Document:

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EXHIBIT 4.5

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is dated as of March 8, 2006, by and
among BroadVision, Inc., a Delaware corporation (the “Company”), and Honu Holdings LLC, a Delaware
limited liability company (the “Buyer”).

     WHEREAS:

     A. Buyer and the Company have entered into a Debt Conversion Agreement dated December 20, 2005
(the “Debt Conversion Agreement”), pursuant to which the Company is issuing 34,500,000 shares of
the Company’s common stock (the “Shares”) to Buyer in a private placement.

     B. It is a condition to the parties’ obligations under the Debt Conversion Agreement that
Buyer and the Company enter into this Agreement.

     C. To induce Buyer to execute and deliver the Debt Conversion Agreement, the Company has
agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”),
and applicable state securities laws.

     NOW, THEREFORE, the Company and Buyer hereby agree as follows:

     1. Definitions.

     Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Debt Conversion Agreement. As used in this Agreement, the following
terms shall have the following meanings:

          a. “Business Day” means any day other than Saturday, Sunday or any other day on which
commercial banks in The City of New York are authorized or required by law to remain closed.

          b. “Effective Date” means the date the Registration Statement has been declared effective by
the SEC.

          c. “Effectiveness Deadline” means the date that is 180 days after the Closing Date.

          d. “Filing Deadline” means the date that is 90 days after the date of this Agreement.

          e. “Investor” means Buyer or any transferee or assignee thereof to whom a Buyer assigns its
rights under this Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee
assigns its rights under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.

 

 

          f. “register,” “registered,” and “registration” refer to a registration effected by preparing
and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act
and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.

          g. “Registrable Securities” means (i) the Shares and (ii) any share capital of the Company
issued or issuable with respect to the Shares as a result of any share split, share dividend,
recapitalization, exchange or similar event or otherwise.

          h. “Registration Statement” means a registration statement or registration statements of the
Company filed under the 1933 Act covering the Registrable Securities.

          i. “Required Holders” means the holders of a majority of the Registrable Securities.

          j. “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis.

          k. “SEC” means the United States Securities and Exchange Commission.

     2. Registration.

          a. Mandatory Registration. The Company shall prepare, and, as soon as practicable but
in no event later than the Filing Deadline, file with the SEC the Registration Statement on Form
S-3 covering the resale of all of the Registrable Securities. In the event that Form S-3 is
unavailable for such a registration, the Company shall use such other form as is available for such
a registration. The Company shall use all commercially reasonable efforts to have the Registration
Statement declared effective by the SEC as soon as practicable, but in no event later than the
Effectiveness Deadline.

          b. Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a) is insufficient to cover
all of the Registrable Securities required to be covered by such Registration Statement, the
Company shall amend the applicable Registration Statement, or file a new Registration Statement (on
the short form available therefor, if applicable), or both, so as to cover at least all of the
Registrable Securities required to be so covered, in each case, as soon as practicable, but in any
event not later than 15 days after the necessity therefor arises. The Company shall use all
commercially reasonable efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.

     3. Related Obligations.

     At such time as the Company is obligated to file a Registration Statement with the SEC
pursuant to Section 2(a) or 2(b), the Company will use all commercially reasonable efforts to
effect the registration of the Registrable Securities in accordance with the intended method of
disposition thereof and, pursuant thereto, the Company shall have the following obligations:

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          a. The Company shall submit to the SEC, promptly upon being informed that no review of a
particular Registration Statement will be made by the staff of the SEC or that the staff has no
further comments on a particular Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date not later than 48
hours after the submission of such request. The Company shall keep each Registration Statement
effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which the
Investors may sell all of the Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under the 1933 Act or
(ii) the date on which the Investors shall have disposed of all of the Registrable Securities
covered by such Registration Statement (the “Registration Period”). The Company shall ensure that
each Registration Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein, or necessary to make the statements therein (in the
case of prospectuses, in the light of the circumstances in which they were made) not misleading.

          b. The Company shall prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus used in connection with
such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under
the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities shall have been
disposed of in accordance with the intended methods of disposition by the seller or sellers thereof
as set forth in such Registration Statement. In the case of amendments and supplements to a
Registration Statement that are required to be filed pursuant to this Agreement (including pursuant
to this Section 3(b)) by reason of the Company filing a report on Form 10-Q, Form 10-K, Form 8-K or
any analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the
Company shall have incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC promptly following the day on
which the 1934 Act report is filed that created the requirement for the Company to amend or
supplement such Registration Statement.

          c. The Company shall furnish to each Investor whose Registrable Securities are included in any
Registration Statement, without charge, (i) promptly after the same is prepared and filed with the
SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents, including exhibits, incorporated therein by
reference, if requested by an Investor and not otherwise available on the EDGAR system, and each
preliminary prospectus, (ii) upon the effectiveness of any Registration Statement (but in no event
later than two Business Days after the Effective Date), ten copies of the prospectus included in
such Registration Statement and all amendments and supplements thereto (or such other number of
copies as such Investor may reasonably request) and (iii) such other documents, including copies of
any preliminary or final prospectus, as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such Investor.

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          d. The Company shall use all commercially reasonable efforts to (i) register and qualify,
unless an exemption from registration and qualification applies, the resale by Investors of the
Registrable Securities covered by a Registration Statement under such other securities or “blue
sky” laws of such jurisdictions in the United States as the Investor may reasonably request, (ii)
prepare and file in those jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify
the Registrable Securities for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (y) subject itself to general taxation in any such jurisdiction or (z) file a general
consent to service of process in any such jurisdiction.

          e. The Company shall cooperate with the Investors who hold Registrable Securities and, to the
extent applicable, facilitate the timely preparation and delivery of certificates representing the
Registrable Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the Investors may
reasonably request and registered in such names as the Investors may request.

          f. If requested by an Investor, the Company shall (i) as soon as practicable incorporate in a
prospectus supplement or post-effective amendment such information as an Investor reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other terms of the offering
of the Registrable Securities to be sold in such offering, (ii) as soon as practicable make all
required filings of such prospectus supplement or post-effective amendment after being notified of
the matters to be incorporated in such prospectus supplement or post-effective amendment and (iii)
as soon as practicable, supplement or make amendments to any Registration Statement if reasonably
requested by an Investor holding any Registrable Securities.

          g. Notwithstanding anything to the contrary herein, at any time after the Registration
Statement has been declared effective by the SEC, the Company may delay the disclosure of material,
non-public information concerning the Company the disclosure of which at the time is not, in the
good faith opinion of the Board of Directors of the Company and its counsel, in the best interest
of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace
Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the
existence of material, non-public information giving rise to a Grace Period (provided that in each
notice the Company will not disclose the content of such material, non-public information to the
Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in
writing of the date on which the Grace Period ends.

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     4. Obligations of the Investors.

          a. At least five Business Days prior to the first anticipated filing date of a Registration
Statement, the Company shall notify each Investor in writing of the information the Company
requires from each such Investor if such Investor elects to have any of such Investor’s Registrable
Securities included in such Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities and shall execute such documents
in connection with such registration as the Company may reasonably request.

          b. Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder, unless such Investor has notified
the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable
Securities from such Registration Statement.

          c. To the extent required by applicable law, each Investor shall promptly notify the Company
of any change in any information regarding such Investor furnished by such Investor to the Company
for inclusion in a Registration Statement. Each Investor covenants and agrees that it will comply
with the prospectus delivery requirements of the 1933 Act as applicable to it in connection with
sales of Registrable Securities pursuant to the Registration Statement.

     5. Expenses of Registration.

     All reasonable expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including,
without limitation, all registration, listing and qualifications fees, printers and accounting
fees, and fees and disbursements of counsel for the Company shall be paid by the Company.

     6. Indemnification.

     In the event any Registrable Securities are included in a Registration Statement under this
Agreement:

          a. To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold
harmless and defend each Investor, the directors, officers, members, partners, employees, agents,
representatives of, and each Person, if any, who controls any Investor within the meaning of the
1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid
in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken
from the foregoing by or before any court or

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governmental, administrative or other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement
or any post-effective amendment thereto or in any filing made in connection with the qualification
of the offering under the securities or other “blue sky” laws of any jurisdiction in which
Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such Registration Statement, or
contained in the final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in the light of the circumstances
under which the statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of
this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively,
“Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification agreement contained
in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or
based upon a Violation that occurs in reliance upon and in conformity with information furnished in
writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company pursuant to Section
3(c); (ii) with respect to any preliminary prospectus, shall not inure to the benefit of any such
Person from whom the Person asserting any such Claim purchased the Registrable Securities that are
the subject thereof (or to the benefit of any Person controlling such Person) if the untrue
statement or omission of material fact contained in the preliminary prospectus was corrected in the
prospectus, as then amended or supplemented and if such prospectus was timely made available by the
Company pursuant to Section 3(c), and the Indemnified Person was promptly advised in writing not to
use the incorrect prospectus prior to the use giving rise to a violation and such Indemnified
Person, notwithstanding such advice, used it or failed to deliver the correct prospectus as
required by the 1933 Act; (iii) shall not be available to the extent such Claim is based on a
failure of the Investor to deliver or to cause to be delivered the prospectus made available by the
Company, including a corrected prospectus, if such prospectus or corrected prospectus was timely
made available by the Company pursuant to Section 3(c)
; and (iv) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9.

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          b. In connection with any Registration Statement in which an Investor is participating, each
such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against
any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the
1934 Act or otherwise, insofar as such Claim or Indemnified Damages 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 to the Company by such Investor
expressly for use in connection with such Registration Statement or any post-effective amendment
thereof; and, subject to Section 6(c), such Investor promptly will reimburse any legal or other
expenses reasonably incurred by an Indemnified Party in connection with investigating or defending
any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and
the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however,
that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of such Indemnified
Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure
to the benefit of any Indemnified Party if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then
amended or supplemented.

          c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section 6, 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 control of the defense thereof with
counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses of not more than
one counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by
such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such proceeding. In the case
of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be
selected by the Investors holding a majority in interest of the Registrable Securities included in
the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified

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Person shall cooperate fully with the indemnifying party in connection with any negotiation or
defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its prior written consent, provided,
however, that the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the Indemnified Party
or Indemnified Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all third parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except
to the extent that the indemnifying party is prejudiced in its ability to defend such action.

          d. The indemnification required by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.

          e. The indemnity agreements contained herein shall be in addition to (i) any cause of action
or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or
others and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

     7. Contribution.

     To the extent any indemnification by an indemnifying party is prohibited or limited by law,
the indemnifying party agrees to make the maximum contribution with respect to any amounts for
which it would otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person
is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in
connection with such sale shall be entitled to contribution from any Person involved in such sale
of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution
by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to such Registration
Statement.

     8. Reports Under the 1934 Act.

     With a view to making available to the Investors the benefits of Rule 144 promulgated under
the 1933 Act or any other similar rule or regulation of the SEC that may at

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any time permit the Investors to sell securities of the Company to the public without
registration (“Rule 144”), the Company agrees to:

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

          b. file with the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such
requirements and the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and

          c. furnish to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual report of the Company and such other reports and documents so filed by the Company (other
than any correspondence filed by the Company with the SEC, including, without limitation, any
confidential treatment requests) and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without registration.

     9. Assignment of Registration Rights.

     The rights under this Agreement shall be automatically assignable by the Investors to any
transferee of all or any portion of such Investor’s Registrable Securities if: (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such assignment; (ii) the
Company is, within a reasonable time after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee and (b) the securities with
respect to which such registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such securities by the transferee
or assignee is restricted under the 1933 Act and applicable state securities laws; and (iv) at or
before the time the Company receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein.

     10. Amendment of Registration Rights.

     Provisions of this Agreement may be amended and the observance thereof 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 Required Holders. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any party to amend or consent
to a waiver or modification of any provision of any of this Agreement unless the same consideration
also is offered to all of the parties to this Agreement.

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     11. Termination of Obligations.

     The obligations of the Company pursuant to Section 3 hereof shall cease and terminate upon the
earlier to occur of (a) such time as all of the Registrable Securities have been resold or (b) such
time as all of the Registrable Securities may be resold pursuant to Rule 144(k).

     12. Miscellaneous.

          a. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is
deemed to own of record such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from
the such record owner of such Registrable Securities.

          b. Any notices, consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have been delivered:
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:

     If to the Company:

BroadVision, Inc.

585 Broadway

Redwood City, California 94063

Attention:       Chief Financial Officer

Telephone:     650-261-5100

Facsimile:       650-261-5900

     If to Buyer:

Honu Holdings LLC

c/o Cooley Godward LLP

101 California Street, Fifth Floor

San Francisco, CA 94111-5800

Attn: Kenneth L. Guernsey

Telephone:     415-693-2000

Facsimile:      415-693-2222

Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

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          c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

          d. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of California, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of California or
any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of California. If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.

          e. This Agreement and the instruments referenced herein constitute the entire agreement among
the parties hereto with respect to the subject matter hereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein. This Agreement and
the instruments referenced herein supersede all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.

          f. Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and
be binding upon the permitted successors and assigns of each of the parties hereto.

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

          h. This Agreement may be executed in identical counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this Agreement.

          i. Each party shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements, certificates, instruments and
documents, as any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

          j. All consents and other determinations required to be made by the Investors pursuant to this
Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders.

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          k. The language used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent and no rules of strict construction will be applied against any
party.

          l. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.

[signature page follows]

12

 

     IN WITNESS WHEREOF, Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written above.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	BROADVISION, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William E. Meyer	 	 
	 

	 	 	 	 

William E. Meyer
	 	 
	 

	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 
	 	 	HONU HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Pehong Chen	 	 
	 

	 	 	 	 

Pehong Chen
	 	 
	 

	 	 	 	Managerexv10w1

 

Exhibit 10.1

CYBERKINETICS NEUROTECHNOLOGY SYSTEMS, INC.

FOURTH AMENDED AND RESTATED 2002 EQUITY INCENTIVE PLAN

Initially adopted: effective as of August 12, 2002

Approved by stockholders: effective as of August 12, 2002

First amendment and restatement: as of June 20, 2003

Amendment approved by stockholders: as of June 20, 2003

Second amendment and restatement: as of April 30, 2004

Amendment approved by stockholders: as of April 30, 2004

Third amendment and restatement: as of March 30, 2005

Amendment approved by stockholders: as of June 23, 2005

Fourth amendment and restatement: as of April 11, 2006

Amendment approved by stockholders: as of June 7, 2006

Termination date: August 12, 2012

Section 1. General.

     (a) Purpose of the Plan. Cyberkinetics Neurotechnology Systems, Inc. (the “Company”),
by means of the Plan, seeks to retain the services of eligible recipients and to provide incentives
for eligible recipients to exert efforts for the success of the Company and its Affiliates.

     (b) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the
Employees, Directors and Consultants of the Company and its Affiliates.

     (c) Available Stock Awards. The purpose of the Plan is to provide a means by which
Participants may be given an opportunity to benefit from increases in the value of the Common Stock
through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory
Stock Options, (iii) stock bonuses, and (iv) rights to acquire restricted stock.

     (d) Definitions. Capitalized terms not defined elsewhere in this Agreement are defined in
Section 15 of the Plan.

Section 2. Administration.

     (a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in Section 2(c).

     (b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

     (i) to determine from time to time which of the persons eligible under
the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; what type or combination of types of Stock Award shall
be granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted
to receive Common Stock pursuant to a Stock Award; the number of shares
of Common Stock with respect to which a Stock Award shall be granted to
each such person; whether shares of Common Stock acquired pursuant to a
Stock Award shall be subject to forfeiture or buy back; and the form of
consideration that the Company may receive upon exercise of an Option or
a right to acquire restricted stock;

     (ii) to construe and interpret the Plan and Stock Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration, including the correction of any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement, in a manner
and to the extent the Board shall deem necessary or expedient to make the
Plan fully effective;

     (iii) to amend the Plan or a Stock Award as provided in Section 11; and

     (iv) generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the Plan.

     (c) Delegation to Committee.

     (i) General. From time to time, the Board may delegate
administration of the Plan to a Committee or Committees of one or
more members of the Board, and the term “Committee” shall apply to
any person or persons to whom such authority has been delegated. If
administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, including the power to delegate
to a subcommittee any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board
shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board
the administration of the Plan.

     (ii) Committee Composition when Common Stock is Publicly Traded. At
such time as the Common Stock is publicly traded, in the discretion
of the Board, a Committee may consist solely of two or more Outside
Directors, in accordance with Section 162(m)

 

 

of the Code, and/or
solely of two or more Non-Employee Directors, in accordance with
Rule 16b-3. Within the scope of such authority, the Board or the
Committee may (1) delegate to a committee of one or more members of
the Board who are not Outside Directors the authority to grant Stock
Awards to eligible persons who are either (a) not then Covered
Employees and are not expected to be Covered Employees at the time
of recognition of income resulting from such Stock Award, or (b) not
persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code, and/or (2) delegate to a committee of
one or more members of the Board who are not Non-Employee Directors
the authority to grant Stock Awards to eligible persons who are not
then subject to Section 16 of the Exchange Act.

     (d) Effect of Board’s Decision. All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

Section 3. Shares Subject to the Plan.

     (a) Share Reserve. Subject to the provisions of Section 10 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed, in the aggregate 4,400,000 shares of Common Stock, par value $0.0001 per share.

     (b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full, the shares of
Common Stock not acquired under such Stock Award shall revert to and again become available for
issuance under the Plan.

     (c) Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

Section 4. Options.

     Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if stock certificates are issued, such
certificates will include a legend that will indicate whether each such certificate was issued
pursuant to exercise of an Incentive Stock Option or Nonstatutory Stock Option; provided, however,
that notwithstanding the following, an Incentive Stock Option may provide that it will remain
exercisable as a Nonstatutory Stock Option after an event or series of events that may otherwise
disqualify such Option from being an Incentive Stock Option. The provisions of separate Options
need not be identical, but each Option shall include (through incorporation of provisions hereof by
reference in the Option Agreement for shares of Common Stock or otherwise) the substance of each of
the following provisions:

     (a) Eligibility.

     (i) Incentive Stock Options. Incentive Stock Options may be granted only to Employees.

     (ii) Nonstatutory Stock Options. Nonstatutory Stock Options may be granted to Employees, Directors and Consultants.

     (b) Term. No Incentive Stock Option shall be exercisable after the
expiration of ten years from the date it was granted; provided
however that no Incentive Stock Option granted to a Ten Percent
Stockholder shall be exercisable after the expiration of five years
from the date it was granted.

     (c) Exercise Price.

     (i) Generally. Subject to clauses (ii) and (iii) below, the Board of
Directors may determine exercise price of Options granted pursuant
to this Plan; provided, however, that the exercise price of an
Option shall be not less than the par value of the Common Stock
subject to the Option.

     (ii) Incentive Stock Option. The exercise price of each Incentive
Stock Option shall be not less than 100% of the Fair Market Value of
the Common Stock subject to the Option on the date the Option is
granted; provided, however, that a Ten Percent Stockholder shall not
be granted an Incentive Stock Option unless the exercise price of
such Option is at least 110% of the Fair Market Value of the Common
Stock on the date of grant. Notwithstanding the foregoing, an
Incentive Stock Option may be granted with an exercise price lower
than that set forth in the preceding sentence if such Option is
granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.

     (iii) Nonstatutory Stock Option. The exercise price of each
Nonstatutory Stock Option shall be determined by the Board of
Directors on the date the Option is granted; provided, however, that
subsequent to the Listing Date, the exercise price of each
Nonstatutory Stock Option granted pursuant to this Plan shall be at
least 85% of the Fair Market Value of the Common Stock subject to
the Option on the date the Option is granted.

     (d) Consideration. The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted

 

 

by applicable statutes and regulations, either (i) in cash at the time
the Option is exercised, or (ii) at the discretion of the Board at
the time of the grant of the Option (or subsequently in the case of
a Nonstatutory Stock Option) (1) by delivery to the Company of other
            shares of Common Stock, (2) according to a deferred payment or a
similar arrangement with the Optionholder, or (3) in any other form
of legal consideration that may be acceptable to the Board. Unless
otherwise specifically provided in the Option, the purchase price of
Common Stock acquired pursuant to an Option that is paid by delivery
to the Company of other Common Stock acquired, directly or
indirectly from the Company, shall be paid only by shares of the
Common Stock of the Company that have been held for more than six
months (or such longer or shorter period of time required to avoid a
charge to earnings for financial accounting purposes). At any time
that the Company is incorporated in the State of Delaware, payment
of the Common Stock’s “par value,” as defined in the Delaware
General Corporation Law shall not be made by deferred payment. In
the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the market rate
of interest necessary, as determined by the Board, to avoid a charge
to earnings for financial accounting purposes.

     (e) Transferability.

     (i) Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder.

     (ii) Nonstatutory Stock Option. A Nonstatutory Stock Option shall be
non-transferable, unless otherwise expressly provided in the Option
Agreement. If a Nonstatutory Stock Option does not provide for
transferability or otherwise states that it is non-transferable,
then the Nonstatutory Stock Option shall not be transferable except
by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the
Optionholder.

     (f) Vesting Generally. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become
exercisable in periodic installments that may, but need not, be
equal. The Option may be subject to such other terms and conditions
on the time or times when it may be exercised (which may be based on
performance or other criteria) as the Board may deem appropriate.
The vesting provisions of individual Options may vary.

     (g) Limitations on the Exercise of Incentive Stock Options.

     (i) Termination of Employee Status Generally. In the event an
Incentive Stock Option holder’s Employment terminates (other than
upon the Optionholder’s death or Disability), the Optionholder may
exercise his or her Option (to the extent that the Optionholder was
entitled to exercise such Option as of the date of termination) but
only within such period of time ending on the earlier of (1) the
date three months following the effective date of termination of the
Optionholder’s Employment (or such shorter period specified in the
Option Agreement), or (2) the expiration of the term of the Option
as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time
specified in the Option Agreement, the Option shall terminate.

     (ii) Disability of Optionholder. In the event that an Incentive
Stock Option holder’s Employment terminates as a result of his or
her Disability, the Optionholder may exercise his or her Option (to
the extent that the Optionholder was entitled to exercise such
Option as of the date of termination), but only within such period
of time ending on the earlier of (1) the date that is twelve months
following such effective date of termination (or such shorter period
specified in the Option Agreement) or (2) the expiration of the term
of the Option as set forth in the Option Agreement. If, after the
effective date of termination, the Optionholder does not exercise
his or her Option within the time specified herein, the Option shall
terminate.

     (iii) Death of Optionholder. In the event (1) an Incentive
Stockholder’s Employment terminates as a result of the his or her
death, or (2) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the
Optionholder’s Employment during which he or she may exercise such
Option, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of
death) by the Optionholder’s estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only
within the period ending on the earlier of (x) the date twelve
months following the date of death (or such shorter period specified
in the Option Agreement), or (y) the expiration of such Option. If,
after death, the Option is not exercised within the time specified
herein, the Option shall terminate.

     (iv) Incentive Stock Option $100,000 Limitation. To the extent that
the aggregate Fair Market Value (determined at the time of grant) of
Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionholder during any
calendar year (under all plans of the Company and its Affiliates)
are in excess of $100,000, the Options or portions thereof that
exceed such limit (according to the order that they were granted)
shall be treated as Nonstatutory Stock Options.

 

 

     (h) Extension of Termination Date. A Nonstatutory Stock Option
Agreement may provide that if the exercise of the Option following
the termination of the Optionholder’s Continuous Service (other than
upon the Optionholder’s death or Disability) would be prohibited at
any time solely because the issuance of shares of Common Stock would
violate the registration requirements under the Securities Act, then
the Option may terminate on the earlier of (i) the expiration of the
term of the Option set forth in Section 3(b), or (ii) the expiration
of a period of three months after the termination of the
Optionholder’s Continuous Service during which the exercise of the
Option would not be in violation of such registration requirements.

     (i) Early Exercise. An Option Agreement may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholder’s Continuous Service terminates to exercise the Option
as to any part or all of the shares of Common Stock subject to the
Option prior to the full vesting of the Option. Any unvested shares
of Common Stock so purchased may be subject to a repurchase option
in favor of the Company or to any other restriction the Board
determines to be appropriate.

     (j) Right of First Refusal. An Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date,
to exercise a right of first refusal following receipt of notice
from the Optionholder of the intent to transfer all or any part of
the shares of Common Stock received upon the exercise of the Option.
Except as expressly provided in this Section 4(j), such right of
first refusal shall otherwise comply with any applicable provisions
of the Bylaws of the Company.

     (k) Deferred Delivery. An Option may, but need not, include
provisions relating to deferred delivery of shares of Common Stock
upon its exercise as may be determined by the Board of Directors.

     (l) Re-Load Options. Without in any way limiting the authority of
the Board to make or not to make grants of Options hereunder, the
Board shall have the authority (but not an obligation) to include as
part of any Option Agreement a provision entitling the Optionholder
to a further Option (a “Re-Load Option”) in the event the
Optionholder exercises the Option evidenced by the Option Agreement,
in whole or in part, by surrendering other shares of Common Stock in
accordance with this Plan and the terms and conditions of the Option
Agreement. Unless otherwise specifically provided in the Option, the
Optionholder shall not surrender shares of Common Stock acquired,
directly or indirectly from the Company, unless such shares have
been held for more than six months (or such longer or shorter period
of time required to avoid a charge to earnings for financial
accounting purposes).

     (i) Any such Re-Load Option shall (1) provide for a number of shares
of Common Stock equal to the number of shares of Common Stock
surrendered as part or all of the exercise price of such Option; (2)
have an expiration date which is the same as the expiration date of
the Option the exercise of which gave rise to such Re-Load Option;
and (3) have an exercise price which is equal to 100% of the Fair
Market Value of the Common Stock subject to the Re-Load Option on
the date of exercise of the original Option (subject to the
provisions of Section 4(c)(2) in the event such Option is an
Incentive Stock Option). Notwithstanding the foregoing, a Re-Load
Option shall be subject to the same exercise price and term
provisions heretofore described for Options under the Plan.

     (ii) Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board may designate at the time of
the grant of the original Option; provided, however, that the
designation of any Re-Load Option as an Incentive Stock Option shall
be subject to the $100,000 annual limitation on the ability to
exercise Incentive Stock Options described in Section 422(d) of the
Code. There shall be no Re-Load Options on a Re-Load Option. Any
such Re-Load Option shall be subject to the availability of
sufficient shares of Common Stock under Section 3(a) and the
“Section 162(m) Limitation” on the grants of Options under Section
4(g)(iv) and shall be subject to such other terms and conditions as
the Board may determine which are not inconsistent with the express
provisions of the Plan regarding the terms of Options.

Section 5. Stock Bonus Awards and Rights to Acquire Restricted Stock.

     (a) Stock Bonus Awards. Each stock bonus agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. Subject to the terms of this Section
5(a), the terms and conditions of stock bonus agreements may change from time to time, and the
terms and conditions of separate stock bonus agreements need not be identical.

     (i) Consideration. A stock bonus may be awarded in consideration for
past services actually rendered to the Company or an Affiliate for
its benefit.

     (ii) Vesting. Shares of Common Stock awarded under the stock bonus
agreement may, but need not, be subject to a share repurchase option
in favor of the Company in accordance with a vesting schedule to be
determined by the Board.

     (iii) Termination of Participant’s Continuous Service. A stock bonus
may provide that in the event a Participant’s Continuous Service
terminates, the Company may reacquire any or all of the shares of
Common Stock held by a Participant which have not vested as of the
date of termination under the terms of the stock bonus agreement.

 

 

     (iv) Transferability. Rights to acquire shares of Common Stock under
a stock bonus agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the stock
bonus agreement, and as the Board shall determine in its discretion,
so long as Common Stock awarded under the stock bonus agreement
remains subject to the terms of the stock bonus agreement and the
Investor Rights Agreement.

     (b) Restricted Stock Awards. Each restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. Subject to the
terms of this Section 5(b) the terms and conditions of the restricted stock purchase agreements may
change from time to time, and the terms and conditions of separate restricted stock purchase
agreements need not be identical.

     (i) Purchase Price. The purchase price of restricted stock awards
may be determined by the Board of Directors, but shall not be less
than 85% of the Fair Market Value of the Common Stock on the date
issued.

     (ii) Consideration. The purchase price of Common Stock acquired
pursuant to the restricted stock purchase agreement may be paid
either: (a) in cash at the time of purchase; (b) at the discretion
of the Board, according to a deferred payment or other similar
arrangement with the Participant; or (c) in any other form of legal
consideration that may be acceptable to the Board in its discretion;
provided, however, that payment of the Common Stock’s “par value,”
as defined in the Delaware General Corporation Law shall not be made
by deferred payment.

     (iii) Vesting. Shares of Common Stock acquired under the restricted
stock purchase agreement may, but need not, be subject to a share
repurchase option in favor of the Company in accordance with a
vesting schedule to be determined by the Board.

     (iv) Termination of Participant’s Continuous Service. In the event a
Participant’s Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of Common
Stock held by the Participant which have not vested as of the date
of termination under the terms of the restricted stock purchase
agreement.

     (v) Transferability. Rights to acquire shares of Common Stock under
the restricted stock purchase agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth in
the restricted stock purchase agreement, as the Board shall
determine in its discretion, so long as Common Stock awarded under
the restricted stock purchase agreement remains subject to the terms
of the restricted stock purchase agreement and the Investor Rights
Agreement.

Section 6. Certain Restrictions Applicable Generally.

     (a) Section 162(m) Limitation. Subject to the provisions of Section 10 relating to adjustments
upon changes in the shares of Common Stock, no Employee shall be eligible to be granted Awards
covering more than $1 million in shares of Common Stock during any calendar year. This Section 6(a)
shall not apply prior to the Listing Date and, following the Listing Date, this Section 6(a) shall
not apply until (i) the earliest of: (1) the first material modification of the Plan (including any
increase in the number of shares of Common Stock reserved for issuance under the Plan in accordance
with Section 3); (2) the issuance of all of the shares of Common Stock reserved for issuance under
the Plan; (3) the expiration of the Plan; or (4) the first meeting of stockholders at which
Directors are to be elected that occurs after the close of the third calendar year following the
calendar year in which occurred the first registration of an equity security under Section 12 of
the Exchange Act; or (ii) such other date required by Section 162(m) of the Code and the rules and
regulations promulgated thereunder.

     (b) Consultants.

     (i) Prior to the Listing Date, a Consultant shall not be eligible
for the grant of a Stock Award if, at the time of grant, either the
offer or the sale of the Company’s securities to such Consultant is
not exempt under Rule 701 of the Securities Act (“Rule 701”) because
of the nature of the services that the Consultant is providing to
the Company or because the Consultant is not a natural person, or as
otherwise provided by Rule 701, unless the Company determines that
such grant need not comply with the requirements of Rule 701 and
will satisfy another exemption under the Securities Act as well as
comply with the securities laws of all other relevant jurisdictions.

     (ii) From and after the Listing Date, a Consultant shall not be
eligible for the grant of a Stock Award if, at the time of grant, a
Form S-8 Registration Statement under the Securities Act (“Form
S-8”) is not available to register either the offer or the sale of
the Company’s securities to such Consultant because of the nature of
the services that the Consultant is providing to the Company or
because the Consultant is not a natural person, or as otherwise
provided by the rules governing the use of Form S-8, unless the
Company determines both (i) that such grant (A) shall be registered
in another manner under the Securities Act (e.g., on a Form S-3
Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the
Securities Act, if applicable, and (ii) that such grant complies
with the securities laws of all other relevant jurisdictions.

     (c) Lock-Up; Stockholders’ Agreement. By receipt and acceptance of a Stock Award, each
Participant agrees, if requested in writing by an underwriter of Common Stock or other securities
of the Company, not to sell, assign, donate, pledge, encumber, hypothecate, grant an option to, or
otherwise transfer or dispose of, whether in privately negotiated or open market transactions, any
Common Stock or other securities of the Company held by him, her or it during the 180-day period
following the effective date of a registration statement filed pursuant to the Company’s initial
public offering. The provisions of this Section 6(c) are intended to be automatic in effect, and no
further acknowledgement or evidence of agreement shall be required for the Company or its transfer
agent

 

 

to enforce the provisions of this Section 6(c), or for the Company or its transfer agent to enter
into a “stop transfer” or similar order with respect to securities of the Company held by
Participants. As a condition to receipt of any Stock Award (or Common Stock underlying any option),
you may be required to execute a counterpart or otherwise agree to be bound by the Company’s
Stockholders’ Rights Agreement, as is in effect from time to time.

Section 7. Covenants of the Company.

     (a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

     (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained.

Section 8. Use of Proceeds from Stock.

     Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.

Section 9. Miscellaneous.

     (a) Acceleration of Exercisability and Vesting; Forfeiture. The Board shall have the power to
accelerate the time at which a Stock Award may first be exercised or the time during which a Stock
Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in
the Stock Award stating the time at which it may first be exercised or the time during which it
will vest. The Board shall have the authority to provide in any Stock Award that such Stock Award
will be forfeited under certain limited conditions, such as the breach of any of the Company’s
policies or a termination for “Cause” (as defined in Section 15).

     (b) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.

     (c) No Employment or other Service Rights. Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the
service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the Affiliate is incorporated,
as the case may be.

     (d) Investment Assurances. The Company may require a Participant, as a condition of exercising
or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable
and experienced in financial and business matters and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of exercising the Stock
Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with
any present intention of selling or otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be inoperative if (1)
the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under
the Stock Award has been registered under a then currently effective registration statement under
the Securities Act or (2) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock.

     (e) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award,
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.

Section 10. Adjustments upon Changes in Stock.

     (a) Capitalization Adjustments. If any change is made in the Common Stock subject to the Plan,
or subject to any Stock Award, without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to Section 3(a) and the

 

 

outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities
and price per share of Common Stock subject to such outstanding Stock Awards. The Board shall make
such adjustments, and its determination shall be final, binding and conclusive. (The conversion of
any convertible securities of the Company shall not be treated as a transaction “without receipt of
consideration” by the Company.)

     (b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company,
then all outstanding Stock Awards shall terminate immediately prior to such event.

     (c) Asset Sale, Merger, Consolidation, or Series of Transactions. Unless a Stock Award
Agreement provides otherwise, in the event of (i) a sale, lease or other disposition of all or
substantially all of the assets of the Company, (ii) a consolidation or merger of the Company with
or into any other corporation or other entity or person, or any other corporate reorganization, in
which the stockholders of the Company immediately prior to such consolidation, merger or
reorganization, own less than 50% of the Company’s outstanding voting power of the surviving entity
(or its parent) following the consolidation, merger or reorganization or (iii) any transaction (or
series of related transactions involving a person or entity, or a group of affiliated persons or
entities) in which in excess of 50% of the Company’s outstanding voting power is transferred
(individually, a “Corporate Transaction”), then any surviving corporation or acquiring
corporation shall assume any Stock Awards outstanding under the Plan or shall substitute similar
stock awards (including an award to acquire the same consideration paid to the stockholders in the
Corporate Transaction) for those outstanding under the Plan. In the event any surviving corporation
or acquiring corporation refuses to assume such Stock Awards or to substitute similar stock awards
for those outstanding under the Plan, then with respect to Stock Awards held by Participants whose
Continuous Service has not terminated, the vesting of such Stock Awards (and, if applicable, the
time during which such Stock Awards may be exercised) may, in the discretion of the Board, be
accelerated in full, and the Stock Awards shall terminate if not exercised (if applicable) at or
prior to the Corporate Transaction. With respect to any other Stock Awards outstanding under the
Plan, such Stock Awards shall terminate if not exercised (if applicable) prior to the Corporate
Transaction.

Section 11. Amendment of the Plan and Stock Awards.

     (a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 10 relating to adjustments upon changes in Common Stock, no
amendment shall be effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule
16b-3 or any Nasdaq or securities exchange listing requirements.

     (b) Stockholder Approval. The Board may, in its sole discretion, submit any other
amendment to the Plan for stockholder approval, including, but not limited to, amendments to the
Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations
thereunder regarding the exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.

     (c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible Employees with the maximum
benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.

     (d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the Plan
shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of
the Participant and (ii) the Participant consents in writing.

     (e) Amendment of Stock Awards. The Board at any time, and from time to time, may amend the
terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award
shall not be impaired by any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.

Section 12. Termination or Suspension of the Plan.

     (a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth anniversary of the date the Plan
is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No
Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

     (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and
obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the Participant.

Section 13. Effective Date of Plan.

     The Plan shall become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be within twelve months before or
after the date the Plan is adopted by the Board.

Section 14. Choice of Law.

     The law of the State of Delaware shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

Section 15. Definitions.

     (a) “Affiliate” means any parent corporation or subsidiary corporation of the Company,
whether now or hereafter existing, as those

 

 

terms are defined in Sections 424(e) and (f), respectively, of the Code.

     (b) “Board” means the Board of Directors of the Company.

     (c) “Cause” includes (and is not limited to) dishonesty with respect to the Company
and its Affiliates, insubordination, substantial malfeasance or nonfeasance of duty, unauthorized
disclosure of confidential information, conduct substantially prejudicial to the business of the
Company or any Affiliate and termination by the Participant in violation of an agreement by the
Participant to remain in the employ of the Company or of an Affiliate. The determination of the
Committee as to the existence of cause will be conclusive on the Participant and the Company.
“Cause” is not limited to events that have occurred prior to a Participant’s termination of service
to the Company, nor is it necessary that the Committee’s finding of “cause” occur prior to
termination. If the Committee determines, subsequent to the termination of a Participant’s service
but prior to the exercise of a Stock Award, that either prior or subsequent to the Participant’s
termination the Participant engaged in conduct which would constitute “Cause,” then the right any
Stock Award will be forfeited. Any definition in an agreement between a Participant and the Company
or an Affiliate which contains a conflicting definition of “Cause” for termination and which is in
effect at the time of such termination will supersede the definition in this Plan with respect to
that Participant.

     (d) “Code” means the Internal Revenue Code of 1986, as amended.

     (e) “Committee” means a committee of one or more members of the Board appointed by the
Board in accordance with subsection 2(c).

     (f) “Common Stock” means the Common Stock, par value $0.0001, of the Company.

     (g) “Company” means Cyberkinetics Neurotechnology Systems, Inc., a Delaware
corporation.

     (h) “Consultant” means any person, including an advisor, engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services.
However, the term “Consultant” shall not include either Directors who are not compensated by the
Company for their services as Directors or Directors who are merely paid a director’s fee by the
Company for their services as Directors.

     (i) “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The
Participant’s Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participant’s Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or
Committee, in that party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that party, including sick
leave, military leave or any other personal leave.

     (j) “Covered Employee” means the Company’s chief executive officer and the four other
highest compensated officers of the Company for whom total compensation is required to be reported
to stockholder under the Exchange Act, as determined for purposes of Section 162(m) of the Code.

     (k) “Director” means a member of the Board of Directors of the Company.

     (l) “Disability” means the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.

     (m) “Employee” or “Employment” means any person employed by the Company or an
Affiliate as determined in accordance with Section 3401(c) of the Code.

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

     (o) “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:

     (i) If the Common Stock is listed on any established stock exchange
or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be
the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or market (or the
exchange or market with the greatest volume of trading in the Common
Stock) on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable.

     (ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board, with
particular reference to sales of shares of Common Stock and, if no
such sales provide meaningful guidance, with reference to sales of
any classes or series of preferred stock of the Company; provided
that proper discounts may be taken by the Board to reflect the fair
market value of the Common Stock in light of liquidation and
redemption rights enjoyed by such preferred stock.

     (p) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

     (q) “Listing Date” means the first date upon which any security of the Company is
listed (or approved for listing) upon notice of issuance on any securities exchange or designated
(or approved for designation) upon notice of issuance as a national market security on an
interdealer quotation system.

     (r) “Non-Employee Director” means a Director who either (i) is not a current Employee
or Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its Affiliates for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction as to which
disclosure would be required under Item 404(a) of Regulation S-K and is not engaged in a business
relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a “non-

 

 

employee director” for purposes of Rule 16b-3.

     (s) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

     (t) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

     (u) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted
pursuant to the Plan.

     (v) “Option Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant. Each Option
Agreement shall be subject to the terms and conditions of the Plan.

     (w) “Optionholder” means a person to whom an Option is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Option.

     (x) “Outside Director” means a Director who either (i) is not a current employee of
the Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” receiving compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is
not currently receiving direct or indirect remuneration from the Company or an “affiliated
corporation” for services in any capacity other than as a Director or (ii) is otherwise considered
an “outside director” for purposes of Section 162(m) of the Code.

     (y) “Participant” means a person to whom a Stock Award is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Stock Award.

     (z) “Plan” means this Second Amended and Restated 2002 Equity Incentive Plan.

     (aa) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
to Rule 16b-3, as in effect from time to time.

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

     (cc) “Stock Award” means any right granted under the Plan, including an Option, a
stock bonus and a right to acquire restricted stock.

     (dd) “Stock Award Agreement” means a written agreement between the Company and a
holder of a Stock Award, subject to the terms and conditions of this Plan, evidencing the terms and
conditions of an individual Stock Award grant.

     (ee) “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant
to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or of any of its Affiliates.

* * *

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