Exhibit 10.2 - Registration Rights Agreement, dated as of March 1, 2007


     

    Exhibit
      10.2

    
      


      REGISTRATION
        RIGHTS AGREEMENT

      


      This
        Registration Rights Agreement (the “Agreement”) is made and entered into as of
        this 1st day of March, 2007 by and among Caprius, Inc., a Delaware
        corporation (the “Company”), and the “Investors” named in that certain Purchase
        Agreement by and among the Company and the Investors (the “Purchase
        Agreement”).

       

      The
        parties hereby agree as follows:

       

      1. Certain
        Definitions.

       

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

       

      “Affiliate”
means,
        with respect to any person, any other person which directly or indirectly
        controls, is controlled by, or is under common control with, such
        person.

       

      “Business
        Day”
means
        a
        day, other than a Saturday or Sunday, on which banks in New York City are
        open
        for the general transaction of business.

       

      “Common
        Stock”
shall
        mean the Company’s common stock, par value $0.01 per share, and any securities
        into which such shares may hereinafter be reclassified.

       

      “Conversion
        Shares”
means
        the shares of Common Stock issuable upon conversion of the Shares.

       

      “Investors”
shall
        mean the Investors identified in the Purchase Agreement and any Affiliate
        or
        permitted transferee of any Investor who is a subsequent holder of any Warrants
        or Registrable Securities.

       

      “Preferred
        Stock”
means
        the Company’s Series E Convertible Preferred Stock, par value $0.01 per
        share.

       

      “Prospectus”
shall
        mean (i) the prospectus included in any Registration Statement, 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 such
        Registration Statement and by all other amendments and supplements to the
        prospectus, including post-effective amendments and all material incorporated
        by
        reference in such prospectus, and (ii) any “free writing prospectus” as defined
        in Rule 405 under the 1933 Act.

       

      “Register,”
        “registered”
and
        “registration”
refer
        to a registration made by preparing and filing a Registration Statement or
        similar document in compliance with the 1933 Act (as defined below), and
        the
        declaration or ordering of effectiveness of such Registration Statement or
        document.

       

      “Registrable
        Securities”
shall
        mean (i) the Conversion Shares, (ii) the Warrant Shares and (iii) any other
        securities issued or issuable with respect to or in exchange for Registrable
        Securities; provided, that, a security shall cease to be a Registrable Security
        upon (A) sale pursuant to a Registration Statement or Rule 144 under the
        1933
        Act, or (B) such security becoming eligible for sale by the Investors pursuant
        to Rule 144(k).

       

      “Registration
        Statement”
shall
        mean any registration statement of the Company filed under the 1933 Act that
        covers the resale of any of the Registrable Securities pursuant to
        the

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      provisions
        of this Agreement, amendments and supplements to such Registration Statement,
        including post-effective amendments, all exhibits and all material incorporated
        by reference in such Registration Statement.

       

      “Required
        Investors”
means
        the Investors holding at least 66% of the Registrable Securities at the time
        of
        the action taken by the Required Investors.

       

      “SEC”
means
        the U.S. Securities and Exchange Commission.

       

      “Shares”
means
        the shares of Preferred Stock issued pursuant to the Purchase
        Agreement.

       

      “1933
        Act”
means
        the Securities Act of 1933, as amended, and the rules and regulations
        promulgated thereunder.

       

      “1934
        Act”
means
        the Securities Exchange Act of 1934, as amended, and the rules and regulations
        promulgated thereunder.

       

      “Warrants”
means,
        the warrants to purchase shares of Common Stock issued to the Investors pursuant
        to the Purchase Agreement, the form of which is attached to the Purchase
        Agreement as Exhibit B.

       

      “Warrant
        Shares”
means
        the shares of Common Stock issuable upon the exercise of the
        Warrants.

       

      2. Registration.

       

      (a)  Registration
        Statements.

       

      (i) Promptly
        following the Initial Closing Date (as defined in the Purchase Agreement),
        but
        no later than thirty (30) days after the Initial Closing Date (the “Filing
        Deadline”), the Company shall prepare and file with the SEC one Registration
        Statement on Form SB-2 (or, if Form SB-2 is not then available to the Company,
        on such form of registration statement as is then available to effect a
        registration for resale of the Registrable Securities), covering the resale
        of
        the Registrable Securities in an amount at least equal to the Conversion
        Shares
        and the Warrant Shares. Subject to any SEC comments, such Registration Statement
        shall include the plan of distribution attached hereto as Exhibit
        A.
        Such
        Registration Statement also shall cover, to the extent allowable under the
        1933
        Act and the rules promulgated thereunder (including Rule 416), such
        indeterminate number of additional shares of Common Stock resulting from
        stock
        splits, stock dividends or similar transactions with respect to the Registrable
        Securities. Such Registration Statement shall not include any shares of Common
        Stock or other securities for the account of any other holder without the
        prior
        written consent of the Required Investors. The Registration Statement (and
        each
        amendment or supplement thereto, and each request for acceleration of
        effectiveness thereof) shall be provided in accordance with Section 3(c)
        to the
        Investors and their counsel prior to its filing or other submission. If a
        Registration Statement covering the Registrable Securities is not filed with
        the
        SEC on or prior to the Filing Deadline, the Company will make pro rata payments
        to each Investor, as liquidated damages and not as a penalty, in an amount
        equal
        to 1.5% of the aggregate amount invested by such Investor for each 30-day
        period
        or pro rata for any portion thereof following the Filing Deadline for which
        no
        Registration Statement is filed with respect to the Registrable Securities.
        Such
        payments shall constitute the Investors’ exclusive monetary remedy for such
        events, but shall not

       

      
        
          
          

        

        
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      affect
        the right of the Investors to seek injunctive relief. Such payments shall
        be
        made to each Investor in cash. 

       

      (ii) Additional
        Registrable Securities.
        Upon
        the written demand of any Investor and upon any change in the Conversion
        Price
        (as defined in the Preferred Stock) or the Warrant Price (as defined in the
        Warrant) such that additional shares of Common Stock become issuable upon
        the
        conversion of the Shares or the exercise of the Warrants (the “Additional
        Shares”), the Company shall prepare and file with the SEC one or more
        Registration Statements on Form SB-2 or amend the Registration Statement
        filed
        pursuant to clause (i) above, if such Registration Statement has not previously
        been declared effective (or, if Form SB-2 is not then available to the Company,
        on such form of registration statement as is then available to effect a
        registration for resale of the Additional Shares, subject to the Required
        Investors’ consent) covering the resale of the Additional Shares, but only to
        the extent the Additional Shares are not at the time covered by an effective
        Registration Statement. Subject to any SEC comments, such Registration Statement
        shall include the plan of distribution attached hereto as Exhibit
        A.
        Such
        Registration Statement also shall cover, to the extent allowable under the
        1933
        Act and the rules promulgated thereunder (including Rule 416), such
        indeterminate number of additional shares of Common Stock resulting from
        stock
        splits, stock dividends or similar transactions with respect to the Additional
        Shares. Such Registration Statement shall not include any shares of Common
        Stock
        or other securities for the account of any other holder without the prior
        written consent of the Required Investors. The Registration Statement (and
        each
        amendment or supplement thereto, and each request for acceleration of
        effectiveness thereof) shall be provided in accordance with Section 3(c)
        to the
        Investors and their counsel prior to its filing or other submission. If a
        Registration Statement covering the Additional Shares is required to be filed
        under this Section 2(a)(ii) and is not filed with the SEC within five Business
        Days of the request of any Investor or upon the occurrence of any of the
        events
        specified in this Section 2(a)(ii), the Company will make pro rata payments
        to
        each Investor, as liquidated damages and not as a penalty, in an amount equal
        to
        1.5% of the aggregate amount invested by such Investor for each 30-day period
        or
        pro rata for any portion thereof following the date by which such Registration
        Statement should have been filed for which no Registration Statement is filed
        with respect to the Additional Shares. Such payments shall constitute the
        Investors’ exclusive monetary remedy for such events, but shall not affect the
        right of the Investors to seek injunctive relief. Such payments shall be
        made to
        each Investor in cash.

       

      (iii) S-3
        Qualification.
        Promptly following the date (the “Qualification Date”) upon which the Company
        becomes eligible to use a registration statement on Form S-3 to register
        the
        Registrable Securities or Additional Shares, as applicable, for resale, but
        in
        no event more than thirty (30) days after the Qualification Date (the
“Qualification Deadline”), the Company shall file a registration statement on
        Form S-3 covering the Registrable Securities or Additional Shares, as applicable
        (or a post-effective amendment on Form S-3 to the registration statement
        on Form
        SB-2) (a “Shelf Registration Statement”) and shall use commercially reasonable
        efforts to cause such Shelf Registration Statement to be declared effective
        as
        promptly as practicable thereafter. If a Shelf Registration Statement covering
        the Registrable Securities is not filed with the SEC on or prior to the
        Qualification Deadline, the Company will make pro rata payments to each
        Investor, as liquidated damages and not as a penalty, in an amount equal
        to 1.5%
        of the aggregate purchase price paid by such Investor pursuant to the Purchase
        Agreement attributable to those Registrable Securities that remain unsold
        at
        that time

       

      
        
          
          

        

        
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      for
        each
        30-day period or pro rata for any portion thereof following the date by which
        such Shelf Registration Statement should have been filed for which no such
        Shelf
        Registration Statement is filed with respect to the Registrable Securities
        or
        Additional Shares, as applicable. Such payments shall constitute the Investors’
exclusive monetary remedy for such events, but shall not affect the right
        of the
        Investors to seek injunctive relief. Such payments shall be made to each
        Investor in cash.

       

      (b)  Expenses.
        The
        Company will pay all expenses associated with each registration, including
        filing and printing fees, the Company’s counsel and accounting fees and
        expenses, costs associated with clearing the Registrable Securities for sale
        under applicable state securities laws, listing fees, fees and expenses of
        one
        counsel to the Investors and the Investors’ reasonable expenses in connection
        with the registration, but excluding discounts, commissions, fees of
        underwriters, selling brokers, dealer managers or similar securities industry
        professionals with respect to the Registrable Securities being
        sold.

       

      (c)  Effectiveness.

       

      (i) The
        Company shall use commercially reasonable efforts to have the Registration
        Statement declared effective as soon as practicable. The Company shall notify
        the Investors by facsimile or e-mail as promptly as practicable, and in any
        event, within twenty-four (24) hours, after any Registration Statement is
        declared effective and shall simultaneously provide the Investors with copies
        of
        any related Prospectus to be used in connection with the sale or other
        disposition of the securities covered thereby. If (A)(x) a Registration
        Statement covering the Registrable Securities is not declared effective by
        the
        SEC prior to the earlier of (i) five (5) Business Days after the SEC shall
        have
        informed the Company that no review of the Registration Statement will be
        made
        or that the SEC has no further comments on the Registration Statement or
        (ii)
        the 90th
        day
        after the Closing Date (the 120th
        day if
        the SEC reviews the Registration Statement), (y) a Registration Statement
        covering Additional Shares is not declared effective by the SEC within ninety
        (90) days following the time such Registration Statement was required to
        be
        filed pursuant to Section 2(a)(ii) (120 days if the SEC reviews the Registration
        Statement) or (z) a Shelf Registration Statement is not declared effective
        by
        the SEC within ninety (90) days after the Qualification Deadline (120 days
        if
        the SEC reviews the Registration Statement), or
        (B)
        after a Registration Statement has been declared effective by the SEC, sales
        cannot be made pursuant to such Registration Statement for any reason (including
        without limitation by reason of a stop order, or the Company’s failure to update
        the Registration Statement), but excluding the inability of any Investor
        to sell
        the Registrable Securities covered thereby due to market conditions and except
        as excused pursuant to subparagraph (ii) below, then
        the
        Company will make pro rata payments to each Investor, as liquidated damages
        and
        not as a penalty, in an amount equal to 1.5% of the aggregate amount invested
        by
        such Investor for each 30-day period or pro rata for any portion thereof
        following the date by which such Registration Statement should have been
        effective (the “Blackout Period”). Such payments shall constitute the Investors’
exclusive monetary remedy for such events, but shall not affect the right
        of the
        Investors to seek injunctive relief. The amounts payable as liquidated damages
        pursuant to this paragraph shall be paid monthly within three (3) Business
        Days
        of the last day of each month following the commencement of the Blackout
        Period
        until the termination of the Blackout Period. Such payments shall be made
        to
        each Investor in cash.

       

      
        
          
          

        

        
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      (ii) For
        not
        more than twenty (20) consecutive days or for a total of not more than
        forty-five (45) days in any twelve (12) month period, the Company may delay
        the
        disclosure of material non-public information concerning the Company, by
        suspending the use of any Prospectus included in any registration contemplated
        by this Section containing such information, the disclosure of which at the
        time
        is not, in the good faith opinion of the Company, in the best interests of
        the
        Company (an “Allowed Delay”); provided, that the Company shall promptly (a)
        notify the Investors in writing of the existence of (but in no event, without
        the prior written consent of an Investor, shall the Company disclose to such
        Investor any of the facts or circumstances regarding) material non-public
        information giving rise to an Allowed Delay, (b) advise the Investors in
        writing
        to cease all sales under the Registration Statement until the end of the
        Allowed
        Delay and (c) use commercially reasonable efforts to terminate an Allowed
        Delay
        as promptly as practicable.

       

      (d) Rule
        415; Cutbacks.
        Notwithstanding the other provisions of this Section 2, if at any time the
        SEC
        takes the position that the offering of some or all of the Registrable
        Securities in a Registration Statement is not eligible to be made on a delayed
        or continuous basis under the provisions of Rule 415 under the 1933 Act,
        the
        Company shall (i) remove from the Registration Statement such portion of
        the
        Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such
        restrictions and limitations on the registration and resale of the Registrable
        Securities as the SEC may require to assure the Company’s compliance with the
        requirements of Rule 415 (collectively, the “SEC Restrictions”). Any cut-back
        imposed pursuant to this Section 2(d) shall be allocated among the Investors
        on
        a pro rata basis and shall be allocated first to any Warrant Shares, unless
        the
        SEC Restrictions otherwise require. No liquidated damages shall accrue on
        or as
        to any Cut Back Shares until such time as the Company is able to effect the
        registration of the Cut Back Shares in accordance with any SEC Restrictions
        (such date, the “Restriction Termination Date”). From and after the Restriction
        Termination Date, all of the provisions of this Section 2 (including the
        liquidated damages provisions) shall again be applicable to the Cut Back
        Shares;
        provided, however, that for such purposes the Closing Date shall be deemed
        to be
        the Restriction Termination Date.

      


      3. Company
        Obligations.
        The
        Company will use commercially reasonable efforts to effect the registration
        of
        the Registrable Securities in accordance with the terms hereof, and pursuant
        thereto the Company will, as expeditiously as possible:

       

      (a)  use
        commercially reasonable efforts to cause such Registration Statement to become
        effective and to remain continuously effective for a period that will terminate
        upon the earlier of (i) the date on which all Registrable Securities covered
        by
        such Registration Statement as amended from time to time, have been sold,
        and
        (ii) the date on which all Registrable Securities covered by such Registration
        Statement may be sold pursuant to Rule 144(k) (the “Effectiveness Period”) and
        advise the Investors in writing when the Effectiveness Period has
        expired;

       

      (b)  prepare
        and file with the SEC such amendments and post-effective amendments to the
        Registration Statement and the Prospectus as may be necessary to keep the
        Registration Statement effective for the Effectiveness Period and to comply
        with
        the provisions

       

      
        
          
          

        

        
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      of
        the
        1933 Act and the 1934 Act with respect to the distribution of all of the
        Registrable Securities covered thereby;

       

      (c)  provide
        copies to and permit counsel designated by the Investors to review each
        Registration Statement and all amendments and supplements thereto no fewer
        than
        three (3) Business Days prior to their filing with the SEC and not file any
        document to which such counsel reasonably objects;

       

      (d)  furnish
        to the Investors and their legal counsel (i) promptly after the same is prepared
        and publicly distributed, filed with the SEC, or received by the Company
        (but
        not later than two (2) Business Days after the filing date, receipt date
        or
        sending date, as the case may be) one (1) copy of any Registration Statement
        and
        any amendment thereto, each preliminary prospectus and Prospectus and each
        amendment or supplement thereto, and each letter written by or on behalf
        of the
        Company to the SEC or the staff of the SEC, and each item of correspondence
        from
        the SEC or the staff of the SEC, in each case relating to such Registration
        Statement (other than any portion of any thereof which contains information
        for
        which the Company has sought confidential treatment), and (ii) such number
        of
        copies of a Prospectus, including a preliminary prospectus, and all amendments
        and supplements thereto and such other documents as each Investor may reasonably
        request in order to facilitate the disposition of the Registrable Securities
        owned by such Investor that are covered by the related Registration
        Statement;

       

      (e)  use
        commercially reasonable efforts to (i) prevent the issuance of any stop order
        or
        other suspension of effectiveness and, (ii) if such order is issued, obtain
        the
        withdrawal of any such order at the earliest possible moment;

       

      (f)  prior
        to
        any public offering of Registrable Securities, use commercially reasonable
        efforts to register or qualify or cooperate with the Investors and their
        counsel
        in connection with the registration or qualification of such Registrable
        Securities for offer and sale under the securities or blue sky laws of such
        jurisdictions requested by the Investors and do any and all other commercially
        reasonable acts or things necessary or advisable to enable the distribution
        in
        such jurisdictions of the Registrable Securities covered by the Registration
        Statement;
        provided, however, that the Company shall not be required in connection
        therewith or as a condition thereto to (i) qualify to do business in any
        jurisdiction where it would not otherwise be required to qualify but for
        this
        Section 3(f), (ii) subject itself to general taxation in any jurisdiction
        where
        it would not otherwise be so subject but for this Section 3(f), or (iii)
        file a
        general consent to service of process in any such jurisdiction;

       

      (g)  use
        commercially reasonable efforts to cause all Registrable Securities covered
        by a
        Registration Statement to be listed on each securities exchange, interdealer
        quotation system or other market on which similar securities issued by the
        Company are then listed;

       

      (h)  immediately
        notify the Investors, at any time prior to the end of the Effectiveness Period,
        upon discovery that, or upon the happening of any event as a result of which,
        the Prospectus 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 not

       

      
        
          
          

        

        
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      misleading
        in light of the circumstances then existing, and promptly prepare, file with
        the
        SEC and furnish to such holder a supplement to or an amendment of such
        Prospectus as may be necessary so that 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 not misleading
        in
        light of the circumstances then existing; and

       

      (i)  otherwise
        use commercially reasonable efforts to comply with all applicable rules and
        regulations of the SEC under the 1933 Act and the 1934 Act, including, without
        limitation, Rule 172 under the 1933 Act, file any final Prospectus, including
        any supplement or amendment thereof, with the SEC pursuant to Rule 424 under
        the
        1933 Act, promptly inform the Investors in writing if, at any time during
        the
        Effectiveness Period, the Company does not satisfy the conditions specified
        in
        Rule 172 and, as a result thereof, the Investors are required to deliver
        a
        Prospectus in connection with any disposition of Registrable Securities and
        take
        such other actions as may be reasonably necessary to facilitate the registration
        of the Registrable Securities hereunder; and make available to its security
        holders, as soon as reasonably practicable, but not later than the Availability
        Date (as defined below), an earnings statement covering a period of at least
        twelve (12) months, beginning after the effective date of each Registration
        Statement, which earnings statement shall satisfy the provisions of Section
        11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the
        purpose of this subsection 3(i), “Availability Date” means the 45th day
        following the end of the fourth fiscal quarter that includes the effective
        date
        of such Registration Statement, except that, if such fourth fiscal quarter
        is
        the last quarter of the Company’s fiscal year, “Availability Date” means the
        90th day after the end of such fourth fiscal quarter).

       

      (j)  With
        a
        view to making available to the Investors the benefits of Rule 144 (or its
        successor rule) and any other rule or regulation of the SEC that may at any
        time
        permit the Investors to sell shares of Common Stock to the public without
        registration, the Company covenants and agrees to: (i) make and keep public
        information available, as those terms are understood and defined in Rule
        144,
        until the earlier of (A) three months after such date as all of the Registrable
        Securities may be resold pursuant to Rule 144(k) or any other rule of similar
        effect or (B) such date as all of the Registrable Securities shall have been
        resold; (ii) file with the SEC in a timely manner all reports and other
        documents required of the Company under the 1934 Act; and (iii) furnish to
        each
        Investor upon request, as long as such Investor owns any Registrable Securities,
        (A) a written statement by the Company that it has complied with the reporting
        requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual
        Report on Form 10-KSB or Quarterly Report on Form 10-QSB, and (C) such other
        information as may be reasonably requested in order to avail such Investor
        of
        any rule or regulation of the SEC that permits the selling of any such
        Registrable Securities without registration.

      


      4. Due
        Diligence Review; Information.
        The
        Company shall make available, during normal business hours, for inspection
        and
        review by the Investors, advisors to and representatives of the Investors
        (who
        may or may not be affiliated with the Investors and who are reasonably
        acceptable to the Company), all financial and other records, all SEC Filings
        (as
        defined in the Purchase Agreement) and other filings with the SEC, and all
        other
        corporate documents and properties of the Company as may be reasonably necessary
        for the purpose of such review, and cause the Company’s officers, directors and
        employees, within a reasonable time period, to supply all such information
        reasonably requested by the Investors or any such

       

      
        
          
          

        

        
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      representative,
        advisor or underwriter in connection with such Registration Statement
        (including, without limitation, in response to all questions and other inquiries
        reasonably made or submitted by any of them), prior to and from time to time
        after the filing and effectiveness of the Registration Statement for the
        sole
        purpose of enabling the Investors and such representatives, advisors and
        underwriters and their respective accountants and attorneys to conduct initial
        and ongoing due diligence with respect to the Company and the accuracy of
        such
        Registration Statement.

       

      The
        Company shall not disclose material nonpublic information to the Investors,
        or
        to advisors to or representatives of the Investors, unless prior to disclosure
        of such information the Company identifies such information as being material
        nonpublic information and provides the Investors, such advisors and
        representatives with the opportunity to accept or refuse to accept such material
        nonpublic information for review and any Investor wishing to obtain such
        information enters into an appropriate confidentiality agreement with the
        Company with respect thereto.

       

      5. Obligations
        of the Investors.

       

      (a)  Each
        Investor shall furnish in writing to the Company such information regarding
        itself, the Registrable Securities held by it and the intended method of
        disposition of the Registrable Securities held by it, as shall be reasonably
        required to effect the registration of such Registrable Securities and shall
        execute such documents in connection with such registration as the Company
        may
        reasonably request. At least five (5) Business Days prior to the first
        anticipated filing date of any Registration Statement, the Company shall
        notify
        each Investor of the information the Company requires from such Investor
        if such
        Investor elects to have any of the Registrable Securities included in the
        Registration Statement. An Investor shall provide such information to the
        Company at least two (2) Business Days prior to the first anticipated filing
        date of such Registration Statement if such Investor elects to have any of
        the
        Registrable Securities included in the Registration Statement.

       

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

       

      (c)  Each
        Investor agrees that, upon receipt of any notice from the Company of either
        (i)
        the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii)
        the
        happening of an event pursuant to Section 3(h) hereof, such Investor will
        immediately discontinue disposition of Registrable Securities pursuant to
        the
        Registration Statement covering such Registrable Securities, until the Investor
        is advised by the Company that such dispositions may again be made.

       

      6. Indemnification.

       

      (a)  Indemnification
        by the Company.
        The
        Company will indemnify and hold harmless each Investor and its officers,
        directors, members, employees and agents, successors and assigns, and each
        other
        person, if any, who controls such Investor within the

       

      
        
          
          

        

        
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      meaning
        of the 1933 Act, against any losses, claims, damages or liabilities, joint
        or
        several, to which they may become subject under the 1933 Act or otherwise,
        insofar as such losses, claims, damages or liabilities (or actions in respect
        thereof) arise out of or are based upon: (i) any untrue statement or alleged
        untrue statement of any material fact contained in any Registration Statement,
        any preliminary Prospectus or final Prospectus, or any amendment or supplement
        thereof; (ii) any blue sky application or other document executed by the
        Company
        specifically for that purpose or based upon written information furnished
        by the
        Company filed in any state or other jurisdiction in order to qualify any
        or all
        of the Registrable Securities under the securities laws thereof (any such
        application, document or information herein called a “Blue
        Sky
        Application”);
        (iii)
        the omission or alleged omission to state therein a material fact required
        to be
        stated therein or necessary to make the statements therein not misleading;
        (iv)
        any violation by the Company or its agents of any rule or regulation promulgated
        under the 1933 Act applicable to the Company or its agents and relating to
        action or inaction required of the Company in connection with such registration;
        or (v) any failure to register or qualify the Registrable Securities included
        in
        any such Registration in any state where the Company or its agents has
        affirmatively undertaken or agreed in writing that the Company will undertake
        such registration or qualification on an Investor’s behalf and will reimburse
        such Investor, and each such officer, director or member and each such
        controlling person for any legal or other expenses reasonably incurred by
        them
        in connection with investigating or defending any such loss, claim, damage,
        liability or action; provided,
        however,
        that
        the Company will not be liable in any such case if and to the extent that
        any
        such loss, claim, damage or liability arises out of or is based upon an untrue
        statement or alleged untrue statement or omission or alleged omission so
        made in
        conformity with information furnished by such Investor or any such controlling
        person in writing specifically for use in such Registration Statement or
        Prospectus.

       

      (b)  Indemnification
        by the Investors.
        Each
        Investor agrees, severally but not jointly, to indemnify and hold harmless,
        to
        the fullest extent permitted by law, the Company, its directors, officers,
        employees, stockholders and each person who controls the Company (within
        the
        meaning of the 1933 Act) against any losses, claims, damages, liabilities
        and
        expense (including reasonable attorney fees) resulting from any untrue statement
        of a material fact or any omission of a material fact required to be stated
        in
        the Registration Statement or Prospectus or preliminary Prospectus or amendment
        or supplement thereto 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 furnished in writing by such Investor
        to the Company specifically for inclusion in such Registration Statement
        or
        Prospectus or amendment or supplement thereto. In no event shall the liability
        of an Investor be greater in amount than the dollar amount of the proceeds
        (net
        of all expense paid by such Investor in connection with any claim relating
        to
        this Section 6 and the amount of any damages such Investor has otherwise
        been
        required to pay by reason of such untrue statement or omission) received
        by such
        Investor upon the sale of the Registrable Securities included in the
        Registration Statement giving rise to such indemnification
        obligation.

       

      (c)  Conduct
        of Indemnification Proceedings.
        Any
        person entitled to indemnification hereunder shall (i) give prompt notice
        to the
        indemnifying party of any claim with respect to which it seeks indemnification
        and (ii) permit such indemnifying party to assume the defense of such claim
        with
        counsel reasonably satisfactory to the indemnified party; provided
        that any
        person entitled to indemnification hereunder shall have the right to
        employ

       

      
        
          
          

        

        
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      separate
        counsel and to participate in the defense of such claim, but the fees and
        expenses of such counsel shall be at the expense of such person unless (a)
        the
        indemnifying party has agreed to pay such fees or expenses, or (b) the
        indemnifying party shall have failed to assume the defense of such claim
        and
        employ counsel reasonably satisfactory to such person or (c) in the reasonable
        judgment of any such person, based upon written advice of its counsel, a
        conflict of interest exists between such person and the indemnifying party
        with
        respect to such claims (in which case, if the person notifies the indemnifying
        party in writing that such person elects to employ separate counsel at the
        expense of the indemnifying party, the indemnifying party shall not have
        the
        right to assume the defense of such claim on behalf of such person); and
        provided,
        further,
        that
        the failure of any indemnified party to give notice as provided herein shall
        not
        relieve the indemnifying party of its obligations hereunder, except to the
        extent that such failure to give notice shall materially adversely affect
        the
        indemnifying party in the defense of any such claim or litigation. It is
        understood that the indemnifying party shall not, in connection with any
        proceeding in the same jurisdiction, be liable for fees or expenses of more
        than
        one separate firm of attorneys at any time for all such indemnified parties.
        No
        indemnifying party will, except with the consent of the indemnified party,
        consent to entry of any judgment or enter into any settlement that does not
        include as an unconditional term thereof the giving by the claimant or plaintiff
        to such indemnified party of a release from all liability in respect of such
        claim or litigation.

       

      (d)  Contribution.
        If for
        any reason the indemnification provided for in the preceding paragraphs (a)
        and
        (b) is unavailable to an indemnified party or insufficient to hold it harmless,
        other than as expressly specified therein, then the indemnifying party shall
        contribute to the amount paid or payable by the indemnified party as a result
        of
        such loss, claim, damage or liability in such proportion as is appropriate
        to
        reflect the relative fault of the indemnified party and the indemnifying
        party,
        as well as any other relevant equitable considerations. No person guilty
        of
        fraudulent misrepresentation within the meaning of Section 11(f) of the 1933
        Act
        shall be entitled to contribution from any person not guilty of such fraudulent
        misrepresentation. In no event shall the contribution obligation of a holder
        of
        Registrable Securities be greater in amount than the dollar amount of the
        proceeds (net of all expenses paid by such holder in connection with any
        claim
        relating to this Section 6 and the amount of any damages such holder has
        otherwise been required to pay by reason of such untrue or alleged untrue
        statement or omission or alleged omission) received by it upon the sale of
        the
        Registrable Securities giving rise to such contribution obligation.

       

      7. Miscellaneous.

       

      (a)  Amendments
        and Waivers.
        This
        Agreement may be amended only by a writing signed by the Company and the
        Required Investors, which shall be binding on all of the Investors. The Company
        may take any action herein prohibited, or omit to perform any act herein
        required to be performed by it, only if the Company shall have obtained the
        written consent to such amendment, action or omission to act, of the Required
        Investors.

       

      (b)  Notices.
        All
        notices and other communications provided for or permitted hereunder shall
        be
        made as set forth in Section 9.4 of the Purchase Agreement.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      


      (c)  Assignments
        and Transfers by Investors.
        The
        provisions of this Agreement shall be binding upon and inure to the benefit
        of
        the Investors and their respective successors and assigns. An Investor may
        transfer or assign, in whole or from time to time in part, to one or more
        persons its rights hereunder in connection with the transfer of Registrable
        Securities by such Investor to such person, provided that such Investor complies
        with all laws applicable thereto and provides written notice of assignment
        to
        the Company promptly after such assignment is effected.

       

      (d)  Assignments
        and Transfers by the Company.
        This
        Agreement may not be assigned by the Company (whether by operation of law
        or
        otherwise) without the prior written consent of the Required Investors,
        provided, however, that the Company may assign its rights and delegate its
        duties hereunder to any surviving or successor corporation in connection
        with a
        merger or consolidation of the Company with another corporation, or a sale,
        transfer or other disposition of all or substantially all of the Company’s
        assets to another corporation, without the prior written consent of the Required
        Investors, after notice duly given by the Company to each Investor.

       

      (e)  Benefits
        of the Agreement.
        The
        terms and conditions of this Agreement shall inure to the benefit of and
        be
        binding upon the respective permitted successors and assigns of the parties.
        Nothing in this Agreement, express or implied, is intended to confer upon
        any
        party other than the parties hereto or their respective successors and assigns
        any rights, remedies, obligations, or liabilities under or by reason of this
        Agreement, except as expressly provided in this Agreement.

       

      (f)  Counterparts;
        Faxes.
        This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed an original, but all of which together shall constitute one and the
        same
        instrument. This Agreement may also be executed via facsimile, which shall
        be
        deemed an original.

       

      (g)  Titles
        and Subtitles.
        The
        titles and subtitles used in this Agreement are used for convenience only
        and
        are not to be considered in construing or interpreting this
        Agreement.

       

      (h)  Severability.
        Any
        provision of this Agreement that is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining
        provisions hereof but shall be interpreted as if it were written so as to
        be
        enforceable to the maximum extent permitted by applicable law, and any such
        prohibition or unenforceability in any jurisdiction shall not invalidate
        or
        render unenforceable such provision in any other jurisdiction. To the extent
        permitted by applicable law, the parties hereby waive any provision of law
        which
        renders any provisions hereof prohibited or unenforceable in any
        respect.

       

      (i)  Further
        Assurances.
        The
        parties shall execute and deliver all such further instruments and documents
        and
        take all such other actions as may reasonably be required to carry out the
        transactions contemplated hereby and to evidence the fulfillment of the
        agreements herein contained.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      


      (j)  Entire
        Agreement.
        This
        Agreement is intended by the parties as a final expression of their agreement
        and intended to be a complete and exclusive statement of the agreement and
        understanding of the parties hereto in respect of the subject matter contained
        herein. This Agreement supersedes all prior agreements and understandings
        between the parties with respect to such subject matter.

       

      (k)  Governing
        Law; Consent to Jurisdiction; Waiver of Jury Trial.
        This
        Agreement shall be governed by, and construed in accordance with, the internal
        laws of the State of New York without regard to the choice of law principles
        thereof. Each of the parties hereto irrevocably submits to the exclusive
        jurisdiction of the courts of the State of New York located in New York County
        and the United States District Court for the Southern District of New York
        for
        the purpose of any suit, action, proceeding or judgment relating to or arising
        out of this Agreement and the transactions contemplated hereby. Service of
        process in connection with any such suit, action or proceeding may be served
        on
        each party hereto anywhere in the world by the same methods as are specified
        for
        the giving of notices under this Agreement. Each of the parties hereto
        irrevocably consents to the jurisdiction of any such court in any such suit,
        action or proceeding and to the laying of venue in such court. Each party
        hereto
        irrevocably waives any objection to the laying of venue of any such suit,
        action
        or proceeding brought in such courts and irrevocably waives any claim that
        any
        such suit, action or proceeding brought in any such court has been brought
        in an
        inconvenient forum. EACH
        OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
        LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS
        BEEN
        CONSULTED SPECIFICALLY AS TO THIS WAIVER.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, the parties have executed this Agreement or caused their
        duly
        authorized officers to execute this Agreement as of the date first above
        written.

       

      The
        Company:        CAPRIUS,
        INC.

      


      


      


      By: /s/
        Jonathan Joels        

      Name:
        Jonathan Joels

      Title:
        Chief Financial Officer



      
        
          
          

        

        
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      Exhibit
        A

      


      Plan
        of Distribution

      


      The
        selling stockholders, which as used herein includes donees, pledgees,
        transferees or other successors-in-interest selling shares of common stock
        or
        interests in shares of common stock received after the date of this prospectus
        from a selling stockholder as a gift, pledge, partnership distribution or
        other
        transfer, may, from time to time, sell, transfer or otherwise dispose of
        any or
        all of their shares of common stock or interests in shares of common stock
        on
        any stock exchange, market or trading facility on which the shares are traded
        or
        in private transactions. These dispositions may be at fixed prices, at
        prevailing market prices at the time of sale, at prices related to the
        prevailing market price, at varying prices determined at the time of sale,
        or at
        negotiated prices.

      


      The
        selling stockholders may use any one or more of the following methods when
        disposing of shares or interests therein:

      


      -
        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;

      


      -
        settlement of short sales effected after the date the registration statement
        of
        which this Prospectus is a part is declared effective by the SEC;

      


      -
        through
        the writing or settlement of options or other hedging transactions, whether
        through an options exchange or otherwise;

      


      -
        broker-dealers may agree with the selling stockholders to sell a specified
        number of such shares at a stipulated price per share; and

      


      -
        a
        combination of any such methods of sale.

      


      The
        selling stockholders may, from time to time, pledge or grant a security interest
        in some or all of the shares of common stock 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 amending the list of selling
        stockholders to include the pledgee, transferee or other successors in interest
        as


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      selling
        stockholders under this prospectus. 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.

      


      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. 

      


      In
        connection with the sale of our common stock or interests therein, the selling
        stockholders may enter into hedging transactions with broker-dealers or other
        financial institutions, which may in turn engage in short sales of the common
        stock in the course of hedging the positions they assume. The selling
        stockholders may also sell shares of our common stock short and deliver these
        securities to close out their short positions, or loan or pledge the common
        stock to broker-dealers that in turn may sell these securities. The selling
        stockholders may also enter into option or other transactions with
        broker-dealers or other financial institutions or the creation of one or
        more
        derivative securities which require the delivery to such broker-dealer or
        other
        financial institution of shares offered by this prospectus, which shares
        such
        broker-dealer or other financial institution may resell pursuant to this
        prospectus (as supplemented or amended to reflect such
        transaction).

      


      The
        aggregate proceeds to the selling stockholders from the sale of the common
        stock
        offered by them will be the purchase price of the common stock less discounts
        or
        commissions, if any. Each of the selling stockholders reserves the right
        to
        accept and, together with their agents from time to time, to reject, in whole
        or
        in part, any proposed purchase of common stock to be made directly or through
        agents. We will not receive any of the proceeds from this offering. Upon
        any
        exercise of the warrants by payment of cash, however, we will receive the
        exercise price of the warrants.

      


      The
        selling stockholders also may resell all or a portion of the shares in open
        market transactions in reliance upon Rule 144 under the Securities Act of
        1933,
        provided that they meet the criteria and conform to the requirements of that
        rule.

      


      The
        selling stockholders and any underwriters, broker-dealers or agents that
        participate in the sale of the common stock or interests therein may be
        "underwriters" within the meaning of Section 2(11) of the Securities Act.
        Any
        discounts, commissions, concessions or profit they earn on any resale of
        the
        shares may be underwriting discounts and commissions under the Securities
        Act.
        Selling stockholders who are "underwriters" within the meaning of Section
        2(11)
        of the Securities Act will be subject to the prospectus delivery requirements
        of
        the Securities Act.

      


      To
        the
        extent required, the shares of our common stock to be sold, the names of
        the
        selling stockholders, the respective purchase prices and public offering
        prices,
        the names of any agents, dealer or underwriter, any applicable commissions
        or
        discounts with respect to a particular offer will be set forth in an
        accompanying prospectus supplement or, if appropriate, a post-effective
        amendment to the registration statement that includes this
        prospectus.


      
        
          
          

        

        
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      In
        order
        to comply with the securities laws of some states, if applicable, the common
        stock may be sold in these jurisdictions only through registered or licensed
        brokers or dealers. In addition, in some states the common stock may not
        be sold
        unless it has been registered or qualified for sale or an exemption from
        registration or qualification requirements is available and is complied
        with.

      


      We
        have
        advised the selling stockholders that the anti-manipulation rules of Regulation
        M under the Exchange Act may apply to sales of shares in the market and to
        the
        activities of the selling stockholders and their affiliates. In addition,
        to the
        extent applicable we will make copies of this prospectus (as it may be
        supplemented or amended from time to time) available to the selling stockholders
        for the purpose of satisfying the prospectus delivery requirements of the
        Securities Act. The selling stockholders may indemnify any broker-dealer
        that
        participates in transactions involving the sale of the shares against certain
        liabilities, including liabilities arising under the Securities
        Act.

      


      We
        have
        agreed to indemnify the selling stockholders against liabilities, including
        liabilities under the Securities Act and state securities laws, relating
        to the
        registration of the shares offered by this prospectus.

      


      We
        have
        agreed with the selling stockholders to keep the registration statement of
        which
        this prospectus constitutes a part effective until the earlier of (1) such
        time
        as all of the shares covered by this prospectus have been disposed of pursuant
        to and in accordance with the registration statement or (2) the date on which
        the shares may be sold pursuant to Rule 144(k) of the Securities
        Act.

       

      
        
          
          

        

        
          3