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exhibit4-1.htm

    
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    NEITHER THESE
SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY
LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

     

    STRATASYS, INC.

     

    WARRANT

     

    
      	Warrant No. A--1 (2010)	Dated: January 18,
  2010

    

         Stratasys, Inc., a Delaware corporation (the
“Company”), hereby certifies that, for
value received, Hewlett-Packard Company or its registered assigns (the “Holder”), is entitled to purchase from
the Company up to a total of Five Hundred Thousand (500,000) shares of common
stock, $0.01 par value per share (the “Common Stock”), of the Company (each
such share, a “Warrant Share” and all such shares, the
“Warrant Shares”) at an exercise price
equal to $17.78 per share (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time and from
time to time from and after the date hereof and through and including the
earlier of (x) the date that is seven years from the date of issuance hereof or
(y) the date of the closing of a Fundamental Transaction (as defined in Section
9(c) below) (the “Expiration Date”), and subject to the
following terms and conditions. This Warrant (this “Warrant”) is issued pursuant to that
certain Protective Rights Agreement, dated as of the date hereof, by and between
the Company and the Holder (the “Protective Rights
Agreement”).

     

         1. Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms used
in this Warrant shall have the meanings ascribed to them below.

     

         “Business Day” means any day other than
Saturday, Sunday or any other day on which commercial banks in The City of New
York are authorized or required by law to remain closed.

     

    

    
    

         “Closing Price” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on an Eligible Market or any
other national securities exchange, the closing sale price per share of the
Common Stock for such date (or the nearest preceding date) on the primary
Eligible Market or exchange on which the Common
Stock is then listed or quoted; (b) if prices for the Common Stock are then
quoted on the OTC Bulletin Board, the closing sale price per share of the Common
Stock for such date (or the nearest preceding date) so quoted; (c) if prices for
the Common Stock are then reported in the “Pink Sheets” published by Pink OTC
Markets Inc. (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent closing sale price per share of the Common
Stock so reported; or (d) in all other cases, the fair market value of a share
of Common Stock as determined in good faith by Board of Directors of the
Company.

     

         “Eligible Market” means any of
the New York Stock Exchange, the Nasdaq Stock Market or the OTC Bulletin Board
(or any successor thereto).

     

         “Person” means any individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or any court or other federal, state, local or
other governmental authority or other entity of any kind.

     

         “Prospectus” means the
prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

     

          “Registrable Securities” means
any Warrant Shares, together with any securities issued or issuable upon any
stock split, dividend or other distribution, recapitalization or similar event
with respect to the foregoing.

     

         “Registration Statement” means
a registration statement filed by the Company under the Securities Act,
including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration
statement.

     

         “SEC” means the Unites States Securities and Exchange
Commission.

     

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

     

         “Trading Day” means any day on
which the Common Stock is listed or quoted and traded on its primary Trading
Market.

     

         “Trading Market” means the
Nasdaq Global Select Market or any other Eligible Market on which the Common
Stock is then listed or quoted.

     

         “Transfer Agent” means
Continental Stock Transfer Company, or any other transfer agent selected by the
Company.

     

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         2. Registration of
Warrant. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.

     

         3. Registration of
Transfers. The Company shall register the transfer of any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant, with the Form
of Assignment attached hereto duly completed and signed, to the Transfer Agent
or to the Company at its address specified herein. Upon any such registration or
transfer, a new warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new warrant, a “New Warrant”), evidencing the
portion of this Warrant so transferred shall be issued to the transferee and a
New Warrant evidencing the remaining portion of this Warrant not so transferred,
if any, shall be issued to the transferring Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a
Warrant.

     

         4. Exercise and Duration of
Warrants.

     

         (a) This Warrant shall be exercisable by the
registered Holder at any time and from time to time on or after the date hereof
to and including the Expiration Date. At 5:00 P.M., New York City time on the
Expiration Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value.

     

         (b) A Holder may exercise this Warrant by
delivering to the Company (i) an exercise notice, in the form attached hereto
(the “Exercise Notice”),
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares as to which this Warrant is being exercised
(which may take the form of a “cashless exercise” if so indicated in the
Exercise Notice and if a “cashless exercise” may occur at such time pursuant to
Section 10 below), and the date such items are delivered to the Company (as
determined in accordance with the notice provisions hereof) is an “Exercise Date.” The Holder
shall not be required to deliver the original Warrant in order to effect an
exercise hereunder. Execution and delivery of the Exercise Notice shall have the
same effect as cancellation of the original Warrant and issuance of a New
Warrant evidencing the right to purchase the remaining number of Warrant
Shares.

     

         5. Delivery of Warrant
Shares.

     

         (a) Upon exercise of this Warrant, the Company
shall promptly issue or cause to be issued and cause to be delivered to or upon
the written order of the Holder and in such name or names as the Holder may
designate, a certificate for the Warrant Shares issuable upon such exercise. The
Holder, or any Person so designated by the Holder to receive Warrant Shares,
shall be deemed to have become holder of record of such Warrant Shares as of the
Exercise Date.

     

         (b) This Warrant is exercisable, either in its
entirety or, from time to time, for a portion of the number of Warrant Shares.
Upon surrender of this Warrant following one or more partial exercises, the
Company shall issue or cause to be issued, at its expense, a New Warrant
evidencing the right to purchase the remaining number of Warrant
Shares.

     

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         (c) The Company’s obligations to issue and
deliver Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by
the Holder to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any Person or any action
to enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder or any other Person
of any obligation to the Company or any violation or alleged violation of law by
the Holder or any other Person, and irrespective of any other circumstance which
might otherwise limit such obligation of the Company to the Holder in connection
with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity,
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

     

         6. Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge
to the Holder for any issue or transfer tax, withholding tax, transfer agent fee
or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder or an Affiliate thereof. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this Warrant
or receiving Warrant Shares upon exercise hereof.

     

         7. Replacement of
Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation hereof, or in lieu of and substitution for this Warrant, a New
Warrant, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable bond or
indemnity, if requested. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may
prescribe.

     

         8. Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (after giving effect to the adjustments and
restrictions of Section 9, if any). The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with the
terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
securities exchange or automated quotation system upon which the Common Stock
may be listed.

     

         9. Certain Adjustments.
The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section 9.

     

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         (a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides outstanding shares of Common Stock into a larger number of shares, or
(iii) combines outstanding shares of Common Stock into a smaller number of
shares, then in each such case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

     

         (b) Pro Rata
Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to holders of Common Stock (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock
covered by the preceding paragraph), (iii) rights or warrants to subscribe for
or purchase any security, or (iv) any other asset other than cash (in each case,
“Distributed Property”), then in each
such case the Exercise Price in effect immediately prior to the record date
fixed for determination of stockholders entitled to receive such distribution
shall be adjusted (effective on such record date) to equal the product of such
Exercise Price times a fraction of which the denominator shall be the average of
the Closing Prices for the five Trading Days immediately prior to (but not
including) such record date and of which the numerator shall be such average
less the then fair market value of the Distributed Property distributed in
respect of one outstanding share of Common Stock, as determined by the Company's
independent certified public accountants that regularly examine the financial
statements of the Company, which shall be definitive, absent manifest
error.

     

         (c) Fundamental
Transactions. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another
Person in which the holders of the Company’s securities entitled to vote are not
the holders of a majority of the securities entitled to vote in the successor
company, (ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 9(a) above) (in any
such case, a “Fundamental Transaction”), then at the
closing of such Fundamental Transaction the Holder shall have the right to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the “Alternate Consideration”). The
aggregate Exercise Price for this Warrant will not be affected by any such
Fundamental Transaction, but the Company shall apportion such aggregate Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant upon the closing of such Fundamental
Transaction.

     

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         (d) Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraphs (a) or (b) of this Section, the number of Warrant Shares that may
be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.

     

         (e) Calculations. All
calculations under this Section 9 shall be made to the nearest
cent or the nearest 1/100th of a share, as applicable. The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company.

     

         (f) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense
will promptly compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant
Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s Transfer Agent.

     

         (g) Notice of Corporate
Events. If the Company (i) declares a dividend or any other distribution
of cash, securities or other property in respect of its Common Stock, including
without limitation any granting of rights or warrants to subscribe for or
purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or
approves, enters into any agreement contemplating or solicits stockholder
approval for any Fundamental Transaction or (iii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then the
Company shall deliver to the Holder a notice describing the material terms and
conditions of such transaction, at least 20 calendar days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that the
Holder is given the practical opportunity to exercise this Warrant prior to such
time so as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall not
affect the validity of the corporate action required to be described in such
notice.

     

         10. Payment of Exercise
Price. The Holder shall pay the Exercise Price in immediately available
funds; provided, however, that the Holder may satisfy its obligation to pay the
Exercise Price through a “cashless exercise,” in which event the Company shall
issue to the Holder the number of Warrant Shares determined as
follows:

     

    
      	 
where:	
              X = Y [(A-B)/A]

               

              X = the number of Warrant Shares to be
      issued to the Holder.

               

              Y = the number of Warrant Shares with
      respect to which this Warrant is being exercised.

               

              A = the average of the Closing Prices
      for the five Trading Days immediately prior to (but not including) the
      Exercise Date.

               

              B = the Exercise
      Price.

            

    

    
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         For purposes of Rule 144 promulgated
under the Securities Act, it is intended, understood and acknowledged that the
Warrant Shares issued in a cashless exercise transaction shall be deemed to have
been acquired by the Holder, and the holding period for the Warrant Shares shall
be deemed to have commenced, on the date this Warrant was originally issued
pursuant to the Protective Rights Agreement.

     

         11. Limitation on
Exercise. Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder’s for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), does not exceed 4.999%
(the “Maximum Percentage”) of the total
number of issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
Each delivery of an Exercise Notice hereunder will constitute a representation
by the Holder that it has evaluated the limitation set forth in this paragraph
and determined that issuance of the full number of Warrant Shares requested in
such Exercise Notice is permitted under this paragraph. The Company’s obligation
to issue shares of Common Stock in excess of the limitation referred to in this
Section shall be suspended (and shall not terminate or expire notwithstanding
any contrary provisions hereof) until such time, if any, as such shares of
Common Stock may be issued in compliance with such limitation, but in no event
later than the Expiration Date. By written notice to the Company, the Holder may
waive the provisions of this Section or increase or decrease the Maximum
Percentage to any other percentage specified in such notice, but (i) any such
waiver or increase will not be effective until the 61st day after such notice is
delivered to the Company, and (ii) any such waiver or increase or decrease will
apply only to the Holder and not to any other holder of Warrants.

     

         12. Fractional Shares.
The Company shall not be required to issue or cause to be issued fractional
Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant
Share would, except for the provisions of this Section, be issuable upon
exercise of this Warrant, the number of Warrant Shares to be issued will be
rounded up to the nearest whole share.

     

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         13. Registration
Rights.

     

         (a) If at any time prior to the expiration of
the Registration Period (as hereinafter defined in Section 13(d)(i)) the Company
proposes to file with the SEC a Registration Statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its securities (other than on Form S-4 or Form S-8 (or their equivalents at such
time) relating to securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans) the Company shall
promptly send to each Holder written notice of the Company's intention to file a
Registration Statement and of such Holder's rights under this Section 13 and, if
within fifteen (15) days after receipt of such notice, such Holder shall so
request in writing, the Company shall include in such Registration Statement all
or any part of the Registrable Securities such Holder requests to be registered,
subject to the priorities set forth below in this Section 13(a). The obligations
of the Company under this Section 13(a) may be waived by Holders holding a
majority of the Registrable Securities. If an offering in connection with which
a Holder is entitled to registration under this Section 13(a) is an underwritten
offering, then each Holder whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed to by the Company, offer
and sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering. If a registration pursuant to this Section 13(a) is to be
an underwritten public offering and the managing underwriter(s) advise the
Company in writing that, in their reasonable good faith opinion, marketing or
other factors dictate that a limitation on the number of shares of Common Stock
that may be included in the Registration Statement is necessary to facilitate
and not adversely affect the proposed offering, then the Company shall include
in such registration: (i) first, all securities the Company proposes to sell for
its own account, (ii) second, up to the full number of securities proposed to be
registered for the account of the holders of securities entitled to inclusion of
their securities in the Registration Statement by reason of demand registration
rights, and (iii) third, the securities requested to be registered by the
Holders and other holders of securities entitled to participate in the
registration, as of the date hereof, drawn from them pro rata based on the
number each has requested to be included in such registration.

     

         (b) The initial number of Registrable
Securities included in any Registration Statement and each increase in the
number of Registrable Securities included therein shall be allocated pro rata
among the Holders based on the number of Registrable Securities held by each
Holder at the time the Registration Statement covering such initial number of
Registrable Securities or increase thereof is declared effective by the SEC. In
the event that a Holder sells or otherwise transfers any of such Person's
Registrable Securities, each transferee shall be allocated a pro rata portion of
the then remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any shares of Common Stock included
in a Registration Statement and which remain allocated to any Person which
ceases to hold any Registrable Securities shall be allocated to the remaining
Holders, pro rata based on the number of Registrable Securities then held by
such Holders.

     

         (c) Subject to Section 13(f) hereof, the
Holders holding a majority of the Registrable Securities shall have the right to
select one legal counsel to review and oversee any offering
pursuant to this Section 13 (“Legal Counsel”), which shall be
reasonably acceptable to the Company.

     

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         (d) Whenever a Holder has requested that any
Registrable Securities be registered pursuant to Section 13(a) the Company will
use its commercially reasonable efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following
obligations:

     

         (i) The Company shall
keep such Registration Statement effective pursuant to Rule 415 at all times
until the earlier of (A) the date as of which the Holders may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144 promulgated under the Securities Act (or
successor thereto) or (B) the date on which the Holders shall have sold all the
Registrable Securities covered by such Registration Statement (the “Registration Period”).

     

         (ii) The Company shall
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the Prospectus used
in connection with such Registration Statement, which prospectus is to be filed
pursuant to Rule 424 promulgated under the Securities Act, as may be necessary
to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of
the Company covered by such Registration Statement until such time as all of
such Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements to a
Registration Statement that are required to be filed pursuant to this Agreement
(including pursuant to this Section 13(d)(ii)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Exchange Act, the Company shall file such amendments or supplements with the SEC
on the same day on which the Exchange Act report is filed which created the
requirement for the Company to amend or supplement the Registration
Statement.

     

         (iii) The Company shall
(A) permit Legal Counsel to review and comment upon a Registration Statement and
all amendments and supplements to all Registration Statements within a
reasonable number of days prior to the their filing with the SEC and (B) not
file any document in a form to which Legal Counsel reasonably objects. The
Company shall not submit a request for acceleration of the effectiveness of a
Registration Statement or any amendment or supplement thereto without the prior
approval of Legal Counsel, which approval shall not be unreasonably withheld or
delayed. The Company shall furnish to Legal Counsel, without charge, (A) any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (B) promptly after the
same is prepared and filed with the SEC, one copy of any Registration Statement
and any amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits and (C) upon the
effectiveness of any Registration Statement, one copy of the Prospectus included
in such Registration Statement and all amendments and supplements
thereto.

     

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         (iv) The Company shall furnish to each Holder
whose Registrable Securities are included in any Registration Statement, without
charge, (A) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, all exhibits and each preliminary Prospectus, (B) upon the
effectiveness of any Registration Statement, ten (10) copies of the Prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Holder may reasonably request)
and (C) such other documents, including copies of any preliminary or final
Prospectus, as such Holder may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such
Holder.

     

         (v) The Company shall use reasonable efforts
to (A) register and qualify the Registrable Securities covered by a Registration
Statement under such other securities or "blue sky" laws of such jurisdictions
in the United States as Legal Counsel or any Holder reasonably requests, (B)
prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (C) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (D) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 13(d)(v), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify Legal Counsel and each Holder
who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of
the initiation or threatening of any proceeding for such purpose.

     

         (vi) In the event Holders who hold a majority
of the Registrable Securities being offered in the offering select underwriters
for the offering, the Company shall enter into and perform its obligations under
an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering; provided, however, that the Company shall have
the right to consent to the selection of such underwriter, which consent shall
not be unreasonably withheld.

     

    10

     

    

    
    

         (vii) As promptly as practicable after
becoming aware of such event, the Company shall notify Legal Counsel and each
Holder in writing of the happening of any event as a result of which the
Prospectus included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver ten (10)
copies of such supplement or amendment to Legal Counsel and each Holder (or such
other number of copies as Legal Counsel or such Holder may reasonably request).
The Company shall also promptly notify Legal Counsel and each Holder in writing
(A) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness shall be
delivered to Legal Counsel and each Holder by facsimile on the same day of such
effectiveness and by overnight mail), (B) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus or
related information, and (C) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be
appropriate.

     

         (viii) The Company shall use
its commercially reasonable efforts to prevent the issuance of any stop order or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and to
notify Legal Counsel and each Holder who holds Registrable Securities being sold
(and, in the event of an underwritten offering, the managing underwriters) of
the issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such
purpose.

     

         (ix) At the request of any
Holder, the Company shall furnish to such Holder, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as a Holder may reasonably request (A) if required by an underwriter,
a letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, and (B) an opinion, dated as of such date, of
counsel representing the Company for purposes of such Registration Statement, in
form, scope and substance as is customarily given in an underwritten public
offering, addressed to the underwriters and the Holders.

     

    11

     

    

    
    

        
(x) The Company shall make available for inspection by (A) any Holder,
(B) Legal Counsel, (C) any underwriter participating in any disposition pursuant
to a Registration Statement, (D) one firm of accountants or other agents
retained by the Holders and (E) one firm of attorneys retained by such
underwriters (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records"), as shall be
reasonably deemed necessary by each Holder, and cause the Company's officers,
directors and employees to supply all information that any Inspector may
reasonably request; provided, however, that each Inspector shall hold in strict
confidence and shall not make any disclosure (except to a Holder) or use of any
Record or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
under the Securities Act, (ii) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (iii) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement of which the Inspector has knowledge. Each Holder agrees
that it shall, upon learning that disclosure of such Records is sought in or by
a court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, the Records deemed confidential.

     

         (xi) The Company shall hold in confidence and not make any disclosure of
information concerning a Holder provided to the Company unless (A) disclosure of
such information is necessary to comply with federal or state securities laws,
(B) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (C) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning a Holder is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt written notice to such Holder
and allow such Holder, at the Holder's expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, such
information.

     

         (xii) The Company shall use its commercially reasonable efforts either to
(A) cause all the Registrable Securities covered by a Registration Statement to
be listed on each securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(B) secure the inclusion for quotation on the over-the-counter market on the OTC
Bulletin Board for such Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register with the Financial Industry Regulatory Authority (“FINRA”) as such with respect to such
Registrable Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section
13(d)(xii).

     

         (xiii) The Company shall cooperate with the Holders who hold Registrable
Securities being offered and, to the extent applicable, any managing underwriter
or underwriters, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or, if there is no managing
underwriter or underwriters, the Holders may reasonably request and registered
in such names as the managing underwriter or underwriters, if any, or the
Holders may request.

     

    12

     

    

    
    

         (xiv) The Company shall provide a Transfer Agent of all such Registrable
Securities not later than the effective date of such Registration
Statement.

     

         (xv) If requested by the managing underwriters or a Holder, the Company
shall (A) promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters and the Holders agree
should be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and any other terms of the
underwritten (or best efforts underwritten) offering of the Registrable
Securities to be sold in such offering; (B) make all required filings of such
prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment; and (C) supplement or make amendments to any Registration Statement
if requested by a Holder or any underwriter of such Registrable
Securities.

     

         (xvi) The Company shall make generally available to its security holders
as soon as practical, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the
effective date of the Registration Statement.

     

         (xvii) The Company shall otherwise use its commercially reasonable
efforts to comply with all applicable rules and regulations of the SEC in
connection with any registration hereunder.

     

         (xviii) Within two (2) Business Days after a Registration Statement which
covers applicable Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the Transfer Agent for such Registrable Securities (with copies to the
Holders whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC.

     

         (xix) Notwithstanding anything to the contrary in Section 13(d)(vii), at
any time after the Registration Statement has been declared effective, the
Company may delay the disclosure of material, non-public information concerning
the Company the disclosure of which at the time is not, in the good faith
opinion of the Board of Directors of the Company and its counsel, in the best
interest of the Company and, in the opinion of counsel to the Company, otherwise
required (a “Grace Period”); provided, that
the Company shall promptly (A) notify the Holders in writing of the existence of
material, non-public information giving rise to a Grace Period and the date on
which the Grace Period will begin, and (B) notify the Holders in writing of the
date on which the Grace Period ends; and, provided further, that during any
consecutive 365 day period, there shall be only three Grace Periods, each such
Grace Period not to exceed 20 days each (an “Allowable Grace Period”). For
purposes of determining the length of a Grace Period above, the
Grace Period shall begin on and include the date the Holders receive the notice
referred to in clause (A) above and shall end on and include the date the
Holders receive the notice referred to in clause (B) above. Upon expiration of
an Allowable Grace Period, the Company shall again be bound by the first
sentence of Section 13(d)(vii) with respect to the information giving rise
thereto.

     

    13

     

    

    
    

         (e) The Holders shall have the
following obligations with respect to each Registration
Statement:

     

         (i) At least seven (7) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each Holder in
writing of the information the Company requires from each such Holder if such
Holder elects to have any of such Holder's Registrable Securities included in
such Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this Warrant
with respect to the Registrable Securities of a particular Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably
request.

     

         (ii) Each Holder by such Holder's acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder, unless such Holder has notified the Company in writing of
such Holder's election to exclude all of such Holder's Registrable Securities
from such Registration Statement.

     

         (iii) In the event any Holder elects to participate in an underwritten
public offering pursuant to Section 13(a), each such Holder agrees to enter into
and perform such Holder's obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such offering and
take such other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities.

     

         (iv) Each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 13(d)(viii) or
the first sentence of Section 13(d)(vii), such Holder will immediately
discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
13(d)(viii) or the first sentence of 13(d)(vii).

     

         (v) No Holder may participate in any underwritten Registration hereunder
unless such Holder (A) agrees to sell such Holder's Registrable Securities on
the basis provided in any underwriting arrangements approved by the Holders
entitled hereunder to approve such arrangements, (B) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such underwriting
arrangements, and (C) agrees to pay its pro rata share of all underwriting
discounts and commissions.

     

    14

     

    

    
    

         (vi) Each Holder agrees not to take any action to cause such Holder to
become a registered broker dealer as defined under the 1934 Act or to effect any
change to such Holder's status that would preclude the Company from using Form
S-3 for the Registration Statement.

     

         (f) All reasonable expenses, other than
expenses incurred pursuant to Section 13(d)(x)(D) and (E) and underwriting
discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to this Sections 13, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company and reasonable fees and
disbursements of Legal Counsel, shall be paid by the Company.

     

         (g) In the event any Registrable Securities
are included in a Registration Statement under this Agreement:

     

         (i) To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Holder who holds such Registrable
Securities, the directors, officers, partners, employees, agents,
representatives of, and each Person, if any, who controls any Holder within the
meaning of the Securities Act or the Exchange Act, and any underwriter (as
defined in the Securities Act) for the Holders, and the directors and officers
of, and each Person, if any, who controls, any such underwriter within the
meaning of the Securities Act or the 1934 Act (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges,
costs, attorneys' fees, amounts paid in settlement or expenses, joint or
several, (collectively, "Claims") incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency or body or the SEC,
whether pending or threatened, whether or not an indemnified party is or may be
a party thereto ("Indemnified Damages"), to which any of
them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon: (A) any untrue statement or alleged untrue statement of a material fact in
a Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under the
securities or other "blue sky" laws of any jurisdiction in which Registrable
Securities are offered ("Blue Sky Filing"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (B) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (C) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (D) any material violation of
this Agreement (the matters in the foregoing clauses (A) through (D) being,
collectively, "Violations").

     

    15

     

    

    
    

    The Company
shall reimburse the Holders and each such underwriter or controlling Person,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 13(g): (A) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
or underwriter for such Indemnified Person expressly for use in connection with
the preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such Prospectus was timely made available by the Company
pursuant to Section 13(d)(iv); (B) with respect to any preliminary Prospectus,
shall not inure to the benefit of any such person from whom the person asserting
any such Claim purchased the Registrable Securities that are the subject thereof
(or to the benefit of any person controlling such Person) if the untrue
statement or omission of material fact contained in the preliminary Prospectus
was corrected in the Prospectus, as then amended or supplemented, if such
prospectus was timely made available by the Company pursuant to Section
13(d)(iv), and the Indemnified Person was promptly advised in writing not to use
the incorrect prospectus prior to the use giving rise to a violation and such
Indemnified Person, notwithstanding such advice, used it; (C) shall not be
available to the extent such Claim is based on a failure of the Holder to
deliver or to cause to be delivered the Prospectus made available by the
Company, if such Prospectus was timely made available by the Company pursuant to
Section 13(d)(iv); and (D) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Holders pursuant to Section
13(j).

     

         (ii) In connection with any Registration Statement in which a Holder is
participating, each such Holder agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 13(g)(i), the Company, each of its directors, each of its
officers who signs the Registration Statement, each Person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act (each,
an "Indemnified Party"), against any Claim
or Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or
Indemnified Damages 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 to the Company by such
Holder expressly for use in connection with such Registration Statement; and,
subject to Section 13(g)(iv), such Holder will reimburse any legal or other
expenses reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 13(g)(ii) and the agreement with respect to contribution contained in
Section 13(h) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Holder, which
consent shall not be unreasonably withheld; provided, further, however, that the
Holder shall be liable under this Section 13(g)(ii) for only that amount of a
Claim or Indemnified Damages as does not exceed the net proceeds to such Holder
as a result of the sale of Registrable Securities pursuant to such Registration
Statement.

     

    16

     

    

    
    

    Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Holders pursuant to Section 13(j).
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 13(g)(ii) with respect to any preliminary
Prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary Prospectus
was corrected on a timely basis in the Prospectus and such Prospectus was
provided to Holders as required, as then amended or
supplemented.

     

         (iii) The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution, to the same extent as provided
above, with respect to information such persons so furnished in writing
expressly for inclusion in the Registration Statement.

     

         (iv) Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 13(g) of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 13(g),
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 control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The Company shall
pay reasonable fees for only one separate legal counsel for the Holders, and
such legal counsel shall be selected by the Holders holding a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or claim.

     

    17

     

    

    
    

    The
indemnifying party shall keep the Indemnified Party or Indemnified Person fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its written
consent; provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the consent of the Indemnified Party or Indemnified Person, consent to entry of
any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 13(g), except to the extent that the indemnifying party
is prejudiced in its ability to defend such action.

     

         (v) The indemnification required by this Section 13(g) shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are
incurred.

     

         (vi) The indemnity agreements contained herein shall be in addition to
(A) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (B) any liabilities the
indemnifying party may be subject to pursuant to the law.

     

         (h) To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 13(g) to the fullest extent permitted by
law; provided, however, that: (i) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (ii)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.

     

         (i) With a view to making available to the
Holders the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Holders to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees
to:

     

         (i) make and keep public information available, as those terms are
understood and defined in Rule 144;

     

    18

     

    

    
    

         (ii) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act so long as
the Company remains subject to such requirements until the Holders may sell all
Registrable Securities without restriction under Rule 144, and the filing of
such reports and other documents is required for the applicable provisions of
Rule 144; and

     

         (iii) furnish to each Holder so long as such Holder owns Registrable
Securities, promptly upon request, (A) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (B) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company, and
(C) such other information as may be reasonably requested to permit the Holders
to sell such securities pursuant to Rule 144 without registration.

     

         (j) The rights under this Agreement shall be
automatically assignable by the Holders to any transferee of all or any portion
of Registrable Securities if: (A) the Holder agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (B) the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (i) the name and address of such transferee or
assignee, and (ii) the securities with respect to which such registration rights
are being transferred or assigned; (C) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and applicable state securities
laws; (D) at or before the time the Company receives the written notice
contemplated by clause (E) of this sentence the transferee or assignee agrees in
writing with the Company to be bound by all of the provisions contained
herein.

     

         14. Notices. Any and all
notices or other communications or deliveries hereunder (including without
limitation any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified as
provided in this Section prior to 5:00 p.m. (New York City time) on a Trading
Day, (ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified as
provided in this Section on a day that is not a Trading Day or later than 5:00
p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices or communications shall be as set forth in
the Protective Rights Agreement.

     

         15. Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon 30 days' notice to
the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation
resulting from any consolidation to which the Company or any new warrant agent
shall be a party or any corporation to which the Company or any new warrant
agent transfers substantially all of its corporate trust or stockholders
services business shall be a successor warrant agent under this Warrant without
any further act. Any such successor warrant agent shall
promptly cause notice of its succession as warrant agent to be mailed (by first
class mail, postage prepaid) to the Holder at the Holder's last address as shown
on the Warrant Register.

     

    19

     

    

    
    

         16. Miscellaneous.

     

         (a) Subject to the restrictions on transfer
set forth on the first page hereof, this Warrant may be assigned by the Holder.
This Warrant may not be assigned by the Company except to a successor in the
event of a Fundamental Transaction. This Warrant shall be binding on and inure
to the benefit of the parties hereto and their respective successors and
assigns. Subject to the preceding sentence, nothing in this Warrant shall be
construed to give to any Person other than the Company and the Holder any legal
or equitable right, remedy or cause of action under this Warrant. This Warrant
may be amended only in writing signed by the Company and the Holder and their
successors and assigns.

     

         (b) The Company will not, by amendment of its
governing documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder against
impairment. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any Warrant Shares above the amount payable
therefor on such exercise, (ii) will take all such action as may be reasonably
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares on the exercise of this Warrant, and
(iii) will not close its stockholder books or records in any manner which
interferes with the timely exercise of this Warrant.

     

         (c) All questions concerning the construction,
validity, enforcement and interpretation of this warrant shall be governed by
and construed and enforced in accordance with the laws of the State of
Delaware.

     

         (d) The headings herein are for convenience
only, do not constitute a part of this Warrant and shall not be deemed to limit
or affect any of the provisions hereof.

     

         (e) In case any one or more of the provisions
of this Warrant shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Warrant shall
not in any way be affected or impaired thereby and the parties will attempt in
good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

     

    Signature
Page Follows

     

    20

     

    

    
    

         IN WITNESS WHEREOF, the Company has caused
this Warrant to be duly executed by its authorized officer as of the date first
indicated above.
 

     

    
      	STRATASYS, INC. 
	By: /s/ S. Scott
    Crump
	Name: S. Scott Crump
	Title: CEO &
      President 

    

    21

     

    

    
    

    FORM OF EXERCISE NOTICE

     

    (To be executed by the Holder to exercise the
right to purchase shares of Common Stock under the foregoing
Warrant)

     

    To: STRATASYS, INC.

     

    The undersigned is the Holder of Warrant No.
_______ (the “Warrant”) issued by Stratasys, Inc., a
Delaware corporation (the “Company”). Capitalized terms used
herein and not otherwise defined have the respective meanings set forth in the
Warrant.

     

    
      	1.	        	The Warrant is currently exercisable to
      purchase a total of ______________ Warrant Shares.
	 
	2.	
            	The undersigned Holder hereby exercises
      its right to purchase _________________ Warrant Shares pursuant to the Warrant.
	 
	3.	
            	The Holder intends that payment of the
      Exercise Price shall be made as (check
one):

    

    
      	____ 	      	
              “Cash Exercise” under Section
      10

            
	
            	
            	 
	____ 	
            	
              “Cashless Exercise” under Section
      10

            

    

    
      	4.	        	If the holder has elected a Cash
      Exercise, the holder shall pay the sum of $____________ to the Company in accordance with the
      terms of the Warrant.
	 
	5.	
            	Pursuant to this exercise, the Company
      shall deliver to the holder _______________ Warrant Shares in accordance with the terms of the
      Warrant.
	 
	6.	
            	Following this exercise, the Warrant
      shall be exercisable to purchase a total of ______________ Warrant
  Shares.

    

    
      	Dated: 	                                     	, 	            

    

    
      	Name of
      Holder:
	 
	(Print) 	 	        

    

    
      	By:	 	        

    

    
      	Name:	 	        

    

    
      	Title:	 	        

    

    
      	
              (Signature must
      conform in all respects to name of holder as specified on the face of the
      Warrant)

               

            

    

    

    
    

    FORM OF ASSIGNMENT

     

         [To be completed and signed only upon
transfer of Warrant]

     

         FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto ________________________________ the right represented by the within Warrant to
purchase ____________
shares of Common Stock of
Stratasys, Inc. to which the within Warrant relates and appoints ________________ attorney to transfer said right on the books
of Stratasys, Inc. with full power of substitution in the
premises.

     

    
      	Dated: 	                                     	, 	            

    

    
      	 
	
              (Signature must conform in all respects
      to name of holder as specified on the face of the
      Warrant)

               

            

    

    
      	 
	Address of
    Transferee 
	 
	 
	 
	 

    

    
      	In the presence
    of:f8k011310ex10xiii_suspect.htm

Exhibit 10.13

    AGREEMENT

     

    Between

     

    SUSPECT DETECTION SYSTEMS, INC.

     

    And

     

    YOAV KRILL

    

     

    THIS
AGREEMENT is made and entered into as of this 13 day of January, 2010
by and between
Suspect Detection Systems, Inc., a Delaware corporation having an office located
at 4 Nafcha Street, Jerusalem, Israel 95508 (the "Company"), and Yoav Krill, an
individual having an office located at 150 West 56th
Street, Apartment 4005, New York, New York 10019 ("Mr. Krill").

    

     

    W
I T N E S S E T H:

     

    WHEREAS,
the Company desires to engage the services of Mr. Krill as the Chairman of the
Board of Directors of the Company and Mr. Krill t desires to accept such
engagement subject to the terms and conditions set forth in this
Agreement.

     

    NOW,
THEREFORE, in consideration of the mutual covenants set forth herein and other
valuable consideration, the receipt and sufficiency of which hereby is
acknowledged, the parties agree as follows:

     

    1. Position. Subject to
the provisions of this Agreement, the Company hereby appoints Mr. Krill as the
Chairman of the Board of Directors of the Company and Mr. Krill hereby accepts
such appointment on the terms and conditions hereinafter set forth.

     

    2. Duties. Mr. Krill
shall take such actions and fulfill such duties as are required for him to serve
as the Chairman of the Board of Directors of the Company. Mr. Krill agrees to
perform such services conscientiously and to the best of his abilities and to
use his best efforts to promote the general welfare and interests of the
Company.

     

    3. Standard of Care. The
standard of care owed by Mr. Krill to the Company shall only be to refrain from
engaging in gross neglect, negligent or reckless conduct or intentional
misconduct. In discharging his duties, Mr. Krill shall be fully protected in
relying in good faith upon the records required to be maintained by the Company
and upon such information, opinions, reports or statements by the Company or its
agents, or by any other person, as to matters Mr. Krill reasonably believes are
within such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Company, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, and profits or losses of the Company.

     

    4. Term. The term of
this Agreement shall commence as of the date set forth above and shall continue
until either party provides the other with no less than ninety (90) days prior
written notice that such party desires to terminate the Agreement.
Notwithstanding the foregoing and in addition to such rights of termination as
are otherwise set forth in this Agreement, the Company shall have the additional
right to terminate this Agreement for cause in the event of a material breach by
Mr. Krill in the performance of his duties hereunder, as provided in Paragraphs
5 and 6, below.

     

    
       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

     

    5. Events of Default and
Remedies. The repeated failure, refusal or neglect of Mr. Krill, other
than by reason of disability, to report or to render his services when and as
required hereunder, or to perform any covenant or condition of this Agreement on
his part to be kept or performed, shall be an event of material default
hereunder and the Company may terminate this Agreement if any such event of
material default shall occur and continue during the term hereof, as provided in
Paragraph 6, below.

     

    6. Termination. In
addition to such rights of termination as are otherwise set forth in this
Agreement, the Company shall have the additional right to terminate this
Agreement for cause in the event of Mr. Kill's material breach in the
performance of his duties hereunder.

     

    6.1. If
Mr. Krill engages in activities or conduct which the Company contends is a
material breach of Mr. Krill's obligations under this Agreement, the Company
shall deliver a notice in writing to Mr. Krill to terminate such activities or
conduct. If Mr. Krill fails to take affirmative steps to cure or terminate the
complained of activities or conduct on or before the expiration of ten (10) days
following receipt of said notice, then Mr. Krill shall be deemed in material
breach hereunder. In that event, the Company shall have the right to immediately
thereafter terminate this Agreement. The provisions for notice of default and
time to cure prior to termination shall not apply in the case of any cause
incapable of being cured, in which event the Company may terminate this
Agreement immediately and without prior notice. The right of termination
contained in this Paragraph 6.1 shall not preclude the Company from exercising
any other right it may have either pursuant to the other terms of this Agreement
or by law.

     

    7. Compensation. In
consideration of the services to be performed under this Agreement,
Mr. Krill shall receive an annual Director's Fee in the amount of $25,000 per
annum for the
first twelve (12) month period during which this Agreement remains in force and
effect, Prior to
November 30, 2010 and to each and every November 30 thereafter, the Company and
Mr. Krill
shall agree, in a writing signed by the Company and Mr. Krill, on the amount of
Mr. Krill's
annual Director's Fee, which amount shall not be less than $25,000 per annum and
shall be
increased, proportionately, with any increase in the Company's paid in capital,
sales revenues or net
profits during the immediately prior calendar year. Mr. Krill's annual
Director's Fee shall be paid
by the Company by company or bank check or by wire transfer to a bank account
designated
by Mr. Krill on or before the end of each and every calendar year during the
term of this
Agreement. Mr. Krill shall be responsible for payment of any personal income
taxes due or that may
become due as a result of his compensation under this Agreement.

     

    8 Options. The Company
hereby grants to Mr. Krill 1,500,000 options of common stock of the Company,
exercisable at $0.15 per share, from the stock option plan adopted by the
Company. Of the said amount, 250,000 options shall vest simultaneously with the
execution and delivery of this Agreement, and the balance shall vest each
calendar quarter during the 

     

    
       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

        immediately
subsequent three years (i.e., 104,166 options each calendar quarter), commencing
on March 31, 2010. The said options shall terminate forty-eight (48) months from
the date when the said options vest. Notwithstanding anything contained herein
to the contrary and except as provided for in Paragraph 10, below, if this
Agreement is terminated, any options not previously vested shall become null and
void. The options and the shares of stock issuable upon exercise thereof are
personal to Mr. Krill and shall be subject to the restrictions of applicable
Federal and state securities laws.

      

    

     

    9. Business Expenses.
The Company shall reimburse Mr. Krill for all reasonable and necessary business
expenses incurred by him in connection with the performance of his duties under
this Agreement, including reasonable travel and accommodation expenses during
travel required in connection with the performance of his duties
hereunder.

     

    10. Directors' and Officers'
Liability Insurance. The Company shall obtain and shall keep in full
force directors' and officers' insurance covering Mr. Krill's services as the
Chairman of the Board of Directors of the Company, which insurance shall provide
coverage to the fullest extent permitted by applicable law. Any failure by the
Company to obtain or to keep in force such insurance shall be deemed a material
breach by the Company of this Agreement and shall automatically terminate this
Agreement as of the date when such insurance does not exist, except that Mr.
Krill shall thereafter have the right to receive and to exercise all options
granted or to be granted to him pursuant to Paragraph 8, above, up to a maximum
of 1,500,00o options.

     

    11. No Breaches. Mr.
Krill represents that his execution of this Agreement and the performance of his
duties required hereunder will not be a breach of any other agreement to which
he is a party.

     

    12. Entire Agreement.
This Agreement constitutes the entire understanding between the Company and Mr.
Krill with respect to the subject matter hereof. Neither the Company nor Mr.
Krill shall be bound in any manner by any promises, statements, representations
or information made, given or furnished by any person representing or purporting
to represent the Company or Mr. Krill except to the extent that such promises,
statements, representations or information are expressly set forth in this
Agreement.

     

    13. Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
the respective heirs, successors, and assigns of the parties.

     

    14. Notices. All notices
and other communications required or permitted hereunder shall be delivered
personally, sent via facsimile, certified or registered mail, return receipt
requested, or next day express mail or overnight, nationally recognized courier,
postage prepaid with proof of receipt, to the address or telephone number (in
the case of facsimile) set forth above. Such addresses and telephone numbers may
be changed by notice given in the manner provided herein. Any such notice shall
be deemed given (i) when delivered if delivered personally, (ii) the day after
deposit with the express or courier service when sent by next day express mail
or courier, (iii) five (5) days after deposit with the postal service when sent
by certified or registered mail, or (iv) when sent over a facsimile system with
answer back response set forth on the sender's copy of the
document.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    15. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within New York.

     

    16. Amendment and
Modification. This Agreement may be amended, modified or supplemented
only by written agreement executed by the Company and Mr. Krill.

     

    17. Headings. The
headings of the various paragraphs of this Agreement are inserted for
convenience of reference only and are under no circumstances to be a part of, or
construed as a part of, this Employment Agreement.

     

    18. Execution in
Counterparts. This Agreement may be executed in counterparts and by
facsimile, each of which shall be deemed to be an original and all of which,
when taken together, shall constitute but one and the same
instrument.

     

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

    

    

     

     

     

    
      
        	
                SUSPECT
      DETECTION SYSTEMS, INC.

              
	 
      	 
      
	 
      	 
      
	
                By:

              	/s/ 
      Asher
      Zwebner
	 
      	 
      
	 
      	
                Name:  
      Asher
      Zwebner

              
	 
      	
                Title: 
      Chief Executive Officer

              
	 
      	 
      
	 
      	
                /s/
      YOAV KRILL

              
	 
      	
                YOAV
      KRILL

              

      

    

     

     

    4

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