EXHIBIT 10.8
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
EMISPHERE TECHNOLOGIES, INC.
AND
THE PERSONS LISTED ON THE
SIGNATURE PAGES HEREOF
Dated as of September 26, 2005

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TABLE OF CONTENTS

                        Page           ARTICLE I  DEFINITIONS     1    
1.1
  Defined Terms     1    
1.2
  General Interpretive Principles     4     ARTICLE II  DEMAND REGISTRATION    
4    
2.1
  Request for Registration     4    
2.2
  Joining Holders     5    
2.3
  Effective Registration     5    
2.4
  Underwritten Offering     5    
2.5
  Priority on Demand Registrations     6    
2.6
  Withdrawal and Cancellation of Registration     6    
2.7
  Registration Statement Form     7    
2.8
  Registration on Form S-3     7    
2.9
  Registered Repayment Offering     7     ARTICLE III  PIGGYBACK REGISTRATIONS  
  7    
3.1
  Holder Piggyback Registration     7    
3.2
  Priority on Piggyback Registrations     8    
3.3
  Withdrawals     9     ARTICLE IV  SHELF REGISTRATION     10    
4.1
  Shelf Registration Filing     10    
4.2
  Required Period and Shelf Registration Procedures     10    
4.3
  Effective Registration     10    
4.4
  Underwritten Offering     11     ARTICLE V  STANDSTILL AND SUSPENSION PERIODS
    11    
5.1
  Company Standstill Period     11    
5.2
  Suspension Period     11    
5.3
  Holder Standstill Period     12    
5.4
  Restrictions on Sale by the Company and Others     12    
ARTICLE VI  REGISTRATION PROCEDURES     13    
6.1
  Company Obligations     13     ARTICLE VII  INDEMNIFICATION     16    
7.1
  Indemnification by the Company     16    
7.2
  Indemnification by the Holders     17    
7.3
  Notice of Claims, Etc.      17    
7.4
  Contribution     18    
7.5
  Indemnification Payments; Other Remedies     18     ARTICLE VIII  REGISTRATION
EXPENSES     19     ARTICLE IX  RULE 144     19  

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                        Page             ARTICLE X  MISCELLANEOUS     19    
10.1
  Other Registration Rights     19    
10.2
  Notice Generally     20    
10.3
  Successors and Assigns; No Third Party Beneficiaries     21    
10.4
  Amendments; Waivers     21    
10.5
  Severability     21    
10.6
  Headings     21    
10.7
  Injunctive Relief     21    
10.8
  Remedies Cumulative     22    
10.9
  Governing Law; Jurisdiction     22    
10.10
  Counterparts and Facsimile Execution     22    
10.11
  Attorneys’ Fees     22    
10.12
  Termination of Registration Rights; Survival     22    
10.13
  Entire Agreement     22    
10.14
  Further Assurances     22  

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REGISTRATION RIGHTS AGREEMENT
      THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of
September 26, 2005, by and among Emisphere Technologies, Inc., a Delaware
corporation (together with any Subsidiaries (as hereinafter defined) hereafter
formed or acquired, the “Company”), and the Holders (as hereinafter defined) of
Registrable Securities (as hereinafter defined).
      WHEREAS, contemporaneously with entering into this Agreement, the Company
is entering into that certain Investment and Exchange Agreement (the “Investment
Agreement”) and that certain Senior Secured Term Loan Agreement (the “Loan
Agreement”), each dated as of September 26, 2005, between the Company, on the
one hand, and MHR Capital Partners (500) LP, MHR Capital Partners (100) LP, MHR
Institutional Partners II LP and MHR Institutional Partners IIA LP
(collectively, and including any of their respective Affiliates (as defined
below), the “Investor”), on the other hand;
      WHEREAS, the Investor currently owns certain Warrants (as hereinafter
defined) and Common Stock (as hereinafter defined);
      WHEREAS, in connection with the consummation of the transactions
contemplated by the Investment Agreement, the Holders and the Company desire to
enter into this Agreement to provide the Holders with certain rights relating to
the registration of Registrable Securities owned as of the date hereof or that
may be owned from time to time after the date hereof by Holders or their
Affiliates (as hereinafter defined).
      NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS.
      1.1     Defined Terms. As used in this Agreement, the following
capitalized terms (in their singular and plural forms, as applicable) have the
following meanings:

        “Action” has the meaning assigned to such term in Section 7.3 hereof.  
        “Additional Holder(s)” means the Permitted Assignee(s) who, from time to
time, acquire Registrable Securities and own Registrable Securities at the
relevant time and agree to be bound by the terms hereof and become Holders for
purposes of this Agreement.           “Adverse Effect” has the meaning assigned
to such term in Section 2.5 hereof.           “Affiliate” of a Person means any
Person that, directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, such other
Person. For purposes of this definition, the term “control” (including the terms
“controlling,” “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.           “Agreement” has the meaning
assigned to such term in the introductory paragraph to this Agreement, as the
same may be amended, supplemented or restated from time to time.          
“Business Day” means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in State of New York.          
“Closing Shelf Registration Statement” has the meaning assigned to such term in
Section 4.1 hereof.           “Commission” means the United States Securities
and Exchange Commission and any successor United States federal agency or
governmental authority having similar powers.

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        “Common Stock” means the common stock, par value $0.01 per share, of the
Company.           “Company Indemnified Person” has the meaning assigned to such
term in Section 7.2 hereof.           “Company Standstill Period” has the
meaning assigned to such term in Section 5.1 hereof.           “Convertible
Note” has the meaning assigned to such term in the Investment Agreement.    
      “Convertible Note Shelf Registration Statement” has the meaning assigned
to such term in Section 4.1 hereof.           “Demand Registration” has the
meaning assigned to such term in Section 2.1 hereof.           “Demand Request”
has the meaning assigned to such term in Section 2.1 hereof.          
“Exchange” has the meaning assigned to such term in the Loan Agreement, whether
or not such agreement is in full force and effect as of the date of the
Exchange.           “Exchange Act” means the Securities Exchange Act of 1934, as
amended, or any successor statute, and the rules and regulations of the
Commission thereunder.           “Form S-3” has the meaning assigned to such
term in Section 2.8 hereof.           “Form S-3 Registration” has the meaning
assigned to such term in Section 2.8 hereof.           “Holder” means any
(i) Person (other than the Company) who owns Registrable Securities at the
relevant time and is a party to this Agreement, (ii) Additional Holder, or
(iii) the Investor. The Investor shall be deemed, for purposes hereunder, a
single Holder.           “Holder Indemnified Person” has the meaning assigned to
such term in Section 7.1 hereof.           “Indemnitee” has the meaning assigned
to such term in Section 7.3 hereof.           “Inspectors” has the meaning
assigned to such term in Section 6.1(k) hereof.           “Investor” has the
meaning assigned to such term in the introductory paragraph to this Agreement.  
        “Joining Holder” has the meaning assigned to such term in Section 2.2
hereof.           “Loss” and “Losses” have the meanings assigned to such terms
in Section 7.1 hereof.           “Major Holder” means, with respect to a class
of Registrable Securities, any Person or group or Affiliate of a Person that
holds a minimum of 10% of the Registrable Securities as of the date of
determination.           “Majority Participating Holders” means, with respect to
any registration of Registrable Securities under this Agreement, the Holder or
Holders at the relevant time of at least a majority of amount and/or type of the
Registrable Securities to be included in the Registration Statement in question.
          “Material Disclosure Event” means, as of any date of determination,
any pending or imminent event relating to the Company or any of its
Subsidiaries, which, in the good faith determination of the Board of Directors
of the Company after consultation with counsel to the Company (i) requires
disclosure of material, non-public information relating to such event in any
Registration Statement or related Prospectus (including documents incorporated
by reference therein) so that such Registration Statement would not be
materially misleading, (ii) is otherwise not required to be publicly disclosed
at that time (e.g., on Forms 10-K, 8-K, or 10-Q) under applicable federal or
state securities laws but for the filing of such Registration Statement, and
(iii) if publicly disclosed at the time of such event, could reasonably be
expected to have a material adverse effect on the business, financial condition
or prospects of the Company and its Subsidiaries or would materially adversely
affect a pending or proposed acquisition, merger, recapitalization,
consolidation, reorganization, financing or similar transaction, or negotiations
with respect thereto.           “NASD” has the meaning assigned to such term in
Section 6.1(n) hereof.

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        “Participating Holder” means any Holder on whose behalf Registrable
Securities are registered pursuant to Articles II, III or IV hereof.          
“Permitted Assignee” means any (i) Affiliate of any Holder who acquires
Registrable Securities from such Holder or (ii) any other Person who acquires
any Holder’s Registrable Securities and who shall have been designated as a
Permitted Assignee by such Holder in a written notice to the Company; provided,
however, that the rights of any Person designated as a Permitted Assignee
referred to in the foregoing clause (ii) shall be limited if, and to the extent,
provided in such notice.           “Person” means any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.           “Prospectus” means
the prospectus included in any Registration Statement, all amendments and
supplements to such prospectus and all material incorporated by reference in
such prospectus.           “Purchase Option” has the meaning assigned to such
term in the Investment Agreement.           “Records” has the meaning assigned
to such term in Section 6.1(k) hereof.           “Registered Repayment Offering”
has the meaning assigned to such term in the Loan Agreement.           The terms
“register,” “registered” and “registration” mean a registration effected by
preparing and filing with the Commission a Registration Statement on an
appropriate form in compliance with the Securities Act, and the declaration or
order of the Commission of the effectiveness of such Registration Statement
under the Securities Act.           “Registrable Securities” means the following
securities of the Company held by any of the Holders (or their respective
Affiliates and successors and assigns or Permitted Assignees) at any time or
from time to time: (i) the Convertible Note, (ii) the Warrants, (iii) the shares
of Common Stock (x) issued upon conversion of the Convertible Note, (y) issued
upon the exercise of the Warrants, or (z) otherwise held by the Holders,
(iv) any Convertible Note, Warrants, shares of additional Common Stock or
securities that may be acquired or received by the Holders or issued or
distributed or be issuable with respect to Registrable Securities by way of a
stock dividend, stock split or reverse stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or otherwise, and
any securities issued in exchange for or in replacement of such Registrable
Securities, (v) any securities of the Company that the Company is required to
register in order to satisfy the Company’s payment obligations to the Investor
in the event of a Stockholder Approval Default in the manner prescribed in
Section 12.2(b) of the Loan Agreement as of the appropriate date of
determination, and (vi) any securities of the Company that the Investor may
acquire upon the Investor’s exercise of the Purchase Option; provided, however,
that as to any Registrable Securities, such securities shall cease to constitute
“Registrable Securities” for purposes of this Agreement if and when (i) a
Registration Statement with respect to the sale of such securities shall have
been declared effective by the Commission and such securities shall have been
sold pursuant thereto, or (ii) such securities are sold or transferred in
accordance with the provisions of Rule 144, or (iii) such securities are sold or
transferred (other than in a transaction under clause (i) or (ii) above) by a
person in a transaction in which such person’s rights under this Agreement are
not assigned, or (iv) such securities are no longer outstanding, or (v) such
securities may, in the reasonable determination of the beneficial owner thereof,
be sold or transferred by such beneficial owner pursuant to Rule 144 at the time
such beneficial owner desires to sell or transfer such securities and new
certificates for such securities not bearing a legend restricting transfer under
the Securities Act shall have been delivered to the Holder thereof by the
Company. For purposes of this Agreement, a “class” of Registrable Securities
shall mean all securities with the same terms and a “percentage” (or a
“majority”) of the Registrable Securities (or, where applicable, of any other
securities) shall be determined (x) based on the number of shares of such
securities, in the case of Registrable Securities which are equity securities,
and (y) based on the principal amount of such securities, in the case of
Registrable Securities which are debt securities.

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        “Registration Statement” means any Registration Statement of the Company
filed with, or to be filed with, the Commission under the rules and regulations
promulgated under the Securities Act, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such Registration
Statement.           “Requesting Holder” has the meaning assigned to such term
in Section 2.1 hereof.           “Required Filing Date” has the meaning assigned
to such term in Section 2.1 hereof.           “Required Period” has the meaning
assigned to such term in Section 4.2 hereof.           “Rule 144” means Rule 144
(or any similar provision then in force) promulgated under the Securities Act.  
        “Securities Act” means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations of the Commission thereunder.  
        “Shelf Registration Statement” has the meaning assigned to such term in
Section 4.1 hereof.           “Stockholder Approval” has the meaning assigned to
such term in the Loan Agreement.           “Stockholder Approval Default” has
the meaning assigned to such term in the Loan Agreement.           “Subsidiary”
means (i) as to the Company, any Person in which more than 25% of all equity,
membership, partnership or other ownership interests is owned directly or
indirectly by the Company or one or more of its Subsidiaries; and (ii) as to any
other Person, any Person in which more than 25% of all equity, membership,
partnership or other ownership interests is owned directly or indirectly by such
Person or by one or more of such Person’s Subsidiaries. Unless otherwise
specified in this Agreement or any Loan Document (as defined in the Loan
Agreement), references to a Subsidiary refer to a Subsidiary of the Company.    
      “Suspension Notice” has the meaning assigned to such term in Section 5.2
hereof.           “Suspension Period” has the meaning assigned to such term in
Section 5.2 hereof.           “Underwriter” means a securities dealer(s) who
purchases any Registrable Securities as principal in an underwritten offering
and not as part of such dealer’s market-making activities.          
“Underwritten Offering” means a registration in which securities of the Company
are sold to an underwriter or underwriters on a firm commitment basis for
reoffering to the public.           “Warrants” means all warrants issued by the
Company at any time prior to or after the date hereof, including Warrant No. A3,
dated March 31, 2005, and Warrant No. A4, dated March 31, 2005.

      1.2     General Interpretive Principles. Whenever used in this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
any noun or pronoun shall be deemed to include the plural as well as the
singular and to cover all genders. The name assigned to this Agreement and the
section captions used herein are for convenience of reference only and shall not
be construed to affect the meaning, construction or effect hereof. Unless
otherwise specified, the terms “hereof,” “herein,” “hereunder” and similar terms
refer to this Agreement as a whole (including the exhibits and schedules
hereto), and references herein to Sections refer to Sections of this Agreement.
The words “include,” “includes” and “including,” when used in this Agreement,
shall be deemed to be followed by the words “without limitation.”
ARTICLE II
DEMAND REGISTRATION
      2.1     Request for Registration. Any Major Holder may, from time to time
(each, a “Requesting Holder”) make a request in writing (a “Demand Request”)
that the Company effect the registration under the Securities Act of all or a
specified number of shares (or amount) and type of Registrable Securities held

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by the Requesting Holders proposed to be sold and the intended method(s) of
distribution thereof (a “Demand Registration”); provided, however, that the
Company will in no event be required to effect (a) more than three (3) Demand
Registrations under this Section 2.1 subject to the Company’s compliance with
its obligations under Article III hereof, or (b) any Demand Registration within
three (3) months after the effective date of a Registration Statement relating
to any Underwritten Offering (including any such offering effected pursuant to a
Demand Registration hereunder). Upon receipt of a Demand Request, the Company
will cause to be included in a Registration Statement on an appropriate form
under the Securities Act, filed with the Commission as promptly as practicable
but in any event not later than sixty (60) calendar days after receiving a
Demand Request (the “Required Filing Date”), such Registrable Securities as may
be requested by such Requesting Holders in their Demand Request together with
any other Registrable Securities of the same class as requested by Joining
Holders joining in such request pursuant to Section 2.2 hereof. The Company
shall use its best efforts to cause any such Registration Statement to be
declared effective by the Commission as promptly as possible after such filing.
A registration of any securities by the Company pursuant to Section 2.9 hereof
shall not constitute a Demand Registration or a Demand Request and shall not in
any way affect or limit the rights of the Requesting Holders pursuant to this
Section 2.1.
      2.2     Joining Holders. If at any time the Company proposes to register
Registrable Securities for the account of the Requesting Holders pursuant to
Section 2.1 hereof, then (i) the Company shall give, or cause to be given,
written notice of such proposed filing to all of the Holders of such class of
Registrable Securities as soon as practicable (but in no event less than thirty
(30) calendar days before the anticipated filing date), upon which any Holder
(each such Holder, a “Joining Holder”) may, upon written request to the Company,
so as to be received by the Company no later than the fifth (5th) Business Day
after receipt by such Holder of such notice, request that the Company register,
on the same terms and conditions as the securities otherwise being sold pursuant
to such Demand Registration, any of its Registrable Securities of the same class
as the securities otherwise being sold pursuant to such Demand Registration, and
the Company will use its best efforts to cause such Registrable Securities to be
included in the Registration Statement proposed to be filed by the Company on
the same terms and conditions as any securities of the same class included
therein. All such requests by Joining Holders shall specify the aggregate amount
and/or class of Registrable Securities to be registered and the intended method
of distribution of the same.
      2.3     Effective Registration. A registration will not count as a Demand
Registration for purposes of Section 2.1 hereof (i) unless the related
Registration Statement has been declared effective and has remained effective
until such time as all of such Registrable Securities covered thereby have been
disposed of in accordance with the intended methods of disposition by the
Participating Holders (but in no event for a period of more than one hundred
eighty (180) calendar days after such Registration Statement becomes effective
not including any Suspension Period) or cease to be Registrable Securities,
(ii) if pursuant to Section 2.5 hereof, the Requesting Holders and Joining
Holders are cut back to fewer than 75% of the Registrable Securities requested
to be registered and at the time of the request there was not in effect a Shelf
Registration Statement, as applicable, or the Holders cannot otherwise utilize
the Shelf Registration Statement, as applicable, and (iii) unless the Company
has complied with all of its obligations under this Agreement; it being
understood that if, after such Registration Statement has become effective, an
offering of Registrable Securities pursuant to a Demand Registration is
interfered with by any stop order, injunction, or other order of the Commission
or other governmental agency or court, such Registration Statement with respect
to such Demand Registration will be deemed not to have been effected (and will
not count as a Demand Registration for purposes of Section 2.1 hereof), unless
and until (1) such stop order or injunction is removed, rescinded or otherwise
terminated, and (2) the Requesting Holders thereafter elect to continue the
offering.
      2.4     Underwritten Offering. If the Requesting Holder so elects and so
advises the Company as part of its Demand Request for a Demand Registration, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an Underwritten Offering, and the Requesting Holder
shall be entitled to select the managing Underwriter or Underwriters for such
offering, which managing Underwriter or Underwriters shall be reasonably
acceptable to the Company.

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      2.5     Priority on Demand Registrations.
      (a) Underwritten Offering. With respect to any offering of Registrable
Securities pursuant to a Demand Registration in the form of an Underwritten
Offering, no securities to be sold for the account of any Person (including the
Company) other than the Requesting Holder shall be included in such Demand
Registration unless the Underwriter or managing Underwriter selected in
accordance with Section 2.4 hereof, advises the Requesting Holder in writing
that the inclusion of such securities will not adversely affect the price or
success of the offering (an “Adverse Effect”). Furthermore, in the event that
the Underwriter or managing Underwriter, advises the Requesting Holder in
writing that the amount of Registrable Securities proposed to be included in
such Demand Registration by Requesting Holders and Joining Holders is
sufficiently large (even after exclusion of all securities of any other Person
pursuant to the immediately preceding sentence) to cause an Adverse Effect, the
number of Registrable Securities to be included in such Demand Registration
shall be allocated among all such Requesting Holders and Joining Holders pro
rata based on the ratio of the number of Registrable Securities that each such
Holder requested to be included in such Demand Registration to the total number
of Registrable Securities that all Requesting Holders and Joining Holders
requested to be included in such Demand Registration; provided, however, that
if, as a result of such pro-ration, any Requesting Holder or Joining Holder
shall not be entitled to include in a registration all Registrable Securities of
the class that such Holder had requested to be included, such Holder may elect
to withdraw its request to include such Registrable Securities in such
registration (in which case such registration shall not count as a Demand
Registration in accordance with Section 2.3) or may reduce the number requested
to be included.
      (b) Non-Underwritten Offering. With respect to any offering of Registrable
Securities pursuant to a Demand Registration that is not in the form of an
Underwritten Offering, no securities to be sold for the account of any Person
(including the Company) other than the Requesting Holder shall be included in
such Demand Registration unless the Majority Participating Holders in good
faith, or in the event the Requesting Holder is also the Majority Participating
Holders, the Majority Participating Holders after consultation with the Company,
advises the Requesting Holder in writing that the inclusion of such securities
will not result in an Adverse Effect. Furthermore, in the event that the
Majority Participating Holders in good faith, or in the event the Requesting
Holder is also the Majority Participating Holders, the Majority Participating
Holders after consultation with the Company, advises the Requesting Holder in
writing that the amount of Registrable Securities proposed to be included in
such Demand Registration by Requesting Holders and Joining Holders is
sufficiently large (even after exclusion of all securities of any other Person
pursuant to the immediately preceding sentence) to cause an Adverse Effect, the
number of Registrable Securities to be included in such Demand Registration
shall be allocated among all such Requesting Holders and Joining Holders pro
rata based on the ratio of the number of Registrable Securities that each such
Holder requested to be included in such Demand Registration to the total number
of Registrable Securities that all Requesting Holders and Joining Holders
requested to be included in such Demand Registration; provided, however, that
if, as a result of such pro-ration, any Requesting Holder or Joining Holder
shall not be entitled to include in a registration all Registrable Securities of
the class that such Holder had requested to be included, such Holder may elect
to withdraw its request to include such Registrable Securities in such
registration (in which case such registration shall not count as a Demand
Registration in accordance with Section 2.3) or may reduce the number requested
to be included.
      2.6     Withdrawal and Cancellation of Registration. If (i) the Requesting
Holder disapproves of the terms of any Demand Registration, whether in the form
of an Underwritten Offering or a non-Underwritten Offering, under Article II
hereof, (ii) the Requesting Holder is not entitled to include all of its
Registrable Securities specified in the Demand Request in any offering, (iii) a
Suspension Period occurs after a request for a Demand Registration but before
the Registrable Securities covered by such Demand Request are sold, transferred,
exchanged or disposed in accordance with such Demand Request, or (iv) if the
Company has breached its obligations hereunder, then in any of such cases the
Requesting Holder may elect to withdraw from such offering by giving written
notice to the Company and the Underwriter, to the extent applicable, of its
request to withdraw prior to the effectiveness of the Registration Statement
filed with the Commission with respect to such Demand Registration. If the
Requesting Holder withdraws from the proposed offering relating

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to a Demand Registration in accordance with the previous sentence, then (i) the
Participating Holders shall have no further rights to include their Registrable
Securities in such Demand Registration, (ii) the Company shall, and cause
Affiliates to, cease all efforts to secure registration, and (iii) the Company
shall be responsible for the expenses of the Requesting Holders incurred in
connection with such cancelled registration through the date of the written
notice of withdrawal.
      2.7     Registration Statement Form. Registrations under this Article II
shall be on such appropriate registration form of the Commission (i) as shall be
selected by the Company and as shall be reasonably acceptable to the Major
Holders requesting participation in the Demand Registration, and (ii) as shall
permit the disposition of the Registrable Securities in accordance with the
intended method or methods of disposition specified in the applicable Holders’
requests for such registration. Notwithstanding the foregoing, if, pursuant to a
Demand Registration, (x) the Company proposes to effect registration by filing a
registration statement on Form S-3 (or any successor or similar short-form
registration statement), (y) such registration is in connection with an
Underwritten Offering and (z) the managing Underwriter or Underwriters shall
advise the Company in writing that, in its or their opinion, the use of another
form of Registration Statement (or the inclusion, rather than the incorporation
by reference, of information in the Prospectus related to a Registration
Statement on Form S-3 (or other short-form Registration Statement)) is of
material importance to the success of such proposed offering, then such
registration shall be effected on such other form (or such information shall be
so included in such Prospectus).
      2.8     Registration on Form S-3. Each Holder may at any time and from
time to time, without limitation as to the aggregate number of such requests,
request (each, a “Form S-3 Registration”) in writing that the Company register
the resale of any or all of such Registrable Securities on Form S-3 or any
similar short-form registration which may be available at such time
(“Form S-3”). Upon receipt of such Form S-3 Registration, the Company will
promptly give written notice of the proposed registration to all other Holders
of Registrable Securities, and, as soon as practicable thereafter, effect the
registration of all or such portion of such Holder’s or Holders’ Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written request given within fifteen (15) calendar
days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration pursuant
to this Section 2.8 if Form S-3 is not available for such offering. No
securities other than the Registrable Securities shall be included in the
Form S-3 without the consent of the Holders. Registrations effected pursuant to
this Section 2.8 shall not be counted as Demand Registrations effected pursuant
to Section 2.1.
      2.9     Registered Repayment Offering. In the event the Company shall be
required to engage in one or more Registered Repayment Offerings, on each such
occasion the Company shall, as soon as practicable (and in no event later than
fifteen (15) calendar days after the occurrence of a Stockholder Approval
Default if pursuant to a Shelf Registration Statement, and in no event later
than thirty (30) calendar days after the occurrence of a Stockholder Approval
Default if otherwise), file with the Commission a Registration Statement
relating to the offer and sale of any or all securities of the Company as
necessary in order to satisfy the Company’s payment obligations to the Investor
in the event of a Stockholder Approval Default in the manner prescribed in
Section 12.2(b) of the Loan Agreement as of the appropriate date of
determination. Such registration shall be in the form of an Underwritten
Offering and the Underwriter shall be selected by the Investor. The Company
shall use its best efforts to cause all such securities to be registered and
sold, in accordance with Section 12.2(b) of the Loan Agreement, and to cause the
proceeds thereof to be delivered to the Investor as required by Section 12.2(b)
of the Loan Agreement. Registrations effected pursuant to this Section 2.9 shall
not be counted as a Demand Registration pursuant to Section 2.1 hereof.
ARTICLE III
PIGGYBACK REGISTRATIONS
      3.1     Holder Piggyback Registration. If at any time after the date
hereof the Company proposes to file a Registration Statement under the
Securities Act with respect to an offering of any Registrable Securities or
other securities of the Company, including pursuant to Section 2.9 hereof
(except pursuant to registrations on

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Form S-4 or any successor form or on Form S-8 or any successor form relating
solely to securities issued pursuant to any benefit plan) on a form that would
permit registration of Registrable Securities or other securities of the Company
for sale to the public under the Securities Act, or in the event of any
“take-down” by the Company from a Shelf Registration Statement, then the Company
shall give written notice (“Piggyback Notice”) of such proposed filing or
“take-down” to each Holder as soon as practicable, but in any event not less
than twenty-one (21) calendar days before the anticipated filing date. Such
Piggyback Notice shall (a) describe the proposed registration (including the
number and class of such securities proposed to be registered, the proposed date
of filing of such Registration Statement, any proposed means of distribution of
such securities, any proposed managing underwriter of such securities and a good
faith estimate by the Company of the proposed maximum offering price of such
securities as such price is proposed to appear on the facing page of such
Registration Statement), and (b) offer each Holder the opportunity to register
any of such Holder’s Registrable Securities of the same class as those being
registered by the Company, as each such Holder may request in writing (the
“Piggyback Shares”), on the same terms and conditions as the securities
otherwise being sold pursuant to such registration or “take-down” (each a
“Piggyback Registration”). Such written request must be received by the Company
no later than ten (10) Business Days after receipt by such Holder of a Piggyback
Notice and shall state the intended method of disposition thereof if the
securities otherwise being sold are being sold by more than one method of
disposition. Upon receipt of this request, the Company will use its best efforts
(and shall use its best efforts to cause the Underwriter of a proposed
Underwritten Offering) to cause such Registrable Securities as to which
registration shall have been so requested to be included in the Registration
Statement proposed to be filed by the Company or the “take-down” on the same
terms and conditions as the securities otherwise being sold pursuant to such
registration.
      3.2     Priority on Piggyback Registrations.
      (a) Subject to Section 3.2(b) below, if the Underwriter or managing
Underwriter for a Piggyback Registration that is an Underwritten Offering
advises the Company and the Holders in writing (or, in the event of a Piggyback
Registration that is not being underwritten, if the Majority Participating
Holders in good faith (or in the event the Requesting Holder is also the
Majority Participating Holders, the Majority Participating Holders after
consultation with the Company) advises the Company and the Holders in writing)
that the inclusion of such Piggyback Shares would cause an Adverse Effect, then
the Company will be obligated to include in such Registration Statement only
that number of Registrable Securities which, in the reasonable judgment of the
Underwriter or managing Underwriter (or, in the event of a Piggyback
Registration that is not being underwritten, the Majority Participating Holders
in good faith (or in the event the Requesting Holder is also the Majority
Participating Holders, the Majority Participating Holders after consultation
with the Company)), would not have an Adverse Effect; provided, however, that no
such reduction shall reduce the aggregate amount of Registrable Securities
included in such Registration Statement for the benefit of the Requesting
Holders to less than (i) any time that the Shelf Registration Statements are not
effective or the Holders may not otherwise utilize the Registration Statements,
as applicable, for the offer and sale of all Registrable Securities, all of the
Registrable Securities requested by the Holders to be included in such
Registration Statement (subject to the maximum amount of the securities to be
sold in the related Underwritten Offering), and (ii) any time after the Shelf
Registration Statements are declared effective and the Holders may utilize the
Registration Statement for the offer and sale of all Registrable Securities,
fifty percent (50%) of the total number of securities that are included in each
such Registration Statement thereafter. Any partial reduction in the number of
Registrable Securities to be included in a Registration Statement pursuant to
the immediately preceding sentence shall be affected pro rata based on the ratio
of the number of Registrable Securities that each such Holder requested to be
included in such Registration Statement to the total number of Registrable
Securities that all Holders requested to be included in such Registration
Statement; provided, however, that if, as a result of such pro-ration, any
Holder requesting to be included in such Registration Statement pursuant to
Section 3.1 hereof shall not be entitled to include in a registration all
Registrable Securities of the class that such Holder had requested to be
included, such Holder may elect to withdraw its request to include such
Registrable Securities in such registration or may reduce the number requested
to be included in accordance with Section 3.3 hereof.

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      (b) Priority in Registered Repayment Offering. Subject to Section 2.9
hereof, following the occurrence of a Stockholder Approval Default and until
such time as the Investor is paid in full in cash in accordance with the terms
of Section 12.2(b) of the Loan Agreement, the aggregate amount of the securities
of the Company to be included in a Registration Statement under any Registered
Repayment Offering shall not be reduced to less than all of the securities to be
included in such Registration Statement for the benefit of the Investor pursuant
to this Agreement and Section 12.2(b) of the Loan Agreement as of the
appropriate date of determination; provided, however, that in the event the
Underwriter or the managing Underwriter of a Registered Repayment Offering
reasonably determines in good faith, after consultation with the Investor, that
the inclusion of Piggyback Shares will adversely affect the Company’s ability to
make payment in full to the Investor pursuant to and in accordance with
Section 12.2(b) of the Loan Agreement, and advises the Investor of such
determination in writing in advance, then the Company will be obligated to
include in such Registration Statement only that number or amount of Registrable
Securities which, in the reasonable judgment in good faith of the Underwriter or
the Managing Underwriter after consultation with the Investor, will not
adversely affect the Company’s ability to make payment in full to the Investor
pursuant to Section 12.2(b) of the Loan Agreement as of the appropriate date of
determination.
      (c) Subject to the Company’s compliance with its obligations under this
Article III, if after a Demand Request by the Holders pursuant to Section 2.1
hereof the Company initiates a proposal to register an Underwritten Offering of
securities for its own account pursuant to this Article III and the Holders will
be afforded the right (whether or not exercised by the Holders) to include
Registrable Securities in such Underwritten Offering in accordance with and
subject to the provisions of this Article III, then the proposed registration
for the account of the Company pursuant to this Article III shall be given
priority in all respects.
      (d) Subject to the Company’s compliance with its obligations under this
Article III, and subject to the last sentence of Section 3.2(b) hereof, if prior
to the filing or effectiveness of the Shelf Registration Statements the Company
initiates a proposal to register an Underwritten Offering of equity securities
for its own account pursuant to this Article III and the Holders will be
afforded the right (whether or not exercised by the Holders) to include
Registrable Securities in such Underwritten Offering in accordance with and
subject to the provisions of this Article III, then the proposed registration
for the account of the Company pursuant to this Article III shall be given
priority in all respects.
      (e) Notwithstanding anything contained herein to the contrary (except for
the registration and sale of Company securities pursuant to Section 2.9 hereof)
until the date that is the earlier to occur of (i) one hundred twenty
(120) calendar days from the date that the Closing Shelf Registration Statement
is declared effective, or (ii) the date that Stockholder Approval is obtained,
the Company will not initiate a proposal to register or otherwise conduct an
Underwritten Offering of equity securities of the Company for its own account.
      (f) If the Company issues a notice of a proposed Underwritten Offering of
equity securities of the Company for its own account pursuant to Section 3.2(d)
hereof and subsequently abandons, ceases or withdraws such offering, the Company
shall not issue a notice of a subsequent proposed registration of an
Underwritten Offering of equity securities of the Company for its own account
pursuant to Section 3.2(d) hereof until the Shelf Registration Statements are
declared effective, as applicable.
      3.3     Withdrawals. Each Holder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any Registration
Statement pursuant to this Article III by giving written notice to the Company
of its request to withdraw prior to the effectiveness of the Registration
Statement. Notwithstanding any such withdrawal, the Company shall pay all
expenses incurred by a Holder in connection with such cancelled registration
through the date of such notice of cancellation; provided, however, that the
Company shall not be responsible to pay the expenses incurred by a withdrawing
Holder in connection with more than two (2) such cancelled registrations.

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ARTICLE IV
SHELF REGISTRATION
      4.1     Shelf Registration Filing. Within thirty (30) calendar days
following the date hereof, the Company shall file with the Commission a
Registration Statement (the “Closing Shelf Registration Statement”) relating to
the offer and sale of all of the Registrable Securities (other than (a) the
Convertible Note, (b) the shares of Common Stock issued upon conversion of the
Convertible Note, and (c) any and all shares of additional Common Stock or
securities that may be acquired or received by the Holders or issued or
distributed or be issuable with respect thereto by way of a stock dividend,
stock split or reverse stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or otherwise, and any securities
issued in exchange for or in replacement of the foregoing securities) to the
public, from time to time, on a delayed or continuous basis. In addition, within
thirty (30) calendar days following the date of the Exchange, the Company shall
file with the Commission a Registration Statement (the “Convertible
Note Registration Statement”, together with the Closing Shelf Registration
Statement, the “Shelf Registration Statements”) relating to the offer and sale
of (a) the Convertible Note, (b) all of the shares of Common Stock issued upon
conversion of the Convertible Note, and (c) any and all shares of additional
Common Stock or securities that may be acquired or received by the Holders or
issued or distributed or be issuable with respect thereto by way of a stock
dividend, stock split or reverse stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or otherwise, and any
securities issued in exchange for or in replacement of the foregoing securities,
to the public, from time to time, on a delayed or continuous basis. The Company
shall use its best efforts to cause the Shelf Registration Statements to be
declared effective under the Securities Act as soon as practicable after the
filing thereof with the Commission and to maintain and cause the Shelf
Registration Statements to remain effective thereafter. The Shelf Registration
Statements shall specify the intended method of distribution of the Registrable
Securities substantially in the form of Exhibit A attached hereto. The Company
shall file the Shelf Registration Statements on Form S-3 or, if the Company or
the offering of the Registrable Securities does not satisfy the requirements for
use of such form, such other form as may be appropriate; provided, however, that
if the Shelf Registration Statements are not filed on Form S-3, the Company
shall, promptly upon meeting the requirements for use of such form, file an
appropriate amendment to the Shelf Registration Statements to convert it to
Form S-3. Registrations effected pursuant to this Section shall not be counted
as Demand Registrations effected pursuant to Section 2.1. Notwithstanding
anything contained herein to the contrary, no securities other than the
Registrable Securities shall be included in the Shelf Registration Statements
without the prior written consent of the Holders.
      4.2     Required Period and Shelf Registration Procedures. The Company
shall (i) cause the Shelf Registration Statements to include a resale Prospectus
intended to permit each Holder to sell, at such Holder’s election, all or part
of the Registrable Securities held by such Holder without restriction, (ii) use
its best efforts to prepare and file with the Commission such supplements,
amendments and post-effective amendments to the Shelf Registration Statements as
may be necessary to keep the Shelf Registration Statements continuously
effective (subject to Sections 3.2(c) and 3.2(d) and to any Suspension Period(s)
referred to below) for so long as the securities registered thereunder
constitute Registrable Securities (the “Required Period”), and (iii) use its
best efforts to cause the resale Prospectus to be supplemented by any required
Prospectus supplement (subject to Section 5.2(c) and to any Suspension Period(s)
referred to below).
      4.3     Effective Registration. A registration will not count as a Shelf
Registration Statement until the Registration Statement filed with the
Commission with respect to such Shelf Registration has been declared effective
and the Company has complied with all of its obligations under this Agreement
with respect thereto; provided, however, that if, after such Registration
Statement has been declared effective, the offering of Registrable Securities
pursuant to a Shelf Registration Statement is interfered with by any stop order
or injunction of the Commission or any other governmental agency or court, the
Registration Statement with respect to such Shelf Registration Statement will be
deemed not to have been declared effective, unless and until, (i) such stop
order or injunction is removed, rescinded or otherwise terminated, and (ii) the
Investor (and the Majority Participating Holders, as the case may be) thereafter
elects to continue the offering.

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      4.4     Underwritten Offering. If the Majority Participating Holders so
elect and so advise the Company, the offering of Registrable Securities pursuant
to the Shelf Registration Statements or any “takedown” thereof shall be in the
form of an Underwritten Offering and the Company, if necessary, shall amend or
supplement the Shelf Registration Statements for such purpose, and the Majority
Participating Holders shall be entitled to select the managing Underwriter or
Underwriters and any other Underwriters for such offering; provided, however,
that any such Underwriter shall be reasonably acceptable to the Company.
ARTICLE V
STANDSTILL AND SUSPENSION PERIODS
      5.1     Company Standstill Period. (a) In the event of an Underwritten
Offering of Registrable Securities on a firm commitment basis pursuant to
Section 2.1 hereof, the Company agrees not to, without the prior written consent
of the managing Underwriter and the Majority Participating Holders, in the case
of an Underwritten Offering, or the Majority Participating Holders in the case
of a non-Underwritten Offering, offer, pledge, sell, contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any securities that are the same as, or similar to, the
Registrable Securities, or any securities convertible into, or exchangeable or
exercisable for, any securities of the Company that are the same as, or similar
to, the Registrable Securities (except pursuant to registrations on Form S-4 or
any successor form, or otherwise in connection with the acquisition of a
business or assets of a business, a merger, or an exchange offer for the
securities of the issuer or another entity, or pursuant to a Company dividend
reinvestment plan, or for issuances of securities pursuant to the conversion,
exchange or exercise of then-outstanding convertible or exchangeable securities,
options, rights or warrants, or pursuant to registrations on Form S-8 or any
successor form or otherwise relating solely to securities offered pursuant to
any benefit plan), during the period commencing fifteen (15) calendar days prior
to the effective date of the Registration Statement relating to such Registrable
Securities (to the extent timely notified in writing by the Majority
Participating Holders or the managing Underwriter of such distribution) and
ending on the ninetieth (90th) calendar day after such effective date (the
“Company Standstill Period”).
      (b) The Company agrees to use best efforts to obtain from each holder of
securities of the Company which are subject to selling restrictions and are the
same as or similar to those being registered by the Company, or which are
convertible into or exchangeable or exercisable for any of its securities, an
agreement not to effect any public sale or distribution of such securities
(other than securities purchased in a public offering) during any Company
Standstill Period. Without limiting the foregoing, if after the date hereof the
Company grants, pursuant to and in compliance with Section 10.1 hereof, any
Person (other than a holder of Registrable Securities) any rights to demand or
participate in a registration, the Company agrees that the agreement with
respect thereto shall include such Person’s agreement as contemplated by the
previous sentence.
      5.2     Suspension Period. Except with respect to a registration under
Section 2.9 hereof, the Company may, by notice in writing to each Holder,
postpone the filing or effectiveness of the Shelf Registration Statement or any
other registration requested pursuant to this Agreement, or otherwise suspend
the Demand Registration rights of the Holders and/or require the Holders to
suspend use of any resale Prospectus included in the Shelf Registration
Statement for any period of time reasonably determined by the Company if there
shall occur a Material Disclosure Event (such period, a “Suspension Period”).
Notwithstanding anything herein to the contrary, the Company shall not be
entitled to more than three (3) Suspension Periods, which Suspension Periods
shall have durations of not more than thirty (30) calendar days each (but may at
the Company’s reasonable determination run consecutively for a given Material
Disclosure Event) during any consecutive 12 month period, and which Suspension
Periods shall not exceed more than seventy-five (75) calendar days in the
aggregate in any consecutive 12 month period; provided, however, that if the
Company deems in good faith that it is necessary to file a post-effective
amendment to the Shelf Registration Statement in order to comply with Article IV
hereof, then such period of time from the date of filing such post-effective
amendment until the date on which the Shelf Registration Statement is declared
effective by the Commission shall not be treated as a Suspension Period and the
Company shall use its best efforts to

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cause such post-effective amendment to be declared effective as promptly as
possible, but in no event more than two (2) Business Days following the filing
of such post-effective amendment (subject only to such delay as may be caused
solely as a result of review by the Commission, whereupon the Company shall use
its best efforts to facilitate such review and approval by the Commission and
cause such post-effective amendment to be declared effective as promptly as
possible). Each Holder agrees that, upon receipt of notice from the Company of
the occurrence of a Material Disclosure Event (a “Suspension Notice”), such
Holder will forthwith discontinue any disposition of Registrable Securities
pursuant to the Shelf Registration Statement or any public sale or distribution,
including pursuant to Rule 144, until the earlier of (i) the expiration of the
Suspension Period and (ii) such Holder’s receipt of a notice from the Company to
the effect that such suspension has terminated. Any Suspension Notice shall be
accompanied by a certificate of the Chief Executive Officer, Chief Financial
Officer, President or any Vice President of the Company confirming the existence
of the Material Disclosure Event. If so directed by the Company, such Holder
will deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies, then in such Holder’s possession, of the most recent
Prospectus covering such Registrable Securities at the time of receipt of such
Suspension Notice. The Company covenants and agrees that it will not deliver a
Suspension Notice with respect to a Suspension Period unless Company employees,
officers and directors are also prohibited by the Company for the duration of
such Suspension Period from effecting any public sales of shares of Common Stock
beneficially owned by them. In the event of a Suspension Notice, the Company
shall, promptly after such time as the related Material Disclosure Event no
longer exists, provide notice to all Holders that the Suspension Period has
ended, and take any and all actions necessary or desirable to give effect to any
Holders’ rights under this Agreement that may have been affected by such notice,
including the Holders’ Demand Registration rights and rights with respect to any
Shelf Registration Statement.
      5.3     Holder Standstill Period. Except with respect to a registration
under Section 2.9 hereof, each Holder of Registrable Securities (whether or not
such Registrable Securities are covered by the Shelf Registration Statement or
by a Registration Statement filed pursuant to Section 2.1 or 3.1 hereof) agrees
to enter into a customary lock-up agreement with the managing Underwriter for
any Underwritten Offering of the Company’s equity securities for its own
account, containing terms reasonably acceptable to such managing Underwriter,
covering the period commencing fifteen (15) calendar days prior to the effective
date of any Registration Statement relating to such securities of the Company
and ending on the ninetieth (90th) calendar day after such effective date (or
such shorter period as shall have been agreed to by the Company’s executive
officers and directors in their respective lock-up agreements); provided,
however, that the obligations of each Holder under this Section 5.3 shall apply
only if: (i) such Holder will be afforded the right (whether or not exercised by
the Holder) to include Registrable Securities in such Underwritten Offering in
accordance with and subject to the provisions of Article III hereof, (ii) each
of the Company’s executive officers and directors enter into lock-up agreements
with such managing Underwriter, which agreements shall not contain terms more
favorable to such executive officers or directors than those contained in the
lock-up agreement entered into by such Holder, and (iii) the aggregate
restriction periods in such Holder’s lock-up agreements entered into pursuant to
this Section 5.3 shall not exceed an aggregate of ninety (90) calendar days
during any 365-day period.
      5.4     Restrictions on Sale by the Company and Others. The Company
agrees: (i) not to effect any public sale or distribution of any securities
similar to those being registered in accordance with Section 2.1 hereof, or any
securities convertible into or exchangeable or exercisable for such securities,
from the date the Company receives the written demand for any Demand
Registration until permitted under any “lock-up” agreement with the Underwriter,
but not more than ninety (90) calendar days from the effective date of any
Registration Statement filed pursuant to Section 2.1 hereof, and (ii) that any
agreement entered into after the date hereof pursuant to which the Company
issues or agrees to issue any privately placed securities shall contain a
provision under which holders of such securities agree not to effect any sale or
distribution of any such securities during the periods described in clause (i)
above, in each case including a sale pursuant to Rule 144 under the Securities
Act (except as part of any such registration, if permitted); provided, however,
that the provisions of this Section 5.4 shall not prevent the conversion or
exchange of any securities pursuant to their terms into or for other securities
and shall not prevent the issuance of securities by the Company under any
employee benefit, stock option or stock subscription plans.

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ARTICLE VI
REGISTRATION PROCEDURES
      6.1     Company Obligations. Whenever the Company is required pursuant to
this Agreement to register Registrable Securities, the Company shall (it being
understood and agreed that except as otherwise expressly set forth in this
Article VI, if any other provision of this Agreement is more favorable to the
Holders than the provisions of this Article VI, such other provision shall
apply) use its best efforts to effect the registration and, if applicable, sale
by the Company (including a sale pursuant to Section 2.9 hereof) and to enable
the Holders to consummate disposition of all such Registrable Securities in
accordance with the intended method(s) of distribution thereof as expeditiously
as practicable, and in connection therewith, shall do as follows:

        (a) The Company shall provide the Participating Holders and their
counsel with a reasonable opportunity to review, and comment on, any
Registration Statement to be prepared and filed pursuant to this Agreement prior
to the filing thereof with the Commission, and make all changes thereto as any
Participating Holder may request in writing to the extent such changes are
required, in the reasonable judgment of the Company’s counsel, by the Securities
Act or for the Company to comply with its obligations hereunder;          
(b) The Company shall cause any such Registration Statement and the related
Prospectus and any amendment or supplement thereto, as of the effective date of
such Registration Statement, amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations of the Commission promulgated thereunder and (ii) not to
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, (in
the case of the Prospectus and any preliminary Prospectus in light of the
circumstances under which they were made) not misleading (except that this
clause (ii) shall not apply to statements made or statements omitted by the
Company solely in reliance upon and in full conformity with written information
furnished but not otherwise available to the Company by any Holder solely with
respect to such Holder and expressly for use in the Registration Statement or
any amendment or supplement thereto), or, if for any other reason it shall be
necessary to amend or supplement such Registration Statement or Prospectus in
order to comply with the Securities Act and, in either case as promptly as
reasonably practicable thereafter, prepare and file with the Commission an
amendment or supplement to such Registration Statement or Prospectus which will
correct such statement or omission or effect such compliance;           (c) The
Company shall furnish, at its expense, to the Participating Holders such number
of conformed copies of such Registration Statement and of each such amendment
thereto (in each case including all exhibits thereto, except that the Company
shall not be obligated to furnish to any such Participating Holder more than two
(2) copies of such exhibits), such number of copies of the Prospectus included
in such Registration Statement (including each preliminary Prospectus and each
supplement thereto), and such number of the documents, if any, incorporated by
reference in such Registration Statement or Prospectus, as the Participating
Holders reasonably may request;           (d) The Company shall use its best
efforts to register or qualify the Registrable Securities covered by such
Registration Statement under such securities or “blue sky” laws of the states of
the United States as the Participating Holders reasonably shall request, to keep
such registration or qualification in effect for so long as such Registration
Statement remains in effect, and to do any and all other acts and things that
may be necessary or advisable to enable the Participating Holders to consummate
the disposition in such jurisdictions of the Registrable Securities covered by
such Registration Statement, except that the Company shall not, for any such
purpose, be required to qualify generally to do business as a foreign
corporation in any jurisdiction in which it is not obligated to be so qualified,
or to subject itself to material taxation in any such jurisdiction, or to
consent to general service of process in any such jurisdiction; and use its best
efforts to obtain all other approvals, consents, exemptions or authorizations
from such securities regulatory authorities or governmental agencies as may be
necessary to enable such Participating Holders to consummate the disposition of
such Registrable Securities;

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        (e) The Company shall promptly notify the Participating Holders, at any
time when a Prospectus or Prospectus supplement relating thereto is required to
be delivered under the Securities Act, upon discovery that, or upon the
occurrence 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 any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, which untrue statement or omission
requires amendment of the Registration Statement or supplementing of the
Prospectus, and, as promptly as practicable (subject to Section 5.2 hereof),
prepare and furnish, at its expense, to the Participating Holders a reasonable
number of copies of a supplement to such Prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Registrable Securities, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that with respect to Registrable
Securities registered pursuant to such Registration Statement, each Holder
agrees that it will not enter into any transaction for the sale of any
Registrable Securities pursuant to such Registration Statement during the time
after the furnishing of the Company’s notice that the Company is preparing a
supplement to or an amendment of such Prospectus or Registration Statement and
until the filing and effectiveness thereof. When a Prospectus or Prospectus
supplement relating thereto is required to be delivered under the Securities
Act, each Participating Holder shall notify the Company, as soon as practicable,
after it has actual knowledge of the occurrence of any event as a result of
which the Prospectus included in such Registration Statement, as then in effect,
contains an untrue statement of a material fact with respect to such
Participating Holder or omits to state any material fact with respect to such
Participating Holder required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading with respect to such Participating Holder, which untrue
statement or omission requires material amendment of the Registration Statement
or supplementing of the Prospectus;           (f) The Company shall use its best
efforts to comply with all applicable rules and regulations of the Commission,
and make available to holders of its securities, as soon as practicable, an
earnings statement covering the period of at least 12 months, beginning within
three (3) months after the effective date of such Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;           (g) The Company shall provide,
and cause to be maintained, a transfer agent and registrar for the Registrable
Securities covered by such Registration Statement (which transfer agent and
registrar shall, at the Company’s option, be the Company’s existing transfer
agent and registrar) from and after a date not later than the effective date of
such Registration Statement;           (h) The Company shall notify the
Participating Holders and the managing Underwriter, if any, promptly, and (if
requested by any such Person) confirm such notice in writing, (i) when a
Registration Statement, Prospectus, Prospectus supplement or post-effective
amendment related to such Registration Statement has been filed, and, with
respect to such Registration Statement or any post-effective amendment thereto,
when the same has become effective, (ii) of any request by the Commission or any
other federal or state governmental authority for amendments or supplements to
such Registration Statement or related Prospectus, (iii) of the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of such Registration Statement or the
initiation of any proceedings for that purpose and (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose;           (i) The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of such Registration
Statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, as soon as practicable;

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        (j) The Company shall in the event of an Underwritten Offering of
Registrable Securities pursuant to Section 2.1 hereof, enter into customary
agreements (including underwriting agreements in customary form, which may
include, in the case of an underwritten offering on a firm commitment basis,
“lock-up” obligations substantially similar to Sections 5.1 and 5.4 hereof) and
take such other actions (including using its best efforts to make such road show
presentations and otherwise engaging in such reasonable marketing support in
connection with any such underwritten offering, including the obligation to make
its executive officers available for such purpose if so requested by the
managing underwriter for such offering) as are reasonably requested by the
managing underwriter in order to expedite or facilitate the sale of such
Registrable Securities. The representations, warranties and covenants of the
Company in any underwriting agreement which are made to or for the benefit of
any Underwriters, to the extent applicable, shall also be made to and for the
benefit of the Holders holding Registrable Securities included in such
Registration Statement. No Holder holding Registrable Securities included in
such Registration Statement shall be required to make any representations or
warranties in the underwriting agreement except, if applicable, with respect to
such Holder’s organization, good standing, authority, title to Registrable
Securities, lack of conflict of such sale with such Holder’s material agreements
and organizational documents, and with respect to written information relating
to such Holder that such Holder has furnished in writing expressly for inclusion
in such Registration Statement.           (k) The Company shall make available
for inspection by each Participating Holder, any underwriter participating in
any disposition pursuant to such registration, and any attorney, accountant or
other agent retained by such Participating Holder or any such underwriter
(collectively, the ”Inspectors”), all financial and other records, pertinent
corporate documents and properties of the Company and any of its Subsidiaries
(collectively, the “Records”) as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the officers, directors
and employees of the Company to supply all information reasonably requested by
any such Inspector in connection with such registration, provided, however, that
(i) in connection with any such inspection, any such Inspectors shall cooperate
to the extent reasonably practicable to minimize any disruption to the operation
by the Company of its business and shall comply with all Company site safety
rules, (ii) Records and information obtained hereunder shall be used by such
Inspectors only to exercise their due diligence responsibility and (iii) Records
or information furnished or made available hereunder shall be kept confidential
and shall not be disclosed by such Participating Holder, underwriter or
Inspectors unless (A) the disclosing party advises the other party that the
disclosure of such Records or information is necessary to avoid or correct a
misstatement or omission in a Registration Statement or is otherwise required by
law, (B) the release of such Records or information is ordered pursuant to a
subpoena or other order from a court or governmental authority of competent
jurisdiction (provided, however, that such person shall use its reasonable
efforts to provide the Company with prior written notice of such requirement to
afford the Company with an opportunity to seek a protective order or other
appropriate remedy in response) or (C) such Records or information otherwise
become generally available to the public other than through disclosure by such
Participating Holder, underwriter or Inspector in breach hereof or by any Person
in breach of any other confidentiality arrangement;           (l) The Company
shall, in connection with any registration of an Underwritten Offering of
Registrable Securities hereunder, use best efforts to furnish to each
Participating Holder and to the managing Underwriter, if any, a signed
counterpart, addressed to such Participating Holder and the managing
Underwriter, if any, of (i) an opinion or opinions of counsel to the Company and
(ii) a comfort letter or comfort letters from the Company’s independent public
accountants pursuant to Statement on Auditing Standards No. 72 (or any successor
thereto), each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as each
such Participating Holder and the managing underwriter, if any, reasonably
requests;           (m) The Company shall in connection with any registration of
an Underwritten Offering of Registrable Securities hereunder, provide officers’
certificates and other customary closing documents;           (n) The Company
shall reasonably cooperate with each seller of Registrable Securities and any
underwriter in the disposition of such Registrable Securities and with
underwriters’ counsel, if any, in

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  connection with any filings required to be made with the National Association
of Securities Dealers, Inc. (the “NASD”);           (o) The Company shall use
its best 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.           (p) The Company shall cooperate with the
Participating Holders and the managing Underwriter, Underwriters or agent, if
any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends;           (q) 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
as may be necessary to enable the seller or sellers thereof or the Underwriter
or Underwriters, if any, to consummate the disposition of such Registrable
Securities; and           (r) The Company shall, no later than the effective
date of the applicable Registration Statement, provide a CUSIP number for all
Registrable Securities and provide the applicable transfer agent with printed
certificates for the Registrable Securities which certificates shall be in a
form eligible for deposit with The Depository Trust Company.

ARTICLE VII
INDEMNIFICATION
      7.1     Indemnification by the Company. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to this
Agreement, the Company shall indemnify and hold harmless to the full extent
permitted by law (i) each Holder, each such Holder’s Affiliates and their
respective officers, directors, managers, partners, stockholders, employees,
advisors, agents and other representatives of the foregoing, and each of their
respective successors and assigns, and each Person who controls any of the
foregoing, within the meaning of the Securities Act and the Exchange Act, and
(ii) any selling agent selected by the Holders or their Affiliates with respect
to such Registrable Securities (each such Person being sometimes referred to as
a “Holder Indemnified Person”), against any and all losses, claims, damages,
liabilities (or actions or proceedings in respect thereof, whether or not such
Holder Indemnified Person is a party thereto) and expenses (including reasonable
costs of investigations and legal expenses), joint or several (each a “Loss” and
collectively “Losses”), to which such Holder Indemnified Person may become
subject, to the extent that such Losses (or related actions or proceedings)
arise out of or are based upon (A) any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement in which
such Registrable Securities were included for registration under the Securities
Act, including any preliminary or summary Prospectus or any final Prospectus
included in such Registration Statement (or any amendment or supplement to such
Registration Statement or Prospectus) or any document incorporated by reference
therein or (B) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, (in
the case of the Prospectus and any preliminary Prospectus in light of the
circumstances under which they were made) not misleading; and the Company agrees
to reimburse such Holder Indemnified Person for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall have no obligation to provide any indemnification or reimbursement
hereunder (i) to the extent that any such Losses (or actions or proceedings in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration
Statement, preliminary Prospectus, final Prospectus, amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by the Holder, or on the Holder’s behalf, specifically for inclusion,
respectively, in such Registration Statement, preliminary Prospectus, final
Prospectus, amendment or supplement, or (ii) in the case of a sale directly by a
Holder of Registrable Securities (including a sale of such Registrable
Securities through any underwriter retained by such Holder engaging in a
distribution solely on behalf of such Holder), to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was
contained in a preliminary Prospectus and corrected in a

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final, amended or supplemented Prospectus provided to such Holder prior to the
confirmation of the sale of the Registrable Securities to the Person asserting
any such Loss, and such Holder failed to deliver a copy of the final, amended or
supplemented Prospectus at or prior to such confirmation of sale in any case in
which such delivery is required by the Securities Act, or (iii) in the case of a
sale directly by a Holder of Registrable Securities (including a sale of such
Registrable Securities through any underwriter retained by such Holder engaging
in a distribution solely on behalf of such Holder), to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission was
contained in a final Prospectus but was corrected in an amended or supplemented
final Prospectus provided to such Holder prior to the confirmation of the sale
of the Registrable Securities to the Person asserting any such Loss, and such
Holder failed to deliver a copy of the amended or supplemented final Prospectus
at or prior to such confirmation of sale in any case in which such delivery is
required by the Securities Act. The indemnity provided in this Section 7.1 shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Holder Indemnified Person and shall survive the
transfer or disposal of the Registrable Securities by the Holder or any such
other Persons. The Company will also indemnify, if applicable and if requested,
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution pursuant hereto, their officers
and directors and each Person who controls such Persons (within the meaning of
the Securities Act and the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Holder Indemnified Persons. This
indemnity shall be in addition to any liability the Company may otherwise have.
      7.2     Indemnification by the Holders. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to this
Agreement, each Holder shall, severally and not jointly, indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section 7.1
hereof) the Company, each director and officer of the Company and each other
Person, if any, who controls the Company within the meaning of the Securities
Act and the Exchange Act (each such Person being sometimes referred to as a
“Company Indemnified Person”), against Losses to which the Company or any such
Persons may become subject under the Securities Act or otherwise, to the extent
that such losses (or related actions or proceedings) arise out of or are based
upon (A) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement in which Registrable Securities were
included for registration under the Securities Act, or any preliminary
Prospectus or any final Prospectus included in such Registration Statement (or
any amendment or supplement to such Registration Statement or Prospectus), or
(B) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, (in the case
of the Prospectus and any preliminary Prospectus in light of the circumstances
under which they were made) not misleading, in each case, only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement, preliminary Prospectus, final
Prospectus, amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Holder, or on such Holder’s
behalf, specifically for inclusion, respectively, in such Registration
Statement, preliminary Prospectus, final Prospectus, amendment or supplement;
and each Holder agrees severally but not jointly to reimburse such Company
Indemnified Person for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that a Holder’s aggregate liability
under this Agreement shall be limited to an amount equal to the net proceeds
(after deducting the underwriter’s discount and expenses) received by such
Holder from the sale of such Holder’s Registrable Securities pursuant to such
registration.
      7.3     Notice of Claims, Etc. Promptly after receipt by any Person
entitled to indemnity under Section 7.1 or 7.2 hereof (an “Indemnitee”) of
notice of the commencement of any action or proceeding (an “Action”) involving a
claim referred to in such Sections, such Indemnitee shall, if indemnification is
sought against an indemnifying party, give written notice to such indemnifying
party of the commencement of such Action; provided, however, that the failure of
any Indemnitee to give said notice shall not relieve the indemnifying party of
its obligations under Sections 7.1 or 7.2 hereof, except to the extent that the
indemnifying party is actually prejudiced by such failure. In case an Action is
brought against any Indemnitee, and such Indemnitee notifies the indemnifying
party of the commencement thereof, each indemnifying party shall be entitled to
participate therein and, to the extent it elects to do so by written notice
delivered to the Indemnitee promptly after receiving the aforesaid notice, to
assume the defense thereof with counsel selected

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by such Indemnitee and reasonably satisfactory to such indemnifying party.
Notwithstanding the foregoing, the Indemnitee shall have the right to employ its
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Indemnitee, unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying party, (ii) the
indemnifying party shall not have employed counsel to take charge of the defense
of such Action, reasonably promptly after notice of the commencement thereof or
(iii) such Indemnitee reasonably shall have concluded that there may be defenses
available to it which are different from or additional to those available to the
indemnifying party which, if the indemnifying party and the Indemnitee were to
be represented by the same counsel, could result in a conflict of interest for
such counsel or materially prejudice the prosecution of the defenses available
to such Indemnitee. If any of the events specified in clauses (i), (ii) or
(iii) of the preceding sentence shall have occurred or otherwise shall be
applicable, then the fees and expenses of counsel for the Indemnitee shall be
borne by the indemnifying party; it being understood, however, that the
indemnifying party shall not, in connection with any one such claim or
proceeding, or separate but substantially similar or related claims or
proceedings arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all Indemnitees
hereunder, or for fees and expenses that are not reasonable. Anything in this
Section 7.3 to the contrary notwithstanding, an indemnifying party shall not be
liable for the settlement of any action effected without its prior written
consent (which consent shall not unreasonably be withheld or delayed), but if
settled with the prior written consent of the indemnifying party, or if there
shall be a final judgment adverse to the Indemnitee, the indemnifying party
agrees to indemnify the Indemnitee from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior consent of the Indemnitee (which consent shall not be unreasonably
withheld or delayed), consent to entry of any judgment or enter into any
settlement or compromise, with respect to any pending or threatened action or
claim in respect of which the Indemnitee would be entitled to indemnification or
contribution hereunder (whether or not the Indemnitee is an actual party to such
action or claim), which (i) does not include as a term thereof the unconditional
release of the Indemnitee from all liability in respect of such action or claim
or (ii) includes an admission of fault, culpability or a failure to act by or on
behalf of the Indemnitee.
      7.4     Contribution. If the indemnification provided for in this
Article VII is unavailable or insufficient to hold harmless an Indemnitee in
respect of any Losses, then each indemnifying party shall, in lieu of
indemnifying such Indemnitee, contribute to the amount paid or payable by such
Indemnitee as a result of such Losses in such proportion as appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and the
Indemnitee, on the other hand, which relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such Indemnitee or indemnifying party, and
such parties’ relative intent, knowledge, access to information and opportunity
to correct or mitigate the damage in respect of or prevent the untrue statement
or omission giving rise to such indemnification obligation; provided, however,
that a Holder’s aggregate liability under this Section 7.4 shall be limited to
an amount equal to the net proceeds (after deducting the underwriter’s discount
but before deducting expenses) received by such Holder from the sale of such
Holder’s Registrable Securities pursuant to such registration. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 7.4 were determined solely by pro rata allocation or by any
other method of allocation which did not take account of the equitable
considerations referred to above. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who is not guilty of such
fraudulent misrepresentation.
      7.5     Indemnification Payments; Other Remedies.
      (a) Periodic payments of amounts required to be paid pursuant to this
Article VII shall be made during the course of the investigation or defense, as
and when reasonably itemized bills therefor are delivered to the indemnifying
party in respect of any particular Loss as incurred.
      (b) The remedies provided in this Article VII are not exclusive and shall
not limit any rights or remedies that may otherwise be available to an
Indemnitee at law or in equity.

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ARTICLE VIII
REGISTRATION EXPENSES
      The Company shall bear all costs and expenses incurred in connection with
any offerings pursuant to a Registration Statement or any “take-down” hereunder,
and all expenses incurred in performing or complying with its other obligations
under this Agreement, whether or not the Registration Statement becomes
effective, including, without limitation, the following fees and expenses:
(i) all registration and filing fees, (ii) all fees and expenses of compliance
with state securities or “blue sky” laws (including reasonable fees and
disbursements of counsel in connection with “blue sky” laws qualifications of
the Registrable Securities), (iii) printing and duplicating expenses,
(iv) internal expenses of the Company (including all salaries and expenses of
its officers and employees performing legal or accounting duties), (v) fees and
disbursements of counsel for the Company and fees and expenses of independent
certified public accountants retained by the Company (including the expenses of
any comfort letters or costs associated with the delivery by independent
certified public accountants of a comfort letter or comfort letters or with any
required special audits), (vi) the reasonable fees and expenses of any special
experts retained by the Company, (vii) fees and expenses in connection with any
review of underwriting arrangements by the NASD, including fees and expenses of
any “qualified independent underwriter” in connection with an underwritten
offering, (viii) reasonable fees and expenses of not more than one counsel for
the Participating Holders (as a group), (ix) fees and expenses in connection
with listing, if applicable, the Registrable Securities on a securities exchange
or the Nasdaq National Market, and (x) all duplicating, distribution and
delivery expenses. In connection with any offerings pursuant to a Registration
Statement, each Participating Holder will pay (i) any underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities by
such Participating Holder in connection with an underwritten offering; (ii) any
out-of-pocket expenses of such Participating Holder including any fees and
expenses of counsel to such Participating Holder (other than as set forth in
clause (viii) of the immediately preceding sentence); and (iii) any applicable
transfer taxes.
ARTICLE IX
RULE 144
      With a view to making available to the Holder the benefits of Rule 144 and
any other similar rule or regulation of the Commission that may at any time
permit the Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company covenants
that, for so long as it is subject to Section 13 or 15(d) of the Exchange Act
thereafter, it shall use its best efforts to file in a timely manner all reports
required to be filed by it under the Exchange Act, and that it shall comply with
the requirements of Rule 144(c), as such Rule may be amended from time to time
(or any similar rule or regulation hereafter adopted by the Commission),
regarding the availability of current public information to the extent required
to enable any Holder to sell Registrable Securities without registration under
the Securities Act pursuant to the resale provisions of Rule 144 (or any similar
rule or regulation). Upon the request of any Holder, the Company will promptly
deliver to such Holder a written statement as to whether it has complied with
such requirements and, upon such Holder’s compliance with the applicable
provisions of Rule 144 and its delivery of such documents and certificates as
the Company’s transfer agent may reasonably request in connection therewith,
will take such action as may be required (including using its best efforts to
cause legal counsel to issue an appropriate opinion) to cause its transfer agent
to effectuate any transfer of Registrable Securities properly requested by such
Holder, in accordance with the terms and conditions of Rule 144.
ARTICLE X
MISCELLANEOUS
      10.1     Other Registration Rights. The Company represents and warrants
that no Person has any right to require the Company to register any shares of
the Company’s capital stock (or securities convertible or exercisable into
shares of the Company’s capital stock) for sale or to include shares of the
Company’s capital

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stock (or securities convertible or exercisable into shares of the Company’s
capital stock) in any registration filed by the Company for the sale of shares
of capital stock for its own account or for the account of any other person,
other than pursuant to this Agreement. The Company shall not grant any Person
any registration rights or enter into any agreement providing for registration
rights that are more favorable than those being granted hereunder or that shall
be in conflict with or inconsistent with or otherwise adversely affect the
rights of a Holder in the Registrable Securities or such Holder’s rights under
this Agreement in any respect, including, without limitation, the priority of
registration or the ability to transfer or otherwise dispose of the Registrable
Securities.
      10.2     Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Agreement shall be deemed sufficiently given or made if
in writing and signed by the party making the same, and either delivered in
person with receipt acknowledged or sent by registered or certified mail, return
receipt requested, postage prepaid, or by telecopy and confirmed by telecopy
answerback, addressed, if to any Holder, at the address of such Holder as set
forth on the signature pages hereto, with copies to

  If to the Company, at     Emisphere Technologies, Inc.   765 Old Saw Mill
River Road   Tarrytown, NY 10591   Attention: Michael M. Goldberg,  
                 Chief Executive Officer   Phone: (914) 347-2220   Fax:
(914) 347-2498   Email: mgoldberg@emisphere.com     with a copy to:     Brown
Rudnick Berlack Israels LLP   One Financial Center   Boston, MA 02111  
Attention: Timothy C. Maguire, Esq.   Phone: (617) 856-8377   Fax:
(617) 289-0413   Email: tmaguire@brownrudnick.com     If to the Investor, to:  
  MHR Fund Management LLC   40 West 57th Street, 24th Floor   New York, NY 10019
  Fax number: (212) 262-9356   Attention: Hal Goldstein   Phone: (212) 262-0005
  Fax: (212) 262-9356   Email: hgoldstein@mhrfund.com

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  with a copy to:     Stroock & Stroock & Lavan LLP   180 Maiden Lane   New
York, New York 10038-4982   Attention: Doron Lipshitz, Esq.  
                 Brett Lawrence, Esq.   Phone: (212) 806-5400   Fax:
(212) 806-6006   Email: dlipshitz @stroock.com  
            blawrence@stroock.com

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or three (3) Business Days after the same shall have been deposited
in the United States mail (by registered or certified mail, return receipt
requested, postage prepaid), whichever is earlier.
      10.3     Successors and Assigns; No Third Party Beneficiaries. This
Agreement and the rights, duties and obligations of the Company hereunder may
not be assigned or delegated by the Company in whole or in part. This Agreement
and the rights, duties and obligations of the Holders hereunder may be assigned
by any Holder to a Permitted Assignee in whole or in part, without the consent
of the Company provided such Permitted Assignee agrees to be bound by the terms
of this Agreement, whereupon such Permitted Assignee shall be deemed to be a
Holder for all purposes of this Agreement; provided, however, that this
Agreement, and the rights, duties and obligations of the Investor hereunder may
be freely assigned by the Investor to any Affiliate of the Investor without
notice and without the consent of the Company. Subject to the preceding
sentence, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and all successors to the Company and the Holders. This Agreement
is not intended to confer any rights or benefits on any Persons that are not
party hereto other than as expressly set forth in Article VII and this
Section 10.3; provided, however, that each of the parties hereto acknowledges
and agrees that MHR Fund Management LLC, an Affiliate of the Investor, shall
have the right to act on behalf of the Investor for the purposes of this
Agreement and in connection with any of the transactions contemplated hereby at
any time and from time to time.
      10.4     Amendments; Waivers. This Agreement may be amended or modified
only by a written agreement signed by the Company, the Investor and, if
different from the Investor, the Holders of a majority of the Registrable
Securities then outstanding. No provision of this Agreement may be waived except
pursuant to a writing signed by the Company, the Investor and, if different from
the Investor, the Holders of a majority of the Registrable Securities then
outstanding (including the Registrable Securities held by the Major Holders).
      10.5     Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
      10.6     Headings. The headings used in this Agreement are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Agreement.
      10.7     Injunctive Relief. It is hereby agreed and acknowledged that it
will be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law. Any such Person shall,
therefore, be entitled (in addition to any

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other remedy to which it may be entitled in law or in equity) to injunctive
relief, including, without limitation, specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the parties hereto shall raise the defense
that there is an adequate remedy at law.
      10.8     Remedies Cumulative. In the event that the Company fails to
observe or perform any covenant or agreement to be observed or performed under
this Agreement, each Holder may proceed to protect and enforce its rights by
suit in equity or action at law, whether for specific performance of any term
contained in this Agreement or for an injunction against the breach of any such
term or in aid of the exercise of any power granted in this Agreement or to
enforce any other legal or equitable right, or to take any one or more of such
actions, without being required to post a bond. None of the rights, powers or
remedies conferred under this Agreement shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to any other
right, power or remedy, whether conferred by this Agreement or now or hereafter
available at law, in equity, by statute or otherwise.
      10.9     Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED
EXCLUSIVELY BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK. Each party to this Agreement hereby irrevocably agrees that any
legal action or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in the courts of
the State of New York or of the United States of America for the Southern
District of New York and hereby expressly submits to the personal jurisdiction
and venue of such courts for the purposes thereof and expressly waives any claim
of improper venue and any claim that such courts are an inconvenient forum. Each
party hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such suit, action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the address
set forth in Section 10.2 hereof, such service to become effective ten
(10) calendar days after such mailing.
      10.10     Counterparts and Facsimile Execution. This Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument. This Agreement may be executed
by facsimile signatures.
      10.11     Attorneys’ Fees. In any action of proceeding brought to enforce
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys’ fees in addition to
any other available remedy.
      10.12     Termination of Registration Rights; Survival. All rights granted
under this Agreement shall terminate with respect to any Holder at such time as
such Holder ceases to own any Registrable Securities and this entire Agreement
shall terminate when all Holders cease to own or beneficially own any
Registrable Securities. The provisions of Articles VII, VIII and X shall survive
any termination of this Agreement
      10.13     Entire Agreement. This Agreement embodies the entire agreement
and understanding between the Company and the Holders in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter of this
Agreement.
      10.14     Further Assurances. Each of the parties hereto shall execute
such documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
[Remainder of page intentionally left blank.]

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      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.

  EMISPHERE TECHNOLOGIES, INC.

  By:  /s/ Elliot M. Maza

 
 
  Name: Elliot M. Maza   Title: Chief Financial Officer     MHR CAPITAL PARTNERS
(500) LP

  By: MHR ADVISORS LLC,

  its General Partner

  By:  /s/ Hal Goldstein

 
 
  Name: Hal Goldstein   Title: Authorized Signatory     MHR CAPITAL PARTNERS
(100) LP

  By: MHR ADVISORS LLC,

  its General Partner

  By:  /s/ Hal Goldstein

 
 
  Name: Hal Goldstein   Title: Authorized Signatory

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  MHR INSTITUTIONAL PARTNERS II LP

  By: MHR INSTITUTIONAL ADVISORS II LLC,

  its General Partner

  By:  /s/ Hal Goldstein

 
 
  Name: Hal Goldstein   Title: Authorized Signatory     MHR INSTITUTIONAL
PARTNERS IIA LP

  By: MHR INSTITUTIONAL ADVISORS II LLC,

  its General Partner

  By:  /s/ Hal Goldstein

 
 
  Name: Hal Goldstein   Title: Authorized Signatory

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