Document:

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                                                                     EXHIBIT 4.2

                          REGISTRATION RIGHTS AGREEMENT

                                      AMONG

                               ATHEROGENICS, INC.

                                   AS ISSUER,

                                       AND

                       MORGAN STANLEY & CO. INCORPORATED,
                           LEHMAN BROTHERS, INC., AND
                          ADAMS, HARKNESS & HILL, INC.

                              AS INITIAL PURCHASERS

                           DATED AS OF AUGUST 19, 2003

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         REGISTRATION RIGHTS AGREEMENT dated as of August 19, 2003 between
AtheroGenics, Inc., a Georgia corporation (the "COMPANY"), and Morgan Stanley &
Co. Incorporated, Lehman Brothers, Inc. and Adams, Harkness & Hill, Inc. (the
"INITIAL PURCHASERS") pursuant to the Purchase Agreement dated August 13, 2003
(the "PURCHASE AGREEMENT"), between the Company and the Initial Purchasers. In
order to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement.

         The Company agrees with the Initial Purchasers, (i) for their benefit
as Initial Purchasers and (ii) for the benefit of the beneficial owners
(including the Initial Purchasers) from time to time of the Notes (as defined
herein) and the beneficial owners from time to time of the Underlying Common
Stock (as defined herein) issued upon conversion of the Notes (each of the
foregoing a "HOLDER" and together the "HOLDERS"), as follows:

         SECTION 1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

         "AFFILIATE" means with respect to any specified person, an "affiliate,"
as defined in Rule 144, of such person.

         AMENDMENT EFFECTIVENESS DEADLINE DATE" has the meaning set forth in
Section 2(d) hereof.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.

         "COMMON STOCK" means the shares of common stock, no par value per
share, of the Company together with the rights evidenced by such common stock to
the extent provided in the Rights Agreement, dated as of November 9, 2001,
between the Company and American Stock Transfer & Trust Company (unless such
rights shall have been redeemed or terminated previously) and any other shares
of common stock as may constitute "Common Stock" for purposes of the Indenture,
including the Underlying Common Stock.

         "CONVERSION PRICE" has the meaning assigned such term in the Indenture.

         "DAMAGES ACCRUAL PERIOD" has the meaning set forth in Section 2(e)
hereof.

         "DAMAGES PAYMENT DATE" means each March 1 and September 1.

         "DEFERRAL NOTICE" has the meaning set forth in Section 3(h) hereof.

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         "DEFERRAL PERIOD" has the meaning set forth in Section 3(h) hereof.

         "EFFECTIVENESS DEADLINE DATE" has the meaning set forth in Section 2(a)
hereof.

         "EFFECTIVENESS PERIOD" means the period commencing on the date hereof
and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.

         "EVENT" has the meaning set forth in Section 2(e) hereof.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

         "FILING DEADLINE DATE" has the meaning set forth in Section 2(a)
hereof.

         "HOLDER" has the meaning set forth in the second paragraph of this
Agreement.

         "INDENTURE" means the Indenture, dated as of August 19, 2003, between
the Company and The Bank of New York Trust Company of Florida, N.A., as trustee,
pursuant to which the Notes are being issued.

         "INITIAL PURCHASERS" means Morgan Stanley & Co. Incorporated, Lehman
Brothers, Inc. and Adams, Harkness & Hill, Inc.

         "INITIAL SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(a) hereof.

         "ISSUE DATE" means August 19, 2003.

         "LIQUIDATED DAMAGES AMOUNT" has the meaning set forth in Section 2(e)
hereof.

         "MATERIAL EVENT" has the meaning set forth in Section 3(h) hereof.

         "NOTES" means the 4 1/2% Convertible Notes Due 2008 of the Company to
be purchased pursuant to the Purchase Agreement.

         "NOTICE AND QUESTIONNAIRE" means a written notice delivered to the
Company containing substantially the information called for by the Form of
Selling Securityholder Notice and Questionnaire attached as Annex A to the
Offering Memorandum of the Company dated August 13, 2003 relating to the Notes.

         "NOTICE HOLDER" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.

         "PURCHASE AGREEMENT" has the meaning set forth in the preamble hereof.

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         "PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
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 amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.

         "RECORD HOLDER" means with respect to any Damages Payment Date relating
to any Notes or Underlying Common Stock as to which any Liquidated Damages
Amount has accrued, the registered holder of such Note or Underlying Common
Stock on the February 15 immediately preceding a Damages Payment Date occurring
on a March 1, and on the August 15 immediately preceding a Damages Payment Date
occurring on a September 1.

         "REGISTRABLE SECURITIES" means the Notes until such Notes have been
converted into or exchanged for the Underlying Common Stock and, at all times
subsequent to any such conversion, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted or
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event until, in the case of any such security, (A) the earliest
of (i) its effective registration under the Securities Act and resale in
accordance with the Registration Statement covering it, (ii) expiration of the
holding period that would be applicable thereto under Rule 144(k) or (iii) its
sale to the public pursuant to Rule 144 under the Securities Act, and (B) as a
result of the event or circumstance described in any of the foregoing clauses
(i) through (iii), the legend with respect to transfer restrictions required
under the Indenture is removed or removable in accordance with the terms of the
Indenture or such legend, as the case may be.

         "REGISTRATION STATEMENT" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

         "RESTRICTED SECURITIES" means "Restricted Securities" as defined in
Rule 144.

         "RULE 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

         "RULE 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

         "SEC" means the Securities and Exchange Commission.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

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         "SHELF REGISTRATION STATEMENT" has the meaning set forth in Section
2(a) hereof.

         "SPECIAL COUNSEL" means Davis Polk & Wardwell or one such other
successor counsel as shall be specified by the Holders of a majority of the
Registrable Securities, but which may, with the written consent of the Initial
Purchasers (which shall not be unreasonably withheld), be another nationally
recognized law firm experienced in securities law matters designated by the
Company, the reasonable fees and expenses in connection with Blue Sky
qualifications of the Registrable Securities of which will be paid by the
Company pursuant to Section 5 hereof. For purposes of determining the Holders of
a majority of the Registrable Securities in this definition, Holders of Notes
shall be deemed to be the Holders of the number of shares of Underlying Common
Stock into which such Notes are or would be convertible as of the date the
consent is requested.

         "SUBSEQUENT SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(b) hereof.

         "TIA" means the Trust Indenture Act of 1939, as amended.

         "TRUSTEE" means The Bank of New York Trust Company of Florida, N.A.,
the Trustee under the Indenture.

         "UNDERLYING COMMON STOCK" means the Common Stock into which the Notes
are convertible or issued upon any such conversion.

         SECTION 2. Shelf Registration. (a) The Company shall prepare and file
or cause to be prepared and filed with the SEC, as soon as practicable but in
any event by the date (the "FILING DEADLINE DATE") ninety (90) days after the
Issue Date, a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act (a "SHELF
REGISTRATION STATEMENT") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "INITIAL SHELF REGISTRATION
STATEMENT"). The Initial Shelf Registration Statement shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by such Holders in accordance with the methods of distribution
elected by the Holders and set forth in the Initial Shelf Registration
Statement, provided, to the extent such method of distribution shall include the
services of an underwriter or broker-dealer or similar representative, then all
expenses, fees and commissions related to such method of distribution shall be
paid solely by the Holder or Holders so requesting such services. The Company
shall use its reasonable best efforts to cause the Initial Shelf Registration
Statement to be declared effective under the Securities Act as promptly as is
practicable but in any event by the date (the "EFFECTIVENESS DEADLINE DATE")
that is one hundred eighty (180) days after the Issue Date, and to keep the
Initial Shelf Registration Statement (or any Subsequent Shelf Registration
Statement) continuously effective under the Securities Act until the expiration
of the Effectiveness Period. At the time the Initial Shelf Registration
Statement is declared effective, each Holder that became a Notice Holder on or
prior to the date ten (10) Business Days

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prior to such time of effectiveness shall be named as a selling securityholder
in the Initial Shelf Registration Statement and the related Prospectus in such a
manner as to permit such Holder to deliver such Prospectus to purchasers of
Registrable Securities in accordance with applicable law, so long as such Holder
has provided to the Company by such date a complete and accurate Notice and
Questionnaire for such purpose. None of the Company's security holders (other
than the Holders of Registrable Securities) shall have the right to include any
of the Company's securities in the Shelf Registration Statement.

         (b)      If the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement ceases to be effective for any reason at any time
during the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within thirty (30) days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "SUBSEQUENT SHELF REGISTRATION STATEMENT"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.

         (c)      The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as necessary to name a Notice Holder as a
selling securityholder pursuant to Section (d) below.

         (d)      Each Holder agrees that if such Holder wishes to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus, it will do so only in accordance with this Section 2(d) and Section
3(h) of this Agreement. Following the date that the Initial Shelf Registration
Statement is declared effective, each Holder as of the Effectiveness Deadline
Date that is not a Notice Holder wishing to sell Registrable Securities pursuant
to a Shelf Registration Statement and related Prospectus agrees to deliver a
Notice and Questionnaire to the Company at least ten (10) Business Days prior to
any intended distribution of Registrable Securities under the Shelf Registration
Statement. From and after the date the Initial Shelf Registration Statement is
declared effective, the Company shall, as promptly as practicable after the date
a Notice and Questionnaire is delivered pursuant to Section 8(c), and in any
event upon the later of (x) five (5) Business Days after such date or (y) five
(5) Business Days after the expiration of any Deferral Period in effect when the
Notice and Questionnaire is delivered or put into effect within five (5)
Business Days of such delivery date:

                  (i) if required by applicable law, file with the SEC a
         post-effective amendment to the Shelf Registration Statement or prepare
         and, if required by applicable law, file a supplement to the related
         Prospectus or a supplement or amendment to any document

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         incorporated therein by reference or file any other required document
         so that the Holder delivering such Notice and Questionnaire is named as
         a selling securityholder in the Shelf Registration Statement and the
         related Prospectus in such a manner as to permit such Holder to deliver
         such Prospectus to purchasers of the Registrable Securities in
         accordance with applicable law and, if the Company shall file a
         post-effective amendment to the Shelf Registration Statement, use its
         reasonable best efforts to cause such post-effective amendment to be
         declared effective under the Securities Act as promptly as is
         practicable, but in any event by the date (the "AMENDMENT EFFECTIVENESS
         DEADLINE DATE") that is forty-five (45) days after the date such
         post-effective amendment is required by this clause to be filed;

                  (ii) provide such Holder copies of any documents filed
         pursuant to Section 2(d)(i); and

                  (iii) notify such Holder as promptly as practicable after the
         effectiveness under the Securities Act of any post-effective amendment
         filed pursuant to Section 2(d)(i);

provided, that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Deferral Period in accordance with Section
3(h). Notwithstanding anything contained herein to the contrary, (i) the Company
shall be under no obligation to name any Holder that is not a Notice Holder as a
selling securityholder in any Registration Statement or related Prospectus and
(ii) the Amendment Effectiveness Deadline Date shall be extended by up to ten
(10) Business Days from the expiration of a Deferral Period (and the Company
shall incur no obligation to pay Liquidated Damages during such extension) if
such Deferral Period shall be in effect on the Amendment Effectiveness Deadline
Date, provided, to the extent such method of distribution shall include the
services of an underwriter or broker-dealer or similar representative, then all
expenses, fees and commissions related to such method of distribution shall be
paid solely by the Holder or Holders so requesting such services.

         (e)      The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if, other than as permitted
hereunder,

                  (i)      the Initial Shelf Registration Statement has not been
         filed on or prior to the Filing Deadline Date,

                  (ii)     the Initial Shelf Registration Statement has not been
         declared effective under the Securities Act on or prior to the
         Effectiveness Deadline Date,

                  (iii)    the Company has failed to perform its obligations set
         forth in Section 2(d)(i) within the time period required therein,

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                  (iv)     any post-effective amendment to a Shelf Registration
         Statement filed pursuant to Section 2(d)(i) has not become effective
         under the Securities Act on or prior to the Amendment Effectiveness
         Deadline Date,

                  (v)      the aggregate duration of Deferral Periods in any
         period exceeds the number of days permitted in respect of such period
         pursuant to Section 3(h) hereof, or

                  (vi)     the number of Deferral Periods in any period exceeds
         the number permitted in respect of such period pursuant to Section 3(h)
         hereof.

Each event described in any of the foregoing clauses in Section 2(e)(i) through
(vi) is individually referred to herein as an "EVENT." For purposes of this
Agreement, each Event set forth above shall begin on the day immediately
following each Beginning Date set forth below and end on each Ending Date set
forth in the table below:

<TABLE>
<CAPTION>
Type of
Event by                            Beginning                           Ending
 Clause                               Date                               Date
 ------                               ----                               ----
<S>                     <C>                                <C>
   (i)                  Filing Deadline Date               the date the Initial Shelf
                                                           Registration Statement is filed

  (ii)                  Effectiveness Deadline Date        the date the Initial Shelf
                                                           Registration Statement becomes
                                                           effective under the Securities
                                                           Act

 (iii)                  the date by which the Company is   the date the Company performs
                        required to perform its            its obligations set forth in
                        obligations under Section 2(d)(i)  Section 2(d)(i)

  (iv)                  the Amendment Effectiveness        the date the applicable
                        Deadline Date                      post-effective amendment to a
                                                           Shelf Registration Statement
                                                           becomes effective under the
                                                           Securities Act

   (v)                  the date on which the aggregate    termination of the Deferral
                        duration of Deferral Periods in    Period that caused the limit on
                        any period exceeds the number of   the aggregate duration of Deferral
                        days permitted by Section 3(h)     Periods to be exceeded

</TABLE>

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<TABLE>
<CAPTION>
Type of
Event by                            Beginning                           Ending
 Clause                               Date                               Date
 ------                               ----                               ----
<S>                     <C>                                <C>
  (vi)                  the date of commencement of a      termination of the Deferral
                        Deferral Period that causes the    Period that caused the number of
                        number of Deferral Periods to      Deferral Periods to exceed the
                        exceed the number permitted by     number permitted by Section 3(h)
                        Section 3(h)
</TABLE>

         Commencing on (and including) any date that an Event has begun and
ending on (but excluding) the next date on which there are no Events that have
occurred and are continuing (a "DAMAGES ACCRUAL PERIOD"), the Company shall pay,
as liquidated damages and not as a penalty, to Record Holders of Registrable
Securities interest in an amount (the "LIQUIDATED DAMAGES AMOUNT") accruing, for
each day in the Damages Accrual Period, (i) in respect of any Note, at a rate
per annum equal to 0.5% of the aggregate principal amount of such Note and (ii)
in respect of each share of Underlying Common Stock that has been issued upon
conversion of a Note at a rate per annum equal to 0.5% of the Conversion Price
on such date, as the case may be; provided that in the case of a Damages Accrual
Period that is in effect solely as a result of an Event of the type described in
Section 2(e)(iii) or (iv), such Liquidated Damages Amount shall be paid only to
the Holders (as set forth in the succeeding paragraph) that have delivered
complete and accurate Notices and Questionnaires that caused the Company to
incur the obligations set forth in Section 2(d), the non-performance of which is
the basis of such Event. In calculating the Liquidated Damages Amount on any
date on which no Notes are outstanding, the Conversion Price shall be calculated
as if the Notes were still outstanding. Notwithstanding the foregoing, no
Liquidated Damages Amount shall accrue as to any Registrable Security from and
after the earlier of (x) the date such security is no longer a Registrable
Security and (y) expiration of the Effectiveness Period. The rate of accrual of
the Liquidated Damages Amount with respect to any period shall not exceed the
rate provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events.

         The Liquidated Damages Amount shall accrue from the first day of the
applicable Damages Accrual Period, and shall be payable on each Damages Payment
Date during the Damage Accrual Period (and on the Damages Payment Date next
succeeding the end of the Damages Accrual Period if the Damage Accrual Period
does not end on a Damages Payment Date) to the Record Holders of the Registrable
Securities entitled thereto; provided that any Liquidated Damages Amount accrued
with respect to any Note or portion thereof redeemed by the Company on a
redemption date or converted into Underlying Common Stock on a conversion date
prior to the Damages Payment Date, shall, in any such event, be paid instead to
the Holder who submitted such Note or portion thereof for redemption or
conversion on the applicable redemption date or conversion date, as the case may
be, on such date (or promptly following the

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conversion date, in the case of conversion); provided further, that, in the case
of an Event of the type described in clause (iii) or (iv) of the first paragraph
of this Section 2(e), such Liquidated Damages Amount shall be paid only to the
Holders entitled thereto pursuant to such first paragraph by check mailed to the
address set forth in the Notice and Questionnaire delivered by such Holder. The
Trustee shall be entitled, on behalf of registered holders of Notes or
Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of such Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole damages payable
for a violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude any Holder from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.

         All of the Company's obligations set forth in this Section 2(e) to pay
any Liquidated Damages Amount that is outstanding with respect to any
Registrable Security at the time such security ceases to be a Registrable
Security shall survive until such time as all such obligations with respect to
such security have been satisfied in full (notwithstanding termination of this
Agreement pursuant to Section 8(k)).

         The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

         SECTION 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, during the Effectiveness
Period, the Company shall:

                  (a)      Prepare and file with the SEC a Registration
         Statement or Registration Statements on any appropriate form under the
         Securities Act available for the sale of the Registrable Securities by
         the Holders thereof in accordance with the intended method or methods
         of distribution thereof, and use its reasonable best efforts to cause
         each such Registration Statement to become effective and remain
         effective as provided herein; provided that before filing any
         Registration Statement or Prospectus or any amendments or supplements
         thereto with the SEC, furnish to the Initial Purchasers and the Special
         Counsel of such offering, if any, copies of all such documents
         substantially in the form proposed to be filed at least three (3)
         Business Days prior to the filing of such Registration Statement or
         amendment thereto or Prospectus or supplement thereto.

                  (b)      Subject to Section 3(h), prepare and file with the
         SEC such amendments and post-effective amendments to each Registration
         Statement as may be necessary to keep such Registration Statement
         continuously effective for the applicable period specified in Section
         2(a); cause the related Prospectus to be supplemented by any required
         prospectus supplement, and as so supplemented to be filed pursuant to
         Rule 424 (or any similar provisions then in force) under the Securities
         Act; and use its reasonable best efforts to comply with the provisions
         of the Securities Act applicable to it with

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         respect to the disposition of all securities covered by such
         Registration Statement during the Effectiveness Period in accordance
         with the intended methods of disposition by the sellers thereof set
         forth in such Registration Statement as so amended or such Prospectus
         as so supplemented.

                  (c)      As promptly as practicable give notice to the Notice
         Holders, the Initial Purchasers and the Special Counsel, (i) when any
         Prospectus, prospectus supplement, Registration Statement or
         post-effective amendment to a Registration Statement has been filed
         with the SEC and, with respect to a Registration Statement or any
         post-effective amendment, when the same has been declared effective,
         (ii) of any request, following the effectiveness of the Initial Shelf
         Registration Statement under the Securities Act, by the SEC or any
         other federal or state governmental authority for amendments or
         supplements to any Registration Statement or related Prospectus or for
         additional information, (iii) of the issuance by the SEC or any other
         federal or state governmental authority of any stop order suspending
         the effectiveness of any Registration Statement or the initiation or
         threatening 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, (v) in the sole and
         reasonable discretion of the Company and in consultation with its legal
         counsel of the occurrence of, but not the nature of or details
         concerning, a Material Event and (vi) of the determination by the
         Company that a post-effective amendment to a Registration Statement
         will be filed with the SEC, which notice may, at the discretion of the
         Company (or as required pursuant to Section 3(h)), state that it
         constitutes a Deferral Notice, in which event the provisions of Section
         3(h) shall apply.

                  (d)      Use its reasonable best efforts to obtain the
         withdrawal of any order suspending the effectiveness of a Registration
         Statement or the lifting of any suspension of the qualification (or
         exemption from qualification) of any of the Registrable Securities for
         sale in any jurisdiction in which they have been qualified for sale, in
         either case at the earliest possible moment, and provide immediate
         notice to each Notice Holder and the Initial Purchasers of the
         withdrawal of any such order.

                  (e)      As promptly as practicable furnish to each Notice
         Holder, the Special Counsel and the Initial Purchasers, upon request
         and without charge, at least one (1) conformed copy of the Registration
         Statement and any amendment thereto, including exhibits and all
         documents incorporated or deemed to be incorporated therein by
         reference.

                  (f)      During the Effectiveness Period, deliver to each
         Notice Holder, the Special Counsel, if any, and the Initial Purchasers,
         in connection with any sale of Registrable Securities pursuant to a
         Registration Statement, without charge, as many copies of the
         Prospectus or Prospectuses relating to such Registrable Securities
         (including each preliminary prospectus) and any amendment or supplement
         thereto as such Notice Holder may reasonably request; and the Company
         hereby consents (except during such

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<PAGE>

         periods that a Deferral Notice is outstanding and has not been revoked)
         to the use of such Prospectus or each amendment or supplement thereto
         by each Notice Holder in connection with any offering and sale of the
         Registrable Securities covered by such Prospectus or any amendment or
         supplement thereto in the manner set forth therein.

                  (g)      Prior to any public offering of the Registrable
         Securities pursuant to a Registration Statement, use its reasonable
         best efforts to register or qualify or cooperate with the Notice
         Holders and the 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
         Notice Holder reasonably requests in writing (which request may be
         included in the Notice and Questionnaire); prior to any public offering
         of the Registrable Securities pursuant to the Shelf Registration
         Statement, use its reasonable best efforts to keep each such
         registration or qualification (or exemption therefrom) effective during
         the Effectiveness Period in connection with such Notice Holder's offer
         and sale of Registrable Securities pursuant to such registration or
         qualification (or exemption therefrom) and do any and all other acts or
         things reasonably necessary or advisable to enable the disposition in
         such jurisdictions of such Registrable Securities in the manner set
         forth in the relevant Registration Statement and the related
         Prospectus; provided that the Company will not be required to (i)
         qualify as a foreign corporation or as a dealer in securities in any
         jurisdiction where it would not otherwise be required to qualify but
         for this Agreement or (ii) take any action that would subject it to
         general service of process in suits or to taxation in any such
         jurisdiction where it is not then so subject.

                  (h)      Upon (A) the issuance by the SEC of a stop order
         suspending the effectiveness of the Shelf Registration Statement or the
         initiation of proceedings with respect to the Shelf Registration
         Statement under Section 8(d) or 8(e) of the Securities Act, (B) the
         occurrence of any event or the existence of any fact (a "MATERIAL
         EVENT") as a result of which any Registration Statement shall 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 not misleading, or any Prospectus shall 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 the light of the circumstances under which they were made,
         not misleading, or (C) the occurrence or existence of any pending
         corporate development that, in the reasonable discretion of the
         Company, makes it appropriate to suspend the availability of the Shelf
         Registration Statement and the related Prospectus:

                           (i) in the case of clause (B) above, subject to the
                  next sentence, as promptly as practicable prepare and file, if
                  necessary pursuant to applicable law, a post-effective
                  amendment to such Registration Statement or a supplement to
                  the related Prospectus or any document incorporated therein by
                  reference or file any other required document that would be
                  incorporated by reference into such Registration Statement and
                  Prospectus so that such Registration Statement does

                                       12
<PAGE>

                  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 not misleading, and
                  such Prospectus does 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 the light of the circumstances under which they were made,
                  not misleading, as thereafter delivered to the purchasers of
                  the Registrable Securities being sold thereunder, and, in the
                  case of a post-effective amendment to a Registration
                  Statement, subject to the next sentence, use its reasonable
                  best efforts to cause it to be declared effective as promptly
                  as is practicable, and

                           (ii) give notice to the Notice Holders, and the
                  Special Counsel, if any, that the availability of the Shelf
                  Registration Statement is suspended (a "DEFERRAL NOTICE") and,
                  upon receipt of any Deferral Notice, each Notice Holder agrees
                  not to sell any Registrable Securities pursuant to the
                  Registration Statement until such Notice Holder's receipt of
                  copies of the supplemented or amended Prospectus provided for
                  in clause (i) above, or until it is advised in writing by the
                  Company that the Prospectus may be used, and has received
                  copies of any additional or supplemental filings that are
                  incorporated or deemed incorporated by reference in such
                  Prospectus.

The Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is
practicable, (y) in the case of clause (B) above, as soon as, in the sole
judgment of the Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable thereafter and (z)
in the case of clause (C) above, as soon as in the reasonable discretion of the
Company, such suspension is no longer appropriate. The Company shall be entitled
to exercise its right under this Section 3(h) to suspend the availability of the
Shelf Registration Statement or any Prospectus, without incurring or accruing
any obligation to pay liquidated damages pursuant to Section 2(e), no more than
one (1) time in any three month period or three (3) times in any twelve month
period, and any such period during which the availability of the Registration
Statement and any Prospectus is suspended (the "DEFERRAL PERIOD") shall, without
incurring any obligation to pay liquidated damages pursuant to Section 2(e), not
exceed 30 days; provided that the aggregate duration of any Deferral Periods
shall not exceed 30 days in any three month period (or 60 days in any three
month period in the event of a Material Event pursuant to which the Company has
delivered a second notice as permitted below) or 90 days in any twelve (12)
month period; provided that in the case of a Material Event relating to an
acquisition or a probable acquisition or financing, recapitalization, business
combination or other similar transaction, the Company may, without incurring any
obligation to pay liquidated damages pursuant to Section 2(e), deliver to Notice
Holders a second notice to the effect set forth above, which shall have the
effect of extending the Deferral Period by up to an additional 30 days, or such
shorter period of time as is specified in such second notice.

                                       13
<PAGE>

                  (i)      If requested in writing in connection with a
         disposition of Registrable Securities pursuant to a Registration
         Statement, make reasonably available for inspection during normal
         business hours by a representative for the Notice Holders of such
         Registrable Securities, any broker-dealers, attorneys and accountants
         retained by such Notice Holders, and any attorneys or other agents
         retained by a broker-dealer engaged by such Notice Holders, all
         relevant financial and other records and pertinent corporate documents
         and properties of the Company and its subsidiaries, and cause the
         appropriate officers, directors and employees of the Company and its
         subsidiaries to make reasonably available for inspection during normal
         business hours on reasonable notice all relevant information reasonably
         requested by such representative for the Notice Holders, or any such
         broker-dealers, attorneys or accountants in connection with such
         disposition, in each case as is customary for similar "due diligence"
         examinations; provided that, to the extent the Company, in its
         reasonable discretion, agrees to disclose non-public information, such
         persons shall first agree in writing with the Company that any such
         non-public information shall be kept confidential by such persons and
         shall be used solely for the purposes of exercising rights under this
         Agreement and such person shall not engage in trading any securities of
         the Company until such material non-public information becomes properly
         publicly available, unless (i) disclosure of such information is
         required by court or administrative order or is necessary to respond to
         inquiries of regulatory authorities, (ii) disclosure of such
         information is required by law (including any disclosure requirements
         pursuant to federal securities laws in connection with the filing of
         any Registration Statement or the use of any prospectus referred to in
         this Agreement upon a customary opinion of counsel for such persons
         delivered to the Company), (iii) such information becomes generally
         available to the public other than as a result of a disclosure or
         failure to safeguard by any such person or (iv) such information
         becomes available to any such person from a source other than the
         Company and such source is not bound by a confidentiality agreement,
         and provided further that the foregoing inspection and information
         gathering shall, to the greatest extent possible, be coordinated on
         behalf of all the Notice Holders and the other parties entitled thereto
         by Special Counsel. Any person legally compelled to disclose any such
         confidential information made available for inspection shall provide
         the Company with prompt prior written notice of such requirement so
         that the Company may seek a protective order or other appropriate
         remedy. All costs and expenses and fees (including attorneys' and other
         professional fees) incurred by any Notice Holders pursuant to this
         Section 3(i) shall be solely at such Notice Holder's expense.

                  (j)      During the 12-month period commencing on the first
         day of the first fiscal quarter of the Company commencing after the
         effective date of a Registration Statement, comply with all applicable
         rules and regulations of the SEC and make generally available to its
         securityholders earning statements (which need not be audited)
         satisfying the provisions of Section 11(a) of the Securities Act and
         Rule 158 thereunder (or any similar rule promulgated under the
         Securities Act), which statements shall be made available no later than
         45 days after the end of such 12-month period or 90 days if such
         12-month period coincides with the fiscal year of the Company.

                                       14
<PAGE>

                  (k)      Cooperate with each Notice Holder to facilitate the
         timely preparation and delivery of certificates representing
         Registrable Securities sold or to be sold pursuant to a Registration
         Statement, which certificates shall not bear any restrictive legends,
         and cause such Registrable Securities to be in such denominations as
         are permitted by the Indenture and registered in such names as such
         Notice Holder may request in writing at least one (1) Business Day
         prior to any sale of such Registrable Securities.

                  (l)      Provide a CUSIP number for all Registrable Securities
         covered by each Registration Statement not later than the effective
         date of such Registration Statement and provide the Trustee and the
         transfer agent for the Common Stock with printed certificates for the
         Registrable Securities that are in a form eligible for deposit with The
         Depository Trust Company.

                  (m)      Cooperate and assist in any filings required to be
         made with the National Association of Securities Dealers, Inc.

                  (n)      Upon (i) the filing of the Initial Shelf Registration
         Statement and (ii) the effectiveness of the Initial Shelf Registration
         Statement, announce the same, in each case by release to PR Newswire.

         SECTION 4. Holder's Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to a Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with a
complete and accurate Notice and Questionnaire as required pursuant to Section
2(d) hereof (including the information required to be included in such Notice
and Questionnaire) and the information set forth in the next sentence. Each
Notice Holder agrees promptly to furnish to the Company all information required
to be disclosed in order to make the information previously furnished to the
Company by such Notice Holder not misleading and any other information regarding
such Notice Holder and the distribution of such Registrable Securities as the
Company may from time to time reasonably request. Any sale of any Registrable
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of distribution
is as set forth in the Prospectus delivered by such Holder in connection with
such disposition, that such Prospectus does not as of the time of such sale
contain any untrue statement of a material fact relating to or provided by such
Holder or its plan of distribution and that such Prospectus does not as of the
time of such sale omit to state any material fact relating to or provided by
such Holder or its plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were made, not
misleading.

         SECTION 5. Registration Expenses. Except as otherwise provided in this
Agreement, the Company shall bear all fees and expenses incurred in connection
with the performance by the Company of its obligations under Sections 2 and 3 of
this Agreement whether or not any Registration Statement is declared effective.
Such fees and expenses shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses (x) with
respect to filings required to be made with the National Association of
Securities Dealers,

                                       15
<PAGE>

Inc. and (y) of compliance with federal and state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of the Special
Counsel in connection with Blue Sky qualifications of the Registrable Securities
under the laws of such jurisdictions as Notice Holders of a majority of the
Registrable Securities being sold pursuant to a Registration Statement may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with The Depository Trust Company), (iii) reasonable duplication expenses
relating to copies of any Registration Statement or Prospectus delivered to any
Holders hereunder, (iv) fees and disbursements of counsel for the Company in
connection with the Shelf Registration Statement, (v) reasonable fees and
disbursements of the Trustee and its counsel and of the registrar and transfer
agent for the Common Stock and (vi) any Securities Act liability insurance
obtained by the Company in its sole discretion. In addition, the Company shall
pay the internal expenses of the Company (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing by the Company of the Registrable Securities on any
securities exchange on which similar securities of the Company are then listed
and the fees and expenses of any person, including special experts, retained by
the Company. Notwithstanding the provisions of this Section 5, each seller of
Registrable Securities shall pay selling expenses, including any underwriting
discount and commissions, and all registration expenses incurred by such seller,
and expenses and fees for all counsel and other professionals representing the
seller.

         SECTION 6. Indemnification and Contribution.

         (a)      Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Notice Holder, each person, if any, who
controls any Notice Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and each affiliate of any
Notice Holder within the meaning of Rule 405 under the Securities Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Holder furnished to the Company in writing by such Holder
expressly for use therein; provided that the indemnification contained in this
paragraph shall not inure to the benefit of any Holder (or to the benefit of any
person controlling such Holder or any affiliate of such Holder) on account of
any such losses, claims, damages or liabilities caused by any untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus provided in each case the Company has performed its
obligations under Section 3(f) hereof if either (A) (x) such Holder failed to
send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale by such Holder to the person asserting the
claim from which such losses, claims, damages or liabilities arise and (y) the

                                       16
<PAGE>

Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B) (x) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such Prospectus
as so amended or supplemented, with or prior to the delivery of written
confirmation of the sale of a Registrable Security to the person asserting the
claim from which such losses, claims, damages or liabilities arise.

         (b)      Indemnification by Holders. Each Holder agrees severally and
not jointly to indemnify and hold harmless the Company and its directors, its
officers and each person, if any, who controls the Company (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act) or
any other Holder, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any amendment or
supplement thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Holder and its plan of distribution furnished to the Company in writing by such
Holder expressly for use in such Registration Statement or Prospectus or
amendment or supplement thereto. In no event shall the liability of any Holder
hereunder be greater in amount than the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such indemnification obligation.

         (c)      Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b) hereof, such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (i) the fees and expenses of more than one
separate firm (in addition to any local counsel at its standard non-premium
rates) for all Notice Holders and all persons, if

                                       17
<PAGE>

any, who control any Notice Holder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act or who are affiliates of
any Notice Holder within the meaning of Rule 405 under the Securities Act and
(ii) the fees and expenses of more than one separate firm (in addition to any
local counsel at its standard non-premium rates) for the Company, its directors,
its officers and all persons, if any, who control the Company within the meaning
of either such Section, and that all such fees and expenses shall be reimbursed
as they are incurred. In the case of any such separate firm for the Notice
Holders and such control persons and such affiliates of any Notice Holders, such
firm shall be designated in writing by the Holders of a majority (with Holders
of Notes deemed to be the Holders, for purposes of determining such majority, of
the number of shares of Underlying Common Stock into which such Notes are or
would be convertible as of the date on which such designation is made) of the
Registrable Securities covered by the Registration Statement held by Holders
that are indemnified parties pursuant to Section 6(a). In the case of any such
separate firm for the Company, and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment that is indemnifiable pursuant to Section 6(a) or
6(b), as the case may be. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 60 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified 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.

         (d)      Contribution. To the extent that the indemnification provided
for in Section 6(a) or 6(b) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any

                                       18
<PAGE>

other relevant equitable considerations. The relative benefits received by the
Company on the one hand and by any Holder on the other hand in connection with
the offering of the Securities shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Securities received by
the Company and the value of receiving Registrable Securities that are
registered under the Securities Act bear to the aggregate offering price of the
Securities. The relative fault of the Company on the one hand and the Holders on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Holders, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this Section 6 are
several in proportion to the respective principal amounts of Registrable
Securities (or, in the case of Registrable Securities that are Underlying Common
Stock, amounts equal to the respective numbers of shares times the Conversion
Price) that they have sold pursuant to a Registration Statement, and not joint.

         The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no indemnifying party that is a selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such indemnifying party has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

         (e)      The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
an indemnified party at law or in equity, hereunder, under the Purchase
Agreement or otherwise.

         (f)      The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder, any person controlling any Holder or any affiliate of any Holder
or by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by any
Holder.

         SECTION 7. Information Requirements. The Company covenants that, if at
any time before the end of the Effectiveness Period the Company is not subject
to the reporting requirements of the Exchange Act, it will cooperate with any
Holder and take such further

                                       19
<PAGE>

reasonable action as any Holder may reasonably request in writing (including,
without limitation, making such reasonable representations as any such Holder
may reasonably request), all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A under the Securities Act and customarily taken in connection with
sales pursuant to such exemptions. Upon the written request of any Holder, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such filing requirements, unless such a statement has been
included in the Company's most recent report filed pursuant to Section 13 or
Section 15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this
Section 7 shall be deemed to require the Company to register any of its
securities (other than the Common Stock) under any section of the Exchange Act.

         SECTION 8. Miscellaneous.

         (a)      No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders in this Agreement unless such agreement has been
waived. The Company represents and warrants that the rights granted to the
Holders hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other agreements unless such
agreement has been waived.

         (b)      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 Company has obtained the written consent of Holders
of a majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Notes are or would be convertible as of the date on
which such consent is requested). 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 Holders whose securities are being sold
pursuant to a Registration Statement 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 being sold by such Holders pursuant to
such Registration Statement; 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. Notwithstanding the foregoing
two sentences, this Agreement may be amended by written agreement signed by the
Company and the Initial Purchasers, without the consent of the Holders of
Registrable Securities, to cure any ambiguity or to correct or supplement any
provision contained herein that may be defective or inconsistent with any other
provision contained herein, or to make such other provisions in regard to
matters or questions arising under this Agreement that shall not adversely
affect the interests of the Holders of Registrable Securities. Each Holder of
Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or

                                       20
<PAGE>

not any notice, writing or marking indicating such amendment, modification,
supplement, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.

         (c)      Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

                  (i)      if to a Holder, at the most current address given by
         such Holder to the Company in a Notice and Questionnaire or any
         amendment thereto;

                  (ii)     if to the Company, to:

                           AtheroGenics, Inc.
                           8995 Westside Parkway
                           Alpharetta, Georgia 30004
                           Attention: Mark P. Colonnese
                           Telecopy No.: (678) 336-2500

                           With a copy to:
                           McKenna Long & Aldridge LLP
                           303 Peachtree Street
                           Atlanta, Georgia 30308
                           Attention: Leonard A. Silverstein, Esq.
                           Telecopy No.: (404) 527-4198

                  (iii)    if to the Initial Purchasers, to:

                           Morgan Stanley & Co. Incorporated
                           1585 Broadway
                           New York, New York 10036
                           Attention: Global Capital Markets
                           Telecopy No.: (212) 761-0538

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

         (d)      Approval of Holders. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (as such
term is defined in Rule 405 under the Securities Act) (other than the Initial
Purchasers or subsequent Holders if such subsequent Holders are deemed to be
such affiliates solely by reason of their holdings of such Registrable
Securities) shall not be

                                       21
<PAGE>

counted in determining whether such consent or approval was given by the Holders
of such required percentage.

         (e)      Successors and Assigns. Any person who purchases any
Registrable Securities from any Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of such Initial Purchaser. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities, provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Indenture. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities, such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
person shall be entitled to receive the benefits hereof.

         (f)      Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

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

         (h)      Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         (i)      Severability. If any term provision, covenant or restriction
of this Agreement is held 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 thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.

         (j)      Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and is 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 and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement. In no event will such methods of
distribution take the

                                       22
<PAGE>

form of an underwritten offering of the Registrable Securities without the prior
agreement of the Company.

         (k)      Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for the Liquidated Damages Amount
under Section 2(e) hereof to the extent such amount accrues prior to the end of
the Effectiveness Period, each of which shall remain in effect in accordance
with its terms.

                                       23
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                    ATHEROGENICS, INC.

                                    By: /s/  MARK P. COLONNESE
                                        ----------------------------------------
                                        Name:  Mark P. Colonnese
                                        Title: Senior Vice President of Finance
                                               and Administration, Chief
                                               Financial Officer and Secretary

Confirmed and accepted as of
the date first above written:

MORGAN STANLEY & CO. INCORPORATED
LEHMAN BROTHERS, INC.
ADAMS, HARKNESS & HILL, INC.

By: Morgan Stanley & Co. Incorporated

By: /s/  BRYAN W. ANDRZEJEWSKI
    ------------------------------------
    Name:  Bryan W. Andrzejewski
    Title: Executive Director

                                       243RD AMENDMENT TO LOAN & SECURITY AGREEMENT

 

EXHIBIT 10.1

GUARANTY BUSINESS CREDIT CORPORATION

October 31, 2003

U.S. Plastic Lumber, Ltd.

2300 Glades Road, Suite 440 West

Boca Raton, Florida 33431

Attn: Mark Alsentzer, CEO

	 	 	 
	Re:	 	
Letter Agreement Amending Second Amendment to Loan and Security Agreement

and Limited Waiver of Defaults

Ladies and Gentlemen:

     This letter agreement (this “Letter Agreement”) is delivered to U. S.
Plastic Lumber, Ltd., a Delaware corporation (“Company”), in connection with
(a) the Loan and Security Agreement dated as of December 19, 2002 (as amended,
restated, modified and supplemented from time to time, including, without
limitation, by the “Second Amendment” as herein defined, the “Loan Agreement”)
between Guaranty Business Credit Corporation, a Delaware corporation
(“Lender”), and Company, (b) the Second Amendment to Loan and Security
Agreement and Limited Waiver of Defaults between Company and Lender dated as of
July 25, 2003 with respect to the Loan Agreement (as amended, supplemented and
modified from time to time, the “Second Amendment”), and (c) the letter
agreement dated as of July 25, 2003 regarding the amendment and waiver fee and
early termination fee (as amended, supplemented and modified from time to time,
the “Fee Letter”). Capitalized terms used but not defined in this Letter
Agreement shall have the meanings given to them in the Loan Agreement.

     Company has requested that Lender amend the Loan Agreement to increase the
Special Advance Subline from One Million Seven Hundred Fifty Thousand Dollars
($1,750,000) to Two Million Dollars ($2,000,000), and the Lender has agreed to
Company’s request, subject to the terms and conditions of this Letter
Agreement.

     Further, Company has advised Lender that it intends the Sale (as such term
is defined in the Second Amendment) to take place on or before November 30,
2003. Company has requested that Lender amend the Second Amendment to extend
the deadline for the Closing Date (as such term is defined in the Second
Amendment) for the Sale from October 31, 2003 to November 30, 2003, and the
Lender has agreed to Company’s request, subject to the terms and conditions of
this Letter Agreement.

     Accordingly, subject to the satisfaction of the conditions precedent to
the effectiveness of Lender’s obligations under this Letter Agreement set forth
in the next paragraph, and in

1

 

consideration of good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, (a) Section 7(a) of the Second Amendment is
hereby amended by deleting the amount “One Million Seven Hundred Fifty Thousand
Dollars ($1,750,000)” from such section and substituting in its place “Two
Million Dollars ($2,000,000)”, and (b) Section 2 and Subsection 8(a) of the
Second Amendment are hereby amended by deleting the date “October 31, 2003”
from such section and subsection and substituting in its place “November 30,
2003”.

     Lender’s obligations under this Letter Agreement are subject to the
delivery to Lender of the following fully-executed documents in form and
substance satisfactory to Lender:

     (a)  a secured promissory note by Company in favor of Lender in the amount
of Two Million Dollars ($2,000,000) in respect of the Special Advance Subline,
which promissory note shall amend and restate in full the Amended and Restated
Secured Promissory Note (Special Advance Promissory Note) dated as of October
23, 2003;

     (b)  an amendment to the Junior Participation Agreement dated as of August
7, 2003 between Schultes, Inc., a New Jersey corporation, and Lender, as
amended; and

     (c)  a letter agreement amending the date that the Amendment Fee is due and
payable, as set forth in the Fee Letter.

     Except as amended hereby, the Loan Agreement, the Second Amendment, and
each other Transaction Document remain in full force and effect and are hereby
ratified and confirmed by Company.

     In consideration of Lender executing this Letter Agreement, Company does
hereby release Lender and its employees, officers, directors, attorneys and
agents from any and all claims, demands, causes of action, known or unknown,
arising out of or related to the Loan Agreement or the transactions connected
therewith. Company does hereby warrant and represent that no claims, demands or
causes of action, arising out of or related to the Loan Agreement or the
transactions connected therewith are now known or suspected to exist.

     Company intends this release to cover, encompass, release, and extinguish,
among other things, all claims and matters which might otherwise be reserved by
California Civil Code section 1542, which provides as follows:

	 
	“A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him
must have materially affected his settlement with the
debtor.”

     Company shall pay, on written demand, all fees and costs incurred by
Lender in connection with the negotiation, documentation and execution of this
Letter Agreement, including the reasonable fees and expenses of attorneys. If
any legal action or proceeding shall be commenced at any time by any party to
this Letter Agreement in connection with its interpretation or enforcement, the
prevailing party or parties in such action or proceeding shall be

2

 

entitled to reimbursement of its reasonable attorneys’ fees and costs in
connection therewith, in addition to all other relief to which the prevailing
party or parties may be entitled.

     This Letter Agreement may be executed in one or more counterparts and by
facsimile, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.

     This Letter Agreement shall be governed by and construed according to the
laws of the State of California (without regards to its conflict of laws
principles). Company agrees to pay, on demand, all attorneys’ fees and costs of
the Agent incurred in connection with the negotiation, documentation and
execution of this Letter Agreement. If any legal action or proceeding shall be
commenced at any time by any party to this Letter Agreement in connection with
its interpretation or enforcement, the prevailing party or parties in such
action or proceeding shall be entitled to reimbursement of its reasonable
attorneys’ fees and costs in connection therewith, in addition to all other
relief to which the prevailing party or parties may be entitled. EACH OF
THE PARTIES HERETO WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION TO
ENFORCE, DEFEND, INTERPRET OR OTHERWISE CONCERNING THIS LETTER AGREEMENT.

[The next page is the signature page.]

3

 

     Please evidence your agreement to the forgoing by executing this Letter
Agreement in the space provided below.

	 	 	 
	 	 	
Very truly yours,
	 	 	 
	 	 	
GUARANTY BUSINESS CREDIT CORPORATION
	 	 	 
	 	 	
By: /s/ Greg Carasik

	 	 	
Name: Greg Carasik

	 	 	
Title: Vice President

	 	 	 
	Accepted and Agreed to as of the date hereof:	 	 
	 	 	 
	U.S. PLASTIC LUMBER, LTD.	 	 
	 	 	 
	By: /s/ Michael D. Schmidt

	 	 
	Name: Michael D. Schmidt

	 	 
	Title: Treasurer

	 	 

4

 

     The undersigned hereby acknowledges and consents to the terms of the
foregoing Letter Agreement and agrees that its guaranty and all other documents
executed by it in favor of the Agent and Lenders remain in full force and
effect.

	 	 	 
	 	 	
U.S. PLASTIC LUMBER IP CORPORATION
	 	 	 
	 	 	
By: /s/ Michael D. Schmidt

	 	 	
Name: Michael D. Schmidt

	 	 	
Title: Treasurer

	 	 	 
	 	 	
U.S. PLASTIC LUMBER CORP.
	 
	 	 	
By: /s/ Michael D. Schmidt

	 	 	
Name: Michael D. Schmidt

	 	 	
Title: Chief Financial Officer

	 	 	 
	 	 	
U.S. PLASTIC LUMBER FINANCE
CORPORATION
	 	 	 
	 	 	
By: /s/ Michael D. Schmidt

	 	 	
Name: Michael D. Schmidt

	 	 	
Title: Treasurer

5

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