Document:

Exhibit 10.3

 

INVESTMENT MANAGEMENT TRUST AGREEMENT

 

This Agreement is made as of February   
, 2006 by and between Oracle Healthcare Acquisition Corp. (the “Company”) and
Continental Stock Transfer & Trust Company (“Trustee”).

 

WHEREAS, the Company’s Registration Statement on Form S-1,
No. 333-128748, as amended from time to time (“Registration Statement”),
for its initial public offering of securities (“IPO”) has been declared
effective as of the date hereof by the Securities and Exchange Commission (“Effective
Date”); and

 

WHEREAS, CRT Capital Group LLC (the “Representative”)
is acting as the representative of the underwriters in the IPO; and

 

WHEREAS, as described in the Company’s Registration
Statement, and in accordance with the Company’s Amended and Restated
Certificate of Incorporation, upon consummation of the IPO, $113,500,000 will
be delivered to the Trustee to be deposited and held in a trust account for the
benefit of the Company and the holders of the Company’s common stock, par value
$.0001 per share, issued in the IPO as hereinafter provided and in the event
the Units are registered in Colorado, pursuant to Section 11-51-302(6) of
the Colorado Revised Statutes.  A copy of
the Colorado Statute is attached hereto and made a part hereof (the amount to
be delivered to the Trustee will be referred to herein as the “Property”, the
stockholders for whose benefit the Trustee shall hold the Property will be
referred to as the “Public Stockholders,” and the Public Stockholders and the
Company will be referred to together as the “Beneficiaries”);

 

WHEREAS, pursuant to the Underwriting Agreement, dated
as of February     , 2006, between the Company and the
Representative, a portion of the Property equal to $2,400,000 is attributable
to deferred underwriting commissions that will become payable by the Company to
the underwriters upon the consummation of a Business Combination (as defined in
the Registration Statement) (the “Deferred Discount”); and

 

WHEREAS, the Company and the Trustee desire to enter
into this Agreement to set forth the terms and conditions pursuant to which the
Trustee shall hold the Property.

 

IT IS AGREED:

 

1.                                       Agreements
and Covenants of Trustee.  The
Trustee hereby agrees and covenants to:

 

(a)                                  Hold
the Property in trust for the Beneficiaries in accordance with the terms of
this Agreement, including the terms of Section 11-51-302(6) of the
Colorado Statute, in a segregated trust account (“Trust Account”) established
by the Trustee at Lehman Brothers Inc.;

 

(b)                                 Manage,
supervise and administer the Trust Account subject to the terms and conditions
set forth herein;

 

 

(c)                                  In
a timely manner, upon the instruction of the Company, to invest and reinvest
the Property in (i) any “Government Security,” which shall mean any
Treasury Bill issued by the United States government, having a maturity of one
hundred and eighty days or less; or (ii) any open ended investment company
selected by the Company registered under the Investment Company Act of 1940
that holds itself out as a money market fund and bears the highest (AAA) credit
rating issued by a United States nationally recognized rating agency such as
Standard & Poor’s Corporation or Moody’s Investor Services, as
determined by the Company;

 

(d)                                 Collect
and receive, when due, all principal and income arising from the Property,
which shall become part of the “Property,” as such term is used herein;

 

(e)                                  Notify
the Company and the Representative of all communications received by it with
respect to any Property requiring action by the Company;

 

(f)                                    Supply
any necessary information or documents as may be requested by the Company in
connection with the Company’s preparation of the tax returns for the Trust
Account;

 

(g)                                 Participate
in any plan or proceeding for protecting or enforcing any right or interest arising
from the Property if, as and when instructed by the Company to do so;

 

(h)                                 Render
to the Company and to the Representative, and to such other person as the
Company may instruct, in writing, monthly statements of the activities of and
amounts in the Trust Account reflecting all receipts in writing and
disbursements of the Trust Account;

 

(i)                                     If
there is any income tax obligation relating to the income of the Property in
the Trust Account, then, only at the written instruction of the Company, the
Trustee shall make available in cash from the Property in the Trust Account an
amount specified by the Company as owing to the applicable taxing authority,
which amount shall be paid directly to the taxing authority (and not through
the Company) by electronic funds transfer, account debit or other method of
payment; provided, however, that if a taxing authority will not
accept payment in such manner, then any payment which would have been made
directly to the taxing authority may be made to the Company, and the Company
shall forward such payment to the taxing authority; and

 

(j)                                     Commence
liquidation of the Trust Account only after receipt of and only in accordance
with the terms of a letter (“Termination Letter”), in a form substantially
similar to that attached hereto as either Exhibit A or Exhibit B,
signed on behalf of the Company by its President or Chairman of the Board and
affirmed by its entire Board of Directors, and complete the liquidation of the
Trust Account and distribute the Property in the Trust Account only as directed
in the Termination Letter and the other documents referred to therein; provided,
however, that in the event that a Termination Letter has not been
received by         , 2007 (or the date
that is the six month anniversary of such date, in the event that (i) a
letter of intent, agreement in principle or definitive agreement has been
executed prior to such date in connection with a Business Combination (as
defined in the Termination Letter attached hereto as Exhibit A) that has
not been consummated by            ,
2007 and (ii) the Company has complied with 

 

2

 

Section 2(e) hereof prior to such date), the
Trust Account shall be liquidated in accordance with the procedures set forth
in the Termination Letter attached as Exhibit B to the stockholders of
record on the record date; provided, further, that the record
date shall be within ten (10) days of           ,
2007 (or the date that is the six month anniversary of such date, in the event
that (i) a letter of intent, agreement in principle or definitive
agreement has been executed prior to such date in connection with a Business
Combination that has not been consummated by             ,
2007 and (ii) the Company has complied with Section 2(e) hereof
prior to such date), or as soon thereafter as is practicable.  In all cases, the Trustee shall provide CRT
with a copy of any Termination Letter and/or any other correspondence that it
receives with respect to any proposed withdrawal from the Trust Account
promptly after it receives the same.

 

(k)                                  The
distribution, if any, of the Deferred Discount to the underwriters upon the
liquidation of the Trust Account as provided herein shall be made from the
Trust Account through the Trustee (and not through the Company) in accordance
with a written instruction of the Representative.

 

2.                                       Agreements
and Covenants of the Company.  The
Company hereby agrees and covenants to:

 

(a)                                  Give
all instructions to the Trustee hereunder in writing, signed by the Company’s
President, Chairman of the Board or Chief Financial Officer.  In addition, except with respect to its
duties under paragraph 1(i) above, the Trustee shall be entitled to rely
on, and shall be protected in relying on, any verbal or telephonic advice or instruction
which it in good faith believes to be given by any one of the persons
authorized above to give written instructions, provided that the Company shall
promptly confirm such instructions in writing;

 

(b)                                 Hold
the Trustee harmless and indemnify the Trustee from and against, any and all
expenses, including reasonable counsel fees and disbursements, or loss suffered
by the Trustee in connection with any action, suit or other proceeding brought
against the Trustee involving any claim, or in connection with any claim or
demand which in any way arises out of or relates to this Agreement, the
services of the Trustee hereunder, or the Property or any income earned from
investment of the Property, except for expenses and losses resulting from the
Trustee’s gross negligence or willful misconduct.  Promptly after the receipt by the Trustee of
notice of demand or claim or the commencement of any action, suit or
proceeding, pursuant to which the Trustee intends to seek indemnification under
this paragraph, it shall notify the Company in writing of such claim
(hereinafter referred to as the “Indemnified Claim”).  The Trustee shall have the right to conduct
and manage the defense against such Indemnified Claim, provided, that the
Trustee shall obtain the consent of the Company with respect to the selection
of counsel, which consent shall not be unreasonably withheld.  The Company may participate in such action
with its own counsel;

 

(c)                                  Pay
the Trustee an initial acceptance fee of $1,000 and an annual fee of $3,000 (it
being expressly understood that the Property shall not be used to pay such
fee).  The Company shall pay the Trustee
the initial acceptance fee and first year’s fee at the consummation of the IPO
and thereafter on the anniversary of the Effective Date.  The Trustee shall refund to the Company the
fee (on a pro rata basis) with respect to any period after the liquidation of
the Trust Fund.  The Company shall not be
responsible for any other fees or charges of the Trustee 

 

3

 

except as may be provided in paragraph 2(b) hereof
(it being expressly understood that the Property shall not be used to make any
payments to the Trustee under such paragraph);

 

(d)                                 Provide
to the Trustee any letter of intent, agreement in principle or definitive
agreement that is executed in connection with a Business Combination, together
with a certified copy of a unanimous resolution of the Board of Directors of
the Company affirming that such letter of intent, agreement in principle or
definitive agreement is in effect; provided, however, that in the
event any of the Company’s directors are unable to participate in and approve
such Business Combination due to a pre-existing contractual or fiduciary
relationship, the Company shall provide the Trustee with a certified copy of a
resolution of the remaining members of the Board of Directors of the Company
affirming that such letter of intent, agreement in principle or definitive
agreement is in effect; and

 

(e)                                  In
connection with any vote of the Company’s stockholders regarding a Business
Combination, provide to the Trustee an affidavit or certificate of a firm
regularly engaged in the business of soliciting proxies and tabulating
stockholder votes verifying the vote of the Company’s stockholders regarding
such Business Combination.

 

3.                                       Limitations
of Liability.  The Trustee shall have
no responsibility or liability to:

 

(a)                                  Take
any action with respect to the Property, other than as directed in paragraph 1
hereof and the Trustee shall have no liability to any party, including
liability for any fee or penalty assessed against the Company for late payment
of taxes, except for liability arising out of its own gross negligence or
willful misconduct;

 

(b)                                 Institute
any proceeding for the collection of any principal and income arising from, or
institute, appear in or defend any proceeding of any kind with respect to, any
of the Property unless and until it shall have received instructions from the
Company given as provided herein to do so and the Company shall have advanced
or guaranteed to it funds sufficient to pay any expenses incident thereto;

 

(c)                                  Change
the investment of any Property, other than in compliance with paragraph 1(c);

 

(d)                                 Refund
any depreciation in principal of any Property;

 

(e)                                  Assume
that the authority of any person designated by the Company to give instructions
hereunder shall not be continuing unless provided otherwise in such
designation, or unless the Company shall have delivered a written revocation of
such authority to the Trustee;

 

(f)                                    The
other parties hereto or to anyone else for any action taken or omitted by it,
or any action suffered by it to be taken or omitted, in good faith and in the
exercise of its 

 

4

 

own best judgment, except for its gross negligence or
willful misconduct.  The Trustee may rely
conclusively and shall be protected in acting upon any order, notice, demand,
certificate, opinion or advice of counsel (including counsel chosen by the
Trustee), statement, instrument, report or other paper or document (not only as
to its due execution and the validity and effectiveness of its provisions, but
also as to the truth and acceptability of any information therein contained)
which is believed by the Trustee, in good faith, to be genuine and to be signed
or presented by the proper person or persons. 
The Trustee shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this agreement or any of the terms
hereof, unless evidenced by a written instrument delivered to the Trustee
signed by the proper party or parties and, if the duties or rights of the
Trustee are affected, unless it shall give its prior written consent thereto;

 

(g)                                 Verify
the correctness of the information set forth in the Registration Statement or
to confirm or assure that any acquisition made by the Company or any other
action taken by it is as contemplated by the Registration Statement; and

 

(h)                                 File
income tax or information returns with the United States Internal Revenue
Service and payee statements with the Company, documenting the taxes payable by
the Company, if any, relating to interest earned on the Property; and

 

(i)                                     Pay
any taxes on behalf of the Trust Account (it being expressly understood that,
if there is any income tax obligation relating to the income of the Property in
the Trust Account, then, at the written instruction of the Company, the Trustee
shall disburse funds in an amount specified by the Company, out of the Property
in the Trust Account, as owing to each such taxing authority); and

 

(j)                                     Compute,
confirm or otherwise verify amounts requested by the Company pursuant to
Paragraph 1(i) above.

 

4.                                       Trust
Account Waiver.  The Trustee has no
right, title, interest, or claim of any kind (“Claim”) in or to any monies in
the Trust Account, and hereby waives any Claim in or to any monies in the Trust
Account it may have in the future, and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Account
for any reason whatsoever.

 

5.                                       Termination.  This Agreement shall terminate as follows:

 

(a)                                  If
the Trustee gives written notice to the Company that it desires to resign under
this Agreement, the Company shall use its reasonable efforts to locate a successor
trustee.  At such time that the Company
notifies the Trustee that a successor trustee has been appointed by the Company
and has agreed to become subject to the terms of this Agreement, the Trustee
shall transfer the management of the Trust Account to the successor trustee,
including but not limited to the transfer of copies of the reports and
statements relating to the Trust Account, whereupon this Agreement shall
terminate; provided, however, that, in the event that the Company does not
locate a successor trustee within ninety days of receipt of the resignation
notice from the Trustee, the Trustee may submit an application to have the
Property deposited with the United States District Court for the Southern
District of New York and upon such 

 

5

 

deposit, the Trustee shall be immune from any
liability whatsoever that arises due to any actions or omissions to act by any
party after such deposit; or

 

(b)                                 At
such time that the Trustee has completed the liquidation of the Trust Account
in accordance with the provisions of paragraph 1 (i) hereof, and
distributed the Property in accordance with the provisions of the Termination
Letter, this Agreement shall terminate except with respect to Paragraph 2(b).

 

6.                                       Miscellaneous.

 

(a)                                  The
Company and the Trustee each acknowledge that the Trustee will follow the
security procedures set forth below with respect to funds transferred from the
Trust Account.  Upon receipt of written
instructions, the Trustee will confirm such instructions with an Authorized
Individual at an Authorized Telephone Number listed on the attached Exhibit C.  The Company and the Trustee will each
restrict access to confidential information relating to such security
procedures to authorized persons.  Each
party must notify the other party immediately if it has reason to believe
unauthorized persons may have obtained access to such information, or of any
change in its authorized personnel.  In
executing funds transfers, the Trustee will rely upon account numbers or other
identifying numbers of a beneficiary, beneficiary’s bank or intermediary bank,
rather than names.  The Trustee shall not
be liable for any loss, liability or expense resulting from any error in an
account number or other identifying number, provided it has accurately
transmitted the numbers provided.

 

(b)                                 This
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflict of
laws.  It may be executed in several
counterparts, each one of which shall constitute an original, and together
shall constitute but one instrument.

 

(c)                                  This
Agreement contains the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof. 
This Agreement or any provision hereof may only be changed, amended or
modified by a writing signed by each of the parties hereto.  As to any claim, cross-claim or counterclaim
in any way relating to this Agreement, each party waives the right to trial by
jury.

 

(d)                                 The
parties hereto consent to the jurisdiction and venue of any state or federal
court located in the City of New York for purposes of resolving any disputes
hereunder.

 

(e)                                  Any
notice, consent or request to be given in connection with any of the terms or
provisions of this Agreement shall be in writing and shall be sent by express
mail or similar private courier service, by certified mail (return receipt
requested), by hand delivery or by facsimile transmission:

 

If to the Trustee, to:

 

Continental Stock
Transfer

& Trust Company

17 Battery Place

New York, New York 10004

Attn:  Steven G. Nelson

Fax No.:  (212) 509-5150

 

6

 

If to the Company, to:

 

Oracle Healthcare
Acquisition Corp.

200 Greenwich Avenue, 3rd Floor

Greenwich,
Connecticut 06830

Attn:  Joel D. Liffmann

Fax No.:  (203) 862-1601

 

in either case with a copy to:

 

CRT Capital Group
LLC

262 Harbor Drive

Stamford, CT 06902

Attn:  Eric Seal

Fax No.: (203) 569-6890

 

and

 

Bingham
McCutchen LLP

399
Park Avenue

New
York, New York 10022

Attn:  Floyd I. Wittlin, Esq.

Fax
No.: (212) 752-5370

 

and

 

Willkie
Farr & Gallagher LLP

787
Seventh Avenue

New
York, New York 10019

Attn:  William H. Gump, Esq.

Fax
No.: (212) 728-8111

 

(f)                                    This
Agreement may not be assigned by the Trustee without the prior written consent
of the Company and Representative.

 

(g)                                 Each
of the Trustee and the Company hereby represents that it has the full right and
power and has been duly authorized to enter into this Agreement and to perform
its respective obligations as contemplated hereunder.  The Trustee acknowledges and agrees that it
shall not make any claims or proceed against the Trust Account, including by
way of set-off, and shall not be entitled to any funds in the Trust Account
under any circumstance.

 

(h)                                 The
Trustee hereby consents to the inclusion of Continental Stock Transfer &
Trust Company in the Registration Statement and other materials relating to the
IPO.

 

7

 

IN WITNESS WHEREOF, the parties have duly executed
this Investment Management Trust Agreement as of the date first written above.

 

	
   

  	
  CONTINENTAL STOCK TRANSFER

  
	
   

  	
  & TRUST COMPANY, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ORACLE HEALTHCARE ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  Joel D.
  Liffmann

  
	
   

  	
  Title:    President
  and Chief Operating Officer

  
						

 

8

 

EXHIBIT A

 

[Letterhead of Company]

[Insert date]

 

Continental Stock Transfer

& Trust Company

17 Battery Place

New York, New York 10004

Attn:  Steven Nelson

 

Re:  Trust
Account No.  Termination Letter

 

Gentlemen:

 

Pursuant to the Investment Management Trust Agreement
between Oracle Healthcare Acquisition Corp. (“Company”) and Continental Stock
Transfer & Trust Company (“Trustee”), dated as of           ,
2006 (“Trust Agreement’), this is to advise you that the Company has entered
into an agreement (“Business Agreement”) with               
(“Target Business”) to consummate a business combination with Target Business (“Business
Combination”) on or about [insert date]. 
The Company shall notify you at least two business days in advance of
the actual date of the consummation of the Business Combination (“Consummation
Date”).

 

Pursuant to Section 2(f) of the Trust
Agreement, we are providing you with [an affidavit] [certificate of          ],
which verifies the vote of the Company’s stockholders in connection with the
Business Combination.  In accordance with
the terms of the Trust Agreement, we hereby authorize you to commence
liquidation of the Trust Account to the effect that, on the Consummation Date,
all of the funds held in the Trust Account will be immediately available for
transfer to the account or accounts that the Company shall direct on the
Consummation Date.

 

On the Consummation Date (i) counsel for the
Company shall deliver to you written notification that (a) the Business
Combination has been consummated and (b) the provisions of Section 11-51-302(6) and
Rule 51-3.4 of the Colorado Statute have been met, and (ii) the
Company shall deliver to you written instructions with respect to the transfer
of the funds held in the Trust Account (“Instruction Letter”).  You are hereby directed and authorized to
transfer the funds held in the Trust Account, including, but not limited to (a) funds
to be delivered to any Public Stockholder that has properly exercised their
conversion rights (as described in the Registration Statement), and (b) pursuant
to the terms of the Underwriting Agreement, dated as of             ,
2006, between the Company and the Representative, the portion of the Property
attributable to the deferred underwriters’ fees, immediately upon your receipt
of the counsel’s letter and the Instruction Letter, in accordance with the
terms of the Instruction Letter.  In the
event that certain deposits held in the Trust Account may not be liquidated by
the Consummation Date without penalty, you will notify the Company of the same
and the Company shall direct you as to whether such funds should remain in the
Trust Account and be distributed after the Consummation Date to the
Company.  Upon the distribution of all
the funds in the Trust 

 

A-1

 

Account
pursuant to the terms hereof, the Trust Agreement shall be terminated and the
Trust Account closed.

 

In the event that the Business Combination is not
consummated on the Consummation Date described in the notice thereof and we
have not notified you on or before the original Consummation Date of a new
Consummation Date, then the funds held in the Trust Account shall be reinvested
as provided in the Trust Agreement on the business day immediately following
the Consummation Date as set forth in the notice.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ORACLE HEALTHCARE ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

A-2

 

EXHIBIT B

 

(Letterhead of Company)

(Insert date)

 

Continental Stock Transfer

& Trust Company

17 Battery Place

New York, New York 10004

Attn:  Steven Nelson

 

Re:  Trust
Account No.  Termination Letter

 

Gentlemen:

 

Pursuant to the Investment Management Trust Agreement
between Oracle Healthcare Acquisition Corp. (“Company”) and Continental Stock
Transfer & Trust Company (“Trustee”), dated as of            ,
2006 (“Trust Agreement”), this is to advise you that the Board of Directors of
the Company has voted to dissolve and liquidate the Trust Account.  Attached hereto is a copy of the minutes of
the meeting of the Board of Directors of the Company relating thereto, certified
by the Secretary of the Company as true and correct and in full force and
effect.

 

In accordance with the terms of the Trust Agreement,
we hereby (a) certify to you that, if applicable, the provisions of Section 11-51-302(6) and
Rule 51-3.4 of the Colorado Statute have been met and (b) authorize
you, to commence liquidation of the Trust Account.  In connection with this liquidation, you are
hereby authorized to establish a record date for the purposes of determining
the stockholders of record entitled to receive their per share portion of the
Trust Account.  The record date shall be
within ten (10) days of the liquidation date, or as soon thereafter as is
practicable.  You will notify the Company
in writing as to when all of the funds in the Trust Account will be available
for immediate transfer (“Transfer Date”) in accordance with the terms of the
Trust Agreement and the Amended and Restated Certificate of Incorporation of
the Company.  You shall commence
distribution of such funds in accordance with the terms of the Trust Agreement
and the Amended and Restated Certificate of Incorporation of the Company and
you shall oversee the distribution of the funds.  Upon the payment of all the funds in the
Trust Account, the Trust Agreement shall be terminated.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ORACLE HEALTHCARE ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

B-1

 

EXHIBIT C

 

	
  AUTHORIZED INDIVIDUAL(S)
  FOR

  TELEPHONE CALL BACK

  	
   

  	
  AUTHORIZED TELEPHONE
  NUMBER(S)

  
	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Oracle Healthcare Acquisition Corp.

  200 Greenwich Avenue

  3rd Floor

  Greenwich, Connecticut 06830

  Fax No.: (203) 862-1601

  Attn: Joel D. Liffmann, President and Chief Operating Officer

  	
   

  	
  (203) 862-7900

  
	
   

  	
   

  	
   

  
	
  Trustee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Continental Stock Transfer

  & Trust Company

  17 Battery Place

  New York, New York 10004

  Attn: Steven G. Nelson, Chairman

  	
   

  	
  (212) 845-3202

  

 

C-1Exhibit
10.6

 

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is entered into as of the
          day of
              ,
2006, by and among Oracle Healthcare Acquisition Corp., a Delaware corporation
(the “Company”), and the undersigned parties listed under Investors on
the signature page hereto (each, an “Investor” and collectively, the “Investors”).

WHEREAS, the Investors currently hold all of the
issued and outstanding securities of the Company;

WHEREAS, the Investors and the Company desire to enter
into this Agreement to provide the Investors with certain rights relating to
the registration of shares of Common Stock and Founding Director Warrants held
by them;

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

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

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

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

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

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

“Demand Registration” is defined in Section
2.1.1.

“Demanding Holder” is defined in Section 2.1.1.

“Escrow Agreement” means that certain Stock
Escrow Agreement, dated as of
         , 2006, by and among the
parties hereto and Continental Stock Transfer & Trust Company.

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

“Form S-3” is defined in Section 2.3.

 

 

“Founding Director Warrants” means the 833,334
warrants issued to certain of the Investors identified as purchasers of such
warrants in the Founding Director Warrant Purchase Agreement dated of even date
herewith.

“Indemnified Party” is defined in Section 4.3.

“Indemnifying Party” is defined in Section 4.3.

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

“Investor Indemnified Party” is defined in
Section 4.1.

“Majority-In-Interest” means the
holders of a majority of the shares of Common Stock or other Registrable
Securities on an as converted basis that are exercising their rights under this
Agreement.

“Maximum Number of Securities” means, with
respect to any type of security that is proposed to be offered, the maximum
dollar amount or number of such security that can be sold in an offering
without adversely affecting the proposed offering price, the timing, the
distribution method, or the probability of success of such offering.

“Maximum Number of Shares” means the maximum
dollar amount or number of Registrable Shares that can be sold in an offering
without adversely affecting the proposed offering price, the timing, the
distribution method, or the probability of success of such offering.

“Maximum Number of Warrants” means the maximum
dollar amount or number of Registrable Warrants that can be sold in an offering
without adversely affecting the proposed offering price, the timing, the
distribution method, or the probability of success of such offering.

“Notices” is defined in Section 6.3.

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

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

“Registrable Securities” means (i) all of the
shares of Common Stock owned or held by Investors, (ii) the Founding Director
Warrants owned by certain Investors, and (iii) the shares of Common Stock
underlying the Founding Director Warrants. 
Notwithstanding anything to the contrary, the Founding Director Warrants
and shares of Common Stock underlying the Founding Director Warrants shall not
constitute Registrable Securities until all shares of Common Stock held by
certain Investors that are subject to the Escrow Agreement cease to be subject
to the Escrow Agreement.  Registrable
Securities include any warrants, shares of capital stock or other securities of
the Company issued as a dividend or other distribution with respect to or in
exchange for or in replacement of such shares of Common Stock.  As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when:  (a) a

 

2

 

Registration Statement with respect to the sale of
such securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act; (c) such securities shall have ceased to be outstanding or (d)
the Commission makes a definitive determination to the Company that the
Registrable Securities are salable under Rule 144(k).

“Registrable Shares” means any shares of Common
Stock that are Registrable Securities.

“Registrable Warrants” means any Founding
Director Warrants that are Registrable Securities.

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

“Release Date” means the date on which shares
of Common Stock are disbursed from escrow pursuant to Section 3 of the Escrow
Agreement.

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

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

 

3

 

2.             REGISTRATION
RIGHTS.

2.1.          Demand
Registration.

2.1.1.             Request
for Registration.  At any time and
from time to time on or after the Release Date, the holders of a majority of
the Registrable Securities held by the Investors or the transferees of the
Investors, may make a written demand for registration under the Securities Act
of all or part of their Registrable Securities (a “Demand Registration”).  Any demand for a Demand Registration shall
specify the intended method(s) of distribution, the number of Registrable
Shares proposed to be sold (such specification, the “Share Demand”) and
the number of Registrable Warrants proposed to be sold (such specification, the
“Warrant Demand”).  The Company
will notify all holders of Registrable Securities of the demand, and each
holder of Registrable Securities who wishes to include all or a portion of such
holder’s Registrable Securities in the Demand Registration (each such holder
including Registrable Securities in such registration, a “Demanding Holder”)
shall so notify the Company within fifteen (15) days after the receipt by the
holder of the notice from the Company, which notice shall include a Share
Demand and a Warrant Demand.  Upon any
such request, the Demanding Holders shall be entitled to have the specified
Registrable Securities included in the Demand Registration, subject to Section
2.1.4 and the provisos set forth in Section 3.1.1.  The Company shall not be obligated to effect
more than an aggregate of two (2) Demand Registrations under this Section 2.1.1
in respect of Registrable Securities.

2.1.2.             Effective Registration.  A registration will not count as a Demand
Registration until the Registration Statement filed with the Commission with
respect to such Demand Registration has been declared effective and the Company
has complied with all of its obligations under this Agreement with respect
thereto; provided, however, that if, after such Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court, the Registration
Statement with respect to such Demand Registration will be deemed not to have
been declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) a Majority-In-Interest of
the Demanding Holders thereafter elect to continue the offering; provided,
further, that the Company shall not be obligated to file a second
Registration Statement until a Registration Statement that has been filed is
counted as a Demand Registration or is terminated.

2.1.3.             Underwritten Offering.  If a Majority-In-Interest of the Demanding
Holders so elect and such holders so advise the Company as part of their
written demand for a Demand Registration, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering.  In such event,
the right of any holder to include its Registrable Securities in such
registration shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable Securities in the
underwriting to the extent provided herein. 
All Demanding Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the Underwriter or Underwriters selected for such underwriting by a
Majority-In-Interest of the holders initiating the Demand Registration.

 

4

 

2.1.4.             Reduction of Offering.  If the
managing Underwriter or Underwriters for a Demand Registration that is to be an
underwritten offering advises the Company and the Demanding Holders in writing
that the dollar amount or number of Registrable Securities which the Demanding
Holders desire to sell, taken together with all other shares of Common Stock or
other securities which the Company desires to sell and the shares of Common
Stock, if any, as to which registration has been requested pursuant to written
contractual piggy-back registration rights held by other shareholders of the
Company who desire to sell, exceeds either or both of the Maximum Number of
Shares and the Maximum Number of Warrants, then the Company shall include in
such registration:  (i) first, the
Registrable Shares as to which Demand Registration has been requested by the
Demanding Holders (pro rata 
in accordance with the number of Registrable Shares which such Demanding
Holder has requested be included in such registration, regardless of the number
of Registrable Securities held by each Demanding Holder); (ii) second, to the extent that the
Maximum Number of Securities has not been reached after giving effect to the
foregoing clause (i), the Registrable Warrants as to which Demand Registration
has been requested by the Demanding Holders (pro
rata in
accordance with the number of Registrable Warrants which such Demanding Holder
has requested be included in such registration, regardless of the number of
Registrable Securities held by each Demanding Holder) and that can be sold
without exceeding the Maximum Number of Warrants; (iii) third, to the extent
that the Maximum Number of Securities has not been reached after giving effect
to the foregoing clauses (i) and (ii), the shares of Common Stock or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Securities; and (iv) fourth, to the extent that the
Maximum Number of Securities has not been reached after giving effect to the
foregoing clauses (i), (ii) and (iii), the shares of Common Stock for the
account of other persons that the Company is obligated to register pursuant to
written contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Securities.

2.1.5.             Withdrawal.  If a Majority-In-Interest of the Demanding
Holders disapprove of the terms of any underwriting or are not entitled to
include all of their Registrable Securities in any offering, such
Majority-In-Interest of the Demanding Holders may elect to withdraw from such
offering by giving written notice to the Company and the Underwriter or
Underwriters of their request to withdraw prior to the effectiveness of the
Registration Statement filed with the Commission with respect to such Demand
Registration.  If the majority of the
Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then such registration shall not count as a Demand Registration
provided for in Section 2.1.1.

2.2.          Piggy-Back Registration.

2.2.1.             Piggy-Back Rights.  If at anytime on or after the Release Date
the Company proposes to file a Registration Statement under the Securities Act
with respect to an offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into, equity
securities, by the Company for its own account or for shareholders of the
Company for their account (or by the Company and by shareholders of the Company
including, without limitation, pursuant to Section 2.1), other than a
Registration Statement (i) filed in connection with any employee stock option
or other benefit plan, (ii) for an exchange offer or offering of securities
solely to the Company’s existing shareholders, (iii) for an offering of debt
that is convertible into equity securities of the Company or (iv) for a
dividend reinvestment plan, then the Company shall (x) give written notice of
such proposed filing to the holders of

 

5

 

Registrable Securities as soon as practicable but in
no event less than twenty (20) days before the anticipated filing date, which
notice shall describe the amount and type of securities to be included in such
offering, the intended method(s) of distribution, and the name of the proposed
managing Underwriter or Underwriters, if any, of the offering, and (y) offer to
the holders of Registrable Securities in such notice the opportunity to register
the sale of such number of Registrable Shares as such holder may request in
writing (such request, the “Share Inclusion Request”) and such number of
Registrable Warrants as such holder may request in writing (such request, the “Warrant
Inclusion Request”) within fifteen (15) days following receipt of such
notice (a “Piggy-Back Registration”). 
The Company shall cause such Registrable Securities to be included in
such registration and shall use its best efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in a Piggy-Back Registration to
be included on the same terms and conditions as any similar securities of the
Company and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method(s) of distribution
thereof.  All holders of Registrable
Securities proposing to distribute their securities through a Piggy-Back Registration
that involves an Underwriter or Underwriters shall enter into an underwriting
agreement in customary form with the Underwriter or Underwriters selected for
such Piggy-Back Registration.

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

(i)            If the registration is undertaken
for the Company’s account: (A) first, the shares of Common Stock or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Securities; (B) second, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clause (A), the
Registrable Shares as to which registration has been requested pursuant to
written contractual piggy-back registration rights of security holders (pro rata in accordance with each such Investor’s
Share Inclusion Request, regardless of the number of shares of Registrable
Securities with respect to which such persons have the right to request such
inclusion) that can be sold without exceeding the Maximum Number of Shares; (C)
third, to the extent that the Maximum Number of Warrants has not been reached
after giving effect to the foregoing clauses (A) and (B), the Registrable
Warrants as to which registration has been requested pursuant to contractual
piggy-back registration rights of security holders (pro rata in accordance with
each such Investor’s Warrant Inclusion Request, regardless of the number of
Registrable Securities with respect to which such person have the right to
request such inclusion) and that can be sold without exceeding the Maximum
Number of Warrants.

 

6

 

(ii)           If the registration is a “demand”
registration undertaken at the demand of persons other than the holders of
Registrable Securities pursuant to written contractual arrangements with such
persons, (A) first, the shares of Common Stock for the account of the demanding
persons that can be sold without exceeding the Maximum Number of Shares; (B)
second, to the extent that the Maximum Number of Securities has not been
reached under the foregoing clause (A), the shares of Common Stock or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Securities; and (C) third, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (A) and (B),
the Registrable Shares to which registration has been requested under this
Section 2.2 (pro rata in accordance with
the each such Investor’s Share Inclusion Request, regardless of the number of
Registrable Securities with respect to which such persons have the right to
request such inclusion); and (D) fourth, to the extent that the Maximum Number
of Warrants has not been reached under the foregoing clauses (A), (B) and (C),
the Registrable Warrants as to which registration has been requested under this
Section 2.2 (pro rata in accordance with each such Investor’s Warrant Inclusion
Request regardless of the number of Registrable Securities with respect to
which such persons have the right to request such inclusion) pursuant to
written contractual piggy-back registration rights and that can be sold without
exceeding the Maximum Number of Warrants; and (E), fifth, to the extent that
the Maximum Number of Securities has not been reached under the foregoing
clauses (A), (B) and (C), the shares of Common Stock or other securities as to
which registration has been requested pursuant to written contractual
piggy-back registration rights which other securityholders desire to sell that
can be sold without exceeding the Maximum Number of Securities.

2.2.3.             Withdrawal.  Any holder of Registrable Securities may
elect to withdraw such holder’s request for inclusion of Registrable Securities
in any Piggy-Back Registration by giving written notice to the Company of such
request to withdraw prior to the effectiveness of the Registration
Statement.  The Company may also elect to
withdraw a registration statement at any time prior to the effectiveness of the
Registration Statement.  Notwithstanding
any such withdrawal, the Company shall pay all expenses incurred by the holders
of Registrable Securities in connection with such Piggy-Back Registration as
provided in Section 3.3.

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

 

7

 

public of less than $500,000.  Registrations effected pursuant to this Section
2.3 shall not be counted as Demand Registrations effected pursuant to Section
2.1.

3.             REGISTRATION
PROCEDURES.

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

3.1.1.             Filing Registration Statement.  The Company shall, as expeditiously as
possible and in any event within sixty (60) days after receipt of a request for
a Demand Registration pursuant to Section 2.1, prepare and file with the
Commission a Registration Statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of all Registrable Securities to be
registered thereunder in accordance with the intended method(s) of distribution
thereof, and shall use its best efforts to cause such Registration Statement to
become and remain effective for the period required by Section 3.1.3; provided,
however, that the Company shall have the right to defer any Demand
Registration for up to thirty (30) days, and any Piggy-Back Registration for
such period as may be applicable to deferment of any demand registration to
which such Piggy-Back Registration relates, in each case if the Company shall
furnish to the holders a certificate signed by the Chief Operating Officer of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be materially detrimental to the Company and its
shareholders for such Registration Statement to be effected at such time;
provided further, however, that the Company shall not have the right to
exercise the right set forth in the immediately preceding proviso more than
once in any 365-day period in respect of a Demand Registration hereunder.

3.1.2.             Copies.  The Company shall, prior to filing a
Registration Statement or prospectus, or any amendment or supplement thereto,
furnish without charge to the holders of Registrable Securities included in
such registration, and such holders’ legal counsel, copies of such Registration
Statement as proposed to be filed, each amendment and supplement to such
Registration Statement (in each case including all exhibits thereto and
documents incorporated by reference therein), the prospectus included in such
Registration Statement (including each preliminary prospectus), and such other
documents as the holders of Registrable Securities included in such
registration or legal counsel for any such holders may request in order to
facilitate the disposition of the Registrable Securities owned by such holders.

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

 

8

 

with by any stop order or injunction of the Commission
or any governmental agency or court) or such securities have been withdrawn.

3.1.4.             Notification.  After the filing of a Registration Statement,
the Company shall promptly, and in no event more than two (2) business days
after such filing, notify the holders of Registrable Securities included in
such Registration Statement of such filing, and shall further notify such
holders promptly and confirm such advice in writing in all events within two
(2) business days of the occurrence of any of the following: (i) when such
Registration Statement becomes effective; (ii) when any post-effective
amendment to such Registration Statement becomes effective; (iii) the issuance
or threatened issuance by the Commission of any stop order (and the Company
shall take all actions required to prevent the entry of such stop order or to
remove it if entered); and (iv) any request by the Commission for any amendment
or supplement to such Registration Statement or any prospectus relating thereto
or for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
promptly make available to the holders of Registrable Securities included in
such Registration Statement any such supplement or amendment; except that
before filing with the Commission a Registration Statement or prospectus or any
amendment or supplement thereto, including documents incorporated by reference,
the Company shall furnish to the holders of Registrable Securities included in
such Registration Statement and to the legal counsel for any such holders,
copies of all such documents proposed to be filed sufficiently in advance of
filing to provide such holders and legal counsel with a reasonable opportunity
to review such documents and comment thereon, and the Company shall not file
any Registration Statement or prospectus or amendment or supplement thereto,
including documents incorporated by reference, to which such holders or their
legal counsel shall object.

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

3.1.6.             Agreements for Disposition. 
The Company shall enter into customary agreements (including, if
applicable, an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities. 
The representations, warranties and covenants of the Company in any
underwriting agreement which are made to or for the benefit of any
Underwriters, to the

 

9

 

extent applicable, shall also be made to and
for the benefit of the holders of Registrable Securities included in such
registration statement.  No holder of
Registrable Securities included in such registration statement shall be
required to make any representations or warranties in the underwriting
agreement except, if applicable, with respect to such holder’s organization,
good standing, authority, title to Registrable Securities, lack of conflict of
such sale with such holder’s material agreements and organizational documents,
and with respect to written information relating to such holder that such
holder has furnished in writing expressly for inclusion in such Registration
Statement.  Holders of Registrable
Securities shall agree to such covenants and indemnification and contribution
obligations for selling stockholders as are customarily contained in agreements
of that type. Further, such holders shall cooperate fully in the
preparation of the registration statement and other documents relating to any
offering in which they include securities pursuant to Section 2
hereof.  Each holder shall also furnish to the Company such information
regarding itself, the Registrable Securities held by such holder, and the
intended method of disposition of such securities as shall be reasonably required
to effect the registration of the Registrable Securities.

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

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

3.1.9.             Opinions and Comfort Letters.  The Company shall furnish to each holder of
Registrable Securities included in any Registration Statement a signed
counterpart, addressed to such holder, of (i) any opinion of counsel to the
Company delivered to any Underwriter and (ii) any comfort letter from the
Company’s independent public accountants delivered to any Underwriter.  In the event no legal opinion is delivered to
any Underwriter, the Company shall furnish to each holder of Registrable
Securities included in such Registration Statement, at any time that such
holder elects to use a prospectus, an opinion of counsel to the Company to the
effect that the Registration Statement containing such prospectus has been
declared effective and that no stop order is in effect.

3.1.10.           Earnings Statement.  The Company shall comply with all applicable
rules and regulations of the Commission and the Securities Act and make available
to its shareholders, as soon as practicable, an earnings statement covering a
period of twelve (12) months, beginning within three (3) months after the
effective date of the registration statement,

 

10

 

which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder.

3.1.11.           Listing.  The Company shall use its best efforts to
cause all Registrable Securities included in any registration to be listed on
such exchanges or otherwise designated for trading in the same manner as
similar securities issued by the Company are then listed or designated or, if
no such similar securities are then listed or designated, in a manner
satisfactory to the holders of a Majority-In-Interest of the Registrable
Securities included in such registration.

3.2.          Obligation to Suspend Distribution.  Upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3.1.4(iv), or,
in the case of a resale registration on Form S-3 pursuant to Section 2.3
hereof, upon any suspension by the Company, pursuant to a written insider
trading compliance program adopted by the Company’s Board of Directors, of the
ability of all “insiders” covered by such program to transact in the Company’s
securities because of the existence of material non-public information and
holder would be deemed an “insider” under such program, each holder of
Registrable Securities included in any registration shall immediately discontinue
disposition of such Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such holder receives the
supplemented or amended prospectus contemplated by Section 3.1.4(iv) or the
restriction on the ability of “insiders” to transact in the Company’s
securities is removed or is inapplicable to such holder, as applicable, and, if
so directed by the Company, each such holder will deliver to the Company all
copies, other than permanent file copies then in such holder’s possession, of
the most recent prospectus covering such Registrable Securities at the time of
receipt of such notice.

3.3.          Registration Expenses.  The Company shall bear all costs and expenses
incurred in connection with any Demand Registration pursuant to Section 2.1,
any Piggy-Back Registration pursuant to Section 2.2, and any registration on
Form S-3 effected pursuant to Section 2.3, and all expenses incurred in
performing or complying with its other obligations under this Agreement,
whether or not the Registration Statement becomes effective, including, without
limitation; (i) all registration and filing fees; (ii) fees and expenses of
compliance with securities or “blue sky” laws (including fees and disbursements
of counsel in connection with blue sky qualifications of the Registrable
Securities); (iii) printing expenses; (iv) the Company’s internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees); (v) the fees and expenses incurred in connection with the listing
of the Registrable Securities as required by Section 3.1.11; (vi) National
Association of Securities Dealers, Inc. fees; (vii) fees and disbursements of
counsel for the Company and fees and expenses for independent certified public
accountants retained by the Company (including the expenses or costs associated
with the delivery of any opinions or comfort letters requested pursuant to
Section 3.1.9); (viii) the fees and expenses of any special experts retained by
the Company in connection with such registration and (ix) the fees and expenses
of one legal counsel selected by the holders of a Majority-In-Interest of the
Registrable Securities included in such registration.  The Company shall have no obligation to pay
any underwriting discounts or selling commissions or transfer taxes, if any,
attributable to the Registrable Securities being sold by the holders thereof,
which underwriting discounts or selling commissions or transfer taxes, if any,
shall be borne by such holders. 
Additionally, in an underwritten offering, all selling shareholders and
the

 

11

 

Company shall bear the expenses of the underwriter pro rata in proportion to the respective amount of shares each
is selling in such offering.

3.4.          Information.  The holders of Registrable Securities shall
provide such information as may reasonably be requested by the Company, or the
managing Underwriter, if any, in connection with the preparation of any
Registration Statement, including amendments and supplements thereto, in order
to effect the registration of any Registrable Securities under the Securities
Act pursuant to Section 2 and in connection with the Company’s obligation to
comply with federal and applicable state securities laws.

4.             INDEMNIFICATION
AND CONTRIBUTION.

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

4.2.          Indemnification by Holders of
Registrable Securities.  Each selling
holder of Registrable Securities will, in the event that any registration is
being effected under the Securities Act pursuant to this Agreement of any
Registrable Securities held by such selling holder, indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any),
and each other person, if any, who controls such selling holder or such
underwriter within the meaning of the Securities Act, against any losses,
claims, judgments, damages or liabilities, whether joint or several, insofar as
such losses, claims, judgments,

 

12

 

damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or allegedly untrue
statement of a material fact contained in any Registration Statement under
which the sale of such Registrable Securities was registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or the alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such selling holder
expressly for use therein, and shall reimburse the Company, its directors and
officers, and each such controlling person for any legal or other expenses
reasonably incurred by any of them in connection with investigation or
defending any such loss, claim, damage, liability or action.  Each selling holder’s indemnification
obligations hereunder shall be several and not joint and shall be limited to
the amount of any net proceeds (after payment of all underwriting fees,
discounts, commissions and taxes) actually received by such selling holder from
the sale of Registrable Securities which gave rise to such indemnification
obligation.

4.3.          Conduct of Indemnification
Proceedings.  Promptly after receipt
by any person of any notice of any loss, claim, damage or liability or any
action in respect of which indemnity may be sought pursuant to Section 4.1 or
4.2, such person (the “Indemnified Party”) shall, if a claim in respect
thereof is to be made against any other person for indemnification hereunder,
notify such other person (the “Indemnifying Party”) in writing of the
loss, claim, judgment, damage, liability or action; provided, however,
that the failure by the Indemnified Party to notify the Indemnifying Party
shall not relieve the Indemnifying Party from any liability which the
Indemnifying Party may have to such indemnified Party hereunder, except and
solely to the extent the Indemnifying Party is actually prejudiced by such
failure.  If the Indemnified Party is
seeking indemnification with respect to any claim or action brought against the
Indemnified Party, then the Indemnifying Party shall be entitled to participate
in such claim or action, and, to the extent that it wishes, jointly with all
other Indemnifying Parties, to assume control of the defense thereof with
counsel reasonably satisfactory to the Indemnified Party.  After notice from the Indemnifying Party to
the Indemnified Party of its election to assume control of the defense of such
claim or action, the Indemnifying Party shall not be liable to the Indemnified
Party for any legal or other expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that in any action in which
both the Indemnified Party and the Indemnifying Party are named as defendants,
the Indemnified Party shall have the right to employ separate counsel (but no
more than one such separate counsel) to represent the Indemnified Party and its
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, with the fees and expenses of such counsel to be paid by
such Indemnifying Party if, based upon the written opinion of counsel of such
Indemnified Party, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.  No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, consent to entry of judgment or
effect any settlement of any claim or pending or threatened proceeding in
respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such judgment or settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.

 

13

 

4.4.          Contribution.

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

4.4.2.             The parties hereto agree that it
would not be just and equitable if contribution pursuant to this Section 4.4
were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding Section 4.4.1. 
The amount paid or payable by an Indemnified Party as a result of any
loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this
Section 4.4, no holder of Registrable Securities shall be required to
contribute any amount in excess of the dollar amount of the net proceeds (after
payment of all underwriting fees, discounts, commissions and taxes) actually
received by such holder from the sale of Registrable Securities which gave rise
to such contribution obligation.  No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

5.             UNDERWRITING
AND DISTRIBUTION.

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

6.             MISCELLANEOUS.

6.1.          Other Registration Rights.  The Company represents and warrants that no
person, other than a holder of the Registrable Securities, has any right to
require the Company to register any shares of the Company’s capital

 

14

 

stock for sale or to include shares of the Company’s
capital stock in any registration filed by the Company for the sale of shares
of capital stock for its own account or for the account of any other person.

6.2.          Assignment; No Third Party
Beneficiaries.  This Agreement and the rights, duties and obligations
of the Company hereunder may not be assigned or delegated by the Company in
whole or in part.  This Agreement and the rights, duties and obligations
of the holders of Registrable Securities hereunder may be freely assigned or
delegated by such holder of Registrable Securities in conjunction with and to
the extent of any transfer of Registrable Securities by any such holder. 
This Agreement and the provisions hereof shall be binding upon and shall inure
to the benefit of each of the parties and their respective successors and the
permitted assigns of the Investor or holder of Registrable Securities or of any
assignee of the Investor or holder of Registrable Securities.  This
Agreement is not intended to confer any rights or benefits on any persons that
are not party hereto other than as expressly set forth in Article 4 and
this Section 6.2.

6.3.          Notices.  All notices, demands, requests, consents,
approvals or other communications (collectively, “Notices”) required or
permitted to be given hereunder or which are given with respect to this
Agreement shall be in writing and shall be personally served, delivered by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to
such other address as such party shall have specified most recently by written
notice.  Notice shall be deemed given on
the date of service or transmission if personally served or transmitted by
telegram, telex or facsimile, provided, that if such service or transmission is
not on a business day or is after normal business hours, then such notice shall
be deemed given on the next business day. 
Notice otherwise sent as provided herein shall be deemed given on the
next business day following timely delivery of such notice to a reputable air
courier service with an order for next-day delivery.

To the Company:

Oracle Healthcare
Acquisition Corp.

200 Greenwich Avenue

3rd Floor

Greenwich, Connecticut 06830

Attention: Joel D. Liffmann

with a copy to:

Willkie Farr &
Gallagher LLP

787 Seventh Avenue

New York, New York  10019-6099

Attention:  William H. Gump

To an Investor, to:

the addresses listed on
Exhibit A hereto

6.4.          Severability.  This Agreement shall be deemed severable, and
the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of

 

15

 

this Agreement or of any other term or provision
hereof.  Furthermore, in lieu of any such
invalid or unenforceable term or provision, the parties hereto intend that
there shall be added as a part of this Agreement a provision as similar in
terms to such invalid or unenforceable provision as may be possible and be
valid and enforceable.

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

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

6.7.          Modifications and Amendments.  No amendment modification or termination of
this Agreement shall be binding upon any party unless executed in writing by
such party,

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

6.9.          Waivers and Extensions.  Any party to this Agreement may waive any
right, breach or default which such party has the right to waive, provided that
such waiver will not be effective against the waiving party unless it is in
writing, is signed by such party, and specifically refers to this
Agreement.  Waivers may be made in
advance or after the right waived has arisen or the breach or default waived
has occurred.  Any waiver may be
conditional No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof nor of any other agreement or provision herein contained.  No waiver or extension of time for
performance of any obligations or acts shall be deemed a waiver or extension of
the time for performance of any other obligations or acts.

6.10.        Remedies Cumulative.  In the event that the Company fails to
observe or perform any covenant or agreement to be observed or performed under
this Agreement, the Investor or any other holder of Registrable Securities may
proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for
an injunction against the breach of any such term or in aid of the exercise of
any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond.  None of the rights, powers
or remedies conferred under this Agreement shall be mutually exclusive, and
each such right, power or remedy shall be cumulative and in addition to any
other right, power or remedy, whether conferred by this Agreement or now or
hereafter available at law, in equity, by statute or otherwise.

6.11.        Governing Law.  This Agreement shall be governed by,
interpreted under, and construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be performed within the
State of New York, without giving effect to any

 

16

 

choice-of-law provisions thereof that would compel the
application of the substantive laws of any other jurisdiction.

6.12.        Waiver of Trial by Jury.  Each party hereby irrevocably and
unconditionally waives the right to a trial by jury in any action, suit,
counterclaim or other proceeding (whether based on contract, tort or otherwise)
arising out of, connected with or relating to this Agreement, the transactions
contemplated hereby, or the actions of the Investor in the negotiation,
administration, performance or enforcement hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

17

 

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

 

	
   

  	
  ORACLE HEALTHCARE
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Joel D. Liffmann

  
	
   

  	
   

  	
  Title: President and Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  LNF OHAC LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Larry N. Feinberg

  
	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ORACLE HEALTHCARE HOLDING
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Larry N. Feinberg

  
	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JDL OHAC LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Joel D. Liffmann

  
	
   

  	
   

  	
  Title: Managing Member

  
				

 

[SIGNATURE
PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

18

 

	
   

  	
  GRANITE CREEK PARTNERS,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Mark A. Radzik

  
	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Joel D. Liffmann

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  George W. Bickerstaff

  
				

 

 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

19

 

EXHIBIT A

 

20

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