disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in the registration statement;

          (iii) furnish to each seller of Registrable Securities such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such other documents
as such seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;

          (iv) use commercially reasonable efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller of Registrable Securities to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such seller
(provided, however, that the Company will not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (B) subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction);

          (v) notify each seller of such Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, upon discovery that,
or upon the discovery of the happening of any event as a result of which, the prospectus
included in such registration statement contains an untrue statement of a material fact or
omits any fact necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and, at the request of any such seller, the
Company shall prepare and furnish to such seller a reasonable number of

-6-

 

copies of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the statements
therein not misleading;

          (vi) cause all such Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Company are then listed and, if not so listed, to be
listed on a national securities exchange or over-the-counter market and, if listed on the
FINRA automated quotation system, use all commercially reasonable efforts to secure
designation of all such Registrable Securities covered by such registration statement as a
NASDAQ “national market system security” within the meaning of Rule 11Aa2-1 of the Exchange
Act or, failing that, to secure NASDAQ authorization for such Registrable Securities;

          (vii) provide a transfer agent and registrar for all such Registrable Securities not
later than the effective date of such registration statement;

          (viii) enter into such customary agreements (including underwriting agreements) and
take all such other actions as the holders of a majority of the Registrable Securities being
sold or the underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation, effecting a stock
split or a combination of shares prior to the Company’s IPO);

          (ix) upon reasonable notice and during normal business hours, make available for
inspection by any seller of Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, in each case, reasonably required to
conduct due diligence or otherwise in connection with an underwritten offering, and cause
the Company’s officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement, subject to such underwriter, attorney,
accountant or other agent being bound by reasonable agreements or duties of confidentiality;

          (x) otherwise use commercially reasonable efforts to comply with all the applicable
rules and regulations of the SEC, and to make generally available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of at least
twelve (12) months beginning with the first day of the Company’s first full calendar quarter
after the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

          (xi) permit any holder of Registrable Securities which holder, in its reasonable
judgment, might be deemed to be an underwriter or a controlling person of the Company, to
participate in the preparation of such registration or comparable statement and to require
the insertion therein of material, furnished to the Company in writing,

-7-

 

which in the reasonable judgment of such holder and its counsel should be included and
which are acceptable to the Company (which approval shall not be unreasonably withheld); and

          (xii) in the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any related
prospectus or suspending the qualification of any Common Stock included in such registration
statement for sale in any jurisdiction, upon receiving notice or obtaining knowledge
thereof, the Company will use all commercially reasonable efforts promptly to obtain the
withdrawal of such order.

     5. Registration Expenses.

          (a) Payment. All reasonable and customary expenses incident to the Company’s performance
of or compliance with this Agreement (whether with respect to a Demand Registration or Piggyback
Registration), including, without limitation, all registration and filing fees, fees of any
transfer agent and registrar, fees and expenses of compliance with securities or blue sky laws,
printing expenses, FINRA fees and expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and its independent certified public accountants and other
Persons retained by the Company (all such expenses being herein called “Registration Expenses”),
but excluding underwriting discounts and commissions, shall be borne by the Company;
provided that a Demand Registration which is withdrawn at the sole request of the holders
of a majority of the Registrable Securities who demanded such Demand Registration will not count as
a Demand Registration if the Company is reimbursed by such holders for all reasonable out-of-pocket
expenses incurred by the Company in connection with such registration; provided, further,
however, that if at the time of such withdrawal, the holders of such Registrable Securities have
learned of a material adverse change in the condition, business, or prospects of the Company from
that known to such holders at the time of their request and have withdrawn the request with
reasonable promptness after learning of such information, then the holders of such Registrable
Securities shall not be required to pay any of such expenses and the Demand Registration that was
withdrawn shall not count as one of the permitted Demand Registrations hereunder.

          (b) Reimbursement. In connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of Registrable Securities covered by such
registration for the reasonable fees and disbursements of one (1) counsel chosen by the holders of
a majority of the Registrable Securities covered by such registration.

     6. Indemnification. In the event that any Registrable Securities are included in an
effective registration statement under Section 1 or 2:

          (a) Company. The Company agrees to indemnify and hold harmless, to the extent permitted
by law, each holder of Registrable Securities, such holder’s officers and directors and each Person
who controls such holder (within the meaning of the Securities Act) against any losses, claims,
damages, liabilities (joint or several) and expenses to which such holder or any such director or
officer or controlling person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or

-8-

 

actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or
are based upon (i) any untrue or alleged untrue statement of a material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, (ii) any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration statement, and the Company shall
reimburse such holder and each such director, officer and controlling Person for all reasonable
legal and any other reasonable expenses incurred by them in connection with investigating or
defending any such loss, claim, liability, expenses, action or proceeding; provided, however, that
the Company shall not be liable in any such case to the extent that any such loss, claim, damage,
liability or expense (or action or proceeding in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement of a material fact, or omission or alleged omission of
a material fact, made in such registration statement, any such prospectus or preliminary prospectus
or any amendment or supplement thereto, in reliance upon, and in conformity with, written
information prepared and furnished to the Company by such holder for use therein or by such
holder’s failure to deliver a copy of the registration statement prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.

          (b) Holders. In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder shall furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent permitted by law, shall indemnify and
hold harmless the Company, its directors and officers and each other Person who controls the
Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses, to which the Company or any such director or officer or controlling Person may become
subject under the Securities Act or otherwise, to the extent that such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect
thereof) result from (i) any untrue or alleged untrue statement of a material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, but only to the extent that such untrue statement is contained in such registration
statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, in
reliance upon and in conformity with written information prepared and furnished to the Company by
such holder for use therein, (ii) any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is made in such registration statement, any such
prospectus or preliminary prospectus or any amendment or supplement thereto, in reliance upon and
in conformity with written information prepared and furnished to the Company by such holder for use
therein or (iii) any violation or alleged violation by the holder of Registrable Securities of the
Securities Act, but only to the extent that such violation or alleged violation relates to written
information prepared

-9-

 

and furnished to the Company by such holder for use in such registration statement, prospectus
or preliminary prospectus, and such holder shall reimburse the Company and each such director,
officer and controlling Person for all reasonable legal and any other reasonable expenses incurred
by them in connection with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding; provided, however, that the obligation to indemnify shall be several
and not joint, for each holder of Registrable Securities, and shall be limited to the net amount of
proceeds received by such holder from the sale of Registrable Securities pursuant to such
registration statement.

          (c) Notice. Any Person entitled to indemnification hereunder will (1) give prompt written
notice to the indemnifying party of any claim with respect to which it seeks indemnification and
(ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified
party; provided, that the indemnified party may participate in such defense at such party’s
expense. If such defense is assumed, the indemnifying party may not be subject to any liability for
any settlement made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment (with the written advice of counsel) of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such indemnified parties with
respect to such claim. The failure of an indemnified party to give written notice promptly as
required by this subsection (c) shall not affect such indemnified party’s rights under this
Section 6 except to the extent such failure is actually prejudicial to the rights and
obligations of the indemnifying party.

          (d) Survival. The indemnification provided for under this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of the indemnified party or
any officer, director or controlling Person of such indemnified party and will survive the transfer
of securities. The Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company’s indemnification is
unavailable for any reason.

     7. Participation in Underwritten Registrations.

          (a) General. No Person may participate in any registration hereunder which is
underwritten unless such Person (i) cooperates with the Company as reasonably requested by the
Company in the connection with the preparation of the registration statement, and for so long as
the Company is obligated to file and keep effective the registration statement, provides to the
Company, in writing, for use in the registration statement, all such information regarding such
Person and its plan of distribution of the Registrable Securities as may be reasonably necessary to
enable the Company to prepare the registration statement and prospectus covering the Registrable
Securities, to maintain the currency of and effectiveness thereof and otherwise to comply with all
applicable requirements of law in connection therewith, (ii) agrees to sell such Person’s
securities on the basis provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements (including, without

-10-

 

limitation, pursuant to the terms of any over-allotment or “green shoe” option requested by
the managing underwriter(s)), except that no holder of Registrable Securities shall be required to
sell more than the number of Registrable Securities that such holder has requested the Company to
include in any registration, and (iii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably required under the
terms of such underwriting arrangements; provided that no holder of Registrable Securities included
in any underwritten registration shall be required to make any representations or warranties to the
Company or the underwriters other than representations and warranties regarding such holder and
such holder’s intended method of distribution.

          (b) Regulation M. During such time as a holder of Registrable Securities may be engaged
in a distribution of the Registrable Securities, such holder shall comply with Regulation M
promulgated under the Exchange Act and pursuant thereto it shall, among other things, (i) not
engage in any stabilization activity in connection with the securities of the Company in
contravention of such regulation and (ii) distribute the Registrable Securities under the
registration statement solely in the manner described in the registration statement.

          (c) Suspension. Each Person that is participating in any registration hereunder agrees
that, upon receipt of any notice from the Company of the happening of any event of the kind
described in Section 4(a)(v) above, such Person will forthwith discontinue the disposition
of its Registrable Securities, as the case may be, pursuant to the registration statement until
such Person’s receipt of the copies of a supplemented or amended prospectus as contemplated by such
Section 4(a)(v). In the event the Company shall give any such notice pursuant to this
subsection (c), the applicable time period mentioned in Section 4(a)(ii) during which a
Registration Statement is to remain effective shall be extended by the number of days during the
period from and including the date of the giving of such notice to and including the date when each
seller of Registrable Securities covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by Section 4(a)(v).

     8. Current Public Information. At all times after the Company has filed a registration
statement with the SEC which has become effective pursuant to the requirements of either the
Securities Act or the Exchange Act, the Company will file all reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and will take such further action as any holder or holders of Registrable Securities
may reasonably request, all to the extent required to enable such holders to sell Registrable
Securities pursuant to Rule 144 or any similar rule or regulation hereafter adopted by the SEC.

     9. Termination of Rights Hereunder. The rights set forth in Section 1 or
2 shall terminate three (3) years following the consummation of the Company’s IPO, provided
that the Company is then subject to the reporting requirements of Section 12 or 15(d) of the
Exchange Act.

     10. Definitions.

          “Affiliate” means as to any Person (a) any Person which directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with

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such Person; (b) any Person who is a director, partner, member or officer (i) of such Person,
or (ii) of any Person described in clause (a) above; or (c) any Person who is related to a Person
described in clauses (a) or (b) above by blood or marriage. For purposes of this definition,
“control” shall include the ownership of 10% or more of the voting securities of such Person.

          “Agreement” has the meaning specified in the preamble.

          “Common Stock” means the common stock, $.0001 par value per share, of the Company.

          “Company” has the meaning specified in the preamble.

          “Company’s IPO” has the meaning specified in Section 1(a).

          “Delay Notice” has the meaning specified in Section 3(b).

          “Demand Registrations” has the meaning specified in Section 1(a).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “First Closing Date” means March 14, 2007.

          “First Round Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).

          “GT” has the meaning specified in Section 11(m).

          “Investor” and “Investors” have the respective meanings specified in the preamble.

          “Long-Form Registration” has the meaning specified in Section 1(a).

          “Majority Holders” has the meaning specified in Section 1(a).

          “Material Development Condition” has the meaning specified in Section 3(b).

          “Original Purchase Agreement” means the Series A Preferred Stock Purchase Agreement, dated as
of the First Closing Date, as amended by a First Amendment dated as of Second Closing Date, as
further amended by a Second Amendment dated as of the Third Closing Date, as further amended by a
Third Amendment dated as of October 16, 2008 and as further amended by a Fourth Amendment dated as
of February 26, 2009, by and among the Company and the purchasers of the securities named therein
(as the same may be amended, modified, restated or replaced).

          “Person” means any individual, corporation, partnership, company, limited liability company,
joint venture, association, bank, business trust or other entity, whether or not legal entities, or
any governmental entity or agency or political subdivision thereof.

          “Piggyback Registration” has the meaning specified in Section 2(a).

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          “Preferred Stock” means the Company’s (i) Series A Redeemable Convertible Preferred Stock,
$.0001 par value per share, (ii) Series B Redeemable Convertible Preferred Stock, $.0001 par value
per share, (iii) Series C Redeemable Convertible Preferred Stock, $.0001 par value per share and
(iv) Series D Redeemable Convertible Preferred Stock, $.0001 par value per share.

          “Registrable Securities” means (i) any Common Stock issued or issuable upon the conversion or
redemption of the Preferred Stock or any Warrants, (ii) any Common Stock issued or issuable
directly or indirectly with respect to the securities referred to in clause (i) by way of stock
dividend, stock conversion or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization and (iii) any other shares of
Common Stock held by Persons holding securities described in clause (i). As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities (x) when they have
been distributed to the public pursuant to an offering registered under the Securities Act, (y)
when they have been sold to the public through a broker, dealer or market maker in compliance with
Rule 144 under the Securities Act (or any similar rule then in force) or (z) when they may be sold
without registration in compliance with Rule 144(k) under the Securities Act (or any similar rule
then in force). For purposes of this Agreement, a Person shall be deemed to be the holder of
Registrable Securities, and the Registrable Securities shall be deemed to be outstanding and in
existence, whenever such Person has the right to acquire such Registrable Securities upon
conversion of Preferred Stock, exercise of Warrants or conversion or exercise of any other
securities held by such Person, whether or not such acquisition has actually been effected, and
such Person shall be entitled to exercise the rights of a holder of such Registrable Securities
hereunder.

          “Registration Expenses” has the meaning specified in Section 5(a).

          “Registration Period” has the meaning specified in Section 4(a)(ii).

          “Registration Rights Agreement” has the meaning specified in the recitals.

          “Rule 144” has the meaning specified in Section 3(a).

          “SEC” has the meaning specified in Section 3(a).

          “Second Closing Date” means December 19, 2007.

          “Second Round Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).

          “Securities Act” means the Securities Act of 1933, as amended.

          “Series A Preferred Stock” means the Series A Redeemable Convertible Preferred Stock, $.0001
par value per share of the Company.

          “Series B Preferred Stock” means the Series B Redeemable Convertible Preferred Stock, $.0001
par value per share of the Company.

-13-

 

          “Series B Unit” means one Series B Preferred Share and five (5) Series B Warrants.

          “Series B Warrant” means a warrant to purchase one share of Common Stock in the form attached
as Exhibit A to the Series B Warrant Agreement.

          “Series B Warrant Agreement” means the Amended and Restated Series B Warrant Agreement, dated
as of the date of this Agreement, by and among the Company and the holders thereof.

          “Series C Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).

          “Series C Preferred Stock” means the Series C Redeemable Convertible Preferred Stock, $.0001
par value per share of the Company.

          “Series C Unit” means one Series C Preferred Share and five (5) Series C Warrants.

          “Series C Warrant” means a warrant to purchase one share of Common Stock in the form attached
as Exhibit A to the Series C Warrant Agreement.

          “Series C Warrant Agreement” means the Amended and Restated Series C Warrant Agreement, dated
as of the date of this Agreement, by and among the Company and the holders thereof.

          “Series D Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).

          “Series D Preferred Stock” has the meaning specified in the recitals.

          “Series D Purchase Agreement” has the meaning specified in the recitals (as the same may be
amended, modified, restated or replaced).

          “Series D Warrant” means a warrant to purchase one share of Common Stock in the form attached
as Exhibit A to the Series D Warrant Agreement.

          “Series D Warrant Agreement” means the Series D Warrant Agreement, dated as of the date of
this Agreement, by and among the Company and the Series D Investors.

          “Shareholders Agreement” means the Second Amended and Restated Securityholders’ Agreement,
dated as of the date of this Agreement, by and among the Company and the securityholders of the
Company named therein (as the same may be amended, modified, restated or replaced).

          “Short-Form Registration” has the meaning specified in Section 1(a).

          “Third Closing Date” means May 30, 2008.

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          “Third Round Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).

          “Thirty Percent Holders” has the meaning specified in Section 1(a).

          “Warrants” means the Series B Warrants, the Series C Warrants and the Series D Warrants.

     11. Miscellaneous.

          (a) No Inconsistent Agreements. The Company will not hereafter enter into any agreement
with respect to its securities which is inconsistent with or violates the rights granted to the
holders of Registrable Securities in this Agreement.

          (b) Remedies. Any Person having rights under any provision of this Agreement shall be
entitled to enforce such rights specifically to recover damages caused by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in its sole discretion apply to any court of
law or equity of competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement; provided, however, that no party hereto shall have any right to
obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this
Agreement as a result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.

          (c) Amendments and Waivers. Except as otherwise provided herein, the provisions of this
Agreement may be amended or waived only upon the prior written consent of the Company and the
holders of a majority of the Registrable Securities.

          (d) Successors and Assigns. Subject to Section 11(l), this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties hereto and their
respective legal successors and assigns.

          (e) Severability. If any provision of this Agreement shall be held to be illegal, invalid
or unenforceable, such illegality, invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.

          (f) Counterparts and Gender References. This Agreement may be executed in several
counterparts (including by means of separate signature pages, which may be attached hereto) by one
or more of the parties, each of which shall be deemed an original, and all of said counterparts
(and signature pages) shall be deemed to constitute or be part of one and the same instrument. One
or more counterparts of this Agreement may be delivered by facsimile or electronically with the
intention that delivery by such means shall have the same effect as delivery of an original
counterpart thereof. All gender references shall be deemed modified to fit the context.

-15-

 

          (g) Headings; Exhibits. The headings or other subdivisions in this Agreement are intended
solely for convenience or reference and shall be given no effect in the construction or
interpretation of this Agreement.

          (h) Governing Law. The internal law of the State of Florida will govern all questions
concerning the construction, validity and interpretation of this Agreement, without regard to the
choice of law provisions of such state or any other state.

          (i) Notices. All notices or other communications required or permitted hereunder shall be
in writing and shall be deemed given or delivered (a) when delivered personally, (b) if transmitted
by facsimile when confirmation of transmission is received, (c) if sent by registered or certified
mail, postage prepaid, return receipt requested, three (3) business days after mailing or (d) if
sent by reputable overnight courier service, one business day after delivery to such service, and
shall be addressed as follows:

          If to the Company, to:

	 	 	 	XStream Systems, Inc.

10305 102nd Terrace

Suite 101

Sebastian, FL 32958

Attention: Chief Executive Officer

Facsimile: (772) 589-4622

          with a copy to:

	 	 	 	Greenberg Traurig, P.A.

5100 Town Center Circle

Suite 400

Boca Raton, FL 33486

Attention: Bruce C. Rosetto

Facsimile: (561) 367-6225

          If to any Investor, to such Investor’s address as set forth on Schedule I
hereto.

     Any party may change the name and address of the designee to whom notice shall be sent by
giving written notice of such change to the other parties hereto.

          (j) Submission to Jurisdiction; Waiver of Jury Trial.

          (i) Each of the parties hereto hereby irrevocably submits in any suit, action or
proceeding arising out of or related to this Agreement, or any of the transactions
contemplated hereby, to the exclusive jurisdiction of the United States District Court for
the Southern District of Florida and the jurisdiction of any court of the State of Florida
located in Indian River County, Florida and, to the extent permissible by law, waives any
and all claims and objections that any such court is an inconvenient forum.

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          (ii) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY IN
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN OR AMONG. ANY OF THE
PARTIES ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY
OTHER INSTRUMENT OR DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH. ANY
PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

          (k) Aggregation of Stock. All shares of Registrable Securities held or acquired by
affiliated Persons or Persons under common management or control shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.

          (l) Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to Sections 1 and 2 may be assigned (but only with
all related obligations) by a holder to a transferee or assignee of such Registrable Securities
that is a Permitted Transferee (as defined in the Shareholders Agreement) of such holder; provided
that (A) the Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the Registrable Securities with
respect to which such rights are being assigned and (B) such transferee or assignee agrees in
writing to be bound by and subject to the terms and conditions of this Agreement in the form of
Joinder Agreement attached hereto as Exhibit A. For the purposes of determining the number
of shares of Registrable Securities held by a transferee or assignee, the holdings of a transferee
or assignee (1) that is a subsidiary, parent, partner, limited partner, retired partner, member,
retired member or stockholder of a holder, (2) that is an Affiliate of the holder, (3) who is a
holder’s immediate family member or (4) that is a trust for the benefit of an individual holder or
such holder’s immediate family member, shall be aggregated together and with those of the assigning
holder; provided that all transferees and assignees who would not qualify individually for
assignment of registration rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices or taking any action under Sections 1 and
2. Notwithstanding the foregoing, any transferee of a Warrant shall be entitled to, and
shall become, a party to this Agreement as a condition to the transfer of such Warrant and shall be
considered an “Investor” and a holder of Registrable Securities with the rights and obligations
provided in this Agreement.

          (m) Greenberg Traurig Represents the Company. Each of the Investors hereby agrees and
acknowledges that the law firm of Greenberg Traurig, P.A. (“GT”), hereby renders advice and counsel
solely to the Company. Each of the Investors hereby agrees and acknowledges that GT has not
represented any of the Investors in connection with this Agreement or any other agreement
contemplated by or in connection with this Agreement or the transactions contemplated by or in
connection with this Agreement, and that EACH OF THE SHAREHOLDERS HAS BEEN AND IS HEREBY ADVISED TO
RETAIN INDEPENDENT COUNSEL to advise each one of them regarding this Agreement and any other
agreement contemplated by this Agreement. Each of the Investors hereby waives, releases and
relinquishes any claim against GT or any of its shareholders, employees or agents from any conflict
of

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interest arising from this Agreement or the transactions contemplated in this Agreement or any
other agreement contemplated by this Agreement.

[Signature Page Follows]

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

	 	 	 	 	 
	 	COMPANY:

XSTREAM SYSTEMS, INC.

 	 
	 	By:  	/s/ Anthony Chidoni	 
	 	 	Name:  	Anthony Chidoni	 
	 	 	Title:  	Secretary	 
	 
	 	INVESTORS:

 	 
	 	
 	 

[Signature Page to A&R Registration Rights Agreement]

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