Document:

newcardio_ex1012.htm

Exhibit 10.12

    

    NEWCARDIO,
INC.

    EMPLOYMENT
AGREEMENT

     

    THIS
EMPLOYMENT AGREEMENT (the "Agreement")
is made and entered into as of November 1, 2007 by and between NewCardio,
Inc., a Delaware corporation (the "Company"), and Branislav
Vajdic (the "Executive").

     

    BACKGROUND

     

    A. The Company desires to retain the
services of the Executive as the Chief Executive Officer of the Company from the
date of this Agreement (the "Effective
Date"). The Company also
desires to provide employment security to the Executive, thereby inducing the
Executive to continue employment with the Company and enhancing the Executive's
ability to perform effectively.

     

    B. The Executive is willing to be employed
by the Company on the terms and subject to the conditions set forth in this
Agreement.

     

    THE
PARTIES AGREE AS FOLLOWS:

     

    1. Title,
Duties and Responsibilities.

     

    1.1 Title. The
Executive will be employed by the Company as its Chief Executive Officer, at the
pleasure of the Board of Directors of the Company (the "Board"). For so long as
Executive remains the Chief Executive Officer of the Company, the Company shall
use commercially reasonable efforts to nominate Executive for membership on the
Board at each annual meeting of the stockholders of the Company, or at any
meeting of the stockholders of the Company at which members of the Board are to
be elected, or whenever members of the Board are to be elected by written
consent, subject in each case to the approval of the Company's stockholders
and/or the Board, as applicable.

     

    1.2 Duties.
The Executive will devote all of the Executive's business time, energy,
and skill to the affairs of the Company; provided, however, that reasonable time
for the activities set forth on Exhibit A, personal
business, charitable or professional activities or such other activities which
shall be approved in advance by the Board will he permitted, in any case so long
as such activities do not materially interfere with the Executive's performance
of services under this Agreement.

     

    1.3 Performance of
Duties. The Executive will discharge the duties described herein and
duties as set forth by the Board from time to time, in a diligent and
professional manner. The Executive will report to the Board, and will further
comply with the Company's business policies, rules and regulations, as adopted
from time to time by the Board.

     

    2. Terms of
Employment.

     

    2.l 
For purposes of this Agreement, the following terms will have the following
meanings:

     

    (a) "Accrued
Compensation" means any
accrued Total Cash Compensation, any benefits under any plan of the Company in
which the Executive is a participant to the full extent of the Executive's
rights under such plans, any accrued vacation pay, and any appropriate business
expenses incurred by the Executive in connection with the performance of the
Executive's duties hereunder, all to the extent unpaid on the date of
termination.

     

    (b) "Base Salary"
will have the meaning set forth in Section 3.1 hereof.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (c) "Change
of Control' means the
occurrence of any one of the following: (i) any "person", as such term is used
in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")
(other than the Company, a
subsidiary, an affiliate, or a Company employee benefit plan, including any
trustee of such plan acting as trustee) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Company representing 50% or more of the combined voting power of
the Company's then outstanding securities; or (ii) a sale of all or
substantially all of the assets of the Company; or (iii) any merger,
reorganization or other transaction of the Company whether or not another entity
is the survivor, pursuant in which holders of all the shares of capital stock of
the Company outstanding prior to the transaction hold, as a group, less than 50%
of the shares of capital stock of the Company outstanding after the transaction;
provided, however, that neither (A) a merger effected exclusively for the
purpose of changing the domicile of the Corporation in which the holders of all
the shares of capital stock of the Company immediately prior to the merger hold
the voting power of the surviving entity following the merger in the same
relative amounts with substantially the same rights, preferences and privileges,
nor (B) a transaction the primary purpose of which is to raise capital for the
Company, nor (C) a reverse merger involving a publicly traded entity and the
Company during such time the Company is a privately-held entity (the
"Reverse
Merger"), will constitute
a Change of Control.

     

    (d) "Death
Termination" means
termination of the Executive's employment due to the death of the
Executive.

     

    (e)"Disability
Termination" means termination of the Executive's employment by the
Company due to the Executive's incapacitation due to disability. The Executive
will be deemed to be incapacitated due to disability if at the end of any month
the Executive is unable to perform substantially all of the Executive's duties
under this Agreement in the normal and regular manner due to illness, injury or
mental or physical incapacity, and has been unable so to perform for either (i)
three consecutive full calendar months then ending, or (ii) 90 or more of the
normal working days during the 12 consecutive full calendar months then ending.
Nothing in this paragraph will alter the Company's obligations under applicable
law, which may, in certain circumstances, result in the suspension or alteration
of the foregoing time periods.

     

    (f)"PIPE Financing"
means the Company's first sale and issuance of restricted securities to a
third party investor following the closing of the Reverse Merger during the term
hereof.

     

    (g) "Termination
For Cause" means
termination of the Executive's employment by the Company due to (i) the
Executive's dishonesty or fraud, gross negligence in the performance of the
Executive's duties and responsibilities; (ii) the Executive's conviction of a
felony involving moral turpitude; (iii) the Executive's incurable material
breach of the terms of this Agreement or the Confidentiality Agreement (as
defined below); or (iv) the willful and continued refusal by Executive to
substantially perform Executive's duties or responsibilities for the Company
described herein and as set forth by the Board from time to
time.

     

    (h) "Termination
Other Than For Cause" means termination of the Executive's
employment by the Company due to any reason other than as specified in Sections
2.1(d), (e), or (g) hereof.

     

    (i) "Total
Cash Compensation" means
the Executive's Base Salary plus any cash bonuses, commissions or similar
payment accrued during the preceding calendar year, and if there is no complete
preceding calendar year, then the preceding 12 month period, and if there is no
complete preceding 12 month period, then the preceding employment period
annualized to a twelve (12) month period.

     

    
      
         

      

      
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    (j) "Voluntary
Termination" means
termination of the Executive's employment by the voluntary action of the
Executive, other than by reason of a Disability Termination or a Death
Termination or as described in 2.1(k).

     

    (k)"Voluntary Resignation for
Good Reason" means Executives voluntary resignation of Executive's
employment with the Company within thirty (30) days following the expiration of
any Company cure period (discussed below) following the occurrence of one or
more of the following, without Executive's consent: (i) the assignment to
Executive of any authority, duties, or responsibilities, or the reduction of
Executive's authority, duties, or responsibilities, either of which results in a
material diminution of Executive's authority, duties, or responsibilities with
the Company in effect immediately prior to such assignment, or the removal of
Executive from Executive's authority, duties, or responsibilities with the
Company in effect immediately prior to such removal; provided, however, that the
Company's hiring of a new Chief Executive Officer following the date hereof (and
removal of Executive from such office) and reassignment of Executive to a Vice
President level or superior position or executive office of the Company (with a
corresponding reduction in authority, duties, or responsibilities based on such
title change) will not constitute "Good Reason" hereunder; (ii) a material
reduction of Executive's Base Salary (in other words, a reduction of more than
ten percent of Executive's Base Salary in any one year); (iii) a material change
in the geographic location at which Executive must perform services (in other
words, the relocation of Executive to a facility that is more than fifty (50)
miles from Executive's current location); and (iv) the failure of the Company to
obtain assumption of this Agreement by any successor. Executive will not resipt
for Good Reason without first providing the Company with written notice of the
acts or omissions constituting the grounds for "Good Reason" within ninety (90)
days of the initial existence of the grounds for "Good Reason" and a reasonable
cure period of not less than thirty (30) days following the date of such
notice.

     

     2.2
Employee at
Will. The
Executive is an "at will" employee of the Company, and the Executive's
employment may be terminated by the Company at any time by giving the Executive
written notice thereof, subject to the terms and conditions of this Agreement
and the At-Will Employment, Confidential Information, Invention Assignment and
Arbitration Agreement attached as Exhibit B hereto (the
"Confidentiality
Agreement"),
the terms
of which are herein incorporated by reference.

     

     2.3
Termination
For Cause. Upon a Termination For
Cause, the Company will pay the Executive Accrued Compensation, if
any.

     

    2.4 Termination Other
Than For Cause.
The Company shall give Executive not less than three (3) months advance
notice of a Termination Other Than For Cause. Upon a Termination Other Than For
Cause, and provided Executive executes and delivers to the Company a release and
waiver of claims in the form attached hereto as Exhibit C and such
release and waiver of claims is not revoked and has become effective pursuant to
its terms, the Company will pay the Executive (a) Accrued Compensation, if any,
and (b) a monthly cash severance payment equal to (x) the Total Cash
Compensation, divided by twelve (12), times (y) thirty three (33) months, minus
the number of whole months elapsing during the period beginning with the date of
this Agreement and ending on the effective termination date of Executive's
employment, with any fractional month prorated based on the number of days so
elapsed divided by the total number of days in such calendar month (the result
of (y), the "Other Than For
Cause Severance Period"). For certainty, in no event shall the Other Than
For Cause Severance Period exceed thirty three (33) months.

     

     2.5
Voluntary
Resignation For Good Reason. Upon a Voluntary
Resignation For Good Reason, and provided Executive executes and delivers to the
Company a release and waiver of claims in the form attached hereto as Exhibit C and such
release and waiver of claims is not revoked and has become effective pursuant to
its terms, the Company will pay the Executive (a) Accrued Compensation, if any,
and (b) a monthly cash severance payment equal to (x) the Total Cash
Compensation, divided by twelve (12), times (y) thirty six (36) months, minus
the number of whole months elapsing during the period beginning with the date of
this Agreement and ending on the effective termination date of Executive's
employment, with any fractional month prorated based on the number of days so
elapsed divided by the total number of days in such calendar month (the result
of (y), the "Good Reason
Severance Period"). For certainty, in no event shall the Good Reason
Severance Period exceed thirty six (36) months.

     

    
      
         

      

      
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     2.6
Disability
Termination. The Company will have the right to effect a Disability
Termination by giving written notice thereof to the Executive. Upon a Disability
Termination, the Company will pay the Executive all Accrued Compensation, if
any.

      

    2.7 Death
Termination. Upon a Death Termination, the Executive's employment will he
deemed to have terminated as of the last day of the month during which her death
occurs, and the Company will promptly pay to the Executive's estate Accrued
Compensation, if any.

     

    2.8 Voluntary
Termination. In the event the Executive wishes to consummate a Voluntary
Termination, the Executive shall give the Company at least thirty (30) days
advance written notice. During such period, the Executive will continue to
receive regularly scheduled Base Salary payments and benefits. Following the
effective date of a Voluntary Termination, the Company will pay the Executive
Accrued Compensation, if any.

     

    2.9 Timing of
Termination Payments. Unless expressly provided otherwise, the foregoing
termination payments will be made at the usual and agreed times provided for in
Section 3.1 of this Agreement.

     

    3. Compensation and
Benefits.

     

    3.1 Base Salary.
As payment for the services to be rendered by the Executive as provided
in Section 1 and subject to the provisions of Section 2 of this Agreement, the
Company will pay the Executive a "Base Salary" at the rate of $290,000 per year,
payable on the Company's normal payroll schedule. The Executive's "Base Salary"
may be increased in accordance with the provisions hereof or as otherwise
determined from time to time, but reviewed at least annually, by the
Compensation Committee of the Board.

     

    3.2 Additional
Benefits.

     

    (a) Benefit
Plans. The Executive will
be eligible to participate in such of the Company's benefit plans as are now
generally available or later made generally available to senior officers of the
Company, including, without limitation, medical, dental, life, and disability
insurance plans.

     

    (b) Expense
Reimbursement. The Company
ogees to reimburse the Executive for all reasonable, ordinary and necessary
travel and entertainment expenses incurred by the Executive in conjunction with
the Executive's services to the Company consistent with the Company's standard
reimbursement policies. The Company will pay travel costs incurred by the
Executive in conjunction with the Executive's services to the Company consistent
with the Company's standard travel policies.

     

    (c) Vacation.
The Executive will be entitled, without loss of compensation, to twenty
(20) days of vacation per year. Unused vacation in any given year may be accrued
by the Executive pursuant to the Company's standard vacation
policies.

     

    3.3 Bonus.

     

    (a) Mandatory.
As soon as practicable following the closing of the PIPE Financing, the
Company shall pay Executive a one time, lump sum cash bonus in the amount of (x)
$24,166.67, times the number of whole months elapsing during the period
beginning April 1, 2007 and ending on the closing date of the PIPE Financing,
with any fractional month prorated based on the number of days so elapsed
divided by the total number of days in such calendar month, minus (y) the total
amount of cash compensation paid to Executive by the Company during the period
beginning April 1, 2007 and ending on the closing date of the PIPE Financing,
which bonus shall be subject to normal withholdings.

     

    
      
         

      

      
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     (b)
Other.
The Executive will be entitled to participate in any management bonus
plan adopted by the Company on terms comparable to other senior officers of the
Company, which may include the following:

     

    (i) 2007
Program. In the event the
PIPE Financing is closed during calendar year 2007, then Executive may be entitled to
a one time, lump sum cash bonus payment, payable upon the first payroll date
following December 31, 2007 in accordance with the Company's normal payroll
procedures, in an amount equal to 0% to 37.5% of Executive's Base Salary as of
December 31, 2007, with such final percentage determined by the Board based upon
Executive's and/or the Company's achievement by December 31, 2007 of the
following milestones:

     

    
      	
              Milestone

            	
              Percentage
      of then Base Salary

            
	
              (1)
      Closinof a PIPE Financing

            	 
      
	
              (A) Closing of a PIPE Financing at a
      pre-money Company valuation of $20M but less than $25M;
      or

            	
              5%;
      or

            
	
              (B) Closing of a PIPE Financing at a
      pre-money Company valuation of greater than $25M

            	
              10%

            
	
              (2)
      Completion of new QTinno studies involving at least 5,000
    ECGs

            	
              4%

            
	
              (3) Identification, interviewing of,
      and proposal of at least two (2) qualified candidates for the position of
      Chief Financial Officer of the Company either full or part
      time

            	
              8%

            
	
              (4) Identification, interviewing of,
      and proposal of at least two (2) qualified candidates for membership on
      the Board

            	
              8%

            
	
              (5)
      Submission of a detailed financial and investor relations plan for
      calendar year 2008

            	
              7.5%

            
	
              TOTAL

            	
              37.5%

            

    

    

     

    (ii) 2008
Program. Provided the PIPE
Financing has closed prior to or during calendar year 2007, then Executive may
be entitled to a one time,
lump sum cash bonus payment, payable upon the first payroll date following
December 31, 2008 in accordance with the Company's normal payroll procedures, in
an amount equal to 0% to 50.0% of Executive's Base Salary as of December 31,
2008, with such final percentage determined by the Board based upon Executive's
achievement by December 31, 2008 of certain milestones to be determined by the
Board and Executive as soon as practicable following the later to occur of the
date of closing of the PIPE Financing and January 1. 2008.

     

    3.4 Option to
Purchase common Stock. Promptly following the
Effective Date, the senior management of the Company will recommend that the
Board grant the Executive an option (the "Option") to purchase 1,000,000
shares of the Company's Common Stock pursuant to the Company's 2004 Equity
Incentive Plan (the "Plan") at an exercise price per
share equal to the fair market value of a share of the Company's Common Stock as
of the date of such grant, as determined by the Board, and subject to the
following vesting schedule: 1/36 of the shares subject to the Option shall vest
on each monthly anniversary of the date of this Agreement, subject to
Executive's Continuous Service (as defined in the Plan) through each such date.
Notwithstanding the above, the Option will vest immediately with respect to 100%
of any then unvested or unreleased shares upon a Termination Other Than For
Cause.

     

    
      
         

      

      
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    3.5 Future
Options. Any
other equity award made to Executive following the Effective Date in addition to
the Option which is subject to vesting or forfeiture (each such equity award, a
"Future
Option") shall
also vest immediately with respect to 100% of any then unvcsted or unreleased
shares upon a Termination Other Than For Cause.

     

    4. Miscellaneous.

     

    4.1 Waiver. The waiver of the breach of
any provision of this Agreement will not operate or be construed as a waiver of
any subsequent breach of the same or other provision hereof.

     

    4.2 Notices. All notices and other
communications under this Agreement will be in writing and will be given by
personal or courier delivery, facsimile or first class mail, certified or
registered with return receipt requested, and will be deemed to have been duly
given upon receipt if personally delivered or delivered by courier, on the date
of transmission if transmitted by facsimile, or three business days after
mailing if mailed, to the addresses of the Company and the Executive contained
in the records of the Company at the time of such notice. Any party may change
such party's address for notices by notice duly given pursuant to this Section
4.2.

     

    4.3 Headings. The section headings used
in this Agreement are intended for convenience of reference and will not by
themselves determine the construction or interpretation of any provision of this
Agreement.

     

    4.4 Governing
Law. This
Agreement will be governed by and construed in accordance with the laws of the
State of California, excluding those laws that direct the application of the
laws of another jurisdiction.

     

    4.5 Survival of
Obligations. This Agreement will be
binding upon and inure to the benefit of the executors, administrators, heirs,
successors, and assigns of the parties; provided, however, that except as herein
expressly provided, this Agreement will not be assignable either by the Company
(except to an affiliate or successor of the Company) or by the Executive without
the prior written consent of the other party.

     

    4.6 Counterparts and
Facsimile Signatures. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Agreement may be
executed by facsimile signature (including signatures in Adobe PDF or similar
format).

     

    4.7 Withholding.
All sums payable to the Executive hereunder will be reduced by all
federal, state, local, and other withholdings and similar taxes and payments
required by applicable law.

     

    4.8 
Enforcement.
If any portion of this Agreement is determined to be invalid or
unenforceable, such portion will be adjusted, rather than voided, to achieve the
intent of the parties to the extent possible, and the remainder will be enforced
to the maximum extent possible.

     

    4.9 Entire Agreement;
Modifications. Except as otherwise provided herein or in the exhibits
hereto, this Agreement and all exhibits hereto represents the entire
understanding among the parties with respect to the subject matter of this
Agreement, and supersedes any and all prior and contemporaneous understandings,
agreements, plans, and negotiations, whether written or oral, with respect to
the subject matter hereof, including, without limitation, any understandings,
agreements, or obligations respecting any past or future compensation, bonuses,
reimbursements, or other payments to the Executive from the Company. All
modifications to the Agreement must be in writing and signed by each of the
parties hereto. The Company and Executive acknowledge that upon the execution of
this Agreement, the Consulting Agreement dated March 1, 2007, as amended,
between the parties is hereby terminated, save for any surviving obligations of
the parties set forth therein, and Executive hereby waives any notice
requirements in connection therewith; provided, however, that to the extent any
provision of this Agreement or the Confidentiality Agreement conflicts with a
surviving obligation of the Consulting Agreement, the provision set forth in
this Agreement and/or the Confidentiality Agreement shall control.

     

    
      
         

      

      
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    4.10
Section
409A.

     

    (a) 
Notwithstanding anything to the contrary in this Agreement, if Executive is a
"specified employee" within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the "Code")
and the final regulations and any guidance promulgated thereunder ("Section 409A")
at the time of Executive's termination, and the severance payable to
Executive, if any, pursuant to this Agreement, when considered together with any
other severance payments or separation benefits which may be considered deferred
compensation under Section 409A (together, the "Deferred
Compensation Separation Benefits") will not and could not under any
circumstances, regardless of when such termination occurs, be paid in full by
March 15 of the year following Executive's termination, then only that portion
of the Deferred Compensation Separation Benefits which do not exceed the Section
409A Limit (as defined below) may be made within the first six (6) months
following Executive's termination of employment in accordance with the payment
schedule applicable to each payment or benefit. For these purposes, each
severance payment is hereby designated as a separate payment and will not
collectively be treated as a single payment. Any portion of the Deferred
Compensation Separation Benefits in excess of the Section 409A Limit shall
accrue and, to the extent such portion of the Deferred Compensation Separation
Benefits would otherwise have been payable within the first six (6) months
following Executive's termination of employment, will become payable on the
first payroll date that occurs on or after the date six (6) months and one (1)
day following the date of Executive's termination of employment. All subsequent
Deferred Compensation Separation Benefits, if any, will be payable in accordance
with the payment schedule applicable to each payment or benefit.

     

    (b) The foregoing provision is intended to
comply with the requirements of Section 409A so that none of the severance
payments and benefits to be provided hereunder will be subject to the additional
tax imposed under Section 409A, and any ambiguities herein will he interpreted
to so comply. The Company and Executive agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable actions which
are necessary, appropriate or desirable to avoid imposition of any additional
tax or income recognition prior to actual payment to Executive under Section
409A.

     

    (c) For purposes of this Agreement,
"Section
409A Limit" means the
lesser of two (2) times: (i) Executive's annualized compensation based upon the
annual rate of pay paid to Executive during the Company's taxable year preceding
the Company's taxable year of Executive's termination of employment as
determined under Treasury Regulation 1..409A­1(b)(9)(iii)(A)(1) and any
Internal Revenue Service guidance issued with respect thereto; or (ii) the
maximum amount that may be taken into account under a qualified plan pursuant to
Section 401(a)(17) of the Code for the year in which Executive's employment is
terminated.

     

    [Remainder
of Page Intentionally Left Blank]

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as
of the Effective Date.

    

    
      	 
      	 
      	
              NewCardio,
      Inc.

            
	 
      	 
      	 
      
	 
      	 
      	
              By:
      /s/ R. N.
      Blair            

            
	 
      	 
      	
              Name:
      R. N. Blair

            
	 
      	 
      	
              Title:
      Chairman of Board

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
              /s/ Branislav
      Vajdic            

            
	 
      	 
      	
              Branislav
      Vajdic

            
	 
      	 
      	 
      
	 
      	 
      	
              Address:
      PO Box 3423

            
	 
      	 
      	
              Saratoga,
      CA 55070

            
	 
      	 
      	 
      
	 
      	 
      	
              Telephone:
      408-621-9465

            
	 
      	 
      	
              Facsimile:
      408-907-8923

            
	 
      	 
      	
              Email:
      bvajdic@yahoo.com

            

    

    

    
      
         

      

      
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    EXHIBIT
A

     

     

    OTHER
ACTIVITIES

     

     

    N/A

     

    

     

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    AT-WILL
EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION

    ASSIGNMENT
AND ARBITRATION AGREEMENT

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
       

      NEWCARDIO,
INC.

      AT
WILL EMPLOYMENT, CONFIDENTIAL INFORMATION,

      INVENTION
ASSIGNMENT,

      AND
ARBITRATION AGREEMENT

       

      As a
condition of my employment with NewCardio, Inc., its subsidiaries, affiliates,
successors or assigns (together the "Company"), and in
consideration of my employment with the Company and my receipt of the
compensation now and hereafter paid to me by Company, I agree to the
following:

       

      1. At-Will
Employment.

       

      I
UNDERSTAND AND ACKNOWLEDGE THAT MY EMPLOYMENT WITH THE COMPANY IS FOR AN
UNSPECIFIED DURATION AND CONSTITUTES "AT-WILL" EMPLOYMENT. I ALSO UNDERSTAND THAT ANY
REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND NOT VALID UNLESS OBTAINED IN
WRITING AND SIGNED BY THE PRESIDENT OF THE COMPANY. T ACKNOWLEDGE THAT THIS
EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD
CAUSE OR FOR ANY OR NO CAUSE, AT THE OPTION EITHER Of' THE COMPANY OR MYSELF,
WITII OR WITHOUT NOTICE.

       

      2. Confidential
Information.

       

      A. Company
Information. I agree at
all times during the term of my employment and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company, or to
disclose to any person, firm or corporation without written authorization of the
Board of Directors of the Company, any Confidential Information of the Company,
except under a non­disclosure agreement duly authorized and executed by the
Company. I understand that "Confidential
Information" means any
non-public information that relates to the actual or anticipated business or
research and development of the Company, technical data, trade secrets or
know-how, including, but not limited to, research, product plans or other
information regarding Company's products or services and markets therefor,
customer lists and customers (including, but not limited to, customers of the
Company on whom I called or with whom I became acquainted during the term of my
employment), software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information. I further understand that
Confidential Information does not include any of the foregoing items which have
become publicly known and made generally available through no wrongful act of
mine or of others who were under confidentiality obligations as to the item or
items involved or improvements or new versions thereof.

       

      B. Former Employer
Information. I agree that
I will not, during my employment with the Company, improperly use or disclose
any proprietary information or trade secrets of any former or concurrent
employer or other person or entity and that 1 will not bring onto the premises
of the Company any unpublished document or proprietary information belonging to
any such employer, person or entity unless consented to in writing by such
employer, person or entity.

        

      C. Third Party Information. I
recognize that the Company has received and in the future will receive
from third parties their confidential or proprietary information subject to a
duty on the Company's part to maintain the confidentiality of such information
and to use it only for certain limited purposes. I agree to hold all such
confidential or proprietary information in the strictest confidence and not to
disclose it to any person. firm or corporation or to use it except as necessary
in carrying out my work for the Company consistent with the Company's agreement
with such third party.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      3. Inventions.

       

      A. Inventions Retained
and Licensed. I have
attached hereto, as Exhibit
A, a list describing all
inventions, original works of authorship, developments, improvements, and trade
secrets which were made by me prior to my employment with the Company
(collectively referred to as "Prior Inventions"),
which belong to me, which
relate to the Company's proposed business, products or research and development,
and which are not assigned to the Company hereunder; or, if no such list is
attached, I represent that there are no such Prior Inventions, If in the course
of my employment with the Company, I incorporate into a Company product, process
or service a Prior Invention owned by me or in which I have an interest, I hereby grant to the
Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual,
worldwide license to make, have made, modify, use and sell such Prior Invention
as part of or in connection with such product, process or service, and to
practice any method related thereto.

       

      B. Assignment of
Inventions. I agree that I
will promptly make full written disclosure to the Company, will hold in trust
for the sole right and benefit of the Company, and hereby assign to the Company,
or its designee, all my right, title, and interest in and to any and all
inventions, original works of authorship, developments, concepts, improvements,
designs, discoveries, ideas, trademarks or trade secrets, whether or not
patentable or registrable under copyright or similar laws, which I may solely or
jointly conceive or develop or reduce to practice, or cause to be conceived or
developed or reduced to practice, during the period of time I am in the employ
of the Company (collectively referred to as "Inventions"),
except as provided in
Section
3.F below. I further
acknowledge that all original works of authorship which are made by rue (solely
or jointly with others) within the scope of and during the period of my
employment with the Company and which are protectible by copyright are "works
made for hire," as that term is defined in the United States Copyright Act. I
understand and agree that the decision whether or not to commercialize or market
any invention developed by me solely or jointly with others is within the
Company's sole discretion and for the Company's sole benefit and that no royalty
will be due to me as a result of the Company's efforts to commercialize or
market any such invention.

       

      C. Inventions Assigned
to the United States. I
agree to assign to the United States government all my right. title, and
interest in and to any and all Inventions whenever such full title is required
to be in the United States by a contract between the Company and the United
States or any of its agencies.

       

      D. Maintenance of
Records. I agree to keep
and maintain adequate and current written records of all Inventions made by me
(solely or jointly with others) during the term of my employment with the
Company. The records will he in the form of notes, sketches, drawings, and any
other format that may be specified by the Company. The records will be available
to and remain the sole property of the Company at all times.

       

      E. Patent and Copyright Registrations.
I agree to assist the Company, or its designee, at the Company's expense,
in every proper way to secure the Company's rights in the Inventions and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto in any and all countries, including the disclosure to the
Company of all pertinent information and data with respect thereto, the
execution of all applications, specifications, oaths, assignments and all other
instruments which the Company shall deem necessary in order to apply for and
obtain such rights and in order to assign and convey to the Company, its
successors, assigns, and nominees the sole and exclusive rights, title and
interest in and to such Inventions, and any copyrights, patents, mask work
rights or other intellectual property rights relating thereto. I further agree
that my obligation to execute or cause to be executed, when it is in my power to
do so, any such instrument or papers shall continue after the termination of
this Agreement If the Company is unable because of my mental or physical
incapacity or for any other reason to secure my signature to apply for or to
pursue any application for any United States or foreign patents or copyright
registrations covering Inventions or original works of authorship assigned to
the Company as above, then I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as my agent and attorney in
fact, to act for and in my behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations thereon
with the same legal force and effect as if executed by me.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      F. Exception to Assignments. I
understand that the provisions of this Agreement requiring assignment of
Inventions to the Company do not apply to any invention which qualifies fully
under the provisions of California Labor Code Section 2870 (attached hereto as
Exhibit
13). I will
advise the Company promptly in writing of any inventions that I believe meet the
criteria in California Labor Code Section 2870 and not otherwise disclosed on
Exhibit
A.

       

      4. Conflicting
Employment.

       

      I agree
that, during the term of my employment with the Company, I will not engage in
any other employment, occupation or consulting directly related to the business
in which the Company is now involved or becomes involved during the term of my
employment, nor will I engage in any other activities that conflict with my
obligations to the Company.

       

      5. Returning Company
Documents. I agree that,
at the time of leaving the employ of the Company, I will deliver to the Company
(and will not keep in my possession, recreate or deliver to anyone else) any and
all devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings blueprints, sketches, materials, equipment, other
documents or property, or reproductions of any aforementioned items developed by
me pursuant to my employment with the Company or otherwise belonging to the
Company, its successors or assigns, including, without limitation, those records maintained pursuant to
paragraph 3.D.
In the event of the
termination of my employment, I agree to sign and deliver the "Termination
Certification" attached hereto as Exhibit
C.

      

      6. Notification of New
Employer. In the event
that I leave the employ of the Company, I hereby grant consent to notification
by the Company to my new employer about my rights and obligations under this
Agreement.

       

      7. Solicitation of
Employees. I agree that
for a period of twelve (12) months immediately following the termination of my
relationship with the Company for any reason, whether with or without cause, I
shall not either directly or indirectly solicit, induce, recruit or encourage
any of the Company's employees to leave their employment, or take away such
employees, or attempt to solicit, induce, recruit, encourage or take away
employees of the Company, either for myself or for any other person or
entity.

       

      8. Conflict of
Interest Guidelines. I
agree to diligently adhere to the Conflict of Interest Guidelines attached as
Exhibit
D
hereto.

       

      9. Representations.
I agree to execute any
proper oath or verify any proper document required to carry cut the terms of
this Agreement. I represent that my performance of all the terms of this
Agreement will not breach any agreement to keep in confidence proprietary
information acquired by me in confidence or in trust prior to my employment by
the Company. I hereby represent and warrant that I have not entered into, and I
will not enter into, any oral or written agreement in conflict
herewith.

       

      10. Arbitration and Equitable
Relief

       

      A. Arbitration. IN CONSIDERATION
OF MY EMPLOYMENT WITH THE COMPANY, ITS PROMISE TO ARBITRATE ALL
EMPLOYMENT-RELATED DISPUTES AND MY RECEIPT OF THE COMPENSATION, PAY RAISES AND
OTHER BENEFITS PAID TO ME BY THE COMPANY, AT PRESENT AND IN THE FUTURE, I AGREE
THAT ANY AND ALL CONTROVERSIES, CLAIMS, OR DISPUTES WITH ANYONE (INCLUDING THE
COMPANY AND ANY EMPLOYEE, OFFICER, DIRECTOR, SHAREHOLDER OR BENEFIT PLAN OF THE
COMPANY IN THEIR CAPACITY AS SUCH OR OTHERWISE) ARISING OUT OF, RELATING TO, OR
RESULTING FROM MY EMPLOYMENT WITH THE COMPANY OR THE TERMINATION OF MY
EMPLOYMENT WITH THE COMPANY, INCLUDING ANY BREACH OF THIS AGREEMENT, SHALL BE
SUBJECT TO BINDING ARBITRATION UNDER THE ARBITRATION RULES SET FORTH IN
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 THROUGH 1294.2, INCLUDING
SECTION 1283.05 (THE "RULES") AND PURSUANT TO CALIFORNIA LAW. DISPUTES WHICH I
AGREE TO ARBITRATE, AND THEREBY AGREE TO WAIVE ANY RIGHT TO A TRIAL BY JURY,
INCLUDE ANY STATUTORY CLAIMS UNDER STATE OR FEDERAL LAW, INCLUDING, BUT NOT
LIMITED TO, CLAIMS UNDER TITLE VII OF THIS CIVIL RIGHTS ACT OF 1964, THE
AMERICANS WITH DISABILITIES ACT OF 1990, THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION ACT, THE WORKER ADJUSTMENT AND
RETRAINING NOTIFICATION ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, THE
FAMILY AND MEDICAL LEAVE ACT. THE CALIFORNIA FAMILY RIGHTS ACT, THE CALIFORNIA
LABOR CODE, CLAIMS OF HARASSMENT, DISCRIMINATION OR WRONGFUL TERMINATION AND ANY
STATUTORY CLAIMS. I FURTHER UNDERSTAND THAT THIS AGREEMENT TO ARBITRATE ALSO
APPLIES TO ANY DISPUTES THAT THE COMPANY MAY HAVE WITH ME.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      B. Procedure.
I AGREE THAT ANY
ARBITRATION WILL BE ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION ("AAA")
AND THAT THE NEUTRAL ARBITRATOR WILL BE SELECTED IN A MANNER CONSISTENT WITH ITS
NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES. I AGREE THAT THE
ARBITRATOR SHALL HAVE THE POWER TO DECIDE ANY MOTIONS BROUGHT BY ANY PARTY TO
THE ARBITRATION, INCLUDING MOTIONS FOR SUMMARY JUDGMENT AND/OR ADJUDICATION AND
MOTIONS TO DISMISS AND DEMURRERS, PRIOR TO ANY ARBITRATION HEARING. I ALSO AGREE
THAT THE ARBITRATOR SHALL HAVE THE POWER TO AWARD ANY REMEDIES, INCLUDING
ATTORNEYS' FEES AND COSTS, AVAILABLE UNDER APPLICABLE LAW. I UNDERSTAND THAT THE
COMPANY WILL PAY FOR ANY ADMINISTRATIVE OR HEARING FEES CHARGED BY THE
ARBITRATOR OR AAA EXCEPT THAT I SHALL PAY THE FIRST $125.00 OF ANY FILING FEES
ASSOCIATED WITH ANY ARBITRATION I INITIATE. I AGREE THAT THE ARBITRATOR SHALL
ADMINISTER AND CONDUCT ANY ARBITRATION IN A MANNER CONSISTENT WITH THE RULES AND
THAT TO THE EXTENT THAT THE AAA'S NATIONAL RULES FOR THE RESOLUTION OF
EMPLOYMENT DISPUTES CONFLICT WITH THE RULES, THE RULES SHALL TAKE PRECEDENCE. I
AGREE THAT THE DECISION OF THE ARBITRATOR SHALL BE IN
WRITING.

       

      C. Remedy.
EXCEPT AS PROVIDED BY THE
RULES AND THIS AGREEMENT, ARBITRATION SHALL BE THE SOLE, EXCLUSIVE AND FINAL
REMEDY FOR ANY DISPUTE BETWEEN ME AND TILE COMPANY. ACCORDINGLY, EXCEPT AS
PROVIDED FOR BY THE RULES AND THIS AGREEMENT, NEITHER I NOR THE COMPANY WILL BE
PERMITTED TO PURSUE COURT ACTION REGARDING CLAIMS THAT ARE SUBJECT TO
ARBITRATION. NOTWITHSTANDING, THE ARBITRATOR WILL NOT HAVE THE AUTHORITY TO
DISREGARD OR REFUSE TO ENFORCE ANY LAWFUL COMPANY POLICY, AND THE ARBITRATOR
SHALL NOT ORDER OR REQUIRE THE COMPANY TO ADOPT A POLICY NOT OTHERWISE REQUIRED
BY LAW WHICH THE COMPANY HAS NOT ADOPTED.

       

      D. Availability of Injunctive Relief.
 BOTH PARTIES AGREE THAT ANY PARTY MAY PETITION A COURT FOR
INJUNCTIVE RELIEF AS PERMITTED BY THE RULES INCLUDING, BUT NOT LIMITED TO, WHERE
EITHER PARTY ALLEGES OR CLAIMS A VIOLATION OF THE AT-WILL EMPLOYMENT,
CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT AND ARBITRATION AGREEMENT BETWEEN
ME AND THE COMPANY OR ANY OTHER AGREEMENT REGARDING TRADE SECRETS, CONFIDENTIAL
INFORMATION, NONSOLICITATION OR LABOR CODE §2570. BOTH PARTIES UNDERSTAND THAT
ANY BREACH OR THREATENED BREACH OF SUCH AN AGREEMENT WILL CAUSE IRREPARABLE
INJURY AND THAT MONEY DAMAGES WILL NOT PROVIDE AN ADEQUATE REMEDY THEREFOR AND
BOTH PARTIES HEREBY CONSENT TO THE ISSUANCE OF AN INJUNCTION. IN THE EVENT
EITHER PARTY SEEKS INJUNCTIVE RELIEF, THE PREVAILING PARTY SHALL BE ENTITLED TO
RECOVER REASONABLE COSTS AND ATTORNEYS' FEES.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      E. Administrative
Relief.  I UNDERSTAND
THAT THIS AGREEMENT DOES NOT PROHIBIT ME FROM PURSUING AN ADMINISTRATIVE CLAIM
WITH A LOCAL, STATE OR FEDERAL ADMINISTRATIVE BODY SUCH AS THE DEPARTMENT OF
FAIR EMPLOYMENT AND HOUSING, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR THE
WORKERS' COMPENSATION BOARD. THIS AGREEMENT DOES, HOWEVER, PRECLUDE ME FROM
PURSUING COURT ACTION REGARDING ANY SUCH CLAIM.

       

      F. Voluntary Nature of
Agreement. I ACKNOWLEDGE
AND AGREE THAT I AM EXECUTING THIS AGREEMENT VOLUNTARILY AND WITHOUT ANY DURESS
OR UNDUE INFLUENCE BY THE COMPANY OR ANYONE ELSE. I FURTHER ACKNOWLEDGE AND
AGREE THAT I HAVE CAREFULLY READ THIS AGREEMENT AND THAT I HAVE ASKED ANY
QUESTIONS NEEDED FOR ME TO UNDERSTAND THE TERMS, CONSEQUENCES AND BINDING EFFECT
OF THIS AGREEMENT AND FULLY UNDERSTAND IT, INCLUDING THAT I AM WAIVING MY
RIGHT TO A JURY TRIAL. FINALLY, I AGREE THAT I HAVE BEEN
PROVIDED AN OPPORTUNITY TO SEEK THE ADVICE OF AN ATTORNEY OF MY CHOICE BEFORE
SIGNING THIS AGREEMENT.

      

      11. General
Provisions.

       

      A. Governing Law;
Consent to Personal Jurisdiction. This Agreement will be governed by the
laws of the State of California. I hereby expressly consent to the personal
jurisdiction of the state and federal courts located in California for any
lawsuit filed there against me by the Company arising from or relating to this
Agreement.

       

      B. Entire Agreement.
This Agreement sets forth
the entire agreement and understanding between the Company and me relating to
the subject matter herein and supersedes all prior discussions or
representations between us including, but not limited to, any representations
made during my interview(s) or relocation negotiations, whether written or oral.
No modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing signed by the
President of the Company and me. Any subsequent change or changes in my duties,
salary or compensation will not affect the validity or scope of this
Agreement.

       

      C. Severability. If one or more
of the provisions in
this Agreement are deemed void by law, then the remaining provisions will
continue in full force and effect.

       

      D. Successors and Assigns. This
Agreement will be binding upon my heirs, executors, administrators and other
legal representatives and will be for the benefit of the Company, its
successors, and its assigns.

       

      (signature
page follows)

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      
        	
                Date:
      Nov 1, 2007

              	 
      	
                /s/
      Branislav Vajdic

              
	 
      	 
      	
                signature

              
	 
      	 
      	 
      
	 
      	 
      	
                Branislav
      Vajdic

              
	 
      	 
      	
                Name
      of Employee (typed or printed)

              

      

       

      

       

      Witness:

       

      

       

      /s/ Corinna
Aguilar        

      Signature

       

      

       

      Corinna Aguilar            

      Name
(typed or printed)

       

      

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      Exhibit
A

       

      LIST OF
PRIOR INVENTIONS

      AND
ORIGINAL WORKS OF AUTHORSHIP

      

       

      
        	
                Title

              	
                Date

              	
                Identifying
      Number or Brief Description

              

      

      

      All
inventions that I have made prior to employment and contract work for NewCardio
are outside of biomedical/signal processing field. They are property of Intel
Corporation my former employer.

      

      

      __ No
inventions or improvements

      

      __
Additional Sheets Attached

      

      

      Signature
of Employee: /s/
Branislav Vajdic        

      

      Print
Name of Employee: Branislav Vajdic

      

      Date:
Nov. 1, 2007

       

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      Exhibit
B

       

      CALIFORNIA
LABOR CODE SECTION 2870

      INVENTION
ON OWN TIME-EXEMPTION FROM AGREEMENT

       

      "(a) Any
provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer's equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

       

      (1) Relate at the time of conception or
reduction to practice of the invention to the employer's business, or actual or
demonstrably anticipated research or development of the employer;
or

       

      (2) Result from any work performed by the
employee for the employer.

       

      (b) To
the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable."

       

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      Exhibit
C

       

      NEWCARDIO,
INC.

       

      TERMINATION
CERTIFICATION

       

      This is
to certify that I do not have in my possession, nor have I failed to return, any
devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, other
documents or property, or reproductions of any aforementioned items belonging to
NewCardio, Inc., its subsidiaries, affiliates, successors or assigns (together,
the "Company").

       

      I further
certify that I have complied with all the terms of the Company's At Will
Employment, Confidential Information. Invention Assignment and Arbitration
Agreement signed by me, including the reporting of any inventions and original
works of authorship (as defined therein), conceived or made by me (solely or
jointly with others) covered by that agreement.

       

      I further
agree that, in compliance with the At Will Employment, Confidential Information,
Invention Assignment, and Arbitration Agreement, I will preserve as confidential
all trade secrets, confidential knowledge, data or other proprietary information
relating to products, processes, know- how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of the Company or any of its
employees, clients, consultants or licensees.

       

      I further
agree that for twelve (12) months from this date, I will not solicit, induce,
recruit or encourage any of the Company's employees to leave their
employment.

       

      Date: Nov
1, 2007

       

      

      
        	 
      	
                /s/
      Branislav
      Vajdic                                     
      

              
	 
      	
                (Employee's
      Signature

              
	 
      	 
      
	 
      	
                Branislav
      Vajdic                                         
      

              
	 
      	
                (Type/Print
      Employee's Name)

              

      

      

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      Exhibit
D

       

      NEWCARDIO,
INC.

       

      CONFLICT
OF INTEREST GUIDELINES

       

      It is the
policy of NewCardio, Inc. to conduct its affairs in strict compliance with the
letter and spirit of the law and to adhere to the highest principles of business
ethics. Accordingly, all officers, employees and independent contractors must
avoid activities which are in conflict, or give the appearance of being in
conflict, with these principles and with the interests of the Company. The
following are potentially compromising situations which must be avoided. Any
exceptions must be reported to the President and written approval for
continuation must be obtained.

       

      1. Revealing confidential information to
outsiders or misusing confidential information. Unauthorized divulging of
information is a violation of this policy whether or not for personal gain and
whether or not harm to the Company is intended. (The At Will Employment,
Confidential Information, Invention Assignment and Arbitration Agreement
elaborates on this principle and is a binding agreement.)

       

      2. Accepting or offering substantial
gifts, excessive entertainment, favors or payments which may be deemed to
constitute undue influence or otherwise be improper or embarrassing to the
Company.

       

      3. Participating in civic or professional
organizations that might involve divulging confidential information of the
Company.

       

      4. Initiating or approving personnel
actions affecting reward or punishment of employees or applicants where there is
a family relationship or is or appears to be a personal or social
involvement.

       

      5. Initiating or approving any form of
personal or social harassment of employees.

       

      6. Investing or holding outside
directorship in suppliers, customers, or competing companies, including
financial speculations, where such investment or directorship might influence in
any manner a decision or course of action of the Company.

       

      7. Borrowing from or lending to employees,
customers or suppliers.

       

      8. Acquiring real estate of interest to
the Company.

       

      9. Improperly using or disclosing to the
Company any proprietary information or trade secrets of any former or concurrent
employer or other person or entity with whom obligations of confidentiality
exist.

       

      10. Unlawfully discussing prices, costs,
customers, sales or markets with competing companies or their
employees.

       

      11.
Making any unlawful agreement with distributors with respect to
prices.

       

      12. Improperly using or authorizing the use
of any inventions which are the subject of patent claims of any other person or
entity.

       

      13. Engaging in any conduct which is not in
the best interest of the Company.

       

      Each
officer, employee and independent contractor must take every necessary action to
ensure compliance with these guidelines and to bring problem areas to the
attention of higher management for review. Violations of this conflict of
interest policy may result in discharge without warning.

       

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      EXHIBIT
C

       

      RELEASE
AND WAIVER OF CLAIMS

       

      In
consideration of the payments and other benefits set forth in the Employment
Agreement dated [_], 200[_]. to which this form is attached (the "Employment
Agreement"),
I, Branislav
Vajdic, hereby furnish NewCardio, Inc. (the "Company") with the following release
and waiver ("Release and
Waiver").

       

      In
exchange for the consideration provided to me by the Employment Agreement that I
am not otherwise entitled to receive, I hereby generally and completely release
the Company and its directors, officers, employees, stockholders, partners,
agents, attorneys, predecessors, successors, parent and subsidiary entities,
insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way related
to events, acts, conduct, or omissions occurring prior to my signing this
Release and Waiver. This general release includes, but is not limited to: (1)
all claims arising out of or in any way related to my employment with the
Company or the termination of that employment; (2) all claims related to my
compensation or benefits from the Company, including, but not limited to,
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including, but not limited to, claims for fraud. defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including, but not limited to, claims for
discrimination, harassment, retaliation, attorneys' fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) ("ADEA"), and the California
Fair Employment and Housing Act (as amended).

       

      I also
acknowledge that I have read and understand Section 1542 of the California Civil
Code which reads as follows: "A general release does not extend to
claims which the creditor does not know or suspect to exist in his favor
at the time of executing
the release, which if known by him must have materially affected his settlement
with the debtor." I hereby expressly waive and relinquish all rights and
benefits under that section and any law of any jurisdiction of similar effect
with respect to any claims I may have against the Company.

       

      I
acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this Release and Waiver is knowing and voluntary, and
that the consideration given for this Release and Waiver is in addition to
anything of value
to which I was already entitled as an executive of the Company. I further
acknowledge that I have been advised, as required by the Older Workers Benefit
Protection Act, that: (a) the release
and waiver granted herein does not relate to claims under the ADEA which may
arise after this Release and Waiver is executed; (h) I should consult with an
attorney prior to executing this Release and Waiver; (c) if I am over the age of
forty (40) on the date I am signing this Release and Waiver, 1 have 21 days in
which to consider this Release and Waiver (although I may choose voluntarily to
execute this

       

      Release
and Waiver earlier); (d) if I am over the age of forty (40) on the date I am
signing this Release and Waiver, I have seven days following the execution of
this Release and Waiver to revoke my consent to this Release and Waiver; and (e)
if I am over the age of forty (40) on the date I am signing this Release and
Waiver, this Release and Waiver shall not be effective until the eighth day
after ! execute this Release and Waiver and the revocation period has expired;
otherwise it shall be effective upon the date of my signature
below.

       

      I
acknowledge my continuing obligations under the At-Will Employment. Confidential
Information, Invention Assignment and Arbitration Agreement a copy of which is
attached hereto (the "Confidentiality Agreement").
Pursuant to the Confidentiality Agreement, I understand that among other
things, I must not use or disclose any confidential or proprietary information
of the Company and I must immediately return all Company property and documents
(including all embodiments of proprietary information) and all copies thereof in
my possession or control. I understand and agree that my right to the severance
pay I am receiving is in exchange for my agreement to the terms of this Release
and Waiver and is contingent upon my continued compliance with my
Confidentiality Agreement.

       

      This
Release and Waiver, including the Confidentiality Agreement, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company and me with regard to the subject matter hereof. I am not relying on any
promise or representation by the Company that is not expressly stated herein.
This Release and Waiver may only be modified by a writing signed by both me and
a duly authorized officer of the Company.

       

      Date:   __________________                                                                         By: __________________________

                                                                                                                                                 
Branislav
Vajdic

       

       

       

      11Exhibit 4.5  

Exhibit A  

TO CERTIFICATE OF DESIGNATION AND PREFERENCES OF

INTERESTS TO BE REPRESENTED BY

SPECIAL SERIES NON-VOTING COMMON SHARES OF

CURRENT MEDIA, LLC  

REGISTRATION RIGHTS  

        1.    Certain Definitions.    In addition to the terms defined elsewhere in the Current Media, LLC Operating
Agreement, the following terms shall have the following meanings: 

        "Registrable Securities" means the Common Stock received by the Series S Members upon a Conversion; provided, however, that any
such securities shall cease to be Registrable Securities (i) when a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with the plan of distribution set forth in such registration statement or the registration statement has remained effective for
180 days whether or not such securities have been disposed of, (ii) when such securities have been sold to the public either pursuant to a registration statement or Rule 144, or
sold in a private
transaction in which the transferor's rights hereunder were not assigned to the transferee or (iii) when they shall have ceased to be outstanding. 

        "Registration Expenses" means all expenses incurred by the Company in complying with Sections 2 and 3 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses, transfer agent's and registrar's expenses, and escrow fees, fees and disbursements of counsel for the Company, blue sky
fees and expenses and the expense of any special audits incident to or required by any such registration, but shall not include fees and disbursements of counsel, auditors or other professionals or
consultants retained by the Series S Members. 

        "SEC" means the U.S. Securities and Exchange Commission. 

        "Selling Expenses" means all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered
pursuant to these piggyback registration rights. 

        "Series A Member" means a Person holding "Registrable Securities" as that term is defined in Annex A to the Operating
Agreement granting registration rights to Members holding Series A Preferred Shares. 

        "Series S Member" means a Person holding Registrable Securities and that immediately before the Conversion was a Member holding
Series S Common Shares. 

        2.    Requested Registration.    

        2.1   Request for Registration by Members.

        (a)   At
any time after the first to occur of (i) eight years after the date hereof and (ii) six months after the effective date of the Company's initial Public
Offering, any Series S Member or Series S Members holding not less than a majority of the Registrable Securities then held by all of the Series S Members may, by written notice,
request that the Company effect a registration, qualification or compliance with respect to all or any part of the Registrable Securities then held by such Members, provided that, if the securities
requested to be registered constitute less than all of the outstanding Registrable Securities at such time, such securities shall have an estimated aggregate offering price, net of underwriting
discounts and expenses, equal to or exceeding $20 million (a "Demand Registration"). 

A-1

 

        (b)   The
Company shall have the right, by delivering written notice to all Series S Members within ninety (90) days of receipt by the Company of a written
notice delivered pursuant to clause (i) of subsection (a) above, to elect not to effectuate a Public Offering pursuant to such notice, and if the Company elects not to effectuate a
Public Offering, the Company shall be obligated to offer to purchase or cause a designee to offer to purchase all of the Series S Shares then held by the Series S Members at their fair
market value, including fractional shares which shall be purchased at a pro rata price. The Company's written notice pursuant to the preceding sentence (the "Offer Notice") shall state the per share
price being offered by the Company for each Series S Share. Each Series S Member desiring to sell its Series S Shares to the Company must deliver an irrevocable written notice to
the Company to such effect (the "Acceptance Notice") within twenty (20) business days after receipt of the Company's Offer Notice. Any Series S member who does not timely deliver a
written notice accepting the Company's offer shall be deemed to have elected to retain its Series S Shares. A Series S Member may not elect to sell less than all of its Series S
Shares. 

        With
respect to each Series S Member timely accepting the Company's offer as provided herein (a "Selling Member"), the closing of the sale of its Series S Shares shall
occur on a date mutually agreed with the Company (or its designee acquiring the Series S Shares) within thirty (30) days of its Acceptance Notice (or such later date as any dispute
regarding the fair market value of the Series S Shares is resolved as provided below) and at the closing, (i) each Selling Member shall deliver to the Company (or its designee acquiring
the Series S Shares) the certificate or certificates representing all of its Series S Shares, duly endorsed in blank and accompanied by appropriate membership interest powers;
(ii) each Selling Member shall transfer all of its Series S Shares to the Company (or its designee acquiring the Series S Shares) free and clear of all liens and encumbrances of
any nature whatsoever other than the Operating Agreement of the Company; and (iii) the Company (or its designee acquiring the Series S Shares) shall deliver to each Selling Member, by
bank check or by wire transfer of immediately available funds, the per share purchase price stated in the Offer Notice (or the Supplemental Offer Notice or Arbitrator's Notice, as applicable)
multiplied by the number of Series S Shares held by such Selling Member. 

        If
a Selling Member disputes the fair market value stated in the Offer Notice, the Selling Member must notify the Company in writing (which shall then be obligated to promptly notify the
other Selling Members) of its disagreement at the time it delivers its acceptance notice. If the Selling Member and the Company resolve the dispute, the Company shall promptly give written notice of
the resolution of the dispute (and the agreed upon fair market value of Series S Shares) to the Selling Members (the "Supplemental Offer Notice"). If such disagreement is not resolved within
twenty (20) days following delivery of the Offer Notice, the Company or a Selling Member, by notice to the other, shall have the right to require the determination of fair market value to be
made by arbitration, which shall be exclusive means of resolving the dispute. Any arbitration initiated hereunder shall be conducted using the same procedures set forth in Section 9.2(e) of the
Operating Agreement and the Company shall promptly give written notice to the Selling Members of the arbitrator's decision (the "Arbitrator's Notice"). 

        (c)   Within
ten (10) days after the receipt by the Company of a written request under clause (ii) of the Section 2.1(a) or within ninety (90) days
after receipt by the Company of a written request under clause (i) of Section 2.1(a) if the Company has not delivered an Offer Notice on or prior to such date, the Company shall give
written notice of the proposed registration, qualification or compliance to all other holders of Registrable Securities, and as soon as practicable, use its best efforts to effect such registration,
qualification or compliance (including, without limitation, appropriate qualification under applicable blue sky or other 

A-2

 

state
securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities
of any other Series S Members and the securities of other Person holding securities of the Company that are entitled to piggyback registration rights who are joining in such request as are
specified in a written request received by the Company within twenty (20) days after receipt of such written notice from the Company. 

        (d)   Notwithstanding
the foregoing, the Company shall not be obligated to take any action to effect any such registration, qualification or compliance pursuant to this
Section 2.1: 

        (i)    In
any particular jurisdiction in which the Company would be required to qualify as a foreign corporation, subject itself to taxation in that jurisdiction or execute a
general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by
the Securities Act; 

        (ii)   During
the period starting with the date ninety (90) days prior to the Company's estimated date of filing of, and ending on the date six (6) months
immediately following the effective date of, a registration statement pertaining to securities of the Company (other than a registration of securities in a Rule 145 transaction, with respect to
an employee benefit plan or with respect to the Company's first registered public offering of its stock), provided that the Company is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective; 

        (iii)  After
the Company has effected three such registrations pursuant to this Section 2.1 and such registrations have been declared or ordered effective; 

        (iv)  To
effectuate an initial Public Offering if the Company delivers an Offer Notice; or 

        (v)   If
either (x) the Company shall furnish to the Series S Members requesting registration a certificate signed by the Chairman of the Board or the Chief
Executive Officer stating that in the good faith judgment of the Board (i) that a postponement or withdrawal is necessary in order to avoid premature disclosure of a matter that the Board has
determined would not be in the best interests of the Company to be disclosed at such time or (ii) that the filing of a registration statement would have a material adverse effect on the Company
or its members or shareholders, as the case may be, or (y) the Company would be required to prepare audited financial statements as of a date other than its fiscal year end, then the Company's
obligation to use its best efforts to register, qualify or comply under this Section 2.1 shall be deferred for a period not to exceed ninety (90) days from the date of receipt of written
request from the Members; provided, however, that the Company shall not be entitled to exercise such right under this Section 2.1 more than once in any twelve-month period and provided,
further, however, that in any of the events described above, the Series S Member(s) requesting such Demand Registration shall be entitled to withdraw such request and, if such request is
withdrawn, such Demand Registration shall not count as the one permitted Demand Registration. The Company shall provide written notice to the Members requesting such Demand Registration and any other
Persons requesting inclusion in such registration of (x) any postponement or withdrawal of the filing or effectiveness of a Registration Statement pursuant to this Section 2.1,
(y) the Company's decision to file or seek effectiveness of such Registration Statement following such withdrawal or postponement and (z) the effectiveness of such Registration
Statement. 

A-3

 

        Subject
to the foregoing clauses (i) through (v), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon
as practicable, after receipt of a valid request for a Demand Registration under this Section 2.1. 

        2.2   Underwriting.    The right of any Series S Member to registration pursuant to this Section 2
shall be conditioned upon such Person's participation in the underwriting arrangements required by this Section 2, and the inclusion of such Person's Registrable Securities in the underwriting
to the extent provided herein. 

        2.3   Procedures.    The Company shall (together with all Members proposing to distribute their securities through
such underwriting) enter into an underwriting agreement in customary form with an underwriter or underwriters of recognized national standing selected for such underwriting by the Company and
reasonably acceptable to a majority of the Members proposing to distribute their securities through such underwriting. Subject to the following sentence, the Company may include in any Demand
Registration any securities to be issued by the Company or held by any other holders of the Company's securities. Notwithstanding any other provision of this Section 2, if the managing
underwriter advises the Company in writing that, in its opinion, marketing factors require a limitation of the number of shares to be underwritten, the underwriter may limit the Registrable Securities
and other securities to be distributed through such underwriting. The Company shall so advise all Persons distributing their securities through such underwriting of such limitation and the number of
shares of Registrable Securities and other securities that may be included in the registration (and underwriting if any) shall be allocated (i) first, among all Series S Members and
other Persons holding securities (except
securities described in clause (iii)) in proportion, as nearly as practicable, to the respective amounts of Registrable Securities or other securities requested by such Series S Members
and other holders of the Company's securities (except securities described in clause (iii)) to be included in such registration statement and (ii) second, to the securities the Company
proposes to sell in such registration and (iii) third, securities requested to be included in such registration by Persons, if any, whose rights to piggyback registration provide that they are
subordinate to the rights of the Series S Members. 

        If
any Series S Member who has requested inclusion in the registration as provided above disapproves of the terms of the underwriting, such Person shall provide written notice of
such Person's disapproval to the Company and the managing underwriter. Upon the receipt of such notice, such Person shall be withdrawn from the underwriting. If all the Series S Members who had
requested inclusion in a registration are withdrawn from the underwriting in accordance with this paragraph, the registration shall still be deemed to be a Demand Registration and the Series S
Members shall not be entitled to request another registration, unless the Series A Members who had requested inclusion in such registration pay the Registration Expenses associated with such
withdrawn registration. 

        2.4   Registration Statement Form.    Except as provided in the next sentence, a registration under this
Section 2 shall be on such appropriate registration form of the SEC (i) as shall be selected by the Company and, as shall be reasonably acceptable to the Series S Members holding
a majority of the Registrable Securities so to be registered and (ii) as shall permit the disposition of such Registrable Securities in accordance with the intended method or methods of
disposition specified in their request for such registration. If, at any time that the Company is eligible to use Form S-3 or any successor thereto, the Series S Members
requesting the Demand Registration and the other Persons whose shares will be registered holding a majority of the securities to be registered have requested that the Company file a
Registration Statement on Form S-3 or any successor thereto for a public offering of all or any portion of the Registrable Securities held by such Members, then the Company shall
use its best efforts to register under the Securities Act on Form S-3 or any successor thereto, the number of shares of Registrable Securities specified in such notice. If, in
connection with a registration under Section 2 which is proposed by the Company to 

A-4

 

be
on Form S-3 or any similar short form registration statement which is a successor to Form S-3, the managing underwriters, if any, shall advise the Company in
writing that in their opinion the use of another permitted form is of material importance to the success of the offering, then such registration shall be on such other permitted form. 

        2.5   Effective Registration Statement.    A registration requested pursuant to this Section 2 shall not be
deemed to have been effected (i) unless a registration statement with respect thereto has become effective, provided that a registration which does not become effective after the Company has
filed a registration statement with respect thereto solely by reason of the refusal to proceed of the Series S Members requesting the Demand Registration and the Series A Members which
initially elected to register their shares in such registration or the refusal to proceed by Members such that the estimated aggregate offering price net of underwriting discounts and expenses, does
not equal or exceed $20 million shall be deemed to have been effected by the Company at the request of such Members, (ii) if, after it has become effective, such registration becomes
subject to any stop order, injunction or other order or requirement of the SEC or other governmental agency or court other than by reason of
some act or omission by the Series S Members, unless such stop-order, injunction or other order or requirement is vacated or otherwise removed, or (iii) the conditions to
closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than by reason of some act or omission by the
Series S Members. 

        2.6   Effective Period of Demand Registrations.    After a Demand Registration filed pursuant to this Agreement has
become effective, the Company shall use its best efforts to keep such Demand Registration effective for a period equal to 180 days from the date on which the SEC declares such Demand
Registration effective (or if such Demand Registration is not effective during any period within such 180 days, such 180-day period shall be extended by the number of days during
such period when such Demand Registration is not effective), or such shorter period which shall terminate when all of the Registrable Securities covered by such Demand Registration have been sold
pursuant to such Demand Registration, provided, however, that (i) such 180-day period shall be extended for a period of time equal to the period the Member refrains from selling any
securities included in such registration at the request of an underwriter of the Registrable Securities; 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 180-day period shall be extended, if necessary, to keep the registration statement
effective until all such Registrable Securities are sold, however in no event longer than one year from the effective date of the registration statement and provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a continuous or delayed basis, and provided further that applicable rules under the Securities Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a post-effective amendment that (I) includes any prospectus required by Section 10(a)(3) of the
Securities Act or (II) 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 (I) and (II) above to be contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration
statement. If the Company shall withdraw a Demand Registration pursuant to subsection 2.1(iv) (a "Withdrawn Demand Registration"), the Series S Members shall be entitled to a replacement
Demand Registration. 

        3.    Piggyback Registration.    

        3.1   Notice of Registration.    If, at any time or from time to time, the Company shall determine to register (a
"Piggyback Registration") any of its common equity securities, either for its own account or the account of a security holder or holders, other than (x) a registration relating solely 

A-5

 

to
employee benefit plans or (y) a registration relating solely to a Rule 145 transaction, the Company will: 

        (i)    promptly
give to each Series S Member written notice thereof; and 

        (ii)   subject
to Section 3.2, include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved
therein, all of the Registrable Securities specified in a written request or requests, made within twenty (20) days after receipt of such written notice from the Company, by any Series S
Member, 

        3.2   Underwriting.    If the registration for which the Company gives notice is for a registered public offering
involving an underwriting, the Company shall so advise the Series S Members as a part of the written notice given pursuant to Section 3.1. In such event the right of any Series S
Member to registration pursuant to this Section 3 shall be conditioned upon such Series S Member's participation in such underwriting and the inclusion of such Series S Member's
Registrable Securities in the underwriting to the extent provided herein. All Series S Members proposing to distribute their securities through such underwriting shall (together with the
Company and the other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected by the Company. 

        Notwithstanding
any other provision of this Section 3, if the Company undertakes a public offering for its own account and the managing underwriter advises the Company in writing
that, in its opinion, the number of securities to be included in such registration exceeds the number which can be sold in such offering, and/or that the number of shares of Registrable Securities
proposed to be included in any such registration would adversely affect the price per share of the equity securities to be sold in such offering, the Company shall include in such registration
(i) first, the securities the Company proposes to sell, (ii) second, the Registrable Securities and (except with respect to securities described in clause (iii)) other securities
requested to be included in such registration (including, without limitation, those of the other Persons) pro rata among the Series S Members and the holders of such securities on the basis of
the number of shares requested to be registered by such holders or as such holders may otherwise agree and (iii) third, securities requested to be included in such registration by Persons, if
any, whose rights to piggyback registration provide that they are subordinate to the rights of the Series S Members and/or Series A Members. No Registrable Securities excluded from the
underwriting by reason of the underwriter's marketing limitation shall be included in such registration. 

        Notwithstanding
the other provisions of this Section 3, if a Piggyback Registration is an underwritten secondary registration on behalf of a holder of the Company's securities
other than Registrable Securities, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the
number which can be sold in such offering and/or that the number of shares of Registrable Securities proposed to be included in any such registration would adversely affect the price per share of the
Company's equity securities to be sold in such offering, the Company shall include in such registration (i) first, the securities requested to be included therein by the holders requesting such
registration the Registrable Securities requested to be included in such registration by the Series S Members and (except with respect to securities described in clause (iii)) any other
securities requested to be included in such registration, pro rata among the holders of such securities on the basis of the number of shares requested to be registered by such holders,
(ii) second, the securities the Company proposes to sell, and (iii) third, securities requested to be included in such registration by Persons, if any, whose rights to piggyback
registration provide that they are subordinate to the rights of the Series S Members and/or the Person(s) initiating the underwriting as to which the piggyback registration rights relate. 

A-6

 

        No
Registrable Securities excluded from the underwriting by reason of the underwriter's marketing limitation shall be included in such registration. 

        If
any Series S Member who has requested inclusion in the registration as provided above disapproves of the terms of any such underwriting prior to the effectiveness of such
registration, such Series S Member may elect to withdraw therefrom by written notice to the Company and the managing underwriter. Any securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration, and shall not be transferred in a public distribution prior to ninety (90) days after the effective date of the registration statement relating
thereto, or such other shorter period of time as the underwriters may require. 

        3.3   Right to Terminate Registration.    The Company shall have the right at any time in its sole discretion to
postpone, terminate or withdraw any registration initiated by it under this Section 3 prior to the effectiveness of such registration whether or not any Series S Member has elected to
include securities in such registration. 

        3.4   Delay of Registration.    No Holder shall have any right to take any action to restrain, enjoin, or otherwise
delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of Section 2 or Section 3. 

        4.    Expenses of Registration.    

        (a)   The
Company shall bear all Registration Expenses in connection with all registrations pursuant to Section 2 and Section 3 hereof exclusive of any Selling
Expenses. All Selling Expenses relating to securities registered on behalf of the Series S Members shall be borne by the holders of securities included in such registration pro rata among each
other on the basis of the number of shares so registered. In addition, each Series S Member shall bear its own expenses incurred in connection with exercising its rights hereunder. The Company
shall pay its internal expenses, the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on
each securities exchange on which they are to be listed. 

        (b)   The
obligation of the Company to bear the Registration Expenses shall apply irrespective of whether a registration, once properly demanded, if applicable, becomes
effective, is withdrawn or suspended, is converted to another form of registration and irrespective of when any of the foregoing shall occur; provided, however, that Registration Expenses for any
Registration Statement withdrawn solely at the
request of the Series S Members (unless withdrawn following postponement of filing by the Company in accordance with Section 3.3) shall be borne by the Series S Members and the
Registration Expenses in respect of any supplements or amendments to a Registration Statement or Prospectus resulting from a misstatement furnished to the Company by a Member shall be borne by such
Member. 

        5.    Registration Procedures.    Whenever Registrable Securities are to be registered pursuant hereto, the Company
will use its reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended methods of disposition thereof, and pursuant thereto the Company
shall: 

        (a)   Prepare
and file with the SEC a registration statement with respect to such securities and use reasonable efforts to cause such registration statement to become and
remain effective for 180 days or less if the distribution described in the Registration Statement has been completed; 

        (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 Securities Act with respect to the disposition of all securities covered by such registration statement; 

A-7

 

        (c)   Furnish
to the Series S Members participating in such registration and to the underwriters of the securities being registered such reasonable number of copies of
the registration statement, preliminary prospectus, final prospectus and such other documents as may be reasonably requested in order to facilitate the public offering of such securities; 

        (d)   Use
its reasonable 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 underwriters, and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller and underwriter to
consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided, that the Company will not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction); 

        (e)   In
the case of an underwritten offering, enter into an underwriting agreement provided such underwriting agreement contains reasonable and customary provisions; 

        (f)    Notify
each seller of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the
Securities 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 and, at the request of any such
seller, the Company promptly shall prepare and furnish to such seller and each underwriter if any a reasonable number of copies of such supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein not misleading; 

        (g)   Use
its reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which securities of the same class issued by the Company
are then listed; and 

        (h)   Provide
a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement. 

        If
requested by the Company, each seller of Registrable Securities as to which any registration is being effected shall furnish to the Company any other information regarding such seller
and the distribution of such securities as the Company may from time to time reasonably request in writing and as shall be required in connection with any registration, qualification or compliance
referred to in this Agreement. 

        Each
seller of Registrable Securities agrees by having its Registrable Securities treated as Registrable Securities that, upon notice from the Company of the happening of any event as a
result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not
misleading (a "Suspension Notice"), such seller will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until such seller is advised in writing by the
Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by Section 5(f) hereof, and, if so directed by the Company, such
seller will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such seller's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. If the Company shall give any notice to suspend the disposition of Registrable Securities 

A-8

 

pursuant
to a Prospectus, the Company shall extend the period of time during which the Company is required to maintain the Registration Statement effective pursuant to this Agreement by the number of
days during the period from and including the date of the giving of such notice to and including the date such seller either is advised by the Company that the use of the Prospectus may be resumed or
receives the copies of the supplemented or amended Prospectus contemplated by Section 5(f). 

        6.    Indemnification.    

        (a)   To
the extent permitted by law, the Company will indemnify each Series S Member with respect to which registration, qualification or compliance has been effected
pursuant to this Agreement and each of their respective officers and directors, and each underwriter, if any, and each Person who controls any underwriter within the meaning of Section 15 of
the Securities Act, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document,
or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Company of the Securities Act or any rule or
regulation promulgated under the Securities Act applicable to the Company in connection with any such registration, qualification or compliance, and the Company will reimburse each such
Series S Member, each such underwriter and each Person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises
out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with information furnished to the Company by such
Series S Member or controlling Person specifically for use therein, or the failure of such Series S Member to deliver a Prospectus that was delivered to the Series S Member prior
to a sale or sales by such Series S Member. 

        (b)   To
the extent permitted by law, each Series S Member will, if Registrable Securities held by such Series S Member are included in the securities as to
which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, and each other Series S Member, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such directors, officers, other Series S Members, underwriters or control Persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with information
furnished to the Company by such Series S Member specifically for use therein. 

        (c)   Each
party entitled to indemnification under this Section 6 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity 

A-9

 

may
be sought and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 6 unless the failure to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action and provided further, that the Indemnifying Party shall not assume the defense for matters as to which there is a conflict
of interest or separate and different defenses but shall bear the expense of such defense nevertheless, except that the Company shall not be obligated to bear the expense of more than one counsel for
all the Series S Members and all of the Series A Members collectively. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified
Party of a release from all liability in respect to such claim or litigation. 

        (d)   If
the foregoing indemnification is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, claim, damage,
liability or action referred to therein, then the Indemnifying Party shall, in lieu of indemnifying such Indemnified Party hereunder, contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or actions in such proportion as 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 which resulted in such losses, claims, damages, liabilities or actions as well as any other relevant equitable considerations,
including the failure to give any notice under paragraph (c). The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of 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. 

        7.    Transfer or Assignment of Registration Rights.    The demand and piggyback registration rights granted to a
Series S Member hereby may be transferred or assigned but only to a transferee who acquires Series S Common Shares from a Series S Member, provided that the transfer to the
transferee is made in accordance with the terms and conditions of the Agreement and the transferee becomes a Substitute Member. After an initial public offering of the Company's equity securities, the
piggyback registration rights granted to a Series S Member hereby may not be assigned or transferred. 

        8.    Termination of Registration Rights.    The rights of any Series S Member to request inclusion in any
registration and the obligations of the Company to register Registrable Securities hereunder shall terminate on the second anniversary of the closing of the initial public offering of the Company's
securities, if any. 

A-10

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