Document:

Exhibit
10.2

 

EXECUTION
COPY

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is
made and entered into as of September 15, 2009, by and among Helicos
BioSciences Corporation, a Delaware corporation (the “Company”), and the several purchasers
signatory hereto (each a “Purchaser”
and collectively, the “Purchasers”).

 

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

 

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

 

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

 

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

 

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

 

“Agreement” shall have the meaning set forth in the Preamble.

 

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

 

“Closing”
has the meaning set forth in the Purchase Agreement.

 

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

 

“Commission” means the Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par
value $0.001 per share, and any securities into which such shares of common
stock may hereinafter be reclassified.

 

“Company” shall have the meaning set forth in the Preamble.

 

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

 

“Effectiveness Deadline” means, with respect to the Initial
Registration Statement or the New Registration Statement, the 45th calendar day following the Closing Date (or,
in the event the Commission reviews and has written comments to the Initial
Registration Statement or the New Registration Statement, the 75th calendar day following the Closing Date); provided, however, that if the Company is
notified by the Commission that the Initial Registration Statement will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Deadline as to such Registration Statement shall be the fifth (5th) Trading Day
following the date on which the Company is so notified if 

 

 

such
date precedes the dates otherwise required above; provided, further, that if the Effectiveness Deadline falls
on a Saturday, Sunday or other day that the Commission is closed for business,
the Effectiveness Deadline shall be extended to the next Business Day on which
the Commission is open for business. 
With respect to any Remainder Registration Statement, the 45th calendar day following the date that the
Company is eligible to file such Remainder Registration Statement pursuant to
SEC Guidance (or, in the event the Commission reviews and has written comments
to the Remainder Registration Statement, the 75th calendar day following the date that the
Company is eligible to file such Remainder Registration Statement pursuant to
SEC Guidance); provided, however, that if the Company is notified by the
Commission that the Remainder Registration Statement will not be reviewed or is
no longer subject to further review and comments, the Effectiveness Deadline as
to such Remainder Registration Statement shall be the fifth (5th) Trading Day
following the date on which the Company is so notified if such date precedes
the dates otherwise required above; provided, further, that if the
Effectiveness Deadline falls on a Saturday, Sunday or other day that the
Commission is closed for business, the Effectiveness Deadline shall be extended
to the next Business Day on which the Commission is open for business.

 

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

 

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

 

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

 

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

 

“Filing Deadline” means, with respect to the Initial
Registration Statement required to be filed pursuant to Section 2(a), the
15th calendar day following the Closing
Date, provided, however, that if
the Filing Deadline falls on a Saturday, Sunday or other day that the
Commission is closed for business, the Filing Deadline shall be extended to the
next business day on which the Commission is open for business.  With respect to any Remainder Registration
Statement, the 15th calendar day following the date that the
Company is eligible to file such Remainder Registration Statement pursuant to
SEC Guidance, provided, however, that if the Filing Deadline falls on a
Saturday, Sunday or other day that the Commission is closed for business, the
Filing Deadline shall be extended to the next business day on which the
Commission is open for business.

 

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

 

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

 

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

 

“Initial Registration Statement” means the
initial Registration Statement filed pursuant to Section 2(a) of this
Agreement.

 

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

 

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

 

“New Registration Statement” shall have the
meaning set forth in Section 2(a).

 

2

 

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

 

“Principal Market” means the Trading Market on which the
Common Stock is primarily listed on and quoted for trading, which, as of the
Closing Date, shall be the NASDAQ Global Market.

 

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

 

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

 

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

 

“Purchaser” or “Purchasers”
shall have the meaning set forth in the Preamble.

 

“Registrable Securities” means all of (i) the Shares, (ii) the
Warrant Shares and (iii) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing, provided,
that the Holder has completed and delivered to the Company a Selling
Stockholder Questionnaire; and provided,
further, that Shares and Warrant Shares shall cease to be
Registrable Securities upon the earliest to occur of the following: (A) a
sale pursuant to an effective Registration Statement or Rule 144 under the
Securities Act (in which case, only such security sold shall cease to be a
Registrable Security); or (B) becoming eligible for sale without the requirement
for the Company to be in compliance with the current public information
required under Rule 144 and without volume or manner of sale restrictions  by Holders who are
not Affiliates of the Company in a written opinion letter to such
effect, addressed, delivered and acceptable to the Transfer Agent and the
affected Holders (assuming that such securities and any securities issuable
upon exercise, conversion or exchange of which, or as a dividend upon which,
such securities were issued or are issuable, and all Warrants are exercised by “cashless
exercise” as provided in each of the Warrants), as reasonably determined by the
Company, upon the advice of counsel to the Company.

 

“Registration Statements” means any one or more registration
statements of the Company filed under the Securities Act that covers the resale
of any of the Registrable Securities pursuant to the provisions of this
Agreement (including without limitation the Initial Registration Statement, the
New Registration Statement and any Remainder Registration Statements),
amendments and supplements to such Registration Statements, including
post-effective amendments, all exhibits and all material incorporated by
reference or deemed to be incorporated by reference in such Registration
Statements.

 

“Remainder Registration Statement” shall have the meaning set
forth in Section 2(a).

 

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

 

3

 

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

 

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

 

“SEC Guidance” means (i) any publicly-available written
or oral guidance, comments, requirements or requests of the Commission staff
and (ii) the Securities Act.

 

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

 

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

 

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

 

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

 

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

 

“Warrants” means the Warrants issued pursuant to the Purchase
Agreement.

 

“Warrant Shares” means the shares of Common Stock issued or
issuable upon exercise of the Warrants.

 

2.             Registration.

 

(a)           On or prior to
the Filing Deadline, the Company shall prepare and file with the Commission a
Registration Statement covering the resale of all of the Registrable Securities
not already covered by an existing and effective Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 (the
“Initial Registration Statement”).  The Initial Registration Statement shall be
on Form S-3 (except if the Company is then ineligible to register for
resale of the Registrable Securities on Form S-3, in which case such
registration shall be on such other form available to register for resale of
the Registrable Securities as a secondary offering) subject to the provisions
of Section 2(f) and shall contain (except if otherwise required
pursuant to written comments received from the 

 

4

 

Commission upon a review of
such Registration Statement) the “Plan of Distribution” section attached hereto
as Annex A.  Notwithstanding the
registration obligations set forth in this Section 2, in the event the
Commission informs the Company that all of the Registrable Securities cannot,
as a result of the application of Rule 415, be registered for resale as a
secondary offering on a single registration statement, the Company agrees to
promptly (i) inform each of the Holders thereof and use its commercially
reasonable efforts to file amendments to the Initial Registration Statement as
required by the Commission and/or (ii) withdraw the Initial Registration
Statement and file a new registration statement (a “New Registration Statement”), in either case covering the
maximum number of Registrable Securities permitted to be registered by the
Commission, on Form S-3 or such other form available to register for
resale the Registrable Securities as a secondary offering; provided, however, that prior to filing
such amendment or New Registration Statement, the Company shall be obligated to
use its commercially reasonable efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29. Notwithstanding any other provision of this
Agreement and subject to the payment of liquidated damages in Section 2(c),
if any SEC Guidance sets forth a limitation of the number of Registrable
Securities permitted to be registered on a particular Registration Statement as
a secondary offering (and notwithstanding that the Company used diligent
efforts to advocate with the Commission for the registration of all or a
greater number of Registrable Securities), unless otherwise directed in writing
by a Holder as to its Registrable Securities, the number of Registrable
Securities to be registered on such Registration Statement will first be
reduced by Registrable Securities not acquired pursuant to the Purchase
Agreement (whether pursuant to registration rights or otherwise), second by Registrable Securities represented by
holders of Warrant Shares (applied, in the case that some Warrant Shares may be
registered, to the Holders on a pro rata basis based on the total number of
unregistered Warrant Shares held by such Holders), and third by
Registrable Securities represented by Shares (applied, in the case that some
Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Shares held by such Holders).  The foregoing sentence is subject to a
determination by the Commission that certain Holders must be reduced first
based on the number of Shares held by such Holders.  The Company shall confirm with each Holder
that, with respect to any Registrable Securities that are required to be
reduced, the Registrable Securities held by such Holder shall be reduced first
by the Warrant Shares and second by the Shares. 
In the event the Company is required to amend the Initial Registration
Statement or files a New Registration Statement pursuant to SEC Guidance, as
the case may be, under clauses (i) or (ii) above or otherwise to
include additional Registrable Securities, the Company will use its
commercially reasonable efforts to file with the Commission, as promptly as
allowed by Commission or SEC Guidance provided to the Company or to registrants
of securities in general, one or more registration statements on Form S-3
or such other form available to register for resale those Registrable
Securities that were not registered for resale on the Initial Registration
Statement, as amended, or the New Registration Statement (the “Remainder Registration Statements”).

 

(b)           The Company shall use its commercially reasonable
efforts to cause each Registration Statement to be declared effective by the
Commission as soon as practicable but in no event later than the Effectiveness
Deadline for each the Initial Registration Statement (and any New Registration
Statement, as required) and any Remainder Registration Statements.  The Company shall use its commercially
reasonable efforts to keep the Registration Statements continuously effective
under the Securities Act until the earlier of (i) such time as all of the
Registrable Securities covered by such Registration Statement have been
publicly sold by the Holders or (ii) the date that all Registrable
Securities covered by such Registration Statement may be sold by non-affiliates
without volume or manner of sale restrictions under Rule 144, without the
requirement for the Company to be in compliance with the current public
information requirements under Rule 144, as determined by counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
reasonably acceptable to the Company’s Transfer Agent and the effected Holders
(the “Effectiveness Period”).  The Company shall request effectiveness of a
Registration Statement as of 5:00 p.m. New York City time on a Trading
Day.  

 

5

 

The Company shall promptly notify the Holders via
facsimile or electronic mail of a “.pdf” format data file of the effectiveness
of a Registration Statement within one (1) business day of the Effective
Date. The Company shall, by 9:30 a.m. New York City time on the first
Trading Day after the Effective Date, file a final Prospectus with the
Commission, as required by Rule 424(b).

 

(c)           If: (i) any
Registration Statement is not filed with the Commission on or prior to its
respective Filing Deadline, including the Initial Registration Statement, a New
Registration Statement or a Remainder Registration Statement, (ii) any
Registration Statement, as applicable, is not declared effective by the Commission
(or otherwise does not become effective) for any reason on or prior to the
Effectiveness Deadline  or (iii) after
its Effective Date, (A) such Registration Statement ceases for any reason
(including without limitation by reason of a stop order, or the Company’s
failure to update the Registration Statement), to remain continuously effective
as to all Registrable Securities for which it is required to be effective or (B) the
Holders are not permitted to utilize the Prospectus therein to resell such
Registrable Securities, in the case of (A) and (B), for more than an
aggregate of 30 Trading Days (which need not be consecutive) during any 12
month period, or (iv) the Company fails to file with the SEC any required
reports under Section 13 or 15(d) of the 1934 Act such that it is not
in compliance with Rule 144(c)(1) as a result of which the Holders
who are not affiliates are unable to sell Registrable Securities without
restriction under Rule 144 (or any successor thereto) (any such failure or breach in
clauses (i) through (iv) above being referred to as an “Event,” and, for purposes of clauses (i), (ii) or (iv),
the date on which such Event occurs, or for purposes of clause (iii), the date
on which such 30 Trading Day period is exceeded, being referred to as an “Event Date”), then in addition to any
other rights the Holders may have hereunder or under applicable law, on each
such Event Date and on each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty (“Liquidated
Damages”), equal to 2.0% of the aggregate purchase price paid by
such Holder pursuant to the Purchase Agreement for any Registrable Securities
held by such Holder on the Event Date (except with respect to an Event pursuant
to Section 2(c)(iii) occurring by reason of exceeding the specified
thirty (30) Trading Day Period, in which case the amount of the monthly
Liquidated Damages shall be 1.0% of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement for any Registrable Securities held
by such Holder on the Event Date), which remedy shall be exclusive of any other
remedies available under this Agreement or under applicable law.  The parties agree that (1) notwithstanding anything to the
contrary herein or in the Purchase Agreement, no Liquidated Damages shall be
payable with respect to any period after the expiration of the Effectiveness
Period (it being understood that this sentence shall not relieve the Company of
any Liquidated Damages accruing prior to the Effectiveness Period), and in no
event shall the aggregate amount of
Liquidated Damages payable to a
Holder exceed, in the aggregate, twelve percent (12%) of the aggregate
purchase price paid by such Holder pursuant to the Purchase Agreement and (2) in no event shall the
Company be liable in any 30-day period for Liquidated Damages under this
Agreement in excess of 2.0% of the aggregate purchase price paid by the Holders
pursuant to the Purchase Agreement.  If
the Company fails to pay any Liquidated Damages pursuant to this Section 2(c) in
full within five (5) Business Days after the date payable, the Company
will pay interest thereon at a rate of 1.5% per month (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder, accruing
daily from the date such Liquidated Damages are due until such amounts, plus
all such interest thereon, are paid in full. 
The Liquidated Damages pursuant to the terms hereof shall apply on a
daily pro-rata basis for any portion of a month prior to the cure of an Event,
except in the case of the first Event Date. 
The Company shall not be liable for Liquidated Damages under this
Agreement as to any Registrable Securities which are not permitted by the
Commission to be included in a Registration Statement due solely to SEC
Guidance from the time that it is determined that such Registrable Securities
are not permitted to be registered until such time as the provisions of this
Agreement as to the Remainder Registration Statements required to be filed
hereunder are triggered, in which case the provisions of this Section 2(c) shall
once again apply.  In such case, the
Liquidated Damages shall be calculated to only apply to the percentage of
Registrable Securities which 

 

6

 

are permitted in accordance
with SEC Guidance to be included in such Registration Statement.  The
Company may require, from time to time, information by a Holder that is
necessary to complete the Registration Statement in accordance with the
requirements of the Securities Act.  In
the event of the failure by such Holder to comply with the Company’s request
within fifteen (15) days from the date of such request, the Company shall be
permitted to exclude such Holder from a Registration Statement, without being
subject to the payment of Liquidated Damages to such Holder. At such time that
such Holder complies with the Company’s request the Company shall use its best
efforts to include such Holder on the Registration Statement.

 

(d)           Each Holder agrees to furnish to the Company a
completed Selling Stockholder Questionnaire not more than five (5) Trading
Days following the date of this Agreement. At least ten (10) Trading Days prior to the
first anticipated filing date of a Registration Statement for any registration
under this Agreement, the Company will notify each Holder of the information
the Company requires from that Holder other than the information contained in
the Selling Stockholder Questionnaire, if any, which shall be completed and
delivered to the Company promptly upon request and, in any event, within three (3) Trading
Days prior to the applicable anticipated filing date.  Each Holder further agrees
that it shall not be entitled to be named as a selling securityholder in the
Registration Statement or use the Prospectus for offers and resales of
Registrable Securities at any time, unless such Holder has returned to the
Company a completed and signed Selling Stockholder Questionnaire and a response
to any requests for further information as described in the previous sentence.  If a Holder of
Registrable Securities returns a Selling Stockholder Questionnaire or a request
for further information, in either case, after its respective deadline, the Company
shall use its commercially best efforts at the expense of the Holder who failed
to return the Selling Stockholder Questionnaire or to respond for further
information to take such actions as are required to name such Holder as a
selling security holder in the Registration Statement or any pre-effective or
post-effective amendment thereto and to include (to the extent not theretofore
included) in the Registration Statement the Registrable Securities identified
in such late Selling Stockholder Questionnaire or request for further
information. Each
Holder acknowledges and agrees that the information in the Selling Stockholder
Questionnaire or request for further information as described in
this Section 2(d) will be used by the Company in the preparation of the Registration
Statement and hereby consents to the inclusion of such information in the
Registration Statement.

 

(e)           [Reserved.]

 

(f)            In the event that Form S-3 is not  available for
the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Holders and (ii) undertake
to register the Registrable Securities on Form S-3 promptly after such
form is available, provided that
the Company shall maintain the effectiveness of the Registration Statement then
in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the Commission.

 

(g)           To the extent that a Holder has the right, pursuant to
the terms of an agreement entered into with the Company prior to the date
hereof, to cause the Company to register any securities issued by the Company
(the “Prior Registration Rights”), such Holder
hereby waives the Prior Registration Rights and acknowledges and agrees that
the only such registration rights such Holder has shall be set forth in this
Agreement.

 

7

 

3.             Registration Procedures.

 

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

 

(a)           Not less than
five (5) Trading Days prior to the filing of a Registration Statement and
not less than three (3) Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (except for Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
and any similar or successor reports), the Company shall, (i) furnish to the Holder copies of such Registration
Statement, Prospectus or amendment or supplement thereto, as proposed to be
filed, which documents will be subject to the review of such Holder (it being
acknowledged and agreed that if a Holder does not object to or comment on the
aforementioned documents within such five (5) Trading Day or three (3) Trading
Day period, as the case may be, then the Holder shall be deemed to have
consented to and approved the use of such documents), and (ii) cause its
officers and directors, counsel and independent registered public accountants
to respond to such inquiries as shall be reasonably necessary, in the
reasonable opinion of respective counsel to each Holder, to conduct a
reasonable investigation within the meaning of the Securities Act.  The Company shall not file any
Registration Statement or amendment or supplement thereto in a form to which a
Holder reasonably objects in good faith, provided that, the Company is notified
of such objection in writing within the five (5) Trading Day or three (3) Trading
Day period described above, as applicable.

 

(b)           (i) 
Prepare and file with the Commission such amendments (including post-effective
amendments) and supplements, to each Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep such Registration
Statement continuously effective as to the applicable Registrable Securities
for its Effectiveness Period; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be filed
pursuant to Rule 424; (iii) respond as promptly as reasonably
practicable to any comments received from the Commission with respect to each
Registration Statement or any amendment thereto and, as promptly as reasonably
possible, provide the Holders true and complete copies of all correspondence
from and to the Commission relating to such Registration Statement other than
any information that would result in the disclosure to the Holders of material
and non-public information concerning the Company; and (iv) comply with
the provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of (subject to the terms of this Agreement) in accordance with the intended
methods of disposition by the Holders thereof as set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented; provided, however, that each Purchaser
shall be responsible for the delivery of the Prospectus to the Persons to whom
such Purchaser sells any of the Shares or the Warrant Shares (including in
accordance with Rule 172 under the Securities Act), and each Purchaser
agrees to dispose of Registrable Securities in compliance with the plan of
distribution described in the Registration Statement and otherwise in
compliance with applicable federal and state securities laws. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b))
by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K
or any analogous report under the Exchange Act, the Company shall have
incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the Commission on
the same day on which the Exchange Act report which created the requirement for
the Company to amend or supplement such Registration Statement was filed.

 

(c)           Notify the
Holders (which notice shall, pursuant to clauses (iii) through (v) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until the
requisite changes have been made) as promptly as reasonably practicable (and,
in the case of (i)(A) below, not less than two Trading Days prior to such
filing, in the case of (iii) and (iv) below, not more than one
Trading Day after 

 

8

 

such issuance or receipt,
and in the case of (v) below, not more than one Trading Day after the
occurrence or existence of such development) and (if requested by any such
Person) confirm such notice in writing no later than one Trading Day following
the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when
the Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on any
Registration Statement (in which case the Company shall provide to each of the
Holders true and complete copies of all comments other than information that
the Company believes would constitute material and non-public information); and
(C) with respect to each Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional
information that pertains to the Holders as “Selling Stockholders” or the “Plan
of Distribution”; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of
the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in such
Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus,
form of prospectus or supplement thereto, in light of the circumstances under
which they were made), not misleading.

 

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

 

(e)           If requested by a Holder, furnish to such Holder,
without charge, at least one conformed copy of each Registration Statement and
each amendment thereto and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference) promptly
after the filing of such documents with the Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on
the Commission’s EDGAR system.

 

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

 

9

 

(g)           If requested by
the Holders, cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
delivered to a transferee pursuant to the Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement
and under law, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such
Holders may reasonably request.

 

(h)           Following the
occurrence of any event contemplated by Section 3(c)(ii)-(v), as promptly
as reasonably practicable (taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its stockholders of
the premature disclosure of such event), prepare a supplement or amendment,
including a post-effective amendment, to the affected Registration Statements
or a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, no Registration Statement nor any
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus, form of prospectus or
supplement thereto, in light of the circumstances under which they were made),
not misleading.

 

(i)            The Company may
require each selling Holder to furnish to the Company a certified statement as
to (i) the number of shares of Common Stock beneficially owned by such
Holder and any Affiliate thereof, (ii) any Financial Industry Regulatory
Authority (“FINRA”) affiliations, (iii) any
natural persons who have the power to vote or dispose of the Common Stock and (iv) any
other information as may be requested by the Commission, FINRA or any state
securities commission. During any periods that the Company is unable to meet
its obligations hereunder with respect to the registration of Registrable
Securities because any Holder fails to furnish such information within five
Trading Days of the Company’s request, (i) any Liquidated Damages that are
accruing at such time as to such Holder shall only be tolled only with respect
to that Holder and only if the Liquidated Damages were directly caused by such
Holder failure to provide such information; and (ii) any Event that may
otherwise occur solely because of such delay shall be suspended as to such
Holder only, until such information is delivered to the Company.

 

(j)            Not permit any securities other than Registrable
Securities to be included on any Registration Statement.

 

(k)           If during the Effectiveness Period, the number of
Registrable Securities at any time exceeds 100% of the number of shares of
Common Stock then registered in a Registration Statement, then the Company
shall file as soon as reasonably practicable, but in any case prior to the
applicable Filing Deadline, subject to applicable SEC Guidance, an additional
Registration Statement covering the resale by the Holders of not less than the
number of such Registrable Securities.

 

(l)            Comply with all applicable rules and regulations
of the Commission.

 

4.             Registration Expenses.  All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions and all legal
fees and expenses of legal counsel for any Holder) shall be borne by the
Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement.  The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for
trading, and (B) with respect to compliance with applicable state
securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for 

 

10

 

investment under the laws of such jurisdictions as
requested by the Holders)), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the Holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel
for the Company, (v) Securities Act liability insurance, if the Company so
desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement.  In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.  In no event shall the Company
be responsible for any underwriting, broker or similar fees or commissions of
any Holder or, except to the extent provided for in the Transaction Documents,
any legal fees or other costs of the Holders.

 

5.                                     Indemnification.

 

(a)                                  Indemnification
by the Company.  The Company
shall, notwithstanding any termination of this Agreement, indemnify, defend and
hold harmless each Holder, the officers, directors, agents, partners, members,
managers, stockholders, Affiliates and employees (and any other Persons with a
functionally equivalent role of a Person holding such titles, notwithstanding a
lack of such title or any other title) of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers,
directors, partners, members, managers, stockholders, agents and employees (and
any other Persons with a functionally equivalent role of a Person holding such
titles, notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and investigation and
reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of
or are based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (A) such
untrue statements, alleged untrue statements, omissions or alleged omissions
are based solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, or to the extent that
such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and approved by such
Holder expressly for use in the Registration Statement, such Prospectus or such
form of Prospectus or in any amendment or supplement thereto (it being
understood that each Holder has approved Annex A hereto for this
purpose), (B) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)-(v), related to the use by a Holder of an
outdated or defective Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of the Advice contemplated and defined in Section 6(c) below,
but only if and to the extent that following the receipt of the Advice the
misstatement or omission giving rise to such Loss would have been corrected or (C) any
such Losses arise out of the Purchaser’s (or any other indemnified Person’s)
failure to send or give a copy of the Prospectus or supplement (as then amended
or supplemented), if required, to the Persons asserting an untrue statement or
alleged untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
Prospectus or supplement.  The Company
shall notify the Holders promptly of the institution, threat or assertion of
any Proceeding arising from or in connection 

 

11

 

with the transactions
contemplated by this Agreement of which the Company is aware.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of an Indemnified
Party (as defined in Section 5(c)) and shall survive the transfer of the
Registrable Securities by the Holders.

 

(b)                                 Indemnification
by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising out of or are based upon any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or
any form of prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus, or any form of
prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading (i) to the extent, but only to the extent,
that such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein or (ii) to the extent, but only to the extent,
that such information relates to such Holder or such Holder’s proposed method
of distribution of Registrable Securities and was reviewed and approved by such
Holder expressly for use in a Registration Statement (it being understood that
the Holder has approved Annex A hereto for this purpose), such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
or (iii) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), to the extent, but only to the extent, related to
the use by such Holder of an outdated or defective Prospectus after the Company
has notified such Holder in writing that the Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice contemplated in
Section 6(c).  In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.

 

(c)                                  Conduct of
Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified
Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all reasonable fees and expenses incurred in connection
with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have materially and adversely
prejudiced the Indemnifying Party.

 

An Indemnified Party shall
have the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall
have failed promptly to assume the defense of such Proceeding and to employ
counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel 

 

12

 

shall
be at the expense of the Indemnifying Party); provided,
that the Indemnifying Party shall not be liable for the fees and expenses of
more than one separate firm of attorneys at any time for all Indemnified
Parties.  The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld, delayed or
conditioned.  No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding, is solely for monetary damages, and does not contain an
admission of wrongdoing on the part of the Indemnified Party.

 

Subject to the terms of this
Agreement, all fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this Section 5(c))
shall be paid to the Indemnified Party, as incurred, within twenty Trading Days
of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is finally
judicially determined to not be entitled to indemnification hereunder). The failure to deliver written notice
to the Indemnifying Party within a reasonable time of the commencement of any
such action shall not relieve such Indemnifying Party of any liability to the
Indemnified Party under this Section 5, except to the extent that the
Indemnifying Party is materially and adversely prejudiced in its ability to
defend such action.

 

(d)                                 Contribution.  If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party or insufficient to hold an
Indemnified Party harmless for any Losses, then each Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission.  The
amount paid or payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in this Agreement, any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section 5(d) was available to such party in accordance with its
terms.

 

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

 

13

 

The indemnity and
contribution agreements contained in this Section 5 are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties and
are not in diminution or limitation of the indemnification provisions under the
Purchase Agreement.

 

6.                                     Miscellaneous.

 

(a)                                  Remedies.  In the event of a breach by the Company or by
a Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this
Agreement.  The Company and each Holder
agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

 

(b)                                 Compliance.  Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it (unless an exemption therefrom is available) in connection
with sales of Registrable Securities pursuant to the Registration Statement and shall sell the Registrable
Securities only in accordance with a method of distribution described in the
Registration Statement.

 

(c)                                  Discontinued Disposition. 
By its acquisition of Registrable Securities, each Holder agrees that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(c)(ii)-(v), such Holder will forthwith
discontinue disposition of such Registrable Securities under a Registration
Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed.   
The Company may provide appropriate stop orders to enforce the
provisions of this paragraph.

 

(d)                                 Amendments and
Waivers.  The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, or waived unless the same shall be in writing and
signed by the Company and Holders holding a majority of the then outstanding
Registrable Securities, including Holders of at least two-thirds of the then
outstanding Registrable Securities held by Holders who are not Inside Investors
(as such term is defined in the Purchase Agreement), provided that any party
may give a waiver as to itself. 
Notwithstanding the foregoing,  a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of all of
the Registrable Securities to which such waiver or consent relates; provided, however,
that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.

 

(e)                                  Notices.  Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the Purchase Agreement.

 

(f)                                    Successors and
Assigns.  This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder.  Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.  The Company may not
assign its rights (except by merger or in connection with another entity
acquiring all or substantially all of the Company’s assets) or obligations
hereunder without the prior written consent of all 

 

14

 

the Holders of the then
outstanding Registrable Securities.  Each
Holder may assign its respective rights hereunder in the manner and to the
Persons as permitted under the Purchase Agreement.

 

(g)                                 Execution and
Counterparts.  This
Agreement may be executed in two or more counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature were the original thereof.

 

(h)                                 Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.

 

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

 

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

 

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

 

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

 

15

 

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

 

	
   

  	
  HELICOS BIOSCIENCES CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
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  Title:

  

 

 

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

 

	
   

  	
  NAME OF INVESTING ENTITY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AUTHORIZED SIGNATORY

  
	
   

  	
   

  	
   

  
	
   

  	
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  ADDRESS FOR NOTICE

  
	
   

  	
   

  
	
   

  	
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  Email:

  

 

 

Annex A

 

PLAN OF
DISTRIBUTION

 

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

 

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

 

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

 

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

 

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

 

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

 

·                  privately negotiated transactions;

 

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

 

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

 

·                  through the writing or settlement of
options or other hedging transactions, whether such options are listed on an
options exchange or otherwise;

 

·                  a combination of any such methods of
sale; and

 

·                  any other method permitted pursuant to
applicable law.

 

The
selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act, as
permitted by that rule, or Section 4(1) under the Securities Act, if
available, rather than under this prospectus, provided that they meet the
criteria and conform to the requirements of those provisions.

 

 

Broker-dealers engaged by
the selling stockholders may arrange for other broker-dealers to participate in
sales. If the selling stockholders effect such transactions by selling Common Stock to or through
underwriters, broker-dealers or agents, such underwriters, broker-dealers or
agents may receive commissions in the form of discounts, concessions or
commissions from the selling stockholders or commissions from purchasers of the
Common Stock for whom they may
act as agent or to whom they may sell as principal. Such commissions will be in
amounts to be negotiated, but, except as set forth in a supplement to this
Prospectus, in the case of an agency transaction will not be in excess of a
customary brokerage commission in compliance with NASD Rule 2440; and in
the case of a principal transaction a markup or markdown in compliance with NASD
IM-2440.

 

In connection with sales
of the Common Stock or
otherwise, the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the Common Stock in
the course of hedging in positions they assume. 
The selling stockholders may also sell Common Stock short and if such short sale shall take place after
the date that this Registration Statement is declared effective by the
Commission, the selling stockholders may deliver Common Stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short
sales.  The selling stockholders may also
loan or pledge Common Stock to
broker-dealers that in turn may sell such shares, to the extent permitted by
applicable law. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the
creation of one or more derivative securities which require the delivery to
such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction). Notwithstanding the foregoing, the selling
stockholders have agreed not to use shares registered on this registration
statement to cover short sales of our Common Stock made prior to the date the
registration statement, of which this prospectus forms a part, has been
declared effective by the SEC.

 

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

 

The selling stockholders and any broker-dealer or
agents participating in the distribution of the Common Stock may be deemed to be “underwriters” within the meaning
of Section 2(11) of the Securities Act in connection with such sales.  In such event, any commissions paid, or any
discounts or concessions allowed to, any such broker-dealer or agent and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. Selling
Stockholders who are “underwriters” within the meaning of Section 2(11) of
the Securities Act will be subject to the applicable prospectus delivery
requirements of the Securities Act and may be subject to certain statutory
liabilities of, including but not limited to, Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934,
as amended, or the Exchange Act.

 

Each selling stockholder has informed the Company that
it is not a registered broker-dealer and does not have any written or oral
agreement or understanding, directly or indirectly, with any person to
distribute the Common Stock.  Upon the Company being
notified in writing by a selling stockholder that any material arrangement has
been entered into with a broker-dealer for the sale of Common Stock through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this prospectus will be
filed, if required, pursuant to Rule 424(b) under the Securities Act,

 

 

disclosing (i) the name of each such selling
stockholder and of the participating broker-dealer(s), (ii) the number of
shares involved, (iii) the price at which such the Common Stock was sold, (iv) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction.  In no event shall any broker-dealer receive
fees, commissions and markups, which, in the aggregate, would exceed eight percent
(8%).

 

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

 

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

 

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

 

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

 

 

Annex
B

 

HELICOS BIOSCIENCES CORPORATION

 

SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE

 

The undersigned holder
of common stock, par value $0.001 per share, of Helicos BioSciences
Corporation, a Delaware corporation (the “Company”),
issued pursuant to a certain Securities Purchase Agreement by and among the
Company and the Purchasers named therein, dated as of September 15,
2009, understands
that the Company intends to file with the Securities and Exchange Commission a
registration statement on Form S-3 (the “Resale Registration Statement”) for the registration and the resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities
Act”), of the Registrable Securities in accordance with the terms of
a certain Registration Rights Agreement by and among the Company and the
Purchasers named therein, dated as of September 15, 2009 (the “Agreement”).  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Agreement.

 

In order to sell or
otherwise dispose of any Registrable Securities pursuant to the Resale
Registration Statement, a holder of Registrable Securities generally will be
required to be named as a selling stockholder in the related prospectus or a
supplement thereto (as so supplemented, the “Prospectus”), deliver the Prospectus to purchasers of
Registrable Securities (including pursuant to Rule 172 under the Securities
Act) and be bound by the provisions of the Agreement (including certain
indemnification provisions, as described below).  Holders must complete and deliver this Notice
and Questionnaire in order to be named as selling stockholders in the
Prospectus.  Holders of
Registrable Securities who do not complete, execute and return this Notice and
Questionnaire within five (5)Trading Days following the date of the Agreement (1) will
not be named as selling stockholders in the Resale Registration Statement or
the Prospectus and (2) may not use the Prospectus for resales of
Registrable Securities.

 

Certain legal
consequences arise from being named as a selling stockholder in the Resale
Registration Statement and the Prospectus. 
Holders of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not named
as a selling stockholder in the Resale Registration Statement and the
Prospectus.

 

NOTICE

 

The undersigned holder
(the “Selling Stockholder”)
of Registrable Securities hereby gives notice to the Company of its intention
to sell or otherwise dispose of Registrable Securities owned by it and listed
below in Item (3), unless otherwise specified in Item (3), pursuant to the
Resale Registration Statement.  The
undersigned, by signing and returning this Notice and Questionnaire,
understands and agrees that it will be bound by the terms and conditions of
this Notice and Questionnaire and the Agreement.

 

The undersigned hereby
provides the following information to the Company and represents and warrants
that such information is accurate and complete:

 

QUESTIONNAIRE

 

1.                                      Name.

 

(a)                                  Full Legal Name
of Selling Stockholder:

 

 

 

 

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

 

 

 

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

 

 

 

2. 
Address for Notices to Selling Stockholder:

 

	
   

  
	
   

  
	
  Telephone:

  
	
  Fax:

  
	
  Contact
  Person:

  
	
  E-mail
  address of Contact Person:

  

 

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

 

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

 

 

 

(b)                                 Number of shares of Common Stock to be
registered pursuant to this Notice for resale:

 

 

 

4. 
Broker-Dealer Status:

 

(a)                                  Are you a
broker-dealer?

 

Yes o    No o

 

 

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

 

Yes o    No o

 

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

 

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

 

Yes o    No o

 

Note:                   If yes, provide a narrative
explanation below:

 

 

 

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

 

Yes o    No o

 

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

 

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

 

Except as set forth below in this Item 5, the undersigned is
not the beneficial or registered owner of any securities of the Company other
than the Registrable Securities listed above in Item 3.

 

Type and amount of other
securities beneficially owned:

 

 

 

6.  Relationships with the Company:

 

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

 

State
any exceptions here:

 

 

 

 

7. 
Plan of Distribution:

 

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

 

State
any exceptions here:

 

 

 

***********

 

The
undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the
date hereof and prior to the effective date of any applicable Resale
Registration Statement. All notices hereunder and pursuant to the Agreement shall be made in
writing, by hand delivery, confirmed or facsimile transmission, first-class
mail or air courier guaranteeing overnight delivery at the address set forth
below.  In the absence of any such
notification, the Company shall be entitled to continue to rely on the accuracy
of the information in this Notice and Questionnaire.

 

By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (7) above and
the inclusion of such information in the Resale Registration Statement and the
Prospectus.  The undersigned understands
that such information will be relied upon by the Company in connection with the
preparation or amendment of any such Registration Statement and the Prospectus.

 

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

 

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

 

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

 

 

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

 

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

 

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

 

	
  Dated:

  	
   

  	
   

  	
  Beneficial Owner:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This AGREEMENT (this “Agreement”) is
made and entered into as of the 15th day of 
September 2009, by and between Toreador Resources Corporation, a
Delaware corporation (the “Company”), and Marc Sengès (“Employee”).

 

W  I  T  N  E
S  S  E  T  H :

 

WHEREAS, the Company desires to employ the Employee
as its Chief Financial Officer as of September 15, 2009 (the “Effective
Date”); and

 

WHEREAS, the Company desires to enter into this
Agreement embodying the terms of such employment, and Employee desires to enter
into this Agreement and to accept such employment, subject to the terms and
provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the promises and
mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are mutually acknowledged, the Company and
Employee hereby agree as follows:

 

Section 1.             Definitions.

 

(a)          “Accrued
Obligations” shall mean (i) all accrued but unpaid Base Salary through
the date of termination of Employee’s employment, (ii) any unpaid or
unreimbursed expenses incurred in accordance with Section 1 below, (iii) any
benefits provided under the Company’s employee benefit plans upon a termination
of employment and in accordance with the terms contained therein.

 

(b)          “Agreement”
shall have the meaning set forth in the preamble hereto.

 

(c)          “Appointment
Date” shall have the meaning set forth in Section 3(a) below.

 

(d)          “Base
Salary” shall mean the salary provided for in Section 4(a) below
or any increased salary granted to Employee pursuant to Section 4(a).

 

(e)          “Board”
shall mean the Board of Directors of the Company.

 

(f)           “Cause”
shall mean (i) Employee’s act(s) of gross negligence or willful
misconduct in the course of Employee’s employment hereunder that is or could
reasonably be expected to be materially injurious to the Company or any other
member of the Company Group, (ii) willful failure or refusal by Employee
to perform in any material respect his duties or responsibilities, (iii) misappropriation
by Employee of any assets or business opportunities of the Company or any other
member of the Company Group, (iv) embezzlement or fraud committed by
Employee, or at his direction, (v) Employee’s conviction of, or pleading “guilty”
or “ no contest” to, (A) a felony under United States state or federal
law, or (B) any other criminal charge in any jurisdiction that has, or
could be reasonably expected to have, a material adverse impact on the
performance of Employee’s duties to the Company or any other member of the
Company Group or otherwise result in material injury to the reputation or
business of the Company or any other member of the Company Group, (vi) any
material violation of a written Company policy, including but not limited to
those relating to sexual harassment or business conduct, and those otherwise
set forth in the manuals or statements of written Company policy, or (vii) Employee’s
breach of Section 9 of this Agreement.

 

 

(g)          “Change
of Control” shall mean a “change of control event” within the meaning of
Treas. Reg. 1.409A-3(i)(5); provided, that
in no event shall the consummation of the Proposed Transaction constitute a
Change in Control for purposes of this Agreement.

 

(h)          “Change
of Control Severance Term” shall mean the twenty-four (24) month period
following Employee’s termination pursuant to Section 8(h) below.

 

(i)           “Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

(j)           “Common
Shares” shall have the meaning set forth in Section 4(c) below.

 

(k)          “Company”
shall have the meaning set forth in the preamble hereto.

 

(l)           “Company
Group” shall mean the Company together with any direct or indirect
subsidiaries of the Company.

 

(m)         “Compensation
Committee” shall mean the Board or the committee of the Board designated to
make compensation decisions relating to senior executive officers of the
Company Group.

 

(n)          “Competitive
Activities” shall mean any business activities in which the Company or any
other member of the Company Group engages during the Term of Employment.

 

(o)          “Confidential
Information” shall mean confidential or proprietary trade secrets, client
lists, client identities and information, information regarding service
providers, investment methodologies, marketing data or plans, sales plans,
management organization information, operating policies or manuals, business
plans or operations or techniques, financial records or data, or other
financial, commercial, business, or technical information (i) relating to
the Company or any other member of the Company Group or (ii) that the
Company or any other member of the Company Group may receive belonging to
suppliers, customers, or others who do business with the Company or any other
member of the Company Group, but shall exclude any information that is in the
public domain or hereafter enters the public domain, in each case without the
breach by Employee of Section 9(a) below.

 

(p)          “Developments”
shall have the meaning set forth in Section 9(f) below.

 

(q)          “Disability”
shall mean any physical or mental disability or infirmity of the Employee that
has prevented the performance of Employee’s duties for a period of (i) ninety
(90) consecutive days or (ii) one hundred twenty (120) non-consecutive
days during any twelve (12) month period. 
Any question as to the existence, extent, or potentiality of Employee’s
Disability upon which Employee and the Company cannot agree shall be determined
by a qualified, independent physician selected by the Company and approved by
Employee (which approval shall not be unreasonably withheld).  The determination of any such physician shall
be final and conclusive for all purposes of this Agreement.

 

(r)           “Effective
Date” shall have the meaning set forth in the recitals above.

 

(s)          “Employee”
shall have the meaning set forth in the preamble hereto.

 

(t)           “Good
Reason” shall mean, without Employee’s consent, (i) a diminution in
Employee’s title, duties, or responsibilities, (ii) a reduction in the
Base Salary, STI Award target or LTI Award target, (iii) the failure of
the Company to pay any compensation hereunder when due or to perform any other
obligation of the Company hereunder, or (iv)  failure of the Company to
obtain a written 

 

2

 

agreement from any successor or assign of the Company to assume the obligations
of the Company under this Agreement upon a Change of Control.

 

(u)          “Interfering
Activities” shall mean (i) encouraging, soliciting, or inducing, or in
any manner attempting to encourage, solicit, or induce, any individual employed
by, or individual or entity providing consulting services to, the Company or
any other member of the Company Group to terminate such employment or
consulting services; provided, that
the foregoing shall not be violated by general advertising not targeted at
employees or consultants of the Company or any other member of the Company
Group; (ii) hiring any individual who was employed by the Company or any
other member of the Company Group within the six (6) month period prior to
the date of such hiring; or (iii) encouraging, soliciting, or inducing, or
in any manner attempting to encourage, solicit, or induce, any customer,
supplier, licensee, or other business relation of the Company or any other
member of the Company Group to cease doing business with or materially reduce the
amount of business conducted with the Company or any other member of the
Company Group, or in any way interfering with the relationship between any such
customer, supplier, licensee, or business relation and the Company or any other
member of the Company Group.

 

(v)          “LTI
Award” shall have the meaning set forth in Section 4(c) below.

 

(w)         “Person”
shall mean any individual, corporation, partnership, limited liability company,
joint venture, association, joint-stock company, trust (charitable or non-charitable),
unincorporated organization, or other form of business entity.

 

(x)           “Proposed
Transaction” shall mean the proposed transaction whereby the Company will
become a wholly-owned subsidiary of Toreador Holding SAS, a wholly-owned
subsidiary of the Company.

 

(y)          “Release
Expiration Date” shall mean the date that is twenty-one (21) days following
the date upon which the Company timely delivers Employee the release
contemplated in Section 8(h) below, or in the event that such
termination of employment is “in connection with an exit incentive or other
employment termination program” (as such phrase is defined
in the Age Discrimination
in Employment Act of 1967), the date that is forty-five (45) days
following such delivery date.

 

(z)           “Restricted
Area” shall mean any jurisdiction in which the Company or any other member
of the Company Group engages in business during the Term of Employment, or at
the time of a termination of Employee’s employment was engaged in business.

 

(aa)        “Restricted
Period” shall mean the period commencing on the Effective Date and
extending to the twelve (12) month anniversary of Employee’s termination of
employment for any reason.

 

(bb)        “Severance
Term” shall mean the six (6) month period following Employee’s
termination by the Company without Cause (other than by reason of death or
Disability) or by Employee for Good Reason.

 

(cc)        “STI
Award” shall have the meaning set forth in Section 4(a) below.

 

(dd)        “Term
of Employment” shall mean the period specified in Section 2 below.

 

3

 

Section 2.             Acceptance and Term of
Employment.

 

The Company agrees to employ Employee, and
Employee agrees to serve the Company, on the terms and conditions set forth
herein.  The “Term of Employment” shall
mean the period commencing on the Effective Date and, unless terminated sooner
as provided in Section 8 hereof, continuing for a period of two (2) years
from the Effective Date; provided, however, that the Term of Employment shall
be extended automatically at the end of the initial two (2) year term for
a one (1) year term and thereafter for successive one (1) year terms
if neither the Company nor Employee has advised the other in writing in
accordance with Section 17 at least ninety (90) days prior to the end of
the then current term that such term will not be extended for an additional one
(1) year term.

 

Section 3.             Position, Duties, and
Responsibilities; Place of Performance.

 

(a)          During
the Term of Employment, Employee shall be employed and serve as the Chief Financial
Officer of the Company and shall have such duties and responsibilities as are
commensurate with such title.  The
Employee shall report to the Chief Executive Officer and shall carry out and
perform all orders, directions and policies given to him by the Chief Executive
Officer consistent with his position and title.

 

(b)          Employee
shall devote his full business time, attention, skill, and best efforts to the
performance of his duties under this Agreement and shall not engage in any
other business or occupation during the Term of Employment, including, without
limitation, any activity that (x) conflicts with the interests of the
Company or any other member of the Company Group, (y) interferes with the
proper and efficient performance of Employee’s duties for the Company, or (z) interferes
with Employee’s exercise of judgment in the Company’s best interests.  Notwithstanding the foregoing, nothing herein
shall preclude Employee from (i) serving, with the prior written consent
of the Board, as a member of the boards of directors or advisory boards (or
their equivalents in the case of a non-corporate entity) of non-competing
businesses, (ii) engaging in charitable activities and community affairs,
and (iii) managing his personal investments and affairs; provided, however, that
the activities set out in clauses (i), (ii), and (iii) shall be limited by
Employee so as not to materially interfere, individually or in the aggregate,
with the performance of his duties and responsibilities hereunder.

 

Section 4.             Compensation.  During the Term of Employment, Employee shall
be entitled to the following compensation:

 

(a)          Base
Salary.  Employee shall be paid an
annualized Base Salary, payable in accordance with the regular payroll
practices of the Company, of not less than EUR 204,500 (or its counter value in
United States Dollar at the date hereof, i.e ...), with increases, if any, as may
be approved in writing by the Compensation Committee.

 

(b)          Short-Term
Incentive Awards.

 

(i)           In his capacity as
CFO of the Company, Employee shall be eligible for an annual cash short-term
incentive award determined by the Compensation Committee in respect of each
fiscal year (or partial fiscal year) during the Term of Employment (the “STI
Award”) in accordance with this Section 4(b).  The target STI Award for each fiscal year
shall be 75% of Base Salary (or such greater percentage of Base Salary as the
Board or Compensation Committee shall determine, in its sole discretion) and,
if earned, shall be paid by no later than March 31st of each year with
respect to the preceding year.

 

4

 

(ii)          The criteria for
achieving the STI Award shall be based upon the level of achievement of Company
and individual performance objectives for such fiscal year, as determined by
the Board or the Compensation Committee and agreed to by Employee, as evidenced
by an Addendum to this Agreement executed by the Company and Employee by December 1
of each year with respect to the following year.

 

(iii)         The STI Award for
any partial fiscal year occurring during the Term of Employment shall be pro
rated as and to the extent provided in Section 8.

 

(c)          Long-Term Incentive Awards.

 

(i)           In his capacity as
CFO of the Company, Employee shall be eligible for a long-term incentive award
determined by the Compensation Committee in respect of each fiscal year (or
partial fiscal year) during the Term of Employment in accordance with this Section 4(c) (the
“LTI Award”).  The LTI Award for
2009, the performance criteria for which the Company agrees have been achieved,
shall be the grant, as of the Effective Date, of the number of shares of common
stock of the Company (“Common Shares”) equal to 150% of the Base Salary
divided by the closing price of the Common Shares on the Effective Date.

 

(ii)          The target LTI Award
for each subsequent fiscal year shall be a number of Common Shares equal to
150% of Base Salary divided by the January Representative Value (as
defined in Exhibit A, annexed hereto) of the Company’s Common Shares and,
if earned, shall be granted by no later than March 31st of the following
year.  The actual LTI Award payable shall
be based upon the level of achievement of the annual performance objectives for
such fiscal year, as described in Exhibit A annexed hereto.

 

(iii)         The LTI Award for
any year shall vest in three equal installments, with the first 1/3 vesting on
the first anniversary of the grant of the LTI Award , the second 1/3 vesting on
the second anniversary of the grant of the LTI Award, and the remaining 1/3
vesting on the third anniversary of the grant of the LTI Award, and shall be
subject to such restriction on written transfer policies as the Company may
adopt from time to time and which are applicable to all officers, directors and
other management personnel of the Company.

 

Section 5.             Employee
Benefits.

 

(a)          General. 
During the Term of Employment, Employee shall be entitled to participate
in health insurance, retirement, and other benefits provided to other senior
executives of the Company.

 

(b)          Vacation and Time Off.  During each calendar year of the Term of
Employment, Employee shall be eligible for twenty-five (25) days paid vacation,
as well as sick pay and other paid and unpaid time off in accordance with the
policies and practices of the Company.

 

Section 6.             Key-Man Insurance.

 

At any time during the Term of
Employment, the Company shall have the right to insure the life of Employee for
the sole benefit of the Company, in such amounts, and with such terms, as it
may determine.  All premiums payable
thereon shall be the obligation of the Company. 
Employee shall have no interest in any such policy, but agrees to
cooperate with the Company in procuring such insurance by submitting to
physical examinations, supplying all information required by the insurance company,
and 

 

5

 

executing
all necessary documents, provided that no financial obligation is imposed on
Employee by any such documents.

 

Section 7.             Reimbursement of
Business Expenses.

 

Employee is authorized to incur reasonable business
expenses in carrying out his duties and responsibilities under this Agreement,
and the Company shall promptly reimburse him for all such reasonable business
expenses, subject to documentation in accordance with written Company policy,
as in effect from time to time.

 

Section 8.             Termination of
Employment.

 

(a)          General.  The Term of Employment shall terminate
earlier than as provided in Section 2 hereof upon the earliest to occur of
(i) Employee’s death, (ii) a termination by reason of a Disability, (iii) a
termination by the Company with or without Cause, and (iv) a termination
by Employee with or without Good Reason. 
Upon any termination of Employee’s employment for any reason, except as
may otherwise be requested by the Company in writing and agreed upon in writing
by Employee, Employee shall resign from any and all directorships, committee
memberships, and any other positions Employee holds with the Company or any
other member of the Company Group.

 

(b)          Termination
Due to Death or Disability.  Employee’s
employment shall terminate automatically upon his death.  The Company may terminate Employee’s
employment immediately upon the occurrence of a Disability, such termination to
be effective upon Employee’s receipt of written notice of such
termination.  In the event Employee’s
employment is terminated due to his death or Disability, Employee or his estate
or his beneficiaries, as the case may be, shall be entitled to:

 

(i)           The Accrued Obligations; and

 

(ii)          Any unpaid STI Award in respect of any
completed fiscal year that has ended prior to the date of such termination,
which amount shall be paid within sixty (60) days from the date of such; and

 

(iii)         Any STI Award that would have been
payable with respect to the year of termination in the absence of the Employee’s
death or Disability, pro-rated for the period the Employee worked prior to his
death or Disability provided
that the Employee has worked at least 6 months in the fiscal year for which the
bonus is payable, which amount shall be paid at such time STI Awards
are paid to other senior executives of the Company, but in no event later than
one day prior to the date that is 2 1/2 months following the last day of the
fiscal year in which such termination occurs; and

 

(iv)         Immediate pro-rata vesting of any
Common Shares previously awarded to the Employee based on the number of months
the Employee has worked for the Company from the date of grant as a percentage
of the total number of months required for complete vesting in absence of a
termination of employment, and cancellation of any remaining Common Shares not
so vested; and

 

(v)          The rights to the same compensation
and benefits as provided in Section 8(d) below, in lieu of clauses (i) through
(iv), if the termination of Employee’s employment is by reason of death or
Disability while the Employee is traveling on official Company business.

 

6

 

Following such termination of Employee’s
employment by reason of death or Disability, except as set forth in this Section 8(b),
Employee shall have no further rights to any compensation or any other benefits
under this Agreement.

 

(c)          Termination by the Company for Cause.

 

(i)           The Company may terminate Employee’s
employment at any time for Cause, effective upon Employee’s receipt of written
notice of such termination; provided, however, that with respect to any Cause of termination
relying on clause (ii) or (vi) of the definition of Cause set forth
in Section 1(f) hereof, to the extent such act or acts are curable,
Employee shall be given not less than twenty (20) days’ written notice by the
Board of the Company’s intention to terminate him for Cause, such notice to
state in detail the particular act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Cause is based,
and such termination shall be effective at the expiration of such twenty (20)
day notice period unless Employee has substantially cured such act or acts or
failure or failures to act that give rise to Cause during such period.

 

(ii)          In the event the Company terminates
Employee’s employment for Cause, he shall be entitled only to the Accrued
Obligations, and any previously awarded Common Shares which are not vested as
of the date of termination shall be cancelled. 
Following such termination of Employee’s employment for Cause, except as
set forth in this Section 8(c)(ii), Employee shall have no further rights
to any compensation or any other benefits under this Agreement.

 

(d)          Termination
by the Company without Cause.  The
Company may terminate Employee’s employment at any time without Cause,
effective upon Employee’s receipt of written notice of such termination.  In the event Employee’s employment is
terminated by the Company without Cause (other than due to death or
Disability), Employee shall be entitled to:

 

(i)           The Accrued Obligations;

 

(ii)          Any unpaid STI Award in respect of any
completed fiscal year that has ended prior to the date of such termination,
which amount shall be paid at such time STI Awards are paid to other senior
executives of the Company, but in no event later than one day prior to the date
that is 21⁄2 months following the last day of the fiscal year in which such
termination occurred; and

 

(iii)         The target STI Award for the year in
which termination occurs, pro-rated for the period the Employee worked prior to
such termination, which amount shall be paid at such time STI Awards are paid
to other senior executives of the Company, but in no event later than one day
prior to the date that is 2 1/2 months following the last day of the fiscal
year in which such termination occurs; and

 

(iv)         Immediate vesting of any Common Shares,
including LTI Awards, previously awarded to the Employee; and

 

Following such termination of Employee’s
employment by the Company without Cause, except as set forth in this Section 8(d),
Employee shall have no further rights to any compensation or any other benefits
under this Agreement.

 

(e)          Termination
by Employee with Good Reason. 
Employee may terminate his employment with Good Reason by providing the
Company twenty (20) days’ written notice setting forth 

 

7

 

in reasonable specificity the event that constitutes Good Reason.  During such twenty (20) day notice period,
the Company shall have a cure right (if curable), and if not cured within such
period, Employee’s termination will be effective upon the expiration of such
cure period, and Employee shall be entitled to the same payments and benefits
as provided in Section 8(d) above for a termination by the Company
without Cause, subject to the same conditions on payment and benefits as
described in Section 8(d)  above. 
Following such termination of Employee’s employment by Employee with
Good Reason, except as set forth in this Section 8(e), Employee shall have
no further rights to any compensation or any other benefits under this
Agreement.

 

(f)           Termination
by Employee without Good Reason. 
Employee may terminate his employment without Good Reason by providing
the Company thirty (30) days’ written notice of such termination.  In the event of a termination of employment
by Employee under this Section 8(f), except as provided in Section 8(h),
Employee shall be entitled only to the Accrued Obligations, and any previously
awarded Common Shares which are not vested as of the date of termination shall
be cancelled.  In the event of
termination of Employee’s employment under this Section 8(f), the Company
may, in its sole and absolute discretion, by written notice accelerate such
date of termination without changing the characterization of such termination
as a termination by Employee without Good Reason.  Following such termination of Employee’s
employment by Employee without Good Reason, except as set forth in this Section 8(f) or
Section 8(h), Employee shall have no further rights to any compensation or
any other benefits under this Agreement.

 

(g)          Non-Extension
of the Term of Employment.  Employee’s
employment hereunder shall terminate upon the close of business of the last day
of the then current term if either the Company or Employee gives timely notice
of its intention not to extend the then current term of employment, as provided
in Section 2.  Upon such termination
of the Term of Employment, Employee shall be entitled to:

 

(i)           The Accrued Obligations; and

 

(ii)          Any unpaid STI Award in respect of any
completed fiscal year that has ended prior to the date of such termination,
which amount shall be paid at such time STI Awards are paid to other senior
executives of the Company, but in no event later than one day prior to the date
that is 21⁄2 months following the last day of the fiscal year in which such
termination occurred.

 

In the event that Employee’s employment
hereunder is terminated by reason of the Company giving notice of its intention
not to extend any Term of Employment under Section 2, in addition to the
above, Employee shall be entitled to the following benefits:

 

(iii)         Any STI Award that would have been
payable with respect to the year of termination in the absence of the Employee’s
termination, pro-rated for the period the Employee worked prior to such
termination provided that the Employee
has worked at least 6 months in the fiscal year for which the bonus is payable, which amount
shall be paid at such time STI Awards are paid to other senior executives of
the Company, but in no event later than one day prior to the date that is 21⁄2
months following the last day of the fiscal year in which such termination
occurred; and

 

(iv)         Immediate vesting of any Common Shares,
including LTI Awards, previously awarded to the Employee; and

 

(v)          Continuation of
payment of Base Salary for a period of twenty-four (24) months, payable in
accordance with the Company’s regular payroll practices.

 

8

 

Following such termination of Employee’s
employment pursuant to Section 2, except as set forth in this Section 8(g),
Employee shall have no further rights to any compensation or any other benefits
under this Agreement.  In the event that
Employee’s employment hereunder is terminated by reason of the Employee giving
notice of his intention not to extend any Term of Employment under Section 2,
then any previously awarded Common Shares which are not vested as of the date
of termination shall be cancelled.

 

(h)          Termination
Following Change of Control.  If,
upon a Change of Control of the Company or during the one (1) year period
following such Change of Control, Employee is terminated by the Company without
Cause or Employee terminates his employment with Good Reason, in lieu of the
benefits payable pursuant to Sections 8(d) or 8(e) or 8(f) hereof,
as applicable, Employee shall be entitled to:

 

(i)           The Accrued Obligations;

 

(ii)          Any unpaid STI Award in respect of any
completed fiscal year that has ended prior to the date of such termination,
which amount shall be paid at such time STI Awards are paid to other senior
executives of the Company, but in no event later than one day prior to the date
that is 21⁄2 months following the last day of the fiscal year in which such
termination occurred;

 

(iii)         The target STI Award
for the year in which termination occurs, pro-rated for the period the Employee
worked prior to such termination provided
that the Employee has worked at least 6 months in the fiscal year for which the
bonus is payable, which amount shall be paid at such time STI Awards
are paid to other senior executives of the Company, but in no event later than
one day prior to the date that is 2 1/2 months following the last day of the
fiscal year in which such termination occurs;

 

(iv)         A lump-sum cash
payment equal to twenty-four (24) months of the Employee’s Base Salary, which
amount shall be paid in a lump sum within ten (10) business days following
the closing of such Change of Control; and

 

(v)          Immediate vesting of
all Common Shares, including LTI Awards, previously issued.

 

Following such termination
of Employee’s employment following a Change of Control, except as set forth in
this Section 8(g), Employee shall have no further rights to any compensation
or any other benefits under this Agreement.

 

(i)           Release.  Notwithstanding any provision herein to the
contrary, the Company may require that, prior to payment of any amount or
provision of any benefit pursuant to subsection (d), (e), or (h) or pursuant
to clauses (iii) through (v) of subsection (g) of this Section 8
(other than the Accrued Obligations), Employee shall have executed, on or prior
to the Release Expiration Date, a customary general release in favor of the
Company Group in such form as is reasonably required by the Company, and any
waiting periods contained in such release shall have expired.  To the extent that the Company requires
execution of such release, the Company shall deliver such release to Employee
within ten (10) business days following the termination of Employee’s
employment hereunder, and the Company’s failure to deliver such release prior
to the expiration of such ten (10) business day period shall constitute a
waiver of any requirement to execute such release.  Assuming a timely delivery of the release by
the Company, if Employee fails to execute such release on or prior to the
Release Expiration Date or timely revokes his acceptance of such release
thereafter, Employee shall not be entitled to any payments or benefits pursuant
to subsection (d), (e), or (h) or pursuant to clauses (iii) through (v) of
subsection (g) 

 

9

 

of this Section 8 (other than the Accrued Obligations).  Notwithstanding anything herein to the
contrary, in any case where the date of termination and the Release Expiration
Date fall in two separate taxable years, any payments required to be made to
Employee that are treated as deferred compensation for purposes of Section 409A
of the Code shall be made in the later taxable year.

 

Section 9.             Restrictive
Covenants.  Employee
acknowledges and agrees that (A) the agreements and covenants contained in
this Section 9 are (i) reasonable and valid in geographical and
temporal scope and in all other respects and (ii) essential to protect the
value of the business and assets of the Company Group, and (B) by his
employment with the Company, Employee has obtained and will obtain knowledge,
contacts, know-how, training, and experience, and there is a substantial probability
that such knowledge, contacts, know-how, training, and experience could be used
to the substantial advantage of a competitor of the Company Group and to the
substantial detriment of the Company Group.

 

(a)          Confidential
Information.  At any time during and
after the end of the Term of Employment, without the prior written consent of
the Chief Executive Officer, Employee shall not disclose to or use for the
benefit of any third party any Confidential Information, except to the extent
required by an order of a court having jurisdiction or under subpoena from an
appropriate government agency, in which event, Employee shall use his best
efforts to consult with the Board prior to responding to any such order or
subpoena, and except as required in the performance of his duties hereunder.

 

(b)          Non-Competition.  Employee
covenants and agrees that during the Restricted Period, Employee shall not,
directly or indirectly, individually or jointly, own any interest in, operate,
join, control, participate as a partner, director, principal, officer, or agent
of, enter into the employment of, act as a consultant to, or perform any
services for, any Person (other than the Company or any other member of the
Company Group), that engages in any Competitive Activities within the
Restricted Area.  Notwithstanding
anything herein to the contrary, this Section 9(b) shall not prevent
Employee from acquiring as an investment securities representing not more than
three percent (3%) of the outstanding voting securities of any publicly held
corporation.

 

(c)          Non-Interference.  During the Restricted Period, Employee shall
not, directly or indirectly, for his own account or for the account of any
other Person, engage in Interfering Activities.

 

(d)          Non-Disparagement.  During the Term of Employment, and during the
Restricted Period, Employee shall not make any disparaging or defamatory
comments regarding any member of the Company Group or their respective current
or former directors, officers, or employees in any respect or make any comments
concerning any aspect of Employee’s relationship with any member of the Company
Group or any conduct or events that precipitated any termination of employment
from any member of the Company Group. 
Employee’s obligations under this subsection (d) shall not apply to
disclosures required by applicable law, regulation, or order of a court or
governmental agency.

 

(e)          Return
of Documents.  In the event of the
termination of Employee’s employment for any reason, Employee shall deliver to
the Company all of (i) the property of the Company and any other member of
the Company Group and (ii) the documents and data of any nature and in
whatever medium of the Company and any other member of the Company Group, and
he shall not take with him any such property, documents, or data, or any
reproduction thereof, or any documents containing or pertaining to any
Confidential Information.

 

(f)           Works
for Hire.  Employee agrees that the
Company shall own all right, title, and interest throughout the world in and to
any and all inventions, original works of authorship, developments, concepts,
know-how, improvements, and trade secrets, whether or not patentable or
registrable under copyright or similar laws, that Employee may solely or
jointly conceive or develop or

 

10

 

reduce to practice, or cause to be conceived or developed or reduced to
practice during the Term of Employment, whether or not during regular working
hours, provided they either (i) relate at the time of conception or
development to the actual or demonstrably proposed business or research and
development activities of any member of the Company Group; (ii) result
from or relate to any work performed for the Company or any member of the
Company Group; or (iii) are developed through the use of Confidential Information
and/or Company resources or in consultation with any personnel of the Company
or any other member of the Company Group (collectively referred to as “Developments”).  Employee hereby assigns to the Company all
right, title, and interest in and to any and all of these Developments.  Employee agrees to assist the Company, at the
Company’s expense, to further evidence, record, and perfect such assignments,
and to perfect, obtain, maintain, enforce, and defend any rights specified to
be so owned or assigned.  Employee hereby
irrevocably designates and appoints the Company and its agents as
attorneys-in-fact to act for Employee and on his behalf to execute and file any
document and to do all other lawfully permitted acts to further the purposes of
the foregoing with the same legal force and effect as if executed by
Employee.  In addition, and not in
contravention of any of the foregoing, Employee acknowledges that all original
works of authorship that are made by him (solely or jointly with others) within
the scope of employment and that are protectable by copyright are “works made
for hire,” as that term is defined in the United States Copyright Act (17 USC §
101).  To the extent allowed by law, this
includes all rights of paternity, integrity, disclosure, and withdrawal, and
any other rights that may be known or referred to as “moral rights.”  To the extent Employee retains any such moral
rights under applicable law, Employee hereby waives such moral rights and
consents to any action consistent with the terms of this Agreement with respect
to such moral rights, in each case, to the full extent of such applicable
law.  Employee will confirm any such
waivers and consents from time to time as requested by the Company.

 

(g)          Blue
Pencil.  If any court of competent
jurisdiction shall at any time deem the duration or the geographic scope of any
of the provisions of this Section 9 unenforceable, the other provisions of
this Section 9 shall nevertheless stand, and the duration and/or
geographic scope set forth herein shall be deemed to be the longest period
and/or greatest size permissible by law under the circumstances, and the
parties hereto agree that such court shall reduce the time period and/or
geographic scope to permissible duration or size.

 

Section 10.           Injunctive Relief.

 

Without limiting the remedies available to members
of the Company Group, Employee acknowledges that a breach of any of the
covenants contained in Section 9 hereof may result in material irreparable
injury to the Company Group (or a member thereof) for which there is no
adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of such a breach or threat
thereof, the Company (or any other member of the Company Group) shall be entitled
to obtain a temporary restraining order and/or a preliminary or permanent
injunction, without the necessity of proving irreparable harm or injury as a
result of such breach or threatened breach of Section 9 hereof,
restraining Employee from engaging in activities prohibited by Section 9
hereof or such other relief as may be required specifically to enforce any of
the covenants in Section 9 hereof. 
Notwithstanding any other provision to the contrary, the Restricted
Period shall be tolled during any period of violation of any of the covenants
in Section 9 (b) or (c) hereof and during any other period
required for litigation during which the Company (or any other member of the
Company Group) seeks to enforce such covenants against Employee if it is ultimately
determined that Employee was in breach of such covenants.

 

Section 11.           Representations and
Warranties of Employee.

 

Employee represents and warrants to the Company
that—

 

11

 

(a)          Employee
is entering into this Agreement voluntarily and that his employment hereunder
and compliance with the terms and conditions hereof will not conflict with or
result in the breach by him of any agreement to which he is a party or by which
he may be bound;

 

(b)          Employee
has not violated, and in connection with his employment with the Company will
not violate, any non-solicitation, non-competition, or other similar covenant
or agreement of a prior employer by which he is or may be bound; and

 

(c)          in
connection with his employment with the Company, Employee will not use any
confidential or proprietary information he may have obtained in connection with
employment with any prior employer.

 

Section 12.           Set Off; Mitigation.

 

The Company’s obligation to pay Employee the amounts
provided and to make the arrangements provided hereunder shall be subject to
set-off, counterclaim, or recoupment of amounts owed by Employee to the Company
or its affiliates; provided, however, that to the extent any amount so subject to
set-off, counterclaim, or recoupment is payable in installments hereunder, such
set-off, counterclaim, or recoupment shall not modify the applicable payment
date of any installment, and to the extent an obligation cannot be satisfied by
reduction of a single installment payment, any portion not satisfied shall
remain an outstanding obligation of Employee and shall be applied to the next
installment only at such time the installment is otherwise payable pursuant to
the specified payment schedule.  Employee
shall not be required to mitigate the amount of any payment provided for
pursuant to this Agreement by seeking other employment or otherwise, and except
as provided in Section 8(d)(vi) hereof, the amount of any payment
provided for pursuant to this Agreement shall not be reduced by any
compensation earned as a result of Employee’s other employment or otherwise.

 

Section 13.           Successors and Assigns;
No Third-Party Beneficiaries.

 

(a)          The
Company.  This Agreement shall inure
to the benefit of the Company and its respective successors and assigns.  Neither this Agreement nor any of the rights,
obligations, or interests arising hereunder may be assigned by the Company to a
Person (other than another member of the Company Group, or its or their
respective successors) without Employee’s prior written consent; provided, however, that
in the event of the merger or consolidation, or transfer or sale of all or
substantially all of the assets, of the Company with or to any other individual
or entity, this Agreement shall, subject to the provisions hereof, be binding
upon and inure to the benefit of such successor, and such successor shall
discharge and perform all the promises, covenants, duties, and obligations of
the Company hereunder, it being agreed that in such circumstances, the consent
of Employee shall not be required in connection therewith.

 

(b)          Employee.  Employee’s rights and obligations under this
Agreement shall not be transferable by Employee by assignment or otherwise,
without the prior written consent of the Company; provided,
however, that if Employee shall die, all
amounts then payable to Employee hereunder shall be paid in accordance with the
terms of this Agreement to Employee’s devisee, legatee, or other designee, or
if there be no such designee, to Employee’s estate.

 

(c)          No
Third-Party Beneficiaries.  Except as otherwise set forth in Section 8(b) or
Section 13(b) hereof, nothing expressed or referred to in this
Agreement will be construed to give any Person other than the Company, the
other members of the Company Group, and Employee any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement.

 

12

 

Section 14.           Waiver and Amendments.

 

Any waiver, alteration, amendment, or modification
of any of the terms of this Agreement shall be valid only if made in writing
and signed by each of the parties hereto; provided, however, that any such waiver, alteration, amendment, or
modification is consented to on the Company’s behalf by the Board.  No waiver by either of the parties hereto of
their rights hereunder shall be deemed to constitute a waiver with respect to
any subsequent occurrences or transactions hereunder unless such waiver specifically
states that it is to be construed as a continuing waiver.

 

Section 15.           Severability.

 

If any covenants or such other provisions of this
Agreement are found to be invalid or unenforceable by a final determination of
a court of competent jurisdiction, (a) the remaining terms and provisions
hereof shall be unimpaired, and (b) the invalid or unenforceable term or
provision hereof shall be deemed replaced by a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision hereof.

 

Section 16.           Governing Law and
Jurisdiction.

 

In the event of any dispute under this Agreement or
relating or arising under the employment relationship (a “Dispute”), the
parties agree first to engage in good faith negotiations to try to resolve the
Dispute.  If the Dispute is not resolved
through such negotiations, the parties agree to engage in mediation using the
services of an agreed upon mediator.  If
the parties fail to agree on a mediator, they shall proceed under the rules and
administration of JAMS in New York City. 
If the Dispute is not resolved through such mediation, the parties agree
to submit the Dispute to binding arbitration. 
Each party expressly waives any right, whether pursuant to any
applicable federal, state, or local statute, to a jury trial and/or to have a
court of law determine rights and award damages with respect to any such
dispute.  The party invoking arbitration
shall notify the other party in writing (the “Written Notice”). The
parties shall exercise their best efforts, in good faith, to agree upon
selection of a single arbitrator.  If the
parties are unable to agree upon selection of a single arbitrator, they shall
so notify the American Arbitration Association (“AAA”) or another agreed upon
arbitration administrator and request that the arbitration provider work with
the parties to select a single arbitrator. 
The arbitration shall be (a) conducted in accordance with the
American Arbitration Association’s National Rules for the Resolution of
Employment Disputes, (b) held at a location in New York City, and (c) completed
within six months (or within such other time as the parties may mutually agree)
of the receipt of Written Notice by the party being notified.  The arbitrator shall have no authority to
assess punitive or exemplary damages as to any dispute arising out of or
concerning the provisions of this Agreement or otherwise arising out of the
employment relationship, except as and unless such damages are expressly
authorized by otherwise applicable and controlling statutes.  The arbitrator’s decision shall be final and
binding and enforceable in any court of competent jurisdiction.  Each party shall bear its own costs,
including attorneys’ fees, and share all costs of the arbitration equally,
subject to the following:  (i) nothing
provided herein shall interfere with either party’s right to seek or receive
damages or costs as may be allowed by applicable statutory law (such as, but
not necessarily limited to, reasonable attorneys’ fees and dispute resolution
related costs and expenses, if allowed by applicable statutory law), and (ii) the
arbitrator shall have the authority to award reasonable attorneys’ fees, costs,
and expenses to the party that substantially prevails.

 

Section 17.           Notices.

 

(a)          Every
notice or other communication relating to this Agreement shall be in writing,
and shall be mailed to or delivered to the party for whom or which it is
intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein 

 

13

 

provided; provided, that unless and until
some other address be so designated, all notices and communications by Employee
to the Company shall be mailed or delivered to the Company at its principal
executive office, and all notices and communications by the Company to Employee
may be given to Employee personally or may be mailed to Employee at Employee’s
last known address, as reflected in the Company’s records.

 

(b)          Any
notice so addressed shall be deemed to be given (i) if delivered by hand,
on the date of such delivery, (ii) if mailed by courier or by overnight
mail, on the first business day following the date of such mailing, and (iii) if
mailed by registered or certified mail, on the third business day after the
date of such mailing.

 

Section 18.           Section Headings.

 

The headings of the sections
and subsections of this Agreement are inserted for convenience only and shall
not be deemed to constitute a part thereof or affect the meaning or
interpretation of this Agreement or of any term or provision hereof.

 

Section 19.           Entire Agreement.

 

This Agreement, together with any exhibits attached
hereto, constitutes the entire understanding and agreement of the parties
hereto regarding the employment of Employee. 
This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings, and agreements between the
parties relating to the subject matter of this Agreement.

 

Section 20.           Survival of Operative
Sections.

 

Upon any termination of Employee’s employment, the
provisions of Section 8 through 21 of this Agreement (together with any
related definitions set forth in Section 1 hereof) shall survive to the
extent necessary to give effect to the provisions thereof.

 

Section 21.           Counterparts.

 

This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.  The execution of this Agreement may be by
actual or facsimile signature.

 

*        *        *

[Signatures
to appear on the following page.]

 

14

 

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

 

	
   

  	
  TOREADOR RESOURCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: CRAIG M. MCKENZIE

  
	
   

  	
  Title: PRESIDENT AND

  
	
   

  	
  CHIEF EXECUTIVE OFFICER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MARC SENGES

  

 

 

EXHIBIT A

 

LONG-TERM INCENTIVE AWARD

 

The performance objectives for achieving the target
LTI for the fiscal year ending December 31, 2010 and each fiscal year
thereafter during the Term of Employment, shall be as follows (the fiscal year
for which the calculation is being made shall be referred to herein as the ‘Award
Year’):

 

1.               The Compensation Committee shall calculate the January Representative
Value (as defined below) for Toreador’s common stock and for the common stock
of each member of the Competitor Set (as defined below) for January of the
Award Year and for January of the immediately following year.

 

2.               Next, the Compensation Committee shall calculate the year-over-year
change in the January Representative Value for Toreador’s common stock and
for the common stock of each member of the Competitor Set, and shall rank
Toreador and all such companies in order of stock appreciation performance
(without regard for either cash dividends paid or share repurchases) from January of
the Award Year to the following January.

 

The Employee shall be entitled to an LTI Award, based
on the above ranking of Toreador’s stock appreciation performance, as follows:

 

	
  Toreador’s ranking

  	
   

  	
  LTI Award

  
	
   

  	
   

  	
   

  
	
  Below the 50th percentile

  	
   

  	
  [0

  
	
  50th percentile

  	
   

  	
  1 X Base Salary

  
	
  75th percentile

  	
   

  	
  1.5 X Base Salary

  
	
  100th percentile

  	
   

  	
  2 X Base Salary]

  

 

In the event Toreador’s ranking is between the 50th
and 75th percentile or between the 75th and 100th percentile, the amount of the
LTI Award shall be determined by linear interpolation.  For example, if Toreador’s ranking is in the
60th percentile, the LTI Award shall be [1.2] times Base Salary.

 

The LTI Award for each Award Year shall be the grant
of a number of Toreador Common Shares equal to the above multiple of Base
Salary (for such Award Year) divided by the January Representative Value
of Toreador’s Common Shares for the January immediately following the
Award Year.  If earned, the LTI Award
shall be granted by no later than March 1st of the year immediately following the Award
Year.  The Common Shares shall be subject
to the vesting schedule and Company restrictions described in Section 4(d) of
the Agreement.

 

For purposes hereof, the following terms shall have
the meanings set forth below:

 

‘January Representative Value’ of a company’s
common stock shall mean the average closing price of such company’s common
stock on the principal U.S. stock exchange in which such company’s common stock
is listed or traded during the last fifteen (15) trading days of January, as
determined by the Compensation Committee.

 

‘Competitor Set’ shall mean the group of five to
fifteen publicly-traded companies determined by the Compensation Committee, in
consultation with the Employee. Such determination shall be made no later than March 1st
2010 and shall be applicable to that calendar year. The Competitor Set for each
year shall continue in effect for subsequent years unless and until the
Compensation Committee shall make a determination, in consultation with the
Employee, to change the companies in the group.

 

16

 

ADDENDUM TO EMPLOYMENT AGREEMENT

[SHORT-TERM INCENTIVE AWARD]

 

This Addendum to Employment Agreement is made and
entered into as of the      day of     
2009 by and between Toreador Resources Corporation (the “Company”) and Marc
Sengès (“Employee”) pursuant to Section 4(c) of the Employment
agreement effective      
2009 (the “Agreement”) pursuant to which Employee is employed as Chief
Financial Officer of the Company.  
Capitalized terms defined in the Agreement shall have the same meaning
when used herein, unless the context otherwise requires.

 

The Company and Employee hereby agree as follows:

 

1.  The
performance objectives to be achieved in 2009 as a condition for Employee’s
entitlement to a pro rata share of the target STI Award (being 50% of Base
Salary, or EUR 102,225, at target) based on a fraction calculated by his actual
employment period divided by the entire year for the fiscal year ending December 31,
2009, shall be as follows:

 

[to be completed]

 

 

IN WITNESS WHEREOF, the undersigned have executed
this Addendum as of the date first above written.

 

	
   

  	
  TOREADOR RESOURCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Title:

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MARC SENGES

  

 

17

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