Document:

Exhibit
        10.15

       

      ADDENDUM

      to

      PREFERRED
        STOCK PURCHASE AGREEMENT

      

      This
        ADDENDUM
        TO PREFERRED STOCK PURCHASE AGREEMENT (this
        “Addendum”), dated and effective as of June 1, 2005, is by and among Trulite,
        Inc., a Delaware corporation (the “Company”), Contango Contango Partners, L.P.,
        a Delaware limited partnership (“Investor”), J. Kevin Shurtleff and Andrew J.
        Nielson.

      

      W
        I T N E S S E T H:

      

      WHEREAS,
        the Company, Trulite Energy Partners, L.P., J. Kevin Shurtleff and Andrew
        J.
        Nielson entered into a Preferred Stock Purchase Agreement dated and effective
        as
        of July 26, 2004 (the “Purchase Agreement”); 

      

      WHEREAS,
        on February 2, 2005, Trulite Energy Partners, L.P. was merged with and into
        Investor;

      

      WHEREAS,
        pursuant to Section 11.5 of the Purchase Agreement, the Purchase Agreement
        may
        be amended
        with the consent of the Company, Investor and Messrs. Shurtleff and
        Nielson;

      

      WHEREAS,
        the Company, Investor and Messrs. Shurtleff and Nielson desire to enter into
        this Addendum pursuant to which Investor shall buy an additional 934,725
        shares
        of Series A Cumulative Convertible Preferred Stock, par value $0.0001 per
        share,
        of the Company (“Series A Preferred Stock”); and 

      

      WHEREAS,
        all capitalized terms not otherwise defined herein shall have the meaning
        ascribed to them in the Purchase Agreement.

      

      NOW,
        THEREFORE, the parties agree as follows:

      

      1.  Purchase
        of Series A Preferred Stock.
        

       

      (a) The
        Company has authorized the issuance and sale to Investor of 934,725 shares
        of
        Series A Preferred Stock, in exchange for aggregate cash consideration of
        $750,000.

       

      (b) On
        the
        date hereof, Investor shall purchase from the Company, and the Company shall
        issue and sell to Investor, 934,725 shares of Series A Preferred Stock in
        exchange for $750,000. 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c) On
        the
        date hereof, the Company shall deliver to Investor 934,725 shares of Series
        A
        Preferred Stock registered in the name of Investor, free and clear of any
        Lien,
        and Investor shall wire in same day funds $750,000 to such account as the
        Company may specify.

      

      2.  Acknowledgement.
        Each of
        the Company and Messrs. Shurtleff and Nielsen hereby acknowledge and agree
        that
        as of the effective date of the merger of Trulite Energy Partners, L.P. with
        and
        into Investor, Investor has been a party to the Purchase Agreement, Co-Sale
        Agreement, and Investor’s Rights Agreement as successor in interest thereto as a
        result of the merger with Trulite Energy Partners, L.P., and has enjoyed,
        and
        shall continue to enjoy, all the rights and benefits of Trulite Energy Partners,
        L.P. granted thereunder.

      

      3.  Representations
        and Warranties.
        Except
        as otherwise disclosed in writing to the Company or Investor, as the case
        may
        be, all of the representations and warranties of the Company and the Principal
        Stockholders and the Investors under the Purchase Agreement are true and
        correct
        as of the date hereof as if made on the date hereof.

      

      4.  Applicable
        Law.
        This
        Amendment shall be governed by, and shall be construed and enforced in
        accordance with, the substantive laws of the State of Texas.

      

      5.  Extent
        of Amendments and References.
        Except
        as otherwise expressly provided herein, the Purchase Agreement and the other
        agreements referred to therein are not amended, modified or affected by this
        Amendment. Except as expressly set forth herein, all of the terms, conditions,
        covenants, representations, warranties and all other provisions of the Purchase
        Agreement are herein ratified and confirmed and shall remain in full force
        and
        effect. From and after the effectiveness of this Addendum, the terms “this
        Agreement”, “hereof”, “herein”, “hereunder” and terms of like import, when used
        herein or in the Purchase Agreement shall, except where the context otherwise
        requires, refer to the Purchase Agreement, as amended by this
        Addendum.

      

      6.  Entire
        Agreement.
        This
        Addendum contains the entire agreement of the parties concerning the subject
        matter hereof. In the event of irreconcilable conflict between this Addendum
        and
        the other documents contemplated hereby, the provisions of this Addendum
        shall
        control.

      

      7.   Counterparts.
        This
        Amendment may be executed in one or more counterparts, each of which shall
        be
        deemed to be an original, but all of which shall constitute one and the same
        Addendum.

      

      [Signatures
        are on following page.]

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
        themselves or by its duly authorized officers as of the date first written
        above.

      
        	 	 	 
	 	TRULITE,
                INC.
	 	 
	 	
	 	 
	 	By:  	/s/ 
                John Sifonis
	 	
                
John
                Sifonis
	 	President
                and Chief Executive Officer

        	 	 	 
	 	 
	 	CONTANGO
                CAPITAL PARTNERS, L.P.
	 
 	 
 	 
 
	 	By:  	Contango
                Capital Partnership Management, LLC, its general partner
	 	
              
	 	
                

              
	 	
                
William
                J. Berger
	 	President and Chief Executive OfficerExhibit
        10.16

      

      

      INVESTOR’S
        RIGHTS AGREEMENT

      

      by
        and between

      

      TRULITE,
        INC.,

      

      TRULITE
        ENERGY PARTNERS, L.P.

      

      and

      

      THE
        PRINCIPAL STOCKHOLDERS NAMED HEREIN 

       

      July
        28, 2004

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      TABLE
        OF CONTENTS

      

      Page

      

        
          	
                  ARTICLE
                    I GENERAL PROVISIONS

                	 4
	
                     1.1
                    DEFINITIONS

                	 4
	
                     1.2
                    INTERPRETATION

                	 5
	
                  ARTICLE
                    II REGISTRATION; RESTRICTIONS ON TRANSFER

                	 6
	
                     2.1
                    RESTRICTIONS ON TRANSFER

                	 6
	
                     2.2
                    DEMAND REGISTRATION

                	 6
	
                     2.3
                    PIGGYBACK REGISTRATIONS

                	 8
	
                     2.4
                    FORM S-3 REGISTRATION

                	 9
	
                     2.5
                    OBLIGATIONS OF THE COMPANY

                	 9
	
                     2.6
                    INFORMATION BY HOLDER

                	 10
	
                     2.7
                    EXPENSES OF REGISTRATION

                	 11
	
                     2.8
                    INDEMNIFICATION

                	 11
	
                     2.9
                    RULE 144 REPORTING

                	 13
	
                     2.10
                    ASSIGNMENT OF REGISTRATION RIGHTS

                	 13
	
                     2.11
                    LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS

                	 13
	
                     2.12
                    MARKET STANDOFF AGREEMENT

                	 14
	
                     2.13
                    TERMINATION OF REGISTRATION RIGHTS

                	 14
	
                  ARTICLE
                    III COVENANTS OF THE COMPANY

                	 14
	
                     3.1
                    DELIVERY OF FINANCIAL STATEMENTS

                	 14
	
                     3.2
                    ANNUAL BUDGETS

                	 15
	
                     3.3
                    INSPECTION RIGHTS

                	 16
	
                     3.4
                    PREEMPTIVE RIGHTS

                	 16
	
                     3.5
                    CONFIDENTIAL INFORMATION AND INVENTIONS ASSIGNMENT
                    AGREEMENT

                	 17
	
                     3.6
                    PUBLIC DISCLOSURES

                	 17
	
                     3.7
                    AFFIRMATIVE COVENANTS

                	 17
	
                     3.8
                    NOTIFICATION OF CERTAIN MATTERS

                	 18
	
                     3.9
                    SALE OF THE COMPANY

                	 18
	
                  ARTICLE
                    IV GOVERNANCE OF THE COMPANY

                	 18
	
                     4.1
                    VOTING RIGHTS

                	 18
	
                     4.2
                    BOARD REPRESENTATION

                	 18
	
                     4.3
                    COMMITTEES

                	 19
	
                     4.4
                    ACTIONS REQUIRING APPROVAL OF THE SERIES A PREFERRED STOCK
                    HOLDERS

                	 20
	
                     4.5
                    OTHER ACTIONS

                	 21
	
                  ARTICLE
                    V TERMINATION AND ASSIGNMENT OF COVENANTS 

                	 21
	
                     5.1
                    TERMINATION

                	 21
	
                     5.2
                    ASSIGNMENT OF RIGHTS

                	 21
	
                  ARTICLE
                    VI MISCELLANEOUS

                	 21
	
                     6.1
                    SUCCESSORS AND ASSIGNS

                	 21
	
                     6.2
                    GOVERNING LAW

                	 21
	
                     6.3
                    Counterparts

                	 21
	
                     6.4
                    NOTICES

                	 21
	
                     6.5
                    ATTORNEY'S FEES

                	 22
	
                     6.6
                    ENTIRE AGREEMENT

                	 22
	
                     6.7
                    ADDITIONAL ACTIONS AND DOCUMENTS

                	 22
	
                     6.8
                    AMENDMENT AND WAIVER

                	 22
	
                     6.9
                    DELAYS OR OMISSIONS

                	 22
	
                     6.10
                    SEVERABILITY

                	 22
	
                     6.11
                    ADDITIONAL INVESTORS

                	 23

        

      

       

      LIST
        OF
        APPENDICES

      

      APPENDIX
        A Notice
        Addresses

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      INVESTOR’S
        RIGHTS AGREEMENT

      

      THIS
        INVESTOR’S RIGHTS AGREEMENT (this “Agreement”)
        is
        entered into as of the ____ day of ___________ 2004,
        by
        Trulite, Inc., a Delaware corporation (the “Company”),
        and
        Trulite Energy Partners, L.P. in its capacity as the purchaser (the “Investor”)
        of the
        Company’s Series A 8% Cumulative Convertible Preferred Stock, par value $0.0001
        per share (the “Series
        A Preferred Stock”),
        and
        Kevin Shurtleff and Andrew J. Nielson, who collectively beneficially own
        100% of
        the common stock of the Company issued and outstanding on the date hereof
        (the
“Principal
        Stockholders”).

      

      W
        I T N E
        S S E T H:

      

      WHEREAS,
        on the date hereof, Investor desires to purchase Series A Preferred Stock
        from
        the Company pursuant to a Purchase Agreement dated July ____, 2004 by and
        between the Company, Investor and the principal stockholders of the Company
        set
        forth in Appendix
        A
        (the
“Purchase
        Agreement”);
        

      

      WHEREAS,
        the Company desires to set forth certain registration, corporate governance,
        information and other rights of Investor; and

       

      WHEREAS,
        terms not otherwise defined herein shall have the meaning ascribed to them
        in
        the Purchase Agreement;

       

      NOW,
        THEREFORE, in consideration of the mutual promises and covenants set forth
        herein and in the Purchase Agreement, the parties hereto agree as
        follows:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      GENERAL
        PROVISIONS

       

      Definitions.
        Capitalized terms used in this Agreement and not defined in the text hereof
        shall have the meanings set forth below:

       

      “Aggregate
        Registrable Securities” means,
        as
        of any particular date, the sum of (i) the number of shares of Common Stock
        issued and outstanding on such date that are Registrable Securities and (ii)
        the
        number of shares of Common Stock issuable pursuant to exercisable or convertible
        securities that are Registrable Securities (but excluding those shares issuable
        pursuant to any security that cannot be exercised for or converted into Common
        Stock as of such date).

       

      “Annual
        Budget”
        shall
        mean, as of any particular date, the annual budget of the Company that has
        been
        approved in the manner described or provided for in Section 3.2(a) or (b)
        and is
        then in effect, including any amendments to any such budget approved in the
        manner specified in Section 3.2(c).

       

      “Common
        Stock”
        means
        shares of common stock issued by the Company.

       

      “Exchange
        Act”
        means
        the Securities Exchange Act of 1934, as amended.

       

      “Form
        S-3”
        means
        Form S-3 under the Securities Act as in effect on the date hereof or any
        registration form under the Securities Act subsequently adopted by the SEC
        that
        permits inclusion or incorporation of substantial information by reference
        to
        other documents filed by the Company with the SEC.

       

      “Fully-diluted
        Basis”
        means
        the computation of outstanding shares of Common Stock after giving effect
        to (i)
        the exercise of all outstanding options and warrants, (ii) the conversion
        or
        exchange of all convertible securities (including the Series A Preferred
        Stock)
        or exchangeable securities, and (iii) the issuance of all shares of
        Common
        Stock pursuant to any other subscriptions, rights, contracts, commitments
        or
        other arrangements of any character.

       

      “Holder”
        means
        any person owning or having the right to acquire Registrable Securities or
        any
        assignee thereof in accordance with Section 2.10 hereof.

       

      “Initial
        Offering”
        means
        the Company’s first firm commitment underwritten public offering of its Common
        Stock under the Securities Act. 

       

      “Investor”
        has the
        meaning set forth in the introduction of this Agreement.

       

      “Principal
        Stockholders”
        has the
        meaning set forth in the introduction of this Agreement.

       

      “Purchase
        Agreement”
        has the
        meaning set forth in the introduction of this Agreement.

       

      “Qualified
        IPO”
        means
        the Company’s closing of an Initial Offering in which the aggregate gross
        proceeds to the Company equal at least $40 million and that results in a
        market
        capitalization (calculated by the managing underwriter or underwriters for
        such
        offering) of at least $150 million.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

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

       

      “Registrable
        Securities”
        means
        (i) the Common Stock issuable or issued upon conversion of the Series A
        Preferred Stock, and (ii) any Common Stock issued as (or issuable upon the
        conversion or exercise of any warrant, right or other security that is issued
        as) a dividend or other distribution with respect to, in exchange for, or
        in
        replacement of, the Series A Preferred Stock or Common Stock referenced in
        clause (i) above, excluding in all cases, however, any Registrable Securities
        sold or transferred by a Holder in a transaction in which its rights under
        Article II are not assigned; provided,
        however,
        that
“Registrable
        Securities”
        shall
        also be deemed, solely for the limited purposes of Sections 2.3, 2.8, 2.10
        and
        2.12, to refer to those securities specified in 2.3(a).

       

      “Registration
        Expenses”
        means
        all expenses, except Selling Expenses, incurred by the Company in complying
        with
        Sections 2.2, 2.3, 2.4 or 2.5 including all registration, qualification and
        filing fees, printing expenses, escrow fees, fees and disbursements of counsel
        for the Company, blue sky fees and expenses, accounting fees (including the
        expense of any special audits incident to or required by any such registration)
        and the reasonable fees and disbursements of one counsel for all
        Holders.

       

      “Rule
        144”
        means
        Rule 144 promulgated by the SEC pursuant to the Securities Act.

       

      “SEC”
        means
        the U.S. Securities and Exchange Commission.

       

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

       

      “Selling
        Expenses”
        means
        all underwriting discounts and selling commissions applicable to the sale
        of
        Registrable Securities.

       

      “Selling
        Stockholder”
        means
        any Holder who sells Registrable Securities under any section of Article
        II or
        any Principal Stockholder who sells Common Stock under Section 2.3.

       

      Interpretation.
        

       

      Unless
        the context otherwise requires, (i) all references to Sections, Articles
        or
        Appendices are to Sections, Articles or Appendices of or to this Agreement,
        (ii)
        the term “including”
        means
        including without limitation and (iii) all references to any particular statute
        shall be deemed to refer to such statute as amended through the date hereof
        or
        to any successor statute.

       

      No
        provision of this Agreement will be interpreted in favor of or against any
        of
        the parties by reason of the extent to which any such party or its counsel
        participated in the drafting thereof or by reason of the extent to which
        any
        such provision is inconsistent with any prior draft of this
        Agreement.

       

      The
        titles and subtitles used in this Agreement are used for convenience only
        and
        are not to be considered in construing or interpreting this
        Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      All
        pronouns contained herein, and any variations thereof, shall be deemed to
        refer
        to the masculine, feminine or neutral, singular or plural, as the identities
        of
        the parties hereto may require.

       

      REGISTRATION;
        RESTRICTIONS ON TRANSFER

       

      Restrictions
        on Transfer.

       

      In
        order
        to ensure compliance with the provisions of the Securities Act, each Holder
        agrees not to make any disposition of all or any portion of the Registrable
        Securities held by it unless and until:

       

      There
        is
        in effect a registration statement under the Securities Act covering such
        proposed disposition and such disposition is made in accordance with such
        registration statement; or

       

      (a)
        The
        transferee has agreed in writing to be bound by the terms of this Section
        2.1,
        (B) such Holder shall have notified the Company that it proposes to dispose
        of
        such securities in a transaction that does not require registration of such
        securities under the Securities Act, and (C) if reasonably requested by the
        Company, such Holder shall have furnished the Company with an opinion of
        counsel, reasonably satisfactory to the Company, that such disposition will
        not
        require registration of such shares under the Securities Act. 

       

      Notwithstanding
        the provisions of paragraphs (a)(i) and (ii) above, no such registration
        statement or opinion of counsel shall be necessary for a transfer made pursuant
        to Rule 144 or by a Holder that is (A) a partnership to its partners, (B)
        a
        corporation to its stockholders or to any of such corporation’s affiliates, (C)
        a limited liability company to its members or to any of such company’s
        affiliates or (D) an individual Holder to the Holder’s family members or a trust
        for the benefit of the Holder or his family members; provided,
        however, that
        in
        each case the transferee will be subject to the terms of this Agreement to
        the
        same extent as if he were an original Holder hereunder.

       

      Each
        certificate representing Registrable Securities shall (unless otherwise
        permitted by the provisions of this Agreement or the Purchase Agreement)
        be
        stamped or otherwise imprinted with a legend substantially similar to the
        legend
        set forth in the Purchase Agreement (in addition to any legend required under
        applicable state securities laws).

       

      Demand
        Registration.

       

      Subject
        to the conditions of this Section 2.2, if the Company shall receive at any
        time
        after the earlier of (i) three years from the date hereof or (ii) 180 days
        after
        the effective date of the Initial Offering, a written request from the Holders
        of at least a majority of the Aggregate Registrable Securities (the “Initiating
        Holders”)
        that
        the Company file a registration statement under the Securities Act covering
        the
        registration of at least 20% of the Aggregate Registrable Securities (or
        any
        lesser percentage if the reasonably anticipated aggregate offering price
        to the
        public would exceed $2,000,000), then the Company shall, within 20 days of
        the
        receipt thereof, give written notice of such request to all Holders, and,
        subject to the terms, conditions and limitations of this Article II, use
        its
        best efforts to effect, as soon as practicable, the registration under the
        Securities Act of all Registrable Securities that the Holders request to
        be
        registered in a written request received by the Company within 20 days of
        the
        mailing of the Company’s notice pursuant to this Section 2.2(a).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      If
        the
        Initiating Holders intend to distribute the Registrable Securities covered
        by
        their request by means of an underwriting, they shall so advise the Company
        as a
        part of their request made pursuant to this Section 2.2 or any request pursuant
        to Section 2.4 and the Company shall include such information in the written
        notice referred to in Section 2.2(a) or Section 2.4(a), as applicable. In
        such
        event, the right of any Holder to include its Registrable Securities in such
        registration shall be conditioned upon such Holder’s participation in such
        underwriting and the inclusion of such Holder’s Registrable Securities in the
        underwriting (unless otherwise mutually agreed in writing by a majority in
        interest of the Initiating Holders and such Holder) to the extent provided
        herein. The Company and all Holders proposing to distribute their securities
        through such underwriting shall enter into an underwriting agreement in
        customary form with the underwriter or underwriters selected for such
        underwriting by a majority in interest of the Initiating Holders, but subject
        to
        the reasonable approval of the Company. The Company shall be entitled to
        include
        in any registration pursuant to this Section 2.2 or Section 2.4, for sale
        in
        accordance with the method of distribution specified by the Initiating Holders,
        Common Stock to be sold by the Company for its account, subject to the limits
        specified in paragraph (c) below.

       

      Notwithstanding
        any other provision of this Section 2.2 or Section 2.4, if the managing
        underwriter or underwriters advise the Company that marketing factors require
        a
        limitation of the number of securities underwritten (including Registrable
        Securities), then the Company shall so advise all Holders of Registrable
        Securities that would otherwise be underwritten pursuant hereto, and the
        number
        of shares that may be included in the underwriting shall be allocated to
        the
        Holders of such Registrable Securities on a pro
        rata
        basis
        based on the total number of Registrable Securities held by all such Holders
        (including the Initiating Holders); provided,
        however,
        that
        the definitive number of shares of Registrable Securities to be included
        in such
        underwriting and registration shall not be reduced unless any other securities
        proposed to be sold in the offering by the Company are first entirely excluded
        from the underwriting and registration. Any securities excluded or withdrawn
        from such underwriting shall be withdrawn from the registration.

       

      The
        Company shall not be required to effect a registration pursuant to this Section
        2.2:

       

      after
        the
        Company has effected two registrations pursuant to this Section 2.2, and
        such
        registrations have been declared or ordered effective;

       

      if
        within
        five business days of receipt of a written request from Initiating Holders
        pursuant to Section 2.2(a), the Company gives notice to the Holders of the
        Company’s intention to make its Initial Offering within 60 days;

       

      during
        the period starting with the date of the filing of, and ending on a date
        120
        days following the effective date of, a Company-initiated registration subject
        to Section 2.3 below, provided that the Company is actively employing in
        good
        faith all reasonable efforts to cause such registration statement to become
        effective; or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      if
        the
        Initiating Holders propose to dispose of Registrable Securities that may
        be
        registered on Form S-3 pursuant to Section 2.4 hereof.

       

      Piggyback
        Registrations.
        

       

      If
        the
        Company proposes to register (including for this purpose a registration effected
        by the Company for stockholders other than the Holders) any of its stock
        or
        other securities under the Securities Act in connection with the public offering
        of such securities (other than a registration relating solely to the sale
        of
        securities to participants in an employee benefit plan, a registration relating
        to a corporate reorganization or other transaction under Rule 145 of the
        Securities Act, a registration on any form that does not include substantially
        the same information as would be required to be included in a registration
        statement covering the sale of the Registrable Securities, or a registration
        in
        which the only Common Stock being registered is Common Stock issuable upon
        conversion of debt securities that are also being registered), the Company
        shall, at such time, promptly give each Holder and Principal Stockholder
        written
        notice of such registration. Subject to the terms and conditions of this
        Section
        2.3, each Holder shall be entitled to include in any registration pursuant
        to
        this Section 2.3, for sale for such Holder’s account in accordance with the
        method of disposition specified by the Company, all Registrable Securities
        owned
        by it, and each Principal Stockholder shall be entitled to include in any
        such
        registration, for sale for such stockholder’s account in accordance with such
        method of disposition, all shares of outstanding Common Stock owned by him
        (which, solely for purposes of Sections 2.3, 2.8, 2.10 and 2.12, shall be
        deemed
        to be Registrable Securities). Upon the written request of any Holder or
        Principal Stockholder given within 20 days after mailing of such notice by
        the
        Company in accordance with Section 6.4, the Company shall, subject to the
        terms,
        conditions and limitations of this Article II, use its best efforts to cause
        to
        be registered under the Securities Act all of the Registrable Securities
        that
        each such Holder or Principal Stockholder has requested to be
        registered.

       

      In
        connection with any offering involving an underwriting of Common Stock, the
        Company shall not be required under this Section 2.3 to include any of the
        securities of the Holders or Principal Stockholders in such underwriting
        unless
        they accept the terms of the underwriting as agreed upon between the Company
        and
        the underwriters selected by the Company and, if requested, enter into an
        underwriting agreement in customary form with an underwriter or underwriters
        selected by the Company, and then only in such quantity as the underwriters
        determine in their sole discretion will not jeopardize the success of the
        offering by the Company. Notwithstanding any other provision of the Agreement,
        if the managing underwriter or underwriters determine in good faith that
        marketing factors require a limitation of the number of shares to be
        underwritten, the definitive number of shares that may be included in the
        underwriting shall be allocated, first, to the Company, second, to the Holders
        on a pro
        rata
        basis
        based on the total number of Registrable Securities held by the Holders,
        third,
        to any Principal Stockholders on a pro
        rata
        basis
        and fourth, to any other stockholders of the Company (other than a Holder
        or
        Principal Stockholder) on a pro
        rata
        basis.
        If any Holder or Principal Stockholder disapproves of the terms of any such
        underwriting, such Holder or Principal Stockholder may elect to withdraw
        therefrom by written notice to the Company and the underwriter, delivered
        at
        least 10 business days prior to the effective date of the registration
        statement. Any securities excluded or withdrawn from such underwriting shall
        be
        excluded and withdrawn from the registration. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      The
        Company shall have the right to terminate or withdraw any registration initiated
        by it under this Section 2.3 prior to the effectiveness of such registration
        whether or not any Holder or Principal Stockholder has elected to include
        securities in such registration. The expenses of such withdrawn registration
        shall be borne by the Company in accordance with Section 2.7
        hereof.

       

      Form
        S-3 Registration.
        In
        case
        the Company shall receive from one or more Holders of Registrable Securities
        a
        written request or requests that the Company effect a registration on Form
        S-3
        with respect to all or a part of the Registrable Securities owned by such
        Holder
        or Holders, the Company shall:

       

      promptly
        give written notice of the proposed registration to all other Holders;
        and

       

      use
        its
        best efforts to effect, as soon as practicable, such registration as may
        be so
        requested and as would permit or facilitate the sale and distribution of
        all or
        such portion of such Holders’ Registrable Securities as are specified in such
        request, together with all or such portion of the Registrable Securities
        of any
        other Holders joining in such request as are specified in a written request
        given within 20 days after receipt of such written notice from the Company;
        provided,
        however,
        that
        the Company shall not be obligated to effect any such registration or
        qualification pursuant to this Section 2.4:

       

      if
        Form
        S-3 is not available for such offering by the Holder or Holders;

       

      if
        the
        anticipated aggregate offering price to the public (net of any underwriters’
        discounts or commissions) is less than $1,000,000; 

       

      during
        the period starting with the date of the filing of, and ending on a date
        120
        days following the effective date of, a Company-initiated registration subject
        to Section 2.3 above, provided that the Company is actively employing in
        good
        faith all reasonable efforts to cause such registration statement to become
        effective; or

       

      if
        the
        Company has, within the 12-month period preceding the date of such request,
        already effected one registration on Form S-3 for the Holders pursuant to
        this
        Section 2.4.

       

      Subject
        to the foregoing, the Company shall file a registration statement on Form
        S-3
        covering the Registrable Securities so requested to be registered as soon
        as
        practicable after receipt of the request or requests of the Holders.
        Registrations effected pursuant to this Section 2.4 shall not be counted
        as
        requests for registration effected pursuant to Section 2.2 or 2.3,
        respectively.

       

      Obligations
        of the Company.
        Whenever
        required under this Article II to effect any registration, the Company shall,
        as
        expeditiously as reasonably possible:

       

      prepare
        and file with the SEC a registration statement and use its best efforts to
        cause
        such registration statement to become effective, and keep such registration
        statement effective for a period of 120 days or, if earlier, until the
        distribution contemplated in such registration statement has been
        completed;

       

      prepare
        and file with the SEC such amendments and supplements to such registration
        statement and the prospectus used in connection with such registration statement
        as may be necessary to comply with the provisions of the Securities Act with
        respect to the disposition of all securities covered by such registration
        statement;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      furnish
        to the Selling Stockholders such numbers of copies of a prospectus, including
        a
        preliminary prospectus, in conformity with the requirements of the Securities
        Act, and such other documents as they may reasonably request in order to
        facilitate the disposition of securities owned by them;

       

      use
        its
        best efforts to register and qualify the securities covered by such registration
        statement under such other securities or Blue Sky laws of such jurisdictions
        as
        shall be reasonably requested by the Selling Stockholders, provided that
        the
        Company shall not be required in connection therewith or as a condition thereto
        to qualify to do business or to file a general consent to service of process
        in
        any such states or jurisdictions;

       

      before
        filing the registration statement or any amendments or supplements thereto,
        furnish the Selling Stockholders with copies of all documents proposed to
        be
        filed, and afford counsel to the Selling Stockholders a reasonable opportunity
        to review and comment upon such documents;

       

      in
        the
        event of any underwritten public offering, enter into and perform its
        obligations under an underwriting agreement, in usual and customary form
        (including representations, warranties and indemnitees of the Company for
        the
        benefit of the underwriters and the Selling Stockholders), with the underwriter
        or underwriters of such offering;

       

      cause
        the
        securities covered by such registration statement to be listed on each
        securities exchange or over-the-counter market on which the Company’s securities
        of the same class and series are then listed, or, if no such securities are
        then
        listed, the securities exchange or over-the-counter market as the Company
        and
        the Holders of a majority of the Registrable Securities may mutually
        agree;

       

      notify
        each Selling Stockholder covered by such registration statement at any time
        when
        a prospectus relating thereto is required to be delivered under the Securities
        Act of the happening of any event as a result of which the prospectus included
        in such registration statement, as then in effect, includes an untrue statement
        of a material fact or omits to state a material fact required to be stated
        therein or necessary to make the statements therein not misleading in the
        light
        of the circumstances then existing; and

       

      use
        its
        best efforts to furnish to the underwriters, on the date that securities
        are
        delivered to the underwriters for sale, if such securities are being sold
        through underwriters, (i) an opinion, dated as of such date, of counsel
        representing the Company for the purposes of such registration, in form and
        substance as is customarily given to underwriters in an underwritten public
        offering, and (ii) a letter, dated as of such date, from the independent
        certified public accountants of the Company, in form and substance as is
        customarily given by independent certified public accountants to underwriters
        in
        an underwritten public offering.

       

      Information
        by Holder.
        Any
        Selling Stockholder holding securities included in any registration effected
        under this Article II shall promptly furnish to the Company such information
        regarding itself, the securities to be sold by it, and the intended method
        of
        disposition of such securities as shall be required to effect the registration
        of such stockholder’s securities.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Expenses
        of Registration.
        All
        Registration Expenses incurred in connection with any and all with registrations
        pursuant to Sections 2.2, 2.3, and 2.4 shall be borne by the Company. Unless
        otherwise stated, all Selling Expenses relating to securities registered
        on
        behalf of Selling Stockholders shall be borne by such stockholders pro
        rata
        on the
        basis of the number of securities so registered. The Company shall not, however,
        be required to pay for expenses of any registration proceeding begun pursuant
        to
        Section 2.2, the request of which has been subsequently withdrawn by the
        Initiating Holders, unless the withdrawal is based upon material adverse
        developments concerning the Company or material adverse changes in general
        economic market conditions, in which case such registration proceeding shall
        not
        be counted as a demand registration under Section 2.2.

       

      Indemnification.
        In the
        event any Registrable Securities are included in a registration statement
        under
        this Article II:

       

      The
        Company will indemnify and hold harmless each Selling Stockholder, the officers,
        directors, managers, stockholders, partners and members of each Selling
        Stockholder (as applicable), legal counsel and accountants for each Selling
        Stockholder, any underwriter (as defined in the Securities Act) for such
        stockholder and each person, if any, who controls any of the foregoing within
        the meaning of the Securities Act or the Exchange Act, against any losses,
        claims, damages or liabilities (including reasonable attorneys’ fees), joint or
        several, to which they may become subject under the Securities Act, the Exchange
        Act or any state securities laws, insofar as such losses, claims, damages,
        or
        liabilities, (or actions in respect thereof) arise out of or are based upon
        any
        of the following statements, omissions or violations (collectively, a
“Violation”):
        (i)
        any untrue statement or alleged untrue statement of a material fact contained
        or
        deemed to be contained in such registration statement, including any preliminary
        prospectus or final prospectus contained therein or any amendments or
        supplements thereto, (ii) the omission or alleged omission to state therein
        a
        material fact required to be stated therein, or necessary to make the statements
        therein not misleading, or (iii) any violation or alleged violation by the
        Company of the Securities Act, the Exchange Act, any state securities laws
        or
        any rule or regulation promulgated under the Securities Act, the Exchange
        Act or
        any state securities laws; and the Company will reimburse any person entitled
        to
        be indemnified pursuant to this Section 2.8(a) for any legal or other expenses
        incurred by such person, as incurred, in connection with investigating or
        defending any such loss, claim, damage, liability or action; provided,
        however,
        that
        the Company’s obligations under this Section 2.8(a) shall not apply to (A) any
        person who participates as an underwriter in the offering or sale of Registrable
        Securities or any other person if any, who controls such underwriter within
        the
        meaning of the Securities Act, with respect to any prospectus, as amended
        or
        supplemented as the case may be, to the extent that any such loss, claim,
        damage
        or liability of such underwriter or controlling person results from the fact
        that such underwriter sold Registrable Securities to a person to whom there
        was
        not sent or given, at or prior to the written confirmation of such sale,
        a copy
        of the final prospectus (including any documents incorporated by reference
        therein), if the Company has previously furnished copies thereof to such
        underwriter and such final prospectus, as then amended or supplemented, is
        free
        of any statements or omissions constituting a Violation, or (B) any loss,
        claim,
        damage, liability or action to the extent that it arises out of or is based
        upon
        a Violation that occurs in reliance upon and in conformity with written
        information furnished expressly for use in connection with such registration
        by
        any person entitled to be indemnified pursuant to this Section
        2.8(a).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Each
        Selling Stockholder will, if Registrable Securities held by such stockholder
        are
        included in the securities as to which such registration is being effected,
        indemnify and hold harmless the Company, each of its directors and officers,
        legal counsel and accountants for the Company, any underwriter, any other
        stockholder selling securities in such registration statement and any
        controlling person of any of the foregoing within the meaning of the Securities
        Act or the Exchange Act, against any losses, claims, damages or liabilities
        (including reasonable attorneys’ fees), joint or several, to which they may
        become subject under the Securities Act, the Exchange Act or any state
        securities laws, insofar as such losses, claims, damages or liabilities (or
        actions in respect thereto) arise out of or are based upon any Violation,
        in
        each case to the extent (and only to the extent) that such Violation occurs
        in
        reliance upon and in conformity with written information furnished by such
        stockholder expressly for use in connection with such registration; and each
        such stockholder will reimburse any person entitled to be indemnified pursuant
        to this Section 2.8(b) for any legal or other expenses incurred by such person,
        as incurred, in connection with investigating or defending any such loss,
        claim,
        damage, liability or action; provided,
        however,
        the
        liability of each Selling Stockholder under this Section 2.8(b) shall be
        limited
        to an amount equal to the proceeds of the offering received by such stockholder,
        unless such liability arises out of or is based on a willful omission or
        misconduct by such stockholder.

       

      Each
        party entitled to indemnification under this Section 2.8 (the “Indemnified
        Party”)
        shall
        give notice to the party required to provide indemnification (the “Indemnifying
        Party”)
        promptly after such Indemnified Party has actual knowledge of any claim as
        to
        which indemnity may be sought, and shall permit the Indemnifying Party to
        assume
        the defense of any such claim or any litigation resulting therefrom, and,
        to the
        extent an Indemnifying Party so desires, jointly with any other Indemnifying
        Party similarly noticed, to assume the defense thereof with counsel mutually
        satisfactory to the parties; provided,
        however,
        that an
        Indemnified Party (together with all other Indemnified Parties that may be
        represented without conflict by one counsel) shall have the right to retain
        one
        separate counsel, with the fees and expenses to be paid by the Indemnifying
        Party, if representation of such Indemnified Party by the counsel retained
        by
        the Indemnifying Party would be inappropriate due to actual or potential
        differing interests between such Indemnified Party and any other party or
        parties represented by such counsel in such proceeding. The failure of any
        Indemnified Party to give notice as provided herein shall not relieve the
        Indemnifying Party of its obligations under this Section 2.8 unless the failure
        to give such notice is materially prejudicial to an Indemnifying Party’s ability
        to defend such action. No Indemnifying Party, in the defense of any such
        claim
        or litigation, shall, except upon the consent of each Indemnified Party,
        consent
        to entry of any judgment or enter into any settlement that does not include
        as
        an unconditional term thereof the giving by the claimant or plaintiff to
        such
        Indemnified Party of a full and unconditional release from all liability
        in
        respect to such claim or litigation.

       

      If
        the
        indemnification provided for in this Section 2.8 is held by a court of competent
        jurisdiction to be unavailable to an Indemnified Party with respect to any
        loss,
        liability, claim, damage or expense referred to herein, then the Indemnifying
        Party, in lieu of indemnifying such Indemnified Party hereunder, shall to
        the
        extent permitted by applicable law contribute to the amount paid or payable
        by
        such Indemnified Party as a result of such loss, liability, claim, damage
        or
        expense in such proportion as is appropriate to reflect the relative fault
        of
        the Indemnifying Party on the one hand and of the Indemnified Party on the
        other
        in connection with the statements or omissions that resulted in such loss,
        liability, claim, damage or expense, as well as any other relevant equitable
        considerations. The relative fault of the Indemnifying Party and of the
        Indemnified Party shall be determined by reference to, among other things,
        whether the untrue or alleged untrue statement of a material fact or the
        omission to state a material fact relates to information supplied by the
        Indemnifying Party or by the Indemnified Party and the parties’ relative intent,
        knowledge, access to information, and opportunity to correct or prevent such
        statement, omission or other violation; provided,
        however,
        that in
        no event shall any contribution by a Selling Stockholder hereunder exceed
        the
        net proceeds from the offering received by such stockholder.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
        obligations of the Company and Selling Stockholders under this Section 2.8
        shall
        survive the completion of any offering of Registrable Securities in a
        registration statement under this Article II, and the termination of this
        Agreement. 

       

      Rule
        144 Reporting.
        The
        Company agrees that it shall, at all times after the effective date of the
        Initial Offering:

       

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

       

      file
        with
        the SEC in a timely manner all reports and other documents required of the
        Company under the Securities Act and the Exchange Act; and

       

      furnish
        to any Holder, so long as the Holder owns any Registrable Securities, forthwith
        upon request (i) a written statement by the Company that it has complied
        with
        the reporting requirements of Rule 144, the Securities Act and the Exchange
        Act
        (at any time after it has become subject to such reporting requirements),
        or
        that it qualifies as a registrant whose securities may be resold pursuant
        to
        Form S-3 (at any time after it so qualifies), and (ii) such other information
        as
        may be reasonably requested in availing any Holder of any rule or regulation
        of
        the SEC that permits the selling of any such securities without registration
        or
        pursuant to such form.

       

      Assignment
        of Registration Rights.
        Each
        Holder or Principal Stockholder may assign its rights to cause the Company
        to
        register Registrable Securities pursuant to this Article II to a transferee
        or
        assignee in connection with any transfer of Series A Preferred Stock or
        Registrable Securities, provided that (i) such transfer is made in accordance
        with any applicable restrictions on the transfer of such securities set forth
        in
        Section 2.1 or in any agreement or instrument setting forth any other transfer
        restrictions applicable to such securities, (ii) such transfer is made to
        another Holder, to an affiliate of the transferor or to any other transferee
        or
        assignee who holds, immediately after such assignment or transfer, at least
        20%
        of the Series A Preferred Stock or Registrable Securities held by the transferor
        immediately prior to such assignment or transfer, (iii) such transfer is
        of at
        least 100,000 shares of Series A Preferred Stock or Registrable Securities,
        (iv)
        such transferee agrees in writing to be bound by and subject to the terms
        and
        conditions of this Agreement and (v) such writing, along with the transferee’s
        name and address, is furnished to the Company.

       

      Limitations
        on Subsequent Registration Rights.
        The
        Company shall not enter into any agreement granting any holder or prospective
        holder of any securities of the Company registration rights with respect
        to such
        securities that are superior to those of the Holders granted hereunder unless
        such rights are approved by Holders holding not less than a majority of the
        Aggregate Registrable Securities hereunder, which approval shall not be
        unreasonably withheld or delayed.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Market
        Standoff Agreement.
        Each
        Holder and Principal Stockholder agrees not to sell or otherwise transfer
        or
        dispose of any shares of capital stock of the Company beneficially owned
        by such
        Holder or Principal Stockholder for the period specified by the representative
        of the underwriters of any underwritten public offering of shares of capital
        stock of the Company, provided that (i) such period does not exceed the 180-day
        period following the effective date of the registration statement of the
        Company
        filed under the Securities Act, (ii) this Section 2.12 shall only apply to
        the
        first registration statement of the Company that includes securities to be
        sold
        on its behalf to the public in any underwritten offering; and (iii) all officers
        and directors of the Company and holders of at least one percent of the
        Company’s voting securities are bound by and have entered into similar
        agreements.

       

      The
        obligations described in this Section 2.12 shall not apply to a registration
        relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
        forms that may be promulgated in the future, or a registration relating solely
        to a transaction on Form S-4 or similar forms that may be promulgated in
        the
        future. The Company may impose stop-transfer instructions with respect to
        the
        shares of capital stock of the Company subject to the foregoing restriction
        until the end of such 180-day period.

       

      Termination
        of Registration Rights.
        No
        Holder or Principal Stockholder shall be entitled to exercise any right provided
        for in this Article II after five years following the consummation of the
        Initial Offering or, as to any Holder, such earlier time at which all
        Registrable Securities held by such Holder (and any affiliate of the Holder
        with
        whom such Holder must aggregate its sales under Rule 144) can be sold in
        any
        three-month period without registration in compliance with Rule 144 of the
        Securities Act. 

       

      COVENANTS
        OF THE COMPANY

       

      Delivery
        of Financial Statements.
        The
        Company so long as Investor owns at least 100,000 shares of Preferred Stock,
        shall deliver to Investor:

       

      as
        soon
        as practicable after the end of each fiscal year of the Company, but in no
        event
        more than 120 days thereafter, a balance sheet and the related statement
        of
        profit and loss and statement of cash flows of the Company as of and for
        such
        fiscal year, such annual financial reports to be prepared in accordance with
        generally accepted accounting principles (“GAAP”),
        audited and certified by independent public accountants selected by the
        Company’s Board of Directors (“Board
        of Directors”),
        and
        accompanied by a copy of such accountants’ annual management letter to the Board
        of Directors;

       

      as
        soon
        as practicable after the end of each of the four quarters of each fiscal
        year of
        the Company, but in no event more than 30 days thereafter, an unaudited balance
        sheet and the related statement of profit and loss and statement of cash
        flows
        for and as of the end of such fiscal quarter, together with a narrative report
        prepared by the Company’s Chief Financial Officer that sets forth (i) a
        discussion of significant or material events and developments regarding the
        Company that occurred during the quarter just ended, (ii) a status report
        on
        operations, material contracts, contract negotiations and sales initiatives,
        (iii) a discussion of the financial information set forth in the financial
        statements, (iv) a discussion of the impact of such events, developments
        and
        financial results on the Company, its projections and other business plans
        and
        goals, (v) a discussion of any other matters that may reasonably be anticipated
        to have a material effect on the Company’s business, operations, plans or
        prospects, and (vi) such other matters as may, from time to time, be required
        by
        the Board of Directors, all of which shall be in a form reasonably satisfactory
        to Investor;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      within
        30
        days of the end of each month, an unaudited statement of profit and loss
        for
        such month, in reasonable detail;

       

      with
        respect to the financial statements called for in subsections (b) and (c)
        of
        this Section 3.1, an instrument executed by the Chief Financial Officer of
        the
        Company certifying that (i) such financials were prepared in accordance with
        GAAP consistently applied with prior practice for earlier periods (with the
        exception of footnotes that may be required by GAAP) and fairly present the
        financial condition of the Company and its results of operation for the period
        specified, subject to normal year-end audit adjustments, (ii) since the date
        of
        the last balance sheet furnished to Investor, there has been no event,
        occurrence or condition that has resulted in, or with the lapse of time,
        will
        result in, a material adverse effect on the condition (financial or otherwise),
        assets, operations, earnings, prospects, business (as such business is presently
        conducted and as it is proposed to be conducted) or properties of the Company
        (a
“Material
        Adverse Effect”)
        and
        (iii) the Company is not in default under any of its debt agreements or
        instruments or under any other material agreements (which certification,
        in the
        event of any such Material Adverse Effect or any such default, shall specify
        the
        nature and period of existence thereof and what actions the Company has taken
        and proposes to take with respect thereto); 

       

      promptly
        upon receipt thereof, any additional reports, management letters or other
        detailed information concerning significant aspects of the Company’s operations
        or financial affairs given to the Company by its independent public accountants
        (and not otherwise contained in other materials provided
        hereunder);

       

      promptly
        (but in any event within five business days) after the discovery or receipt
        of
        notice of any default under any debt agreement or instrument or under any
        other
        material agreement to which the Company is a party or is bound, or of any
        event,
        occurrence or condition that has resulted in, or with the lapse of time,
        will
        result in a Material Adverse Effect, an instrument executed by an officer
        of the
        Company specifying the nature and period of existence thereof and what actions
        the Company have taken and propose to take with respect thereto;
        and

       

      such
        other information relating to the financial condition, business, operations,
        earnings, prospects or corporate affairs of the Company as Investor may from
        time to time reasonably request, including budget reconciliations and tax
        returns.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Annual
        Budgets.
        The
        Company’s Annual Budget for the balance of 2004 shall be the budget approved by
        the Board of Directors and Investor no later than September 1,
        2004.

       

      For
        2005
        and each year thereafter, the Chief Financial Officer of the Company shall
        prepare and submit to the Board of Directors, at least 30 days prior to the
        end
        of each preceding year, (i) a detailed operating and capital expenditure
        budget
        for the applicable year, including projections, in reasonable detail, of
        the
        Company’s expected cash receipts, expenditures, reserves, distributions,
        borrowings, payments of principal and interest on borrowings, acquisitions
        of
        capital assets, and estimated consolidated balance sheets, consolidated
        statements of income and consolidated statements of cash flow on a monthly
        and
        quarterly basis and (ii) a narrative explanation, prepared by management
        of the
        Company, of the items contained therein, all in form and substance reasonably
        acceptable to the Board of Directors. Each such proposed annual budget must
        be
        submitted to and approved by (i) the Board of Directors and (ii) the holders
        of
        at least a majority of the outstanding shares of Series A Preferred Stock
        in
        accordance with Section 4.4, whereupon it shall become the Annual Budget
        for
        such period.

       

      The
        Company shall be operated in accordance with each Annual Budget, as such
        Annual
        Budget may be amended from time to time by (i) the Board of Directors and
        (ii)
        the holders of at least a majority of the outstanding shares of Series A
        Preferred Stock in accordance with Section 4.4.

       

      Inspection
        Rights.
        The
        Company shall permit Investor to visit and inspect the Company’s properties, to
        examine its books of account and records and to discuss the Company’s financial
        condition, business, operations, earnings, prospects or corporate affairs
        with
        its officers, all at such reasonable times during normal working hours as
        may be
        requested by Investor in order to monitor its investment in the Company and
        for
        all other legitimate purposes.

       

      Preemptive
        Rights.
        Each
        time the Company proposes to offer any shares of, or securities convertible
        into
        or exchangeable or exercisable for any shares of, any class of its capital
        stock
        (“Shares”), the Company shall first make an offering of the Shares to Investor
        in accordance with the following provisions:

       

      The
        Company shall deliver a notice in accordance with Section 6.4 (“Notice”) to
        Investor stating (i) its bona fide intention to offer such Shares, (ii) the
        number of Shares to be offered, and (iii) the price and terms upon which
        it
        proposes to offer the Shares.

       

      By
        written notification received by the Company, within 15 calendar days after
        receipt of the Notice, Investor may elect to purchase or obtain, at the price
        and on the terms specified in the Notice, up to that portion of Shares that
        equals the proportion that the number of shares of Common Stock issued and
        held,
        or issuable upon conversion of all securities convertible into or exchangeable
        or exercisable for Common Stock (including the Series A Preferred Stock)
        then
        held by Investor, bears to the total number of Shares of Common Stock of
        the
        Company then outstanding (assuming full conversion and exercise of all
        convertible, exchangeable and exercisable securities).

       

      Following
        application of the foregoing procedures, the Company may offer the remaining
        unsubscribed portion of such Shares to any person or persons at a price not
        less
        than, and upon terms no more favorable to the offeree than, those specified
        in
        the Notice. If the Company does not consummate the sale of the Shares within
        120
        days after completion of the offering process described in paragraphs (a)
        and
        (b), the rights provided hereunder shall be deemed to be revived and such
        Shares
        shall not be offered unless first reoffered to the Investors in accordance
        herewith.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
        preemptive rights in this Section 3.5 shall not be applicable to (i) the
        issuance of securities pursuant to the Purchase Agreement, (ii) the issuance
        of
        securities pursuant to a Qualified IPO, (iii) the issuance of securities
        pursuant to the conversion, exchange or exercise of convertible, exchangeable
        or
        exercisable securities (including the Series A Preferred Stock) including
        by
        reason of any anti-dilution adjustment, (iv) the issuance of securities in
        connection with a bona fide acquisition by the Company of another company
        or
        business, whether by merger, consolidation, sale of assets, sale or exchange
        of
        stock or otherwise, or (v) any issuance of securities to vendors, suppliers,
        customers, lessors, licensors, licensees or other strategic business partners
        if
        the holders of at least a majority of the principal amount of the outstanding
        Series A Preferred Stock agree to waive preemptive rights with respect to
        such
        issuance under subparagraph (v).

       

      Investor
        shall be entitled to apportion the preemptive right hereby granted it among
        itself and its subsidiaries and affiliates in such proportions as it deems
        appropriate.

       

      Confidential
        Information and Inventions Assignment Agreement.
        The
        Company shall require each person or entity that the Company employs or retains,
        as an employee, independent contractor or consultant, to execute and deliver
        a
        Confidential Information and Inventions Assignment Agreement in substantially
        the form attached to the Purchase Agreement, as such form may be revised,
        updated, modified, superceded or replaced from time to time on advice of
        the
        Company’s counsel and as subsequently approved by the Board of
        Directors.

       

      Public
        Disclosures.
        The
        Company shall not, nor shall it permit any of its affiliates to, disclose
        Investor’s name or identity as an investor in the Company in any press release
        or other public announcement or in any document or material filed with any
        governmental entity, without the prior written consent of Investor, unless
        such
        disclosure is required by applicable law or governmental regulations or by
        order
        of a court of competent jurisdiction, in which case prior to making such
        disclosure the Company shall give to Investor a copy of such proposed disclosure
        and shall permit Investor to review, comment upon and revise the form and
        substance of such disclosure. In all such press releases or other public
        announcements, Investor shall be described as the initial institutional investor
        in the Company.

       

      Affirmative
        Covenants.
        So long
        as any Series A Preferred Stock remain outstanding, the Company
        shall:

       

      apply
        for
        and continue in force with good and responsible insurance companies adequate
        insurance covering risks of such types and in such amounts as are customary
        for
        corporations of similar size engaged in similar lines of business;

       

      maintain
        proper books of record and account that fairly present its financial condition
        and results of operations and make provisions on its financial statements
        for
        all such proper reserves as in each case are required in accordance with
        GAAP;
        and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      if
        the
        Company issues any security or enters into an agreement with any holder or
        prospective holder of any security issued or to be issued by the Company
        that
        would grant rights superior to those held by Investor, the Company shall
        grant
        rights to Investor pari
        passu
        with
        such rights.

       

      Notification
        of Certain Matters.
        The
        Company shall promptly notify Investor of (i) any suits, assessments, or
        litigation instituted against the Company claiming damages or assessing
        liability in excess of $100,000, (ii) any tax or other governmental audits
        or
        investigations instituted against the Company, (iii) the actual or threatened
        termination of any relationship with a material customer, lessor, lessee,
        vendor, supplier, licensor, licensee, sales agent or other strategic business
        partner, (iv) any notice received by the Company or its subsidiaries from
        any
        court or governmental authority that the Company or its subsidiaries are
        or may
        be in violation of any statute, rule, regulation, mandate, decree, judgment,
        decision, order or ordinance and (v) the actual or threatened lapse, reduction
        or termination of any insurance policy.

      

      Sale
        of the Company.
        If the
        Board of Directors and the holders of at least a majority of the outstanding
        shares of Series A Preferred Stock approve any sale of the Company to a third
        party, the Principal Stockholders hereby agree to participate in such sale
        on
        the terms approved by the Board and holders of Series A Preferred Stock,
        provided, however, that each of such Principal Stockholders receives an amount
        of consideration in such transaction per share of Common Stock held by such
        Principal Stockholder equal to the per share purchase price originally paid
        by
        him therefore.

       

      GOVERNANCE
        OF THE COMPANY

       

      Voting
        Rights.
        With
        respect to all matters submitted to a vote or consent of the Company’s
        stockholders, a holder of Series A Preferred Stock will have (i) the right
        to be
        notified of and to participate in, all stockholder meetings, and to receive
        copies of any consents or other written materials soliciting stockholder
        consents or approvals, all to the same extent as required to be delivered
        to
        holders of Common Stock, and (ii) the right to that number of votes equal
        to the
        number of shares of Common Stock issuable upon conversion of its Series A
        Preferred Stock at the time of such vote.

       

      Board
        Representation. 

       

      Subject
        to the terms and conditions of this Section 4.2, the Board of Directors of
        the
        Company shall consist of five directors. 

       

      So
        long
        as Investor or its affiliates hold a majority of the outstanding shares of
        Series A Preferred Stock, Investor shall be entitled to nominate, elect,
        remove
        and replace three members of the Company’s Board of Directors (with all such
        directors nominated and elected by Investor being hereinafter referred to
        as the
“Series
        A Directors”);
        provided, however, that if Investor or its affiliates fail to purchase either
        of
        (i) the Second Tranche Shares despite the occurrence of the Second Tranche
        Trigger Event and the fulfillment of the conditions of Article VIII of the
        Purchase Agreement, or (ii) the Third Tranche Shares despite the occurrence
        of
        the Third Tranche Trigger Event and the fulfillment of the conditions of
        Article
        VIII of the Purchase Agreement, within 30 days of any such obligation of
        Investor to purchase such Purchased Shares, the number of Series A Directors
        shall be reduced by one for each such Tranche that is not so
        purchased.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      Investor
        and Kevin Shurtleff shall be entitled to nominate, elect, remove and replace
        one
        member of the Board of Directors, and shall elect such director as soon as
        practicable following the First Tranche Closing.

       

      The
        holders of the outstanding Common Stock shall be entitled to nominate, elect,
        remove and replace the remaining member(s) of the Board of Directors. Common
        Stock issuable upon conversion of the Series A Preferred Stock is not deemed
        to
        be outstanding Common Stock for purposes of this paragraph unless and until
        actually issued.

       

      All
        directors shall be elected to serve a one-year term and until their successors
        have been duly elected and qualified. 

       

      Any
        director may be removed, with or without cause, by the holder or holders
        of
        equity securities who nominated such director, as applicable. In the event
        a
        director position becomes vacant, the holder or holders of securities who
        nominated the director whose position has become vacant shall have the sole
        right to fill such vacancy. 

       

      Except
        as
        set forth in Section 4.6, at all meetings of the Board of Directors, the
        presence of at least two-thirds of the total number of directors shall
        constitute a quorum for the transaction of business and the act of a majority
        of
        the directors present at any meeting at which there is a quorum shall constitute
        the act of the Board of Directors.

       

      Each
        Principal Stockholder and Investor hereby agree to vote their shares of Common
        Stock (or Series A Preferred Stock, as the case may be) to effect the terms
        and
        conditions of this Article IV and irrevocably instructs the Company to disregard
        any vote, consent, proxy, or voting instruction given to the Company by such
        stockholder or Investor that relates to the nomination or election of directors
        and is not in accordance with the provisions of this Agreement. Each Principal
        Stockholder and Investor shall hold the Company harmless from any liability
        as a
        result of the Company’s disregarding of any vote such stockholder or investor
        attempts to cast in contravention of this Agreement.

       

      The
        Company shall provide customary director and officer liability insurance
        coverage for all directors in such amounts, and underwritten by such insurance
        company, as shall be approved by the Board of Directors and the Series A
        Directors.

       

      Committees.
        As soon
        as practicable after the date of this Agreement, the Board of Directors of
        the
        Company shall form a Compensation Committee that shall be charged with the
        task
        of making recommendations to the Board of Directors regarding compensation
        of
        the Company’s officers and key personnel and having all other powers and
        responsibilities specified in the Company’s Bylaws. The Compensation Committee
        shall be a standing committee of the Board of Directors and shall meet at
        least
        twice annually. At least one Series A Director and Kevin Shurtleff shall
        be
        members of the Compensation Committee. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Actions
        Requiring Approval of the Series A Preferred Stock Holders. In
        addition to any other authorizations of the stockholders as may be required
        by
        law or any authorizations of the Board of Directors as may be required by
        law or
        this Article IV, so long as at least 100,000 shares of Series A Preferred
        Stock
        remain outstanding, the Company shall not have the power to take any action
        set
        forth below unless such action has been approved by the holders of at least
        a
        majority of the outstanding shares of Series A Preferrred Stock, voting together
        as a separate class: 

       

      any
        amendment of the Company’s Certificate of Incorporation or Bylaws;

       

      any
        transaction in which the Company or any of its subsidiaries merges, consolidates
        or exchanges shares with any other entity;

       

      any
        acquisition by the Company of the capital stock or substantially all of the
        assets of any other entity;

       

      any
        sale,
        exchange, transfer or other disposition of all or a substantial portion of
        the
        assets of the Company or any of its subsidiaries;

       

      the
        dissolution of the Company or the adoption of a plan of liquidation of the
        Company;

       

      any
        action by which the Company commences, consents to or acquiesces in the filing
        of bankruptcy proceedings, the appointment of a receiver or similar official,
        or
        a general assignment for the benefit of creditors;

       

      the
        issuance by the Company or any of its subsidiaries of any capital stock or
        any
        options, rights or other instruments providing for the issuance of capital
        stock
        or securities convertible into or exchangeable for capital stock, that have
        rights that are senior to or pari-passu
        with the
        Series A Preferred Stock in any respect;

       

      any
        transaction or series of transactions, in which in excess of 10% of the
        Company’s total voting power on a Fully Diluted Basis is transferred to a third
        party; 

       

      the
        payment or declaration of dividends or other distributions in respect of
        any
        securities of the Company;

       

      enlarging
        or modifying the purpose or scope of the Company’s business; 

       

      taking
        any action that causes the Company or any of its subsidiaries to (i) incur
        or
        become liable for any indebtedness to be owed to a stockholder or any affiliate
        thereof, (ii) incur or become liable for any indebtedness to be owed to any
        other person or entity in excess of an aggregate of $75,000, except for
        indebtedness expressly contemplated in an Annual Budget, or (iii) guarantee
        any
        indebtedness or other obligations of any persons or entities;

       

      the
        formation or acquisition of a subsidiary, the entering into of a joint venture
        or partnership with any other person or entity, or the investment in the
        equity
        of any other entity;

       

      the
        grant
        of any exclusion right or license in respect of any technology developed
        or
        owned by the Company;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      the
        approval or amendment of any Annual Budget as described in Section 3.2;
        or

       

      any
        other
        matter that requires the consent or approval of the holders of Series A
        Preferred Stock under any other express provision of this
        Agreement.

       

      Other
        Actions.
        The
        Company, Investor and the Principal Stockholders shall cast all votes and
        shall
        take, or cause to be taken, all actions within their respective power and
        authority as may be appropriate to ensure that the organizational documents
        of
        the Company do not conflict with the terms and conditions of this Agreement
        and
        to elect, remove or replace directors in the manner contemplated by Section
        4.2.

       

      TERMINATION
        AND ASSIGNMENT OF COVENANTS

       

      Termination.
        The
        covenants set forth in Articles III and IV shall terminate immediately prior
        to
        the earlier of the date on which (i) a Qualifying IPO is consummated, (ii)
        the
        Company commences filing reports with the SEC pursuant to Section 13 or 15(d)
        of
        the Exchange Act or (iii) another company or entity consummates an acquisition
        of the Company by consolidation, merger or other business combination in
        which
        the holders of the Company’s outstanding securities immediately prior to such
        transaction own, immediately after such transaction, securities representing
        less than 50% of the voting power of the corporation or other entity surviving
        such transaction; provided,
        however,
        that
        notwithstanding the foregoing, Sections 4.2(b), (c), (d), (g) and (h) and
        Section 4.5 shall survive any such termination pursuant to item (i) or (ii)
        above.

       

      Assignment
        of Rights.
        The
        rights granted under Articles III or IV may be assigned by Investor to any
        other
        person or entity who (i) is another Holder, an affiliate of the Investor
        or any
        other party who acquires from the Investor Series A Preferred Stock or
        Registrable Securities constituting or entitling the assignee to receive
        at
        least 25% of the Registrable Securities held by Investor immediately prior
        to
        the assignment and (ii) is not a competitor, or an affiliate of a competitor,
        of
        the Company. 

       

      MISCELLANEOUS

       

      Successors
        and Assigns.
        Except
        as otherwise provided herein, the terms and conditions of this Agreement
        shall
        inure to the benefit of and be binding upon the respective successors, heirs,
        executors, administrators and assigns of the parties (including transferees
        and
        assignees under Sections 2.10 and 5.2). 

       

      Governing
        Law.
        This
        Agreement shall be governed by and construed under the laws of the State
        of
        Texas, without reference to its conflicts of laws provisions.

       

      Counterparts.
        This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed an original, but all of which together shall constitute one and the
        same
        instrument.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      Notices.
        Unless
        otherwise provided, any notice required or permitted under this Agreement
        shall
        be given in writing and shall be deemed effectively given upon personal delivery
        to the party to be notified or upon delivery by confirmed facsimile
        transmission, nationally recognized overnight courier service, or upon deposit
        with the United States Post Office, by registered or certified mail, postage
        prepaid and addressed to the party to be notified at the address indicated
        for
        such party on Appendix
        A
        attached
        hereto, or at such other address as such party may designate by ten days’
        advance written notice to the other parties. If any Holder or Principal
        Stockholder is not listed on Appendix
        A
        and has
        not previously furnished an address hereunder, then notices may be furnished
        to
        the address for such person reflected in the books and records of the
        Company.

       

      Attorney’s
        Fees.
        If any
        action at law or in equity is necessary to enforce or interpret the terms
        of
        this Agreement, the prevailing party shall be entitled to reasonable attorneys’
        fees, costs and necessary disbursements in addition to any other relief to
        which
        such party may be entitled.

       

      Entire
        Agreement.
        This
        Agreement, the Purchase Agreement, that certain Right of First Refusal and
        Co-Sale Agreement dated as of the date hereof by and among the Company, Investor
        and the other parties named therein, and any other agreements referenced
        herein
        constitute the entire agreement among the parties and no party shall be liable
        or bound to any other party in any manner by any warranties, representations,
        or
        covenants except as specifically set forth herein or therein.

       

      Additional
        Actions and Documents.
        The
        parties shall execute and deliver further documents and instruments and shall
        take other further actions as may be required or appropriate to carry out
        the
        intent and purposes of this Agreement.

       

      Amendment
        and Waiver.
        Except
        as otherwise provided herein, any term of this Agreement may be amended and
        the
        observance of any term of this Agreement may be waived (either generally
        or in a
        particular instance and either retroactively or prospectively), only with
        the
        written consent of (i) the Company and (ii) the holders of at least a majority
        of the Registrable Securities. Any amendment or waiver effected in accordance
        with this paragraph shall be binding upon each Holder, each Principal
        Stockholder, each transferee or assignee under Section 2.10 or 5.2 and the
        Company.

       

      Delays
        or Omissions.
        It is
        agreed that no delay or omission to exercise any rights, power, or remedy
        accruing to any party upon any breach, default or noncompliance of the Company
        under this Agreement shall impair any such rights, power, or remedy, nor
        shall
        it be construed to be a waiver of any such breach, default or noncompliance,
        or
        any acquiescence therein, or of any similar breach, default or noncompliance
        thereafter occurring. It is further agreed that any waiver, consent or approval
        of any kind or character of any breach, default or noncompliance under this
        Agreement or any waiver of any provisions or conditions of this Agreement
        must
        be in writing, must be made in accordance with Section 6.8 and shall be
        effective only to the extent specifically set forth in such writing. All
        remedies, either under this Agreement, by law or otherwise, shall be cumulative
        and not alternative.

       

      Severability.
        If one
        or more provisions of this Agreement are held to be unenforceable under
        applicable law, such provision shall be excluded from this Agreement and
        the
        balance of the Agreement shall be interpreted as if such provision was so
        excluded and shall be enforceable in accordance with its terms.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      Additional
        Investors.
        Notwithstanding anything to the contrary contained herein, if the Company
        shall
        issue additional Series A Preferred Stock on terms and conditions substantially
        similar to those issued to Investor, any purchaser of such Series A Preferred
        Stock may become a party to this Agreement by executing and delivering an
        additional counterpart signature page to this Agreement and shall be deemed
        a
“Holder”
        and an
“Investor”
        hereunder.

       

      [SIGNATURES
        ON THE FOLLOWING PAGES]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have executed this Investor’s Rights
        Agreement as of the date set forth in the first paragraph hereof.

       

       

      
        	 	 	 
	 	THE
                COMPANY:
	 	 
	 	TRULITE, INC.
	 
 	 
 	 
 
	 	By:  	
                 

                 

              
	 	
                
Name:
                William J. Berger
	 	Title:
                President and Chief Executive Officer

      

       

      
        	 	 	 
	 	INVESTOR:
	 	 
	 	TRULITE
                ENERGY PARTNERS, L.P.
	 
 	 
 	 
 
	 	By:  	
                Contango
                  Capital Partnership Management LLC,

              
	 	
                Its
                  General Partner

              

      

      
        
          	 	 	 
	 	
 	
                
	 	
                   

                  By:  

                	
                   

                
	 	
                  
Name:
                  William J. Berger
	 	Title:
                  President and Chief Executive Officer

        

        
          	 	 	 
	 	 	 
	 	PRINCIPAL
                  STOCKHOLDERS:
	 
 	 
 	 
 
	 	
                   

                  By:  

                	 
	 	
                  

                

        

        
          	 	 	 
	 
 	 
 	 
 
	 	
                   

                  By:

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