Document:

Exhibit 4.1

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT, dated as of January 5, 2006 (this “Agreement”),
by and among CBS Corporation, a Delaware corporation (the “Company”),
and Stephen D. Greenberg, Lauren Tyler and Cliff Friedman, each an individual
(collectively, the “Holder Representatives”), as representatives of the
stockholders of the Company listed on Schedule I hereto (each, a “Stockholder”);

 

WHEREAS, pursuant to the Agreement and Plan of Merger (the “Merger
Agreement”), dated as of November 2, 2005, by and among CSTV Networks, Inc.,
a Delaware corporation (“CSTV”), the Company, School Acquisition Sub
Corp., a Delaware corporation  and an indirect, wholly owned
subsidiary of the Company (“Sub”), and the Holder Representatives, Sub
has merged with and into CSTV;

 

WHEREAS, pursuant to the Merger Agreement, each Stockholder will be
issued shares of non-voting Class B common stock of the Company, $0.001
par value (the “Common Stock” and, together with any Common Stock or
other securities of the Company issued as a dividend or other distribution with
respect thereto, or in exchange therefore, or in replacement thereof, the “Company
Common Stock”); and

 

WHEREAS, the Company and the Holder Representatives now wish to enter
into this Agreement to set forth their understanding as to the registration
rights of the Stockholders with respect to the Company Common Stock.

 

NOW, THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree
as follows:

 

ARTICLE 1

DEFINITIONS

 

SECTION 1.01.  Definitions.  (a)  As used in this Agreement, the
following terms shall have the following meanings:

 

“Agreement” has the meaning set forth in the introductory
paragraph hereof.

 

“Affiliate” has the meaning set forth in Rule 12b-2, as in
effect on the date hereof, under the Exchange Act.

 

“beneficially own” has the meaning set forth in Rule 13d-3,
as in effect on the date hereof, under the Exchange Act.

 

“Blockage Notice” has the meaning set forth in Section 2.01(c) hereof.

 

“Blockage Period” has the meaning set forth in Section 2.01(c) hereof.

 

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by Law to be closed in The
City of New York.  If any payment or
other obligation is due to be made or performed hereunder on a day that is not
a Business Day, such payment or other obligation shall be made or performed on
the next Business Day.

 

“Commission” means the United States Securities and Exchange
Commission and any successor agency.

 

“Company” has the meaning set forth in the introductory
paragraph hereof.

 

“CSTV” has the meaning set forth in the Recitals hereof.

 

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

 

“Holder” means a Stockholder and any Permitted Transferee of the
Stockholder.

 

“Holders Shares” means the shares of Company Common Stock issued
by the Company to the Holders pursuant to the Merger Agreement.

 

“Holder Representatives” has the meaning set forth in the
Recitals hereof.

 

“Initial Requesting Holder” means the Requesting Holders
initiating the registration pursuant to the first sentence of Section 2.02(a).

 

“Majority Holders” means the Holders holding a majority in
aggregate of the Registrable Stock held by all Holders.

 

“Merger Agreement” has the meaning set forth in the Recitals
hereof.

 

“Officer’s Certificate” has the meaning set forth in Section 2.03
hereof.

 

“Other Securities” has the meaning ascribed thereto in Section 2.04(a) hereof.

 

“Permitted Transferee” means any Person to whom the Registrable
Stock is transferred in accordance with Section 3.01.

 

“Person” means any individual, firm, corporation, partnership,
limited partnership, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the
Exchange Act.

 

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“Register,” “registered” and “registration” shall
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement or
document.

 

“Registrable Stock” means the Holder Shares and any securities
issued or issuable with respect to any Holder Shares by way of conversion,
exchange, replacement, stock dividend, stock split or other distribution or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise.  For purposes of this Agreement, any
Registrable Stock shall cease to be Registrable Stock when (i) a
registration statement covering such Registrable Stock has been declared
effective and such Registrable Stock has been disposed of pursuant to such
effective registration statement, (ii) such Registrable Stock is sold by a
Person in a transaction in which the rights under the provisions of this
Agreement, or any portion thereof, are not assigned pursuant to the terms
hereof, or (iii) such Registrable Stock is eligible for sale under Rule 144(k)
without any volume, manner of sale or other restriction.

 

“Registration Expenses” means any and all expenses incident to
performance of or compliance with any registration or marketing of securities
pursuant to Article 2, including (i) the fees, disbursements and
expenses of the Company’s counsel and accountants in connection with this
Agreement and the performance of the Company’s obligations hereunder (including
the expenses of any annual audit letters and “cold comfort” letters required or
incidental to the performance of such obligations); (ii) all expenses,
including filing fees, in connection with the preparation, printing and filing
of the registration statement, any preliminary prospectus or final prospectus,
any other offering document and amendments and supplements thereto and the
mailing and delivering of copies thereof to any underwriters and dealers; (iii) the
cost of printing and producing any agreements among underwriters, underwriting
agreements, selling group agreements and any other customary documents in
connection with the marketing of securities pursuant to Article 2; (iv) all
expenses in connection with the qualification of the securities to be disposed
of for offering and sale under state securities laws, including the reasonable
fees and disbursements of counsel for the underwriters or the Holders of
securities in connection with such qualification and in connection with any
blue sky and legal investment surveys, including the cost of printing and
producing any such blue sky or legal investment surveys; (v) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the securities being registered
pursuant to Article 2; (vi) transfer agents’ and registrars’ fees and
expenses and the fees and expenses of any other agent or trustee appointed in
connection with such offering; (vii) all security engraving and security
printing expenses; (viii) all fees and expenses payable in connection with
the listing of the securities on any securities exchange or automated
interdealer quotation system; (ix) the costs and expenses of the Company
and its officers relating to analyst or investor presentations, if any, or any “road
show” undertaken in connection with the registration and/or marketing of any
Registrable Stock; and (x) the reasonable fees and expenses of no more than one
legal counsel to the Holders selected by Holders holding a majority of the
Registrable Stock included in the

 

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relevant
registration statement, as applicable. 
In no event shall Registration Expenses be deemed to include
underwriting discounts and commissions, brokerage fees and transfer taxes, if
any.

 

“Requesting Holders” means the Holders requesting the
registration of their Registrable Stock pursuant to Section 2.02(a) or
2.02(f).

 

“Rule 415 Offering” means an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to
similar effect) promulgated under the Securities Act.

 

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

 

“Selling Holder” means any Holder whose Registrable Stock is included
at the request of such Holder in the relevant registration statement.

 

“Shelf Registration Statement” means a “shelf” registration
statement of the Company relating to a Rule 415 Offering which covers all
of the Registrable Stock held by the Holders, on Form S-3 under the
Securities Act, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all materials
incorporated by reference therein.

 

“Sub” has the meaning set forth in the Recitals hereof.

 

“Subsidiary” means, with respect to the Holder, (x) any
partnership of which the Holder or any of its Subsidiaries is a general partner
or (y) any other entity in which the Holder or any of its Subsidiaries owns or
has the power to vote more than 50% of the equity interests in such entity
having general voting power to participate in the election of the governing
body of such entity.

 

“Stockholder” has the meaning set forth in the introductory
paragraph hereof.

 

“Transfer” has the meaning set forth in Section 3.01
hereof.

 

(b)                                 All
other capitalized terms not defined herein shall have the meaning set forth in
the Merger Agreement.

 

ARTICLE 2

REGISTRATION RIGHTS

 

SECTION 2.01.  Shelf Registration.  (a) In accordance with the terms of the
Merger Agreement, the Company shall prepare and file with the Commission a
registration statement on Form S-3 in connection with the resale of the
CBS Class B Common Stock issued under the Merger Agreement.  The Company shall use its

 

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commercially
reasonable efforts to have the Shelf Registration Statement declared effective
under the Securities Act as promptly as practicable after such filing; provided,
however, such effective date shall in no event be later than the date
the shares of CBS Class B Common Stock are first issued to the
Stockholders as Merger Consideration (the “Issuance Date”).  The Company will advise the Holder
Representatives, promptly after it receives notice thereof, of the time when
the Shelf Registration Statement has become effective or any supplement or
amendment has been filed, the issuance of any stop order, the suspension of the
qualification of the CBS Class B Common Stock issuable in connection with
the Merger for offering of sale in any jurisdiction, or any request by the
Commission for amendment of the Shelf Registration Statement or comments
thereon and responses thereto or requests by the Commission for additional
information.  If at any time following
the Effective Time any information relating to the Stockholders or the Company,
or any of their respective Affiliates, officers or directors, should be
discovered by any or all of the Stockholders or the Company which should be set
forth in an amendment or supplement to the Shelf Registration Statement, so
that such document would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading, the party which discovers such information shall promptly notify
the other parties hereto and an appropriate amendment or supplement describing
such information shall be filed with the Commission, subject to Blockage
Periods as provided below. 
Notwithstanding any provision in this Section 2.01 to the contrary,
the Company shall not be obligated to provide the Holder Representatives or any
Stockholder with copies of comment letters received by the Company from the
Commission or any of the Company’s responses thereto, except to the extent such
comment letter or response relates directly to a Stockholder.

 

(b)                                 Subject
to the terms of this Agreement, the Company agrees to use reasonable best
efforts to keep the Shelf Registration Statement continuously effective from the
date the Commission declares the Shelf Registration Statement effective until
the first date that the Holders cease to hold any Registrable Stock.

 

(c)                                  If,
and only if, (i) there has been or there is pending a material development
or change in the business, affairs or prospects of the Company, (ii) the
Company’s U.S. securities counsel has advised the Company that such material
development or change should be disclosed in the Shelf Registration Statement,
the prospectus included therein, or an amendment or supplement thereto in order
to ensure that the Shelf Registration Statement and such prospectus, as amended
or supplemented, will not contain any misstatement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (iii) in the good faith judgment of
any officer of the Company, disclosure of such development or change would be
materially disadvantageous to the Company, then the Company may deliver written
notification to the Holder Representatives on behalf of all Holders that
Registrable Stock may not be sold pursuant to the Shelf Registrations Statement
(a “Blockage Notice”).  Upon
receipt of a Blockage Notice, the Holder Representatives shall notify all
Holders of such Blockage Notice.  No
Holder of Registrable Stock shall sell any Registrable Stock pursuant to the
Shelf Registration

 

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Statement for
the period (the “Blockage Period”) beginning on the date that is two (2) trading
days after the date such Blockage Notice was received by the Holder
Representatives and ending on the earlier of (i) the date on which the
Company notifies the Holder Representatives that the Blockage Period has ended
(and the Company agrees promptly to notify the Holder Representatives if the
circumstances described in clause (i) or (ii) of the first sentence
of this paragraph giving rise to such Blockage Period no longer apply) and (ii) thirty
(30) days following delivery of a Blockage Notice.  The Company shall promptly prepare and file
any amendment or supplement to the Shelf Registration Statement or the
prospectus included therein necessary so that at the conclusion of the Blockage
Period, the Shelf Registration Statement and the prospectus included therein do
not contain any misstatements of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading and notify the Holder Representatives of such amendment or supplement
and of the conclusion of the Blockage Period. 
Notwithstanding anything herein to the contrary, there shall be not less
than 270 days in any consecutive 360-day period during which no Blockage Period
is in effect.

 

(d)                                 If
no Blockage Notice is delivered, the Company will cooperate with the Selling
Holders in preparing a supplement to the prospectus included in the Shelf
Registration Statement to reflect the plan of distribution of the Registrable
Stock to be sold.  Notwithstanding
anything herein to the contrary, the Company shall not deliver a Blockage
Notice less than five (5) trading days after the expiration of the
Blockage Period.

 

SECTION 2.02.  Demand
Registration.  (a)  If at any
time after the Issuance Date, the Shelf Registration Statement referred to in Section 2.01
is not effective (subject to any permitted postponement pursuant to Section 2.03),
the Majority Holders may request in writing that the Company effect the
registration under the Securities Act of any or all of the Registrable Stock
held by such requesting Holders, which notice shall specify the intended method
or methods of disposition of such Registrable Stock.  Except as otherwise provided herein, the
Company shall prepare and (within forty-five (45) days after such request has been
given) file with the Commission a registration statement with respect to (x)
all Registrable Stock included in such request and (y) all Registrable Stock
included in any request delivered by the Requesting Holders pursuant to Section 2.02(f),
and thereafter use its reasonable best efforts to effect the registration under
the Securities Act and applicable state securities laws of such Registrable
Stock for disposition in accordance with the intended method or methods of
disposition stated in such request; provided
that the Company shall not be obligated to effect any such
registration pursuant to this Section 2.02(a) if (i) within
thirty (30) days of receipt of a written request from the Requesting Holders,
the Company gives notice to the Requesting Holders that the Company intends to
effect an offering of the Company’s securities for the Company’s account, the
Company’s managing underwriter or placement agent advises the Company not to
include all Registrable Stock in such offering and the Company has taken
substantial steps and is proceeding with reasonable diligence to effect such
offering (provided that in such
case, the Company shall, subject to Section 2.04(c), use its

 

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reasonable
best efforts to include in the registration relating to such public offering
all Registrable Stock requested to be included by any Holder pursuant to Section 2.04(c) and,
in the event Section 2.04(c) applies to such registration, shall
include in such registration a number of shares of such Registrable Stock that
is equal to at least 25% of the shares of Common Stock (on an as converted
basis, with respect to securities convertible into or exchangeable for Common
Stock to be included in such registration) that the Company is registering
pursuant to such registration) or (ii) the Requesting Holders propose to
sell less than all Registrable Stock then held by them pursuant to such
registration statement and the estimated aggregate price to the public of such
Registrable Stock is less than forty million dollars ($40,000,000).

 

(b)                                 The
Majority Holders may collectively exercise their rights under this Section 2.02
on not more than three occasions.

 

(c)                                  The
Holders shall not have the right to require the filing of a registration statement
pursuant to this Section 2.02 while any registration statement that has
been filed pursuant to this Section 2.02 has yet to become effective or
within six (6) months following the effectiveness of any registration
statement on Form S-1 that was filed pursuant to this Section 2.02.

 

(d)                                 A
registration pursuant to this Section 2.02 shall not be deemed to have
been effected (and, therefore, rights of a Requesting Holder shall be deemed
not to have been exercised for purposes of paragraph (a) above) (i) if
it has not become effective, (ii) if after it has become effective such
registration (or the use of the prospectus contained in such registration
statement) is (A) interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court
for any reason other than a misrepresentation or an omission by any Holder or
underwriter for such Holder or (B) delayed, withdrawn, suspended or
terminated and, in each case, as a result thereof, the Registrable Stock
requested to be registered cannot be completely distributed in accordance with
the plan of distribution set forth in the related registration statement (until
such time as the Registrable Stock requested to be registered may be completely
distributed in accordance with the plan of distribution set forth in the
related registration statement) or (iii) if the conditions to closing
specified in any purchase agreement or underwriting agreement containing
customary terms for secondary offerings by selling securityholders entered into
by the Company in connection with such registration are not satisfied or waived
other than because of some act or omission by any Holder or underwriter for
such Holder.

 

(e)                                  In
the event that any registration pursuant to Section 2.02(a) shall
involve, in whole or in part, an underwritten offering, the Holders of a
majority of the Registrable Stock to be registered shall select the lead
underwriter or underwriters (which selection or selections shall be subject to
the approval of the Company, which approval shall not be unreasonably
withheld), as well as counsel for the Holders, with respect to such
registration.  The parties hereto
acknowledge and agree that the Company shall have sole discretion with respect
to the selection of underwriters for any registration pursuant to Section 2.04
that involves an underwritten offering.

 

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(f)                                    Upon
receipt of a written request from the Initial Requesting Holders pursuant to
the first sentence of Section 2.02(a), the Company shall promptly give
written notice of such requested registration to the Holder Representatives and
the intended method or methods of disposition stated in such request.  Each other Holder may, by written notice to
the Company to be delivered within ten (10) days of the delivery of the
Company’s notice, request the inclusion in such registration of any Registrable
Stock held by such other Holder.  The
Company shall promptly after the expiration of such 10-day period notify the
Holder Representatives of (i) the identity of the other Requesting Holders
and (ii) the number of shares of Registrable Stock requested to be
included therein by each Requesting Holder. 
In the event that the Initial Requesting Holders intend to distribute
the Registrable Stock covered by their request by means of an underwriting, the
right of any Holder to include all or any portion of its Registrable Stock in
such registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Stock in the
underwriting to the extent provided herein. 
All Holders proposing to distribute all of any portion of their
Registrable Stock through such underwriting shall enter into an underwriting
agreement in customary form (for secondary sales by selling stockholders) with
the underwriter or underwriters selected pursuant to Section 2.02(e).

 

(g)                                 The
Company shall have the right to cause the registration of additional equity
securities for sale for the account of any Person that is not a Holder
(including the Company and any directors, officers or employees of the Company
(such additional equity securities, the “Additional Equity Securities”))
in any registration of Registrable Stock requested by the Requesting Holders; provided, that if such registration is to
be an underwritten registration and such Requesting Holders are advised in
writing (with a copy to the Company) by a nationally recognized investment
banking firm selected pursuant to paragraph (e) above that, in such firm’s
good faith view, all or a part of the equity securities to be included in such
registration (including any Additional Equity Securities) cannot be sold and
the inclusion of all or part of the equity securities that would otherwise be included
in such registration would be likely to have an adverse effect on the price,
timing or distribution of the offering and sale of the equity securities to be
included in such registration, then the Company shall exclude from such
registration such Additional Equity Securities or part thereof, to the nearest
extent possible on a pro rata basis,
in which case the Company shall include in such registration:

 

(i)                                     first, up to the full number of shares of
Registrable Stock and

 

(ii)                                  second, up to the full number of any other
Additional Equity Securities, if any, in excess of the Registrable Stock to be
sold in such offering which, in the good faith view of such investment banking
firm, can be so sold without so adversely affecting such offering in the manner
described above.

 

In the event that the number of shares of Registrable Stock requested
to be included in a registration statement by the Requesting Holders that will
not include any Additional Equity Securities exceeds the number which, in the
good faith view of such investment banking firm, can be sold without adversely
affecting the price, timing,

 

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distribution
or sale of securities in the offering, the number shall be allocated pro rata among all of the Requesting
Holders on the basis of the relative number of shares of Registrable Stock then
held by each such Requesting Holder (with any number in excess of a Requesting
Holder’s request reallocated among the remaining Requesting Holders in a like
manner).

 

SECTION 2.03.  Postponement.  The Company shall be entitled to postpone for
a reasonable period of time up to thirty (30) days and no more than ninety (90)
days in any consecutive 12-month period; provided,
however, the Company shall not postpone within less than five (5) trading
days after the immediately prior postponement, the filing of any registration
statement or any amendment or supplement thereto otherwise required to be
prepared and filed by it pursuant to Section 2.01 (except in the case of the
Shelf Registration Statement which must be effective no later than the Issuance
Date in accordance with such Section 2.01) or 2.02 if the Company
furnishes to the Holder Representatives an officer’s certificate executed by
the Chief Executive Officer, Chief Financial Officer or any other duly
authorized officer of the Company (“Officer’s Certificate”) stating that
the Company or any of its Subsidiaries is engaged in confidential negotiations
or other confidential business activities (or any such executive officer
determines that the Company is at such time otherwise in possession of material
non-public information with respect to the Company or any of its Subsidiaries),
disclosure of which would be required in such registration statement, and the
Company determines in good faith that such disclosure would be materially
detrimental to the Company and its stockholders other than the Holders.  A deferral of the filing of a registration
statement pursuant to this Section 2.03 shall be lifted, and notice to the
Holder Representatives shall promptly be given and the registration statement
shall be filed forthwith, if the negotiations or other activities are
terminated or publicly disclosed (or such material non-public information has
been publicly disclosed by the Company). 
In order to defer the filing of a registration statement pursuant to
this Section 2.03, the Company shall promptly (but in any event within ten
(10) days), upon determining to seek such deferral, deliver to the Holder
Representatives (subject to the Holders entering into a customary
confidentiality obligation as to such information, which the Holders hereby
agree to do) the Officer’s Certificate stating that the Company is deferring
such filing pursuant to this Section 2.03 and an approximation of the
anticipated delay.

 

SECTION 2.04.  Piggyback
Registration.  (a) In the event
that the Company proposes to register any of its Common Stock, any other of its
equity securities or securities convertible into or exchangeable for its equity
securities (collectively, including Common Stock, “Other Securities”)
under the Securities Act, whether or not for sale for its own account, in a
manner that would permit registration of Registrable Stock for sale for cash to
the public under the Securities Act, it shall so long as Holders own
Registrable Stock, give prompt written notice to the Holder Representatives of
its intention to do so and of the rights of such Holder under this Section 2.04.  Subject to the terms and conditions hereof,
such notice shall offer each such Holder the opportunity to include in such
registration statement such number of shares of Registrable Stock as such
Holder may request.  Upon the written
request of any such Holder made within ten (10)

 

9

 

days after the
receipt of the Company’s notice (which request shall specify the number of
shares of Registrable Stock intended to be disposed of and the intended method
of disposition thereof), the Company shall use its reasonable best efforts to
effect, in connection with the registration of the Other Securities, the
registration under the Securities Act of all Registrable Stock which the
Company has been so requested to register, to the extent required to permit the
disposition (in accordance with such intended methods thereof) of the
Registrable Stock so requested to be registered.  Notwithstanding the immediately preceding
sentence, in the event that the holders of the Other Securities intend to
distribute the Other Securities covered by such registration by means of an
underwriting, the right of any Holder to include all or any portion of its
Registrable Stock in such registration shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s Registrable
Stock in the underwriting to the extent provided herein.  All Holders proposing to distribute all or
any portion of their Registrable Stock through such underwriting shall enter
into an underwriting agreement in customary form (for secondary sales by
selling stockholders) with the underwriter or underwriters.

 

(b)                                 If,
at any time after giving a written notice of its intention to register any
Other Securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to register the Other Securities, the Company may, at its election,
give written notice of such determination to the Holder Representatives and
thereupon the Company shall be relieved of its obligation to register such
Registrable Stock in connection with the registration of such Other Securities,
without prejudice, however, to the rights of the Holders immediately to request
that such registration be effected as a registration under Section 2.02 to
the extent permitted thereunder.

 

(c)                                  If
the registration referred to in the first sentence of Section 2.04(a) is
to be an underwritten registration and a nationally recognized investment
banking firm selected by the Company advises the Company in writing that, in
such firm’s good faith view, the inclusion of all or a part of such Registrable
Stock in such registration would be likely to have an adverse effect upon the
price, timing or distribution of the offering and sale of the Other Securities
then contemplated, the Company shall include in such registration:

 

(i)                                     first, all Other Securities the Company
proposes to sell for its own account,

 

(ii)                                  second,
any securities of the Company to be registered pursuant to “demand”
registration rights existing as of the date hereof, and

 

(iii)                               third,
up to the full number of shares of Registrable Stock held by Holders of
Registrable Stock in excess of the number of Other Securities to be sold in
such offering which, in the good faith view of such investment banking firm,
can be so sold without so adversely affecting such offering in the manner

 

10

 

described
above.

 

(d)                                 The
Company shall not be required to effect any registration of Registrable Stock
under this Section 2.04 incidental to the registration of any of its
securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans or in connection with the
filing of a Form S-4 or Form S-8 registration statement.

 

(e)                                  No
registration of Registrable Stock effected under this Section 2.04 shall
relieve the Company of its obligation to effect a registration of Registrable
Stock pursuant to Section 2.01 or 2.02.

 

SECTION 2.05.  Expenses.  Except as provided herein, the Company shall
pay all Registration Expenses under this Article 2 with respect to a
particular offering (or proposed offering). 
Each Selling Holder shall bear the fees and expenses of its own counsel
as well as all underwriting discounts and commissions, brokerage fees and
taxes, except that reasonable fees and expenses of one counsel representing all
Selling Holders selected by the Selling Holders holding a majority of the
Registrable Stock included in the relevant registration statement, as
applicable, will constitute Registration Expenses.

 

SECTION 2.06.  Registration
and Qualification.  If the Company is
required to effect the registration of any Registrable Stock under the Securities
Act as provided in Section 2.01, 2.02 or 2.04, the Company shall as
promptly as practicable, but subject to the other provisions of this Agreement:

 

(a)                                  prepare,
file and use its reasonable best efforts to cause to become effective a
registration statement under the Securities Act relating to the Registrable
Stock to be offered in accordance with the intended method of disposition
thereof;

 

(b)                                 prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement continuously effective and to
comply with the provisions of the Securities Act with respect to the
disposition of all such Registrable Stock until such time as all of such
Registrable Stock have been disposed of in accordance with the intended methods
of disposition set forth in such registration statement; provided that the Company will, at least
five (5) Business Days prior to filing a registration statement or prospectus
or any amendment or supplement thereto, furnish to the Holder Representatives
copies of such registration statement or prospectus (or amendment or
supplement) as proposed to be filed (including, upon the request of such
Holder, documents to be incorporated by reference therein) which documents will
be subject to the reasonable review and comments of such Holder (and its
attorneys) during such 5 business-day period and the Company will not file any
registration statement, any prospectus or any amendment or supplement thereto
(or any such documents incorporated by reference) containing any statements
with respect to

 

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such Holder to
which such Holder shall reasonably object in writing; it being agreed that
there is no need to pre-deliver or give a right to review of any Exchange Act
filing that is fully incorporated by reference;

 

(c)                                  furnish
to the Holder Representatives and to any underwriter of such Registrable Stock
such number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in such registration statement or prospectus, and
such other documents as the Selling Holders or such underwriter may reasonably
request, and, upon the request of the Selling Holders or such underwriter, a
copy of any and all transmittal letters or other correspondence to or received
from, the Commission or any other governmental agency or self-regulatory body
or other body having jurisdiction (including any domestic or foreign securities
exchange) relating to such offering;

 

(d)                                 after
the filing of the registration statement, promptly notify the Holder
Representatives in writing of the effectiveness thereof and of any stop order
issued or, to the knowledge of the Company, threatened by the Commission and
use its reasonable best efforts to prevent the entry of such stop order or to
promptly remove it if entered and promptly notify the Holder Representatives of
such lifting or withdrawal of such order;

 

(e)                                  use
its reasonable best efforts to register or qualify all Registrable Stock
covered by such registration statement under the securities or blue sky laws of
such U.S. jurisdictions as may be necessary and as the Selling Holders or any
underwriter of such Registrable Stock shall reasonably request, and use its
reasonable best efforts to obtain all appropriate registrations, permits and
consents in connection therewith, and do any and all other acts and things
which may be reasonably necessary or advisable to enable the Selling Holders or
any such underwriter to consummate the disposition in such jurisdictions of the
Registrable Stock covered by such registration statement; provided that the Company shall not for
any such purpose be required to qualify generally to do business as a foreign
corporation in any such jurisdiction wherein it is not so qualified or to
consent to general service of process in any such jurisdiction or become
subject to taxation in any such jurisdiction;

 

(f)                                    use
its reasonable best efforts in the event of an underwritten offering to furnish
to the Holder Representatives and to any underwriter of such Registrable Stock (i) an
opinion of counsel for the Company addressed to each underwriter and each
Selling Holder and dated the date of the closing under the underwriting
agreement and (ii) a “cold comfort” letter addressed to each underwriter
and each Selling Holder and signed by the independent public accountants who
have audited the financial statements of the Company included in such
registration statement, in each such case covering substantially the same
matters with respect to such registration

 

12

 

statement (and
the prospectus included therein) as are customarily covered in opinions of
issuer’s counsel and in accountants’ letters delivered to underwriters in
connection with the consummation of underwritten secondary public offerings of
securities by selling securityholders;

 

(g)                                 as
promptly as practicable, notify the Holder Representatives in writing (i) at
any time when a prospectus relating to a registration pursuant to Section 2.01,
Section 2.02 or Section 2.04 is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any 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 (ii) of any
request by the Commission or any other regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration statement
or other document relating to such offering, and in either such case, at the
request of the Selling Holders (but subject to Section 2.03) prepare and
furnish to the Holder Representatives as promptly as practicable a reasonable
number of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
Registrable Stock, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading (and the Selling Holders agree to
immediately discontinue use (and cause each other Person acting on its behalf
to immediately discontinue use) of the prospectus included in such registration
statement following receipt of such notice until such time as such prospectus
shall have been so amended or supplemented or such time as the Company shall
have provided the Holder Representatives with a subsequent notice to the effect
that such prospectus may again be used);

 

(h)                                 if
requested by the lead or managing underwriters or Selling Holders, use its
reasonable best efforts to list all such Registrable Stock covered by such
registration on each securities exchange and automated interdealer quotation
system on which the Common Stock is then listed; upon the Selling Holders’
reasonable request, send appropriate officers of the Company to attend
customary “road shows” and analyst and investor presentations scheduled in
connection with any such underwritten offering of Registrable Stock; provided, however, that attending such
road show would not unduly interfere with the operation of the Company; and
furnish for delivery in connection with the closing of any offering of
Registrable Stock pursuant to a registration effected pursuant to Section 2.01,
Section 2.02 or Section 2.04 unlegended certificates representing
ownership of the Registrable Stock being sold in such denominations as shall be
requested by the Selling Holders or the underwriters.

 

In addition, each Holder agrees that (i) in connection with any
registration of Registrable Stock pursuant to this Article 2 it will
timely provide all information reasonably necessary with respect to such Holder
and its plan of distribution, for such

 

13

 

registration
of Registrable Stock, (ii) failure to provide such information will
postpone the Company’s obligations to such Holder for the applicable
registration until such information is provided and (iii) the Company will
have no obligation to update or amend selling stockholders’ information in any
filing more frequently than every 90 days, if such update would require a
post-effective amendment. 
Notwithstanding anything to the contrary in this Article 2, the
Company shall not be obligated to effect any offering by means of an
underwritten offering (and, without limiting the generality of the foregoing,
the Company shall not be obligated to comply with Section 2.07 and
paragraphs (f) and (h) of Section 2.06) unless the estimated
aggregate price to the public of the securities to be sold thereunder are in
excess of forty million dollars ($40,000,000).

 

SECTION 2.07.  Underwriting;
Due Diligence.  (a) If requested
by the underwriters for any underwritten offering of Registrable Stock pursuant
to a registration requested under this Article 2, the Company shall enter
into an underwriting agreement with such underwriters for such offering, which
agreement will contain such representations and warranties and covenants by the
Company and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions by selling
securityholders, including indemnification and contribution provisions substantially
to the effect and to the extent provided in Section 2.08, and agreements
as to the provision of opinions of counsel and accountants’ letters to such
underwriters and Selling Holders the effect and to the extent provided in Section 2.06(f).  The Selling Holders on whose behalf the
Registrable Stock are to be distributed by such underwriters shall be parties
to any such underwriting agreement and the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters, shall also be made to and for the benefit of such Selling
Holders.  Such underwriting agreement
shall also contain such representations and warranties and covenants and
indemnification by such Selling Holders and underwriters and such other terms
and provisions as are customarily contained in underwriting agreements with
respect to secondary distributions on the part of shareholders, including
indemnification and contribution provisions substantially to the effect and to
the extent provided in Section 2.08. 
Notwithstanding anything to the contrary herein, such underwriting
agreement shall not require the Selling Holders to have any liability with
respect to the representations made by, the operations of or the disclosures
made by the Company.

 

(b) In connection with the preparation and filing of each
registration statement registering Registrable Stock under the Securities Act
under this Article 2, upon entering into a confidentiality agreement with
the Company that is in customary form for underwritten public offerings and
reasonably satisfactory to the Company, the Company shall give the
underwriters, if any, and underwriters’ counsel, and counsel for the Holders as
selected pursuant to Section 2.02(e) or by the Selling Holders
holding a majority of the Registrable Stock included in the relevant
registration statement, as applicable, such reasonable and customary access to
its books, records and properties and such opportunities to discuss the
business and affairs of the Company with its officers and the independent
public accountants who have audited the financial statements of the

 

14

 

Company as
shall be necessary, in the reasonable opinion of such underwriters, such
underwriters’ counsel or such counsel for the Holders, to conduct a reasonable
investigation within the meaning of the Securities Act; provided that such underwriters, such
underwriters’ counsel and such counsel for the Holders shall use their
reasonable best efforts to coordinate any such investigation of the books,
records and properties of the Company and any such discussions with the Company’s
officers and accountants so that all such investigations occur at the same time
and all such discussions occur at the same time.

 

SECTION 2.08.  Indemnification
and Contribution.  (a) The
Company agrees to indemnify and hold harmless each Selling Holder and each
Person, if any, who controls each Selling Holder within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, and the agents,
employees, officers and directors of such Holder and control persons from and
against any and all losses, claims, damages and liabilities (including, subject
to Section 2.08(c), any reasonable legal or other costs, fees and expenses
reasonably incurred in connection with defending or investigating any such
action or claim) insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement of a material fact contained
in any registration statement filed by the Company pursuant to this Agreement
at the time it became effective or any amendment thereof, any preliminary
prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or prospectus or free writing prospectus or
materials (in each case, as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) relating to the Registrable
Stock, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission which is based upon information relating to a
Selling Holder or underwriter which is furnished to the Company in writing by
or on behalf of such Selling Holder or underwriter expressly for use therein.  The Company also agrees to indemnify any
underwriter of the Registrable Stock so offered and each Person, if any, who
controls such underwriter on substantially the same basis as that of the
indemnification by the Company of each Selling Holder provided in this Section 2.08(a).  Notwithstanding the foregoing, (i) with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus, as the case
may be, the indemnity agreement contained in this paragraph shall not apply to
the extent that any such losses, claims, damages or liabilities result from the
fact that a current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) was not sent or given to the Person asserting
such losses, claims, damages or liabilities at or prior to the written
confirmation of the sale of the Registrable Stock concerned to such Person if
it is determined that the Company had provided such current prospectus (or such
amended or supplemented prospectus, as the case may be) to the Holder
Representatives or underwriter prior to such confirmation and it was the
responsibility of the Holder Representatives or underwriter to provide such
Person with a current copy of the prospectus and such current copy of the
prospectus (or such amended

 

15

 

or
supplemented prospectus, as the case may be) would have cured the defect giving
rise to such losses, claims, damages or liabilities, and (ii) the
indemnity agreement shall also not apply to losses, claims, damages or
liabilities attributable to a failure of a Selling Holder, underwriter or other
Person on their behalf to comply with Section 2.06(g) or a Blockage
Notice.

 

(b)                                 Each
Selling Holder agrees, to the extent Registrable Stock held by such Selling
Holder are included in the securities as to which a registration is being
effected hereunder, severally and not jointly, to indemnify and hold harmless
the Company, its directors, officers and each Person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, subject to Section 2.08(c), any reasonable legal
or other costs, fees and expenses reasonably incurred in connection with
defending or investigating any such action or claim) insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or alleged
untrue statement of a material fact contained in such registration statement at
the time it became effective or any amendment thereof, any preliminary
prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto)
relating to the Registrable Stock, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with
reference to information relating to such Selling Holder furnished in writing
by or on behalf of such Selling Holder expressly for use in a registration
statement, any preliminary prospectus, prospectus or any amendments or
supplements thereto.  Each Selling Holder
also agrees to indemnify any underwriter of the Registrable Stock so offered
and each Person, if any, who controls such underwriter to the same extent and
on substantially the same basis as that of the indemnification by such Selling
Holder of the Company provided in this Section 2.08(b).  Notwithstanding any other provision of this Section 2.08,
no Selling Holder’s obligations to indemnify pursuant to this Section 2.08
shall exceed the amount of net proceeds received by such Selling Holder in
connection with the offering of its Registrable Stock.  Each Selling Holder’s obligations to
indemnify pursuant to this Section are several in the proportion that the
net proceeds of the offering received by such Selling Holder bear to the total
net proceeds of the offering received by all Selling Holders so obligated to
indemnify and not joint.

 

(c)                                  Each
party indemnified under paragraph (a) or (b) above shall, promptly
after receipt of notice of a claim or action against such indemnified party in
respect of which indemnity may be sought hereunder, notify the indemnifying
party in writing of the claim or action and the indemnifying party shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party, and shall assume the payment of all
fees and expenses in connection therewith; provided
that the failure of any indemnified party so to notify the
indemnifying party shall not relieve the indemnifying party of its obligations
hereunder except to the extent

 

16

 

that the
indemnifying party is materially prejudiced by such failure to notify.  In any such action, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the sole expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) in the reasonable judgment of such
indemnified party representation of both parties by the same counsel would be
inappropriate due to material differing interests between them or there may be
one or more legal defenses available to it that are different from or additional
to those available to such person or, in which case the reasonable fees and
expenses of such counsel shall be at the sole expense of the indemnifying
party.  It is understood that the
indemnifying party shall not, in connection with any claim or action or related
proceeding in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such indemnified parties, and that all such
reasonable fees and expenses shall be reimbursed as they are incurred.  In the case of any such separate firm for the
Holders as indemnified parties, such firm shall be designated in writing by the
indemnified party or the indemnified parties holding a majority of the Registrable
Stock included in such registration.  The
indemnifying party shall not be liable for any settlement of any claim or
action effected without its written consent, which consent shall not be
unreasonably withheld or delayed, but if settled with such consent, or if there
be a final judgment for the plaintiff, the indemnifying party shall indemnify
and hold harmless such indemnified parties from and against any loss or
liability (to the extent stated above) by reason of such settlement or
judgment.  No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened claim or action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.

 

(d)                                 If
the indemnification provided for in this Section 2.08 shall for any reason
be unavailable (other than in accordance with its terms) or insufficient to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, cost, claim or
damage (A) as between the Company and the underwriters, in such proportion
as is appropriate to reflect the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations, and (B) as between (x) the Company and the Selling Holders
or (y) the Selling Holders and the underwriters, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations.  The relative fault of
the Company, the Selling Holders and the underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue

 

17

 

statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, by a Selling Holder or by the
underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, as well as
the matters referred to in the last sentence of Section 2.08(a).  The amount paid or payable by an indemnified
party as a result of the loss, cost, claim, damage or liability, or action in
respect thereof, referred to above in this paragraph (d) shall be deemed
to include, for purposes of this paragraph (d), any legal or other costs, fees
and expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  The Company and the Selling Holders agree
that it would not be just and equitable if contribution pursuant to this Section 2.08
were determined by pro rata allocation
(even if the underwriters and/or Selling Holders were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this paragraph.  Notwithstanding any other provision of this Section 2.08,
no Selling Holder shall be required to contribute any amount in excess of the
amount by which the net proceeds of the offering received by such Selling
Holder exceed the amount of any damages which such Selling Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.  Each
Selling Holder’s obligations to contribute pursuant to this Section are
several in the proportion that the net proceeds of the offering received by
such Selling Holder bear to the total net proceeds of the offering received by
all the Selling Holders and not joint. 
No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

 

(e)                                  Indemnification
and contribution similar to that specified in the preceding paragraphs of this Section 2.08
(with appropriate modifications) shall be given by the Company, the Selling
Holders and the underwriters with respect to any required registration or other
qualification of securities under any Law.

 

(f)                                    The
obligations of the parties under this Section 2.08 shall be in addition to
any liability which any party may otherwise have to any other party.

 

(g)                                 Notwithstanding
the foregoing, to the extent that the provisions on indemnification and contribution
contained in an underwriting agreement entered into in connection with an
underwritten public offering are in conflict with the foregoing provisions, the
provisions in such underwriting agreement shall control; provided that the Holders shall have no
obligation to include Registrable Stock under any such underwriting agreement.

 

SECTION 2.09.  Rule 144
and Form S-3.  The Company shall
use its reasonable best efforts to ensure that the conditions to the
availability of Rule 144 set forth in paragraph (c) thereof shall at
all times be satisfied.  The Company
further agrees to use its reasonable best efforts to cause all conditions to
the availability of Form S-3 (or

 

18

 

any successor
form) under the Securities Act for the filing of registration statements under
this Agreement to at all times be satisfied.

 

SECTION 2.10.  Lock-Up
Agreements.  If requested by the lead
or managing underwriters, each Holder hereby agrees that such Holder shall not
sell any Common Stock or securities convertible into or exercisable for Common
Stock held by such Holder (other than the sale pursuant to the registration
statement of those securities included in the registration) for such requested
period (not to exceed ninety (90) days) after the effective date of a
registration statement for an underwritten public offering of any of the
Company’s equity securities in which Registrable Stock of such Holder are
included (unless Registrable Stock sought to be included in such underwritten
public offering by such Holder were excluded pursuant to the applicable
provisions of this Article 2). 
Notwithstanding the foregoing, this Section 2.10 shall not apply
unless all then officers and directors of the Company, and all stockholders of
the Company who own Common Stock representing 10% or more of the outstanding
Common Stock, enter into similar agreements. 
Any discretionary waiver or termination of the requirements under the
foregoing pro rata basis.

 

ARTICLE 3

MISCELLANEOUS

 

SECTION 3.01.  Transfers;
Rights of Transferees of Registrable Stock; Legends.  The Registrable Stock shall be transferable,
in whole or in part from time to time, subject to the following restrictions in
this Section 3.01.  Each Holder
agrees not to make any direct or indirect sale, assignment, pledge, transfer or
other disposition, whether or not for value (each, a “Transfer”) of all
or any portion of the Registrable Stock (or any right or interest therein)
unless and until (a) there is then in effect a registration statement
under the Securities Act covering such proposed Transfer and such Transfer is
made in accordance with such registration statement, (b) such Transfer is
made in accordance with Rule 144 under the Securities Act and the Company
has received an opinion of counsel for such Holder (which opinion may rely on
customary certifications as to factual matters), reasonably satisfactory to the
Company, that such Transfer is made in accordance with Rule 144 under the
Securities Act or (c) (i) the transferee has agreed in writing to be
bound by these Transfer restrictions, (ii) such Holder shall have notified
the Company of the proposed Transfer and (iii) if reasonably requested by
the Company and the transferee is not an Affiliate, immediate family member,
trust or estate of the Holder, such Holder shall have furnished the Company
with an opinion of counsel for such Holder (which opinion may rely on customary
certifications as to factual matters), reasonably satisfactory to the Company,
that such Transfer does not require registration of the Registrable Stock under
the Securities Act.  In connection with a
Transfer pursuant to clause (c) of the immediately preceding sentence, the
transferee of all or any portion of the Registrable Stock will be deemed a
Holder hereunder as soon as the Company receives (A) written notice
stating the name and address of the transferee and identifying the number of
shares of Registrable Stock, as applicable, transferred, (B) a written
agreement, in form and substance acceptable to the Company and Majority
Holders, from such transferee to the Company whereby such

 

19

 

transferee
agrees to be bound by the terms of this Agreement as a Holder and (C) if
required under clause (c)(iii) above, the opinion referred to therein.
Certificates representing the Registrable Stock shall bear a legend referring
to this Agreement and the Transfer restrictions contained herein; provided that such legend shall be removed
in connection with any Transfer pursuant to clause (a) or (b) of this
Section 3.01.

 

SECTION 3.02.  Holder
Representatives.  Pursuant to and in
accordance with Section 2.11 of the Merger Agreement and the Consent and
Indemnity Agreement, each Stockholder has delivered a Stockholder Consent (as defined
in the Merger Agreement), whereby each Stockholder has irrevocably appointed,
authorized and directed the Holder Representatives, collectively, to act as the
Holder Representatives, as such Stockholder’s agent, representative proxy and
attorney-in-fact, including, but not limited to with respect to the execution
and delivery of this Agreement.

 

SECTION 3.03.Interpretation.  When a reference is made in this Agreement to
a Section, Article or Exhibit such reference shall be to a Section, Article or
Exhibit of this Agreement unless otherwise indicated.  The headings contained in this Agreement or
in any Exhibit are for convenience of reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.  All words used in this Agreement will be
construed to be of such gender or number as the circumstances require.  Any capitalized terms used in any Exhibit but
not otherwise defined therein shall have the meaning as defined in this
Agreement.  All Exhibits annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth herein.  The word “including”
and words of similar import when used in this Agreement will mean “including,
without limitation”, unless otherwise specified.

 

SECTION 3.04.  Amendment
and Modification.  This Agreement may
not be amended, modified or supplemented in any manner, whether by course of
conduct or otherwise, except by an instrument in writing signed on behalf of
Company, Sub and the Majority Holders.

 

SECTION 3.05.  Assignment;
Successors.  Except as provided in Section 3.01
or the last sentence of this Section 3.05, neither this Agreement nor any
of the rights, interests or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise, by any party
without the prior written consent of Company, and any such assignment without
such prior written consent shall be null and void; provided, however, that no
assignment shall relieve or limit the assignor’s obligations hereunder.  Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and permitted assigns.

 

SECTION 3.06.  No
Third-Party Beneficiaries.  This
Agreement shall be binding upon and inure solely to the benefit of the Company,
each of the Holder Representatives, solely in their capacity as Holder
Representatives, each of the Stockholders and its respective successors and
assigns, and nothing in this Agreement,

 

20

 

express or
implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature under or by reason of this
Agreement.

 

SECTION 3.07.  Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the
date of delivery if delivered during normal business hours either personally,
or, if by facsimile upon written confirmation of receipt by facsimile or
otherwise (and any such delivery that is not during normal business hours shall
be deemed duly given on the next Business Day after such delivery), (b) on
the first Business Day following the date of dispatch if delivered utilizing a
next-day service by a recognized next-day courier or (c) on the earlier of
confirmed receipt or the fifth Business Day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid.  All notices hereunder shall be
delivered to the addresses set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:

 

(a)                                  if
to the Company, Sub, or CSTV, to:

 

CBS Corporation

51 West 52nd Street

New York, NY  10036

Attn:  Executive Vice President, General
Counsel

Fax:  212 975-1770

 

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

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY  10153

Attn:  Howard Chatzinoff and Michael
Lubowitz

Fax:  (212) 310-8007

 

(i)                                     if to the Holder
Representatives, to:

 

Allen & Company, Inc.

711 5th Ave., 9th Fl.

New York, NY 10022

Attn:  Stephen D. Greenberg

Fax:  (212) 832-8023

 

SECTION 3.08.  Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.

 

21

 

SECTION 3.09.  Severability.  Whenever possible, each provision or portion
of any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable Law, but if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable Law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.

 

SECTION 3.10.  Submission
to Exclusive Jurisdiction; Waiver of Jury Trial.  Each of the parties irrevocably agrees that
any legal action or proceeding arising out of or relating to this Agreement or
for recognition and enforcement of any judgment in respect hereof brought by
any other party or its successors or assigns shall be brought and determined in
any state or federal court located in the County of New York and City of New
York, and all of the parties hereby irrevocably submit to the exclusive
jurisdiction of the aforesaid courts for itself and with respect to its property,
generally and unconditionally, with regard to any such action or proceeding
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any action, suit or proceeding relating
thereto except in such courts).  Each
party further agrees to accept service of process in any manner permitted by
such courts.  Each of the parties hereby
irrevocably and unconditionally waives, and agrees not to assert, by way of
motion or as a defense, counterclaim or otherwise, in any action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, (a) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason other than the failure lawfully
to serve process, (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) that (i) the suit, action or proceeding in any such court is
brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper or (iii) this Agreement, or the subject matter
hereof, may not be enforced in or by such courts.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 3.11.  Governing
Law.  This Agreement and all disputes
or controversies arising out of or relating to this Agreement or the
transactions contemplated hereby shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware, without regard to
the laws of any other jurisdiction that might be applied because of the
conflicts of laws principles of the State of New York.

 

SECTION 3.12.  Facsimile
Signature.  This Agreement may be
executed by facsimile signature and a facsimile signature shall constitute an
original for all purposes.

 

22

 

SECTION 3.13.  No
Presumption Against Drafting Party. 
Each of the Company and each Holder acknowledge that each party to this
Agreement has been represented by counsel in connection with this Agreement and
the transactions contemplated by this Agreement.  Accordingly, any rule of law or any
legal decision that would require interpretation of any claimed ambiguities in
this Agreement against the drafting party has no application and is expressly
waived.

 

[Remainder of Page Intentionally Left
Blank]

 

23

 

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

 

 

	
   

  	
  CBS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Louis J.
  Briskman

  	
   

  
	
   

  	
   

  	
  Name: Louis
  J. Briskman

  
	
   

  	
   

  	
  Title:  
  Executive Vice President and General

  Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Stephen D.
  Greenberg, as a member of the Holder Representatives

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen
  D. Greenberg

  	
   

  
	
   

  	
   

  	
  Stephen D.
  Greenberg

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lauren
  Tyler, as a Holder Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lauren
  Tyler

  	
   

  
	
   

  	
   

  	
  Lauren Tyler

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Cliff
  Friedman, as a Holder Representative

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cliff
  Friedman

  	
   

  
	
   

  	
   

  	
  Cliff
  Friedman

  

 

 

[SIGNATURE PAGE TO REGISTRATION
RIGHTS AGREEMENT]

 

 

SCHEDULE I

 

Shareholders

 

	
  JP Morgan
  Partners (SBIC), LLC

  	
   

  	
  WPC
  Entrepreneur Fund II, LP

  
	
   

  	
   

  	
   

  
	
  JP Morgan
  Partners Global Investors (SBIC), LLC

  	
   

  	
  Court Square
  Ventures I, LLC

  
	
   

  	
   

  	
   

  
	
  Echostar
  Media Holdings Corporation

  	
   

  	
  Court Square
  Sports Holdings, LLC

  
	
   

  	
   

  	
   

  
	
  Soros
  Private Equity Investors LP

  	
   

  	
  Court Square
  Sports Holdings II, LLC

  
	
   

  	
   

  	
   

  
	
  Middlefork
  LLC

  	
   

  	
  Fusient
  Media Ventures

  
	
   

  	
   

  	
   

  
	
  Constellation
  Venture Capital II LP

  	
   

  	
  Sports
  Capital Partners

  
	
   

  	
   

  	
   

  
	
  Constellation
  Venture Capital Offshore II LP

  	
   

  	
  Mandalay
  Corporate Enterprises, LLC

  
	
   

  	
   

  	
   

  
	
  The BSC
  Employee Fund IV, LP

  	
   

  	
  Athlon
  Venture Fund I LP

  
	
   

  	
   

  	
   

  
	
  CVC II
  Partners, LLC

  	
   

  	
  Casey
  Wasserman Living Trust

  
	
   

  	
   

  	
   

  
	
  The BSC
  Employee Fund VI, LP

  	
   

  	
  SK Hedge
  Fund LLC

  
	
   

  	
   

  	
   

  
	
  The Coca
  Cola Company

  	
   

  	
  F.O.C.
  Investors, LLC

  
	
   

  	
   

  	
   

  
	
  Allen &
  Company Incorporated

  	
   

  	
  Ehrenkranz &
  Ehrenkranz

  
	
   

  	
   

  	
   

  
	
  Allen &
  Company LLC

  (formerly NCSN Allen Partners)

  	
   

  	
  R&A
  Investment Associates

  
	
   

  	
   

  	
   

  
	
  Chilton
  Investment Company, et al

  	
   

  	
  Drew Katz

  
	
   

  	
   

  	
   

  
	
  Chilton
  International, LP

  	
   

  	
  AGM Partners
  LLC

  
	
   

  	
   

  	
   

  
	
  Chilton
  Investment Partners, LP

  	
   

  	
  Don 2, LLC

  
	
   

  	
   

  	
   

  
	
  Chilton QP
  Investment Partners, LP

  	
   

  	
  James C.
  Bosek

  
	
   

  	
   

  	
   

  
	
  Chilton
  Opportunity Trust, LP

  	
   

  	
  David L.
  Shuman

  
	
   

  	
   

  	
   

  
	
  Chilton
  Opportunity International, LP

  	
   

  	
  Joseph
  Namath

  
	
   

  	
   

  	
   

  
	
  Chilton New
  Era Partners, LP

  	
   

  	
  Barbara
  Shulman

  
	
   

  	
   

  	
   

  
	
  Chilton New
  Era International, LP

  	
   

  	
  Not Penn
  State Partners

  
	
   

  	
   

  	
   

  
	
  Westin
  Presidio Capital, IV, LP

  	
   

  	
  Stephen D.
  Greenberg

  

 

 

	
  Chris
  Bevilacqua

  	
   

  	
  Deborah
  Dorman

  
	
   

  	
   

  	
   

  
	
  UB Capital
  LLC

  	
   

  	
  Michaelle Yu

  
	
   

  	
   

  	
   

  
	
  The Darrin
  Bedol 2003 Trust

  	
   

  	
  Gentry Smith

  
	
   

  	
   

  	
   

  
	
  The Samantha
  Bedol 2003 Trust

  	
   

  	
  Aaron
  Volkman

  
	
   

  	
   

  	
   

  
	
  Bill Bradley

  	
   

  	
  Dave
  Siegerman

  
	
   

  	
   

  	
   

  
	
  Ackerley
  Partners LLC

  	
   

  	
  Jennifer
  Rosenbaum

  
	
   

  	
   

  	
   

  
	
  New York
  City Investment Fund, LLC

  	
   

  	
  Eric Barchie

  
	
   

  	
   

  	
   

  
	
  Michael
  Dessart

  	
   

  	
  Victoria
  Barba

  
	
   

  	
   

  	
   

  
	
  Joseph Reid

  	
   

  	
  Tammy Price

  
	
   

  	
   

  	
   

  
	
  Phil Green

  	
   

  	
  Brian T.
  Bedol

  
	
   

  	
   

  	
   

  
	
  Lane
  Feinstein

  	
   

  	
  Scott J.
  Marshall

  
	
   

  	
   

  	
   

  
	
  Gideon Cohen2006 DIRECTOR AND KEY EMPLOYEES STOCK OPTION PLAN

2006 DIRECTOR AND KEY EMPLOYEES STOCK OPTION PLAN

 

I. PURPOSES

COFFEE PACIFICA, INC., a Nevada corporation (the "Company")
desires to afford certain of its directors, key employees and certain directors
of any subsidiary corporation or parent corporation of the Company now existing
or hereafter formed or acquired an opportunity to acquire a proprietary interest
in the Company, and thus to create in such directors and key employees an
increased interest in and a greater concern for the welfare of the Company and
its subsidiaries.

The Company seeks to retain the services of certain persons
now serving as directors and key employees and to secure the services of persons
capable of filling such positions.

The stock options ("Options") offered pursuant to the Plan
are a matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any director.

The Options granted under the Plan are intended to be options
that do not meet the requirements for incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

II. AMOUNT OF STOCK SUBJECT TO THE PLAN

The total number of shares of common stock of the Company
which may be purchased or acquired pursuant to the exercise of Options granted
under the Plan shall not exceed, in the aggregate, 5,000,000 shares of the
authorized common stock, $.001 par value per share, of the Company (the
"Shares"), such number subject to adjustment as provided in Article XII hereof.
Shares that are the subject of Options shall be counted only once in determining
whether the maximum number of Shares that may be purchased or awarded under the
Plan has been exceeded.

Shares acquired under the Plan may be either authorized but
unissued Shares or Shares of issued stock held in the Company's treasury, or
both, at the discretion of the Company. If and to the extent that Options
granted under the Plan expire or terminate without having been exercised, the
Shares covered by such expired or terminated Options shall again become
available for award under the Plan.

Except as provided in Article XVII and subject to Article II,
the Company may, from time to time, grant to certain directors and key employees
of the Company, or of any subsidiary corporation or parent corporation of the
Company now existing or hereafter formed or acquired, Options under the terms
hereinafter set forth.

 

As used in the Plan, the term "subsidiary corporation" and
"parent corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 424(f) and 424(e) of the Code.

III. ADMINISTRATION

The board of directors of the Company (the "Board") may
designate from among its members a director stock option committee, (the
"Committee") to administer the Plan. The Committee shall consist of no fewer
than two members of the Board. A majority of the members of the Committee shall
constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Any member of the Committee may be removed at
any time either with or without cause by resolution adopted by the Board, and
any vacancy on the Committee at any time may be filled by resolution adopted by
the Board.

Subject to the express provisions of the Plan, the Board and
the Committee shall have authority, in their discretion, to determine the
directors and key employees to whom Options shall be granted, the time when such
Options shall be granted, the number of Shares which shall be subject to each
Option, the purchase price or exercise price of each Option, the period(s)
during which such Options shall become exercisable (whether in whole or in part)
and the other terms and provisions thereof (which need not be identical).

Subject to the express provisions of the Plan, the Board and
the Committee also shall have authority to construe the Plan and the Options
granted thereunder, to amend the Plan and the Options granted thereunder, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the Options (which need not be identical)
granted thereunder and to make all other determinations necessary or advisable
for administering the Plan. The Board and the Committee also shall have the
authority to require, in its discretion, as a condition of the granting of any
such Option, that the director or key employee agree (i) not to sell or
otherwise dispose of Shares acquired pursuant to the exercise of such Option for
a period of six (6) months following the date of the acquisition of such Option
and (ii) that in the event of termination of service of such director, other
than as a result of removal without cause, such director or key employee will
not, for a period to be fixed at the time of the grant of the Option, enter into
any other employment or participate directly or indirectly in any other business
or enterprise which is competitive with the business of the Company or any
subsidiary corporation or parent corporation of the Company, or enter into any
employment in which such director or key employee will be called upon to utilize
special knowledge obtained through service as a director or key employee of the
Company or any subsidiary corporation or parent corporation thereof. In no event
will a director or key employee who is subject to the reporting requirements of
Section 16(a) of the Exchange Act be entitled to sell or otherwise dispose of
any Shares acquired pursuant to exercise of any such Options for a period of six
(6) months from the date of the acquisition of such Options.

The determination of the Board or Committee on matters
referred to in this Article III shall be conclusive.

The Board or Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the administration of the
Plan and may rely upon any opinion or computation received from any such legal
counsel, consultant or agent. Expenses incurred in the engagement of such
counsel, consultant or agent shall be paid by the Company. No member or former
member of the Board or Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any award of Options granted
hereunder. 

IV. ELIGIBILITY

The Plan does not create a right in any director or key
employee to participate in the Plan, nor does it create a right in any director
or key employee to have any Options granted to him or her.

V. OPTION PRICE AND PAYMENT

The price for each Share purchasable under any Option granted
hereunder shall be such amount as the Committee shall deem appropriate but not
less than one hundred percent (100%) of the fair market value per share at the
date the Option is granted.

If the Shares are listed on a national securities quotation
medium and exchange in the United States (which, for purposes of this Article V,
shall be deemed to include any last sale reported over-the-counter market), on
any date on which the fair market value per Share shall be deemed to be the
average of the high and low quotations at which such Shares are sold on such
national securities exchange or over-the-counter market on the date such Option
is granted. If the Shares are listed on a national securities exchange or
over-the-counter market in the United States on such date, but the Shares are
not traded on such date, or such national securities exchange or
over-the-counter market is not open for business on such date, the fair market
value per Share shall be determined as of the closest preceding date on which
such exchange or over-the-counter market shall have been open for business and
the Shares shall have been traded. 

If a public market exists for the Shares on any date on which
the fair market value per Share is to be determined but the Shares are not
listed on a national securities exchange in the United States, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market for the Shares on such date. If there
are no bid and asked quotations for the Shares on such date, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market for the Shares on the closest date
preceding such date for which such quotations are available.

If no public market exists for the Shares on any date on
which the fair market value per Share is to be determined, the Committee shall,
in its sole discretion and best judgment, determine the fair market value of a
Share.

For purposes of this Plan, the determination by the Committee
of the fair market value of a Share shall be conclusive.

Upon the exercise of an Option granted hereunder, the Company
shall cause the purchased Shares to be issued only when it shall have received
the full purchase price for the Shares in cash or by certified check; provided,
however, that in lieu of cash, the holder of an Option may, if and to the extent
the terms of such Option so provide and to the extent permitted by applicable
law, exercise an Option (a) in whole or in part, by delivering to the Company
shares of common stock of the Company (in proper form for transfer and
accompanied by all requisite stock transfer tax stamps or cash in lieu thereof)

owned by such holder having a fair market value equal to the
exercise price applicable to that portion of the Option being exercised by the
delivery of such Shares or (b) in part, by delivering to the Company an executed
promissory note on such terms and conditions as the Committee shall determine,
at the time of grant, in its sole discretion; provided, however, that the
principal amount of such note shall not exceed eighty percent (80%) (or such
lesser percentage as would be permitted by applicable margin regulations) of the
aggregate purchase price of the Shares then being purchased pursuant to the
exercise of such Option. The fair market value of the stock so delivered shall
be determined as of the date immediately preceding the date on which the Option
is exercised, or as may be required in order to comply with or to conform to the
requirements of any applicable laws or regulations.

VI. USE OF PROCEEDS

The cash proceeds of the sale of Shares pursuant to the Plan
are to be added to the general funds of the Company and used for its general
corporate purposes as the Board shall determine.

VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE

Any Option shall be exercisable at such times, in such
amounts and during such period or periods as the Board or Committee shall
determine at the date of the grant of such Option.

Subject to the provisions of Article XVIII, the Board or
Committee shall have the right to accelerate, in whole or in part, from time to
time, conditionally or unconditionally, rights to exercise any Option granted
hereunder.

To the extent that an Option is not exercised within the
period of exercisability specified therein, it shall expire as to the then
unexercised part.

In no event shall an Option granted hereunder be exercised
for a fraction of a Share.

VIII. EXERCISE OF OPTIONS

Options granted under the Plan shall be exercised by the
optionee as to all or part of the Shares covered thereby by the giving of
written notice of the exercise thereof to the Corporate Secretary of the Company
at the principal business office of the Company, specifying the number of Shares
to be purchased and specifying a business day not more than fifteen (15) days
from the date such notice is given for the payment of the purchase price against
delivery of the Shares being purchased. Subject to the terms of Articles XIII,
XV, and XVI, the Company shall cause certificates for the Shares so purchased to
be delivered to the optionee at the principal business office of the Company,
against payment of the full purchase price, on the date specified in the notice
of exercise.

IX. NON-TRANSFERABILITY OF OPTIONS

An Option granted hereunder shall not be transferable,
whether by operation of law or otherwise, other than by will or the law of
descent and distribution, and any Option granted hereunder shall be exercisable
during the lifetime of the holder only by such holder. Except to the extent
provided above, Options may not be assigned, transferred, pledged, hypothecated
or disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process.

X. TERMINATION OF EMPLOYMENT

Upon the cessation of such person's status as a director or
key employee of the Company and all subsidiary corporations and parent
corporations of the Company, an

Option previously granted to the director, unless otherwise
specified by the Board or Committee in the Option, to the extent not theretofore
exercised, terminate and become null and void, provided that:

(a) if the director or key employee shall die while serving
as a director or key employee of such corporation or during either the three (3)
month or one (1) year period, whichever is applicable, specified in clause (b)
below and at a time when such director or key employee was entitled to exercise
an Option as herein provided, the legal representative of such director, or such
person who acquired such Option by bequest or inheritance or by reason of the
death of the director, may, not later than one (1) year from the date of death,
exercise such Option, to the extent not theretofore exercised, in respect of any
or all of such number of Shares as specified by the Board or Committee in such
Option; and

(b) if the service of any director to whom such Option shall
have been granted shall terminate by reason of the or key employee's retirement
(at such age or upon such conditions as shall be specified by the Board),
disability (as described in Section 22(e)(3) of the Code) or removal other than
for cause (as defined below), and while such director or key employee is
entitled to exercise such Option as herein provided, such director or key
employee shall have the right to exercise such Option so granted, to the extent
not theretofore exercised, in respect of any or all of such number of Shares as
specified by the Board or Committee in such Option, at any time up to and
including (i) three (3) months after the date of such termination of service in
the case of termination by reason of retirement or removal other than for cause
and (ii) one (1) year after the date of termination of service in the case of
termination by reason of disability.

If a director or key employee voluntarily terminates his or
her service, or is discharged for cause, any Option granted hereunder shall,
unless otherwise specified by the Board or Committee in the Option, forthwith
terminate with respect to any unexercised portion thereof.

If an Option granted hereunder shall be exercised by the
legal representative of a deceased or disabled director or key employee or
former director, or by a person who acquired an Option granted hereunder by
bequest or inheritance or by reason of death of any director or key employee or
former director, written notice of such exercise shall be accompanied by a
certified copy of letters testamentary or equivalent proof of the right of such
legal representative or other person to exercise such Option.

For the purposes of the Plan, the term "for cause" shall mean
(i) with respect to a director or key employee who is party to a written
agreement with, or, alternatively, participates in a compensation or benefit
plan of the Company or a subsidiary corporation or parent corporation of the
Company, which agreement or plan contains a definition of "for cause" or "cause"
(or words of like import) for purposes of termination of service thereunder,
"for cause" or "cause" as defined in the most recent of such agreements or
plans, or (ii) in all other cases, as determined by the Board in its sole
discretion, (a) the willful commission by a director or key employee of a
criminal or other act that causes or probably will cause substantial economic
damage to the Company or a subsidiary corporation or parent corporation of the
Company or substantial injury to the business reputation of the Company or a
subsidiary corporation or parent corporation of the Company; (b) the commission
by a director or key employee of an act of fraud in the performance of such
director's duties on behalf of the Company or a subsidiary corporation or parent
corporation of the Company; or (c) the continuing willful failure of a director
or key employee to perform the duties of such director or key employee to the
Company or a subsidiary corporation or parent corporation of the Company (other
than such failure resulting from the director's incapacity due to physical or
mental illness) after written notice thereof (specifying the particulars thereof
in reasonable detail) and a reasonable opportunity to be heard and cure such
failure are given to the director or key employee by the Board or the Committee.
For purposes of the Plan, no act, or failure to act, on the director's part
shall be considered "willful" unless done or omitted to be done by the director
or key employee not in good faith and without reasonable belief that the
director's action or omission was in the best interest of the Company or a
subsidiary corporation or parent corporation of the Company. 

In the event of the complete liquidation or dissolution of a
subsidiary corporation, or in the event that the Company ceases to own, directly
or indirectly, stock possessing 50% or more of the total combined voting power
of all classes of stock of such corporation, any unexercised Options theretofore
granted to any person who served as a director or key employee of such
subsidiary corporation will be deemed canceled unless such person serves on the
Board or board of directors of any parent corporation or another subsidiary
corporation after the occurrence of such event. In the event an Option is to be
canceled pursuant to the provisions of the previous sentence, notice of such
cancellation will be given to each director or key employee holding unexercised
Options and such holder will have the right to exercise such Options in full
(without regard to any limitation set forth or imposed pursuant to Article VII)
during the 30 day period following notice of such cancellation.

Notwithstanding anything to the contrary contained in this
Article XI, in no event, however, shall any person be entitled to exercise any
Option after the expiration of the period of exercisability of such Option as
specified therein.

XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS

In the event of any change in the outstanding Shares through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or other like change in capital structure of the Company, the Board or Committee
shall make such adjustment to each outstanding Option that it, in its sole
discretion, deems appropriate. The term "Shares" after any such change shall
refer to the securities, cash and/or property then receivable upon exercise of
an Option. In addition, in the event of any such change, the Board or Committee
shall make any further adjustment as may be appropriate to the maximum number of
Shares which may be acquired under the Plan pursuant to the exercise of Options,
the maximum number of Shares which may be so acquired by one director or key
employee and the number of Shares and prices per Share subject to outstanding
Options as shall be equitable to prevent dilution or enlargement of rights under
such Options, and the determination of the Board or Committee as to these
matters shall be conclusive.

In the event of a "change in control" of the Company, all
then outstanding Options shall immediately become exercisable. For purposes of
the Plan, a "change in control" of the Company occurs if: (a) any "Person" (as
such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing (i) 50% or more of the combined voting
power of the Company's then-outstanding securities; or (ii) 25% or more but less
than 50% of the combined voting power of the Company's then

outstanding securities if such transaction(s) giving rise to
such beneficial ownership are not approved by the Board; or (b) at any time a
majority of the members of the Bard has been elected or designated by any
Person; or (c) the Board shall approve a sale of all or substantially all of the
assets, the result of which would be the occurrence of any event described in
clause (a) or (b) above.

The Board or Committee, in its discretion, may determine
that, upon the occurrence of a transaction described in the preceding paragraph,
each Option outstanding hereunder shall terminate within a specified number of
days after notice to the holder, and such holder shall receive, with respect to
each Share subject to such Option, cash in an amount equal to the excess of the
fair market value of such Shares immediately prior to the occurrence of such
transaction over the exercise price per share of such Option. 

XII. RIGHT TO TERMINATE EMPLOYMENT

The Plan shall not impose any obligation on the Company or on
any subsidiary corporation or parent corporation thereof to continue the service
of any holder of Options and it shall not impose any obligation on the part of
any holder of Options to remain in the service of the Company or of any
subsidiary corporation or parent corporation thereof.

XIII. PURCHASE FOR INVESTMENT

Except for hereinafter provided, the Board or Committee may
require a director or key employee, as a condition upon exercise of any Option
granted hereunder,

to execute and deliver to the Company (a) stock powers with
respect to Shares underlying a particular Option and required to be held by a
custodian, and (b) a written statement, in form satisfactory to the Board or
Committee in which the director or key employee represents and warrants that
Shares are being acquired for such person's own account for investment only and
not with a view to the resale or distribution thereof. The director or key
employee shall, at the request of the Board or Committee, be required to
represent and warrant in writing that any subsequent resale or distribution of
Shares by the director or key employee shall be made only pursuant to either (i)
a Registration Statement on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), which Registration Statement has become
effective and is current with regard to the Shares being sold, or (ii) a
specific exemption from the registration requirements of the Securities Act, but
in claiming such exemption the director or key employee shall, prior to any
offer of sale or sale of such Shares, obtain a prior favorable written opinion
of counsel, in form and substance satisfactory to counsel for the Company, as to
the application of such exemption thereto. The foregoing restriction shall not
apply to (i) issuances by the Company so long as the Shares being issued are
registered under the Securities Act and a prospectus in respect thereof is
current or (ii) re-offerings of Shares by affiliates of the Company (as defined
in Rule 405 or any successor rule or regulation promulgated under the Securities
Act) if the Shares being re-offered are registered under the Securities Act and
a prospectus in respect thereof is current.

XIV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES

Upon any exercise of an Option which may be granted hereunder
and, in the case of an Option, payment of the purchase price, a certificate or
certificates for the Shares shall be issued by the Company in the name of the
person exercising the Option and shall be delivered to or upon the order of such
person.

The Company may endorse such legend or legends upon the
certificates for Shares issued pursuant to the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares as, in
its discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (ii) implement the provisions of the Plan and any agreement
between the Company and the optionee or grantee with respect to such Shares.

The Company shall pay all issue or transfer taxes with
respect to the issuance of transfer of Shares, as well as all fees and expenses
necessarily incurred by the Company in connection with such issuance or
transfer, except fees and expenses which may be necessitated by the filing or
amending of a Registration Statement under the Securities Act, which fees and
expenses shall be borne by the recipient of the Shares unless such Registration
Statement has been filed by the Company for its own corporate purposes (and the
Company so states) in which event the recipient of the Shares shall bear only
fees and expenses as are attributable solely to the inclusion of the Shares he
or she receives in the Registration Statement.

All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.

XV. LISTING OF SHARES AND RELATED MATTERS

The Board or Committee may delay any award, issuance or
delivery of Shares if it determines that listing, registration or qualification
of Shares or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares under the Plan, until such listing, registration,
qualification, consent or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to the Committee.

XVI. AMENDMENT OF THE PLAN

The Board or the Committee, as the case may be, may, from
time to time, amend the Plan, provided that no amendment shall be made, without
the approval of the stockholders of the Company, that will (i) increase the
total number of Shares reserved for Options under the Plan (other than an
increase resulting from an adjustment provided for in Article XII), (ii) reduce
the exercise price of any Option granted hereunder below the price required by
Article V, (iii) modify the provisions of the Plan relating to eligibility, or
(iv) materially increase the benefits accruing to participants under the Plan.
The rights and obligations under any Option granted before amendment of the Plan
or any unexercised portion of such Option shall not be adversely affected by
amendment of the Plan, Option without the consent of the holder of such Option.

XVII. TERMINATION OR SUSPENSION OF THE PLAN

The Board may at any time suspend or terminate the Plan. The
Plan, unless sooner terminated by action of the Board, shall terminate at the
close of business five (5) years from the date the Plan is first adopted by the
Board of Directors. Options may not be granted while the Plan is suspended or
after it is terminated. Rights and obligations under any Option granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except upon the consent of the person to whom the
Option was granted. The power of the Board or Committee to construe and
administer any Options granted prior to the termination or suspension of the
Plan under Article III nevertheless shall continue after such termination or
during such suspension.

XVIII. GOVERNING LAW

The Plan, such Options as may be granted thereunder and all
related matters shall be governed by, and construed and enforced in accordance
with, the laws of the State of Nevada from time to time obtaining.

XIX. PARTIAL INVALIDITY

The invalidity or illegibility of any provision hereof shall
not be deemed to affect the validity of any other provision.

XX. EFFECTIVE DATE

The Plan shall become effective at 5:30 P.M., Pacific
Daylight Time, on the Effective Date.

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