Document:

Exhibit 4.11

 

EXHIBIT D

 

LOCK-UP/LEAK-OUT AGREEMENT

 

THIS LOCK-UP/LEAK-OUT AGREEMENT (the “Agreement”) is
made and entered into as of the       day of
December, 2004, between Two Moons Kachinas Corp., a Nevada corporation (“Two
Moons”), and the individuals that execute and deliver a Counterpart Signature
Page hereof, and sometimes collectively referred to herein as the
“Shareholders” and each, a “Shareholder.”   
For all purposes of this Agreement, “Shareholder” includes any
“affiliate, controlling person of Shareholder, agent, representative or other
person with whom Shareholder is acting in concert with.

 

WHEREAS, the Buyers (as defined herein), along with
certain other persons, are acquiring Common Stock of Two Moons from certain
current stockholders of Two Moons (respectively, the “Change in Control
Transaction” and the “Buyers”); and

 

WHEREAS, the Buyers that are participating in the
Change in Control Transaction have identified a potential reorganization,
merger or acquisition for Two Moons that may or may not be completed or if
completed, may or may not be beneficial to Two Moons and its stockholders (the
“Reorganization Transaction”); and

 

WHEREAS, in order to facilitate the consummation of
the transactions contemplated by the Change in Control Transaction and the
Reorganization Transaction and to protect the Company, the Shareholders have
agreed to enter into this Agreement and to restrict the public sale,
assignment, transfer, conveyance, hypothecation or alienation of the Common
Stock, all on the terms set forth below.

 

NOW, THEREFORE, in consideration of the foregoing
premises and the mutual covenants contained herein, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Except as otherwise
expressly provided herein, and except as each Shareholder may be otherwise
restricted from selling shares of Common Stock, each Shareholder may only
publicly sell Common Stock subject to the following conditions commencing on
the execution and delivery of this Agreement and for the twelve (12) month
period from the filing of a Form 8-K12g3 (“successor issuer” 8-K Current
Report) the Closing of the Reorganization Transaction (the “Lock-Up/Leak-Out
Period”):

 

1.1                                 Each Shareholder
shall be allowed to sell 1/12th of such Shareholder’s shares of Common Stock
per month during the Lock-Up/Leak-Out Period, on a non-cumulative basis,
meaning that if no Common Stock was sold during one month while Common Stock
was qualified to be sold, such shares of Common Stock could not be sold in the
next successive month.

 

 

1.2                                 Except as otherwise
provided herein, all Common Stock shall only be sold in “broker’s transactions”
and each Shareholder must comply with the “manner of sale” requirements as
those terms are defined in Rule 144 of the Securities and Exchange
Commission during the Lock-Up/Leak-Out Period.

 

1.3                                 An appropriate
legend describing this Agreement shall be imprinted on each stock certificate
representing Common Stock covered hereby, and the transfer records of Two
Moons’ transfer agent shall reflect such appropriate restrictions.

 

1.4                                 The Shareholders
agree that they will not engage in any short selling of the Common Stock during
the Lock-Up/Leak-Out Period.

 

1.5                                 During the
Lock-Up/Leak/Out Period, Two Moons shall maintain its “reporting” status with
the Securities and Exchange Commission; file all reports that are required to
be filed by it during such period; and use its “best efforts” to ensure that
the Common Stock is continually quoted for public trading on a nationally recognized
medium of no less significance than the OTC Electronic Bulletin Board of the
National Association of Securities Dealers, Inc. (the “NASD”), the NASDAQ
Small Cap or a recognized national stock exchange.

 

1.6                                 During the
Lock-Up/Leak-Out Period, each Shareholder will be required to submit a legal
opinion to the Company with any requested transfer hereunder to the effect that
any monthly sale is being made in compliance with this Agreement.

 

2.                                       The delivery of a
duly executed copy of the Broker/Dealer Agreement by a selling Shareholder’s
broker and a duly executed Seller’s Resale Agreement by the selling Shareholder
in the forms attached hereto shall be satisfactory evidence for all purposes of
this Agreement that such selling Shareholder and its broker will comply with
the “broker’s transactions” and “manner of sale” requirements of this Agreement,
and no further evidence thereof will be required of any selling Shareholder; provided,
however, Two Moons may confirm such compliance with any Shareholder and any
selling Shareholder’s broker, to the extent that it deems reasonably required
or necessary to assure compliance with this Agreement.

 

3.                                       Notwithstanding
anything to the contrary set forth herein, Two Moons may, in its sole
discretion and in good faith, at any time and from time to time, waive any of
the conditions or restrictions contained herein to increase the liquidity of
the Common Stock or if such waiver would otherwise be in the best interests of
the development of the trading market for the Common Stock. Unless otherwise
agreed by the Shareholders, all such waivers shall be pro rata, as to all of
the Shareholders who

 

 

executed a Lock-Up/Leak-Out Agreement in connection
with the Change in Control Transaction whose Common Stock can, at the time of
any such waiver, be publicly sold in accordance with the Securities Act of
1933, as amended (the “Securities Act”), or Rule 144 promulgated
thereunder by the Securities and Exchange Commission or otherwise.

 

4.                                       Other than the
contemplated Reorganization Transaction or any merger with a subsidiary, in the
event of: (a) a completed tender offer to purchase all or substantially
all of Two Moons’ issued and outstanding securities; or (b) a merger, consolidation
or other reorganization of Two Moons with or into an unaffiliated entity, then
this Agreement shall terminate as of the closing of such event and the Common Stock
restricted pursuant hereto shall be released from such restrictions.

 

5.                                       Except as otherwise
provided in this Agreement or any other agreements between the parties, the
Shareholders shall be entitled to their respective beneficial rights of
ownership of the Common Stock, including the right to vote the Common Stock for
any and all purposes.

 

6.                                       The number of
shares of Common Stock included in any monthly allotment that can be sold by a
Shareholder shall be appropriately adjusted should Two Moons make a dividend or
distribution, undergo a forward split or a reverse split or otherwise
reclassify its shares of Common Stock.

 

7.                                       This Agreement may
be executed in any number of counterparts with the same force and effect as if
all parties had executed the same document.

 

8.                                       All notices,
instructions or other communications required or permitted to be given pursuant
to this Agreement shall be given in writing and delivered by certified mail,
return receipt requested, overnight delivery or hand-delivered to all parties
to this Agreement, to Two Moons, at 9005 Cobble Canyon Lane, Sandy, Utah 84093;
or, subsequent to the Closing of the Change in Control Transaction and the Reorganization
Transaction, to One Innovation Drive, Worcester, MA 01605; and to the Shareholders,
at the addresses in their Counterpart Signature Pages. All notices shall be deemed
to be given on the same day if delivered by hand or on the following business day
if sent by overnight delivery or the second business day following the date of mailing.

 

9.                                       The resale
restrictions on the Common Stock set forth in this Agreement shall be in
addition to all other restrictions on transfer imposed by applicable United
States and state securities laws, rules and regulations.

 

10.                                 Two Moons or each
Shareholder who fails to fully adhere to the terms and conditions of this
Agreement shall be liable to every other party for any damages suffered by any
party by reason of any such breach of the terms and conditions hereof. Each
Shareholder agrees that in the event of a breach of any of the terms and conditions
of this Agreement by any such Shareholder, that in addition to all other remedies
that may be available in law or in equity to the non-defaulting parties, a

 

 

preliminary and permanent injunction, without bond
or surety, and an order of a court requiring such defaulting Shareholder to
cease and desist from violating the terms and conditions of this Agreement and
specifically requiring such Shareholder to perform his/her/its obligations
hereunder is fair and reasonable by reason of the inability of the parties to
this Agreement to presently determine the type, extent or amount of damages
that Two Moons or the non-defaulting Shareholders may suffer as a result of any
breach or continuation thereof.

 

11.                                 This Agreement sets
forth the entire understanding of the parties hereto with respect to the
subject matter hereof, and may not be amended except by a written instrument
executed by the parties hereto.

 

12.                                 This Agreement
shall be governed by and construed in accordance with the laws of the State of
Utah applicable to contracts entered into and to be performed wholly within
said State; and Two Moons and the Shareholders agree that any action based upon
this Agreement may be brought in the United States and state courts of Utah only,
and each submits himself/herself/itself to the jurisdiction of such courts for
all purposes hereunder.

 

13.                                 In the event of
default hereunder, the non-defaulting parties shall be entitled to recover
reasonable attorney’s fees incurred in the enforcement of this Agreement.

 

IN WITNESS WHEREOF, the undersigned have duly
executed and delivered this Agreement as of the day and year first above
written.

 

 

	
   

  	
  TWO MOONS
  KACHINAS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
  .

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
							

 

 

LOCK-UP/LEAK-OUT AGREEMENT

COUNTERPART SIGNATURE PAGE

 

This
Counterpart Signature Page for that certain Lock-Up/Leak-Out Agreement
(the “Agreement”) dated as of the        day
of December, 2004, among Two Moons Kachinas Corp., a Nevada corporation (“Two
Moons”); and certain persons who are “Shareholders” of Two Moons, by which the
undersigned, through execution and delivery of this Counterpart Signature Page,
intends to be legally bound by the terms of the Agreement, as a Shareholder, of
the number of shares of Two Moons set forth below or hereafter acquired during
the Lock-Up/Leak-Out Period as defined in the Agreement.

 

	
   

  	
   

  	
   

  
	
   

  	
  (Entity
  Name, if Applicable)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Printed
  Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street
  Address)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City and
  State)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Number of
  Shares Owned or Underlying Other Securities)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Date)

  	
   

  

 

 

Broker/Dealer Agreement

 

Two Moons Kachinas Corp.

9005 Cobble Canyon Lane

Sandy, Utah 84093

 

Interwest Transfer Company

1981 East Murray-Holladay Blvd.

Salt Lake City, Utah 84117

 

Re:                                                                               Resale restriction
of certain shares of common stock of Two Moons Kachinas Corp., a Nevada
corporation (“Two Moons” or the “Company”)

 

Dear Ladies and Gentlemen:

 

The undersigned broker hereby acknowledges receipt
of stock certificates representing                       shares
of common stock of the Company that are owned by                                                                     (the
“Customer”).

 

In consideration of transferring these securities
free of any legend or other notation respecting the resale of these securities
so that the undersigned broker can effect a sale of such shares (a “Company
Approved Sale”), the undersigned broker agrees:

 

(i)                                     That all sales of
these securities or any other securities of Two Moons on deposit in the
accounts of the Customer will be made in “broker’s transactions” only as that
term is defined in Rule 144 of the Securities and Exchange Commission
until           , 200   
(the “Resale Restriction Period”);

 

(ii)                                  That there will be
no legend removal or DTC’s of any securities of the Customer prior to a Company
Approved Sale during the “Resale Restrictions Period”;

 

(iii)                               That if any of the securities of the Company
are ordered out by the Customer for delivery prior to the expiration of the
Resale Restriction Period, that instructions will be given to the Company’s
transfer agent to re-issue the stock certificates for the Customer with the
appropriate restriction or restrictions as are outlined in the Letter Agreement
of the Customer, and to the effect that such securities can only be sold in
“broker’s transactions.”

 

 

The undersigned broker further agrees that we will
provide you with reasonable documentation on your request to verify our
compliance with this Letter Agreement.

 

	
   

  	
  Very truly
  yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Broker/Dealer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  City, State,
  Zip

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
						

 

 

Seller’s Resale Agreement

 

Two
Moons Kachinas Corp.

9005
Cobble Canyon Lane

Sandy,
Utah 84093

 

Interwest Transfer Company

1981 East Murray-Holladay Blvd.

Salt Lake City, Utah 84117

 

Re:                                                                               Resale restriction
of certain shares of common stock of Two Moons Kachinas Corp., a Nevada
corporation (“Two Moons” or the “Company”)

 

Dear
Ladies and Gentlemen:

 

The
undersigned agrees to effect all sales of shares of common stock of Stock
Certificate No.                            
representing                           shares
of common stock of Two Moons in
accordance with the “manner of sale” requirements of Rule 144 as outlined
in Schedule 1 hereto until on or before                         ,
200  .

 

DATED
this              day
of                                           ,
200   .

 

	
   

  	
  Very truly
  yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  City, State,
  Zip

  	
   

  
						

 

 

SCHEDULE 1

 

SELLER’S REQUIREMENTS IN “BROKERS’ TRANSACTIONS”

RULE 144 “MANNER OF SALE” REQUIREMENTS

 

The
securities shall be sold in “brokers’ transactions” within the meaning of
Section 4(4) of the Securities Act or in transactions directly with a
“market maker,” as that term is defined in Section 3(a)(38) of the
Securities Exchange Act of 1934, and the person selling the securities shall
not (1) solicit or arrange for the solicitation of orders to buy the
securities in anticipation of or in connection with such transaction, or
(2) make any payment in connection with the offer or sale of the
securities to any person other than the broker who executes the order to sell
the securities.Exhibit 4.12

 

 

ADVANCED CELL TECHNOLOGY, INC.

 

 

INVESTOR’S RIGHTS AGREEMENT

 

 

 

 

December 31, 1998

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  Registration Rights

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
  1.2

  	
  Request for Registration

  	
   

  
	
   

  	
  1.3

  	
  Company Registration

  	
   

  
	
   

  	
  1.4

  	
  Obligations of the
  Company 

  	
   

  
	
   

  	
  1.5

  	
  Furnish Information

  	
   

  
	
   

  	
  1.6

  	
  Expenses of Demand
  Registration

  	
   

  
	
   

  	
  1.7

  	
  Expenses of
  Company Registration

  	
   

  
	
   

  	
  1.8

  	
  Underwriting Requirements

  	
   

  
	
   

  	
  1.9

  	
  Delay of Registration

  	
   

  
	
   

  	
  1.10

  	
  Indemnification

  	
   

  
	
   

  	
  1.11

  	
  Reports
  Under Securities Exchange Act of 1934

  	
   

  
	
   

  	
  1.12

  	
  Form S-3
  Registration

  	
   

  
	
   

  	
  1.13

  	
  Assignment of
  Registration Rights

  	
   

  
	
   

  	
  1.14

  	
  Limitations on
  Subsequent Registration Rights

  	
   

  
	
   

  	
  1.15

  	
  “Market Stand-Off” Agreement

  	
   

  
	
   

  	
  1.16

  	
  Termination of
  Registration Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Covenants of the Company

  	
   

  
	
   

  	
  2.1

  	
  Delivery of Financial
  Statements

  	
   

  
	
   

  	
  2.2

  	
  Inspection

  	
   

  
	
   

  	
  2.3

  	
  Termination of
  Information and Inspection Covenants

  	
   

  
	
   

  	
  2.4

  	
  Right of First Offer

  	
   

  
	
   

  	
  2.5

  	
  Negative Covenants

  	
   

  
	
   

  	
  2.7

  	
  Termination of Certain
  Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Miscellaneous

  	
   

  
	
   

  	
  3.1

  	
  Successors and Assigns

  	
   

  
	
   

  	
  3.2

  	
  Governing
  Law

  	
   

  
	
   

  	
  3.3

  	
  Counterparts

  	
   

  
	
   

  	
  3.4

  	
  Titles and Subtitles

  	
   

  
	
   

  	
  3.5

  	
  Notices

  	
   

  
	
   

  	
  3.6

  	
  Expenses

  	
   

  
	
   

  	
  3.7

  	
  Amendments and Waivers

  	
   

  
	
   

  	
  3.8

  	
  Severability

  	
   

  
	
   

  	
  3.9

  	
  Aggregation of Stock

  	
   

  
	
   

  	
  3.10

  	
  Entire Agreement;
  Amendment; Waiver

  	
   

  

 

i

 

INVESTOR’S RIGHTS AGREEMENT

 

THIS INVESTOR’S RIGHTS AGREEMENT is made as of the       day
of December, 1998, by and between Advanced Cell Technology, Inc., a
Delaware corporation (the “Company”), and Avian Farms, Inc., a Delaware
corporation, referred to herein as an “Investor.”

 

RECITALS

 

WHEREAS, the Company and the Investor are parties to the Series A
Preferred Stock Purchase Agreement of even date herewith (the “Series A
Agreement”);

 

WHEREAS, in order to induce the Company to enter into the Series A
Agreement and to induce the Investor to invest funds in the Company pursuant to
the Series A Agreement, the Investor and the Company hereby agree that
this Agreement shall govern the rights of the Investor to cause the Company to
register shares of Common Stock issuable to the Investor and
certain other matters as set forth herein;

 

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

 

I.                               Registration Rights.
The Company covenants and agrees as follows:

 

1.1                        Definitions. For purposes of this Section 1:

 

(a)                         The term “Act” means the Securities Act of
1933, as amended.

 

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

 

(c)                         The term “Holder” means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.13 hereof.

 

(d)                        The term “1934 Act” shall mean the Securities
Exchange Act of 1934, as
amended.

 

(e)                         The term “register”, “registered,” and “registration”
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration
or ordering of effectiveness of such registration statement or document.

 

1

 

(f)                          The term “Registrable Securities” means (i) the
Common Stock issuable or issued upon conversion of the Series A Preferred
Stock, and (ii) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which
is issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of the shares referenced in (i) above, excluding in
all cases, however, any Registrable Securities sold by a person in a transaction
in which his rights under this Section 1 are not assigned.

 

(g)                       The number of shares of “Registrable
Securities then outstanding” shall be determined by the number of shares of
Common Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities which are,
Registrable Securities.

 

(h)                        The term “SEC” shall mean the Securities and
Exchange Commission.

 

1.2                        Request for Registration.

 

(a)                         If the Company shall receive at any time
after the earlier of (i) December 31, 1999, or (ii) three (3) months
after the effective date of the first registration statement for a public
offering of securities of the Company (other than a registration statement
relating either to the sale of securities to employees of the Company pursuant to
a stock option, stock purchase or similar plan or a SEC Rule 145
transaction), a written request from the Holders of a majority of the
Registrable Securities then outstanding that the Company file a registration
statement under the Act covering the registration of at least forty percent
(40%) of the Registrable Securities then outstanding (or a lesser percent if
the anticipated aggregate offering price, net of underwriting discounts and commissions,
would exceed $7,500,000), then the Company shall:

 

(i)                                     within ten (10) days of the receipt
thereof, give written notice of such request to all Holders; and

 

(ii)                                  effect as soon as practicable, and in any
event within 60 days of the receipt of such request, the registration under the
Act of all Registrable Securities which the Holders request to be registered,
subject to the limitations of subsection 1.2(b), within twenty (20) days
of the mailing of such notice by the Company in accordance with Section 3.5.

 

(b)                        If the Holders initiating the registration
request hereunder (“Initiating Holders”) intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to subsection 1.2(a) and
the Company shall include such information in the written notice referred to in
subsection 1.2(a). The underwriter will be selected by the Company and
shall be reasonably acceptable to a majority in interest of the Initiating
Holders. In such event, the right of any Holder to include his Registrable Securities
in such registration shall be conditioned upon such Holder’s participation in

 

2

 

such underwriting and the inclusion of such Holder’s Registrable
Securities in the underwriting (unless otherwise mutually agreed by a majority
in interest of the Initiating Holders and such Holder) to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company as provided in subsection 1.4(e))
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other
provision of this Section 1.2, if the underwriter advises the Initiating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Initiating Holders shall so advise all
Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated among all Holders thereof,
including the Initiating Holders, in proportion (as nearly as practicable) to
the amount of Registrable Securities of the Company owned by each Holder,
provided, however, that the number of shares of Registrable Securities to be
included in such underwriting shall not be reduced unless all other securities
are first entirely excluded from the underwriting.

 

(c)                         Notwithstanding the foregoing, if the Company
shall furnish to Holders requesting a registration statement pursuant to this Section 1.2,
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 seriously detrimental to the Company and its stockholders for such
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to
defer taking action with respect to such filing for a period of not more than
120 days after receipt of the request of the Initiating Holders; provided,
however, that the Company may not utilize this right more than once in any
twelve-month period.

 

(d)                        In addition, the Company shall not be
obligated to effect, or to take any action to effect, any registration pursuant
to this Section 1.2:

 

(i)                                     After the Company has effected two
registrations pursuant to this Section 1.2 and such registrations have
been declared or ordered effective;

 

(ii)                                  During the period starting with the date
sixty (60) days prior to the Company’s good faith estimate of the date of
filing of, and ending on a date one hundred eighty (180) days after the
effective date of, a registration subject to Section 1.3 hereof; provided
that the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective; or

 

(iii)                               If the Initiating Holders propose to dispose
of shares of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.12 below.

 

1.3                        Company
Registration. If (but without any obligation to do so)
the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock or other securities

 

3

 

under the Act in connection with the public offering of such securities
solely for cash (other than a registration relating solely to the sale of
securities to participants in a Company stock plan, a registration on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Securities or a registration in which the only Common Stock being registered is
Common Stock issuable upon conversion of debt securities which are also being
registered), the Company shall, at such time, promptly give each Holder written
notice of such registration. Upon the written request of each Holder given
within twenty (20) days after mailing of such notice by the Company in
accordance with Section 3.5, the Company shall, subject to the provisions
of Section 1.8, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.

 

1.4                        Obligations of the Company. Whenever required under this Section 1
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:

 

(a)                         Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period of up to
one hundred twenty (120) days or until the distribution contemplated in the Registration
Statement has been completed, provided, however, that (i) such 120-day period
shall be extended for a period of time equal to the period the Holder refrains
from selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which
are intended to be offered on a continuous or delayed basis, such 120-day
period shall be extended, if necessary, to keep the registration statement
effective until all such Registrable Securities are sold, provided that Rule 415,
or any successor rule under the Act, permits an offering on a continuous
or delayed basis, and provided further that applicable rules under the Act
governing the obligation to file a post-effective amendment permit, in lieu of
filing a post-effective amendment which (1) includes any prospectus
required by Section 10(a)(3) of the Act or (11) reflects facts or
events representing a material or fundamental change in the information set
forth in the registration statement, the incorporation by reference of information
required to be included in (1) and (11) above to be contained in periodic reports
filed pursuant to Section 13 or 15(d) of the 1934 Act in the
registration statement.

 

(b)                        Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such registration statement.

 

(c)                         Furnish to the Holders such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and

 

4

 

such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.

 

(d)                        Use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or jurisdictions,
unless the Company is already subject to service in such jurisdiction and except
as may be required by the Act.

 

(e)                         In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering. Each Holder participating in such underwriting shall also enter into
and perform its obligations under such an agreement.

 

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

 

(g)                        Cause all such Registrable Securities
registered pursuant hereunder to be listed on each securities exchange on which
similar securities issued by the Company are then listed.

 

(h)                        Provide a transfer agent and registrar for
all Registrable Securities registered pursuant hereunder and a CUSIP number for
all such Registrable Securities, in each case not later than the effective date
of such registration.

 

(i)                            Use its best efforts to furnish, at the
request of any Holder requesting registration of Registrable Securities
pursuant to this Section 1, on the date that such Registrable Securities
are delivered to the underwriters for sale in connection with a registration
pursuant to this Section 1, if such securities are being sold through
underwriters, or, if such securities are not being sold through underwriters,
on the date that the registration statement with respect to such securities
becomes effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date,
from the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants
to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities.

 

5

 

1.5                        Furnish Information.

 

(a)                         It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder’s
Registrable Securities.

 

(b)                        The Company shall have no obligation with
respect to any registration requested pursuant to Section 1.2 or Section 1.12
if, due to the operation of subsection 1.5(a), the number of shares or the
anticipated aggregate offering price of the Registrable Securities to be
included in the registration does not equal or exceed the number of shares or
the anticipated aggregate offering price required to originally trigger the
Company’s obligation to initiate such registration as specified in subsection 1.2(a) or
subsection 1.12(b)(2), whichever is applicable.

 

1.6                        Expenses of Demand Registration. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 1.2, including (without limitation) all
registration, filing and qualification fees, printers’ and accounting fees,
fees and disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holders shall be borne by the
Company, provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2
if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered (in which
case all participating holders shall bear such expenses), unless the Holders of
a majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 1.2.

 

1.7                        Expenses of Company Registration. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of Registrable
Securities with respect to the registrations pursuant to Section 1.3 for
each Holder (which right may be assigned as provided in Section 1.13),
including (without limitation) all registration, filing, and qualification
fees, printers and accounting fees relating or apportionable thereto and the
fees and disbursements of counsel for the Company in its capacity as counsel to
the selling Holders hereunder; if Company counsel does not make itself
available for this purpose, the Company will pay the reasonable fees and
disbursements of one counsel for the selling Holders selected by them, but
excluding underwriting discounts and commissions relating to Registrable
Securities.

 

1.8                        Underwriting Requirements. In connection with any offering involving
an underwriting of shares of the Company’s capital stock, the Company shall not
be required under Section 1.3 to include any of the Holders’ securities in
such underwriting unless they accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it (or by other
persons entitled to select the

 

6

 

underwriters), and then only in such quantity as the
underwriters determine in their sole discretion will not, jeopardize the
success of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata among the selling stockholders according to the total amount of securities
entitled to be included therein owned by each selling Stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholders)
but in no event shall (i) the amount of securities of the selling Holders
included in the offering be reduced below twenty percent (20%) of the total
amount of securities included in such offering, unless such offering is the
initial public offering of the Company’s securities in which case the selling
stockholders may be excluded if the underwriters make the determination
described above and no other stockholder’s securities are included or (ii) notwithstanding
(i) above, any shares being sold by a stockholder exercising a demand registration
right similar to that granted in Section 1.2 be excluded from such
offering. For purposes of the preceding parenthetical concerning apportionment,
for any selling stockholder which is a holder of Registrable Securities and
which is a partnership or corporation, the partners, retired partners and
stockholders of such holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single “selling stockholder”, and any
pro-rata reduction with respect to such “selling stockholder” shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such “selling stockholder”, as defined in
this sentence.

 

1.9                        Delay
of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.

 

1.10                  Indemnification. In the event any Registrable Securities are included in a
registration statement under this Section 1:

 

(a)                         To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, any underwriter (as defined in
the Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the 1934 Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act or the 1934 Act, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a “Violation”):
(i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(ii) the omission

 

7

 

or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, any
state securities law or any rule or regulation promulgated under the Act,
the 1934 Act or any state securities law; and the Company will pay to each such
Holder, underwriter or controlling person any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action, provided, however, that the
indemnity agreement contained in this subsection 1.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, underwriter or
controlling person.

 

(b)                        To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any losses,
claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the 1934 Act or other federal
or state law insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration, and each such
Holder will pay any legal or other expenses reasonably incurred by any person
intended to be indemnified pursuant to this subsection 1.10(b), in connection
with investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection 1.10(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld, provided, that, in no
event shall any indemnity under this subsection 1.10(b) exceed the gross
proceeds from the offering received by such Holder.

 

(c)                         Promptly after receipt by an indemnified
party under this Section 1.10 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section 1.10,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties, provided, however, that an indemnified party (together
with all other indemnified parties which may be represented without conflict by

 

8

 

one counsel) shall have the right to retain one separate counsel, with
the fees and expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 1.10, but the
omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 1.10.

 

(d)                        If the indemnification provided for in this Section 1.10
is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.

 

(e)                         Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.

 

(f)                           The obligations of the Company and Holders
under this Section 1.10 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1,
and otherwise.

 

1.11                  Reports Under Securities Exchange Act of 1934. With a view to making available to the Holders the benefits of Rule 144
promulgated under the Act and any other rule or regulation of the SEC that
may at any time permit a Holder to sell securities of the Company to the public
without registration or pursuant to a registration on Form S-3, the
Company agrees to:

 

(a)                         make and keep public information available,
as those terms are understood and defined in SEC Rule 144, at all times
after ninety (90) days after the effective date of the first registration
statement filed by the Company for the offering of its securities to the
general public;

 

9

 

(b)                        take such action, including the voluntary
registration of its Common Stock under Section 12 of the 1934 Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable after
the end of the fiscal year in which the first registration statement filed by
the Company for the offering of its securities to the general public is
declared effective;

 

(c)                         file with the SEC in a timely manner all
reports and other documents required of the Company under the Act and the 1934
Act; and

 

(d)                        furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements
of SEC Rule 144 (at any time after ninety (90) days after the effective
date of the first registration statement filed by the Company), the Act and the
1934 Act (at any time after it has become subject to such reporting requirements),
or that it qualifies as a registrant whose securities may be resold pursuant to
Form S-3 (at any time after it so qualifies), (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation
of the SEC which permits the selling of any such securities without
registration or pursuant to such form.

 

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

 

(a)                         promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and

 

(b)                        as soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution 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 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, qualification or compliance, pursuant to this section 1.12:
(1) if Form S-3 is not available for such offering by the Holders, (2) if
the Holders, 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 an aggregate price to the
public (net of any underwriters’ discounts or commissions) of less than
$250,000; (3) if the Company shall furnish to the Holders a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its

 

10

 

stockholders for such Form S-3 Registration to be effected at such
time, in which event the Company shall have the right to defer the filing of
the Form S-3 registration statement for a period of not more than 60 days
after receipt of the request of the Holder or Holders under this Section 1.12,
provided, however, that the Company shall not utilize this right more than once
in any twelve month period; (4) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two
registrations on Form S-3 for the Holders pursuant to this Section 1.121
or (5) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service
of process in effecting such registration, qualification or compliance.

 

(c)                         Subject to the foregoing, the Company shall
file a registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders. All expenses incurred in connection
with a registration requested pursuant to Section 1.12, including (without
limitation) all registration, filing, qualification, printer’s and accounting
fees and the reasonable fees and disbursements of counsel for the selling
Holder or Holders and counsel for the Company, [but excluding any underwriters’
discounts or commissions associated with Registrable Securities], shall be
borne pro rata by the Holder or Holders participating in the Form S-3
Registration. Registrations effected pursuant to this Section 1.12 shall
not be counted as demands for registration or registrations effected pursuant
to Sections 1.2 or 1.3, respectively.

 

1.13                  Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities
pursuant to this Section 1 may be assigned (but only with all related
obligations) by a Holder to a transferee or assignee of such securities who,
after such assignment or transfer, holds at least 1,000,000 shares of Registrable
Securities (subject to appropriate adjustment for stock splits, stock dividends,
combinations and other recapitalizations), provided: (a) the Company is,
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned, (b) such
transferee or assignee agrees in writing to be bound by and subject to the
terms and conditions of this Agreement, including without limitation the
provisions of Section 1.15 below; and (c) such assignment shall be
effective only if immediately following such transfer the further disposition
of such securities by the transferee or assignee is restricted under the Act.

 

1.14                  Limitations on Subsequent Registration Rights. From and after the date of this Agreement,
the Company shall not, without the prior written consent of the Holders of a
majority of the outstanding Registrable Securities, enter into any agreement with
any holder or prospective holder of any securities of the Company which would allow
such holder or prospective holder (a) to include such securities in any
registration filed under Section 1.2 hereof, unless under the terms of
such agreement, such holder or prospective holder may include such securities
in any such registration only to the extent that the inclusion of his
securities will not reduce the amount of the Registrable Securities of the
Holders which is included or (b) to make a demand registration which could
result

 

11

 

in such registration statement being declared effective prior to the
earlier of either of the dates set forth in subsection l.2(a) or
within one hundred twenty (120) days of the effective date of any registration
effected pursuant to Section 1.2.

 

1.15                  “Market
Stand-Off” Agreement. The Investor hereby agrees that, during the
period of duration specified by the Company and an underwriter of common stock
or other securities of the Company, following the effective date of a
registration statement of the Company filed under the Act, it shall not, to the
extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period except common stock included in such
registration; provided, however, that:

 

(a)                         such agreement shall be applicable only to
the first two such registration statements of the Company which covers common
stock (or other securities) to be sold on its behalf to the public in an
underwritten offering (during the two-year period following the effective date
of a registration statement referenced in Section 1.2(a)(ii); and

 

(b)                        all officers and directors of the Company and
all other persons with registration rights (whether or not pursuant to this
Agreement) enter into similar agreements; and

 

(c)                         such market stand-off time period shall not
exceed 180 days.

 

In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of the
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.

 

Notwithstanding the foregoing, the obligations described in this Section 1.15
shall not apply to a registration relating solely to employee benefit plans on Form S-l
or Form S-8 or similar forms which may be promulgated in the future, or a
registration relating solely to a Commission Rule 145 transaction on Form S-14
or Form S-15 or similar forms which may be promulgated in the future.

 

1.16                  Termination of Registration Rights.

 

(a)                         No Holder shall be entitled to exercise any
right provided for in this Section 1 after five (5) years following
the consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Act in connection with the initial firm
commitment underwritten offering of its securities to the general public.

 

12

 

(b)                        In addition, the right of any Holder to
request registration or inclusion in any registration pursuant to Section 1.3
shall terminate on the closing of the first Company-initiated registered public
offering of Common Stock of the Company if all shares of Registrable Securities
held or entitled to be held upon conversion by such Holder may immediately be
sold under Rule 144 during any 90-day period, or on such date after the
closing of the first Company-initiated registered public offering of Common
Stock of the Company as all shares of Registrable Securities held or entitled
to be held upon conversion by such Holder may immediately be sold under Rule 144
during any 90-day period; provided, however, that the provisions of this Section 1.16(b)
shall not apply to any Holder who owns more than two percent (2%) of the
Company’s outstanding stock until such time as such Holder owns less than two
percent (2%) of the outstanding stock of the Company.

 

2.                             Covenants of the Company.

 

2.1                       Delivery
of Financial Statements. The Company shall deliver to the Investor.

 

(a)                        as soon as practicable, but in any event within ninety (90) days after
the end of each fiscal year of the Company, an income statement for such fiscal
year, a balance sheet of the Company and statement of stockholder’s equity as
of the end of such year, and a schedule as to the sources and applications
of funds for such year, such year-end financial reports to be in reasonable
detail, prepared in accordance with generally accepted accounting principles (“gaap”),
and audited and certified by independent public accountants of nationally
recognized standing selected by the Company;

 

(b)                         as soon as practicable, but in any event within forty-five (45) days after
the end of each of the first three (3) quarters of each fiscal year of the
Company, an unaudited profit or loss statement, schedule as to the sources
and application of funds for such fiscal quarter.

 

(c)                        within forty-five (45) days of the end of each month, an unaudited income
statement and schedule as to the sources and application of funds and
balance sheet for and as of the end of such month, in reasonable detail;

 

(d)                       with respect to the financial statements called for in subsections (b) and
(c) of this Section 2.1, an instrument executed by the Chief
Financial Officer or President of the Company and certifying that such
financials were prepared in accordance with gaap consistently applied with
prior practice for earlier periods (with the exception of footnotes that may be
required by gaap) and fairly present the financial condition of the Company and
its results of operation for the period specified, subject to year-end audit
adjustment;

 

(e)                        such other information relating to the financial condition, business, prospects
or corporate affairs of the Company as the Investor or any assignee of the

 

13

 

Investor may from time to time request, provided, however, that the
Company shall not be obligated under this subsection (e) or any other
subsection of Section 2.1 to provide information which it deems in
good faith to be a trade secret or similar confidential information.

 

2.2                       Inspection. The Company shall permit the Investor, at
the Investor’s expense, to visit and inspect the Company’s properties, to
examine its books of account and records and to discuss the Company’s affairs,
finances and accounts with its officers, all at such reasonable times as may be
requested by the Investor, provided, however, that the Company shall not be
obligated pursuant to this Section 2.2 to provide access to any
information which it reasonably considers to be a trade secret or similar
confidential information.

 

2.3                       Termination
of Information and
Inspection Covenants. The
covenants set forth in subsections 2.1 (c), and (e) and Section 2.2
shall terminate as to Investor and be of no further force or effect when the
sale of securities pursuant to a registration statement filed by the Company under
the Act in connection with the firm commitment underwritten offering of its
securities to the general public is consummated or when the Company first
becomes subject to the periodic reporting requirements of Sections 12(g) or
15(d) of the 1934 Act, whichever event shall first occur.

 

2.4                       Right of First Offer. Subject to the terms and conditions
specified in this paragraph 2.4, the Company hereby grants to each Major
Investor (as hereinafter defined) a right of first offer with respect to future
sales by the Company of its Shares (as hereinafter defined). For purposes of
this Section 2.4, a Major Investor shall mean any investor (i) who
holds at least 50% of the original investment the
Investor makes in the Company pursuant to the Series A Agreement and (ii) who
acquires at least 50% of the Series A Preferred Stock (or the common stock
issued upon conversion thereof) issued pursuant to the Series A Agreement.
For purposes of this Section 2.4, Investor includes any general partners
and affiliates of an Investor. An Investor shall be entitled to apportion the
right of first offer hereby granted it among itself and its partners and
affiliates in such proportions as it deems appropriate.

 

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

 

(a)                        The Company shall deliver a notice by certified mail (“Notice”) to the
Major Investor stating (i) its bona fide intention to offer such Shares, (ii) the
number of such Shares to be offered, and (iii) the price and terms, if
any, upon which it proposes to offer such Shares.

 

(b)                       By written notification received by the Company, within 20 calendar
days after giving of the Notice, the Major Investor may elect to purchase or obtain,
at the price and on the terms specified in the Notice, up to that portion of
such

 

14

 

Shares which equals the proportion that the number of shares of common
stock issued and held, or issuable upon conversion of the Series A
Preferred Stock then held, by such Major Investor bears to the total number of
shares of common stock of the Company then outstanding (assuming full
conversion and exercise of all convertible (or exercisable) securities). The
Company shall promptly, in writing, inform each Major Investor which purchases
all the shares available to it (“Fully-Exercising Investor”) of any other Major
Investor’s failure to do likewise. During the ten-day period commencing after
such information is given, each Fully-Exercising Investor shall be entitled to
obtain that portion of the Shares not subscribed for by the Major Investor
which is equal to the proportion that the number of shares of common stock
issued and held, or issuable upon conversion of Series A Preferred Stock
then held, by such Fully-Exercising Investor bears to the total number of
shares of common stock issued and held, or issuable upon conversion of the Series A
Preferred Stock then held, by all Fully-Exercising Investor who wish to
purchase some of the unsubscribed shares.

 

(c)                        If all Shares which Investor are entitled to obtain pursuant to subsection 2.4(b) are
not elected to be obtained as provided in subsection 2.4(b) hereof, the
Company may, during the 30-day period following the expiration of the period provided
in subsection 2.4(b) hereof, offer the remaining unsubscribed portion
of such Shares to any person or persons at a price not less than, and upon
terms no more favorable to the offeree than those specified in the Notice. If
the Company does not enter into an agreement for the sale of the Shares within
such period, or if such agreement is not consummated within 30 days of the
execution thereof, the right provided hereunder shall be deemed to be revived
and such Shares shall not be offered unless first reoffered to the Major
Investor in accordance herewith.

 

(d)                       The right of first offer in this paragraph 2.4 shall not be applicable (i) to
the issuance or sale of not to exceed 4,535,761 shares of common stock (or
options therefor) to employees for the primary purpose of soliciting or
retaining their employment, provided each employee executes an agreement, in
substantially the form of the Stockholder Agreement attached as Exhibit D
hereto, (ii) to or after consummation of a bona fide, firmly underwritten
public offering of shares of common stock, registered under the Act pursuant to
a registration statement on Form S-l, resulting in aggregate net cash
proceeds to the Company of at least $15,000,000, (iii) the issuance of
securities pursuant to the conversion or exercise of convertible or exercisable
securities, (iv) the issuance of securities in connection with a bona fide
business acquisition of or by the Company, whether by merger, consolidation,
sale of assets, sale or exchange of stock or otherwise or (v) the issuance
of stock, warrants or other securities or rights to persons or entities with
which the Company has business relationships provided such issuances are for
other than primarily equity financing purposes and provided that at the time of
any such issuance, the aggregate of such issuance and similar issuances in the
preceding twelve month period do not exceed 2% of the then outstanding Common
Stock of the Company (assuming full conversion and exercise of all convertible
and exercisable securities).

 

15

 

(e)                        The right of first refusal set forth in this Section 2.4 may not be
assigned or transferred, except that (i) such right is assignable by each
Holder to any wholly owned subsidiary or parent of, or to any corporation or
entity that is, within the meaning of the Act, controlling, controlled by or under
common control with, any such Holder, and (ii) such right is assignable
between and among any of the Holders.

 

2.5                       Negative Covenants. So long as fifty percent (50%) or more of
the Series A Preferred Stock is still outstanding, the Company shall not,
without the prior written consent of the holders of fifty percent (50%) of the
outstanding Series A Preferred Stock:

 

(a)                        Authorize or issue any other class or series of stock in addition to Common
Stock and Series A Preferred Stock;

 

(b)                       Declare or pay any dividends on Common Stock other than dividends
payable solely in Common Stock;

 

(c)                        Make, or permit any subsidiary to make, any loan or advance to, or own
any stock or other securities of, any subsidiary or other corporation,
partnership, or other entity unless it is wholly owned by the Company;

 

(d)                       Make, or permit any subsidiary to make, any loan or advance to any,
person, including, without limitation, any employee or director of the Company
or any subsidiary, except advances and similar expenditures in the ordinary
course of business or under the terms of a employee stock or option plan
approved by the Board of Directors;

 

(e)                        Guarantee, directly or indirectly, or permit any subsidiary to guarantee,
directly or indirectly, any indebtedness except for trade accounts of the Company
or any subsidiary arising in the ordinary course of business, or

 

(f)                          Merge with or into or consolidate with any other corporation, or sell,
lease, or otherwise dispose of all or substantially all of its properties or
assets.

 

(g)                       Incur any indebtedness in excess of $500,000, other than trade credit
incurred in the ordinary course of business.

 

2.6                       Termination
of Certain
Covenants. The covenants set
forth in Section 2.5 shall terminate and be of no further force or effect
upon the consummation of the sale of securities pursuant to a registration
statement filed by the Company under the Act in connection with the firm
commitment underwritten offering of its securities to the general public.

 

16

 

3.                                       Miscellaneous.

 

3.1                       Successors
and Assigns. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties (including transferees
of any shares of Registrable Securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

3.2                       Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Maine as applied to agreements among Maine residents
entered into and to be performed entirely within Maine.

 

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

 

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

 

3.5                       Notices. Unless otherwise provided, any notice
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given upon personal delivery to the party to be notified
or upon deposit with the United States Post Office, by registered or certified
mail, postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days’ advance written notice
to the other parties.

 

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

 

3.7                       Amendments
and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
Registrable Securities then outstanding, each future holder of all such
Registrable Securities, and the Company.

 

3.8                       Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this

 

17

 

Agreement and the balance of the Agreement shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms.

 

3.9                       Aggregation
of Stock. All shares of Registrable Securities held
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.

 

3.10                 Entire Agreement, Amendment, Waiver. This Agreement (including the Exhibits hereto, if any) constitutes
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof.

 

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

 

	
   

  	
  ADVANCED
  CELL TECHNOLOGY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Daniel Chiu

  	
   

  
	
   

  	
   

  	
   Daniel Chiu, Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR:
  AVIAN FARMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
  , President

  

 

 

Advanced Cell TechJBZInvestor Rights Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]