Exhibit 4.2




REGISTRATION

RIGHTS AGREEMENT




This Registration

Rights Agreement (this “Agreement”) is made and entered into as of

December 2, 2002, by and among SureBeam Corporation, a Delaware corporation

(the “Company”), and the investors signatory hereto (each a “Purchaser”

and collectively, the “Purchasers”).




This Agreement is

made pursuant to the Securities Purchase Agreement, dated as of the date hereof

among the Company and the Purchasers (the “Purchase Agreement”).




The Company and

the Purchasers hereby agree as follows:




1.             Definitions.  Capitalized terms used and not otherwise

defined herein that are defined in the Purchase Agreement shall have the

meanings given such terms in the Purchase Agreement.  As used in this Agreement, the following terms shall have the

following meanings:




 




“Effectiveness Date” means, with respect to the

initial Registration Statement required to be filed hereunder, the earlier of

(a) the 90th day following the Closing Date, provided, that such date

shall be extended by one day for each day that the Commission takes, beyond ten

(10) calendar days from the date of delivery by the Company, to respond to any

correspondence from the Company during the period that the Registration

Statement is subject to review by the Commission, provided, however,

that in no event will such date be extended later than the 120th day following

the Closing Date and (b) the fifth Trading Day following the date on

which the Company is notified by the Commission that such Registration

Statement will not be reviewed or is no longer subject to further review and

comments, and, with respect to any additional Registration Statements that may

be required pursuant to Section 2(c), the 90th day following the date on which

the Company first knows, or reasonably should have known, that such additional

Registration Statement is required under such Section.




 




“Effectiveness Period” shall have the meaning

set forth in Section 2(a).




 




“Filing Date”

means, with respect to the initial Registration Statement required to be filed

hereunder, the 30th day following the Closing Date, and, with respect to any

additional Registration Statements that may be required pursuant to Section

2(c), the 30th day following the date on which the Company first knows, or

reasonably should have known that such additional Registration Statement is

required under such Section.




“Holder” or

“Holders” means the holder or holders, as the case may be, from time to

time of Registrable Securities.




“Indemnified

Party” shall have the meaning set forth in Section 5(c).




“Indemnifying

Party” shall have the meaning set forth in Section 5(c).




“Losses”

shall have the meaning set forth in Section 5(a).




“New Warrants”  shall have the meaning set forth in the

Warrants.




 





























 




“Proceeding”

means an action, claim, suit, investigation or proceeding (including, without

limitation, an investigation or partial proceeding, such as a deposition),

whether commenced or threatened.




“Prospectus”

means the prospectus included in a Registration Statement (including, without

limitation, a prospectus that includes any information previously omitted from

a prospectus filed as part of an effective registration statement in reliance

upon Rule 430A promulgated under the Securities Act), as amended or

supplemented by any prospectus supplement, with respect to the terms of the

offering of any portion of the Registrable Securities covered by the

Registration Statement, and all other amendments and supplements to the

Prospectus, including post–effective amendments, and all material

incorporated by reference or deemed to be incorporated by reference in such

Prospectus.




“Registrable

Securities” means (i) the Shares, and (ii) the shares of Common Stock

issuable upon exercise of the Warrants.




“Registration Statement” means the initial

registration statement required to be filed hereunder and any additional

registration statements contemplated by Section 2(c), including (in each

case) the Prospectus, amendments and supplements to such registration statement

or Prospectus, including pre– and post–effective amendments, all

exhibits thereto, and all material incorporated by reference or deemed to be

incorporated by reference in such registration statement.




 




“Rule 144” means Rule 144 promulgated by the

Commission pursuant to the Securities Act, as such Rule may be amended from

time to time, or any similar rule or regulation hereafter adopted by the

Commission having substantially the same effect as such Rule.




 




“Rule 415”

means Rule 415 promulgated by the Commission pursuant to the Securities Act, as

such Rule may be amended from time to time, or any similar rule or regulation

hereafter adopted by the Commission having substantially the same effect as

such Rule.




“Rule 424”

means Rule 424 promulgated by the Commission pursuant to the Securities Act, as

such Rule may be amended from time to time, or any similar rule or regulation

hereafter adopted by the Commission having substantially the same effect as

such Rule.




“Shares”

means the shares of Common Stock issued to the Purchasers pursuant to the

Purchase Agreement.




“Special

Counsel” means Purchaser Counsel who will be reimbursed by the Company

pursuant to Section 4.




“Warrants”

means (i) the Warrants issued under the Purchase Agreement, and (ii) the New

Warrants issued under the Warrants.




2.             Registration.




(a)           On or prior to each Filing Date, the

Company shall prepare and file with the Commission a Registration Statement

covering the resale of all Registrable Securities for an




 




 




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offering to be made on a continuous basis pursuant to Rule 415.  Each Registration Statement shall be on Form

S–3 (except if the Company is not then eligible to register for resale

the Registrable Securities on Form S–3, in which case such

registration shall be on another appropriate form in accordance herewith) and

shall contain (except if otherwise directed by the Holders) the “Plan of

Distribution” attached hereto as Annex A.  The Company shall cause such Registration Statement to remain

effective as provided herein. The Company shall use its best efforts to cause

each Registration Statement to be declared effective under the Securities Act

on or before the Effectiveness Date, and shall use its best efforts to keep

each Registration Statement continuously effective under the Securities Act

until the date which is two years after the date that such Registration

Statement is declared effective by the Commission or such earlier date when all

Registrable Securities covered by such Registration Statement have been sold or

may be sold without volume restrictions pursuant to Rule 144(k) as determined

by the counsel to the Company pursuant to a written opinion letter to such

effect, addressed and acceptable to the Company’s transfer agent and the

affected Holders (the “Effectiveness Period”).




 




(b)           If:

(a) any Registration Statement is not filed on or prior to the Filing Date (if

the Company files such Registration Statement without affording the Holder the

opportunity to review and comment on the same as required by Section 3(a)

hereof, the Company shall not be deemed to have satisfied this clause (a)), or

(b) the Company fails to file with the Commission a request for acceleration in

accordance with Rule 461 promulgated under the Securities Act, within five

Trading Day of the date that the Company is notified (orally or in writing,

whichever is earlier) by the Commission that a Registration Statement will not

be “reviewed,” or not subject to further review, or (c) the Company fails to

respond to any comments made by the Commission within fifteen Trading Days

after the receipt of such comments, or (d) after a Registration Statement is

filed with and declared effective by the Commission, such Registration

Statement ceases to be effective as to all Registrable Securities to which it

is required to relate (whether upon the delivery of an Advice pursuant to

Section 6(d) or otherwise) at any time prior to the expiration of the

Effectiveness Period without being succeeded within fifteen Trading Days by an

amendment to such Registration Statement or by a subsequent  Registration Statement filed with and

declared effective by the Commission, or (e) an amendment to a Registration

Statement is not filed by the Company with the Commission within fifteen

Trading Days of the Commission’s notifying the Company that such amendment is

required in order for such Registration Statement to be declared effective, or

(f) the Common Stock is not listed or quoted, or is suspended from trading on

the Nasdaq National Market for a period of three Trading Days (which need not

be consecutive Trading Days), or (g) the exercise rights of the Holders

pursuant to the Warrants are suspended for any reason , or (h) any Registration

Statement shall not be declared effective by the Commission on or prior to the

applicable Effectiveness Date (any such failure or breach being referred to as

an “Event,” and for purposes of clause (a), (g) or (h) the date on which

such Event occurs, or for purposes of clause (b) the date on which such five

Trading Day period is exceeded, or for purposes of clauses (c) (d) or (e) the

date which such fifteen Trading Day-period is exceeded or for purposes of

clause (g) the date on which such three Trading Day period is exceeded, being

referred to as “Event Date”), then, in addition to any other rights

available to the Holders: (x) on each such Event Date the Company shall pay to

each Holder an amount in cash, as liquidated damages and not as a penalty,

equal to 1% of the aggregate purchase price paid by such Holder pursuant to the

Purchase Agreement; and (y) on each monthly anniversary of each such Event Date

thereof (if the applicable Event shall not have been cured by such date) until

the applicable Event is cured, the Company shall pay to each 




 




 




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Holder an amount in cash, as liquidated damages and not as a penalty,

equal to 2% of the aggregate purchase price paid by such Holder pursuant to the

Purchase Agreement.  If the Company

fails to pay any liquidated damages pursuant to this Section in full within

seven days after the date payable, the Company will pay interest thereon at a

rate of 18% per annum (or such lesser maximum amount that is permitted to be

paid by applicable law) to the Holder, accruing daily from the date such

liquidated damages are due until such amounts, plus all such interest thereon,

are paid in full.  The liquidated

damages pursuant to the terms hereof shall apply on a pro-rata basis for any

portion of a month prior to the cure of an Event.




 




(c)           If the number of Registrable

Securities at any time exceeds 85% of the number of shares of Common Stock then

registered in a Registration Statement, then the Company shall file an

additional Registration Statement covering the resale of such additional shares

or Registrable Securities (as applicable) in accordance with this Agreement.




(d)           Notwithstanding anything herein to

the contrary, the Company shall prepare and file a Registration Statement

covering the resale of shares of Common Stock issuable upon exercise of the New

Warrants within 15 Trading Days following the issuance of such New Warrants.




3.             Registration Procedures




In connection with

the Company’s registration obligations hereunder, the Company shall:




(a)           Not less than two Trading Days prior

to the filing of the Registration Statement or any related Prospectus or any

amendment or supplement thereto, the Company shall, (i) furnish to the Holders

and their Special Counsel copies of all such documents proposed to be filed

(including documents incorporated or deemed incorporated by reference) which documents

will be subject to the review of such Holders and their Special Counsel, and

(ii) cause its officers and directors, counsel and independent certified public

accountants to respond to such inquiries as shall be necessary, in the

reasonable opinion of respective counsel to conduct a reasonable investigation

within the meaning of the Securities Act. 

The Company shall not file the Registration Statement or any such

Prospectus or any amendments or supplements thereto to which the Holders of a

majority of the Registrable Securities and their Special Counsel shall

reasonably object in good faith.




(b)           (i)  Prepare and file with the Commission such

amendments, including post–effective amendments, to the Registration

Statement and the Prospectus used in connection therewith as may be necessary

to keep the Registration Statement continuously effective as to the applicable

Registrable Securities for the Effectiveness Period and prepare and file with

the Commission such additional Registration Statements in order to register for

resale under the Securities Act all of the Registrable Securities; (ii) cause

the related Prospectus to be amended or supplemented by any required Prospectus

supplement, and as so supplemented or amended to be filed pursuant to Rule 424;

(iii) respond as promptly as reasonably possible, and in any event within ten

days, to any comments received from the Commission with respect to the

Registration Statement or any amendment thereto and, as promptly as reasonably

possible provide the Holders true and complete copies of all correspondence

from and to the Commission relating to 




 




 




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the Registration Statement; and (iv) comply in all material respects

with the provisions of the Securities Act and the Exchange Act with respect to

the disposition of all Registrable Securities covered by the Registration

Statement during the applicable period in accordance with the intended methods

of disposition by the Holders thereof set forth in the Registration Statement

as so amended or in such Prospectus as so supplemented.




 




(c)           Notify the Holders of Registrable

Securities to be sold and their Special Counsel as promptly as reasonably

possible (and, in the case of (i)(A) below, not less than three Trading Days prior

to such filing) and (if requested by any such Person) confirm such notice in

writing no later than one Trading Day following the day (i)(A) when a

Prospectus or any Prospectus supplement or post–effective amendment to

the Registration Statement is proposed to be filed; (B) when the Commission

notifies the Company whether there will be a “review” of such Registration

Statement and whenever the Commission comments in writing on such Registration

Statement (the Company shall provide true and complete copies thereof and all

written responses thereto to each of the Holders); and (C) with respect to the

Registration Statement or any post–effective amendment, 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 the Registration

Statement or Prospectus or for additional information; (iii) of the issuance by

the Commission of any stop order suspending the effectiveness of the

Registration Statement covering any or all of the Registrable Securities or the

initiation of any Proceedings for that purpose; (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; and (v) of the occurrence of any event or passage of time that

makes the financial statements included in the Registration Statement ineligible

for inclusion therein or any statement made in the Registration Statement or

Prospectus or any document incorporated or deemed to be incorporated therein by

reference untrue in any material respect or that requires any revisions to the

Registration Statement, Prospectus or other documents so that, in the case of

the Registration Statement or the Prospectus, as the case may be, it will not

contain any untrue statement of a material fact or omit to state any material

fact required to be stated therein or necessary to make the statements therein,

in light of the circumstances under which they were made, not misleading.




(d)           Use its best efforts to avoid the

issuance of, or, if issued, obtain the withdrawal of (i) any order suspending

the effectiveness of the Registration Statement, or (ii) any suspension of the

qualification (or exemption from qualification) of any of the Registrable

Securities for sale in any jurisdiction, at the earliest practicable moment.




(e)           Furnish

to each Holder and their Special Counsel, without charge, at least one

conformed copy of each Registration Statement and each amendment thereto,

including financial statements and schedules, all documents incorporated or

deemed to be incorporated therein by reference, and all exhibits to the extent

requested by such Person (including those previously furnished or incorporated

by reference) promptly after the filing of such documents with the Commission.




 




(f)            Promptly

deliver to each Holder and their Special Counsel, without charge, as many copies

of the Prospectus or Prospectuses (including each form of prospectus) 




 




 




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and each amendment or supplement thereto as such Persons may reasonably

request.  The Company hereby consents to

the use of such Prospectus and each amendment or supplement thereto by each of

the selling Holders in connection with the offering and sale of the Registrable

Securities covered by such Prospectus and any amendment or supplement thereto.




 




 




(g)           Prior

to any public offering of Registrable Securities, use its best efforts to

register or qualify or cooperate with the selling Holders and their Special

Counsel in connection with the registration or qualification (or exemption from

such registration or qualification) of such Registrable Securities for offer

and sale under the securities or Blue Sky laws of such jurisdictions within the

United States as any Holder requests in writing, to keep each such registration

or qualification (or exemption therefrom) effective during the Effectiveness

Period and to do any and all other acts or things necessary or advisable to

enable the disposition in such jurisdictions of the Registrable Securities

covered by a Registration Statement; provided, that the Company shall

not be required to qualify generally to do business in any jurisdiction where

it is not then so qualified or subject the Company to any material tax in any

such jurisdiction where it is not then so subject.




 




(h)           Cooperate with the Holders to

facilitate the timely preparation and delivery of certificates representing

Registrable Securities to be delivered to a transferee pursuant to a

Registration Statement, which certificates shall be free, to the extent

permitted by the Purchase Agreement, of all restrictive legends, and to enable

such Registrable Securities to be in such denominations and registered in such

names as any such Holders may request.




(i)            Upon the occurrence of any event

contemplated by Section 3(c)(v), as promptly as reasonably possible, prepare a

supplement or amendment, including a post–effective amendment, to the

Registration Statement or a supplement to the related Prospectus or any

document incorporated or deemed to be incorporated therein by reference, and

file any other required document so that, as thereafter delivered, neither the

Registration Statement nor such Prospectus will contain 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 light of the circumstances under

which they were made, not misleading.




(j)            Comply with all applicable rules and

regulations of the Commission.




(k)           The Company may require each selling

Holder to furnish to the Company a certified statement as to the number of

shares of Common Stock beneficially owned by such Holder and, if requested by

the Commission, the controlling person thereof.




4.             Registration

Expenses.  All fees and expenses

incident to the performance of or compliance with this Agreement by the Company

shall be borne by the Company whether or not any Registrable Securities are

sold pursuant to the Registration Statement. 

The fees and expenses referred to in the foregoing sentence shall

include, without limitation, (i) all registration and filing fees (including,

without limitation, fees and expenses (A) with respect to filings required to

be made with the Nasdaq National Market on which the Common Stock is then

listed for trading, and (B) in compliance with applicable state securities or

Blue Sky laws), (ii) printing expenses (including, without limitation, expenses

of printing certificates for Registrable Securities and of printing

prospectuses if the printing of prospectuses is reasonably requested by 




 




 




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the holders of a majority of the Registrable Securities included in the

Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)

fees and disbursements of counsel for the Company and up to $10,000 of the fees

and disbursements of Special Counsel, (v) Securities Act liability insurance,

if the Company so desires such insurance, and (vi) fees and expenses of all

other Persons retained by the Company in connection with the consummation of

the transactions contemplated by this Agreement.  In addition, the Company shall be responsible for all of its

internal expenses incurred in connection with the consummation of the

transactions contemplated by this Agreement (including, without limitation, all

salaries and expenses of its officers and employees performing legal or

accounting duties), the expense of any annual audit and the fees and expenses

incurred in connection with the listing of the Registrable Securities on any

securities exchange as required hereunder.




 




5.             Indemnification




(a)           Indemnification by the Company.  The Company shall, notwithstanding any

termination of this Agreement, indemnify and hold harmless each Holder, the

officers, directors, agents, brokers (including brokers who offer and sell

Registrable Securities as principal as a result of a pledge or any failure to

perform under a margin call of Common Stock), investment advisors and employees

of each of them, each Person who controls any such Holder (within the meaning

of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers,

directors, agents and employees of each such controlling Person, to the fullest

extent permitted by applicable law, from and against any and all losses,

claims, damages, liabilities, costs (including, without limitation, reasonable

costs of preparation and reasonable attorneys’ fees) and expenses

(collectively, “Losses”), as incurred, arising out of or relating to any

untrue or alleged untrue statement of a material fact contained in the

Registration Statement, any Prospectus or any form of prospectus or in any

amendment or supplement thereto or in any preliminary prospectus, or arising

out of or relating to any omission or alleged omission of a material fact

required to be stated therein or necessary to make the statements therein (in

the case of any Prospectus or form of prospectus or supplement thereto, in

light of the circumstances under which they were made) not misleading, except

to the extent, but only to the extent, that (1) such untrue statements or

omissions are based solely upon information regarding such Holder furnished in

writing to the Company by such Holder expressly for use therein, or to the

extent that such information relates to such Holder or such Holder’s proposed

method of distribution of Registrable Securities and was reviewed and expressly

approved in writing by such Holder expressly for use in the Registration

Statement, such Prospectus or such form of Prospectus or in any amendment or

supplement thereto (it being understood that the Holder has approved Annex A

hereto for this purpose) or (2) in the case of an occurrence of an event of the

type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated

or defective Prospectus after the Company has notified such Holder in writing

that the Prospectus is outdated or defective and prior to the receipt by such

Holder of the Advice contemplated in Section 5(e).  The Company shall notify the Holders promptly of the institution,

threat or assertion of any Proceeding of which the Company is aware in

connection with the transactions contemplated by this Agreement.




(b)           Indemnification

by Holders. Each Holder shall, severally and not jointly, indemnify and

hold harmless the Company, its directors, officers, agents and employees, each

Person who controls the Company (within the meaning of Section 15 of the

Securities Act and 




 




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Section 20 of the Exchange Act), and the directors, officers, agents or

employees of such controlling Persons, to the fullest extent permitted by

applicable law, from and against all Losses, as incurred, arising solely out of

or based solely upon: (x) such Holder’s failure to comply with the prospectus

delivery requirements of the Securities Act or (y) any untrue statement of a

material fact contained in any Registration Statement, any Prospectus, or any

form of prospectus, or in any amendment or supplement thereto, or arising

solely out of or based solely upon any omission of a material fact required to

be stated therein or necessary to make the statements therein not misleading to

the extent, but only to the extent, that such untrue statement or omission is

contained in any information so furnished in writing by such Holder to the

Company specifically for inclusion in such Registration Statement or such Prospectus

or to the extent that (1) such untrue statements or omissions are based solely

upon information regarding such Holder furnished in writing to the Company by

such Holder expressly for use therein, or to the extent that such information

relates to such Holder or such Holder’s proposed method of distribution of

Registrable Securities and was reviewed and expressly approved in writing by

such Holder expressly for use in the Registration Statement (it being

understood that the Holder has approved Annex A hereto for this purpose), such

Prospectus or such form of Prospectus or in any amendment or supplement thereto

or (2) in the case of an occurrence of an event of the type specified in

Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective

Prospectus after the Company has notified such Holder in writing that the

Prospectus is outdated or  defective and

prior to the receipt by such Holder of the Advice contemplated in Section 6(d).  In no event shall the liability of any

selling Holder hereunder be greater in amount than the dollar amount of the net

proceeds received by such Holder upon the sale of the Registrable Securities

giving rise to such indemnification obligation.




 




(c)           Conduct of Indemnification

Proceedings. If any Proceeding shall be brought or asserted against any

Person entitled to indemnity hereunder (an “Indemnified Party”), such

Indemnified Party shall promptly notify the Person from whom indemnity is

sought (the “Indemnifying Party”) in writing, and the Indemnifying Party

shall assume the defense thereof, including the employment of counsel

reasonably satisfactory to the Indemnified Party and the payment of all fees

and expenses incurred in connection with defense thereof; provided, that the

failure of any Indemnified Party to give such notice shall not relieve the

Indemnifying Party of its obligations or liabilities pursuant to this

Agreement, except (and only) to the extent that it shall be finally determined

by a court of competent jurisdiction (which determination is not subject to

appeal or further review) that such failure shall have proximately and

materially adversely prejudiced the Indemnifying Party.




An Indemnified Party shall have the right to employ

separate counsel in any such Proceeding and to participate in the defense

thereof, but the fees and expenses of such counsel shall be at the expense of

such Indemnified Party or Parties unless: 

(1) the Indemnifying Party has agreed in writing to pay such fees and

expenses; (2) the Indemnifying Party shall have failed promptly to assume the

defense of such Proceeding and to employ counsel reasonably satisfactory to

such Indemnified Party in any such Proceeding; or (3) the named parties to any

such Proceeding (including any impleaded parties) include both such Indemnified

Party and the Indemnifying Party, and such Indemnified Party shall have been

advised by counsel that a conflict of interest is likely to exist if the same

counsel were to represent such Indemnified Party and the Indemnifying Party (in

which case, if such Indemnified Party notifies the Indemnifying Party in

writing that it elects to employ separate counsel at the expense of the

Indemnifying 




 




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Party, the Indemnifying Party shall not have the right to assume the

defense thereof and such counsel shall be at the expense of the Indemnifying

Party).  The Indemnifying Party shall

not be liable for any settlement of any such Proceeding effected without its

written consent, which consent shall not be unreasonably withheld.  No Indemnifying Party shall, without the

prior written consent of the Indemnified Party, effect any settlement of any

pending Proceeding in respect of which any Indemnified Party is a party, unless

such settlement includes an unconditional release of such Indemnified Party

from all liability on claims that are the subject matter of such Proceeding.




 




All fees and

expenses of the Indemnified Party (including reasonable fees and expenses to

the extent incurred in connection with investigating or preparing to defend

such Proceeding in a manner not inconsistent with this Section) shall be paid

to the Indemnified Party, as incurred, within ten Trading Days of written

notice thereof to the Indemnifying Party (regardless of whether it is

ultimately determined that an Indemnified Party is not entitled to

indemnification hereunder; provided, that the Indemnifying Party may

require such Indemnified Party to undertake to reimburse all such fees and

expenses to the extent it is finally judicially determined that such

Indemnified Party is not entitled to indemnification hereunder).




(d)           Contribution.  If a claim for indemnification under Section

5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy

or otherwise), then each Indemnifying Party, in lieu of indemnifying such

Indemnified Party, shall contribute to the amount paid or payable by such

Indemnified Party as a result of such Losses, in such proportion as is

appropriate to reflect the relative fault of the Indemnifying Party and

Indemnified Party in connection with the actions, statements or omissions that

resulted in such Losses as well as any other relevant equitable

considerations.  The relative fault of

such Indemnifying Party and Indemnified Party shall be determined by reference

to, among other things, whether any action in question, including any untrue or

alleged untrue statement of a material fact or omission or alleged omission of

a material fact, has been taken or made by, or relates to information supplied

by, such Indemnifying Party or Indemnified Party, and the parties’ relative

intent, knowledge, access to information and opportunity to correct or prevent

such action, statement or omission.  The

amount paid or payable by a party as a result of any Losses shall be deemed to

include, subject to the limitations set forth in Section 5(c), any reasonable

attorneys’ or other reasonable fees or expenses incurred by such party in

connection with any Proceeding to the extent such party would have been

indemnified for such fees or expenses if the indemnification provided for in

this Section was available to such party in accordance with its terms.




The parties hereto agree that it would not be just and

equitable if contribution pursuant to this Section 5(d) were determined by pro

rata allocation or by any other method of allocation that does not take into

account the equitable considerations referred to in the immediately preceding

paragraph.  Notwithstanding the

provisions of this Section 5(d), no Holder shall be required to contribute, in

the aggregate, any amount in excess of the amount by which the proceeds

actually received by such Holder from the sale of the Registrable Securities

subject to the Proceeding exceeds the amount of any damages that such Holder

has otherwise been required to pay by reason of such untrue or alleged untrue

statement or omission or alleged omission.




 




 




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The indemnity and

contribution agreements contained in this Section are in addition to any

liability that the Indemnifying Parties may have to the Indemnified Parties.




6.             Miscellaneous




(a)           Remedies.  In the event of a breach by the Company or

by a Holder, of any of their obligations under this Agreement, each Holder or

the Company, as the case may be, in addition to being entitled to exercise all

rights granted by law and under this Agreement, including recovery of damages,

will be entitled to specific performance of its rights under this

Agreement.  The Company and each Holder

agree that monetary damages would not provide adequate compensation for any

losses incurred by reason of a breach by it of any of the provisions of this

Agreement and hereby further agrees that, in the event of any action for

specific performance in respect of such breach, it shall waive the defense that

a remedy at law would be adequate.




(b)           No Piggyback on Registrations.  Neither the Company nor any of its security

holders (other than the Holders in such capacity pursuant hereto) may include

securities of the Company in the Registration Statement other than the

Registrable Securities, and the Company shall not after the date hereof enter

into any agreement providing any such right to any of its security

holders.  The Company has not previously

entered into any agreement granting any registration rights with respect to any

of its securities to any Person which have not been fully satisfied.




(c)           Compliance.  Each Holder covenants and agrees that it

will comply with the prospectus delivery requirements of the Securities Act as

applicable to it in connection with sales of Registrable Securities pursuant to

the Registration Statement.




(d)           Discontinued Disposition.  Each Holder agrees by its acquisition of

such Registrable Securities that, upon receipt of a notice from the Company of

the occurrence of any event of the kind described in Section 3(c), such Holder

will forthwith discontinue disposition of such Registrable Securities under the

Registration Statement until such Holder’s receipt of the copies of the

supplemented Prospectus and/or amended Registration Statement or until it is

advised in writing (the “Advice”) by the Company that the use of the

applicable Prospectus may be resumed, and, in either case, has received copies

of any additional or supplemental filings that are incorporated or deemed to be

incorporated by reference in such Prospectus or Registration Statement.  The Company may provide appropriate stop

orders to enforce the provisions of this paragraph.




(e)           Piggy-Back

Registrations.  If at any time

during the Effectiveness Period  there

is not an effective Registration Statement covering all of the Registrable

Securities and the Company shall determine to prepare and file with the

Commission a registration statement relating to an offering for its own account

or the account of others under the Securities Act of any of its equity

securities, other than on Form S-4 or Form S-8 (each as promulgated under the

Securities Act) or their then equivalents relating to equity securities to be

issued solely in connection with any acquisition of any entity or business or

equity securities issuable in connection with stock option or other employee

benefit plans, then the Company shall send to each Holder written notice of

such determination and, if within fifteen days after receipt of such 




 




 




10





























 




 




notice, any such Holder shall so request in writing, the Company shall

include in such registration statement all or any part of such Registrable

Securities such holder requests to be registered, subject to customary

underwriter cutbacks applicable to all holders of registration rights.




 




(f)            Amendments and Waivers. The

provisions of this Agreement, including the provisions of this sentence, may

not be amended, modified or supplemented, and waivers or consents to departures

from the provisions hereof may not be given, unless the same shall be in

writing and signed by the Company and the Holders of all of the then

outstanding Registrable Securities. 

Notwithstanding the foregoing, a waiver or consent to depart from the

provisions hereof with respect to a matter that relates exclusively to the

rights of certain Holders and that does not directly or indirectly affect the

rights of other Holders may be given by Holders of at least a majority of the

Registrable Securities to which such waiver or consent relates, provided,

that the provisions of this sentence may not be amended, modified, or

supplemented except in accordance with the provisions of the immediately

preceding sentence.




(g)           Notices.  Any and all notices or other communications

or deliveries required or permitted to be provided hereunder shall be in

writing and shall be deemed given and effective on the earliest of (i) the date

of transmission, if such notice or communication is delivered via facsimile at

the facsimile telephone number specified in this Section prior to 6:30 p.m.

(New York City time) on a Trading Day, (ii) the Trading Day after the date of

transmission, if such notice or communication is delivered via facsimile at the

facsimile telephone number specified in this Agreement later than 6:30 p.m.

(New York City time) on any date and earlier than 11:59 p.m. (New York City

time) on such date, (iii) the Trading Day following the date of mailing, if

sent by nationally recognized overnight courier service, or (iv) upon actual

receipt by the party to whom such notice is required to be given.  The address for such notices and

communications shall be as follows:




	

  If to the

  Company:


  	

  SureBeam

  Corporation


  
	

   


  	

  9276 Scranton Road, Suite 600


  
	

   


  	

  San Diego, CA 92121


  
	

   


  	

  Attn: Chief

  Financial Officer


  
	

   


  	

  Fax No.: [ ]


  
	

   


  	

   


  
	

  If to a

  Purchaser:


  	

  To the address

  set forth under such Purchaser’s name on the signature pages hereto.


  
	

   


  	

   


  
	

  With a copy to:


  	

  Bryan Cave LLP.


  
	

   


  	

  1290 Avenue of

  the Americas


  
	

   


  	

  New York, NY

  10104


  
	

   


  	

  Attn: Eric L.

  Cohen, Esq.


  
	

   


  	

  Fax No.:

  212-541-1432 and 212-541-4630


  
	

   


  	

   


  
	

  If to any other

  Person who is then the registered Holder:


  
	

   


  	

   


  
	

   


  	

  To the address

  of such Holder as it appears in the stock transfer books of the Company


  





 




11





























 




or such other address as

may be designated in writing hereafter, in the same manner, by such Person.




(h)           Successors and Assigns.  This Agreement shall inure to the benefit of

and be binding upon the successors and permitted assigns of each of the parties

and shall inure to the benefit of each Holder. 

The Company may not assign its rights or obligations hereunder without

the prior written consent of each Holder. 

Each Holder may assign their respective rights hereunder in the manner

and to the Persons as permitted under the Purchase Agreement.




(i)            Execution and Counterparts.  This Agreement may be executed in any number

of counterparts, each of which when so executed shall be deemed to be an

original and, all of which taken together shall constitute one and the same

Agreement.  In the event that any

signature is delivered by facsimile transmission, such signature shall create a

valid binding obligation of the party executing (or on whose behalf such

signature is executed) the same with the same force and effect as if such

facsimile signature were the original thereof.




(j)            Governing Law.  All questions concerning the construction,

validity, enforcement and interpretation of this Agreement shall be governed by

and construed and enforced in accordance with the internal laws of the State of

New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings

concerning the interpretations, enforcement and defense of the transactions

contemplated by this Agreement (whether brought against a party hereto or its

respective affiliates, directors, officers, shareholders, employees or agents)

shall be commenced in the state and federal courts sitting in the City of New

York, Borough of Manhattan.  Each party

hereto hereby irrevocably submits to the exclusive jurisdiction of the state

and federal courts sitting in the City of New York, Borough of Manhattan for

the adjudication of any dispute hereunder or in connection herewith or with any

transaction contemplated hereby or discussed herein (including with respect to

the enforcement of this Agreement), and hereby irrevocably waives, and agrees

not to assert in any suit, action or proceeding, any claim that it is not

personally subject to the jurisdiction of any such court, that such suit,

action or proceeding is improper. Each party hereto (including its affiliates,

agents, officers, directors and employees) hereby irrevocably waives, to the

fullest extent permitted by applicable law, any and all right to trial by jury

in any legal proceeding arising out of or relating to this Agreement or the

transactions contemplated hereby. If either party shall commence an action or

proceeding to enforce any provisions of this Agreement, then the prevailing

party in such action or proceeding shall be reimbursed by the other party for

its attorneys fees and other costs and expenses incurred with the

investigation, preparation and prosecution of such action or proceeding.




(k)           Cumulative Remedies.  The remedies provided herein are cumulative

and not exclusive of any remedies provided by law.




(l)            Severability.

If any term, provision, covenant or restriction of this Agreement is held by a

court of competent jurisdiction to be invalid, illegal, void or unenforceable,

the remainder of the terms, provisions, covenants and restrictions set forth

herein shall remain in full force and effect and shall in no way be affected,

impaired or invalidated, and the parties hereto shall use their reasonable

efforts to find and employ an alternative means to achieve the same or

substantially the same result as that contemplated by such term, provision, 




 




12





























 




 




covenant or restriction.  It is

hereby stipulated and declared to be the intention of the parties that they would

have executed the remaining terms, provisions, covenants and restrictions

without including any of such that may be hereafter declared invalid, illegal,

void or unenforceable.




 




(m)          Headings.  The headings in this Agreement are for

convenience of reference only and shall not limit or otherwise affect the

meaning hereof.




(n)           Independent Nature of Purchasers’

Obligations and Rights.  The

obligations of each Purchaser hereunder is several and not joint with the

obligations of any other Purchaser hereunder, and no Purchaser shall be

responsible in any way for the performance of the obligations of any other

Purchaser hereunder.  Nothing contained

herein or in any other agreement or document delivered at any closing, and no

action taken by any Purchaser pursuant hereto or thereto, shall be deemed to

constitute the Purchasers as a partnership, an association, a joint venture or

any other kind of entity, or create a presumption that the Purchasers are in

any way acting in concert with respect to such obligations or the transactions

contemplated by this Agreement.  Each

Purchaser shall be entitled to protect and enforce its rights, including

without limitation the rights arising out of this Agreement, and it shall not

be necessary for any other Purchaser to be joined as an additional party in any

proceeding for such purpose.




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGES TO FOLLOW]




 




 




13





























 




IN WITNESS WHEREOF, the parties have executed this

Registration Rights Agreement as of the date first written above.




 




	

  SUREBEAM CORPORATION


  
	

   


  
	

  By:


  	

   


  
	

  Name:


  
	

  Title:


  





[REMAINDER OF PAGE

INTENTIONALLY LEFT BLANK


SIGNATURE PAGES OF PURCHASER TO FOLLOW]




14





























 




IN WITNESS WHEREOF, the parties have executed this

Registration Rights Agreement as of the date first written above.




 




	

  PURCHASER:


  
	

   


  
	

  By:


  	

   


  
	

   


  	

  Name:


  
	

   


  	

  Title:


  





 




 




15





























 




Annex A




Plan of Distribution




The Selling Stockholders

and any of their pledgees, assignees and successors-in-interest may, from time

to time, sell any or all of their shares of Common Stock on any stock exchange,

market or trading facility on which the shares are traded or in private

transactions.  These sales may be at

fixed or negotiated prices.  The Selling

Stockholders may use any one or more of the following methods when selling

shares:




•                                          ordinary brokerage transactions and

transactions in which the broker–dealer solicits purchasers;




•                                          block trades in which the broker–dealer

will attempt to sell the shares as agent but may position and resell a portion

of the block as principal to facilitate the transaction;




•                                          purchases by a broker–dealer as

principal and resale by the broker–dealer for its account;




•                                          an exchange distribution in accordance

with the rules of the applicable exchange;




•                                          privately negotiated transactions;




•                                          short sales




•                                          broker–dealers may agree with the

Selling Stockholders to sell a specified number of such shares at a stipulated

price per share;




•                                          a combination of any such methods of

sale; and




•                                          any other method permitted pursuant to

applicable law.




The Selling Stockholders

may also sell shares under Rule 144 under the Securities Act, if available,

rather than under this prospectus.




Broker–dealers

engaged by the Selling Stockholders may arrange for other brokers–dealers

to participate in sales.  Broker–dealers

may receive commissions or discounts from the Selling Stockholders (or, if any

broker–dealer acts as agent for the purchaser of shares, from the purchaser)

in amounts to be negotiated.  The

Selling Stockholders do not expect these commissions and discounts to exceed

what is customary in the types of transactions involved.




The selling stockholder

may from time to time pledge or grant a security interest in some or all of the

Shares or common stock or Warrant owned by them and, if they default in the

performance of their secured obligations, the pledgees or secured parties may

offer and sell the shares of common stock from time to time under this

prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or

other applicable provision of the Securities Act of 1933 amending the list of

selling stockholders to include the pledgee, transferee or other successors in

interest as selling stockholders under this prospectus.




 




16





























 




The selling stockholders

also may transfer the shares of common stock in other circumstances, in which

case the transferees, pledgees or other successors in interest will be the selling

beneficial owners for purposes of this prospectus.




The Selling Stockholders

and any broker–dealers or agents that are involved in selling the shares

may be deemed to be “underwriters” within the meaning of the Securities Act in

connection with such sales.  In such

event, any commissions received by such broker–dealers or agents and any

profit on the resale of the shares purchased by them may be deemed to be

underwriting commissions or discounts under the Securities Act.  The Selling Stockholders have informed the

Company that it does not have any agreement or understanding, directly or

indirectly, with any person to distribute the Common Stock.




The Company is required

to pay all fees and expenses incident to the registration of the shares.  The Company has agreed to indemnify the

Selling Stockholders against certain losses, claims, damages and liabilities,

including liabilities under the Securities Act.




 




17