Document:

Exhibit 10.9

 

EXECUTION COPY

 

ESCROW AGREEMENT,
dated as of November 14, 2007 (“Agreement”),
by and among PROSPECT ACQUISITION CORP., a Delaware corporation (“Company”), FLAT RIDGE INVESTMENTS
LLC, LLM STRUCTURED EQUITY FUND L.P., LLM INVESTORS L.P., CAPITAL MANAGEMENT
SYSTEMS, INC., MICHAEL P. CASTINE, SJC CAPITAL, LLC, MICHAEL DOWNEY, JAMES
CAHILL, DANIEL GRESSEL AND JOHN MERCHANT (collectively “Initial
Stockholders”) and CONTINENTAL STOCK TRANSFER & TRUST
COMPANY, a New York corporation (“Escrow Agent”).

 

WHEREAS, the Company
has entered into an Underwriting Agreement, dated November 14, 2007 (“Underwriting Agreement”), with
Citigroup Global Markets Inc. (“Citigroup”)
acting as representative of the several underwriters (collectively, the “Underwriters”), pursuant to which,
the Underwriters have agreed to purchase 25,000,000 units (“Units”) of the Company. Each Unit
consists of one share of the Company’s common stock, par value $0.0001 per
share (“Common Stock”), and one
warrant to purchase one share of Common Stock, all as more fully described in
the Company’s final Prospectus, dated November 14, 2007 (“Prospectus”) comprising part of the
Company’s Registration Statement on Form S-1 (File No. 333-145110)
under the Securities Act of 1933, as amended (“Registration
Statement”), declared effective on November 14, 2007 (“Effective Date”).

 

WHEREAS, the
Underwriters have required as a condition to purchase of the Units that the
Initial Stockholders deposit the number of shares of Common Stock of the
Company (the “Escrow Shares”) and the
number of Sponsors’ Warrants (as defined in the Warrant Agreement dated November 14,
2007 between the Company and Continental Stock Transfer & Trust
Company, as Warrant Agent (the “Warrant Agreement”),
in each case, as set forth opposite their respective names in Exhibit A
attached hereto (the Escrow Shares and Sponsors’ Warrants are collectively
referred to herein as the “Escrow Securities”)
in escrow as hereinafter provided.

 

WHEREAS, the Company
and the Initial Stockholders desire that the Escrow Agent accept the Escrow
Securities, in escrow, to be held and disbursed as hereinafter provided.

 

IT IS AGREED:

 

1.           Appointment
of Escrow Agent. The Company and the Initial Stockholders hereby appoint
the Escrow Agent to act in accordance with and subject to the terms of this
Agreement and the Escrow Agent hereby accepts such appointment and agrees to
act in accordance with and subject to such terms.

 

2.           Deposit
of Escrow Shares. On or before the Effective Date, each of the Initial
Stockholders shall have delivered or caused to be delivered to the Escrow Agent
certificates representing his, her or its respective Escrow Securities, to be
held and disbursed subject to the terms and conditions of this Agreement. Each
Initial Stockholder acknowledges that the certificates representing his, her or
its Escrow Securities is legended to reflect the deposit of such Escrow
Securities under this Agreement.

 

 

3.           Disbursement
of the Escrow Securities. The Escrow Agent shall hold the Escrow Shares
until the date that is one year after the date of completion of an Initial
Business Combination (as defined in the Warrant Agreement) and the Sponsors’
Warrants until the date that is 30 days after the date of completion of an
Initial Business Combination (in each case, the “Escrow
Period”), on which respective dates it shall, upon written
instructions from the Company’s General Counsel or Chief Executive Officer,
disburse the Escrow Shares (and any applicable stock power) or Sponsors’
Warrants, as the case may be, to the Initial Stockholders; provided,
however, that at the end of the 30-day
period in which the Underwriters may exercise their over-allotment to purchase
an additional 3,750,000 Units of the Company (as described in the Registration
Statement), the Company shall give the Escrow Agent notice with respect to the
amount, if any, of the over-allotment that was exercised by the Underwriters
and, upon such notice, the Initial Stockholders agree that the Escrow Agent
shall return to the Company for cancellation, at a purchase price equal to
$0.0001 per share, the number of Escrow Shares held by each Initial Stockholder
determined by multiplying (a) the product of (i) 937,500, multiplied
by (ii) a fraction, (x) the numerator of which is the number Escrow
Shares held by each Initial Stockholder, and (y) the denominator of which
is the total number of Escrow Shares, by (b) a fraction, (i) the
numerator of which is 3,750,000 minus the number of shares of Common Stock
purchased by the Underwriters upon the exercise of their over-allotment option,
and (ii) the denominator of which is 3,750,000; provided
further, however, that
if the Escrow Agent is notified by the Company pursuant to Section 6.7
hereof that the Company is being liquidated then the Escrow Agent shall
promptly destroy the certificates representing the Escrow Securities held
pursuant to this Agreement; provided further,
however, that if, after the Company
consummates an Initial Business Combination, (i) it (or the surviving
entity) subsequently consummates a liquidation, merger, stock exchange or other
similar transaction which results in all of the stockholders of such entity
having the right to exchange their shares of Common Stock for cash, securities
or other property or (ii) the Closing Price of the Common Stock (as
defined in the Warrant Agreement) equals or exceeds $14.50 per share for any 20
trading days within any 30-trading day period, then the Escrow Agent will, upon
receipt of a certificate, executed by the Chairman of the Board, Chief Executive
Officer, President or other authorized officer of the Company, in form
reasonably acceptable to the Escrow Agent, that such transaction is then being
consummated or such conditions have been achieved, as applicable, release the
Escrow Shares to the Initial Stockholders. The Escrow Agent shall have no
further duties hereunder after the disbursement or destruction of the Escrow
Securities in accordance with this Section 3.

 

4.           Rights
of Initial Stockholders in Escrow Securities.

 

4.1.        Voting
Rights as a Stockholder. Subject to the terms of the Insider Letter
described in Section 4.3 hereof and except as herein provided, the Initial
Stockholders shall retain all of their rights as stockholders of the Company
during the Escrow Period, including, without limitation, the right to vote the
Escrow Shares.

 

4.2.        Dividends
and Other Distributions in Respect of the Escrow Shares. During the Escrow
Period, all dividends payable in cash with respect to the Escrow Shares shall
be paid to the Initial Stockholders, but all dividends payable in stock or
other non-cash property (“Non-Cash Dividends”)
shall be delivered to the Escrow Agent to hold in accordance with the terms
hereof. As used herein, the term “Escrow Shares”
shall be deemed to include the Non-Cash Dividends distributed thereon, if any.

 

2

 

4.3.        Restrictions
on Transfer. During the Escrow Period, no sale, transfer or other
disposition may be made of any or all of the Escrow Securities except to
Permitted Transferees (as defined in the Warrant Agreement); provided, however, that
such permitted transfers may be implemented only upon the respective Permitted
Transferee’s written agreement to be bound by the terms and conditions of this
Agreement and, as applicable, the Insider Letter signed by the Initial
Stockholders transferring the Escrow Shares and/or Warrant Agreement. Even if
transferred in accordance with this Section 4.3, the Escrow Securities
will remain subject to this Agreement and may only be released from escrow in
accordance with Section 3 hereof. As used herein, the term “Insider Letter” refers to that
letter entered into by each of the Initial Stockholders, with Citigroup and the
Company, dated as indicated on Exhibit A hereto, and which is filed as an
exhibit to the Registration Statement, respecting the rights and obligations of
such Initial Stockholder in certain events, including but not limited to the
liquidation of the Company and certain voting and transfer restrictions which
will apply during the Escrow Period.

 

4.4.        Sponsors’
Warrants. The Initial Stockholders who hold Sponsors’ Warrants acknowledge
that the Sponsors’ Warrants are subject to restrictions on exercise and
transfer during the Escrow Period as specified in the Warrant Agreement.

 

5.           Concerning
the Escrow Agent.

 

5.1.        Good
Faith Reliance. The Escrow Agent shall not be liable for any action taken
or omitted by it in good faith and in the exercise of its own best judgment,
and may rely conclusively and shall be protected in acting upon any order,
notice, demand, certificate, opinion or advice of counsel (including counsel
chosen by the Escrow Agent), statement, instrument, report or other paper or
document (not only as to its due execution and the validity and effectiveness
of its provisions, but also as to the truth and acceptability of any
information therein contained) which is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper person or persons. The
Escrow Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement unless evidenced by a
writing delivered to the Escrow Agent signed by the proper party or parties
and, if the duties or rights of the Escrow Agent are affected, unless it shall
have given its prior written consent thereto.

 

5.2.        Indemnification.
The Escrow Agent shall be indemnified and held harmless by the Company from and
against any expenses, including counsel fees and disbursements, or loss
suffered by the Escrow Agent in connection with any action, suit or other
proceeding involving any claim which in any way, directly or indirectly, arises
out of or relates to this Agreement, the services of the Escrow Agent
hereunder, or the Escrow Securities held by it hereunder, other than expenses
or losses arising from the gross negligence or willful misconduct of the Escrow
Agent. Promptly after the receipt by the Escrow Agent of notice of any demand
or claim or the commencement of any action, suit or proceeding, the Escrow
Agent shall notify the other parties hereto in writing. In the event of the
receipt of such notice, the Escrow Agent, in its sole discretion, may commence
an action in the nature of interpleader in an appropriate court to determine
ownership or disposition of the Escrow Securities or it may deposit the Escrow
Securities with the clerk of any appropriate court or it may retain the Escrow
Securities pending receipt of a final, non appealable order of a court having
jurisdiction over all 

 

3

 

of the
parties hereto directing to whom and under what circumstances the Escrow
Securities are to be disbursed and delivered. The provisions of this Section 5.2
shall survive in the event the Escrow Agent resigns or is discharged pursuant
to Sections 5.5 or 5.6 below.

 

5.3.        Compensation.
The Escrow Agent shall be entitled to reasonable compensation from the Company
for all services rendered by it hereunder. The Escrow Agent shall also be
entitled to reimbursement from the Company for all expenses paid or incurred by
it in the administration of its duties hereunder including, but not limited to,
all counsel, advisors’ and agents’ fees and disbursements and all taxes or
other governmental charges.

 

5.4.        Further
Assurances. From time to time on and after the date hereof, the Company and
the Initial Stockholders shall deliver or cause to be delivered to the Escrow
Agent such further documents and instruments and shall do or cause to be done
such further acts as the Escrow Agent shall reasonably request to carry out
more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting
hereunder.

 

5.5.        Resignation.
The Escrow Agent may resign at any time and be discharged from its duties as
escrow agent hereunder by its giving the other parties hereto written notice
and such resignation shall become effective as hereinafter provided. Such
resignation shall become effective at such time that the Escrow Agent shall
turn over to a successor escrow agent appointed by the Company, the Escrow
Securities held hereunder. If no new escrow agent is so appointed within the 60
day period following the giving of such notice of resignation, the Escrow Agent
may deposit the Escrow Securities with any court it reasonably deems
appropriate.

 

5.6.        Discharge
of Escrow Agent. The Escrow Agent shall resign and be discharged from its
duties as escrow agent hereunder if so requested in writing at any time by the
other parties hereto, jointly, provided, however, that such resignation shall
become effective only upon acceptance of appointment by a successor escrow
agent as provided in Section 5.5.

 

5.7.        Liability.
Notwithstanding anything herein to the contrary, the Escrow Agent shall not be
relieved from liability hereunder for its own gross negligence or its own
willful misconduct.

 

5.8.        Trust
Account Waiver. The Escrow Agent hereby waives all right, title, interest,
or claim of any kind (“Claim”) in
or to any monies in the trust account of the Company (the “Trust
Account”) created pursuant to the Investment  Management Trust Agreement, dated as of November 14,
2007, by and between the Company and Continental Stock Transfer &
Trust Company, as Trustee, that it may have now or in the future, and hereby
agrees not to seek recourse, reimbursement, payment or satisfaction for any
Claim against the Trust Account for any reason whatsoever.

 

6.           Miscellaneous.

 

6.1.        Governing
Law. This Agreement shall for all purposes be deemed to be made under and
shall be construed in accordance with the laws of the State of New York,
without giving effect to conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction (whether of the
State of New York or any other 

 

4

 

jurisdiction
that would cause the application of the laws of any jurisdiction other than the
State of New York). The Company hereby agrees that any action, proceeding or
claim against it arising out of or relating in any way to this Agreement shall
be brought and enforced in the courts of the State of New York or the United
States District Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. The
Company hereby waives any objection to such exclusive jurisdiction or that such
courts represent an inconvenience forum. Any such process or summons to be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 6.6 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon
the Company in any action, proceeding or claim.

 

6.2.        Third
Party Beneficiaries. Each of the Initial Stockholders hereby acknowledges
that the Underwriters are third party beneficiaries of this Agreement and this
Agreement may not be modified or changed without the prior written consent of
Citigroup.

 

6.3.        Entire
Agreement. This Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and, except as expressly
provided herein, may not be changed or modified except by an instrument in
writing signed by each party hereto. It may be executed in several original or
facsimile counterparts, each one of which shall constitute an original, and
together shall constitute but one instrument.

 

6.4.        Headings.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation thereof.

 

6.5.        Binding
Effect. This Agreement shall be binding upon and inure to the benefit of
the respective parties hereto and their legal representatives, successors and
assigns.

 

6.6.        Notices.
Any notice or other communication required or which may be given hereunder
shall be in writing and either be delivered personally or be mailed, certified
or registered mail, or by private national courier service, return receipt
requested, postage prepaid, and shall be deemed given when so delivered
personally or, if mailed, two days after the date of mailing, as follows:

 

If to the Company, to:

 

Prospect Acquisition Corp.

695 East Main Street

Stamford, Connecticut  06901

Attn: David A. Minella

Fax No.: (203) 656-0051

 

If to an Initial Stockholder, to his, her or its address set forth in Exhibit A.

 

and if to the Escrow Agent, to:

 

Continental Stock Transfer & Trust Company

17 Battery Place

 

5

 

New York, New York 10004

Attn: Chairman

Fax No.: (212) 509-5150

 

A copy of any notice sent hereunder shall be sent to:

 

Bingham McCutchen LLP

399 Park Avenue

New York, New York 10022

Attn:  Floyd I. Wittlin, Esq.

Fax No.: (212) 752-5378

 

and:

 

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Attn: General Counsel

Fax No.: (212) 816-7912

 

and:

 

Akin Gump Strauss Hauer & Feld LLP

590 Madison Avenue

New York, New York 10022

Attn: Bruce Mendelsohn, Esq.

Fax No.: (212) 872-1002

 

The parties may change the persons and addresses to which the notices
or other communications are to be sent by giving written notice to any such
change in the manner provided herein for giving notice.

 

6.7.        Liquidation
of the Company. The Company shall give the Escrow Agent written notification of
the liquidation and dissolution of the Company in the event that the Company
fails to consummate an Initial Business Combination within the time period(s) specified
in the Prospectus.

 

[SIGNATURE PAGES FOLLOW]

 

6

 

WITNESS the
execution of this Agreement as of the date first above written.

 

	
   

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROSPECT
  ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ David A. Minella

  
	
   

  	
   

  	
  Name:

  	
  David A.
  Minella

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INITIAL
  STOCKHOLDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FLAT RIDGE
  INVESTMENTS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ David A. Minella

  
	
   

  	
   

  	
  Name:

  	
  David A.
  Minella

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LLM
  STRUCTURED EQUITY FUND L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Patrick J. Landers

  
	
   

  	
   

  	
  Name:

  	
  Patrick J.
  Landers

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LLM
  INVESTORS L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Patrick J. Landers

  
	
   

  	
   

  	
  Name:

  	
  Patrick J.
  Landers

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAPITAL
  MANAGEMENT SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Richard A. Mitchell

  
	
   

  	
   

  	
  Name:

  	
  Richard A.
  Mitchell

  
	
   

  	
   

  	
  Title:

  	
  V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Michael P. Castine

  
	
   

  	
   

  	
  Michael P.
  Castine

  
						

 

 

	
   

  	
   

  	
  SJC CAPITAL,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ William Cvengros

  
	
   

  	
   

  	
  Name:

  	
  William
  Cvengros

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Michael Downey

  
	
   

  	
   

  	
  Michael
  Downey

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  James Cahill

  
	
   

  	
   

  	
  James Cahill

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Daniel Gressel

  
	
   

  	
   

  	
  Daniel
  Gressel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  John Merchant

  
	
   

  	
   

  	
  John
  Merchant

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ESCROW
  AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CONTINENTAL
  STOCK TRANSFER &

  TRUST
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ John W. Comer, Jr.

  
	
   

  	
   

  	
  Name:

  	
    John W. Comer, Jr.

  
	
   

  	
   

  	
  Title:

  	
    Vice President

  
					

 

 

	
  Name and Address

  of Initial Stockholder

  	
   

  	
  Number of

  Escrow

  Shares

  	
   

  	
  Stock

  Certificate

  Number

  	
   

  	
  Date of

  Insider

  Letter

  	
   

  	
  Number of

  Sponsors’

  Warrants

  	
   

  	
  Warrant

  Certificate

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Flat Ridge Investments LLC
  

  814 Hollow Tree Ridge Road

  Darien, CT 06820

  Attn: David A. Minella

  	
   

  	
  3,762,516

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3,150,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LLM Structured Equity Fund
  L.P.

  265 Franklin Street, 20th
  Floor

  Boston, Massachusetts 02110
  Attn:

  	
   

  	
  1,696,715

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,646,400

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LLM Investors L.P.

  265 Franklin Street, 20th
  Floor

  Boston, Massachusetts 02110

  Attn:

  	
   

  	
  34,626

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  33,600

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capital
  Management Systems, Inc.

  308 E.
  Lancaster Avenue

  Suite 300

  Wynnewood, PA 19096

  	
   

  	
  432,835

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  420,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael Castine

  14 Larkspur Lane

  Greenwich, CT 06831

  	
   

  	
  158,724

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SJC Capital, LLC

  31975 Peppertree Bend

  San Juan Capistrano, CA
  92675

  	
   

  	
  158,724

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael Downey

  2 Parsons Lane

  Rochester, NY 14610

  	
   

  	
  158,724

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James Cahill

  3 Kimberly Drive

  Redding, CT 06896

  	
   

  	
  467,188

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Daniel Gressel  55 Cedar Cliff Road Greenwich, CT 06878

  	
   

  	
  158,724

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John Merchant

  48 Evergreen Circle

  Canton, MA 02021

  	
   

  	
  158,724

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0Exhibit 10.11

 

EXECUTION COPY

 

REGISTRATION RIGHTS
AGREEMENT

 

THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is entered into as of the 14th day of November, 2007, by and among Prospect
Acquisition Corp., a Delaware corporation (the “Company”)
and the undersigned parties listed under Investor on the signature page hereto
(each, an “Investor” and collectively, the “Investors”).

 

WHEREAS, the Investors
collectively beneficially own all of the 7,187,500 shares of the Company’s
Common Stock (as defined below) issued and outstanding and 5,250,000 Sponsors’
Warrants (as defined below), all of which were acquired by private placement
and currently held of record by certain of the Investors as set forth on
Schedule I hereto;

 

WHEREAS, the Investors
may, in certain circumstances and subject to certain transfer restrictions and
other restrictions, transfer (or cause to be transferred) to Permitted
Transferees (as defined below) some or all of the securities held by such
Investors; and

 

WHEREAS, the Investors
and the Company desire to enter into this Agreement to provide the Investors
with certain rights relating to the registration of shares of Common Stock and
Sponsors’ Warrants held by them and to provide for any Permitted Transferee who
receives shares of Common Stock or Sponsors’ Warrants from an Investor from
time to time to accede to this Agreement.

 

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

 

1.             DEFINITIONS.  The following capitalized terms used herein
have the following meanings:

 

“Adverse
Disclosure” means public disclosure of material non-public
information, which disclosure, in the good faith judgment of the chief
executive officer or principal financial officer of the Company after
consultation with counsel to the Company, (i) would be required to be made
in any Registration Statement or prospectus in order for the applicable
Registration Statement or prospectus not to contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein (in the case of any prospectus and any preliminary prospectus, in the
light of the circumstances under which they were made) not misleading, (ii) would
not be required to be made at such time if the Registration Statement were not
being filed, and (iii) the Company has a bona fide
business purpose for not publicly making it.

 

“Agreement”
means this Agreement, as amended, restated, supplemented, or otherwise modified
from time to time.

 

“Business
day” means any day, except a Saturday, Sunday or legal holidays
on which the banking institutions in the city of New York are authorized or obligated
by law or executive order to close.

 

 

“Commission”
means the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.

 

“Common
Stock” means the common stock, par value $0.0001 per share, of
the Company.

 

“Company”
is defined in the preamble to this Agreement and shall include the Company’s
successors by merger, acquisition, reorganization or otherwise.

 

“Demanding
Holder” is defined in Section 2.1.1.

 

“Demand
Registration” is defined in Section 2.1.1.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder, all as
the same shall be in effect at the time.

 

“Form S-3”
is defined in Section 2.3.

 

“Founders’
Common Stock” means the 7,187,500 of Common Stock held by the
Investors prior to the IPO.

 

“Indemnified
Party” is defined in Section 4.3.

 

“Indemnifying
Party” is defined in Section 4.3.

 

“Investor”
is defined in the preamble to this Agreement.

 

“Investor
Indemnified Party” is defined in Section 4.1.

 

“Maximum
Number of Shares” is defined in Section 2.1.4.

 

“Notices”
is defined in Section 7.3.

 

“Permitted
Transferee” means (a) immediate family members of a holder
and trusts established by a holder for estate planning purposes or (b) affiliates
of a holder.

 

“Person”
shall be construed as broadly as possible and shall include an individual,
corporation, association, partnership (including a limited liability
partnership or a limited liability limited partnership), limited liability
company, estate, trust, joint venture, unincorporated organization or a
government or any department, agency or political subdivision thereof.

 

“Piggy-Back
Registration” is defined in Section 2.2.1.

 

“Register,”
“Registered” and “Registration” mean a registration
effected by preparing and filing a registration statement or similar document
in compliance with the requirements of the Securities Act, and the applicable rules and
regulations promulgated thereunder, and such registration statement becoming
effective.

 

2

 

“Registrable
Securities” mean (i) all of the shares of Common Stock
beneficially owned or held by Investors prior to the consummation of the
Company’s initial public offering and as of the date of this Agreement; and (ii) all
of the Sponsors’ Warrants (and underlying shares of Common Stock). Registrable
Securities include any warrants, shares of capital stock or other securities of
the Company issued as a dividend or other distribution with respect to or in
exchange for or in replacement of such shares of Common Stock. As to any
particular Registrable Securities, such securities shall cease to be
Registrable Securities when: (a) a Registration Statement with respect to
the sale of such securities shall have become effective under the Securities
Act and such securities shall have been sold, transferred, disposed of or
exchanged in accordance with such Registration Statement; (b) such
securities shall have been otherwise transferred pursuant to Rule 144
under the Securities Act (or any similar rule or regulation then in
force), new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent public distribution
of them shall not require registration under the Securities Act; or (c) such
securities shall have ceased to be outstanding. For purposes of this Agreement,
the Investors’ Common Stock and the shares of Common Stock issuable upon
exercise of the Sponsors’ Warrants shall together constitute one “class” of
Registrable Securities and the Sponsors’ Warrants shall constitute another
class of Registrable Securities, provided that no Registrable Securities shall
be part of the relevant class until the Release Date for such Registrable
Securities. A “percentage” (or a “majority”) of the Registrable Securities or
any class thereof (or, where applicable, of any other securities) shall be
determined based on the total number of such securities outstanding at the relevant
time.

 

“Registration
Statement” means a registration statement filed by the Company
with the Commission in compliance with the Securities Act and the rules and
regulations promulgated thereunder for a public offering and sale of Common
Stock including the prospectus, amendments and supplements to such registration
statement, including post-effective amendments and all exhibits and all
material incorporated by reference in such registration statement (other than a
registration statement on Form S-4 or Form S-8, or their successors,
or any registration statement covering only securities proposed to be issued in
exchange for securities or assets of another entity).

 

“Release
Date” means the date on which shares of Common Stock are
disbursed from escrow pursuant to Section 3 of that certain Escrow
Agreement dated as of November 14, 2007 by and among the parties hereto
and Continental Stock Transfer & Trust Company.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect at the time.

 

“Sponsors’
Warrants” means the warrants to purchase shares of Common Stock
being purchased privately by certain of the Investors simultaneously with the
consummation of the Company’s initial public offering, pursuant to that certain
Sponsors’ Warrants Purchase Agreement, dated as of November 14, 2007,
among the Company and the Investors signatory thereto, as listed on Schedule I
hereto.

 

“Underwriter”
means a securities dealer who purchases any Registrable Securities as principal
in an Underwritten Offering and not as part of such dealer’s market-making
activities.

 

3

 

“Underwritten
Offering” means a registration in which securities of the
Company are sold to an Underwriter or Underwriters on a firm commitment basis
for reoffering to the public.

 

2.             REGISTRATION
RIGHTS.

 

2.1.        Demand Registration.

 

2.1.1.     Request for Registration. At any
time and from time to time on or after the date that is (i) after the
Company consummates an “initial business combination” (as defined in the
Company’s Registration Statement with respect to its initial public offering)
with respect to the Sponsors’ Warrants (or underlying shares of Common Stock);
and (ii) the earlier of (x) nine months after the consummation of a
business combination or (y) the date the shares are released from escrow,
with respect to the Founders’ Common Stock, the holders of a
majority-in-interest of any class of Registrable Securities, held by the
Investors or the Permitted Transferees of the Investors, may make a written
demand for registration under the Securities Act of all or part of each such
class of Registrable Securities held by such holders, provided that the
estimated market value of Registrable Securities of all classes to be so
registered thereunder is at least $500,000 in the aggregate. Any such requested
registration shall be referred to as a “Demand Registration”.
Any demand for a Demand Registration shall specify the number of shares of
Registrable Securities proposed to be sold and the intended method(s) of
distribution thereof. Within five (5) business days following receipt of
any request for a Demand Registration, the Company will notify in writing all
holders of Registrable Securities of the class or classes to be registered of
the demand, and each holder of Registrable Securities who wishes to include all
or a portion of such holder’s Registrable Securities in the Demand Registration
(each such holder including shares of Registrable Securities in such
registration, a “Demanding Holder”) shall so notify
the Company in writing, provided that such notice shall be received by the
Company within ten (10) business days of the Company’s having sent the
applicable notice to such holder or holders. All such requests shall specify
the class and aggregate amount of Registrable Securities to be registered and
the intended method of distribution. The Company may include in such
registration additional securities of the class or classes of the Registrable
Securities to be registered hereunder, including securities to be sold for the
Company’s own account or the account of Persons who are not holders of
Registrable Securities. Upon any such request, the Demanding Holders shall be
entitled to have their Registrable Securities included in the Demand
Registration, subject to Section 2.1.4 and the provisos set forth in Section 3.1.1.
The Company shall not be obligated to effect more than an aggregate of three (3) Demand
Registrations under this Section 2.1.1 in respect of each class of
Registrable Securities. In addition, the Company shall not be required to file
a Registration Statement for a Demand Registration at any time during the
12-month period following the effective date of another Registration Statement
filed pursuant to this Section 2.1.

 

2.1.2.     Effective Registration. A
registration will not count as a Demand Registration until the Registration
Statement filed with the Commission with respect to such Demand Registration
has been declared effective and remains effective for not less than 180 days
(or such shorter period as will terminate when all Registrable Securities 

 

4

 

covered by such Registration
Statement have been sold or withdrawn); provided, however, that if, after such Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the Commission
or any other governmental agency or court, the Registration Statement with
respect to such Demand Registration will be deemed not to have been declared
effective, unless and until, (i) such stop order or injunction is removed,
rescinded or otherwise terminated and (ii) a majority-in-interest of the
Demanding Holders thereafter elect to continue the offering; provided, further, that
the Company shall not be obligated to file a second Registration Statement
until a Registration Statement that has been filed is counted as a Demand
Registration or is terminated.

 

2.1.3.     Underwritten Offering. If a
majority-in-interest of the Demanding Holders so elect and such holders so
advise the Company as part of their written demand for a Demand Registration,
the offering of such Registrable Securities pursuant to such Demand
Registration shall be in the form of an Underwritten Offering. In such event,
the right of any holder to include its Registrable Securities in such
registration shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable Securities in the
underwriting to the extent provided herein. The holders of a majority of the
class of Registrable Securities included in such Underwritten Offering shall,
in consultation with the Company, have the right to select the managing
Underwriter or Underwriters for the offering, subject to the right of the
Company should it so choose to select one co-managing Underwriter reasonably
acceptable to such holders. All Demanding Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the Underwriter or Underwriters selected for such
underwriting by a majority-in-interest of the holders initiating the Demand
Registration and consistent with Section 3.2.1.

 

2.1.4.     Reduction of Offering. If the
managing Underwriter or Underwriters for a Demand Registration that is to be an
Underwritten Offering advises the Company and the Demanding Holders in writing
that the dollar amount or number of shares of Registrable Securities which the
Demanding Holders desire to sell, taken together with all other shares of
Common Stock or other securities which the Company desires to sell and the
shares of Common Stock, if any, as to which registration has been requested
pursuant to written contractual piggy-back registration rights held by other
stockholders of the Company who desire to sell, exceeds the maximum dollar
amount or maximum number of shares that can be sold in such offering without
adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar
amount or maximum number of shares, as applicable, the “Maximum
Number of Shares”), then the Company shall include in such
registration: (i) first, the Registrable Securities as to which Demand
Registration has been requested by the Demanding Holders (pro rata among the
holders who have requested participation in the Demand Registration based, for
each such holder, on the percentage derived by dividing (x) the number of
Registrable Securities of such class which such holder has requested to include
in such Demand Registration by (y) the aggregate number of Registrable
Securities of such class which all such holders have requested to include) 

 

5

 

(such proportion is referred
to herein as “Pro 
Rata”) that can be sold without exceeding the Maximum Number
of Shares; (ii) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (i), the shares of Common Stock
or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (iii) third, to the extent that
the Maximum Number of Shares have not been reached under the foregoing clauses (i) and
(ii), the shares of Common Stock or other securities for the account of other
Persons that the Company is obligated to register pursuant to written contractual
arrangements with such Persons, Pro Rata, and that can be sold without
exceeding the Maximum Number of Shares; and (iv) fourth, to the extent
that the Maximum Number of Shares have not been reached under the foregoing
clauses (i), (ii), and (iii), securities that other security holders of the
Company desire to sell, Pro Rata, that can be sold without exceeding the
Maximum Number of Shares. To the extent that any Registrable Securities
requested to be registered are excluded pursuant to the foregoing provisions,
the holders shall have the right to one additional Demand Registration under
this Section 2.1.4.

 

2.1.5.     Withdrawal. A holder may withdraw
its Registrable Securities from a Demand Registration at any time. If all
holders withdraw, or holders withdraw Registrable Securities from a Demand
Registration in such amounts that the Registrable Securities of all classes
that remain covered by the relevant Registration Statement have an estimated
market value of less than $500,000, the Company shall cease all efforts to
secure registration and such withdrawn registration shall be deemed a Demand
Registration for purposes of Section 2.1 unless the withdrawal is based on
the reasonable determination of the Demanding Holders that there has been,
since the date of such request, a material adverse change in the business or
prospects of the Company or in general market conditions and the Demanding
Holders who requested such registration shall have paid or reimbursed the
Company for all of the reasonable out-of-pocket fees and expenses incurred by
the Company in connection with the withdrawn registration.

 

2.1.6.     Suspension of Registration. If the
filing, initial effectiveness or continued use of a Registration Statement in
respect of a Demand Registration at any time would require the Company to make
an Adverse Disclosure or would require the inclusion in such Registration
Statement of financial statements that are unavailable to the Company for
reasons beyond the Company’s control, the Company may, upon giving prompt
written notice of such action to the holders, delay the filing or initial
effectiveness of, or suspend use of, such Registration Statement for the
shortest possible period of time determined in good faith by the Company to be
necessary for such purpose. In the event the Company exercises its rights under
the preceding sentence, the holders agree to suspend, immediately upon their
receipt of the notice referred to above, their use of the prospectus relating
to the Demand Registration in connection with any sale or offer to sell
Registrable Securities. The Company shall immediately notify the holders of the
expiration of any period during which it exercised its rights under this Section 2.1.6.

 

2.1.7.     Registration Statement Form.
Registrations under this Section 2.1 shall be on such appropriate
registration form of the Commission (i) as shall be selected by the
Company and as shall be reasonably acceptable to the holders of a
majority-in-interest of each class of Registrable Securities requesting participation
in the Demand Registration 

 

6

 

and (ii) as shall
permit the disposition of the Registrable Securities in accordance with the
intended method or methods of disposition specified in the applicable holders’
requests for such registration. Notwithstanding the foregoing, if, pursuant to
a Demand Registration, (x) the Company proposes to effect registration by
filing a Registration Statement on Form S-3, (y) such registration is
in connection with an Underwritten Offering, and (z) the managing
Underwriter or Underwriters shall advise the Company in writing that, in its or
their opinion, the use of another form of registration statement (or the
inclusion, rather than the incorporation by reference, of information in the
prospectus related to a Registration Statement on Form S-3) is of material
importance to the success of such proposed offering, then such registration
shall be effected on such other form (or such information shall be so included
in such prospectus).

 

2.2.        Piggy-Back
Registration.

 

2.2.1.     Piggy-Back Rights. If at any time on
or after the date the Company consummates an initial business combination the
Company proposes to file a Registration Statement under the Securities Act with
respect to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities, by the
Company for its own account or for stockholders of the Company for their
account (or by the Company and by stockholders of the Company including,
without limitation, pursuant to Section 2.1), other than a Registration
Statement (i) filed in connection with an offering of securities to
employees or directors of the Company pursuant to any employee stock option or
other benefit plan, (ii) filed on Form S-4 or S-8 or any successor to
such forms, (iii) for an exchange offer or offering of securities solely
to the Company’s existing stockholders, (iv) for an offering of debt that
is convertible into equity securities of the Company, (v) for a dividend
reinvestment plan, or (vi) solely in connection with a merger,
consolidation or non-capital raising bona fide business transaction, then the
Company shall (x) give written notice of such proposed filing to the
holders of Registrable Securities as soon as practicable but in no event less
than ten (10) business days before the anticipated filing date, which
notice shall describe the amount and type of securities to be included in such
offering, the intended method(s) of distribution, and the name of the
proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer
to the holders of Registrable Securities in such notice the opportunity to
register the sale of such number of shares of Registrable Securities as such
holders may request in writing within five (5) business days following
receipt by such holder of such notice (a “Piggy-Back Registration”).
Subject to Section 2.2.2., the Company shall include in such Registration
Statement such Registrable Securities requested to be included therein within
five (5) business days after the receipt by such holder of any such
notice, on the same terms and conditions as any similar securities of the
Company. 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 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 each holder of Registrable Securities and, (x) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration, and (y) in
the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities for the 

 

7

 

same period as the delay in
registering such other securities. If the offering pursuant to a Piggy-Back
Registration is to be an Underwritten Offering, then each holder making a
request for its Registrable Securities to be included therein must, and the
Company shall use commercially reasonable efforts to cause the managing
Underwriter or Underwriters of a proposed Underwritten Offering to permit the
Registrable Securities requested to be included in a Piggy-Back Registration on
the same terms and conditions as any similar securities of the Company and
other Persons selling securities in such Underwritten Offering and to permit
the sale or other disposition of such Registrable Securities in accordance with
the intended method(s) of distribution thereof. All holders of Registrable
Securities proposing to distribute their securities through a Piggy-Back
Registration that involves an Underwriter or Underwriters shall enter into an
underwriting agreement in customary form with the Underwriter or Underwriters
selected for such Piggy-Back Registration.

 

2.2.2.     Reduction of Offering. If the
managing Underwriter or Underwriters for a Piggy-Back Registration that is to
be an Underwritten Offering advises the Company and the holders of Registrable
Securities in writing that the dollar amount or number of shares of Common Stock
which the Company desires to sell, taken together with shares of Common Stock,
if any, as to which registration has been demanded pursuant to written
contractual arrangements with Persons other than the holders of Registrable
Securities hereunder, the Registrable Securities as to which registration has
been requested under this Section 2.2, and the shares of Common Stock, if
any, as to which registration has been requested pursuant to the written
contractual piggy-back registration rights of other stockholders of the
Company, exceeds the Maximum Number of Shares, then the Company shall include
in any such registration:

 

(a)          If the registration is undertaken for
the Company’s account: (A) first, the shares of Common Stock or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Shares; (B) second, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clause (A), the
shares of Common Stock or other securities, if any, comprised of Registrable
Securities, pro rata, as to which registration has been requested pursuant to
this Section 2.2, that can be sold without exceeding the Maximum Number of
Shares; and (C) third, to the extent that the Maximum Number of shares has
not been reached under the foregoing clauses (A) and (B), the shares of
Common Stock or other securities for the account of other Persons that the
Company is obligated to register pursuant to written contractual piggy-back
registration rights with such Persons, pro rata, and that can be sold without
exceeding the Maximum Number of Shares; and

 

(b)         If the registration is a “demand”
registration undertaken at the demand of Persons other than the holders of
Registrable Securities, (A) first, the shares of Common Stock or other
securities for the account of the demanding Persons that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the
Maximum

 

8

 

Number of Shares has not
been reached under the foregoing clause (A), the shares of Common Stock or
other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A) and
(B), the shares of Common Stock or other securities, if any, comprised of
Registrable Securities, Pro Rata, as to which registration has been requested
pursuant to this Section 2.2, that can be sold without exceeding the
Maximum Number of Shares; and (D) fourth, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (A), (B) and
(C), the shares of Common Stock or other securities for the account of other
Persons that the Company is obligated to register pursuant to written
contractual arrangements with such Persons, pro rata, that can be sold without
exceeding the Maximum Number of Shares.

 

2.2.3.     Withdrawal. Any holder of
Registrable Securities may elect to withdraw such holder’s request for
inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement. The Company (whether on its own
determination or as the result of a withdrawal by Persons making a demand
pursuant to written contractual obligations) may withdraw a registration
statement at any time prior to the effectiveness of the Registration Statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses
incurred by the holders of Registrable Securities in connection with such
Piggy-Back Registration as provided in Section 3.3.

 

2.3.        Registrations on Form S-3.

 

(a)          Filing. The holders of
Registrable Securities may at any time and from time to time, request in
writing that the Company register the resale of any or all of such Registrable
Securities on Form S-3 or any similar short-form registration which may be
available at such time (“Form S-3”);
provided, however,
that (i) the Company shall not be obligated to effect such request through
an Underwritten Offering and (ii) the Company shall not be obligated to
effect such a request if the Company has within the preceding twelve (12)
months effected a registration on Form S-3. Upon receipt of such written
request, the Company will promptly give written notice of the proposed
registration to all other holders of Registrable Securities, and, as soon as
practicable thereafter, effect the registration of all or such portion of such holder’s
or holders’ Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities or other securities of
the Company, if any, of any other holder or holders joining in such request as
are specified in a written request given within fifteen (15) business days
after receipt of such written notice from the Company; provided, however, that
the Company shall not be obligated to effect any such registration pursuant to
this Section 2.3: (i) if Form S-3 is not available for such
offering; or (ii) if the holders of the Registrable Securities, together
with the holders of any other securities of the Company entitled to inclusion
in such registration, propose to sell Registrable Securities and such other
securities (if any) at any aggregate price to the public of less than $500,000.
Registrations effected pursuant to this Section 2.3 shall not be counted
as Demand Registrations effected pursuant to Section 2.1.

 

9

 

(b)         Suspension of Registration. If
the filing, initial effectiveness, or continued use of Form S-3 at any
time would require the Company to make an Adverse Disclosure or would require
the inclusion in such Form S-3 of financial statements that are unavailable
to the Company for reasons beyond the Company’s control, the Company may, upon
giving prompt written notice of such actions to the holders, delay the filing
or initial effectiveness of, or suspend use of, the Form S-3 for the
shortest period of time determined in good faith by the Company to be necessary
for such purpose. In the event the Company exercises its rights under the
preceding sentence, the holders agree to suspend, immediately upon their
receipt of the notice referred to above, their use of the prospectus relating
to the registration on such Form S-3 in connection with any sale or offer
to sell Registrable Securities and agree not to disclose to any other Person
the fact that the Company has exercised such rights or any related facts. The
Company shall immediately notify the holders upon the expiration of any period
during which it exercised its rights under this Section 2.3(b).

 

3.             REGISTRATION
PROCEDURES.

 

3.1.        Filings;
Information. Whenever the Company is required to effect the registration of
any Registrable Securities pursuant to Section 2, the Company shall use
its best efforts to effect the registration and sale of such Registrable
Securities in accordance with the intended method(s) of distribution
thereof as expeditiously as reasonably practicable, and in connection with any
such request:

 

3.1.1.     Filing Registration Statement. The
Company shall, as expeditiously as reasonably possible, prepare and file with
the Commission a Registration Statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of all Registrable Securities to be
registered thereunder in accordance with the intended method(s) of
distribution thereof, and shall use its best efforts to cause such Registration
Statement to become and remain effective for the period required by Section 3.1.3;
provided, however, that the Company shall have the right to defer any Demand
Registration for up to thirty (30) calendar days, and any Piggy-Back
Registration for such period as may be applicable to deferment of any demand
registration to which such Piggy-Back Registration relates, in each case if the
Company shall furnish to the holders a certificate signed by the Chairman of
the Board or Chief Executive Officer of the Company stating that, in the good
faith judgment of the Board of Directors of the Company, it would be materially
detrimental to the Company and its stockholders for such Registration Statement
to be effected at such time; provided further, however, that the Company shall
not have the right to exercise the right set forth in the immediately preceding
proviso more than once in any 365-day period in respect of a Demand
Registration hereunder.

 

3.1.2.     Copies. The Company shall, prior to
filing a Registration Statement or prospectus, or any amendment or supplement
thereto, furnish without charge to the holders of Registrable Securities
included in such registration, and such holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement
to such Registration Statement (in each case including all exhibits thereto 

 

10

 

and documents incorporated
by reference therein), the prospectus included in such Registration Statement
(including each preliminary prospectus), and such other documents as the
holders of Registrable Securities included in such registration or legal
counsel for any such holders may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such holders.

 

3.1.3.     Amendments and Supplements. The
Company shall use best efforts to prepare and file with the Commission such
amendments, including post-effective amendments, and supplements to such
Registration Statement and the prospectus used in connection therewith as may
be necessary to keep such Registration Statement effective and in compliance
with the provisions of the Securities Act until all Registrable Securities and
other securities covered by such Registration Statement have been disposed of
in accordance with the intended method(s) of distribution set forth in
such Registration Statement (which period shall not exceed the sum of one
hundred eighty (180) calendar days plus any period during which any such
disposition is interfered with by any stop order or injunction of the
Commission or any governmental agency or court) or such securities have been
withdrawn.

 

3.1.4.     Notification. After the filing of a
Registration Statement, the Company shall as soon as reasonably practical,
notify the holders of Registrable Securities included in such Registration
Statement of such filing and the managing Underwriter or Underwriters, and
shall further notify such holders and such managing Underwriter or Underwriters
and, if requested, confirm such advice in writing, in all events as soon as
reasonably practical after the occurrence of any of the following: (i) when
such Registration Statement becomes effective; (ii) when any
post-effective amendment to such Registration Statement becomes effective; (iii) the
issuance or threatened issuance by the Commission of any stop order (and the
Company shall use best efforts to take all actions required to prevent the
entry of such stop order or to remove it if entered); and (iv) any request
by the Commission for any amendment or supplement to such Registration
Statement or any prospectus relating thereto or for additional information or
of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of the securities covered by such Registration Statement, such prospectus will
not contain an 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 not misleading, and promptly make available to the holders of
Registrable Securities included in such Registration Statement any such
supplement or amendment; except that before filing with the Commission a
Registration Statement or prospectus or any amendment or supplement thereto,
including documents incorporated by reference, except in the case of
registration under Section 2.2; the Company shall furnish to the holders
of Registrable Securities included in such Registration Statement and to the
legal counsel for any such holders, copies of all such documents proposed to be
filed sufficiently in advance of filing to provide such holders and legal
counsel with a reasonable opportunity to review such documents and comment
thereon, and the Company shall not file any Registration Statement or
prospectus or amendment or supplement thereto, including documents incorporated
by reference, to which such holders or their legal counsel shall reasonably object.

 

11

 

3.1.5.     State Securities Laws Compliance.
The Company, on or prior to the date on which the applicable Registration
Statement is declared effective, shall use its best efforts to (i) register
or qualify the Registrable Securities covered by the Registration Statement
under such securities or “blue sky” laws of such jurisdictions in the United
States as the holders of Registrable Securities included in such Registration
Statement (in light of their intended plan of distribution) or Underwriter, if
any, or their respective counsel may reasonably request in writing and (ii) take
such action necessary to cause such Registrable Securities covered by the
Registration Statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
necessary or advisable to enable the holders of Registrable Securities included
in such Registration Statement to consummate the disposition of such
Registrable Securities in such jurisdictions; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph or subject itself to taxation in any such jurisdiction.

 

3.1.6.     Cooperation. The principal executive
officer of the Company, the principal financial officer of the Company, the
principal accounting officer of the Company, and all other officers and members
of the management of the Company shall cooperate fully in any offering of
Registrable Securities hereunder, which cooperation shall include, without
limitation, the preparation of the Registration Statement with respect to such
offering and all other offering materials and related documents, and
participation in meetings with Underwriters, attorneys, accountants and
potential investors.

 

3.1.7.     Records. The Company shall make
available for inspection by the holders of Registrable Securities included in
such Registration Statement, any Underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant, or other
professional retained by any holder of Registrable Securities included in such
Registration Statement or any Underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company’s officers, directors, and employees and the independent public
accountants who have certified its financial statements to make themselves
available to discuss the business of the Company and to supply all information
reasonably requested by any such seller, Underwriter, attorney, accountant or
agent in connection with such Registration Statement as shall be necessary to
enable them to exercise their due diligence responsibility, and cause the
Company’s officers, directors, and employees to supply all information
requested by any of them in connection with such Registration Statement.

 

3.1.8.     Opinions and Comfort Letters. The
Company shall furnish to each holder of Registrable Securities included in any
Registration Statement a signed counterpart, addressed to such holder, of (i) any
opinion of counsel to the Company delivered to any Underwriter dated the
effective date of the Registration Statement or, in the event of an
Underwritten Offering, the date of the closing under the applicable
underwriting agreement, in customary form, scope, and substance, at a minimum
to the effect that the Registration Statement has been declared effective and
that no stop order is in effect, which counsel and opinions shall be reasonably
satisfactory to a majority of the holders 

 

12

 

of each such class and Underwriter or
Underwriters, if any, and their respective counsel and (ii) any comfort
letter from the Company’s independent public accountants delivered to any
Underwriter in customary form and covering such matters of the type customarily
covered by comfort letters as the managing Underwriter or Underwriters
reasonably request. In the event no legal opinion is delivered to any
Underwriter, the Company shall furnish to each holder of Registrable Securities
included in such Registration Statement, at any time that such holder elects to
use a prospectus, an opinion of counsel to the Company to the effect that the
Registration Statement containing such prospectus has been declared effective
and that no stop order is in effect.

 

3.1.9.     Earnings Statement. The Company
shall comply with all applicable rules and regulations of the Commission
and the Securities Act, and make available to its stockholders, as soon as
reasonably practicable but not more than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.

 

3.1.10.   Listing. The Company shall use its
best efforts to cause all Registrable Securities included in any registration
to be listed on such exchanges or otherwise designated for trading in the same
manner as similar securities issued by the Company are then listed or
designated or, if no such similar securities are then listed or designated, in
a manner satisfactory to the holders of a majority-in-interest of the
Registrable Securities included in such registration and on each inter-dealer
quotation system on which any of the Company’s securities of such class are
then quoted.

 

3.1.11.   Withdrawal of Stop Order. The Company
shall make every reasonable effort to prevent or obtain at the earliest
possible moment the withdrawal of any stop order with respect to the applicable
Registration Statement or other order suspending the use of any preliminary or
final prospectus.

 

3.1.12.   CUSIP Number. The Company shall, not
later than the effective date of the applicable Registration Statement, provide
a CUSIP number for all Registrable Securities and provide the applicable
transfer agent with printed certificates for the Registrable Securities which
certificates shall be in a form eligible for deposit with The Depository Trust
Company.

 

3.1.13.   NASD. The Company shall cooperate with
each seller of Registrable Securities and each Underwriter or agent, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers.

 

3.1.14.   Transfer Agent. The Company shall
provide and cause to be maintained a transfer agent and registrar for all
Registrable Securities covered by the applicable Registration Statement from
and after a date not later than the effective date of such Registration
Statement.

 

13

 

3.1.15.   Road Show. The Company shall, in the
case of an Underwritten Offering, cause senior executive officers of the
Company to participate in customary “road show” presentations that may be
reasonably requested by the managing Underwriter in any such Underwritten
Offering and otherwise to facilitate, cooperate with, and participate in each
proposed offering contemplated herein and customary selling efforts related
thereto.

 

3.2.        Underwritten Offerings.

 

3.2.1.     Underwriting Agreements. If
requested by the Underwriters for any Underwritten Offering requested by
holders pursuant to Sections 2.1 or 2.3, the Company and the holders of
Registrable Securities to be included therein shall enter into an underwriting
agreement with such Underwriters, such agreement to be reasonably satisfactory
in substance and form to the Company, the holders of a majority-in-interest of
each class of the Registrable Securities to be included in such Underwritten
Offering and the Underwriters, and to contain such terms and conditions as are
generally prevailing in agreements of that type, including, without limitation,
indemnities no less favorable to the recipient thereof than those provided in Section 2.4.
The holders of any Registrable Securities to be included in any Underwritten
Offering pursuant to Section 2.2 shall enter into such an underwriting
agreement at the request of the Company. All of the representations and
warranties and the other agreements by and on the part of the Company to and
for the benefit of the Underwriters included in any such underwriting agreement
shall also be made to and for the benefit of such holders, and any or all of
the conditions precedent to the obligations of the Underwriters under such
underwriting agreement shall be conditions precedent to the obligations of such
holders. No holder shall be required in any such underwriting agreement to make
any representations or warranties to or agreements with the Company or the
Underwriters other than representations, warranties or agreements regarding
such holder, such holder’s Registrable Securities, such holder’s intended
method of distribution and any other representations required by law.

 

3.2.2.     Price and Underwriting Discounts. In
the case of an Underwritten Offering requested by holders pursuant to Sections
2.1 or 2.3, the price, underwriting discount and other financial terms of the
related underwriting agreement for each class of Registrable Securities shall
be determined by the holders of a majority-in-interest of such class of
Registrable Securities. In the case of any Underwritten Offering pursuant to Section 2.2,
such price, discount and other terms shall be determined by the Company,
subject to the right of the holders to withdraw their request to participate in
the registration pursuant to Section 2.3 after being advised of such price,
discount and other terms.

 

3.2.3.     Participation in Underwritten Offerings.
No Person may participate in an Underwritten Offering unless such Person (i) agrees
to sell such Person’s securities on the basis provided in the underwriting
arrangements approved by the Persons entitled to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.

 

14

 

3.3.        Obligation to Suspend Distribution.
Upon receipt of any notice from the Company of the happening of any event of
the kind described in Section 3.1.4(iii) or 3.1.4(iv), or, in the
case of a resale registration on Form S-3 pursuant to Section 2.3
hereof, upon any suspension by the Company, pursuant to a written insider
trading compliance program adopted by the Company’s board of directors, of the
ability of all “insiders” covered by such program to transact in the Company’s
securities because of the existence of material non-public information, such
holder of Registrable Securities included in any registration shall immediately
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities in the case of Section 3.1.4(iv) until
such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv) or
the restriction on the ability of “insiders” to transact in the Company’s
securities is removed, as applicable, or in any case until the holder is
advised in writing by the Company that the use of the prospectus may be
resumed, and receives copies of any additional or supplemental filings that are
incorporated by reference in the prospectus and, if so directed by the Company,
each such holder will deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies then in such holder’s possession, of
the most recent prospectus covering such Registrable Securities at the time of
receipt of such notice. In the event that the Company shall give any such
notice in respect of a Demand Registration, the period during which the
applicable Registration Statement is required to be maintained effective shall
be extended by the number of days during the period from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement either receives
the copies of the supplemented or amended prospectus contemplated by Section 3.1.4(iv) or
is advised in writing by the Company that the use of the prospectus may be
resumed.

 

3.4.        Registration Expenses. The
Company shall bear all costs and expenses incurred in connection with any Demand
Registration pursuant to Section 2. 1, any Piggy-Back Registration
pursuant to Section 2.2, and any registration on Form S-3 effected
pursuant to Section 2.3, and all expenses incurred in performing or
complying with its other obligations under this Agreement, including, without
limitation: (i) all registration and filing fees and any other fees and
expenses associated with filings required to be made with the SEC; (ii) fees
and expenses of compliance with securities or “blue sky” laws (including fees
and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (iii) printing expenses, duplicating, word
processing, messenger, telephone, facsimile and delivery expenses (including
expenses of printing certificates for the Registrable Securities in a form
eligible for deposit with The Depository Trust Company and of printing
prospectuses); (iv) the Company’s internal expenses (including, without
limitation, all salaries and expenses of its officers and employees); (v) the
fees and expenses incurred in connection with the listing of the Registrable
Securities as required by Section 3.1.11; (vi) National Association
of Securities Dealers fees; (vii) fees and disbursements of counsel for
the Company and fees and expenses for independent certified public accountants
retained by the Company (including the expenses or costs associated with the
delivery of any opinions or comfort letters requested pursuant to Section 3.1.9);
(viii) the fees and disbursements not to exceed $150,000 of any special
experts retained by the Company in connection with such registration; (ix) the
reasonable fees and expenses of one legal counsel selected by the holders of a
majority-in-interest of the Registrable Securities included in such registration;
and (x) Securities Act liability insurance if the Company so desires. The
Company shall have no obligation to pay any other costs or expenses in the
course of the transactions contemplated hereby, including underwriting
discounts or selling commissions attributable to the 

 

15

 

Registrable Securities being sold by the
holders thereof, which underwriting discounts or selling commissions shall be
borne by such holders. Additionally, in an Underwritten Offering, all selling
stockholders and the Company shall bear the expenses of the Underwriter pro
rata in proportion to the respective amount of shares each is selling in such
offering.

 

3.5.        Information. The holders of
Registrable Securities shall provide such information as may reasonably be
requested by the Company, or the managing Underwriter, if any, in connection
with the preparation of any Registration Statement, including amendments and
supplements thereto, in order to effect the registration of any Registrable
Securities under the Securities Act pursuant to Section 2 and in
connection with the Company’s obligation to comply with federal and applicable
state securities laws. The Company shall have the right to exclude any holder
that does not comply with the preceding sentence from the applicable
registration.

 

4.             INDEMNIFICATION
AND CONTRIBUTION.

 

4.1.        Indemnification by the Company.
The Company agrees to indemnify and hold harmless to the extent permitted by
law each Investor and each other holder of Registrable Securities, and each of
their respective officers, employees, affiliates, directors, partners, members,
attorneys, and agents, and each person, if any, who controls an Investor and
each other holder of Registrable Securities (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) (each, an “Investor Indemnified Party”), from and against any expenses
(including reasonable costs of investigation and legal expenses), losses,
claims, damages, or liabilities (or actions or proceedings in respect thereof,
whether or not such indemnified party is a party thereto), whether joint or
several, arising out of or based upon any untrue statement (or allegedly untrue
statement) of a material fact contained in any Registration Statement under
which the sale of such Registrable Securities was registered under the
Securities Act, any preliminary prospectus, final prospectus, or summary
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arising out of or based upon any
omission (or alleged omission) to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company will not be liable in any such case to the extent
that any such expense, loss, claim, damage, or liability arises out of or is
based upon any untrue statement or allegedly untrue statement or omission or
alleged omission made in such Registration Statement, preliminary prospectus,
final prospectus, or summary prospectus, or any such amendment or supplement,
in reliance upon and in conformity with information furnished to the Company,
in writing, by such selling holder expressly for use therein. The Company also
shall indemnify any Underwriter of the Registrable Securities, their officers,
affiliates, directors, partners, members, and agents on substantially the same
basis as that of the indemnification provided above in this Section 4.1.

 

4.2.        Indemnification by Holders of Registrable
Securities. Each selling holder of Registrable Securities will severally
and not jointly, in the event that any registration is being effected under the
Securities Act pursuant to this Agreement of any Registrable Securities held by
such selling holder, indemnify and hold harmless to the fullest extent
permitted by law the Company, each of its directors, officers, employees, and
agents and each Person who controls the Company within the meaning of the
Securities Act, against any losses, claims, judgments, damages, liabilities, or
expenses (including reasonable costs of investigation and legal expenses) 

 

16

 

whether joint or several, insofar as such
losses, claims, damages, liabilities, or expenses (or actions or proceedings in
respect thereof, whether or not such indemnified party is a party thereto)
arise out of or are based upon any untrue statement or allegedly untrue
statement of a material fact contained in any Registration Statement under
which the sale of such Registrable Securities was registered under the
Securities Act, any preliminary prospectus, final prospectus, or summary
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or the alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, to the
extent and only to the extent that the statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company by such selling holder expressly for use therein, and shall reimburse
the Company, its directors and officers, and each other selling holder or
controlling person for any legal or other expenses reasonably incurred by any
of them in connection with investigation or defending any such loss, claim,
damage, liability or action. Each selling holder’s indemnification obligations
hereunder shall be several and not joint and shall be limited to the amount of
any net proceeds actually received by such selling holder. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Company or any indemnified party.

 

4.3.        Conduct of Indemnification
Proceedings. Promptly after receipt by any person of any notice of any
loss, claim, damage, or liability or any action in respect of which indemnity
may be sought pursuant to Section 4.1 or 4.2, such person (the “Indemnified Party”) shall, if a claim in respect thereof is
to be made against any other person for indemnification hereunder, notify such
other person (the “Indemnifying Party”)
in writing of the loss, claim, judgment, damage, liability, or action;
provided, however, that the failure by the Indemnified Party to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
which the Indemnifying Party may have to such Indemnified Party hereunder,
except and solely to the extent the Indemnifying Party is actually prejudiced
by such failure. If the Indemnified Party is seeking indemnification with
respect to any claim or action brought against the Indemnified Party, then the
Indemnifying Party shall be entitled to participate in such claim or action,
and, to the extent that it wishes, jointly with all other Indemnifying Parties,
to assume control of the defense thereof with counsel satisfactory to the
Indemnified Party. After notice from the Indemnifying Party to the Indemnified
Party of its election to assume control of the defense of such claim or action,
the Indemnifying Party shall not be liable to the Indemnified Party for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that in any action in which both the
Indemnified Party and the Indemnifying Party are named as defendants, the
Indemnified Party shall have the right to employ separate counsel (but no more
than one such separate counsel) to represent the Indemnified Party and its
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, with the fees and expenses of such counsel to be paid by
the Indemnifying Party based upon the written opinion of counsel of such
Indemnified Party, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them (in
which case, if the Indemnified Party notifies the Indemnifying Party in writing
that such Indemnified Party elects to employ separate counsel at the expense of
the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense of such claim on behalf of such Indemnified Party). If such
defense is not 

 

17

 

assumed by the Indemnifying Party, the
Indemnifying Party will not be subject to any liability for any settlement made
without its consent, but such consent may not be unreasonably withheld;
provided, however, that an Indemnifying Party shall not be required to consent
to any settlement involving the imposition of equitable remedies or involving
the imposition of any material obligations on such Indemnifying Party other
than financial obligations for which such Indemnified Party will be indemnified
hereunder. If the Indemnifying Party assumes the defense, the Indemnifying
Party shall have the right to settle such action without the consent of the
Indemnified Party; provided, however, that the Indemnifying Party shall be
required to obtain such consent (which consent shall not be unreasonably
withheld) if the settlement includes any admission of wrongdoing on the part of
the Indemnified Party or any restriction on the Indemnified Party or its
officers or directors. No Indemnifying Party shall consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to each
Indemnified Party of an unconditional release from all liability in respect to
such claim or litigation. The Indemnifying Party or Parties shall not, in
connection with any proceeding or related proceedings, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm at any one
time for all such Indemnified Party or Parties unless (x) the employment
of more than one counsel has been authorized in writing by the Indemnifying
Party or parties, (y) a conflict or potential conflict exists or may exist
(based on advice of counsel to an Indemnified Party) between such Indemnified
Party and the other Indemnified Parties or (z) based on advice of counsel,
an Indemnified Party has reasonably concluded that there may be legal defenses
available to it that are different from or in addition to those available to
the other Indemnified Parties, in each of which cases the Indemnifying Party
shall be obligated to pay the reasonable fees and expenses of such additional
counsel or counsels.

 

4.4.        Contribution.

 

4.4.1.     If the indemnification provided for in the
foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party or
insufficient to hold it harmless in respect of any loss, claim, damage, liability,
or action referred to herein, then each such 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 loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the
relative fault of the Indemnified Parties and the Indemnifying Parties in
connection with the actions or omissions which resulted in such loss, claim,
damage, liability, or action, as well as any other relevant equitable
considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

4.4.2.     The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 4.4 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding Section 4.4.1. The amount paid or payable by an
Indemnified Party as a result of any loss, claim, damage, liability or action
referred to in 

 

18

 

the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4.4, no holder of Registrable Securities shall
be required to contribute any amount in excess of the dollar amount of the net
proceeds (after payment of any underwriting fees, discounts, commissions or
taxes) actually received by such holder from the sale of Registrable Securities
which gave rise to such contribution obligation. 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. If indemnification is available
under this Section 4, the indemnifying parties shall indemnify each
indemnified party to the full extent provided in Sections 4.1 and 4.2 hereof
without regard to the relative fault of said Indemnifying Parties or
Indemnified Party.

 

5.             UNDERWRITING
AND DISTRIBUTION.

 

5.1.        Rule 144. The Company
covenants that it shall file any reports required to be filed by it under the
Securities Act and the Exchange Act and shall take such further action as the
holders of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rules may
be amended from time to time, or any similar Rule or regulation hereafter
adopted by the Commission.

 

6.             NO
INCONSISTENT AGREEMENTS; ADDITIONAL RIGHTS.

 

6.1.        The Company will not enter into, and is
not currently a party to, any agreement that is inconsistent with the rights
granted to the holders of Registrable Securities by this Agreement.

 

7.             MISCELLANEOUS.

 

7.1.        Term. This Agreement shall
terminate upon earlier of (a) the tenth anniversary of the date of this
Agreement or (b) the date as of which (i) all of the Registrable
Securities have been sold pursuant to a Registration Statement (but in no event
prior to the applicable period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder) or (ii) the holders are
permitted to sell their Registrable Securities under Rule 144(k) under
the Securities Act (or any similar provision then in force permitting the sale
of restricted securities without limitation on the amount of securities sold or
the manner of sale). The provisions of Section 4 and Section 5 shall
survive any termination.

 

7.2.        Assignment; No Third Party
Beneficiaries. The registration rights of any holder under this Agreement
with respect to any Registrable Securities may be transferred and assigned, provided, however, that no such transfer or assignment shall
be binding upon or obligate the Company to any such assignee unless and until
the Company shall have received written notice of such transfer or assignment
as herein provided and a written agreement of the assignee to be bound by the
provisions of this Agreement. Any transfer or assignment made other than as 

 

19

 

provided in the first sentence of this Section 7.2
shall be null and void. This Agreement and the provisions hereof shall be
binding upon and shall inure to the benefit of each of the parties and the
permitted assigns of the Investor or holder of Registrable Securities or of any
assignee of the Investor or holder of Registrable Securities. This Agreement is
not intended to confer any rights or benefits on any persons that are not party
hereto other than as expressly set forth in Article 4 and this Section 7.2.

 

7.3.        Notices. All notices, demands,
requests, consents, approvals or other communications (collectively, “Notices”) required or permitted to be given hereunder or
which are given with respect to this Agreement shall be in writing and shall be
either personally served, delivered by reputable air courier service with
charges prepaid guaranteeing overnight delivery, or transmitted by hand
delivery, telegram, telex, facsimile, or by mailing in the same sealed
envelope, or registered first-class mail, postage prepaid, return receipt
requested addressed as set forth below, or to such other address as such party
shall have specified most recently by written notice. Notice shall be deemed
given (i) on the date of delivery if personally served, (ii) when
receipt is acknowledged in writing by addressee, if transmitted by telegram,
telex or facsimile, provided, that if such service or transmission is not on a
business day or is after normal business hours, then such notice shall be
deemed given on the next business day, and (iii) five (5) business
days after having been deposited in the mail, postage prepaid, if mailed by
first-class mail. Notice otherwise sent as provided herein shall be deemed
given on the next business day following timely delivery of such notice to a
reputable air courier service with an order for next-day delivery, provided,
however, that notice of a change in address shall be effective only upon
receipt.

 

If to the Company:

 

Prospect Acquisition Corp.

695 East Main Street

Stamford, Connecticut  06901

Attention: David A. Minella

Fax No.: (203) 656-0051

 

with a copy to:

 

Bingham McCutchen LLP

399 Park Avenue

New York, NY 
10022

Attention: 
Floyd I. Wittlin

Fax No.: (212) 752-5378

 

If to an Investor, to the addressee and address set forth on the
signature page hereto.

 

7.4.        Severability. This Agreement shall
be deemed severable, and the invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of this
Agreement or of any other term or provision hereof. Furthermore, in lieu of any
such invalid or unenforceable term or provision, the parties hereto intend that
there shall be added as a part of 

 

20

 

this Agreement a provision as similar in
terms to such invalid or unenforceable provision as may be possible that is
valid and enforceable.

 

7.5.        Counterparts. This Agreement may
be executed in multiple counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and the same
instrument.

 

7.6.        Entire Agreement. This Agreement
(including all agreements entered into pursuant hereto and all certificates and
instruments delivered pursuant hereto and thereto) constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.

 

7.7.        Modifications and Amendments. No
amendment, modification or termination of this Agreement shall be binding upon
any party unless executed in writing by such party and signed by the Company
and the holders of a majority of Registrable Securities of each class then
outstanding. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment, modification, waiver or
consent authorized by this Section 7.7 whether or not such Registrable
Securities shall have been marked accordingly.

 

7.8.        Titles and Headings. Titles and
headings of sections of this Agreement are for convenience only and shall not
affect the construction of any provision of this Agreement.

 

7.9.        Waivers and Extensions. Any party
to this Agreement may waive any right, breach or default which such party has
the right to waive, provided that such waiver will not be effective against the
waiving party unless it is in writing, is signed by such party, and
specifically refers to this Agreement. Waivers may be made in advance or after
the right waived has arisen or the breach or default waived has occurred. Any
waiver may be conditional. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof nor of any other agreement or provision herein
contained. No waiver or extension of time for performance of any obligations or
acts shall be deemed a waiver or extension of the time for performance of any
other obligations or acts. Except as otherwise expressly provided herein, no
failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder, or otherwise available in respect hereof at
law or in equity, shall operate as a waiver thereof, nor shall any single or
partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power, or
remedy.

 

7.10.      Governing Law.

 

(a)          This Agreement shall be governed by,
interpreted under, and construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be performed within the
State of New York, without giving effect to any choice-of-law provisions
thereof that would compel the application of the substantive laws of any other
jurisdiction.

 

(b)         To the fullest extent permitted by
applicable law, each party hereto (i) agrees that any claim, action or
proceeding by such party seeking any relief 

 

21

 

whatsoever arising out of, or in connection
with, this Agreement or the transactions contemplated hereby shall be brought
only in the United States District Court for the Southern District of New York
and in any New York State court located in the Borough of Manhattan and not in
any other State or Federal court in the United States of America or any court
in any other country, (ii) agrees to submit to the exclusive jurisdiction
of such courts located in the State of New York for purposes of all legal
proceedings arising out of, or in connection with, this Agreement or the
transactions contemplated hereby, and (iii) irrevocably waives any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

22

 

IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed and delivered by their duly authorized representatives
as of the date first written above.

 

	
   

  	
   

  	
  PROSPECT
  ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David A.
  Minella

  
	
   

  	
   

  	
  Name:

  	
  David A.
  Minella

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
  Address for
  Notice: 

  	
  695 Main
  Street

  
	
   

  	
   

  	
   

  	
  Stamford, CT
  06901

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FLAT RIDGE
  INVESTMENTS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David A.
  Minella

  
	
   

  	
   

  	
  Name:

  	
  David A.
  Minella

  
	
   

  	
   

  	
  Title: 

  	
  Managing
  Member

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  814 Hollow
  Tree Ridge Road

  
	
   

  	
   

  	
   

  	
  Darien, CT
  06820

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LLM
  STRUCTURED EQUITY FUND L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Patrick
  J. Landers

  
	
   

  	
   

  	
  Name:

  	
  Patrick J.
  Landers

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  265 Franklin
  Street

  
	
   

  	
   

  	
   

  	
  20th Floor

  
	
   

  	
   

  	
   

  	
  Boston, MA
  02110

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LLM
  INVESTORS L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Patrick
  J. Landers

  
	
   

  	
   

  	
  Name:

  	
  Patrick J.
  Landers

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  265 Franklin
  Street

  
	
   

  	
   

  	
   

  	
  20th Floor

  
	
   

  	
   

  	
   

  	
  Boston, MA
  02110

  
										

 

 

	
   

  	
   

  	
  CAPITAL
  MANAGEMENT SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  Richard A. Mitchell

  
	
   

  	
   

  	
  Name:

  	
  Richard A.
  Mitchell

  
	
   

  	
   

  	
  Title:

  	
  V.P.

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  308 E.
  Lancaster Ave.

  
	
   

  	
   

  	
   

  	
  Suite 300

  
	
   

  	
   

  	
   

  	
  Wynnewood,
  PA 19096

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Michael Castine

  
	
   

  	
   

  	
  Michael
  Castine

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  14 Larkspur
  Lane

  
	
   

  	
   

  	
   

  	
  Greenwich, CT
  06831

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SJC
  CAPITAL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  William Cvengros

  
	
   

  	
   

  	
  Name:

  	
    William
  Cvengros

  
	
   

  	
   

  	
  Title:

  	
    Managing
  Member

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  31975
  Peppertree Bend

  
	
   

  	
   

  	
   

  	
  San Juan Capistrano, CA 92675

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Michael Downey

  
	
   

  	
   

  	
  Michael
  Downey

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  2 Parsons
  Lane

  
	
   

  	
   

  	
   

  	
  Rochester,
  NY 14610

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  James Cahill

  
	
   

  	
   

  	
  James Cahill

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  3 Kimberly
  Drive

  
	
   

  	
   

  	
   

  	
  Redding, CT 06896

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Daniel Gressel

  
	
   

  	
   

  	
  Daniel Gressel

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  55 Cedar
  Cliff Road

  
	
   

  	
   

  	
   

  	
  Greenwich,
  CT 06878

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  John Merchant

  
	
   

  	
   

  	
  John Merchant

  
	
   

  	
   

  	
  Address for
  Notice:

  	
  48 Evergreen
  Circle

  
	
   

  	
   

  	
   

  	
  Canton, MA
  02021

  
										

 

 

SCHEDULE I

 

FOUNDERS
COMMON SHARES:

 

	
  Investor

  	
   

  	
  Founders’ Common Stock

  	
   

  
	
  Flat Ridge Investments LLC

  	
   

  	
  3,762,516

  	
   

  
	
  LLM Structured Equity Fund L.P.

  	
   

  	
  1,696,715

  	
   

  
	
  LLM Investors L.P.

  	
   

  	
  34,626

  	
   

  
	
  Capital Management Systems, Inc.

  	
   

  	
  432,835

  	
   

  
	
  Michael Castine

  	
   

  	
  158,724

  	
   

  
	
  SJC Capital LLC

  	
   

  	
  158,724

  	
   

  
	
  Michael Downey

  	
   

  	
  158,724

  	
   

  
	
  James Cahill

  	
   

  	
  467,188

  	
   

  
	
  Daniel Gressel

  	
   

  	
  158,724

  	
   

  
	
  John Merchant

  	
   

  	
  158,724

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  7,187,500

  	
   

  

 

SPONSORS’
WARRANTS:

 

	
  Sponsor

  	
   

  	
  Sponsors’ Warrants

  	
   

  
	
  Flat Ridge Investments LLC

  	
   

  	
  3,150,000

  	
   

  
	
  LLM Structured Equity Fund L.P.

  	
   

  	
  1,646,400

  	
   

  
	
  LLM Investors L.P.

  	
   

  	
  33,600

  	
   

  
	
  Capital Management Systems, Inc.

  	
   

  	
  420,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  5,250,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]