EXHIBIT 10.2

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of March 20, 2006, by
and among CardioVascular BioTherapeutics, Inc., a Delaware corporation, with
headquarters currently located at 7251 West Lake Mead Boulevard, Suite 303, Las
Vegas, Nevada 89128, to be relocated to 1635 Village Center Circle, Suite 250,
Las Vegas, Nevada 89134, effective April 1, 2006 (the “Company”), and the
undersigned buyers (each, a “Buyer” and collectively, the “Buyers”).

WHEREAS:

A. In connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Securities Purchase Agreement”), the Company
has agreed, upon the terms and subject to the conditions of the Securities
Purchase Agreement, to issue and sell at the Closing (as defined in the
Securities Purchase Agreement) to the Buyers (i) convertible notes of the
Company (including accrued and unpaid interest thereon and as any of the same
may be amended, restated or modified and in effect from time to time, the
“Notes”), which will be convertible into shares of the Company’s common stock,
$0.001 par value per share (the “Common Stock”) in accordance with the terms of
the Notes (the shares of Common Stock issuable upon conversion of the Notes
being referred to as the “Conversion Shares”), and (ii) warrants to purchase
shares of Common Stock (any such warrants, as any of the same may be amended,
restated or modified and in effect from time to time, the “Initial Warrants”;
and the shares of Common Stock issuable upon exercise of the Initial Warrants
being referred to herein as the “Initial Warrant Shares”);

B. Pursuant to the terms of the Notes and subject to the conditions thereof, the
Company has agreed to issue to the Buyers additional warrants to purchase shares
of Common Stock (any such additional warrants, as any of the same may be
amended, restated or modified and in effect from time to time, the “Repurchase
Warrants”; and the shares of Common Stock issuable upon exercise of the
Repurchase Warrants being referred to herein as “Repurchase Warrant Shares”);
and

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

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NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:

1. DEFINITIONS.

As used in this Agreement, the following terms shall have the following
meanings:

a. “Effectiveness Deadline” means the Initial Effectiveness Deadline, a
Repurchase Warrant Effectiveness Deadline, an Additional Effectiveness Deadline
or an Additional Repurchase Warrant Effectiveness Deadline (each as defined
below), as applicable.

b. “Filing Deadline” means the Initial Filing Deadline, a Repurchase Warrant
Filing Deadline, an Additional Filing Deadline, or an Additional Repurchase
Warrant Filing Deadline (each as defined below), as applicable.

c. “Initial Registrable Securities” means (i) the Conversion Shares issued or
issuable upon conversion of the Notes (including any principal thereof or
interest thereon), (ii) the Initial Warrant Shares issued or issuable upon
exercise of the Initial Warrants and (iii) any shares of capital stock issued or
issuable with respect to the Conversion Shares, the Notes, the Initial Warrant
Shares and the Initial Warrants as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions of Notes or exercises of Initial Warrants; provided,
however, that any such Initial Registrable Securities shall cease to be Initial
Registrable Securities when a Registration Statement with respect to the sale of
such securities becomes effective under the 1933 Act and such securities are
disposed of in accordance with such Registration Statement, (b) such securities
are sold in accordance with Rule 144 (as defined in Section 8) or (c) such
securities become transferable without any restrictions in accordance with Rule
144(k) (or any successor provision).

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

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

f. “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
governmental or any department or agency thereof.

g. “Register,” “registered,” and “registration” refer to a registration effected
by preparing and filing one or more Registration Statements (as defined below)
in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or
any successor rule providing for offering securities on a continuous or delayed
basis (“Rule 415”), and the declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities and Exchange
Commission (the “SEC”).

h. “Registrable Securities” means the Initial Registrable Securities and the
Repurchase Warrant Registrable Securities, as applicable.

 

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i. “Registration Statement” means the Initial Registration Statement, and any
Repurchase Warrant Registration Statement, as applicable.

j. “Repurchase Warrant Registrable Securities” means all Repurchase Warrant
Shares issued or issuable upon exercise of any Repurchase Warrants and (ii) any
shares of capital stock issued or issuable with respect to the Repurchase
Warrant Shares and the Repurchase Warrants as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on the exercises of Repurchase Warrants; provided,
however, that any such Repurchase Warrant Registrable Securities shall cease to
be Repurchase Warrant Registrable Securities when a Registration Statement with
respect to the sale of such securities becomes effective under the 1933 Act and
such securities are disposed of in accordance with such Registration Statement,
(b) such securities are sold in accordance with Rule 144 or (c) such securities
become transferable without any restrictions in accordance with Rule 144(k) (or
any successor provision).

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

l. “Trading Day” means any day on which the Common Stock is traded on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that “Trading Day” shall not include any day on which the
Common Stock is scheduled to trade, or actually trades, on such exchange or
market for less than 4.5 hours.

m. “Warrants” means the Initial Warrants and any Repurchase Warrants.

n. “Warrant Shares” means the Initial Warrant Shares and any Repurchase Warrant
Shares.

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.

2. REGISTRATION.

a. i. Initial Mandatory Registration. The Company shall prepare, and, as soon as
practicable but in no event later than forty five (45) days after the Closing
Date (the “Initial Filing Deadline”), file with the SEC a Registration Statement
on Form S-3, covering the resale of all of the Initial Registrable Securities.
In the event that Form S-3 is unavailable for such a registration, the Company
shall use such other form as is available for such a registration, subject to
the provisions of Section 2(d). The Initial Registration Statement prepared
pursuant hereto shall register for resale at least that number of shares of
Common Stock equal to the sum of (x) 110% of the number of Initial Warrant
Shares issuable upon exercise of all the outstanding Initial Warrants as of the
second Trading Day immediately preceding the date the Initial Registration
Statement is initially filed with the SEC and (y) 175% of the greater of
(A) $20,000,000 divided by the arithmetic average of the Weighted Average Price
(as defined in the Notes) of the Common Stock on each of the five
(5) consecutive Trading Days ending on the second Trading Day immediately
preceding the date the Initial Registration Statement is initially

 

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filed with the SEC and (B) the number of Conversion Shares issuable upon
conversion of all the outstanding Notes as of the second Trading Day immediately
preceding the date the Initial Registration Statement is initially filed with
the SEC, subject to adjustment as provided in Section 2(e). The calculations set
forth in this paragraph shall be made without regard to any limitations on the
conversion of the Notes or exercise of the Warrants, and such calculations shall
assume that the Notes and Warrants are then convertible and exercisable,
respectively, into shares of Common Stock at the then prevailing Conversion Rate
(as defined in the Notes), and Warrant Exercise Price (as defined in the Initial
Warrants), respectively. The Company shall use its best efforts to have the
Initial Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the date which is one hundred twenty
(120) days after the Closing Date (the “Initial Effectiveness Deadline”).

ii. Repurchase Warrant Mandatory Registration. The Company shall prepare, and,
as soon as practicable but in no event later than ten (10) days after the
issuance of each Repurchase Warrant (each, a “Repurchase Warrant Filing
Deadline”), file with the SEC a Registration Statement on Form S-3, covering the
resale of all of the Repurchase Warrant Registrable Securities. In the event
that Form S-3 is unavailable for such a registration, the Company shall use such
other form as is available for such a registration subject to the provisions of
Section 2(d). Each Repurchase Warrant Registration Statement prepared pursuant
hereto shall register for resale at least that number of shares of Common Stock
equal to 110% of the number of Repurchase Warrant Shares issuable upon the
exercise of such Repurchase Warrant as of the second Trading Day immediately
proceeding the date the Repurchase Warrant Registration Statement is initially
filed with the SEC, subject to adjustment as provided in Section 2(e). The
calculation set forth in this paragraph shall be made without regard to any
limitations on the exercise of the Repurchase Warrants, and such calculation
shall assume that the Repurchase Warrants are then exercisable into shares of
Common Stock at the then prevailing Warrant Exercise Price (as defined in the
Repurchase Warrants). The Company shall use its best efforts to have such
Repurchase Warrant Registration Statement declared effective by the SEC as soon
as practicable, but in no event later than the date which is seventy-five
(75) days after the issuance of such Repurchase Warrant (each, a “Repurchase
Warrant Effectiveness Deadline”).

b. Allocation of Registrable Securities. The initial number of Registrable
Securities included in any Registration Statement and each increase in the
number of Registrable Securities included therein shall be allocated pro rata
among the Investors based on the number of such Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities, each transferee shall be allocated a pro rata
portion of the then remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any shares of Common Stock included
in a Registration Statement and which remain allocated to any Person which
ceases to hold any Registrable Securities covered by such Registration Statement
shall be allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement. For purposes hereof, the number of Registrable
Securities held by an Investor includes all Registrable Securities issuable upon
the conversion of Notes and the exercise of

 

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Warrants held by such Investor, without regard to any limitations on conversion
of the Notes or exercise of the Warrants.

c. Legal Counsel. Subject to Section 5 hereof, the Buyers holding securities
representing at least two-thirds (2/3) of the Registrable Securities shall have
the right to select one legal counsel to review and oversee any offering
pursuant to this Section 2 (“Legal Counsel”), which shall be Katten Muchin
Rosenman LLP or such other counsel as thereafter designated by the holders of
securities representing at least two-thirds (2/3) of the Registrable Securities.
The Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations under this Agreement.

d. Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, the Company
shall undertake to register the Registrable Securities on Form S-3 as soon as
such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.

e. Sufficient Number of Shares Registered.

i. In the event the number of shares available under the Initial Registration
Statement filed pursuant to Section 2(a)(i) is insufficient to cover all of the
Initial Registrable Securities required to be covered by the Initial
Registration Statement or an Investor’s allocated portion of such Initial
Registrable Securities pursuant to Section 2(b), the Company shall, as soon as
practicable, but in any event not later than fifteen (15) days after the
necessity therefor arises (the “Additional Filing Deadline”), amend the Initial
Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to register for resale at
least that number of shares of Common Stock equal to the sum of (x) 110% of the
number of Initial Warrant Shares issuable upon exercise of all the outstanding
Initial Warrants as of the Trading Day immediately preceding the date of the
filing of such amendment or new Registration Statement with the SEC and (y) 175%
of the greater of (A) the principal amount of the Notes then outstanding divided
by the arithmetic average of the Weighted Average Price of the Common Stock on
each of the five (5) consecutive Trading Days immediately preceding the date of
the filing of such amendment or new Registration Statement with the SEC and
(B) the number of Conversion Shares issuable upon conversion of all the
outstanding Notes, as of the Trading Day immediately preceding the date of the
filing of such amendment or new Registration Statement with the SEC. The Company
shall use its best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof, but in any event not later than seventy-five (75) days following the
filing thereof (the “Additional Effectiveness Deadline”). For purposes of the
foregoing provision, the number of shares available under the Initial
Registration Statement shall be deemed “insufficient to cover all of the Initial
Registrable Securities” if as of any date of determination the number of shares
of Common Stock equal to the sum of (x) 100% of the number of Initial Warrant
Shares issuable as of such time upon exercise of all the outstanding Initial
Warrants and (y) 125% of the greater of (A) the principal amount of the Notes
then outstanding divided by the arithmetic average of the Weighted Average Price
of the Common Stock on each of the ten (10) consecutive Trading Days immediately

 

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preceding such date of determination and (B) the number of Conversion Shares
issuable upon conversion of all the outstanding Notes as of the Trading Day
immediately preceding such date of determination is greater than the number of
shares of Common Stock available for resale under such Registration Statement.
The calculations set forth in this paragraph shall be made without regard to any
limitations on the conversion of the Notes or exercise of the Initial Warrants,
and such calculations shall assume that the Notes and the Initial Warrants are
then convertible and exercisable, respectively, into shares of Common Stock at
the then prevailing Conversion Rate and Warrant Exercise Price (as defined in
the Initial Warrants), respectively.

ii. In the event the number of shares available under an Repurchase Warrant
Registration Statement filed pursuant to Section 2(a)(ii) is insufficient to
cover all of the Repurchase Warrant Registrable Securities required to be
covered by the Repurchase Warrant Registration Statement or an Investor’s
allocated portion of such Repurchase Warrant Registrable Securities pursuant to
Section 2(b), the Company shall, as soon as practicable, but in any event not
later than fifteen (15) days after the necessity therefor arises (an “Additional
Repurchase Warrant Filing Deadline”), amend the Repurchase Warrant Registration
Statement, or file a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to register for resale at least that
number of shares of Common Stock equal to 110% of the number of Repurchase
Warrant Shares issuable upon exercise of all the Repurchase Warrants to which
the Repurchase Warrant Registration Statement relates as of the second Trading
Day immediately preceding the date of the filing of such amendment or new
Registration Statement with the SEC. The Company shall use its best efforts to
cause such amendment and/or new Registration Statement to become effective as
soon as practicable following the filing thereof, but in any event not later
than seventy-five (75) days following the filing thereof (an “Additional
Repurchase Warrant Effectiveness Deadline”). For purposes of the foregoing
provision, the number of shares available under an Repurchase Warrant
Registration Statement shall be deemed “insufficient to cover all of the
Repurchase Warrant Registrable Securities” if as of any date of determination
the number of shares of Common Stock equal to 100% of the number of Repurchase
Warrant Shares issuable as of such date of determination upon exercise of all
the outstanding Repurchase Warrants to which the Repurchase Warrant Registration
Statement relates is greater than the number of shares of Common Stock available
for resale under such Registration Statement. The calculations set forth in this
paragraph shall be made without regard to any limitations on the exercise of the
Repurchase Warrants, and such calculations shall assume that the Warrants are
then exercisable into shares of Common Stock at the then prevailing Warrant
Exercise Price (as defined in the Repurchase Warrants).

f. Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement.

i. If (i) a Registration Statement covering Initial Registrable Securities and
required to be filed by the Company pursuant to Section 2(a)(i) or
Section 2(e)(i) of this Agreement is not (A) filed with the SEC on or before the
applicable Filing Deadline or (B) declared effective by the SEC on or before the
applicable Effectiveness Deadline or (ii) on any day after a Registration
Statement has been declared effective by the SEC sales of all the Initial
Registrable Securities required to be included on such Registration Statement
cannot be made (other than during an Allowable Grace Period (as defined in
Section 3(t))) pursuant to such

 

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Registration Statement (including because of a failure to keep the such
Registration Statement effective, to disclose such information as is necessary
for sales to be made pursuant to such Registration Statement or to register
sufficient shares of Common Stock, as determined in accordance with
Section 2(e)), then, as partial relief for the damages to any holder of Notes or
Initial Warrants by reason of any such delay in or reduction of its ability to
sell the underlying shares of Common Stock (which remedy shall not be exclusive
of any other remedies available at law or in equity), the Company shall pay to
such holder an amount in cash equal to the product of (i) the sum of (A) the
principal amount of the Notes held by such holder and (B) the total Aggregate
Exercise Price (as defined in the Initial Warrants) of all Initial Warrants held
by such holder, multiplied by (ii) the sum of (A) 0.02, if such Registration
Statement is not filed by the applicable Filing Deadline, plus (B) 0.02, if such
Registration Statement is not declared effective by the applicable Effectiveness
Deadline, plus (C) the product of (I) 0.000667 multiplied by (II) the sum
(without duplication) of (x) the number of days after the applicable Filing
Deadline that such Registration Statement is not filed with the SEC, plus
(y) the number of days after the applicable Effectiveness Deadline that such
Registration Statement is not declared effective by the SEC, plus (z) the number
of days after such Registration Statement has been declared effective by the SEC
that such Registration Statement is not available (other than during an
Allowable Grace Period) for the sale of at least all the Initial Registrable
Securities required to be included on such Registration Statement pursuant to
Section 2(e)(i).

ii. If (i) a Registration Statement covering all the Repurchase Warrant
Registrable Securities and required to be filed by the Company pursuant to
Section 2(a)(ii) or Section 2(e)(ii) of this Agreement is not (A) filed with the
SEC on or before the applicable Filing Deadline or (B) declared effective by the
SEC on or before the applicable Effectiveness Deadline or (ii) on any day after
such Registration Statement has been declared effective by the SEC sales of all
the Repurchase Warrant Registrable Securities required to be included on such
Registration Statement cannot be made (other than during an Allowable Grace
Period) pursuant to such Registration Statement (including because of a failure
to keep such Registration Statement effective, to disclose such information as
is necessary for sales to be made pursuant to such Registration Statement or to
register sufficient shares of Common Stock, as determined in accordance with
Section 2(e)), then, as partial relief for the damages to any holder of
Repurchase Warrants by reason of any such delay in or reduction of its ability
to sell the underlying shares of Common Stock (which remedy shall not be
exclusive of any other remedies available at law or in equity), the Company
shall pay to such holder an amount in cash equal to the product of (i) the total
Aggregate Exercise Price (as defined in the Repurchase Warrants) of all
Repurchase Warrants held by such holder and to which such Registration Statement
relates, multiplied by (ii) the sum of (A) 0.02, if such Registration Statement
is not filed by the applicable Filing Deadline, plus (B) 0.02, if such
Registration Statement is not declared effective by the applicable Effectiveness
Deadline, plus (C) the product of (I) 0.000667 multiplied by (II) the sum
(without duplication) of (x) the number of days after the applicable Filing
Deadline that such Registration Statement is not filed with the SEC, plus
(y) the number of days after the applicable Effectiveness Deadline that such
Registration Statement is not declared effective by the SEC, plus (z) the number
of days after such Registration Statement has been declared effective by the SEC
that such Registration Statement is not available (other than during an
Allowable Grace Period) for the sale of at least all the Repurchase Warrant
Registrable Securities required to be included on such Registration Statement
pursuant to Section 2(e)(ii).

 

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iii. The payments to which a holder shall be entitled pursuant to this
Section 2(f) are referred to herein as “Registration Delay Payments.”
Registration Delay Payments shall be paid on the earlier of (I) the last day of
the calendar month during which such Registration Delay Payments are incurred
and (II) the third Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make
Registration Delay Payments in a timely manner, such Registration Delay Payments
shall bear interest at the rate of the lesser of 2.0% per month (prorated for
partial months) or the highest lawful interest rate, in each case, until paid in
full.

3. RELATED OBLIGATIONS.

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

a. The Company shall promptly prepare and file with the SEC a Registration
Statement with respect to the applicable Registrable Securities (but in no event
later than the applicable Filing Deadline) and use its best efforts to cause
such Registration Statement relating to the Registrable Securities to become
effective as soon as practicable after such filing (but in no event later than
the applicable Effectiveness Deadline). No later than the first Business Day
after such Registration Statement becomes effective, the Company will file with
the SEC the final prospectus included therein pursuant to Rule 424 (or successor
thereto) promulgated under the 1933 Act. The Company shall keep each
Registration Statement effective pursuant to Rule 415 at all times until the
earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the
1933 Act or (ii) the date on which the Investors shall have sold all the
Registrable Securities covered by such Registration Statement (the “Registration
Period”). Such Registration Statement (including any amendments or supplements
thereto and any prospectuses (preliminary, final, summary or free writing)
contained therein or related thereto shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. The term “best efforts” shall mean, among other
things, that the Company shall submit to the SEC, within two (2) Business Days
after the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff has no further comments
on the Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request.

b. The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until such time as

 

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all of such Registrable Securities shall have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof as set
forth in such Registration Statement.

c. The Company shall (A) permit Legal Counsel to review and comment upon (i) the
Initial Registration Statement at least five (5) Business Days prior to its
filing with the SEC, and (ii) all other Registration Statements and all
amendments and supplements to all Registration Statements (except for Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and any similar or successor reports) within a reasonable number of days
prior to their filing with the SEC, and (B) not file any document, registration
statement, amendment or supplement described in the foregoing clause (A) in a
form to which Legal Counsel reasonably objects. The Company shall not submit a
request for acceleration of the effectiveness of a Registration Statement or any
amendment or supplement thereto without providing prior notice thereof to Legal
Counsel and each Investor. The Company shall furnish to Legal Counsel, without
charge, (i) promptly after the same is prepared and filed with the SEC, one copy
of any Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, and
all exhibits and (ii) upon the effectiveness of any Registration Statement, one
copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto. The Company shall reasonably cooperate with
Legal Counsel in performing the Company’s obligations pursuant to this
Section 3.

d. The Company shall furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) promptly after the
same is prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference that have not been
filed via EDGAR, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, at least one copy of the prospectus
included in such Registration Statement and all amendments and supplements
thereto and (iii) such other documents, including copies of any prospectus
(preliminary, final, summary or free writing), as such Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor.

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

 

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under the securities or “blue sky” laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.

f. The Company shall notify Legal Counsel and each Investor in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, as a result of which the prospectus included in a Registration Statement,
as then in effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare and file with the SEC a
supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver at least one copy of such supplement or
amendment to Legal Counsel and each Investor. The Company shall also promptly
notify Legal Counsel and each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and each
Investor by facsimile on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information, and
(iii) of the Company’s reasonable determination that a post-effective amendment
to a Registration Statement would be appropriate.

g. The Company shall use its best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and to
notify Legal Counsel and each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such purpose.

h. At the reasonable request (in the context of the securities laws) of any
Investor, the Company shall furnish to such Investor, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as an Investor may reasonably request (i) a letter, dated such date,
from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Investors, and
(ii) an opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
Investors.

i. At the reasonable request (in the context of the securities laws) of any
Investor, the Company shall make available for inspection during regular
business hours by (i) any Investor, (ii) Legal Counsel and (iii) one firm of
accountants or other agents retained by the Investors (collectively, the
“Inspectors”), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall
agree to hold in strict confidence and shall not make

 

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any disclosure (except to an Investor) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector has knowledge. Each Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential. Each Inspector which exercises its rights under this
Section 3(i) shall be obligated to execute a non-disclosure agreement containing
such reasonable terms as the Company may request. The fees and expenses of the
Inspectors shall be borne by the applicable Investor.

j. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

k. The Company shall use its best efforts to (i) remain eligible for quotation
of its securities on OTC Bulletin Board and to cause all of the Registrable
Securities covered by a Registration Statement to be quoted thereon, so long as
such Registrable Securities are not listed on a registered national securities
exchange, the NASDAQ National Market (or successor thereto) or the NASDAQ
Capital Market, (ii) cause all the Registrable Securities covered by a
Registration Statement to be listed on each securities exchange or trading
market on which securities of the same class or series issued by the Company are
listed, and (iii) without limiting the generality of the foregoing, arrange for
at least two market makers to register with the National Association of
Securities Dealers, Inc. (“NASD”) as such with respect to such Registrable
Securities. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).

l. The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Investors may reasonably request and registered in
such names as the Investors may request.

 

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m. The Company shall provide a transfer agent and registrar of all such
Registrable Securities not later than the effective date of the applicable
Registration Statement.

n. If requested by an Investor, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as an Investor requests to be included therein relating to the sale
and distribution of Registrable Securities, including information with respect
to the number of Registrable Securities being offered or sold, the purchase
price being paid therefor and any other terms of the offering of the Registrable
Securities to be sold in such offering; (ii) as soon as practicable make all
required filings of such prospectus supplement or post-effective amendment after
being notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment; and (iii) as soon as practicable, supplement or
make amendments to any Registration Statement if reasonably requested by an
Investor of such Registrable Securities.

o. The Company shall use its best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities in the United States
as may be necessary to consummate the disposition of such Registrable
Securities.

p. The Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the 1933 Act) covering a twelve (12)-month period beginning not
later than the first day of the Company’s fiscal quarter next following the
effective date of a Registration Statement.

q. The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.

r. Within two (2) Business Days after a Registration Statement which covers
applicable Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in substantially the form attached hereto as Exhibit A, provided that if the
Company changes its transfer agent, it shall immediately deliver any previously
delivered notices under this Section 3(r) and any subsequent notices to such new
transfer agent.

s. The Company shall make such filings with the NASD (including providing all
required information and paying required fees thereto) as and when reasonably
requested by any Investors and make all other filings and take all other actions
reasonably necessary to expedite and facilitate disposition by the Investors of
Registrable Securities pursuant to a Registration Statement, including
responding to any comments received from the NASD within five Trading Days.

t. Notwithstanding anything to the contrary in Section 3(f), at any time after
the applicable Registration Statement has been declared effective by the SEC,
the Company may delay the disclosure of material non-public information
concerning the Company the disclosure

 

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of which at the time is not, in the good faith opinion of the Board of Directors
of the Company and its counsel, in the best interest of the Company and, in the
opinion of counsel to the Company, otherwise required (a “Grace Period”);
provided, that the Company shall promptly (i) notify the Investors in writing of
the existence of material non-public information giving rise to a Grace Period
(provided that in each notice the Company shall not disclose the content of such
material non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the date on
which the Grace Period ends; and, provided further, that (A) no Grace Period
shall exceed fifteen (15) consecutive days, (B) during any 365 day period such
Grace Periods shall not exceed an aggregate of thirty (30) days and (C) the
first day of any Grace Period must be at least two (2) Trading Days after the
last day of any prior Grace Period (a Grace Period that satisfies all of the
requirements of this Section 3(t) being referred to as an “Allowable Grace
Period”). For purposes of determining the length of a Grace Period above, the
Grace Period shall begin on and include the date the holders receive the notice
referred to in clause (i) and shall end on and include the later of the date the
holders receive the notice referred to in clause (ii) and the date referred to
in such notice. The provisions of Section 3(f) hereof shall not be applicable
during the period of any Allowable Grace Period. Upon expiration of the Grace
Period, the Company shall again be bound by the provisions of Section 3(f) with
respect to the information giving rise thereto unless such material non-public
information is no longer applicable.

4. OBLIGATIONS OF THE INVESTORS.

a. At least seven (7) Business Days prior to the first anticipated filing date
of a Registration Statement and at lease five (5) Business Days prior to the
filing of any amendment or supplement to a Registration Statement, the Company
shall notify each Investor in writing of the information, if any, the Company
requires from each such Investor if such Investor elects to have any of such
Investor’s Registrable Securities included in such Registration Statement or,
with respect to an amendment or a supplement, if such Investor’s Registrable
Securities are included in such Registration Statement (each an “Information
Request”). Provided that the Company shall have complied with its obligations
set forth in the preceding sentence, it shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company, in response to an Information
Request, such information regarding itself, the Registrable Securities held by
it and the intended method of disposition of the Registrable Securities held by
it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.

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

c. Each Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f) or written notice from the Company of an Allowable Grace
Period, such Investor will immediately

 

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discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor’s receipt
of the copies of the supplemented or amended prospectus contemplated by
Section 3(g) or the first sentence of 3(f) or receipt of notice that no
supplement or amendment is required or that the Allowable Grace Period has
ended. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor’s receipt of
a notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f) and for which the Investor has not
yet settled.

5. EXPENSES OF REGISTRATION.

All reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including all registration, listing and qualifications fees,
printers and accounting fees, and fees and disbursements of counsel for the
Company shall be paid by the Company. The Company shall also reimburse the
Investors for the reasonable fees and disbursements of Legal Counsel in
connection with registration, filing or qualification pursuant to Sections 2 and
3 of this Agreement.

6. INDEMNIFICATION.

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

a. To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor, the directors, officers,
partners, members, managers, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the 1933 Act or
the 1934 Act (each, an “Indemnified Person”), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys’ fees, amounts paid in settlement or expenses, joint or several,
(collectively, “Claims”) incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final, summary or free writing prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC)

 

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or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein, in light of the circumstances under which
the statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law, including
any state securities law, or any rule or regulation thereunder relating to the
offer or sale of the Registrable Securities pursuant to a Registration Statement
or (iv) any material violation of this Agreement by the Company (the matters in
the foregoing clauses (i) through (iv) being, collectively, “Violations”).
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto if such prospectus was timely made available by the Company pursuant to
Section 3(d) and (ii) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.

b. In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement, and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each an “Indemnified
Party”), against any Claim or Indemnified Damages to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such
Claim or Indemnified Damages arise out of or are based upon any Violation, in
each case to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6(c), such Investor will reimburse any legal
or other expenses reasonably incurred by an Indemnified Party in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld;
provided, further, however, that the aggregate liability of the Investor in
connection with any Violation shall not exceed the net proceeds to such Investor
as a result of the sale of Registrable Securities pursuant to the Registration
Statement giving rise to such Claim. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Section 9.

c. Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of notice of the commencement of any action or proceeding
(including any

 

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governmental action or proceeding) involving a Claim, such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In any such proceeding, any Indemnified Person or Indemnified Party
may retain its own counsel, but, except as provided in the following sentence,
the fees and expenses of that counsel will be at the expense of that Indemnified
Person or Indemnified Party, as the case may be, unless (i) the indemnifying
party and the Indemnified Person or Indemnified Party, as applicable, shall have
mutually agreed to the retention of that counsel, (ii) the indemnifying party
does not assume the defense of such proceeding in a timely manner or (iii) in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel for the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The Company shall
pay reasonable fees for up to one separate legal counsel for the Investors, and
such legal counsel shall be selected by the Investors holding at least
two-thirds (2/3) in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise with respect to any pending or
threatened action or claim in respect of which indemnification or contribution
may be or has been sought hereunder (whether or not the Indemnified Party or
Indemnified Person is an actual or potential party to such action or claim)
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.

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

 

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

7. CONTRIBUTION.

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

8. REPORTS UNDER THE 1934 ACT.

With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration (“Rule 144”), the Company agrees to:

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

b. file with the SEC in a timely manner all reports and other documents required
of the Company under the 1934 Act so long as the Company remains subject to such
requirements (it being understood that nothing herein shall limit the Company’s
obligations under Section 4(c) of the Securities Purchase Agreement) and the
filing of such reports and other documents is required for the applicable
provisions of Rule 144; and

c. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 and the 1934 Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested to permit the investors to sell such
securities pursuant to Rule 144 without registration.

9. ASSIGNMENT OF REGISTRATION RIGHTS.

The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of Registrable Securities if:
(i) the Investor agrees in writing with the transferee or assignee to assign
such rights, and a copy of such

 

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agreement is furnished to the Company within a reasonable time after such
transfer or assignment; (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to
which such registration rights are being transferred or assigned;
(iii) immediately following such transfer or assignment the further disposition
of such securities by the transferee or assignee is restricted under the 1933
Act and applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein, and the provisions of Section 4(r) of the
Securities Purchase Agreement; and (v) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement.

10. AMENDMENT OF REGISTRATION RIGHTS.

Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
then hold at least two-thirds (2/3) of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon each
Investor and the Company. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.

11. MISCELLANEOUS.

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

b. Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

 

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If to the Company:

On or before March 31, 2006:

CardioVascular BioTherapeutics, Inc.

7251 W. Lake Mead Blvd., Suite 300

Las Vegas, Nevada 89128

Facsimile: (702) 617-5651

Attention: Corporate Controller

After March 31, 2006:

CardioVascular BioTherapeutics, Inc.

1635 Village Center Circle, Suite 250

Las Vegas, Nevada 89134

Facsimile: (702) 617-5651

Attention: Corporate Controller

With copy to:

Lord Bissell & Brook LLP

300 S. Grand Ave. 8th Floor

Los Angeles, CA 90071

Facsimile: (213) 485-1200

Attention: Ronald Warner, Esq.

If to Legal Counsel:

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, Illinois 60661-3693

Telephone: 312-902-5200

Facsimile: 312-902-1061

Attention: Mark D. Wood, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer’s representatives as set forth
on the Schedule of Buyers, or, in the case of a Buyer or other party named
above, to such other address and/or facsimile number and/or to the attention of
such other person as the recipient party has specified by written notice given
to each other party at least five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or deposit with a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively. Notwithstanding the foregoing, the Company or
its counsel may transmit versions of any Registration Statement (or any
amendments or supplements thereto) to Legal Counsel in

 

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satisfaction of its obligations under Section 3(c) to permit Legal Counsel to
review such Registration Statement prior to filing (and solely for such purpose)
by email to mark.wood@kattenlaw.com and mark.guidubaldi@kattenlaw.com, provided
that delivery and receipt of such transmission shall be confirmed by electronic,
telephonic or other means.

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

d. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting the City of New York,
borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

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

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

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

 

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h. This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to each other
party; provided that a facsimile signature shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.

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

j. All consents and other determinations to be made by the Investors pursuant to
this Agreement shall be made, unless otherwise specified in this Agreement, by
Investors holding at least two-thirds (2/3) of the Registrable Securities,
determined as if all of the Notes and the Warrants then outstanding have been
converted into or exercised for Registrable Securities without regard to any
limitations on conversion of the Notes or the exercise of the Warrants. Any
consent or other determination approved by Investors as provided in the
immediately preceding sentence shall be binding on all Investors.

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

l. Each Buyer and each holder of the Securities shall have all rights and
remedies set forth in the Transaction Documents and all rights and remedies that
such Buyers and holders have been granted at any time under any other agreement
or contract and all of the rights that such Buyers and holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security or proving actual damages), to recover damages by reason of any breach
of any provision of this Agreement and to exercise all other rights granted by
law.

m. This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns and, to the extent provided in
Sections 6(a) and 6(b) hereof, each Investor, the directors, officers, partners,
members, managers, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the 1933 Act and the 1934
Act and each of the Company’s directors, each of the Company’s officers who
signs the Registration Statement, and each Person, if any, who controls the
Company within the meaning of the 1933 Act and the 1934 Act, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

 

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n. Unless the context otherwise requires, (a) all references to Sections,
Schedules or Exhibits are to Sections, Schedules or Exhibits contained in or
attached to this Agreement, (b) each accounting term not otherwise defined in
this Agreement has the meaning assigned to it in accordance with GAAP, (c) words
in the singular or plural include the singular and plural and pronouns stated in
either the masculine, the feminine or neuter gender shall include the masculine,
feminine and neuter and (d) the use of the word “including” in this Agreement
shall be by way of example rather than limitation.

* * * * * *

 

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed as of day and year first above written.

 

COMPANY:

   

BUYERS:

CARDIOVASCULAR BIOTHERAPEUTICS, INC.     HFTP INVESTMENT L.L.C.     By:  
Promethean Asset Management L.L.C.     Its:   Investment Manager By:   /s/
Mickael A. Flaa     By:   /s/ Robert J. Brantman Name:   Mickael A. Flaa    
Name:   Robert J. Brantman Title:   Chief Financial Officer     Title:   Partner
and Authorized Signatory     GAIA OFFSHORE MASTER FUND, LTD.     By:  
Promethean Asset Management L.L.C.     Its:   Investment Manager       By:   /s/
Robert J. Brantman       Name:   Robert J. Brantman       Title:   Partner and
Authorized Signatory     CAERUS FUND LTD.     By:   Promethean Asset Management
L.L.C.     Its:   Investment Manager       By:   /s/ Robert J. Brantman      
Name:   Robert J. Brantman       Title:   Partner and Authorized Signatory

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LEONARDO, L.P. By:   Leonardo Capital Management, Inc. Its:   General Partner

  By:   Angelo, Gordon & Co., L.P.   Its:   Director

By:   /s/ Michael L. Gordon Name:   Michael L. Gordon Title:   Authorized
Signatory