Document:

EX-10.2 REGISTRATION RIGHTS AGREEMENT

 

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this “Agreement”) is made and entered into as of April 10,
2007, by and among Tutogen Medical, Inc., a Florida corporation (the “Company”), and certain
purchasers signatory hereto (each a “Purchaser” and, collectively, the “Purchasers”).

          This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date
hereof between the Company and each Purchaser (the “Purchase Agreement”).

          NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby acknowledged,
the Company and the Purchasers agree as follows:

     1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the respective meanings set
forth in this Section 1:

          “Advice” shall have the meaning set forth in Section 6(e).

          “Affiliate” means, with respect to any person, any other person which directly or indirectly
controls, is controlled by, or is under common control with, such person.

          “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City
are open for the general transaction of business.

          “Closing” shall have the meaning set forth in the Purchase Agreement.

          “Closing Date” shall have the meaning set forth in the Purchase Agreement.

          “Commission” means the Securities and Exchange Commission.

          “Common Stock” means the common stock of the Company, $0.01 par value per share, and any
securities into which such common stock may hereinafter be reclassified.

          “Effective Date” means the date that the Registration Statement filed pursuant to Section 2(a)
is first declared effective by the Commission.

          “Effectiveness Deadline” means, with respect to the Registration Statement required to be
filed to cover the resale by the Holders of the Registrable Securities, the earlier of: (i) the
90th calendar day following the Closing Date; provided, that, if the Commission reviews
and has written comments to the filed Registration Statement, then the Effectiveness Deadline under
this clause (i) shall be the 120th calendar day following the Closing Date, and (ii) the
fifth (5th) Trading Day following the date on which the Company is notified by the
Commission that the Registration Statement will not be reviewed or is no longer subject to further
review and comments and the effectiveness of the Registration Statement may be accelerated.

 

 

          “Effectiveness Period” shall have the meaning set forth in Section 2(b).

          “Event” shall have the meaning set forth in Section 2(c).

          “Event Date” shall have the meaning set forth in Section 2(c).

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

          “Filing Deadline” means, with respect to the Registration Statement required to be filed
pursuant to Section 2(a), June 1, 2007.

          “Holder” or “Holders” means the holder or holders, as the case may be, from time to time of
Registrable Securities.

          “Indemnified Party” shall have the meaning set forth in Section 5(c).

          “Indemnifying Party” shall have the meaning set forth in Section 5(c).

          “Losses” shall have the meaning set forth in Section 5(a).

          “New York Courts” means the state and federal courts sitting in the City of New York, Borough
of Manhattan.

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

          “Placement Agent” means Roth Capital Partners LLC and any permitted assigns.

          “Principal Trading Market” means the Trading Market on which the Common Stock is primarily
listed on and quoted for trading, which, as of the Closing Date shall be the American Stock
Exchange (“AMEX”).

          “Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

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

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          “Register,” “registered” and “registration” refer to a registration made 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 Securities” means all of (i) the Shares issuable and (ii) any securities issued
or issuable upon any stock split, dividend or other distribution, recapitalization or similar
event; provided, that the Holder has completed and delivered to the Company a Selling Shareholder
Questionnaire; and, provided, further, that a Holder’s security shall cease to be Registrable
Securities upon the earliest to occur of the following: (A) sale pursuant to a Registration
Statement or Rule 144 under the Securities Act (in which case, only such security sold shall cease
to be a Registrable Security); or (B) such security becoming eligible for sale by the Holder
pursuant to Rule 144(k).

          “Registration Statement” means any registration statement of the Company filed under the
Securities Act that covers the resale of any of the Registrable Securities pursuant to the
provisions of this Agreement, including (in each case) the Prospectus, amendments and supplements
to such registration statement, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by reference in such
Registration Statement.

          “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same purpose and effect as such Rule.

          “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same purpose and effect as such Rule.

          “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same purpose and effect as such Rule.

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

          “Selling Shareholder Questionnaire” means a questionnaire in the form attached as Annex B
hereto, or such other form of questionnaire as may reasonably be adopted by the Company from time
to time.

          “Shares” means the shares of Common Stock issued or issuable to the Purchasers pursuant to the
Purchase Agreement.

          “Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its
primary Trading Market (other than the OTC Bulletin Board), or (ii) if the

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Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on
which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin
Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC
(or any similar organization or agency succeeding to its functions of reporting prices); provided,
that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii)
hereof, then Trading Day shall mean a Business Day.

          “Trading Market” means whichever of the New York Stock Exchange, AMEX, the NASDAQ Global
Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which
the Common Stock is listed or quoted for trading on the date in question.

     2. Registration.

          (a) On or prior to the Filing Deadline, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable Securities not already
covered by an existing and effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except, if
the Company is not then eligible to register for resale the Registrable Securities on Form S-3,
then, in such case, the registration shall be on another appropriate form in accordance herewith)
and shall contain (except if otherwise required pursuant to written comments received from the
Commission upon a review of such Registration Statement) the “Plan of Distribution” attached hereto
as Annex A.

          (b) The Company shall use its commercially reasonable efforts to cause the
Registration Statement to be declared effective under the Securities Act by the Commission as soon
as practicable and, in any event, no later than the Effectiveness Deadline (including filing with
the Commission a request for acceleration of effectiveness in accordance with Rule 461 promulgated
under the Securities Act within five (5) Business Days after the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that a Registration Statement will
not be “reviewed,” or not be subject to further review and the effectiveness of the Registration
Statement may be accelerated) and shall use its commercially reasonable efforts to keep the
Registration Statement continuously effective under the Securities Act until the earlier of: (i)
the date that all of the Registrable Securities covered by such Registration Statement have been
publicly sold by the Holders; (ii) the date that all Registrable Securities covered by the
Registration Statement may be sold by non-affiliates without volume restrictions pursuant to Rule
144(k) as determined by counsel to the Company pursuant to a written opinion letter to such effect,
and based upon such representations as may be reasonably requested from the Holders and any broker
utilized by the Holders, addressed and acceptable to the Company’s transfer agent; and (iii) the
second anniversary of this Agreement (the “Effectiveness Period”). The Company shall ensure that
each Registration Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any 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 the
case of prospectuses, in the light of the circumstances in which they were made) not misleading.
Such Registration Statement shall also cover, to the extent allowable under the Securities Act and
the rules promulgated thereunder

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(including Rule 416), such indeterminate number of additional shares of Common Stock resulting
from stock splits, stock dividends or similar transactions with respect to the Registrable
Securities.

          (c) If: (i) the Registration Statement is not filed on or prior to the Filing
Deadline, (ii) a Registration Statement is not declared effective by the Commission (or otherwise
does not become effective) on or prior to its Effectiveness Deadline or (iii) after its Effective
Date, such Registration Statement ceases for any reason (including without limitation by reason of
a stop order, or the Company’s failure to update the Registration Statement), but excluding the
inability of any Holder to sell the Registrable Securities covered thereby due to market
conditions, to remain continuously effective and available to the Holders as to all Registrable
Securities to which it is required to cover at any time prior to the expiration of the
Effectiveness Period for an aggregate of more than twenty (20) consecutive Trading Days or for more
than an aggregate of forty (40) Trading Days in any 12-month period (which need not be
consecutive), (any such failure or breach in clauses (i), (ii) or (iii) above being referred to as
an “Event,” and, for purposes of clauses (i) or (ii), the date on which such Event occurs, or for
purposes of clause (iii), the date which such twenty (20) consecutive or forty (40) Trading Day
period (as applicable) is exceeded, being referred to as “Event Date”), then: (x) on such Event
Date the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a
penalty, equal to 1.0% of the aggregate purchase price paid by such Holder pursuant to the Purchase
Agreement for any Registrable Securities then held by such Holder (which remedy shall be exclusive
of any other remedies available under this Agreement or by law); and (y) on each monthly
anniversary of each such Event Date thereof (if the applicable Event shall not have been cured by
such date) until the applicable Event is cured, but in no event for more than twelve months from
such Event Date, the Company shall pay to each Holder an amount in cash, as liquidated damages and
not as a penalty, equal to 1.0% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any Registrable Securities then held by such Holder (which remedy shall be
exclusive of any other remedies available under this Agreement or by law). If the Company fails to
pay any liquidated damages pursuant to this Section in full within seven (7) days after the date
such liquidated damages are payable, the Company will pay interest thereon at a rate of 10% per
annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The liquidated damages payable pursuant to the terms hereof
shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event.

          (d) The Company shall not, from the date hereof until the Effective Date of the
Registration Statement, prepare and file with the Commission a registration statement relating to
an offering for its own account or the account of others under the Securities Act of any of its
equity securities other than a registration statement on Form S-8 or, in connection with an
acquisition, on Form S-4, provided that this Section shall not prohibit the Company from filing an
amendment to any registration statement filed prior to the date hereof.

          (e) Each Holder agrees to furnish to the Company a completed Selling Shareholder
Questionnaire. The Company shall not be required to include the Registrable Securities of a Holder
in a Registration Statement who fails to furnish to the Company a fully

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completed Selling Shareholder Questionnaire at least five (5) Trading Days prior to the Filing
Deadline (subject to the requirements set forth in Section 3(a)).

          (f) Notwithstanding anything in this Agreement to the contrary, if the Commission
refuses to declare a Registration Statement, filed pursuant to this Agreement, effective as a valid
secondary offering under Rule 415 due to the number of Registrable Securities included in such
Registration Statement relative to the outstanding number of shares of Common Stock, then, without
any liability under Section 2(c) or any further obligation to register such excess Registrable
Securities, the Company shall be permitted to reduce the number of Registrable Securities included
in such Registration Statement to an amount that does not exceed an amount that the Commission
allows for the offering thereunder to qualify as a valid secondary offering under Rule 415.

     3. Registration Procedures.

          In connection with the Company’s registration obligations hereunder, the Company shall:

          (a) (a) Not less than five (5) Trading Days prior to the filing of a Registration
Statement or any related Prospectus or any amendment or supplement thereto, furnish to each Holder
copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed
to be filed, which documents (other than those incorporated or deemed to be incorporated by
reference) will be subject to the review of such Holder (it being acknowledged and agreed that if a
Holder does not object to or comment on the aforementioned documents within two (2) Trading Days
after its receipt thereof, then the Holder shall be deemed to have consented to and approved the
use of such documents). The Company shall not file a Registration Statement, any such Prospectus
or any amendments or supplements thereto in which the “Selling Stockholder” section thereof differs
from the disclosure received from a Holder in its Selling Shareholder Questionnaire (as amended or
supplemented), except as may otherwise be required by applicable securities law or the Commission.

          (b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously effective as to the
applicable Registrable Securities for its Effectiveness Period and prepare and file with the
Commission such additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended
or supplemented by any required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424; (iii) respond as promptly as reasonably practicable, and provide the
Holders true and complete copies of all written correspondence from and to the Commission relating
to such Registration Statement that pertains to the Holders as Selling Stockholders but not any
comments that would result in the disclosure to the Holders of material and non-public information
concerning the Company; and (iv) comply with the provisions of the Securities Act and the Exchange
Act with respect to the disposition of all Registrable Securities covered by each Registration
Statement during the applicable period in accordance (subject to the terms of this Agreement) with
the intended methods of disposition by the Holders thereof set forth in such Registration Statement
as so amended, or in such Prospectus as so supplemented.

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          (c) (c) Notify the Holders of Registrable Securities to be sold (which notice shall,
pursuant to clauses (ii) through (vi) hereof, be accompanied by an instruction to suspend the use
of the Prospectus until the requisite changes have been made) as promptly as reasonably possible
(and, in the case of (i)(A) below, not less than three (3) Trading Days prior to such filing), and
(if requested by any such Person) confirm such notice in writing no later than three (3) Trading
Days following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the
Company whether there will be a “review” of such Registration Statement and whenever the Commission
comments in writing on any Registration Statement (in which case the Company shall provide true and
complete copies thereof and all written responses thereto to each of the Holders that pertain to
the Holders as a Selling Stockholder or to the Plan of Distribution, but not information which the
Company believes would constitute material and non-public information), and (C) with respect to
each Registration Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental authority for
amendments or supplements to a Registration Statement or Prospectus or for additional information
that pertains to the Holders as Selling Stockholders or the Plan of Distribution; (iii) of the
issuance by the Commission or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue in any material
respect or that requires any material revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the Prospectus, as the case may
be, it will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein (in the case of any
Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which
they were made), not misleading; and (vi) the occurrence or existence of any pending corporate
development with respect to the Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interests of the Company to allow continued
availability of a Registration Statement or Prospectus, provided that any and all of such
information shall remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further, that notwithstanding
each Holder’s agreement to keep such information confidential, the Holders make no acknowledgement
that any such information is material, non-public information.

          (d) Use its commercially reasonable efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, as soon as reasonably practicable.

          (e) If requested by a Holder, furnish to such Holder, without charge, at least one
(1) conformed copy of each Registration Statement and each amendment thereto and all

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exhibits to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the Commission;
provided, that the Company shall have no obligation to provide any document pursuant to this clause
that is available on the Commission’s EDGAR system.

          (f) Upon notification by the Commission that a Registration Statement will not be
reviewed or is no longer subject to further review and comments, the Company shall request
acceleration of such Registration Statement within five (5) Business Days after receipt of such
notice such that it becomes effective no later than 5:00 p.m. New York City time on the Effective
Date and file a prospectus supplement for any Registration Statement, whether or not it is required
under Rule 424 (or otherwise), by 9:00 a.m. New York City time the day after the Effective Date.

          (g) Prior to any resale of Registrable Securities by a Holder, use commercially
reasonable efforts to register or qualify such Registrable Securities for resale by the Holder
under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder
reasonably requests in writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other acts or things
reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities
covered by the Registration Statements; provided, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified or to take any
action that would subject the Company to general service of process in any jurisdiction where it is
not then so subject or subject the Company to any material tax in any such jurisdiction where it is
not then so subject.

          (h) If requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase Agreement and under applicable law, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered in such names as any
such Holders may reasonably request. In connection therewith, if required by the Company’s
transfer agent, the Company shall promptly after the effectiveness of the Registration Statement
cause an opinion of counsel as to the effectiveness of the Registration Statement to be delivered
to and maintained with its transfer agent, together with any other authorizations, certificates and
directions required by the transfer agent, which authorize and direct the transfer agent to issue
such Registrable Securities without legend upon sale by the Holder of such shares of Registrable
Securities under the Registration Statement.

          (i) Following the occurrence of any event contemplated by Section 3(c), as promptly
as reasonably possible, under the circumstances taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its shareholders of the premature
disclosure of such event, prepare a supplement or amendment, including a post-effective amendment,
to the affected Registration Statements or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain 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 the case of any

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Prospectus, form of prospectus or supplement thereto, in light of the circumstances under
which they were made), not misleading. If the Company notifies the Holders in accordance with
Clauses (ii) through (vi) of Section 3(c) above to suspend the use of any Prospectus until the
requisite changes to such Prospectus have been made, then the Holders shall suspend use of such
Prospectus. The Company will use commercially reasonable efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise
its right under this Section 3(i) to suspend the availability of Registration Statement and
Prospectus, subject to the payment of liquidated damages pursuant to Section 2(c).

          (j) (i) In the time and manner required by the Principal Trading Market, prepare
and file with such Trading Market an additional shares listing application covering all of the
Registrable Securities, (ii) take all steps necessary to cause such Registrable Securities to be
approved for listing on the Principal Trading Market as soon as possible thereafter, (iii) if
requested by any Holder, provide such Holder evidence of such listing, and (iv) during the
Effectiveness Period, maintain the listing of such Registrable Securities on the Principal Trading
Market.

          (k) As long as any Holder owns Registrable Securities, the Company covenants to
timely file (or obtain extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or
15(d) of the Exchange Act. As long as any Holder owns Registrable Securities, if the Company is not
required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare
and furnish to the Holders and make publicly available in accordance with Rule 144(c) promulgated
under the Securities Act annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially similar to those that
would otherwise be required to be included in reports required by Section 13(a) or 15(d) of the
Exchange Act, as well as any other information required thereby, in the time period that such
filings would have been required to have been made under the Exchange Act. The Company further
covenants that it will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Person to sell Shares without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under
the Securities Act, including compliance with the provisions of the Purchase Agreement relating to
the transfer of the Shares.

          (l) The Company may require each selling Holder to furnish to the Company a
certified statement as to the number of shares of Common Stock beneficially owned by such Holder
and any Affiliate thereof and as to any NASD affiliations and of any natural persons who have the
power to vote or dispose of the Common Stock. During any periods that the Company is unable to
meet its obligations under this Agreement with respect to the registration of the Registrable
Securities because any Holder fails to furnish such information within three (3) Business Days of
the Company’s request, any liquidated damages that are accruing at such time as to such Holder only
shall be tolled and any Event that may otherwise occur because of such delay shall be suspended as
to such Holder only, until such information is delivered to the Company.

     4. Registration Expenses. All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement (excluding any

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underwriting discounts and selling commissions and all legal fees and expenses of legal
counsel for any Holder) shall be borne by the Company whether or not any Registrable Securities are
sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be made with the
Trading Market on which the Common Stock is then listed for trading, and (B) in compliance with
applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing), (ii)
printing expenses (including, without limitation, expenses of printing certificates for Registrable
Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by
the Holders of a majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi)
fees and expenses of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of any annual audit and
the fees and expenses incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be responsible for any
broker or similar commissions of any Holder or any legal fees or other costs of the Holders.

     5. Indemnification.

          (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors,
agents, partners, members, managers, shareholders, Affiliates and employees of each of them, each
Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, partners, members, managers,
shareholders, agents and employees of each such controlling Person, to the fullest extent permitted
by applicable law, from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and investigation and reasonable
attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to
(i) any untrue or alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto (it
being understood that the Holder has approved Annex A hereto for this purpose) or in any
preliminary prospectus, or arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein (in the
case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading, or (ii) any violation or alleged violation by the
Company of the Securities Act, Exchange Act or any state securities law, or any rule or regulation
thereunder, in connection with the performance of its obligations under this Agreement, except to
the extent, but only to the extent, that (A) such untrue statements, alleged untrue statements,
omissions or alleged omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and approved by such Holder expressly

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for use in the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that each Holder has approved Annex A hereto
for this purpose), (B) in the case of an occurrence of an event of the type specified in Section
3(c)(ii)-(vi), the use by a Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of Advice (as defined in Section 6(e) below), but only if and to the extent
that following the receipt of the Advice the misstatement or omission giving rise to such Loss
would have been corrected, or (C) willful misconduct on the part of the Holder. Each Holder shall
notify the Company promptly of the institution, threat or assertion of any Proceeding, of which the
Holder is aware, arising from or in connection with the transactions contemplated by this
Agreement. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of an Indemnified Party (as defined in Section 5(c)) and shall survive the
transfer of the Registrable Securities by the Holders.

          (b) Indemnification by Holders. Each Holder shall, notwithstanding any
termination of this Agreement, severally and not jointly, indemnify and hold harmless the Company,
its directors, officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising out of or relating to any untrue
or alleged untrue statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising out of
or relating to any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading (i)
to the extent, but only to the extent, that such untrue statements or omissions are based solely
upon information regarding such Holder furnished in writing to the Company by such Holder
specifically for use therein, or (ii) to the extent that such information relates to such Holder or
such Holder’s proposed method of distribution of Registrable Securities and was reviewed and
approved by such Holder specifically for use in the Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of
Prospectus or in any amendment or supplement thereto; provided, however, that the indemnity
agreement contained in this Section 5(b) shall not apply to amounts paid in settlement of any
Losses if such settlement is effected without the prior written consent of the Holder, which
consent shall not be unreasonably withheld. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder
upon the sale of the Registrable Securities giving rise to such indemnification obligation.

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the
“Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all reasonable fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and

11

 

only) to the extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate (but not control) in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict
of interest is likely to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be
at the expense of the Indemnifying Party), provided, however, that the Indemnifying Party shall not
be liable for the fees and expenses of more than one separate firm of attorneys at any time for all
Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be unreasonably withheld,
delayed or conditioned. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

          All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner
not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within
twenty Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it
is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder;
provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined that such Indemnified
Party is not entitled to indemnification hereunder).

          (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b)
is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission.

12

 

The amount paid or payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable
fees or expenses incurred by such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the indemnification provided for in this
Section was available to such party in accordance with its terms.

          The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually
received by such Holder from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, except in the case of
fraud by such Holder. 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.

          The indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties and are not in
diminution or limitation of the indemnification provisions under the Purchase Agreement.

     6. Miscellaneous.

          (a) Remedies. Neither the Company nor any Holder (nor any of the persons
covered in Section 5) shall be liable for any consequential, punitive or special damages, including
lost profits, arising out of, or based upon, any breach of this Agreement. In the event of a
breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each Holder agree that monetary
damages would not provide adequate compensation for any losses incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.

          (b) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings between the parties with
respect to such subject matter, except for, and as provided in the Transaction Documents.

          (c) Benefits of the Agreement. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns any rights,
remedies,

13

 

obligations, or liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

          (d) Compliance. Each Holder covenants and agrees that it will comply with
the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption
therefrom is available) in connection with sales of Registrable Securities pursuant to the
Registration Statement and shall sell the Registrable Securities only in accordance with a method
of distribution described in the Registration Statement, and that it will not sell, offer to sell,
solicit offers to buy, dispose of, loan, pledge or grant any right with respect to any of the
Registrable Securities except as contemplated in the Registration Statement or otherwise in
accordance with the Securities Act.

          (e) Discontinued Disposition. Each Holder further agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Section 3(c)(ii)-(vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement until it is advised in
writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed,
and, in either case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce the provisions of this
paragraph.

          (f) Amendments and Waivers. This Agreement may be amended only by a writing
signed by the Company and the Holders of a majority of the Registrable Securities issued at the
Closing. The Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the written consent to such
amendment, action or omission to act, of each Purchaser. Failure of any party to exercise any right
or remedy under this Agreement or otherwise or delay by a party in exercising such right or remedy
shall not operate as a waiver thereof.

          (g) Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the Registrable Securities
and the Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the Securities Act of
any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee or director benefit plans, then the Company shall
send to each Holder written notice of such determination and, if within fifteen days after receipt
of such notice, any such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such holder requests to be
registered, subject to customary underwriter cutbacks applicable to all holders of registration
rights on a pro rata basis; provided, that (i) the Company shall not be required to register any
Registrable Securities pursuant to this Section 6(g) that are eligible for resale under Rule 144(k)
promulgated under the Securities Act or that are the subject of a then effective Registration
Statement and (ii) if at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed in connection with

14

 

such registration, the Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give written notice of such
determination to such Holder and, thereupon, (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities pursuant to this Section
6(g) in connection with such registration (but not from its obligation to pay expenses in
accordance with Section 4 hereof), and (ii) in the case of a determination to delay registering,
shall be permitted to delay registering any Registrable Securities being registered pursuant to
this Section 6(g) for the same period as the delay in registering such other securities.

          (h) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section prior to 5:00 p.m. (New
York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile or e-mail to the facsimile number or e-mail
addressed specified in this Section on a day that is not a Trading Day or later than 5:00 p.m. (New
York City time) on any Trading Day, (iii) the Business Day following the date of mailing, if sent
by nationally recognized overnight courier service with next day delivery specified, or (iv) upon
actual receipt by the party to whom such notice is required to be given.

          The address for such notices and communications shall be as follows:

	 	 	 	 	 	 	 
	 

	 	If to the Company:
	 	Tutogen Medical, Inc.
	 	 
	 

	 	 	 	13709 Progress Blvd., Box 19	 	 
	 

	 	 	 	Alachua, FL 32615	 	 
	 

	 	 	 	Telephone No.: (386) 462-0402	 	 
	 

	 	 	 	Facsimile No.: (386) 462-7260	 	 
	 

	 	 	 	Attention: L. Robert Johnston Jr	 	 
	 
	 	 	 	 	 	 
	 

	 	With a copy to:
	 	Williams Schifino Mangione & Steady, P.A.	 	 
	 

	 	 	 	One Tampa City Center	 	 
	 

	 	 	 	Suite 3200	 	 
	 

	 	 	 	201 North Franklin Street	 	 
	 

	 	 	 	Tampa, FL 33602	 	 
	 

	 	 	 	Telephone No.: (813) 221-2626	 	 
	 

	 	 	 	Facsimile No.: (813) 221-7335	 	 
	 

	 	 	 	Attention: William J. Schifino Sr.	 	 

	 	 	 	 	 	 	 
	 

	 	If to a Purchaser:
	 	To the address set forth under such Purchaser’s name
on the signature pages hereto.
	 	 
	 
	 	 	 	 	 	 
	 

	 	If to any other Person who is	 	 	 	 
	 

	 	then the registered Holder:
	 	To the address of such Holder as it
appears in the stock transfer books of the Company or such other
address	 	 

15

 

	 	 	 	 	 	 	 
	 

	 	 	 	as may be designated in writing
hereafter, in the same manner, by
such Person.	 	 

provided, that any party may change its address for notices by providing written notice to the
other parties in the manner prescribed by this Section.

          (i) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties and shall inure to
the benefit of each Holder. The Company may not assign its rights or obligations hereunder without
the prior written consent of the Holders of a majority of the then-outstanding Registrable
Securities. The rights of the Holders hereunder, including the right to have the Company register
Registrable Securities pursuant to this Agreement, may be assigned by each Holder to transferees or
assignees of all or any portion of the Registrable Securities, but only if (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a true and complete copy of such
agreement is furnished to the Company prior to such assignment, (ii) prior to such assignment, the
Company is furnished with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being transferred or assigned,
(iii) at or before the time the Company received the written notice contemplated by clause (ii) of
this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein and (iv) the transferee is an “accredited investor” as that term is
defined in Rule 501 of Regulation D.

          (j) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an original and, all
of which taken together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is executed) the same with the
same force and effect as if such facsimile signature were the original thereof.

          (k) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement (whether brought against
a party hereto or its respective Affiliates, employees or agents) will be commenced in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any
New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum.
Each party hereto hereby irrevocably waives personal service of process and consents to process
being served in any such Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any

16

 

manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. If any party shall commence a
Proceeding to enforce any provisions of this Agreement, then the prevailing party in such
Proceeding shall be reimbursed by the other parties for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such Proceeding.

          (l) Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

          (m) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

          (n) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (o) Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint with the obligations
of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser hereunder. The decision of each Purchaser to
purchase Shares pursuant to the Transaction Documents has been made independently of any other
Purchaser. Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way acting in concert with respect
to such obligations or the transactions contemplated by this Agreement. Each Purchaser
acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with
making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in
connection with monitoring its investment in the Shares or enforcing its rights under the
Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any Proceeding for such
purpose. The Company acknowledges that each of the Purchasers has been provided with the same
Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and
not because it was required or requested to do so by any Purchaser.

          (p) Currency. Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in United States Dollars. All amounts owing under this Agreement are in United
States Dollars. All amounts denominated in other currencies shall be converted in the

17

 

United States dollar equivalent amount in accordance with the applicable exchange rate in
effect on the date of calculation.

          (q) Further Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may reasonably be required to
carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements
herein contained.

          (r) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein shall be a Saturday,
Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

          (s) Force Majeure. In no event shall a Holder have any claim or right against the
Company for any failure of performance in accordance with this Agreement due to causes beyond its
reasonable control, including, but not limited to: such delays arising directly out of an act of
God, fire, flood or other natural catastrophe; laws, orders, rules, regulations, directions or
action of governmental authorities having jurisdiction or any civil military authority, or national
emergency, riot, act of terrorism or war or labor dispute.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES TO FOLLOW]

18

 

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

	 	 	 	 	 
	 	TUTOGEN MEDICAL, INC.

 	 
	 	By:  	/s/  Guy L. Mayer
 	 
	 	 	Name:  	Guy L. Mayer 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF HOLDERS TO FOLLOW]

 

 

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

	 	 	 	 	 
	 	NAME OF INVESTING ENTITY

Visium Long Bias Offshore Fund, Ltd.

Visium Long Bias Fund, LP

Visium Balanced Offshore Fund, Ltd.

Visium Balanced Fund, LP

Atlas Master Fund, Ltd.*

AUTHORIZED SIGNATORY

 	 
	 	By:  	/s/ Mark Gottlieb
 	 
	 	 	Name:  	Mark Gottlieb 	 
	 	 	Title:  	Chief Compliance Officer 	 
	 
	 	 	 
	 * 	By:  	/s/ Scott Schroeder
 	 
	 	 	Name:  	Scott Schroeder 	 
	 	 	Title:  	Authorized Signatory 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ADDRESS FOR NOTICE
	 
	 	 	 	 	 	 
	 

	 	c/o:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Street:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	City/State/Zip:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Tel:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Email:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

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

	 	 	 	 	 
	 	NAME OF INVESTING ENTITY

Deerfield Special Situations Fund International, Ltd.

Deerfield Special Situation Fund, LP

AUTHORIZED SIGNATORY

 	 
	 	By:  	/s/ James E. Flynn
 	 
	 	 	Name:  	James E. Flynn 	 
	 	 	Title:  	President 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ADDRESS FOR NOTICE
	 
	 	 	 	 	 	 
	 

	 	c/o:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Street:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	City/State/Zip:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Tel:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Email:	 	 	 	 
	 

	 	 	 	 	 	 

 

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

	 	 	 	 	 
	 	NAME OF INVESTING ENTITY

HealthCor, L.P.

HealthCor Offshore, Ltd.

AUTHORIZED SIGNATORY

 	 
	 	By:  	Steven J. Musumeci
 	 
	 	 	Name:  	Steven J. Musumeci 	 
	 	 	Title:  	Chief Operating Officer 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ADDRESS FOR NOTICE
	 
	 	 	 	 	 	 
	 

	 	c/o:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Street:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	City/State/Zip:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Tel:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Email:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

Annex A

PLAN OF DISTRIBUTION

     We are registering the shares of Common Stock issued to the selling shareholders to permit the
resale of these shares of Common Stock by the holders of the shares of Common Stock from time to
time after the date of this prospectus. We will not receive any of the proceeds from the sale by
the selling shareholders of the shares of Common Stock. We will bear all fees and expenses
incident to our obligation to register the shares of Common Stock.

     The selling shareholders may sell all or a portion of the shares of Common Stock beneficially
owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of Common Stock are sold through underwriters or
broker-dealers, the selling shareholders will be responsible for underwriting discounts or
commissions or agent’s commissions. The shares of Common Stock may be sold on any national
securities exchange or quotation service on which the securities may be listed or quoted at the
time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges
or systems or in the over-the-counter market and in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected in transactions, which may involve crosses or
block transactions. The selling shareholders may use any one or more of the following methods when
selling shares:

	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;

	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

	•	 	an exchange distribution in accordance with the rules of the applicable exchange;

	•	 	privately negotiated transactions;

	•	 	settlement of short sales entered into after the effective date of the registration statement of which this prospectus
is a part;

	•	 	broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price
per share;

	•	 	through the writing of options, whether such options are listed on an options exchange or otherwise;

	•	 	a combination of any such methods of sale; and

	•	 	any other method permitted pursuant to applicable law.

     The selling shareholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.

     Broker-dealers engaged by the selling shareholders may arrange for other brokers-dealers to
participate in sales. If the selling shareholders effect such transactions by selling shares of
Common Stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive

 

 

commissions in the form of discounts, concessions or commissions from the selling shareholders
or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to
whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except
as set forth in a supplement to this Prospectus, in the case of an agency transaction will not be
in excess of a customary brokerage commission in compliance with NASD Rule 2440; and in the case of
a principal transaction a markup or markdown in compliance with NASD IM-2440.

     In connection with sales of the shares of Common Stock or otherwise, the selling shareholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the shares of Common Stock in the course of hedging in positions
they assume. The selling shareholders may also sell shares of Common Stock short and if such short
sale shall take place after the date that this Registration Statement is declared effective by the
Commission, the selling shareholders may deliver shares of Common Stock covered by this prospectus
to close out short positions and to return borrowed shares in connection with such short sales.
The selling shareholders may also loan or pledge shares of Common Stock to broker-dealers that in
turn may sell such shares. The selling shareholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).

     The selling shareholders may pledge or grant a security interest in some or all of the shares
of Common Stock owned by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of Common Stock from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of
selling shareholders to include the pledgee, transferee or other successors in interest as selling
shareholders under this prospectus. The selling shareholders also may transfer and donate the
shares of Common Stock in other circumstances in which case the transferees, donees, pledgees or
other successors in interest will be the selling beneficial owners for purposes of this prospectus.

     The selling shareholders and any broker-dealer or agents participating in the distribution of
the shares of Common Stock may be deemed to be “underwriters” within the meaning of the Securities
Act in connection with such sales. In such event, any commissions paid, or any discounts or
concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. Each selling shareholder has informed the Company that it does not have any written or oral
agreement or understanding, directly or indirectly, with any person to distribute the Common Stock.
At the time a particular offering of the shares of Common Stock is made, a prospectus supplement,
if required, will be distributed which will set forth (i) the name of each such selling shareholder
and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at
which such the shares of Common Stock were sold, (iv) the commissions paid or discounts or
concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did
not conduct any investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction. In no event shall any
broker-dealer receive fees, commissions and markups, which, in the aggregate, would exceed eight
percent (8%). In addition, upon the Company being notified in writing by a selling shareholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a supplement to this
prospectus will be filed if then required in accordance with applicable securities law.

     Under the securities laws of some states, the shares of Common Stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in some states the
shares of Common Stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied
with.

 

 

     There can be no assurance that any selling shareholder will sell any or all of the shares of
Common Stock registered pursuant to the shelf registration statement, of which this prospectus
forms a part.

     The selling shareholder and any other person participating in such distribution will be
subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of Common Stock by the selling
shareholder and any other participating person. Regulation M may also restrict the ability of any
person engaged in the distribution of the shares of Common Stock to engage in market-making
activities with respect to the shares of Common Stock. All of the foregoing may affect the
marketability of the shares of Common Stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of Common Stock.

     We will pay all expenses of the registration of the shares of Common Stock pursuant to the
registration rights agreement, including, without limitation, Securities and Exchange Commission
filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however,
that a selling shareholder will pay all underwriting discounts and selling commissions, if any and
any related legal expenses incurred by it. We will indemnify the selling shareholders against
liabilities, including some liabilities under the Securities Act, in accordance with the
registration rights agreements, or the selling shareholders will be entitled to contribution. We
may be indemnified by the selling shareholders against civil liabilities, including liabilities
under the Securities Act, that may arise from any written information furnished to us by the
selling shareholders specifically for use in this prospectus, in accordance with the related
registration rights agreements, or we may be entitled to contribution.

 

 

Annex B

Tutogen Medical, Inc.

Selling Shareholder Questionnaire

     The undersigned beneficial owner of common stock, $0.01 par value per share (the “Common
Stock”), of Tutogen Medical, Inc. (the “Company”), (the “Registrable
Securities”) understands that the Company has filed or intends to file with the Securities and
Exchange Commission (the “Commission”) a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms
of the Registration Rights Agreement, dated as of April 10, 2007 (the “Registration Rights
Agreement”), among the Company and the Purchasers named therein. The purpose of this
Questionnaire is to facilitate the filing of the Registration Statement under the Securities Act
that will permit you to resell the Registrable Securities in the future. The information supplied
by you will be used in preparing the Registration Statement. A copy of the Registration Rights
Agreement is available from the Company upon request as follows: Tutogen Medical, Inc., 13709
Progress Blvd., Box 19, Alachua, FL 32615. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Registration Rights Agreement.

     Certain legal consequences arise from being named as a selling shareholder in the Registration
Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable
Securities are advised to consult their own securities law counsel regarding the consequences of
being named or not being named as a selling shareholder in the Registration Statement and the
related prospectus.

NOTICE

     The undersigned beneficial owner (the “Selling Shareholder”) of Registrable Securities
hereby elects to include the Registrable Securities owned by it and listed below in Item 3 (unless
otherwise specified under such Item 3) in the Registration Statement.

QUESTIONNAIRE

	1.	 	Name.

	 	 	 	 	 
	 

	 	(a)
	 	Full Legal Name of Selling Shareholder:
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	(b)
	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
	 
	 	 	 	 
	 

	 	 	 	 

 

 

	 	 	 	 	 
	 

	 	(c)
	 	Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
	 
	 	 	 	 
	 

	 	 	 	 

	2.	 	Address for Notices to Selling Shareholder:

	 	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	Telephone:

	 	 
	 

	 	 
	Fax:
	 	 
	 

	 	 
	Contact Person:
	 	 
	 

	 	 
	E-mail address of Contact Person:
	 	 
	 

	 	 

	3.	 	Beneficial Ownership of Registrable Securities Issuable Pursuant to the Purchase Agreement:

	 	 	 	 	 
	 

	 	(a)
	 	Type and Number of Registrable Securities beneficially owned and issued
pursuant to the Purchase Agreement:
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

	4.	 	Broker-Dealer Status:

	 	 	 	 	 
	 

	 	(a)
	 	Are you a broker-dealer?

Yes
o       No o

	 	 	 	 	 
	 

	 	(b)
	 	If “yes” to Section 4(a), did you receive your Registrable Securities as compensation
for investment banking services to the Company?

Yes
o      
No o

	 	 	 
	Note:

	 	If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

	 	 	 	 	 
	 

	 	(c)
	 	Are you an affiliate of a broker-dealer?

Yes
o      
No o

	 	 	 	 	 
	 

	 	Note:
	 	If yes, provide a narrative explanation below:
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

 

 

	 	(c)	 	If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?

Yes  o                No  o

	 	 	 	 	 
	 

	 	Note:
	 	If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling Shareholder.

Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the securities issuable
pursuant to the Purchase Agreement.

	 	(a)	 	Type and Amount of other securities beneficially owned by the selling
shareholder:

	 	 	 	 	 
	 	 	 

6. Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 

7. Plan of Distribution:

The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the
Registration Rights Agreement, and hereby confirms that, except as set forth below, the
information contained therein regarding the undersigned and its plan of distribution is
correct and complete.

State any exceptions here:

	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 

***********

 

 

     The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof and prior to the effective
date of any applicable Registration Statement filed pursuant to the Registration Rights Agreement.

     By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 7 and the inclusion of such information in each
Registration Statement filed pursuant to the Registration Rights Agreement and each related
prospectus. The undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of any such Registration Statement and the related
prospectus.

     By signing below, the undersigned acknowledges that it understands its obligation to comply,
and agrees that it will comply, with the provisions of the Exchange Act and the rules and
regulations thereunder, particularly Regulation M. The undersigned also acknowledges that it
understands that the answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and any amendments or
supplements thereto filed with the Commission pursuant to the Securities Act.

     The undersigned hereby acknowledges and is advised of the following Interpretation A.65 of the
July 1997 SEC Manual of Publicly Available Telephone Interpretations regarding short selling:

     “An Issuer filed a Form S-3 registration statement for a secondary offering of common stock
which is not yet effective. One of the selling shareholders wanted to do a short sale of common
stock “against the box” and cover the short sale with registered shares after the effective date.
The issuer was advised that the short sale could not be made before the registration statement
become effective, because the shares underlying the short sale are deemed to be sold at the time
such sale is made. There would, therefore, be a violation of Section 5 if the shares were
effectively sold prior to the effective date.”

     By returning this Questionnaire, the undersigned will be deemed to be aware of the foregoing
interpretation.

I confirm that, to the best of my knowledge and belief, the foregoing statements (including without
limitation the answers to this Questionnaire) are correct.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be
executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	Beneficial Owner:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	PLEASE FAX A COPY OF THE COMPLETED 
	 	 	 	 	 	 	AND EXECUTED NOTICE AND
 QUESTIONNAIRE, AND RETURN THE

ORIGINAL BY OVERNIGHT MAIL, TO:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	[ADDRESS]Exhibit 10.1                                                      Execution Copy

                            STOCK PURCHASE AGREEMENT

     This Stock Purchase  Agreement (this  "Agreement") is made and entered into
as of the 5th day of April  2007,  by and  between  Millennium  Quest,  Inc.,  a
Delaware  corporation  (the "Company"),  Dimitri  Cocorinis and Terry Cononelos,
officers,  directors and principal  shareholders of the Company (the "Individual
Officers"), and Halter Financial Investments,  L.P., a Texas limited partnership
("Purchaser"), on the following:

                                    Premises

     Purchaser desires to acquire a controlling interest in the Company, and the
Company desires to sell such a controlling interest in the Company to Purchaser,
upon and subject to the terms and conditions of this Agreement.

                                    Agreement

     NOW,  THEREFORE,  on these  premises  and for and in  consideration  of the
mutual promises and covenants set forth herein, the Company and Purchaser hereby
agree as follows:

     1.  Purchase and Sale of Shares.  Purchaser  agrees to purchase and acquire
from the  Company,  and the  Company  agrees to sell and  deliver to  Purchaser,
100,000 restricted shares of the Company's Series A Voting Convertible Preferred
stock, par value $0.001 (the "Shares"),  in consideration of Purchaser's payment
to the Company of $455,000 in immediately available funds at Closing (as defined
herein). Each of the Shares shall have voting rights equivalent to, and shall be
convertible  into, 428.56 shares of the Company's common stock. The transactions
contemplated  hereby  shall be closed by the delivery of the  documents  and the
completion  of the acts more  particularly  set forth  herein.  The  rights  and
preferences  associated  with the Shares are set forth in their  entirety in the
Certificate of Designation of Series A Voting  Convertible  Preferred Stock (the
"Preferred Stock  Designation")  attached hereto as Exhibit "A" and incorporated
herein by reference,  which shall be filed with the Delaware  Secretary of State
on or before Closing.  All references to Shares herein include the shares of the
Company's  common  stock into which the  Shares  are  convertible  as though the
Shares had been converted into common stock. The issue and sale of the Shares to
Purchaser  hereunder is an isolated  private  offering of preferred  stock being
conducted by the Company in reliance  upon the exemption  from the  registration
requirements of the Securities Act of 1933, as amended (the "Act"),  afforded by
Section 4(2) thereunder.

     2. Closing. The closing of the transactions  contemplated hereby shall take
place at a mutually  agreeable  location  in Salt Lake City,  Utah on a mutually
convenient  date and time within five business  days  following the execution of
this Agreement (the "Closing").

     (a) At the Closing, the Company shall deliver or cause to be delivered:

          (i) stock  certificates  for the Shares,  which shall be registered in
          the names and denominations requested by Purchaser;

                                       1
<PAGE>

          (ii) the  corporate  minute  book and all  other  corporate  books and
          records of the Company,  including  agreements,  shareholder  records,
          financial records, and related supporting documents and data under the
          care,  custody,  or control  of the  Company  or its  officers  and/or
          directors.  If any  additional  items  are  received  by such  persons
          subsequent to the Closing  Date,  they shall  immediately  deliver the
          same to the Company;

          (iii) a duly executed officer's  certificate pursuant to Section 6(c);
          and

          (iv) a duly executed receipt for the payment for the Shares.

     (b) At the closing, Purchaser shall deliver or cause to be delivered:

          (i) a  cashier's  check or bank wire  payable  to the  Company  in the
          aggregate amount of $455,000; and

          (ii) a duly executed officer's certificate pursuant to Section 7(c)

     3.  Representations  and  Warranties  of the  Company.  The Company and the
Individual  Officers  jointly and  severally  represent and warrant to Purchaser
that, at the date of this Agreement and on the date of the Closing:

     (a) The  Company  has the full power and  authority  to execute and deliver
     this  Agreement and to perform its  obligations  hereunder.  This Agreement
     constitutes  the valid  and  legally  binding  obligation  of the  Company,
     enforceable  in accordance  with its terms.  The Company is not required to
     give any notice to, make any  filings  with,  or obtain any  authorization,
     consent,  or approval of any government or governmental  agency in order to
     consummate the  transactions  contemplated  by this  Agreement,  except any
     filings with the U.S.  Securities and Exchange Commission ("SEC") and state
     securities  regulators  which  may  be  required  in  connection  with  the
     transactions contemplated hereby.

     (b) The Company and each of its subsidiaries, if any, are corporations duly
     organized,  validly  existing and in good standing  under the laws of their
     states of incorporation,  with all requisite  corporate power and authority
     to  carry  on the  business  in  which  they  are  engaged  and to own  the
     properties  they own, and the Company has all requisite power and authority
     to execute and deliver this  Agreement and to consummate  the  transactions
     contemplated  hereby.  The  Company and each of its  subsidiaries  are duly
     qualified  and  licensed  to do  business  and are in good  standing in all
     jurisdictions  where the nature of their business makes such  qualification
     necessary,  except where the failure to be so  qualified or licensed  would
     not have a material  adverse  effect on the business of the Company and its
     subsidiaries, taken as a whole.

     (c)  There  are  no  legal  actions  or   administrative   proceedings   or
     investigations  instituted,  or  to  the  best  knowledge  of  the  Company
     threatened,  against the Company, that could reasonably be expected to have
     a material  adverse  effect on the  Company or any  subsidiary,  any of the
     Shares,  or the  business of the Company and its  subsidiaries,  if any, or
     which concern the transactions contemplated by this Agreement.

                                       2
<PAGE>

     (d) The Company,  by appropriate and required  corporate  action,  has duly
     authorized the execution of this Agreement and the issuance and delivery of
     the Shares,  subject to the filing of the Preferred Stock  Designation with
     the Delaware  Secretary of State.  The Shares are not subject to preemptive
     or other  rights of any  stockholders  of the  Company  and when  issued in
     accordance  with  the  terms  of  this  Agreement  and the  Certificate  of
     Incorporation  of the  Company,  as amended and  currently  in effect,  the
     Shares will be validly issued,  fully paid and  nonassessable  and free and
     clear of all pledges,  liens and  encumbrances.  The issuance of the Shares
     hereunder will not trigger any outstanding anti-dilution rights.

     (e) The Company's  performance of this  Agreement and  compliance  with the
     provisions  hereof will not violate any provision of any  applicable law or
     of the Certificate of Incorporation or Bylaws of the Company,  or of any of
     its  subsidiaries,  and,  will not conflict with or result in any breach of
     any of the terms,  conditions  or  provisions  of, or  constitute a default
     under,  or result in the  creation  or  imposition  of any lien,  charge or
     encumbrance upon, any of the properties or assets of the Company, or of any
     of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed
     of trust or other agreement or instrument binding upon the Company,  or any
     of its  subsidiaries,  other than such  breaches,  defaults  or liens which
     would  not  have  a  material   adverse  effect  on  the  Company  and  its
     subsidiaries  taken as a whole.  The  Company is not in  default  under any
     provision  of  its  Certificate  of   Incorporation  or  By-laws  or  other
     organizational  documents or under any  provision of any agreement or other
     instrument  to  which  it is a party or by which it is bound or of any law,
     governmental  order,  rule or regulation  so as to affect  adversely in any
     material  manner its  business  or assets or its  condition,  financial  or
     otherwise.

     (f) The  periodic  reports  filed by the  Company  with the SEC through and
     including  its 2006 Annual  Report on Form 10-KSB for the fiscal year ended
     December 31, 2006 (the  "Disclosure  Documents"),  taken  together,  do not
     contain any untrue statement of a material fact or omit to state a material
     fact  required  to be  stated  therein  in  order  to make  the  statements
     contained therein not misleading.

     (g) The Company has provided Purchaser with all material public information
     in  connection  with  the  business  of the  Company  and the  transactions
     contemplated by this Agreement, and no representation or warranty made, nor
     any document,  statement,  or financial  statement prepared or furnished by
     the  Company  in  connection  herewith  contains  any untrue  statement  of
     material  fact,  or omits to state a material  fact  necessary  to make the
     statements or facts contained herein or therein not misleading.

     (h) This  Agreement has been duly executed and delivered by the Company and
     constitutes  a valid and binding  obligation  of the  Company,  enforceable
     against the Company in accordance with its terms.

     (i) No registration,  authorization,  approval, qualification or consent of
     any court or  governmental  authority or agency is necessary in  connection
     with the execution and delivery of this Agreement or the offering, issuance
     or sale of the  Shares  under  this  Agreement  except  the  filing  of the
     Preferred  Stock  Designation  and any  filings  with  the  SEC  and  state

                                       3
<PAGE>

     securities   regulators   required  in  connection  with  the  transactions
     contemplated hereby.

     (j) The  Company is not now,  and after the sale of the  Shares  under this
     Agreement and under all other  agreements  and the  application  of the net
     proceeds  from the sale of the Shares will not be required to register  as,
     an "investment company" within the meaning of the Investment Company Act of
     1940, as amended.

     (k) The Company has filed or will file prior to Closing  all  material  tax
     returns  required  to be filed,  which  returns are true and correct in all
     material respects,  and the Company is not in default in the payment of any
     taxes,  including  penalties  and  interest,  assessments,  fees and  other
     charges, shown thereon as due or otherwise assessed, other than those being
     contested in good faith and for which adequate  reserves have been provided
     or those currently  payable without interest which were payable pursuant to
     said returns or any assessments with respect thereto.

     (l) The Company has not taken any action  outside  the  ordinary  course of
     business  designed  to or that might  reasonably  be  expected  to cause or
     result in  stabilization  or  manipulation  of the  price of the  Company's
     common stock to facilitate the sale or resale of the Company's common stock
     in any manner in contravention of applicable securities laws;

     (m)  Subject  to  the  accuracy  of  the  Purchaser's  representations  and
     warranties in Section 4 of this Agreement, the offer, sale, and issuance of
     the  Shares  in  conformity  with the  terms of this  Agreement  constitute
     transactions that meet the requirements for exemption from the registration
     requirements of Section 5 of the Securities Act;

     (n) Neither the Company,  nor any of its affiliates,  nor any person acting
     on its or their behalf, has directly or indirectly made any offers or sales
     of any  security  or  solicited  any  offers  to  buy  any  security  under
     circumstances  that would require  registration under the Securities Act of
     the  issuance of the Shares to the  Purchaser.  Except as  disclosed in the
     Disclosure Documents,  the Company has not issued or sold any shares of its
     capital  stock for in excess of five years prior to the date hereof and the
     issuance of the Shares to the  Purchaser  will not be  integrated  with any
     other issuance of the Company's  securities  (past,  current or future) for
     purposes of the  Securities  Act.  The Company  will not make any offers or
     sales of any security  (other than the Shares) that would cause the sale of
     the Shares hereunder to be integrated with any other offering of securities
     by the  Company  for  purposes of any  registration  requirement  under the
     Securities Act.

     (o) The Company will at the date of Closing be in material  compliance with
     all applicable  securities (or "Blue Sky") laws of the states of the United
     States in connection with the issuance and sale of the Shares to Purchaser.

     (p) The Company shall use all commercially  reasonable  efforts to continue
     to have its common stock quoted on the OTC Bulletin Board.

                                       4
<PAGE>

     (q) The Company's board of directors has, by unanimous written consent,  or
     by other  action  valid  under  the laws of the  jurisdiction  in which the
     Company is organized,  determined that this Agreement and the  transactions
     contemplated by this Agreement,  are advisable and in the best interests of
     the   Shareholders   and  has  duly   authorized  this  Agreement  and  the
     transactions contemplated by this Agreement.

     (r) As of the date hereof,  the  capitalization  of the Company consists of
     20,000,000  shares of common stock,  par value $0.001,  of which  2,261,643
     shares are issued and outstanding, and 5,000,000 shares of preferred stock,
     par value $0.001, none of which are issued and outstanding.  All issued and
     outstanding shares of the Company's common stock are legally issued,  fully
     paid,  and  nonassessable  and not issued in violation  of the  pre-emptive
     rights of any person. There are no subscriptions, options, warrants, calls,
     commitments, agreements, conversion rights or other rights of any character
     (contingent  or  otherwise)  entitling  any person to purchase or otherwise
     acquire from the Company at any time,  or upon the  happening of any stated
     event, any shares of capital stock or other equity securities of any of the
     Company.

     (s) Except as set forth in the Company Schedules (as defined herein), since
     December 31, 2006, there has not been:

     (i)  any  material  change  in  the  business,   operations,  or  financial
          condition or the manner of conducting the business of the Company;

     (ii) any  declaration,  setting aside,  or payment of any dividend or other
          distribution  in respect of the shares of the Company of any class, or
          any direct or indirect redemption,  purchase,  or other acquisition of
          any shares of any class of the Company;

     (iii) any agreement or arrangement to pay or accrue  compensation to any of
          the  Company's  officers,  directors,  employees,  or agents except as
          contemplated by this Agreement;

     (iv) any  option,  warrant,  or right to  purchase,  or any other  right to
          acquire shares of any class of the Company granted to any person;

     (v)  any employment, bonus, or deferred compensation agreement entered into
          between the Company and any of its officers,  directors,  or any other
          employees or consultants;

     (vi) any issuance of securities of the Company;

     (vii) any  indebtedness  incurred or guaranteed by the Company for borrowed
          money or any commitment to borrow money entered into by the Company or
          any indebtedness for accounts payable for materials or goods purchased
          by or for services rendered on behalf of the Company, except for items
          incurred in the

                                       5
<PAGE>

          ordinary  course of business or in connection  with this Agreement and
          the transactions contemplated hereby; or

     (viii) any amendment to the Certificate of  Incorporation  or Bylaws of the
          Company.

     (t) The Company has delivered to Purchaser the following  schedules,  which
     are collectively  referred to as the "Company  Schedules" and which consist
     of separate  schedules  dated as of the date of execution of this Agreement
     and  instruments  and data as of such  date,  all  certified  by the  chief
     executive officer of the Company as complete, true, and correct:

     (i)  a  schedule  setting  forth  a  description  of any of the  events  or
          information  required to be described pursuant to section 3(s) of this
          Agreement; and

     (ii) a  schedule  setting  forth all  liabilities  and  obligations  of the
          Company,  including  liabilities  for  products  acquired  or services
          performed on or prior to the Closing Date for which  invoices have not
          been issued,  which list shall be updated  through and  including  the
          Closing  Date  (the  "Company  Liabilities").  In no event  shall  the
          Company Liabilities exceed $60,000.

     The Company shall cause the Company  Schedules and the instruments and data
     delivered to Purchaser  hereunder to be updated after the date hereof up to
     and including the Closing Date.

     4.  Representations and Warranties of Purchaser.  Purchaser  represents and
warrants to the Company that,  at the date of this  Agreement and on the date of
Closing:

     (a) Purchaser has been furnished with and has carefully read the Disclosure
     Documents as defined in Section 3(f) hereof.  With respect to individual or
     partnership  tax  and  other  economic   considerations  involved  in  this
     investment,  Purchaser  is not  relying  on the  Company  (or any  agent or
     representative of the Company). Purchaser has carefully considered and has,
     to the extent Purchaser believes such discussion necessary,  discussed with
     Purchaser's  legal, tax,  accounting and financial advisers the suitability
     of an investment in the Shares for Purchaser's particular tax and financial
     situation.

     (b) Purchaser has had an opportunity to inspect relevant documents relating
     to the organization and operations of the Company.  Purchaser  acknowledges
     that all documents,  records and books  pertaining to this investment which
     Purchaser  has  requested  have  been  made  available  for  inspection  by
     Purchaser and Purchaser's attorney, accountant or other adviser(s).

     (c)  Purchaser  and/or  Purchaser's  advisor(s)  has/have  had a reasonable
     opportunity to ask questions of, and receive answers and request additional
     relevant  information  from,  a person or  persons  acting on behalf of the
     Company concerning the transactions contemplated by this Agreement.

                                       6
<PAGE>

     (d) Purchaser is not  purchasing the Shares as a result of or subsequent to
     any advertisement,  article, notice or other communication published in any
     newspaper,  magazine or similar media or broadcast over television or radio
     or presented at any seminar.

     (e) Purchaser,  by reason of Purchaser's business or financial  experience,
     has the capacity to protect  Purchaser's  own interests in connection  with
     the transactions contemplated by this Agreement.

     (f)  Purchaser  has adequate  means of providing  for  Purchaser's  current
     financial needs and contingencies, is able to bear the substantial economic
     risks of an investment in the Shares for an indefinite  period of time, has
     no need for liquidity in such  investment  and, at the present time,  could
     afford a complete loss of such investment.

     (g) Purchaser  has such  knowledge  and  experience  in financial,  tax and
     business  matters so as to enable  Purchaser  to use the  information  made
     available to Purchaser in connection  with the  transaction to evaluate the
     merits and risks of an  investment  in the  Shares and to make an  informed
     investment decision with respect thereto.

     (h) Purchaser  acknowledges  that the Shares have not been registered under
     the Act or under any the securities act of any state. Purchaser understands
     further that in absence of an effective registration statement,  the Shares
     can only be sold pursuant to some exemption from registration, such as Rule
     144 of the Act, which  requires,  among other  conditions,  that the Shares
     must be held for a minimum of one (1) year.

     (i) Purchaser recognizes that investment in the Shares involves substantial
     risks.  Purchaser acknowledges that Purchaser has reviewed the risk factors
     identified within the Disclosure  Documents.  Purchaser further  recognizes
     that no Federal or state agencies have passed upon this transaction or made
     any finding or determination as to the fairness of this investment.

     (j) Purchaser  acknowledges  that each certificate  representing the Shares
     shall contain a legend substantially in the following form:

     THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
     (THE  "SECURITIES  ACT") OR UNDER  APPLICABLE STATE SECURITIES LAWS AND MAY
     NOT BE SOLD,  TRANSFERRED OR OTHERWISE  DISPOSED OF UNLESS REGISTERED UNDER
     THE SECURITIES ACT AND ANY APPLICABLE  STATE SECURITIES LAWS OR PURSUANT TO
     AVAILABLE  EXEMPTIONS FROM SUCH  REGISTRATION,  PROVIDED THAT THE PURCHASER
     DELIVERS  TO THE COMPANY AN OPINION OF COUNSEL  (WHICH  OPINION AND COUNSEL
     ARE REASONABLY  SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY OF
     SUCH EXEMPTION.

     (k)  Purchaser  has the full legal  right and power and all  authority  and
     approval  required (i) to execute and deliver,  or authorize  execution and
     delivery  of,  this  Agreement  and  all  other  instruments  executed  and
     delivered by or on behalf of Purchaser in  connection  with the purchase of
     the Shares,  and (ii) to purchase and hold the Shares. The signature of the
     party signing on behalf of Purchaser is binding upon  Purchaser.  Purchaser
     has not been formed for the specific purpose of acquiring the Shares.

                                       7
<PAGE>

     (l)  Purchaser  understands,  acknowledges  and agrees  with the Company as
     follows:

          (i) No federal or state agency has made any findings or  determination
          as to the fairness of the terms of this  transaction for investment or
          any recommendations or endorsement of the Shares.

          (ii) The transaction is intended to be exempt from registration  under
          the Securities Act by virtue of Section 4(2) of the Securities Act.

          (iii) Purchaser  acknowledges that the information  furnished pursuant
          to this  Agreement  by the  Company to  Purchaser  or its  advisers in
          connection with the  transaction,  is  confidential  and nonpublic and
          agrees that all such written information which is material and not yet
          publicly  disseminated  by the Company  shall be kept in confidence by
          Purchaser  and neither  used by  Purchaser  for  Purchaser's  personal
          benefit  (other  than  in  connection  with  this  transaction),   nor
          disclosed  to any  third  party,  except  Purchaser's  legal and other
          advisers  who  shall be  advised  of the  confidential  nature of such
          information,  for any reason; provided,  however, that this obligation
          shall not apply to any such information that (i) is part of the public
          knowledge or  literature  and readily  accessible  at the date hereof,
          (ii) becomes a part of the public  knowledge or literature and readily
          accessible  by  publication  (except  as a result  of a breach of this
          provision)  or (iii) is  received  from third  parties  (except  third
          parties  who   disclose   such   information   in   violation  of  any
          confidentiality   agreements  or   obligations,   including,   without
          limitation, any subscription agreement entered into with the Company).

          (iv) IN MAKING AN INVESTMENT DECISION,  PURCHASER MUST RELY ON ITS OWN
          EXAMINATION OF THE COMPANY AND THE TERMS OF THE TRANSACTION, INCLUDING
          THE MERITS AND RISKS INVOLVED. THE SHARES HAVE NOT BEEN RECOMMENDED BY
          ANY FEDERAL OR STATE  SECURITIES  COMMISSION OR REGULATORY  AUTHORITY.
          ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

     5. Special  Covenants.  The parties make and agree to the following special
covenants  which  have  served as  material  inducements  for  their  respective
decisions to enter into this Agreement.

     (a) Payment of Obligations / Conversion of Debt. Within seven business days
     following   the  Closing   Date,   the  Company  shall  cause  the  Company
     Liabilities,  other than promissory  note to C&C Investment  Partnership in
     the principal amount of $25,000 (the "C&C Note"), to be paid and satisfied.
     Such  Company  Liabilities  shall not  exceed  $60,000  in total.  Prior to
     Closing,  the  Company  shall  cause the holders of the C&C Note to execute
     that  certain  Settlement  Agreement  attached  hereto as  Exhibit  "B" and
     incorporated herein by reference,  pursuant to which said noteholders shall
     accept  2,500,000  restricted  shares of the Company's common stock in full
     payment and satisfaction of the C&C Note;  provided,  that such transaction
     shall be consummated  subsequent to the later of (i) the date of Closing or
     (ii) the record  date for the  special  cash  distribution  referred  to in
     section 5(g) hereof,  and the shares issuable in consideration  for the C&C

                                       8
<PAGE>

     Note  shall  not  be  entitled  to   participate   in  such   special  cash
     distribution.

     (b) Limitation on Reverse Stock Splits.  Following Closing,  Purchaser,  as
     the controlling  stockholder of the Company, will not permit the Company to
     effect any reverse  stock  split  following  Closing  other than a one-time
     reverse stock split  effected by the Company in connection  with a business
     combination  transaction  with a corporation or other business  entity with
     current business operations (a "Going Public Transaction"),  on a basis not
     greater than 1-for-33, and no shareholder of record of the Company's common
     stock on the effective  date of such split shall have his, her or its total
     share ownership reduced below 100 shares,  unless the Individual  Officers,
     as  representatives  of the Company's  current  shareholders,  consent to a
     larger reverse stock split in writing in advance.  This provision  shall be
     binding upon any  permitted  successors  or assigns of Purchaser  and shall
     automatically  terminate at the time the Company enters into a Going Public
     Transaction in accordance with the terms of this Agreement.

     (c) Limitation on Future Share Issuances.  Following Closing, Purchaser, as
     the controlling  stockholder of the Company, will not permit the Company to
     authorize the issuance of any  additional  shares of the Company's  capital
     stock or securities  convertible into the Company's capital stock except in
     connection with a Going Public Transaction,  including any shares issued to
     any consultants and finders in  contemplation of in connection with a Going
     Public  Transaction.  This  provision  shall be binding upon any  permitted
     successors or assigns of Purchaser and shall automatically terminate at the
     time the Company enters into a Going Public  Transaction in accordance with
     the terms of this Agreement.  In addition,  Purchaser shall not acquire any
     additional  shares of the  Company's  capital  stock  (over and above those
     purchased hereunder) in connection with a Going Public Transaction.

     (d) Minimum Qualifications for Going Public Transaction. Following Closing,
     Purchaser,  as the controlling  stockholder of the Company,  will not allow
     the Company to enter into a Going Public Transaction unless the Company, on
     a combined basis with the operating  entity with which it completes a Going
     Public Transaction,  satisfies the financial  conditions for listing on the
     NASDAQ Capital Market immediately following the closing of the Going Public
     Transaction.  This provision shall be binding upon any permitted successors
     or assigns of Purchaser and shall  automatically  terminate at the time the
     Company enters into a Going Public Transaction in accordance with the terms
     of this Agreement.

     (e) Transfer and Registration Rights.

          (i)  Mandatory  Registration.   Upon  receipt  of  written  demand  by
          Purchaser,  the Company shall prepare, and, as soon as practicable but
          in no event later than 60 calendar days after the date of such notice,
          file with the SEC a Registration Statement or Registration  Statements
          (as is  necessary) on Form S-3 (or if such form is  unavailable,  such
          other form as is available  for  registration)  covering the resale of
          all of the  Shares  (or the  shares  of  common  stock  issuable  upon
          conversion  of the Shares).  The Company shall use its best efforts to
          have the Registration  Statement declared effective by the SEC as soon
          as practicable, but in no event later than 120 calendar days after the
          date notice is received.

                                       9
<PAGE>

          (ii) Piggy Back Registration Rights.

               (aa) If the Company  decides,  including  as  required  under any
               demand  registration  rights  agreement,  to register  any of its
               common stock or securities  convertible  into or exchangeable for
               common stock under the Securities Act on a form which is suitable
               for an offering  for cash or shares of the Company  held by third
               parties and which is not a  registration  solely to  implement an
               employee  benefit plan, a registration  statement on Form S-4 (or
               successor  form) or a transaction  to which Rule 145 or any other
               similar rule of the SEC is applicable,  the Company will promptly
               give written  notice to the  Purchaser of its intention to effect
               such a registration.  Subject to Section  5(c)(ii)(bb) below, the
               Company  shall include all of the Shares (or the shares of common
               stock issuable upon  conversion of the Shares) that the Purchaser
               requests  to be  included  in such a  registration  by a  written
               notice  delivered to the Company  within  fifteen (15) days after
               the notice given by the Company.

               (bb) If the  registration,  as described in Section  5(c)(ii)(aa)
               above, involves an underwritten offering, the Company will not be
               required  to  register  Shares  (or the  shares of  common  stock
               issuable  upon  conversion of the Shares) in excess of the amount
               that  the  principal  underwriter  reasonably  and in good  faith
               recommends may be included in such offering (a "Cutback"),  which
               recommendation,  and supporting reasoning,  shall be delivered to
               Purchaser.  If such a Cutback  occurs,  the number of Shares that
               are  entitled to included in the  registration  and  underwriting
               shall be allocated in the  following  manner:  (i) first,  to the
               Company  for any  securities  it  proposes  to  sell  for its own
               account,   (ii)  second,   to  the   Purchaser   requiring   such
               registration,  and (iii) third,  to other holders of stock of the
               Company requesting inclusion in the registration,  pro rata among
               the  respective  holders  thereof  on the basis of the  number of
               shares  for  which  each such  requesting  holder  has  requested
               registration.

               (cc) All costs and  expenses of any such  registration  statement
               shall be paid by the Company,  other than sales  commissions  and
               the expenses of any separate legal counsel engaged by Purchaser.

               (dd) The Shares issued  pursuant to this Agreement and the shares
               of common stock issuable upon conversion of the Shares may not be
               transferred  except in a transaction  which is in compliance with
               the Act and applicable state laws and regulations.

     (f) Directors of Acquiror Company at Closing Date.  Promptly  following the
     execution of this Agreement, the Company shall take the actions required by
     Regulation 14f-1 promulgated under the Securities  Exchange Act of 1934, as
     amended,  with respect to the change in the Company's  management described
     herein.  On the Closing Date,  the  Individual  Officers  shall resign from
     their  positions as officers of the Company,  Terry  Cononelos shall resign
     from his  position as a director of the Company and Timothy P. Halter shall
     be appointed as President,  Secretary and a director of the Company to fill
     the vacancies created by such resignations. Following the expiration of the

                                       10
<PAGE>

     waiting period required by Regulation 14f-1, Dimitri Cocorinis shall resign
     from his position as a director of the Company.

     (g) Special Cash Distribution. On or prior to the Closing Date, the Company
     shall declare a special cash  distribution to the shareholders of record of
     the Company's common stock. Such special cash distribution  shall be in the
     aggregate amount of  approximately  $415,000 or $0.18 per share for each of
     the  2,261,643  shares of common stock  outstanding  on the record date for
     such distribution; provided, that in no event shall the aggregate amount of
     such  distribution  exceed the amount  permitted  by the  Delaware  General
     Corporation  Law.  Purchaser  expressly  acknowledges  that it will  not be
     entitled to participate in such  distribution and waives any right thereto.
     Purchaser also expressly  acknowledges that all but approximately $5,000 of
     the purchase price for the Shares will be used to pay the  distribution and
     the Company Liabilities,  which will have the effect of materially reducing
     the book value of the Company immediately following Closing.

     (h) Form S-8 Registration of Acquiror Company Common Stock.  From and after
     the date of Closing  and until such time as the  Company  completes a Going
     Public Transaction, the Company shall not issue any shares of the Company's
     common stock pursuant to a registration statement on Form S-8.

     (i) Resales of Restricted  Stock.  The  Individual  Officers of the Company
     holding restricted shares of the Company's common stock, and holders of the
     C & C Notes to whom  shares of the  Company's  common  stock are  issued in
     accordance with Section 5(a) hereof (the "Subject  Shareholders")  shall be
     entitled to the same demand and piggyback  registration rights with respect
     to the shares of the  Company's  common  stock  held by them (the  "Subject
     Shares")  that are  provided to  Purchaser  pursuant to Section 5(e) hereof
     and,  in the  event  of any  Cutback,  an equal  number  of the  Shares  of
     Purchaser   and  the  Subject   Shareholders   shall  be  included  in  any
     registration  statement  (unless  all  of  the  Subject  Shares  have  been
     included,  in which event a greater  number of the Shares of Purchaser  may
     also  be  included)  with  respect  to  which  Purchaser  and  the  Subject
     Shareholders  have  requested  registration.  All  costs  and  expenses  of
     registration shall be paid by the Company, other than sales commissions and
     the  expenses  of  any  separate  legal  counsel  engaged  by  the  Subject
     Shareholders.

     6. Conditions to Purchaser's  Obligations.  The obligations of Purchaser to
close the  transactions  contemplated  by this  Agreement  are  subject,  at its
discretion, to the following conditions:

     (a)  The  representations  and  warranties  made  by the  Company  in  this
     Agreement were true when made and shall be true at the date of Closing with
     the same force and effect as if such  representations  and warranties  were
     made at and as of the date of Closing (except for changes permitted by this
     Agreement),  and the Company  shall have  performed  and complied  with all
     covenants  and  conditions  required by this  Agreement  to be performed or
     complied with by it prior to or at the Closing.

     (b)  Prior to the date of  closing,  there  shall  not  have  occurred  any
     material adverse change in the financial condition, business, or operations

                                       11
<PAGE>

     of the Company,  nor shall any event have occurred which, with the lapse of
     time or the  giving  of notice or both,  may cause or create  any  material
     adverse change in the financial condition,  business,  or operations of the
     Company.

     (c) Purchaser  shall have been furnished with a certificate,  signed by the
     president of the Company and dated as of the date of closing, certifying as
     to the matters set forth in (a) and (b) above.

     (d) Purchaser  shall have received  copies of all documents and information
     which it may have reasonably  requested in connection with the transactions
     contemplated by this Agreement.

     (e) No stop order or  suspension  of trading shall have been imposed by the
     SEC,  or any other  governmental  regulatory  body with  respect  to public
     trading in the Company's common stock.

     (f) The Company  shall have timely  filed its 2006 federal and state income
     tax returns with the applicable taxing authorities.

     7. Conditions to the Company's Obligations.  The obligations of the Company
to close the  transactions  contemplated  by this Agreement are subject,  at its
discretion, to the following conditions:

     (a) The  representations and warranties made by Purchaser in this Agreement
     were true when made and shall be true at the date of closing  with the same
     force and effect as if such representations and warranties were made at and
     as of the date of closing (except for changes permitted by this Agreement),
     and  Purchaser  shall have  performed  and complied  with all covenants and
     conditions  required by this  Agreement to be performed or complied with by
     it prior to or at the closing.

     (b)  Prior to the date of  Closing,  there  shall  not  have  occurred  any
     material adverse change in the financial condition, business, or operations
     of Purchaser,  nor shall any event have occurred  which,  with the lapse of
     time or the  giving  of notice or both,  may cause or create  any  material
     adverse  change in the  financial  condition,  business,  or  operations of
     Purchaser.

     (c) The Company shall have been furnished with a certificate, signed by the
     chairman of Purchaser and dated as of the date of closing, certifying as to
     the matters set forth in (a) and (b) above.

     (d) No stop order or  suspension  of trading shall have been imposed by the
     SEC,  or any other  governmental  regulatory  body with  respect  to public
     trading in the Company's common stock.

                                       12
<PAGE>

     8. Termination.

     (a) This  Agreement  may be  terminated  by the  management  of either  the
     Company or Purchaser at any time prior to the Closing if:

          (i) there  shall be any  actual  or  threatened  action or  proceeding
          before  any  court  or any  governmental  body  which  shall  seek  to
          restrain,  prohibit,  or invalidate the  transactions  contemplated by
          this Agreement and which,  in the judgment of such board of directors,
          made in good faith and based on the advice of its legal counsel, makes
          it inadvisable to proceed with the  transactions  contemplated by this
          Agreement;

          (ii)  any of the  transactions  contemplated  by  this  Agreement  are
          disapproved by any regulatory  authority whose approval is required to
          consummate  such  transactions  or in the  judgment  of such  board of
          directors,  made in good  faith  and based on the  advice of  counsel,
          there is  substantial  likelihood  that any such  approval will not be
          obtained or will be obtained only on a condition or  conditions  which
          would be unduly burdensome,  making it inadvisable to proceed with the
          exchange; or

          (iii)  there shall occur any  material  adverse  change in the assets,
          properties,  business, or financial condition of the party not seeking
          termination pursuant to this provision,  which material adverse change
          occurs  subsequent  to the date of the  information  included  in this
          Agreement.

     In the event of  termination  pursuant to this Section 8(a), no obligation,
     right, or liability shall arise hereunder, and each party shall bear all of
     the expenses  incurred by it in connection with the negotiation,  drafting,
     and execution of this Agreement and the transactions herein contemplated.

     (b) This  Agreement  may be  terminated at any time prior to the Closing by
     action of the board of directors of the Company if Purchaser  shall fail to
     comply in any  material  respect with any of its  covenants  or  agreements
     contained in this Agreement or if any of the  representations or warranties
     of Purchaser  contained herein shall be inaccurate in any material respect.
     If this  Agreement  is  terminated  pursuant  to this  Section  8(b),  this
     Agreement shall be of no further force or effect, and no obligation, right,
     or liability shall arise  hereunder,  except that Purchaser shall reimburse
     the Company for all costs and expenses actually and reasonably  incurred by
     it in connection  with this  Agreement,  which were incurred from and after
     the date hereof;  provided,  however,  such  termination  shall not relieve
     Purchaser  from any  liability for damages  resulting  from any willful and
     intentional breach of this Agreement.

     (c) This  Agreement  may be  terminated at any time prior to the Closing by
     action of the General  Partner of  Purchaser  if the Company  shall fail to
     comply in any  material  respect with any of its  covenants  or  agreements
     contained in this Agreement or if any of the  representations or warranties
     of the  Company  contained  herein  shall  be  inaccurate  in any  material

                                       13
<PAGE>

     respect.  If this  Agreement is  terminated  pursuant to this Section 8(c),
     this  Agreement  shall be of no further force or effect and no  obligation,
     right,  or liability shall arise  hereunder,  except that the Company shall
     reimburse  Purchaser  for all costs and expenses  actually  and  reasonably
     incurred in connection with  Agreement,  which were incurred from and after
     the date hereof;  provided,  however, no such termination shall relieve the
     Company  from any  liability  for  damages  resulting  from any willful and
     intentional breach of this Agreement.

     (d) This  Agreement  may be  terminated by either the board of directors of
     the Company or the General Partner of Purchaser,  if Closing shall not have
     occurred by the close of business on April 30, 2007 (the  "Termination Date
     ");  provided,  however,  that the right to terminate this Agreement  under
     this section  shall not be available to any party whose  failure to fulfill
     any obligation  under this Agreement has been the cause of, or resulted in,
     the failure of the Closing to occur on or before the  Termination  Date. In
     the event of  termination  pursuant to this Section  8(d),  no  obligation,
     right, or liability shall arise hereunder, and each party shall bear all of
     the expenses  incurred by it in connection with the negotiation,  drafting,
     and execution of this Agreement and the transactions herein contemplated.

     9. Finders.  Each of the respective  parties hereto agrees to indemnify and
hold the other party  harmless from and against any claims for  compensation  by
any third party based on or arising from such indemnifying  party's agreement to
pay such third party a commission or other  compensation  for acting as a finder
or broker in connection with the transactions contemplated hereby.

     10.  Survival.   Except  as  otherwise   expressly   provided  herein,  the
representations, warranties and covenants of the respective parties set forth in
Sections  3, 4, 5, 9, 10, 11, 12,  13, 14, 15, 16, 18 and 19 shall  survive  the
Closing and shall continue in full force and effect for a period of two years.

     11.  Governing Law. This Agreement shall be governed by and construed under
and in accordance with the laws of the state of Delaware.

     12.  Expenses  of  Legal   Proceedings.   In  any  action,   proceeding  or
counterclaim  brought to enforce any of the  provisions of this  Agreement or to
recover  damages,  costs  and  expenses  in  connection  with any  breach of the
Agreement,  the  prevailing  party  shall be entitled  to be  reimbursed  by the
opposing party for all of the prevailing  party's  reasonable outside attorneys'
fees, costs and other  out-of-pocket  expenses  incurred in connection with such
action, proceeding or counterclaim.

     13. Expenses of Transaction. Except as otherwise expressly provided in this
Agreement,  each  party to this  Agreement  will  bear its  respective  expenses
incurred in connection with the preparation,  execution, and performance of this
Agreement and the  transactions  contemplated by this  Agreement,  including all
fees and expenses of agents, representatives, counsel, and accountants.

                                       14
<PAGE>

     14. Public Announcements.  The Company and Purchaser shall consult with one
another in issuing any press releases or otherwise  making public  statements or
filings and other communications with the Commission or any regulatory agency or
stock market or trading facility with respect to the  transactions  contemplated
hereby and neither  party shall issue any such press  release or otherwise  make
any such public  statement,  filings or other  communications  without the prior
written consent of the other,  which consent shall not be unreasonably  withheld
or delayed.  Notwithstanding  the foregoing,  however, no prior consent shall be
required if any such disclosure is required by law, in which case the disclosing
party shall use its  reasonable  best efforts in good faith to provide the other
party with prior notice of such public statement,  filing or other communication
and incorporate into such public  statement,  filing or other  communication the
reasonable comments of the other party.

     15.  Entire  Agreement.  This  Agreement  represents  the entire  agreement
between the parties  relating to the  subject  matter  hereof,  and there are no
other  courses  of  dealing,  understandings,  agreements,  representations,  or
warranties,  written  or oral,  except  as set forth  herein.  No  amendment  or
modification hereof shall be effective until and unless the same shall have been
set forth in writing and signed by the parties hereto.

     16. Severability.  If any provision of this Agreement or the application of
such  provision  to  any  person  or  circumstance  shall  be  held  invalid  or
unenforceable,  the  remainder  of this  Agreement  or the  application  of such
provisions to persons or  circumstances  other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and this Agreement shall
be construed as if such invalid or  unenforceable  provision  were not contained
herein.

     17.  Notices.  Any notices or other  communications  required or  permitted
hereunder  shall be  sufficiently  given if sent by registered mail or certified
mail,  postage  prepaid,  or by a  commercially  recognized  means of  overnight
delivery that requires confirmation of receipt, addressed as follows:

               If to the Company, to:     Millennium Quest, Inc.
                                          4089 Mount Olympus Way
                                          Salt Lake City, Utah 84124
                                          Attn: Dimitri Cocorinis, President

               If to Purchaser, to:       Halter Financial Investments, L.P.
                                          12890 Hilltop Road
                                          Argyle, Texas 76226
                                          Attn: Timothy P. Halter, Chairman

or such other  addresses as shall be furnished in writing by either party to the
other in the manner for giving notices  hereunder,  and any such notice shall be
deemed to have been given as of the date so mailed.

     18.  Further  Assurances.  The parties agree (a) to furnish upon request to
each other such  further  information,  (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably  request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.

                                       15
<PAGE>

     19. Assignments, Successors, and No Third-Party Rights. No party may assign
any of its rights under this  Agreement  without the prior  consent of the other
party.  Nothing  expressed or referred to in this Agreement will be construed to
give any Person  other than the parties to this  Agreement  and, for purposes of
Section 5, the Individual  Officers as  representatives of the Company's current
shareholders,  any legal or  equitable  right,  remedy,  or claim  under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions  and conditions are for the sole and exclusive  benefit of
the parties to this Agreement and their successors and assigns.

     20. Execution in  Counterparts.  This Agreement may be executed in multiple
counterparts,  each of which shall be deemed an original  and all of which taken
together shall be but a single instrument.

     IN WITNESS  WHEREOF,  this Agreement has been executed as of the date first
above written.

          The Company:                        Millennium Quest, Inc.
                                              A Delaware corporation

                                              By /s/ Dimitri Cocorinis
                                              ----------------------------------
                                              Dimitri Cocorinis, President

          The Individual Officers:            /s/ Dimitri Cocorinis
                                              ----------------------------------
                                              Dimitri Cocorinis

                                              /s/ Terry Cononelos
                                              ----------------------------------
                                              Terry Cononelos

          Purchaser:                          Halter Financial Investments, L.P.
                                              A Texas Limited Partnership

                                              /s/ Timothy P. Halter
                                              ----------------------------------
                                              Timothy P. Halter, Chairman

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