Document:

exv10w4

 

Exhibit 10.4

INVESTMENT MANAGEMENT TRUST AGREEMENT

          This
Investment Management Trust Agreement (this “Agreement”) is
made as of
                                        
by and between Acquicor Technology Inc., a Delaware corporation (the
“Company”), and Continental Stock Transfer & Trust Company (“Trustee”).

          WHEREAS,
the Company’s Registration Statement on Form S-1, File
No. 333-128058 (as amended, “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”);

          WHEREAS, ThinkEquity Partners LLC (the “Representative”)
is acting as the representative of the underwriters in the IPO;

          WHEREAS,
the Company has completed a private placement of 333,334 units
for an aggregate purchase price of $2,000,004 (the “Private
Placement”);

          WHEREAS, as described in the Company’s Registration Statement, and in accordance with the
Company’s Amended and Restated Certificate of Incorporation,
$                     of the gross proceeds of
the IPO and Private Placement ($                     if the underwriters over-allotment option is exercised in full) will be
delivered to the Trustee to be deposited and held in a trust account for the benefit of the Company
and the public holders of the Company’s common stock, par value $0.0001 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”); 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;

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

          (c) In a timely manner, upon the written instruction of the Company, invest and reinvest the
Property in (i) money market funds meeting certain conditions under Rule 2a-7 (or any successor
rule) promulgated under the Investment Company Act of 1940 as determined by the Company or (ii) securities issued or guaranteed
by the United States, selected 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;

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          (e) Notify the Company of all communications received by it 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 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
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, at the written instruction of the Company, the Trustee shall disburse to the Company by wire transfer, out of the
Property in the Trust Account,  the
amount indicated by the Company as required to pay income taxes; and

          (j) Upon
written request from the Company, the Trustee shall distribute to the
Company such amount as may be requested by the Company; provided,
however, that the amount distributed by the Trustee to the
Company pursuant to this Section 1(j) in any fiscal quarter may
not exceed $375,000 and the aggregate amount distributed by the
Trustee to the Company pursuant to this Section 1(j) may not
exceed the lesser of (i) the aggregate amount of income actually
received or paid on the amounts in the Trust Account and
(ii) $750,000; and

          (k) Commence liquidation of the Trust Account promptly 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 Chief Executive
Officer and Secretary and affirmed by its 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 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), 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 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), or as soon
thereafter as is practicable. In all cases, the Trustee shall provide the Representatives 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.

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 Chief
Executive Officer, President or Chief Financial Officer. In addition, except with respect to its
duties under paragraph 1(k) above, the Trustee shall be entitled to rely on, and

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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 $                     and an annual fee of $                     (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 Account.
The Company shall not be responsible for any other fees or charges of the Trustee 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 prior to                     , 2007 in connection with a Business Combination,
together with a certified copy of a resolution 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 (which firm may be the Trustee)
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 except for liability arising out of its own
gross negligence or willful misconduct;

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          (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 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, judgment, instruction, 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) Calculate, confirm or approve tax amounts requested by the Company
pursuant to Section 1(i) or file tax reports, prepare income tax returns or pay any taxes on behalf of the Company or the Trust Account.

4. 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

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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 deposit, the Trustee shall be immune from
any liability whatsoever;

          (b) At such time that the Trustee has completed the liquidation of the Trust Account in
accordance with the provisions of paragraph 1(k) 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).

5. 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 one
instrument.

          (c) This Agreement contains the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof. The parties hereto may change, waive, amend or modify any
provision contained herein that may be defective or inconsistent with any other provision contained
herein only upon the written consent of each of the parties hereto; provided that such action shall
not materially adversely affect the interests of the Public Stockholders. Any other change,
waiver, amendment or modification to this Agreement which may be made or agreed to by the Company
prior to the consummation of its initial business combination (as described in the Registration Statement)
shall be subject to the unanimous approval of
the Public Stockholders. 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

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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

          if to the Company, to:

Acquicor Technology Inc.

4910 Birch Street, Suite 102

Newport Beach, California 92660

Attn: Gilbert F. Amelio

Tel. No.: (949) 759-3434

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

          (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 waives any and all right, title, interest or claim of any kind
(“Claim”) in or to any distribution of the Trust Account, and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason
whatsoever.

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

[Signature page follows]

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          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:	 	 
	 
	 	 	 	 	 	 
	 	 	ACQUICOR TECHNOLOGY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Gilbert F. Amelio	 	 
	 

	 	 	 	Title: Chairman and Chief Executive Officer	 	 

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Exhibit 10.4

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 paragraph 1(k) of the Investment Management Trust Agreement between Acquicor
Technology Inc. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”),
dated as of                                          (the “Trust Agreement”), this is to advise you that the Company has
entered into an agreement with                                          (the “Target Business”) to consummate a business
combination with the Target Business (the “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 (the “Consummation Date”).

          Pursuant to paragraph 2(e) of the Trust Agreement, we are providing you with [an affidavit][a
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 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 (the “Instruction Letter”). You are hereby directed and authorized to transfer the funds
held in the Trust Account immediately upon your receipt of 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 Account pursuant to the terms hereof, the Trust
Agreement shall be terminated and the Trust Account closed.

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          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,	 	 
	 
	 	 	 	 	 	 
	 	 	Acquicor Technology Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Gilbert F. Amelio	 	 
	 

	 	 	 	Chairman and Chief Executive Officer	 	 

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Exhibit 10.4

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 paragraph 1(k) of the Investment Management Trust Agreement between Acquicor Technology Inc. (the
“Company”) and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of
                                         (the “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
resolutions 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 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 (the “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 and oversee the distribution of such funds in accordance with the terms of the
Trust Agreement and the Amended and Restated Certificate of Incorporation of the Company; provided
that an amount equal to 40% of any income earned on the Property shall remain in the Trust Account
for the purpose of paying any income tax obligation related thereto. When all income tax
obligations related to the income of the Property have been satisfied, you shall distribute the
remaining funds, if any, in accordance with the terms of the Trust Agreement and the Amended and
Restated Certificate of Incorporation. Upon payment of all the funds in the Trust Account, the
Trust Agreement shall be terminated.

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	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	Acquicor Technology Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Gilbert F. Amelio	 	 
	 

	 	 	 	Chairman and Chief Executive Officer	 	 

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Exhibit 10.4

EXHIBIT C

	 	 	 	 	 
	AUTHORIZED INDIVIDUAL(S)

	 	AUTHORIZED
	 	 
	FOR TELEPHONE CALL BACK

	 	TELEPHONE NUMBER(S)	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Company:
	 	 	 	 
	 
	 	 	 	 
	Acquicor Technology Inc.
	 	 	 	 
	4910 Birch Street, Suite 102
	 	 	 	 
	Newport Beach, California 92660
	 	 	 	 
	Attn: Gilbert F. Amelio

	 	(949) 759-3434	 	 
	 
	 	 	 	 
	Trustee:
	 	 	 	 
	 
	 	 	 	 
	Continental Stock Transfer & Trust Company
	 	 	 	 
	17 Battery Place
	 	 	 	 
	New York, New York 10004
	 	 	 	 
	Attn: Steven G. Nelson, Chairman

	 	(212) 845-3200exv10w6

 

Exhibit 10.6

REGISTRATION RIGHTS AGREEMENT

     THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is entered into as of the      day of                 ,
2006, by and among Acquicor Technology Inc., a Delaware corporation
(the “Company”), and each of those persons and
entities listed on Exhibit A hereto (the “Insiders”).

     WHEREAS,
the Insiders hold all of the issued and outstanding securities of the Company as of
the date hereof;

     WHEREAS,
the Insiders have agreed to purchase certain units of the Company in a private placement pursuant to
the Private Placement Unit Purchase Agreement, dated as of                     , 2006, between the Company, Think Equity Partners LLC and the
Insiders (the “Private Placement”), (the units in the Private Placement and the initial public
offering of the Company to be identical except that the warrants
included in the Private Placement units provide for a cashless
exercise upon redemption of such warrants); and

     WHEREAS,
the Insiders and the Company desire to enter into this Agreement to provide the
Insiders with certain rights relating to the registration of the shares of Common Stock (as defined
below) held by such Insiders.

     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.

          “Business Combination” means the acquisition by the Company, whether by merger, capital stock
exchange, stock purchase, asset acquisition, or other similar type of business combination or a
combination of any of the foregoing, of one or more domestic and/or foreign operating businesses,
in the technology, multimedia and networking sectors having a fair market value (as calculated in accordance with requirements set forth in
the Company’s Amended and Restated Certificate of
Incorporation), either individually or collectively, of at least 80% of the Company’s
net assets at the time of such acquisition; provided, however, that any acquisition of multiple
operating businesses shall occur simultaneously with one another.

          “Business Day” means any day, other than a Saturday, Sunday or legal holiday on which the
banking institutions in the City of New York are authorized or obligated by law or executive order
to close.

          “Commission” means the Securities and Exchange Commission, or such successor federal agency or
agencies as may be established in lieu thereof.

          “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.

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

          “Form S-3” is defined in Section 2.3.

          “Indemnified Party” is defined in Section 4.3.

          “Indemnifying Party” is defined in Section 4.3.

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

          “Insider Indemnified Party” is defined in Section 4.1.

          “Insiders
Shares” means all of the shares of Common Stock owned or held by the Insiders,
including all shares of Common Stock issued to the Insiders in the Private Placement (consisting of
shares of Common Stock and shares issuable upon the exercise of warrants constituting the units
purchased in such Private Placement); provided, that such shares shall cease to be Insider
Shares when: (a) a Registration Statement with respect to the sale of such securities shall have
become effective under the Securities Act (as defined below) and such securities shall have been
sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b)
such securities shall have been otherwise transferred pursuant to Rule 144 of the Securities Act
(or any similar provisions thereunder, other than Rule 144A), new certificates for them not bearing
a legend restricting further transfer shall have been delivered by the Company and subsequent
public distribution of them shall not require registration under the Securities Act; or (c) such
securities shall have ceased to be outstanding.

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

          “Notices” is defined in Section 6.2.

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

          “Prospectus” means a prospectus relating to a Registration Statement, as amended or
supplemented, and all materials incorporated by reference in such Prospectus.

          “Purchase
Option” means the option to purchase 1,250,000 units (each consisting of one share of
Common Stock and two warrants, each exercisable for a share of the Common Stock) issued to
ThinkEquity Partners LLC or its designees in connection with the Company’s initial public offering.

          “Purchase Option Shares” means the units issuable pursuant to the Purchase Option, the Common
Stock and warrants included in such units and the Common Stock issuable upon exercise of such
warrants.

          “Register,” “registered” and “registration” mean a registration effected by preparing and
filing a registration statement or similar document under the Securities Act and such registration
statement becoming effective.

          “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 that is three months before the date on which the lock-up period
applicable to the Insider Shares expires.

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

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

     2. REGISTRATION RIGHTS.

          2.1 Demand Registration.

                 2.1.1 General Request for Registration. At any time, and from time to time, on or
after

2.

 

the Release Date, the holders of a majority-in-interest of the Insider Shares held by the
Insiders and their respective transferees, may make a written demand for registration under the Securities Act of
all or part of the Insider Shares (a “Demand Registration"). Any demand for a Demand Registration
shall specify the number of Insider Shares proposed to be sold and the intended method(s) of
distribution thereof. The Company will notify all holders of Insider Shares of any demand pursuant
to this Section 2.1.1, or pursuant to Section 2.1.2 below, as the case may be, within five (5)
Business Days, and each holder of Insider Shares who wishes to include all or a portion of such
holder’s Insider Shares in such Demand Registration (each such holder including shares of Insider
Shares in such Demand Registration, a “Demanding Holder") shall so notify the Company within ten
(10) Business Days after the receipt by such holder of the notice from the Company. Upon any such
demand, the Demanding Holders shall be entitled to have their Insider Shares included in the Demand
Registration subject to Section 2.1.4 and the provisions 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 Insider Shares.

                 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 Insider Shares 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, (a) such stop order or
injunction is removed, rescinded or otherwise terminated, and (b) with respect to a Demand
Registration, 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 any such 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 Insider Shares pursuant to such Demand Registration shall be in
the form of an underwritten offering. In each such case, the right of any holder to include such
holder’s Insider Shares in such registration shall be conditioned upon such holder’s participation
in such underwriting and the inclusion of such holder’s Insider Shares in the underwriting to the
extent provided herein. All Demanding Holders who propose to distribute their Insider Shares
through such an 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.

                 2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the Demanding Holders
in writing that the dollar amount or number of shares of Insider Shares that the Demanding Holders
desire to sell, taken together with all other shares of Common Stock or other securities that 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 holders of
the Company’s securities who desire to sell securities, exceeds the maximum dollar amount or
maximum number of shares that can be sold in such offering without adversely affecting the proposed
offering price, the timing, the distribution method, or the probability of success of such offering
(such maximum dollar amount or maximum number of shares, as applicable, the “Maximum Number Of
Shares"), then the Company shall include in such registration: (a) first, the Insider Shares as to
which the Demand Registration has been requested and that can be sold without exceeding the Maximum
Number of Shares (all pro rata in accordance with the number of such shares that such holders shall
have requested to be included in such registration); (b) second, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clause (a), the shares of Common Stock
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 Shares; and (c), third, to the extent that the Maximum Number of Shares have not been
reached under the foregoing clauses (a) and (b), the shares of Common Stock that the Company or
other stockholders desire to sell that can be sold without exceeding the Maximum Number of Shares.

                 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 Insider Shares in any
offering, such

3.

 

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. In such event, the Company need not seek effectiveness of such
Registration Statement for the benefit of other Insiders. If the majority-in-interest 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 any time on or after the Release Date the Company
proposes to file by Registration Statement, other than a Registration Statement in connection with
a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form
S-8, then the Company shall (a) give written notice of such proposed filing to the holders of
Insider Shares as soon as practicable but in no event less than ten (10) Business Days before the
anticipated filing date, which notice shall describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name of the proposed
managing Underwriter or Underwriters, if any, of the offering, and (b) offer to such holders of
Insider Shares the opportunity to register such number of Insider Shares as such holders may
request in writing within five (5) Business Days following receipt of such notice (a “Piggy-Back
Registration"). The Company shall cause such Insider Shares to be included in such registration and
shall use commercially reasonable efforts to cause the managing Underwriter or Underwriters of a
proposed underwritten offering to permit the Insider Shares 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 Insider Shares in accordance
with the intended method(s) of distribution thereof. All holders of Insider Shares who propose to
distribute 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 Insider Shares in writing that the dollar amount or number of shares of Common Stock that 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 Insider Shares hereunder, the Insider Shares 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 Shares, then the Company shall include
in any such registration:

                 (a) first, subject to the demand registration rights granted to the holders of the Purchase
Option Shares, the shares of Common Stock or other securities that the Company desires to sell that
can be sold without exceeding the Maximum Number of Shares together with the Insider Shares as to
which registration has been requested and any other shares of Common Stock or other securities as
to which registration has been requested pursuant to the Purchase Option (pro rata in accordance
with the number of shares which each such person has actually requested to be included in such
registration that can be sold without exceeding the Maximum Number of Shares),

                 (b) second, to the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (a), the shares of Common Stock, if any, as to which registration has been
requested pursuant to written contractual piggy-back registration rights which other shareholders
desire to sell that can be sold without exceeding the Maximum Number of Shares, and

                 (c) third, to the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (a) and (b), the shares of Common Stock, if any, that other stockholders desire
to sell that can be sold without exceeding the Maximum Number of Shares.

                 2.2.3 Withdrawal. Any holder of Insider Shares may elect to withdraw such holder’s
request for inclusion of Insider Shares 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

4.

 

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 Insider Shares in connection with such Piggy-Back Registration as provided in Section
3.3.

          2.3 Registrations on Form S-3. A holder of Insider Shares may at any time and from
time to time after the Release Date, request in writing that the Company register the resale of any
or all of such Insider Shares on Form S-3 or any similar short-form registration that may be
available at such time (“Form S-3"); provided, however, that: (a) the Company shall
not be obligated to effect such request through an underwritten offering and (b) the Company shall
not be obligated to effect such a request if the Company has within the preceding twelve (12) month
period effected two (2) registrations on Form S-3. Upon receipt of such written request, the
Company will promptly give written notice of the proposed registration to all other holders of
Insider Shares and, as soon as practicable thereafter, effect the registration of all or such
portion of such holder’s or holders’ Insider Shares, as the case may be, as are specified in such
request, together with all or such portion of the Insider Shares of any other holder or holders
joining in such request as are specified in a written request given within five (5) Business Days
after receipt of such written notice from the Company; provided, however, that the
Company shall not be obligated to effect any such registration pursuant to this Section 2.3: (i) if
Form S-3 is not available for such offering; or (ii) if the holders of the Insider Shares, together
with the holders of any other securities of the Company entitled to inclusion in such registration,
propose to sell Insider Shares and such other securities (if any) at any aggregate price to the
public of less than $500,000. Registrations effected pursuant to this Section 2.3 shall not be
counted as Demand Registrations effected pursuant to Section 2.1.

     3. REGISTRATION PROCEDURES.

          3.1 Filings; Information. Whenever the Company is required to effect the registration
of any Insider Shares pursuant to Section 2, the Company shall use commercially reasonable efforts
to effect the registration and sale of such Insider Shares 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 ninety (90) 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 Insider Shares to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use commercially
reasonable 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 ninety (90) 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 Executive Officer of the Company stating that, in the good faith
judgment of the Board of Directors of the Company, it would be materially detrimental to the
Company and its 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
Insider Shares 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 Insider Shares included in such
registration or legal counsel for any such holders may reasonably request in order to facilitate
the disposition of the Insider Shares 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 Insider Shares, and all other securities

5.

 

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 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
Insider Shares 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: (a) when such Registration Statement becomes effective;
(b) when any post-effective amendment to such Registration Statement becomes effective; (c) 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 (d) 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 Insider Shares 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 Insider Shares included in such Registration
Statement and to the legal counsel for any such holders, copies of all such documents proposed to
be filed sufficiently in advance of filing to provide such holders and legal counsel with a
reasonable opportunity to review such documents and comment thereon, and the Company shall not file
any Registration Statement or Prospectus or amendment or supplement thereto, including documents
incorporated by reference, to which such holders or their legal counsel shall reasonably object.

                 3.1.5 State Securities Laws Compliance. The Company shall use commercially reasonable
efforts to (a) register or qualify the Insider Shares covered by the Registration Statement under
such securities or “blue sky” laws of such jurisdictions in the United States as the holders of
Insider Shares included in such Registration Statement (in light of their intended plan of
distribution) may request and (b) take such action necessary to cause such Insider Shares covered
by the Registration Statement to be registered with or approved by such other federal or state
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 Insider
Shares included in such Registration Statement to consummate the disposition of such Insider Shares
in such jurisdictions; provided, however, that in no event shall the Company be
required to register the Insider Shares in a jurisdiction in which such registration would cause
(x) the Company to be obligated to qualify to do business in any such jurisdiction, or would
subject the Company to taxation as a foreign corporation doing business in such jurisdiction or (y)
the principal stockholders of the Company to be obligated to escrow their shares of capital stock
of the Company (except to the extent such shares are already subject to an escrow in 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 Insider
Shares. 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 extent applicable, shall also be
made to and for the benefit of the holders of Insider Shares included in such registration
statement. No holder of Insider Shares included in such registration statement shall be required to
make any representations or warranties in the underwriting agreement except as reasonably requested
by the Company and, if applicable, with respect to such holder’s organization, good standing,
authority, title to Insider Shares, 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 Insider Shares 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 Insider Shares held by such holder, and the intended method of disposition of such securities
as shall be reasonably required to effect the registration of the

6.

 

Insider Shares.

                 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
Insider Shares 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
Insider Shares 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 Insider Shares 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 reasonably
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
Insider Shares included in any Registration Statement a signed counterpart, addressed to such
holder, of (a) any opinion of counsel to the Company delivered to any Underwriter and (b) 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 Insider Shares 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 six (6) months after the effective date of the registration statement, 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 commercially reasonable efforts to cause all
Insider Shares 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 of the Insider Shares that are 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(d), 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, each holder of Insider
Shares included in any registration shall immediately discontinue disposition of such Insider
Shares pursuant to the Registration Statement covering such Insider Shares until such holder
receives the supplemented or amended Prospectus contemplated by Section 3.1.4(d) or the restriction
on the ability of “insiders” to transact in the Company’s securities is removed, 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 Insider Shares at the time of receipt of such notice.

     3.3 Registration Expenses. The Company shall bear all customary 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 reasonable expenses incurred in performing or complying with its other obligations
under this Agreement, whether or not the Registration Statement becomes effective, including,
without limitation: (a) all registration and filing fees; (b) 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 Insider Shares, subject to the limit set forth in paragraph (i) below);
(c) printing

7.

 

(expenses; (d) the Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees); (e) the fees and expenses incurred in connection with the
listing of the Insider Shares, as required by Section 3.1.11; (f) National Association of
Securities Dealers, Inc. fees; (g) 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); (h) the fees and expenses of any special experts retained by the
Company in connection with such registration and (i) the fees and expenses of one legal counsel
selected by the holders of a majority-in-interest of the Insider Shares that are included in such
registration (not to exceed, including the fees and disbursements to counsel in clause (b) of this
Section 3.3, $20,000). The Company shall have no obligation to pay any underwriting discounts or
selling commissions attributable to the Insider Shares being sold by the holders thereof, which
underwriting discounts or selling commissions shall be borne solely by such holders. Additionally,
in an underwritten offering, all selling shareholders and the Company shall bear the expenses of
the underwriter pro rata in proportion to the respective amount of shares each is selling in such
offering.

          3.4 Information. The holders of Insider Shares 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 Insider Shares 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.

          3.5 Holder Obligations. No holder of Insider Shares may participate in any
underwritten offering pursuant to this Section 3 unless such holder (a) agrees to sell only such
holder’s Insider Shares on the basis reasonably provided in any underwriting agreement, and (b)
completes, executes and delivers any and all questionnaires, powers of attorney, custody
agreements, indemnities, underwriting agreements and other documents reasonably required by or
under the terms of any underwriting agreement or as reasonably requested by the Company.

     4. INDEMNIFICATION AND CONTRIBUTION.

          4.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless
the Insiders and any other holder of Insider Shares, and each of their respective officers,
employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any,
who controls an Insider and each other holder of Insider Shares (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) (each, an “Insider 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 Insider Shares
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, except insofar as 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; provided,
however, that the foregoing indemnity shall not inure to the benefit of any holder (or to
the benefit of any person controlling such holder) from whom the person asserting such losses,
claims or liabilities purchased the Insider Shares, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such holder to such person, if required by law so to have been
delivered at or prior to the written confirmation of the sale of the Insider Shares to such person,
and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to
such losses, claims, damages or liabilities, unless such failure is the result of noncompliance by
the Company with Section 3.1.3 hereof. The Company also shall indemnify the Underwriter, their
officers, employees, affiliates, directors, partners, members, attorneys and agents, and each
person who controls the Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.

                 4.2 Indemnification by Holders of Insider Shares. Each selling holder of Insider
Shares will,

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with respect to any Registration Statement where Insider Shares were registered under the
Securities Act, indemnify and hold harmless the Company, each of its directors and officers, each
underwriter, if any, and each other person, if any, who controls such selling holder, such
underwriter or the Company (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act), against any losses, claims, judgments, damages or liabilities, whether joint or
several, insofar as such losses, claims, judgments, 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 Insider Shares
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 actually received by such selling holder in connection with the sale of the Insider Shares
by such selling holder pursuant to the Registration Statement containing such untrue statement or
allegedly untrue statement.

          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, promptly
notify such other person (the “Indemnifying Party") in writing of the loss, claim, judgment,
damage, liability or action. 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 elects jointly with all
other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to
the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its
election to assume control of the defense of such claim or action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable costs of
investigation. In any such proceeding, the Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Party unless (a) the Indemnified Party and the Indemnifying Party shall have mutually agreed to the
retention of such counsel, or (b) the named parties to any such proceeding (including any impleaded
parties) include both the Indemnified Party and the Indemnifying Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interest
between them. The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or there is a final judgment
for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Party shall have requested an Indemnifying Party
to reimburse the Indemnified Party for fees and expenses of counsel as contemplated in this Section
4.3, the Indemnifying Party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (x) such settlement is entered into more than thirty (30)
days after receipt by such Indemnifying Party of the aforesaid request, and (y) such Indemnifying
Party shall not have reimbursed the Indemnified Party in accordance with such request prior to the
date of such settlement (other than reimbursement for fees and expenses the Indemnifying Party is
contesting in good faith). 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.

          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

9.

 

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 benefits received by the Indemnified
Parties on the one hand and the Indemnifying Parties on the other from the offering. If, however,
the allocation provided by the immediately preceding sentence is not permitted by applicable law or
if the Indemnified Party failed to give the notice required under Section 4.3 above, then each
Indemnifying Party shall contribute to such amount paid or payable by such Indemnified Party in
such proportion as is appropriate to reflect not only such relative benefits but also the relative
fault of the Indemnified Parties on the one hand and the Indemnifying Parties on the other 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 Insider Shares shall be
required to contribute any amount in excess of the dollar amount of the net proceeds (after payment
of any underwriting fees, discounts, commissions or taxes) actually received by such holder from
the sale of Insider Shares 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 Insider Shares may reasonably request, all to the extent required from time to time to
enable such holders to sell Insider Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, or any similar
provision thereto, but not Rule 144A.

     6. MISCELLANEOUS.

          6.1 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 Insider Shares
hereunder may be freely assigned or delegated by such holder of Insider Shares in conjunction with
and to the extent of any permitted transfer of Insider Shares by any such holder in accordance with
applicable law. 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
Insider or holder of Insider Shares or of any assignee of the Insider or holder of Insider Shares.
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 Section 4 and this Section 6.1.

          6.2 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 provided in accordance with this Section 6.2. 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

10.

 

courier service with an order for next-day delivery.

To the Company:

Acquicor Technology Inc.

4910 Birch Street, Suite 2

Newport Beach, California 92660

Attention: Chief Executive Officer

 

with a copy to:

 

Cooley Godward LLP

101 California Street, 5th Floor

San Francisco, CA 94111

Attention: Kenneth L. Guernsey

 

To the Insiders:

 

 

c/o Acquicor Technology Inc.

4910 Birch Street, Suite 2

Newport Beach, California 92660

 

with a copy to:

 

Cooley Godward LLP

101 California Street, 5th Floor

San Francisco, CA 94111

Attention: Kenneth L. Guernsey

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

          6.4 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.

          6.5 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.

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

          6.7 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.

          6.8 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

11.

 

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.

          6.9 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 Insiders or any other
holder of Insider Shares 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.

          6.10 Governing Law. This Agreement shall be governed by and interpreted and construed
in accordance with the laws of the State of New York applicable to contracts formed and to be
performed entirely within the State of New York, without regard to the conflicts of law provisions
thereof to the extent such principles or rules would require or permit the application of the laws
of another jurisdiction. The Company and the holders of the Insider Shares irrevocably and
unconditionally submit to the exclusive jurisdiction of the United States District Court for the
Southern District of New York or, if such court does not have jurisdiction, the New York State
Supreme Court in the Borough of Manhattan, in any action arising out of or relating to this
Agreement, agree that all claims in respect of the action may be heard and determined in any such
court and agree not to bring any action arising out of or relating to this Agreement in any other
court. In any action, the Company and the holders of the Insider Shares irrevocably and
unconditionally waive and agree not to assert by way of motion, as a defense or otherwise any
claims that it is not subject to the jurisdiction of the above court, that such action is brought
in an inconvenient forum or that the venue of such action is improper. Without limiting the
foregoing, the Company and the holders of the Insider Shares agree that service of process at each
parties respective addresses as provided for in Section 6.2 above shall be deemed effective service
of process on such party.

          6.11 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 Insiders in the negotiation, administration,
performance or enforcement hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

12.

 

     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.

	 	 	 	 	 
	 	Acquicor Technology Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	Ellen M. Hancock 	 
	 	 	Title:  	President 	 
	 

	 	 	 	 	 
	 	Acquicor Management LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Gilbert F. Amelio, PhD 	 
	 	 	Title:  	Manager 	 
	 
	 	  	 	 
	 	 	Harold L. Clark, Ed.D.  	 
	 
	 	  	 	 
	 	 	John P. Kensey  	 
	 
	 	  	 	 
	 	 	Moshe I. Meidar  	 

13.

 

Exhibit
A

Acquicor
Management LLC

Harold L.
Clark, Ed.D.

John P.
Kensey

Moshe I.
Meidar

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