Document:

Exhibit 10.41

AMENDED
AND RESTATED REGISTRATION RIGHTS AGREEMENT

This Amended and
Restated Registration Rights Agreement (this “Agreement”) is made and entered
into as of July 21, 2006, by and between IWT Tesoro Corporation, a Nevada
corporation (the “Company”), and Laurus Master Fund, Ltd. (the “Purchaser”).

This Agreement is
made pursuant to (i) the Securities Purchase Agreement, dated as of February
10, 2006, by and between the Purchaser and the Company (as amended, modified or
supplemented from time to time, the “February Securities Purchase Agreement”)
and pursuant to the Interest Shares and the Note and Warrants referred to
therein; (ii) the Security Agreement, dated as of August 24, 2005, as amended
and restated as of July 21, 2006, by and between the Purchaser and the Company
(as amended, modified or supplemented from time to time, the “Restated August
Security Agreement”), and pursuant to the Note and the Warrants referred to
therein; and (ii) the Securities Purchase Agreement, dated as of May 3, 2006,
by and between the Purchaser and the Company (as amended, modified or
supplemented from time to time, the “May Securities Purchase Agreement”), and
pursuant to the Warrants referred to therein .The Company and the Purchaser
hereby agree as follows:

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

“August
Registration Rights Agreement” means the registration rights
agreement executed on August 24, 2005, as such agreement may be amended,
modified or supplemented prior or subsequent to the date hereof.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means shares of the Company’s common stock,
par value $0.001 per share.

“Effectiveness Date” “ means, that
the Company shall use its best efforts to cause a Registration Statement to be
declared effective within ninety (90) days following the Filing Date; provided,
however, if such Registration Statement is not declared effective by
such date (A) primarily, in Laurus’ good faith judgment, as a result of the
Commission having provided comments to such Registration Statement, such date
shall be extended until the Commission has no further comments as long as the
Company has used its reasonable best efforts to diligently respond to all such
comments within fifteen (15) days of receipt of such comments, or (B) because
the Effectiveness Date falls within the period commencing (x) fifteen (15) days
prior to and forty-five (45) days following the end of any fiscal quarter of
the Company or (y) fifteen (15) days prior to and one hundred and five (105)
days following the end of any fiscal year of the Company, the Effectiveness
Date shall be extended until such financial statements required to be filed
with the Commission in respect of such fiscal quarter or year have been filed
with the Commission, and (ii) with respect to each additional Registration
Statement required to be filed 

 

hereunder, a date no later than thirty (30) days following the
applicable Filing Date; provided, however, if such Registration
Statement is not declared effective by such date solely as a result of the
Commission having provided comments to such Registration Statement, such date
shall be extended until the Commission has no further comments as long as the
Company has used its reasonable best efforts to diligently responded to all
such comments within fifteen (15) days of receipt of such comments.  The previous notwithstanding, in the event
that the Company has not responded to all comments within fifteen (15) days of
receipt of comments as a result of any delays by the Purchaser in providing
adequate responses to any applicable comments, such delay shall be
automatically be waived by the Purchaser and shall have no adverse effect on
the Company or any penalties that may be incurred by the Company as a result of
such delay.

 “Effectiveness Period”
has the meaning set forth in Section 2(a).

“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and any successor statute.

“February Securities Purchase Agreement” has the meaning
given to such term in the Preamble hereto.

“February
Registration Rights Agreement” means the registration rights
agreement executed on February 10, 2006, as such agreement may be amended,
modified or supplemented prior or subsequent to the date hereof. “Filing Date” means, with respect to the Registration
Statement required to be filed hereunder and particularly with respect to (i)
the Note Shares, the Warrant Shares the Option Shares and the Interest Shares,
a date no later than August 31, , 2006; and (ii) with respect to the shares of
Common Stock issuable to the Holder as a result of adjustments to the Fixed
Conversion Price or Exercise Price, as the case may be, pursuant to the Note or
the Warrants or the Option, or otherwise, thirty (30) days after the date of
the adjustment of the Fixed Conversion Price or the Exercise Price, as the case
may be.

“Holder” or “Holders” means
the Purchaser or any of its affiliates or transferees to the extent any of them
hold Registrable Securities, other than those purchasing Registrable Securities
in a market transaction.

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

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

“Interest
Shares” has the meaning set forth in the February Securities
Purchase Agreement.

“May
Securities Purchase Agreement” has the meaning given to such
term in the Preamble hereto.

“May
Registration Rights Agreement” means the registration rights
agreement executed on May 3, 2006, as such agreement may be amended, modified
or supplemented prior or subsequent to the date hereof.

“Note” has the meaning set forth in the February Securities
Purchase Agreement.

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“Note
Shares” means the shares of Common Stock issuable upon
conversion of the Note.

“Options”
mean the options issued in connection with the Amended August Securities Purchase
Agreement.

“Option
Shares” mean the shares of Common Stock issuable upon exercise of the Options.

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

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

“Registrable Securities” means the Interest Shares, the Note
Shares, the Option Shares and the Warrant Shares

“Registration Statement” means each registration statement
required to be filed hereunder, including the Prospectus therein, amendments
and supplements to such registration statement or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.

“Restated August Securities Purchase Agreement” has the
meaning given to such term in the Preamble hereto.

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

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

“Securities Act” means the Securities Act of 1933, as
amended, and any successor statute.

 “Trading Market”
means any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market,
the NASDAQ National Markets System, the American Stock Exchange or the New York
Stock Exchange.

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“Warrants” means the Common Stock purchase warrants issued in
connection with the May Securities Purchase Agreement, the February Securities
Purchase Agreement and the Amended August SecuritiyAgreement.  .

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

2.             Registration.

(a)           On or prior to the Filing Date the Company shall
prepare and file with the Commission a Registration Statement covering the
Registrable Securities for a selling stockholder resale offering to be made on
a continuous basis pursuant to Rule 415. 
The Registration Statement shall be on Form S-3 (except if the Company
is not then eligible to register for resale the Registrable Securities on Form
S-3, in which case such registration shall be on another appropriate form in
accordance herewith).  The Company shall
cause each Registration Statement to become effective and remain effective as provided
herein.  The Company shall use its best
efforts to cause each Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, but in any
event no later than the Effectiveness Date. 
The Company shall use its reasonable commercial efforts to keep each
Registration Statement continuously effective under the Securities Act until
the date which is the earlier date of when (i) all Registrable Securities have
been sold or (ii) all Registrable Securities covered by such Registration Statement
may be sold immediately without registration under the Securities Act and
without volume restrictions pursuant to Rule 144(k), as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the affected
Holders (the “Effectiveness Period”).

(b)           Within three business days of the Effectiveness
Date and each request by Purchaser in the event it desires to exercise any of
the Warrants or the Option or in the event it desires to convert the Note, the
Company shall cause its counsel to issue an opinion in the form attached hereto
as Exhibit A, to the transfer agent stating that the shares are subject to an
effective registration statement and can be reissued free of restrictive legend
upon notice of a sale by the Purchaser and confirmation by the Purchaser that
it has complied with the prospectus delivery requirements, provided that the
Company has not advised the transfer agent orally or in writing that the opinion
has been withdrawn. Copies of the blanket opinion required by this Section 2(b)
shall be delivered to the Purchaser within the time frame set forth above.

3.             Registration Procedures. 
If and whenever the Company is required by the provisions hereof to effect
the registration of any Registrable Securities under the Securities Act, the
Company will, as expeditiously as possible:

(a)           prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities, respond as promptly as
possible to any comments received from the Commission, and use its best efforts
to cause the Registration Statement to become and remain effective for the
Effectiveness Period with respect 

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thereto, and
promptly provide to the Purchaser copies of all filings and Commission letters
of comment relating thereto;

(b)           prepare and file with the Commission such
amendments and supplements to the Registration Statement and the Prospectus
used in connection therewith as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all Registrable
Securities covered by such Registration Statement and to keep such Registration
Statement effective until the expiration of the Effectiveness Period applicable
to such Registration Statement;

(c)           furnish to the Purchaser such number of copies of
the Registration Statement and the Prospectus included therein (including each
preliminary Prospectus) as the Purchaser reasonably may request to facilitate
the public sale or disposition of the Registrable Securities covered by the
Registration Statement;

(d)           use its best efforts to register or qualify the
Purchaser’s Registrable Securities covered by such Registration Statement under
the securities or “blue sky” laws of such jurisdictions within the United
States as the Purchaser may reasonably request, provided, however, that the
Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;

(e)           list the Registrable Securities covered by such
Registration Statement with any securities exchange on which the Common Stock
of the Company is then listed;

(f)            immediately notify the Purchaser at any time when
a Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event of which the Company has knowledge as a
result of which the Prospectus contained 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 light of the circumstances then existing;
and

(g)           make available for inspection by the Purchaser and
any attorney, accountant or other agent retained by the Purchaser, all publicly
available, non-confidential financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors and employees to supply all publicly available, non-confidential
information reasonably requested by the attorney, accountant or agent of the
Purchaser.

4.             Registration Expenses. 
All expenses relating to the Company’s compliance with Sections 2 and 3
hereof, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses (including reasonable counsel fees)
incurred in connection with complying with state securities or “blue sky” laws,
fees of the NASD, transfer taxes, fees of transfer agents and registrars, fees
of, and disbursements incurred by, one counsel for the Holders, are called “Registration
Expenses”. All selling commissions applicable to the sale of Registrable
Securities, including any fees and disbursements of any special counsel to the 

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Holders beyond those
included in Registration Expenses, are called “Selling Expenses.”  The Company shall only be responsible for all
Registration Expenses.

5.             Indemnification.

(a)           In the event of a registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Company
will indemnify and hold harmless the Purchaser, and its officers, directors and
each other person, if any, who controls the Purchaser within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Purchaser, or such persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement under which such Registrable Securities were
registered under the Securities Act pursuant to this Agreement, any preliminary
Prospectus or final Prospectus contained therein, or any amendment or
supplement thereof, or arise out of or are based upon 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, and will reimburse the
Purchaser, and each such person for any reasonable legal or other expenses incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company
will not be liable in any such case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by or on behalf of the Purchaser or any
such person in writing specifically for use in any such document.

(b)           In the event of a registration
of the Registrable Securities under the Securities Act pursuant to this
Agreement, the Purchaser will indemnify and hold harmless the Company, and its
officers, directors and each other person, if any, who controls the Company
within the meaning of the Securities Act, against all losses, claims, damages
or liabilities, joint or several, to which the Company or such persons may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact which was furnished in writing by the Purchaser to the Company expressly
for use in (and such information is contained in) the Registration Statement
under which such Registrable Securities were registered under the Securities
Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon 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, and will reimburse the Company and each such person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action, provided,
however, that the Purchaser will be liable in any such case if and only
to the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished in writing to
the Company by or on behalf of the Purchaser specifically for use in any such 

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document.  Notwithstanding the provisions of this
paragraph, the Purchaser shall not be required to indemnify any person or
entity in excess of the amount of the aggregate net proceeds received by the
Purchaser in respect of Registrable Securities in connection with any such
registration under the Securities Act.

 

(c)           Promptly after receipt by a party entitled to claim
indemnification hereunder (an “Indemnified Party”) of notice of the
commencement of any action, such Indemnified Party shall, if a claim for
indemnification in respect thereof is to be made against a party hereto
obligated to indemnify such Indemnified Party (an “Indemnifying Party”), notify
the Indemnifying Party in writing thereof, but the omission so to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
such Indemnified Party other than under this Section 5(c) and shall only
relieve it from any liability which it may have to such Indemnified Party under
this Section 5(c) if and to the extent the Indemnifying Party is prejudiced by
such omission. In case any such action shall be brought against any Indemnified
Party and it shall notify the Indemnifying Party of the commencement thereof,
the Indemnifying Party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such Indemnified Party, and, after notice from the Indemnifying
Party to such Indemnified Party of its election so to assume and undertake the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party under this Section 5(c) for any legal expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof; if the
Indemnified Party retains its own counsel, then the Indemnified Party shall pay
all fees, costs and expenses of such counsel, provided, however,
that, if the defendants in any such action include both the Indemnified Party
and the Indemnifying Party and the Indemnified Party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the Indemnifying Party or if
the interests of the Indemnified Party reasonably may be deemed to conflict
with the interests of the Indemnifying Party, the Indemnified Party shall have
the right to select one separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the reasonable
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the Indemnifying Party as incurred.

(d)           In order to provide for just and equitable
contribution in the event of joint liability under the Securities Act in any
case in which either (i) the Purchaser, or any officer, director or controlling
person of the Purchaser, makes a claim for indemnification pursuant to this
Section 5 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section 5
provides for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of the Purchaser or such officer,
director or controlling person of the Purchaser in circumstances for which
indemnification is provided under this Section 5; then, and in each such case,
the Company and the Purchaser will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion so that the Purchaser is responsible only for the
portion represented by the percentage that the public offering price of its
securities offered by the Registration 

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Statement
bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such
case, (A) the Purchaser will not be required to contribute any amount in excess
of the public offering price of all such securities offered by it pursuant to
such Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.

6.             Representations and Warranties.

(a)           The Common Stock is registered pursuant to Section
12(b) or 12(g) of the Exchange Act and, except with respect to certain matters
which the Company has disclosed to the Purchaser on Schedule 4.21 to the
February Securities Purchase Agreement, on Schedule 4.21 to the May Securities
Purchase Agreement or on Schedule 4.21 of the Restated August Security
Agreement, the Company has timely filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act.  The Company has
filed (i) its Annual Report on Form 10-K for its fiscal year ended December 31,
2005 and (ii) its Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2006  (collectively, the “SEC
Reports”).  Each SEC Report was, at the
time of its filing, in substantial compliance with the requirements of its
respective form and none of the SEC Reports, nor the financial statements (and
the notes thereto) included in the SEC Reports, as of their respective filing
dates, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of
the Company included in the SEC Reports comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission or other applicable rules and regulations with
respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles (“GAAP”) applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed) and fairly present
in all material respects the financial condition, the results of operations and
the cash flows of the Company and its subsidiaries, on a consolidated basis, as
of, and for, the periods presented in each such SEC Report.

(b)           The Common Stock is quoted for trading on the
NASDAQ Over The Counter Bulletin Board and satisfies all requirements for the
continuation of such quotation, and the Company shall do all things necessary
for the continuation of such quotation. 
The Company has not received any notice that its Common Stock will no
longer be quoted on the NASDAQ Over The Counter Bulletin Board (except for
prior notices which have been fully remedied) or that the Common Stock does not
meet all requirements for the continuation of such listing.

(c)           Except for securities sold to the Purchaser on
August 25, 2005, neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or
sales of any security or solicited any offers to 

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buy any
security under circumstances that would cause the offering of the Securities
pursuant to the February Securities Purchase Agreement or pursuant to the May
Securities Purchase Agreement to be integrated with prior offerings by the
Company for purposes of the Securities Act which would prevent the Company from
selling the Common Stock pursuant to Rule 506 under the Securities Act, or any
applicable exchange-related stockholder approval provisions, nor will the
Company or any of its affiliates or subsidiaries take any action or steps that
would cause the offering of the Securities to be integrated with other
offerings.

(d)           The Interest Shares, the Note Shares, the Option
Shares and the Warrant Shares and the Note are all restricted securities under
the Securities Act as of the date of this Agreement.  The Company will not issue any stop transfer
order or other order impeding the sale and delivery of any of the Registrable Securities
at such time as such Registrable Securities are registered for public sale or
an exemption from registration is available, except as required by federal or
state securities laws.

(e)           The Company understands the nature of the Interest
Shares, the Note Shares, the Option Shares and the Warrant Shares and
recognizes that the issuance of such Registrable Securities may have a
potential dilutive effect.  The Company
specifically acknowledges that its obligation to issue the Registrable
Securities is binding upon the Company and enforceable regardless of the
dilution such issuance may have on the ownership interests of other
shareholders of the Company.

(f)            Except for agreements made in the ordinary course
of business, there is no agreement that has not been filed with the Commission
as an exhibit to a registration statement or to a form required to be filed by
the Company under the Exchange Act, the breach of which could reasonably be
expected to have a material and adverse effect on the Company and its
subsidiaries, or would prohibit or otherwise interfere with the ability of the
Company to enter into and perform any of its obligations under this Agreement
in any material respect.

(g)           The Company will at all times have authorized and
reserved a sufficient number of shares of Common Stock for the full conversion
of the Note and exercise of the Warrants and the Options.

7.             Miscellaneous.

(a)           Remedies.  In the event of a breach by the Company or by
a Holder, of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this
Agreement.

(b)           No Piggyback on
Registrations.  Except as and
to the extent specified in Schedule 7(b) hereto, neither the Company nor any of
its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in any Registration Statement other than
the Registrable Securities, and the Company shall not 

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after the date
hereof enter into any agreement providing any such right for inclusion of
shares in the Registration Statement to any of its security holders.  Except as and to the extent specified in Schedule
7(b) hereto, the Company has not previously entered into any agreement granting
any registration rights with respect to any of its securities to any person or
entity that have not been fully satisfied.

(c)           Compliance.  Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.

(d)           Discontinued
Disposition.  Each Holder
agrees by its acquisition of such Registrable Securities that, upon receipt of
a notice from the Company of the occurrence of a Discontinuation Event (as
defined below), such Holder will forthwith discontinue disposition of such
Registrable Securities under the applicable Registration Statement until such
Holder’s receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus
or Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph. 
For purposes of this Agreement, a “Discontinuation Event” shall mean (i)
when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); (ii) any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to such Registration Statement or Prospectus or
for additional information; (iii) the issuance by the Commission of any stop
order suspending the effectiveness of such Registration Statement covering any
or all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any
of the Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any Proceeding for such purpose; and/or (v) the occurrence of
any event or passage of time that makes the financial statements included in
such Registration Statement ineligible for inclusion therein or any statement made
in such Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires any revisions to such Registration Statement, Prospectus or
other documents so that, in the case of such Registration Statement or
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

(e)           Piggy-Back
Registrations.  If at any time
after the date hereof there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare
and file with the Commission a registration statement relating to an offering
for its own account or the account of others under the 

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Securities Act
of any of its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents relating to
equity securities to be issued solely in connection with any acquisition of any
entity or business or equity securities issuable in connection with stock
option or other employee benefit plans, so long as such piggyback rights are
permitted under the Securities Act, then the Company shall send to each Holder
written notice of such determination and, if within fifteen (15) days after
receipt of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered to the extent the
Company may do so without violating registration rights of others which exist
as of the date of this Agreement, subject to customary underwriter cutbacks
applicable to all holders of registration rights and subject to obtaining any
required consent of any selling stockholder(s) to such inclusion under such
registration statement.

(f)            Amendments and
Waivers.  The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of the then outstanding Registrable
Securities.  Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of certain Holders
and that does not directly or indirectly affect the rights of other Holders may
be given by Holders of at least a majority of the Registrable Securities to
which such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.

(g)           Notices.  Any notice or request hereunder may be given
to the Company or the Purchaser at the respective addresses set forth below or
as may hereafter be specified in a notice designated as a change of address
under this Section 7(g).  Any notice or
request hereunder shall be given by registered or certified mail, return
receipt requested, hand delivery, overnight mail, Federal Express or other
national overnight next day carrier (collectively, “Courier”) or telecopy
(confirmed by mail).  Notices and
requests shall be, in the case of those by hand delivery, deemed to have been
given when delivered to any party to whom it is addressed, in the case of those
by mail or overnight mail, deemed to have been given three (3) business days
after the date when deposited in the mail or with the overnight mail carrier,
in the case of a Courier, the next business day following timely delivery of
the package with the Courier, and, in the case of a telecopy, when
confirmed.  The address for such notices
and communications shall be as follows:

If to the Company:                                                                                            IWT
Tesoro Corporation

191 Post Road West

Westport, Connecticut 06880

Attention:                                                                                                                                         Henry
J. Boucher, Jr., CEO

Telephone:       (203) 221-2770

Facsimile:         (203) 221-2797

 11
 

 

 

with a copy to:                                                                                                               Rader
and Coleman, P.L.

2101 N.W. Boca Raton Blvd., Suite 1

Boca Raton, Florida 33431

Attention:                                         Gayle
Coleman, Esq.

Telephone:            (561) 368-0545

Facsimile:               (561) 367-1725

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

If to any other Person who is

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

or such other
address as may be designated in writing hereafter in accordance with this
Section 7(g) by such Person.

(h)           Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and shall inure to the benefit of each Holder. 
The Company may not assign its rights or obligations hereunder without
the prior written consent of each Holder. 
Each Holder may assign their respective rights hereunder in the manner
and to the persons and entities as permitted under the Note, the February
Securities Purchase Agreement and the May Securities Purchase Agreement.

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

(j)            Governing Law, Jurisdiction and Waiver of Jury Trial.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.  The
Company hereby consents and agrees that the state or federal courts located in
the County of New York, State of New York shall have exclusion jurisdiction to
hear and determine any Proceeding between the Company, on the one hand, and the
Purchaser, on the other hand, pertaining to this Agreement or to any matter arising
out of or related to this Agreement; 

 12
 

 

provided, that the Purchaser and the Company
acknowledge that any appeals from those courts may have to be heard by a court
located outside of the County of New York, State of New York, and further
provided, that nothing in this Agreement shall be deemed or operate to
preclude the Purchaser from bringing a Proceeding in any other jurisdiction to
collect the obligations, to realize on the Collateral or any other security for
the obligations, or to enforce a judgment or other court order in favor of the
Purchaser.  The Company expressly submits
and consents in advance to such jurisdiction in any Proceeding commenced in any
such court, and the Company hereby waives any objection which it may have based
upon lack of personal jurisdiction, improper venue or forum non conveniens.  The Company hereby waives personal service of
the summons, complaint and other process issued in any such Proceeding and
agrees that service of such summons, complaint and other process may be made by
registered or certified mail addressed to the Company at the address set forth
in Section 7(g) and that service so made shall be deemed completed upon the
earlier of the Company’s actual receipt thereof or three (3) days after deposit
in the U.S. mails, proper postage prepaid. 
The parties hereto desire that their disputes be resolved by a judge
applying such applicable laws. 
Therefore, to achieve the best combination of the benefits of the
judicial system and of arbitration, the parties hereto waive all rights to
trial by jury in any Proceeding brought to resolve any dispute, whether arising
in contract, tort, or otherwise between the Purchaser and/or the Company
arising out of, connected with, related or incidental to the relationship
established between then in connection with this Agreement.  If either party hereto shall commence a
Proceeding to enforce any provisions of this Agreement, the February Securities
Purchase Agreement, the May Securities Purchase Agreement or any other Related
Agreement (as such term is defined in the February Securities Purchase
Agreement and in the May Securities Purchase Agreement), then the prevailing
party in such Proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

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

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

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

 13
 

 

 

(n)           Prior Agreement.  This Agreement supersedes, amends and
restates the February Registration Rights Agreement,, which February
Registration Rights Agreement shall have no further force or effect.

[Balance
of page intentionally left blank;

signature page follows]

 14
 

 

 

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

 

	
  IWT TESORO CORPORATION

  	
   

  	
  LAURUS MASTER FUND, LTD.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  825 Third Avenue, 14th Floor

  
	
   

  	
   

  	
   

  	
  New York, NY 10022

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  David Grin

  
	
   

  	
   

  	
   

  	
  Facsimile:

  	
  212-541-4434

  
						

 

 

 15

 

 

EXHIBIT
A

[________ __, 200__]

Florida Atlantic Stock Transfer

7130 Nob Hill Road

Tamarac, Florida 33321

Attention:  Rene Garcia

Re:          IWT
Tesoro Corporation Registration Statement on Form [S-3]

Ladies and Gentlemen:

As counsel to IWT
Tesoro Corporation, a Nevada corporation (the “Company”), we have been
requested to render our opinion to you in connection with the resale by the
individuals or entitles listed on Schedule A attached hereto (the “Selling
Stockholders”), of an aggregate of __________ shares (the “Shares”) of the
Company’s Common Stock.

A Registration
Statement on Form S-1 under the Securities Act of 1933, as amended (the “Act”),
with respect to the resale of the Shares was declared effective by the
Securities and Exchange Commission on [date]. 
Enclosed is the Prospectus dated [date]. 
We understand that the Shares are to be offered and sold in the manner
described in the Prospectus.

As of the date
hereof, the Registration Statement remains in effect and no stop order
suspending such effectiveness has been issued.

Very truly yours,

[Company counsel]

 

 

Schedule
A to Exhibit A

	
  Selling Stockholder

  	
   

  	
  Shares

  Being Offered

  
	
   

  	
   

  	
   

  

 

 

 

SCHEDULE
7(b)Exhibit 10.1

AKSYS LTD. 1996
STOCK AWARDS PLAN

NOTICE OF NON-QUALIFIED STOCK OPTION AWARD

	
  Grantee’s Name and Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

You (the “Grantee”) have been granted an option to
purchase shares of Common Stock, subject to the terms and conditions of this
Notice of Stock Option Award (the “Notice”), the Aksys, Ltd. 1996 Stock Awards
Plan (the “Plan”), as amended from time to time, and the Non-Qualified Stock
Option Award Agreement (the “Option Agreement”) attached hereto, as follows. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Notice.

	
  Date of Award

  	
   

  
	
   

  	
   

  
	
  Vesting Commencement Date

  	
   

  
	
   

  	
   

  
	
  Exercise Price per Share

  	
   

  
	
   

  	
   

  
	
  Total Number of Shares subject to the Option

  	
   

  
	
   

  	
   

  
	
  Total Exercise Price

  	
   

  
	
   

  	
   

  
	
  Type of Option:

  	
  Non-Qualified Stock Option

  
	
   

  	
   

  
	
  Expiration Date:

  	
   

  
	
   

  	
   

  
	
  Post-Termination Exercise Period:

  	
  Three (3) Months

  

 

Vesting Schedule:

Subject to the Grantee continuing to be a director of
the Company (or other service provider to the Company) and other limitations
set forth in this Notice, the Plan and the Option Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule:

The Shares subject to the Option shall vest in twelve
(12) equal quarterly installments over the thirty-six (36) month period
commencing on the Vesting Commencement Date; i.e., each_____________,
_____________, _____________ and _____________.

 

IN WITNESS WHEREOF, the Company and the Grantee have
executed this Notice and agree that the Option is to be governed by the terms
and conditions of this Notice, the Plan and the Option Agreement.

	
  

  	
  Aksys, Ltd., 

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES
SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD THE GRANTEE
IS A DIRECTOR OR OTHER SERVICE PROVIDER OF THE COMPANY (NOT THROUGH THE ACT OF
BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER).

The Grantee acknowledges receipt of a copy of the Plan
and the Option Agreement, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts the Option subject to all of
the terms and provisions hereof and thereof. The Grantee has reviewed this
Notice, the Plan and the Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Notice, and
fully understands all provisions of this Notice, the Plan and the Option
Agreement. The Grantee hereby agrees that all questions of interpretation and
administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 14 of the Option
Agreement. The Grantee further agrees to the venue selection and waiver of a
jury trial in accordance with Section 15 of the Option Agreement. The Grantee
further agrees to notify the Company upon any change in the residence address
indicated in this Notice.

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  

 

 2

 

AKSYS, LTD. 1996
STOCK AWARDS PLAN

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

1.   Grant of Option.   Askys,
Ltd., a Delaware corporation (the “Company”), hereby grants to the Grantee (the
“Grantee”) named in the Notice of Non-Qualified Stock Option Award (the “Notice”),
an option (the “Option”) to purchase the Total Number of Shares of Common Stock
subject to the Option (the “Shares”) set forth in the Notice, at the Exercise
Price per Share set forth in the Notice (the “Exercise Price”) subject to the
terms and provisions of the Notice, this Non-Qualified Stock Option Award
Agreement (the “Option Agreement”) and the Company’s 1996 Stock Awards Plan
(the “Plan”), as amended from time to time, which are incorporated herein by
reference. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

The Option is intended to qualify as a Non-Qualified
Stock Option and not as an Incentive Stock Option as defined in Section 422 of
the Code.

2.   Exercise of Option.

(a)   Right to Exercise.   The
Option shall be exercisable during its term in accordance with the Vesting
Schedule set out in the Notice and with the applicable provisions of the Plan
and this Option Agreement. The Grantee shall be subject to reasonable
limitations on the number of requested exercises during any monthly or weekly
period as determined by the Administrator. In no event shall the Company issue
fractional Shares.

(b)   Method of Exercise.   The
Option shall be exercisable only by delivery of an Exercise Notice (a form of
which is attached as Exhibit A) or by such other procedure as specified from
time to time by the Administrator which shall state the election to exercise
the Option, the whole number of Shares in respect of which the Option is being
exercised, and such other provisions as may be required by the Administrator. The
exercise notice shall be delivered in person, by certified mail, or by such
other method (including electronic transmission) as determined from time to
time by the Administrator to the Company accompanied by payment of the Exercise
Price. The Option shall be deemed to be exercised upon receipt by the Company
of such notice accompanied by the Exercise Price, which, to the extent
selected, shall be deemed to be satisfied by use of the broker-dealer sale and
remittance procedure to pay the Exercise Price provided in Section 5(d) below.

(c)   Taxes.   No Shares will be
delivered to the Grantee or other person pursuant to the exercise of the Option
until the Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of applicable income tax and employment tax
withholding obligations, including, without limitation, obligations incident to
the receipt of Shares. Upon exercise of the Option, the Company or the Grantee’s
employer may offset or withhold (from any amount owed by the Company or the
Grantee’s employer to the Grantee) or collect from the Grantee or other person
an amount sufficient to satisfy such tax withholding obligations.

3.   Restrictions on Exercise.   The
Option may not be exercised if the issuance of the Shares subject to the Option
upon such exercise would constitute a violation of any Applicable 

 

Laws. If the exercise of
the Option within the applicable time periods set forth in Section 5, 6, and 7
of this Option Agreement is prevented by the provisions of this Section 3, the
Option shall remain exercisable until one (1) month after the date the Grantee
is notified by the Company that the Option is exercisable, but in any event no
later than the Expiration Date set forth in the Notice.

4.   Method of Payment.   Payment
of the Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Grantee; provided, however, that such exercise
method does not then violate any Applicable Law and, provided further, that the
portion of the Exercise Price equal to the par value of the Shares must be paid
in cash or other legal consideration permitted by the Delaware General
Corporation Law:

(a)    cash;

(b)    check;

(c)    surrender
of Shares or delivery of a properly executed form of attestation of ownership
of Shares as the Administrator may require which have a Fair Market Value on
the date of surrender or attestation equal to the aggregate Exercise Price of
the Shares as to which the Option is being exercised; or

(d)    payment
through a broker-dealer sale and remittance procedure pursuant to which the
Grantee (i) shall provide written instructions to a Company-designated
brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (ii) shall provide written
directives to the Company to deliver the certificates for the purchased Shares
directly to such brokerage firm in order to complete the sale transaction.

5.   Termination or Change of Director’s Service.   In
the event the Grantee ceases to be a director or other service provider of the
Company, the Grantee may, but only during the Post-Termination Exercise Period,
exercise the portion of the Option that was vested at the date of such
termination (the “Termination Date”). The Post-Termination Exercise Period
shall commence on the Termination Date. In no event, however, shall the Option
be exercised later than the Expiration Date set forth in the Notice. In the
event of the Grantee’s change in status from employee, director or consultant
to any other status of employee, director or consultant, the Option shall
remain in effect and the Option shall continue to vest in accordance with the
Vesting Schedule set forth in the Notice. Except as provided in Sections 6 and
7 below, to the extent that the Option was unvested on the Termination Date, or
if the Grantee does not exercise the vested portion of the Option within the
Post-Termination Exercise Period, the Option
shall terminate.

6.   Disability of Grantee.   In
the event the Grantee ceases to be a director or other service provider of the
Company as a result of his or her Disability, the Grantee may, but only within
twelve (12) months commencing on the Termination Date (and in no event later
than the Expiration Date), exercise the portion of the Option that was vested
on the Termination Date. To the extent that the Option was unvested on the
Termination Date, or if the Grantee does not 

 2
 

 

exercise the vested
portion of the Option within the time specified herein, the Option shall
terminate.

7.   Death of Grantee.   In
the event of the termination of the Grantee service as a director or other
service provider of the Company as a result of his or her death, or in the
event of the Grantee’s death during the Post-Termination Exercise Period or
during the twelve (12) month period following the Grantee’s termination as a
result of his or her Disability, the person who acquired the right to exercise
the Option pursuant to Section 9 may exercise the portion of the Option that
was vested at the date of termination within twelve (12) months commencing on
the date of death (but in no event later than the Expiration Date). To the
extent that the Option was unvested on the date of death, or if the vested
portion of the Option is not exercised within the time specified herein, the
Option shall terminate.

8.   Change of Control.   Immediately prior to the specified
effective date of a Change of Control, any unvested Shares subject to the
Option shall immediately vest in full. Effective upon the consummation
of a Change of Control, the Option shall terminate except to the extent the
Option is assumed by the successor corporation or its parent or is expressly
reaffirmed by the Company. For purposes of this Option Agreement, “Change of Control” means a change in
ownership or control of the Company effected through a merger, consolidation or
acquisition by any person or related group of persons (other than an
acquisition by the Company or by a Company-sponsored employee benefit plan or
by a person or persons that directly or indirectly controls, is controlled by,
or is under common control with, the Company) of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the outstanding securities of the Company. Notwithstanding
anything else contained herein to the contrary, in no event shall a Change of
Control be deemed to occur by reason of (i) a distribution of the Company’s
common stock held by Durus Life Sciences Master Fund Ltd (“Durus”) to its
investors, partners or members, whether as dividend or otherwise, of all or any
portion of the shares of common stock held, directly or indirectly, by Durus or
(ii) a sale of all or any portion of the Company’s common stock held, directly
or indirectly, by Durus in an underwritten public offering (including, without
limitation, a sale of securities of holdings in an underwritten public
offering), unless following such distribution or sale any person or related
group of persons, other than Durus or its affiliates, possess more than fifty
percent (50%) of the total combined voting power of the outstanding securities
of the Company.

9.   Transferability of Option.   The
Option may not be transferred in any manner other than by will or by the laws
of descent and distribution, provided, however, that the Option may be
transferred during the lifetime of the Grantee to the extent and in the manner
authorized by the Administrator. Notwithstanding the foregoing, the Grantee may
designate one or more beneficiaries of the Grantee’s Option in the event of the
Grantee’s death on a beneficiary designation form provided by the
Administrator. Following the death of the Grantee, the Option, to the extent
provided in Section 7, may be exercised (a) by the person or persons designated
under the deceased Grantee’s beneficiary designation or (b) in the absence of
an effectively designated beneficiary, by the Grantee’s legal representative or
by any person empowered to do so under the deceased Grantee’s will or under the
then applicable laws of descent and distribution. The terms of the Option shall
be binding upon the executors, administrators, heirs, successors and
transferees of the Grantee.

 3
 

 

10.   Term of Option.   The
Option must be exercised no later than the Expiration Date set forth in the
Notice or such earlier date as otherwise provided herein. After the Expiration
Date or such earlier date, the Option shall be of no further force or effect
and may not be exercised.

11.   Tax Consequences.   The
Grantee may incur tax liability as a result of the Grantee’s purchase or
disposition of the Shares. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

12.   Entire Agreement: Governing Law.   The
Notice, the Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to
the Grantee’s interest except by means of a writing signed by the Company and
the Grantee. Nothing in the Notice, the Plan and this Option Agreement (except
as expressly provided therein) is intended to confer any rights or remedies on
any persons other than the parties. The Notice, the Plan and this Option
Agreement are to be construed in accordance with and governed by the internal
laws of the State of Illinois without giving
effect to any choice of law rule that would cause the application of the laws
of any jurisdiction other than the internal laws of the State of Illinois to the rights and duties of the parties. Should any
provision of the Notice, the Plan or this Option Agreement be determined to be
illegal or unenforceable, such provision shall be enforced to the fullest
extent allowed by law and the other provisions shall nevertheless remain
effective and shall remain enforceable.

13.   Construction.   The
captions used in the Notice and this Option Agreement are inserted for
convenience and shall not be deemed a part of the Option for construction or
interpretation. Except when otherwise indicated by the context, the singular
shall include the plural and the plural shall include the singular. Use of the
term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

14.   Administration and Interpretation.   Any
question or dispute regarding the administration or interpretation of the
Notice, the Plan or this Option Agreement shall be submitted by the Grantee or
by the Company to the Administrator. The resolution of such question or dispute
by the Administrator shall be final and binding on all persons.

15.   Venue and Waiver of Jury Trial.   The
Company, the Grantee, and the Grantee’s assignees pursuant to Section 9 (the “parties”)
agree that any suit, action, or proceeding arising out of or relating to the
Notice, the Plan or this Option Agreement shall be brought in the United States
District Court for the Northern District of Illinois (or should such court lack
jurisdiction to hear such action, suit or proceeding, in an Illinois state
court in the County of Cook) and that the parties shall submit to the
jurisdiction of such court. The parties irrevocably waive, to the fullest
extent permitted by law, any objection the party may have to the laying of
venue for any such suit, action or proceeding brought in such court. THE
PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF
ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this
Section 15 shall for any reason be held invalid or unenforceable, it is the
specific intent of the parties that such provisions 

 4
 

 

shall be modified to the
minimum extent necessary to make it or its application valid and enforceable.

16.   Notices.   Any notice
required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the
United States mail by certified mail (if the parties are within the United
States), with postage and fees prepaid, addressed to the other party at its
address as shown in these instruments, or to such other address as such party
may designate in writing from time to time to the other part.

END OF AGREEMENT

 5

 

EXHIBIT A

ASKYS, LTD., INC.
1996 STOCK AWARDS

EXERCISE NOTICE

Aksys, Ltd.

[COMPANY ADDRESS]

Attention: Secretary

1.   Exercise of Option.   Effective
as of today, ______________, ___ the undersigned (the “Grantee”) hereby elects
to exercise the Grantee’s option to purchase ___________ shares of the Common
Stock (the “Shares”) of Aksys, Ltd. (the “Company”) under and pursuant to the
Company’s 1996 Stock Awards Plan (the “Plan”), as amended from time to time,
and the Non-Qualified Stock Option Award Agreement (the “Option Agreement”) and
Notice of Non-qualified Stock Option Award (the “Notice”) dated _____________. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Exercise Notice.

2.   Representations of the Grantee.   The
Grantee acknowledges that the Grantee has received, read and understood the
Notice, the Plan and the Option Agreement and agrees to abide by and be bound
by their terms and conditions.

3.   Rights as Stockholder.   Until
the stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Shares, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued)
such stock certificate promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in Section 7 of
the Plan.

4.   Delivery of Payment.   The
Grantee herewith delivers to the Company the full Exercise Price for the
Shares, which, to the extent selected, shall be deemed to be satisfied by use
of the broker-dealer sale and remittance procedure to pay the Exercise Price
provided in Section 5(d) of the Option Agreement.

5.   Tax Consultation.   The
Grantee understands that the Grantee may suffer adverse tax consequences as a
result of the Grantee’s purchase or disposition of the Shares. The Grantee
represents that the Grantee has consulted with any tax consultants the Grantee
deems advisable in connection with the purchase or disposition of the Shares
and that the Grantee is not relying on the Company for any tax advice

6.   Taxes.   The Grantee agrees
to satisfy all applicable federal, state and local income and employment tax
withholding obligations and herewith delivers to the Company the full amount of
such obligations or has made arrangements acceptable to the Company to satisfy
such obligations.

 

7.   Successors and Assigns.   The
Company may assign any of its rights under this Exercise Notice to single or
multiple assignees, and this agreement shall inure to the benefit of the
successors and assigns of the Company. This Exercise Notice shall be binding
upon the Grantee and his or her heirs, executors, administrators, successors
and assigns.

8.   Construction.   The
captions used in this Exercise Notice are inserted for convenience and shall
not be deemed a part of this agreement for construction or interpretation. Except
when otherwise indicated by the context, the singular shall include the plural
and the plural shall include the singular. Use of the term “or” is not intended
to be exclusive, unless the context clearly requires otherwise.

9.   Administration and Interpretation.   The
Grantee hereby agrees that any question or dispute regarding the administration
or interpretation of this Exercise Notice shall be submitted by the Grantee or
by the Company to the Administrator. The resolution of such question or dispute
by the Administrator shall be final and binding on all persons.

10.   Governing Law; Severability.   This
Exercise Notice is to be construed in accordance with and governed by the
internal laws of the State of Illinois without giving effect to any choice of
law rule that would cause the application of the laws of any jurisdiction other
than the internal laws of the State of Illinois to
the rights and duties of the parties. Should any provision of this Exercise
Notice be determined by a court of law to be illegal or unenforceable, such
provision shall be enforced to the fullest extent allowed by law and the other
provisions shall nevertheless remain effective and shall remain enforceable.

11.   Notices.   Any notice
required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the
United States mail by certified mail (if the parties are within the United
States), with postage and fees prepaid, addressed to the other party at its
address as shown below beneath its signature, or to such other address as such
party may designate in writing from time to time to the other party.

12.   Further Instruments.   The
parties agree to execute such further instruments and to take such further
action as may be reasonably necessary to carry out the purposes and intent of
this agreement.

13.   Entire Agreement.   The
Notice, the Plan, and the Option Agreement are incorporated herein by
reference, and together with this Exercise Notice constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and the Grantee with respect to the subject matter hereof, and may not
be modified adversely to the Grantee’s interest except by means of a writing
signed by the Company and the Grantee. Nothing in the Notice, the Plan, the
Option Agreement and this Exercise Notice (except as expressly provided
therein) is intended to confer any rights or remedies on any persons other than
the parties.

 2
 

 

 

	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  [NAME]

  	
   

  	
  AKSYS, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  (Signature)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [COMPANY ADDRESS]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

 3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]