Document:

Exhibit 4.2

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION
RIGHTS AGREEMENT (this “Agreement”),
dated as of April 28, 2006, by and among Earth Biofuels, Inc., a Delaware
corporation, with headquarters located at 3001 Knox Street, Suite
403, Dallas, Texas 75205 (the “Company”), and
the investors listed on the Schedule of Buyers attached hereto (each, a “Buyer” and collectively, the “Buyers”).

 

WHEREAS:

 

A.            In connection with the Securities Purchase Agreement by
and among the parties hereto of even date herewith (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and
subject to the conditions of the Securities Purchase Agreement, to issue and
sell on the date hereof to each Buyer (i) shares (the “Common Shares”) of the Company’s common stock,
par value $0.001 per share (the “Common Stock”),
and (ii) under certain circumstances set forth therein additional shares of
Common Stock (the “Additional Shares”).

 

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

 

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

 

1.             Definitions.

 

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

 

(a)           “Business
Day” means any day other than Saturday, Sunday or any other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.

 

(b)           “Effective
Date” means the date that the Registration Statement is first
declared effective by the SEC.

 

(c)           “Effectiveness Deadline”
means the date that is 90 days from the Filing Deadline, or, if the
Registration Statement is the subject of review by the SEC, 120 days from the
Filing Deadline.

 

(d)           Filing Deadline”
means August 31, 2006.

 

 

(e)           “Investor”
means a Buyer or any transferee of a Buyer of the Common Shares or Additional
Shares, as applicable, to whom a Buyer assigns its rights under this Agreement
in accordance with the provisions of this Agreement (including but not limited
to Section 9) and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and any transferee or assignee thereof
to whom a transferee or assignee of the Common Shares or Additional Shares, as
applicable, assigns its rights under this Agreement in accordance with the
provisions of this Agreement (including but not limited to Section 9) and who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9.

 

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

 

(g)           “register,”
“registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements (as
defined below) in compliance with the 1933 Act and pursuant to Rule 415, and
the declaration or ordering of effectiveness of such Registration Statement(s)
by the SEC.

 

(h)           “Registrable
Securities” means (i) the Common Shares, (ii) the Additional Shares
and (iii) any shares of capital stock issued or issuable in respect of the
Common Shares or the Additional Shares as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise.

 

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

 

(j)            “Required
Holders” means the holders of at least a majority of the Registrable
Securities.

 

(k)           “Rule
415” means Rule 415 under the 1933 Act or any successor rule
providing for offering securities on a continuous or delayed basis.

 

(l)            “SEC”
means the United States Securities and Exchange Commission.

 

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

 

2.             Registration.

 

(a)   Piggyback Registration
Rights.

 

(i)  Requests for Piggyback
Registration. The Company covenants and agrees with each Investor
that, in the event the Company proposes to file at any time and from time to
time after the date hereof and before the date that is two years from the date
hereof, a registration statement on any form for the general registration of
securities under the Securities Act in respect of the offering of any class of
security other than in connection with an offering

 

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solely to the Company’s employees pursuant to
a registration statement on Form S-8 under the Securities Act or an offering
pursuant to a registration statement on Form S-4 under the Securities Act, or
any successor forms thereto (a “Piggyback Registration
Statement”), then the Company shall in each such case give written
notice (a “Company Notice”) of such proposed
filing to each Investor so that the Company Notice is received by each Investor
at least fifteen (15) business days before the anticipated filing date, and
such notice shall offer to each Investor the opportunity to include in such
Piggyback Registration Statement such number of Registrable Securities, not to
exceed in the aggregate 2,100,000 shares of Common Stock, as each Investor may
request; provided that if the number of shares requested to be so registered
exceeds 2,100,000 shares, the shares of each Investor’s to be registered
thereunder shall be reduced pro rata with each other Investor’s shares so that
the aggregate number thereof equals 2,100,000 shares of Common Stock. Notwithstanding
the foregoing, the Company shall not be obligated to register the Registrable
Securities of any Investor unless there shall have been received by the
Company, within ten (10) business days of receipt of the Company Notice by such
Investor, written notice (a “Piggyback Notice”)
from such Investor, which notice shall set forth the number of Registrable
Securities to be so included.

 

(ii)                   Underwriting.

 

(1)           The Company shall cause
the underwriter of a proposed offering, if any, to permit the Investors holding
Registrable Securities requested to be included in the Piggyback Registration
Statement to include such Registrable Securities in the proposed offering on
terms and conditions at least as favorable to the Investors holding such
Registrable Securities as those offered in respect of the other securities of
the Company included therein. The right of any Investor to be included in a
registration statement pursuant to this Section 2(a)(ii) shall be conditioned
on such Investor’s participation in such underwriting and the inclusion of such
Investor’s Registrable Securities in the underwriting to the extent provided
herein. All Investors proposing to distribute their Registrable Securities
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company.

 

(2)           Notwithstanding the
foregoing, if any underwriter shall advise the Company in writing that, in its
opinion, marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting
shall be allocated, first among the Company and the Investors on a pro rata
basis based on the total number of Registrable Securities to be registered; and
second, to any stockholder of the Company (other than an Investor) on a pro
rata basis; provided, however, that no such reduction shall reduce the amount
of securities of the selling Investors included in the registration below
twenty-five percent (25%) of the total amount of securities included in such
registration. For any Investor which is a partnership or corporation, the
partners, retired partners and stockholders of such Investor, or the estates
and family members of any such partners and retired partners and any trusts for
the benefit of any of the foregoing person shall be deemed to be a single “Investor,”
and any pro rata reduction in respect of such “Investor” shall be based upon
the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such “Investor,” as defined in this
sentence.

 

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(3)           If any Investor
disapproves of the terms of any such underwriting, such Investor may elect to
withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration.

 

(b)           Mandatory Registration. Subject to its
receipt of the Registration Statement Questionnaire (as defined below) from
each of the Investors, the Company shall prepare, and, as soon as practicable
but in no event later than the Filing Deadline, file with the SEC the
Registration Statement on Form SB-2 covering the resale of: (i) in the case
that the Acquisition (as defined in the Securities Purchase Agreement) has not
occurred on or prior to August 31, 2006, all of the Registrable Securities
(including any Additional Shares required to be issued on such date) not
theretofore registered pursuant to Section 2(a), above, and (ii) in the case
that the Acquisition has occurred on or prior to August 31, 2006, such number
of Registrable Securities, not to exceed in the aggregate 2,100,000 shares of
Common Stock, as each Investor may request; provided that if the number of
shares requested to be so registered exceeds 2,100,000 shares, the shares of
each Investor’s to be registered thereunder shall be reduced pro rata with each
other Investor’s shares so that the aggregate number thereof equals 2,100,000
shares of Common Stock (the date of such filing the “Filing Date”). The Registration Statement prepared pursuant
hereto shall register for resale that number of shares of Common Stock provided
for in the immediately preceding sentence, subject to adjustment as provided in
Section 2(f), and shall contain the “Selling Stockholders” section and “Plan of
Distribution” in substantially the form attached hereto as Annex I (except if
otherwise required pursuant to written comments received from the SEC upon a
review of the Registration Statement). Subject to its receipt of the
Registration Statement Questionnaire from each of the Investors, the Company
shall use its best efforts to have the Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the
Effectiveness Deadline. By 9:30 am on the second Business Day following the
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final prospectus to be used in connection with sales
pursuant to such Registration Statement.

 

(c)           Allocation of Registrable
Securities. The initial number of Registrable Securities included in any
Registration Statement and each increase in the number of Registrable
Securities included therein shall be allocated pro rata among the Investors
based on the number of Registrable Securities held by each Investor at the time
the Registration Statement covering such initial number of Registrable
Securities or increase thereof is declared effective by the SEC. In the event
that an Investor sells or otherwise transfers any of such Investor’s
Registrable Securities, each transferee that becomes an investor shall be
allocated a pro rata portion of the then remaining number of Registrable
Securities included in the Registration Statement for such transferor. Any
shares of Common Stock included in the Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities covered
by such Registration Statement shall be allocated to the remaining Investors,
pro rata based on the number of Registrable Securities then held by such
Investors which are covered by such Registration Statement. In no event shall
the Company include any securities other than Registrable Securities on any
Registration Statement without the prior written consent of Buyers holding at
least a majority of the Registrable Securities.

 

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(d)           Legal Counsel. Subject to
Section 5 hereof, the Buyers holding at least a majority of the Registrable
Securities shall have the right to select one legal counsel to review and
oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Schulte
Roth & Zabel LLP or such other counsel as thereafter designated by the
holders of at least a majority of the Registrable Securities. The Company and
Legal Counsel shall reasonably cooperate with each other in performing the
Company’s and the Investors’ obligations under this Agreement.

 

(e)           Eligibility for Form SB-2. The
Company shall (i) register the resale of the Registrable Securities on Form
SB-2 or another appropriate form reasonably acceptable to the Required Holders
and (ii) undertake to register the Registrable Securities on Form SB-2 as soon
as such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form SB-2 covering the Registrable Securities has
been declared effective by the SEC.

 

(f)            Sufficient Number of Shares
Registered. In the event the number of shares available under a
Registration Statement filed pursuant to Section 2(a) or 2(b), as applicable,
is insufficient to cover all of the Registrable Securities required to be
covered by such Registration Statement or an Investor’s allocated portion of
the Registrable Securities pursuant to Section 2(b), the Company shall amend
the applicable Registration Statement, or file a new Registration Statement (on
the short form available therefor, if applicable), or both, so as to cover the
lesser of (i) that number of Registrable Securities required to be registered
pursuant to such Section and (ii) at least 100% of the number of such
Registrable Securities as of the trading day immediately preceding the date of
the filing of such amendment or new or additional Registration Statement, in
each case, as soon as practicable, but in any event not later than twenty (20)
days after the Company becomes aware of the necessity therefor. The Company
shall use its reasonable best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof. For purposes of the foregoing provision, the number of shares
available under a Registration Statement shall be deemed “insufficient to cover
all of the Registrable Securities required to be covered by such Registration
Statement” if at any time the number of shares of Common Stock available for
resale under the Registration Statement is less than the number of Registrable
Securities required to be covered by such Registration Statement.

 

(g)           Effect of Failure to File and Obtain and Maintain
Effectiveness of Registration Statement. If (i) a Registration Statement
covering all the Registrable Securities required to be covered thereby and
required to be filed by the Company pursuant to this Agreement is (A) not filed
with the SEC on or before the Filing Deadline (a “Filing
Failure”), or (B) filed with the SEC
but not declared effective by the SEC on or before the 30th day after the
Effectiveness Deadline (an “Effectiveness Failure”) or (ii) on any day after the Effective Date sales of all of the
Registrable Securities required to be included on such Registration Statement
cannot be made (other than during an Allowable Grace Period (as defined in
Section 3(q)) pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant to
such Registration Statement, a suspension or delisting of the Common Stock on
its principal trading market or exchange, or to register a sufficient number of
shares of

 

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Common Stock) (a “Maintenance
Failure”), then, as partial relief
for the damages to any holder by reason of any such delay in or reduction of
its ability to sell the underlying shares of Common Stock (which remedy shall
not be exclusive of any other remedies available at law or in equity), the
Company shall become liable for payment to each holder of Registrable
Securities relating to such Registration Statement an amount in cash equal to
two percent (2%) of the aggregate Purchase Price (as such term is defined in
the Securities Purchase Agreement) up to a cumulative maximum for all Investors
of ten percent (10%) of the aggregate Purchase Price of such Investor’s
Registrable Securities included in such Registration Statement on each of the
following dates: (i) the day of a Filing Failure and on every thirtieth day
(pro rated for periods totaling less than thirty (30) days) thereafter until
such Filing Failure is cured; (ii) the day of an Effectiveness Failure and on
every thirtieth day (pro rated for periods totaling less than thirty (30) days)
thereafter until such Effectiveness Failure is cured; and (iii) the initial day
of a Maintenance Failure and on every thirtieth day (pro rated for periods
totaling less than thirty (30) days) thereafter until such Maintenance Failure
is cured. The payments to which a holder shall be entitled pursuant to this
Section 2(g) are referred to herein as “Registration Delay Payments.”  Registration Delay Payments shall be paid on
the earlier of (I) the last day of the calendar month during which such
Registration Delay Payments are incurred and (II) the third Business Day after
the event or failure giving rise to the Registration Delay Payments is cured. In
the event the Company fails to make Registration Delay Payments in a timely
manner, such Registration Delay Payments shall bear interest at the rate of one
and one-half percent (1.5%) per month (prorated for partial months) until paid
in full.

 

3.             Related Obligations.

 

In connection with its
obligations pursuant to Section 2, the Company shall have the following
obligations:

 

(a)           The Company shall submit to the SEC, within three (3) Business Days
after the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff of the SEC has no
further comments on a particular Registration Statement, as the case may be, a
request for acceleration of effectiveness of such Registration Statement to a
time and date not later than two (2) Trading Days after the submission of such
request. The Company shall keep each Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (i) the date as of which
all of the Investors may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144(k) (or
successor thereto) promulgated under the 1933 Act or (ii) the date on which the
Investors shall have sold all of the Registrable Securities covered by such
Registration Statement (the “Registration
Period”). The Company shall
ensure that each Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein (in the case
of prospectuses, in the light of the circumstances in which they were made) not
misleading.

 

(b)           The Company shall prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with such Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be

 

6

 

necessary to keep such Registration Statement effective at all times
during the Registration Period (except pursuant to Sections 3(f) and 3(q)),
and, during such period, comply with the provisions of the 1933 Act in respect
of the disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration
Statement which are required to be filed pursuant to this Agreement (including
pursuant to this Section 3(b)) by reason of the Company filing a report on Form
10-KSB, Form 10-QSB or Form 8-K or any analogous report under the Securities
Exchange Act of 1934, as amended (the “1934
Act”), the Company shall have incorporated such report by reference
into such Registration Statement, if applicable, or shall file such amendments
or supplements with the SEC as expeditiously as practicable on or following the
date on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.

 

(c)           The Company shall (A) permit Legal
Counsel to review and comment upon (i) a Registration Statement at least five
(5) Business Days prior to its filing with the SEC and (ii) all amendments and
supplements to all Registration Statements (except for Annual Reports on Form
10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K and
any similar or successor reports) within a reasonable number of days prior to
their filing with the SEC, and (B) not file any Registration Statement or
amendment or supplement thereto in a form to which Legal Counsel reasonably
objects; provided that, the failure of any Investor or his, her or its counsel
to respond to such proposed documents within five (5) Business Days after
receipt thereof shall be deemed approval of same. The Company shall not submit
a request for acceleration of the effectiveness of a Registration Statement or
any amendment or supplement thereto without the prior approval of Legal
Counsel, which consent shall not be unreasonably withheld. The Company shall
furnish to Legal Counsel, without charge, (i) copies of any correspondence from
the SEC or the staff of the SEC to the Company or its representatives relating
to any Registration Statement, (ii) promptly after the same is prepared and
filed with the SEC, one copy of any Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference, if requested by an Investor and not
otherwise available on the EDGAR system, and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus
included in such Registration Statement and all amendments and supplements
thereto. The Company shall reasonably cooperate with Legal Counsel in
performing the Company’s obligations pursuant to this Section 3.

 

(d)           The Company shall furnish to Legal
Counsel and each Investor whose Registrable Securities are included in any
Registration Statement, without charge, (i) promptly after the same is prepared
and filed with the SEC, if requested by an Investor and not otherwise available
on the EDGAR system, at least one copy of such Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10)
copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request) and (iii) such other documents, including
copies

 

7

 

of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor.

 

(e)           The Company shall use its reasonable
best efforts to (i) register and qualify, unless an exemption from registration
and qualification applies, the resale by Investors of the Registrable
Securities covered by a Registration Statement under such other securities or “blue
sky” laws of all applicable jurisdictions in the United States, (ii) prepare
and file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (iv) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction, (y)
subject itself to general taxation in any jurisdiction, or (z) file a general
consent to service of process in any jurisdiction in which it is not now so
qualified or subject to general taxation or has not currently so consented. The
Company shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any notification in
respect of the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue sky” laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.

 

(f)            The Company shall notify Legal
Counsel and each Investor in writing (each such notice to Legal Counsel and the
Investors, a “Suspension Notice”) of the
happening of any of the following events, as promptly as practicable after
becoming aware of such event: (i) any request by the SEC or any other federal
or state governmental authority during the period of effectiveness of the
Registration Statement for amendments or supplements to a Registration
Statement or related prospectus or for additional information; (ii) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose; (iii) the receipt by the
Company of any notification in respect of 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; or (iv) any event or circumstance which necessitates the making of any
changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not include any untrue statement of
a material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the prospectus, it will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), and, subject to Section 3(q), promptly prepare a
supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver a copy of such supplement or amendment to
Legal Counsel and each Investor (or such other number of copies as Legal
Counsel or such Investor may reasonably request). The Company shall also
promptly notify Legal Counsel and each Investor in writing (i) when a
prospectus or any prospectus

 

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supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and
each Investor by facsimile on the same day of such effectiveness and by
overnight mail) and (ii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.

 

(g)           The Company shall use its reasonable
best efforts to prevent the issuance of any stop order or other suspension of
effectiveness of the Registration Statement (other than during an Allowable
Grace Period), or the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension as soon as
reasonably practicable consistent with the provisions of Section 3(f) and to
notify Legal Counsel and each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such purpose.

 

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

 

(i)            Upon the written request of any
Investor in connection with any Investor’s due diligence requirements, if any,
the Company shall make available for inspection by (i) any Investor, (ii) Legal
Counsel and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the “Inspectors”),
all pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector, and cause the Company’s officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree in writing to hold in strict confidence and
shall not make any disclosure (except to an Investor) or use of any Record or
other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
under the 1933 Act, (b) the release of such Records is ordered pursuant to a
final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement of which the Inspector has knowledge. Each Investor
agrees that it shall, upon learning that disclosure of such Records is required
or is sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company,
at its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the Records deemed confidential. Nothing herein
(or in any other confidentiality agreement between the

 

9

 

Company and any Investor) shall be deemed to limit the Investors’
ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.

 

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

 

(k)           The Company shall use its reasonable
best efforts either to (i) cause all the Registrable Securities covered by the
Registration Statement to be listed on each securities exchange on which
securities of the same class or series issued by the Company are then listed,
if any, if the listing of such Registrable Securities is then permitted under
the rules of such exchange, or (ii) secure designation and quotation of all of
the Registrable Securities covered by the Registration Statement on The Nasdaq
Capital Market or the American Stock Exchange. The Company shall pay all fees
and expenses in connection with satisfying its obligation under this Section
3(k).

 

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

 

(m)          If requested by an Investor, the
Company shall (i) as soon as practicable incorporate in a prospectus supplement
or post-effective amendment such information as an Investor reasonably requests
to be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information in respect of the number
of Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to
be sold in such offering; (ii) as soon as practicable make all required filings
of such prospectus supplement or post-effective amendment after being notified
of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) as soon as practicable, supplement or make
amendments to any Registration Statement if reasonably requested by an Investor
holding any Registrable Securities.

 

(n)           The Company shall make generally
available to its security holders as soon as practical, but not later than
ninety (90) days after the close of the period covered

 

10

 

thereby, an earnings statement (in form complying with, and in the manner
provided by, the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the effective date of a Registration Statement.

 

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

 

(p)           Within two (2) Business Days after
the Registration Statement which covers Registrable Securities is declared
effective by the SEC, the Company shall deliver, and shall cause legal counsel
for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as
Exhibit A.

 

(q)           Notwithstanding anything to the
contrary herein, at any time after the Effective Date, upon any event or circumstance
which necessitates the making of any changes in the Registration Statement or
prospectus, or any document incorporated or deemed to be incorporated therein
by reference, so that, in the case of the Registration Statement, it will not
include any untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the prospectus, it will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, the suspension pursuant to the Company’s
Suspension Notice will not trigger any payment or liability for payment by the
Company of any Registration Delay Payments otherwise payable or owing by the
Company pursuant to Section 2(g) of this Agreement (a “Grace Period”);
provided that the Company shall promptly (i) notify the Investors in writing of
the existence of a Grace Period in conformity with the provisions of this
Section 3(q)(provided that in each notice the Company will not disclose the
content of such material, non-public information to the Investors) and the date
on which the Grace Period will begin, and (ii) as soon as such date may be
determined, promptly notify the Investors in writing of the date on which the
Grace Period ends; and, provided further, that no Grace Period shall exceed
twenty (20) consecutive days and during any three hundred sixty five (365) day
period such Grace Periods shall not exceed an aggregate of sixty (60) days and
the first day of any Grace Period must be at least five (5) trading days after
the last day of any prior Grace Period (each, an “Allowable
Grace Period”). For purposes of determining the length of a Grace
Period above, the Grace Period shall begin on and include the date the
Investors receive the notice referred to in clause (i) and shall end on and
include the later of the date the Investors receive the notice referred to in
clause (ii) and the date referred to in such notice. For the avoidance of
doubt, no Maintenance Failure shall occur during an Allowable Grace Period. The
provisions of Section 3(g) hereof shall not be applicable during the period of
any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) in respect of the
information giving rise thereto unless such material, non-public information is
no longer applicable. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to
a transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with

 

11

 

any sale of Registrable Securities in respect of which an Investor has
entered into a contract for sale, and delivered a copy of the prospectus
included as part of the applicable Registration Statement, in each case prior
to the Investor’s receipt of the Suspension Notice related to the Grace Period
and for which the Investor has not yet settled.

 

4.             Obligations and Covenants of the Investors.

 

(a)           The Investor has completed or caused
to be completed the Registration Statement Questionnaire (the “Registration Statement Questionnaire”) attached hereto as Annex
II, for use in preparation of the Registration Statement, and the answers
thereto are true and correct as of the date hereof and, as may be updated by an
Investor in writing, will be true and correct as of the effective date of the
Registration Statement. At least five (5) Business Days prior to the first
anticipated filing date of the Registration Statement, the Company shall notify
each Investor in writing of any additional information the Company requires
from each such Investor if such Investor elects to have any of such Investor’s
Registrable Securities included in such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement in respect of the Registrable
Securities of a particular Investor that such Investor shall furnish 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 and maintain the effectiveness of
the registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may reasonably
request.

 

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

 

(c)           Each Investor agrees that, upon
receipt of any Suspension Notice from the Company, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement covering such Registrable Securities until such Investor’s
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 3(f) or receipt of notice from the Company in writing that no
supplement or amendment is required. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of
Common Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities under all of the circumstances described in the last sentence of
Section 3(q).

 

(d)           Each Investor covenants and agrees
that it will comply with any applicable prospectus delivery requirements of the
1933 Act as applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement.

 

12

 

5.             Expenses of Registration.

 

All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company shall be paid by the Company. The Company shall also reimburse the
Investors for the fees and disbursements of Legal Counsel in connection with
registration, filing or qualification pursuant to Sections 2 and 3 of this
Agreement which amount shall be limited to $7,500.

 

6.             Indemnification.

 

In the event any
Registrable Securities are included in the Registration Statement (provided
that for the purpose of this Section 6, the term “Registration Statement” shall
include any preliminary prospectus, final prospectus, exhibit, supplement or
amendment included in or relating to, and any document incorporated by reference
in, the Registration Statement as such term is defined in Section 1) under this
Agreement:

 

(a)           The Company agrees to indemnify, hold
harmless and defend each Investor, the directors, officers, partners, members,
employees, agents, representatives of, and each Person, if any, who controls
any Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys’ fees, amounts paid in settlement (if such settlement is
effected with the written consent of the party from whom indemnification is
sought, which consent shall not be unreasonably withheld or delayed) or
expenses, joint or several (collectively, “Claims”),
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, (“Indemnified Damages”), to which any of them may become subject
insofar as such Claims or Indemnified Damages arise out of or are based
upon:  (i) any untrue statement or
alleged untrue statement of a material fact in the Registration Statement or
any post-effective amendment thereto or in any filing made in connection with
the qualification of the offering under the securities or other “blue sky” laws
of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary
to make the statements made therein, in the light of the circumstances under
which the statements therein were made, not misleading, (iii) any violation or
alleged violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any material violation
of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”). Subject
to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly
as such expenses are incurred and are due and payable, for any

 

13

 

legal fees or other reasonable expenses incurred by them in connection
with investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a):  (i) shall not apply to a
Claim or Indemnified Damages sought by an Indemnified Person arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person for
such Indemnified Person expressly for use in connection with the preparation of
the Registration Statement or any such amendment thereof or supplement thereto;
and (ii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.

 

(b)           In connection with any Registration
Statement in which an Investor is participating, each such Investor agrees to
severally and not jointly indemnify, hold harmless and defend the Company, each
of its directors, each of its officers who signs the Registration Statement and
each Person, if any, who controls the Company within the meaning of the 1933
Act (each, an “Indemnified Party”) to the same
extent and in the same manner as is set forth in Section 6(a) in respect of the
Indemnified Persons, against any Claim or Indemnified Damages to which any of
them may become subject insofar as such Claim or Indemnified Damages arise out
of or are based upon: any Violation, to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Investor expressly
for use in connection with such Registration Statement, including but not
limited to the Registration Statement Questionnaire attached hereto as Annex
II; or (ii) the use by such Investor of an outdated or defective prospectus
after the Company has notified such Investor in writing that the prospectus is
outdated or defective; and, subject to Section 6(c), such Investor will
reimburse any legal or other expenses reasonably incurred by an Indemnified
Party in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the
agreement in respect of contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim or Indemnified Damages if such
settlement is effected without the prior written consent of such Investor,
which consent shall not be unreasonably withheld or delayed; provided, further,
however, that an Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to
such Registration Statement giving rise to such indemnification obligation. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer
of the Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) in respect of any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.

 

(c)           Promptly after receipt by an
Indemnified Person or Indemnified Party under this Section 6 of the written
threat of or notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving a Claim or

 

14

 

Indemnified Damages, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, promptly deliver to the indemnifying party a
written notice of the written threat of or notice of the commencement of such
action. In case any such action is brought against any Indemnified Party or
Indemnified Person and such Indemnified Party or Indemnified Person seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Person or the Indemnified Party, as
the case may be; provided, however, that if the defendants in any such action
include both the Indemnified Party or Indemnified Person, on the one hand, and
the indemnifying party, on the other hand, and the Indemnified Party or
Indemnified Person shall have reasonably concluded, based on an opinion of
counsel reasonably satisfactory to the indemnifying party, that the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and
any other party represented by such counsel in such proceeding and/or that
there may be legal defenses available to it and/or any other Indemnified Party
or Indemnified Person which are different from or additional to those available
to the indemnifying party; provided further, that the indemnifying party shall
not be responsible for the reasonable fees and expenses of more than one (1)
separate legal counsel for all such Indemnified Persons or Indemnified Parties.
In the case of an Indemnified Person, legal counsel referred to in the
immediately preceding sentence shall be selected by the Investors holding at
least a majority in interest of
the Registrable Securities included in the Registration Statement to which the
Claim or Indemnified Damages relate. The Indemnified Party or Indemnified
Person shall reasonably cooperate with the indemnifying party in connection
with any negotiation or defense of any such action or Claim or Indemnified
Damages by the indemnifying party and shall furnish to the indemnifying party
all information reasonably available to the Indemnified Party or Indemnified
Person which relates to such action or Claim or Indemnified Damages. The
indemnifying party shall keep the Indemnified Party or Indemnified Person
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim, investigation, inquiry or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim, Indemnified Damages or litigation, and such settlement
shall not include any admission as to fault on the part of the Indemnified
Party. Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Indemnified Party or Indemnified
Person in respect of all third parties, firms or corporations relating to the
matter for which indemnification has been made. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6, except to
the extent that the indemnifying party is materially prejudiced in its ability
to defend such action as a result of such failure.

 

15

 

(d)           No Person involved in the sale of
Registrable Securities who is guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) in connection with such
sale shall be entitled to indemnification from any Person who is not guilty of
such fraudulent misrepresentation.

 

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

 

(f)            The indemnity agreements contained
herein shall be in addition to  (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law. Notwithstanding the
foregoing, in the event that any of the provisions of Section 9(k) of the
Securities Purchase Agreement and this Section 6 may be deemed to both be
applicable to any of the same losses, claims, damages, liabilities, judgments,
fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in
settlement or expenses incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from
the foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, the
provisions of this Section 6 shall control and such provisions of the Section
9(k) of the Securities Purchase Agreement shall be inoperative.

 

7.             Contribution.

 

To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to, in
lieu of indemnifying such Indemnified Person or Indemnified Party, as
applicable, make the maximum contribution in respect of any amounts for which
it would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that:  (i) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities
which Person is guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) in connection with such sale shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation; and (iii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.

 

8.             Reports Under the 1934 Act.

 

With a view to making
available to the Investors the benefits of Rule 144 promulgated under the 1933
Act or any other similar rule or regulation of the SEC that may at any time
permit the Investors to sell securities of the Company to the public without
registration (“Rule 144”), at all
times during which there are Registrable Securities outstanding which have not
been previously (a) sold to or through a broker or dealer or underwriter in a
public distribution, or (b) sold in a transaction exempt from the registration
and prospectus delivery requirements of the 1933 Act under Section 4(l)
thereof, in the case of either clause (a) or clause (b) in such a manner that,
upon the consummation of such sale, all transfer restrictions and

 

16

 

restrictive legends in respect of such shares are removed upon the
consummation of such sale, the Company agrees to use reasonable efforts to:

 

(a)           make and keep public information
available, as contemplated by Rule 144(c) of the 1933 Act;

 

(b)           file with the SEC in a timely manner
all reports and other documents required of the Company under the 1933 Act and
the 1934 Act so long as the Company remains subject to such requirements and
the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and

 

(c)           furnish to each Investor so long as
such Investor owns Registrable Securities, promptly upon request, (i) a written
statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144(c), the 1933 Act and the 1934 Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.

 

9.             Assignment of Registration Rights.

 

The rights under this
Agreement shall be automatically assignable by the Investors to any transferee
of all or any portion of such Investor’s Registrable Securities if:  (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities in respect of which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act or applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein and in
each of the other Transaction Documents; and (v) such transfer shall have been
to a Permitted Transferee and permitted and made in accordance with the
applicable requirements of the Securities Purchase Agreement, including but not
limited to those in Section 9(g) thereof.

 

10.           Amendment of Registration Rights.

 

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

 

17

 

11.           Miscellaneous.

 

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

 

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

 

	
  If
  to the Company:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Earth Biofuels, Inc.

  
	
   

  	
  3001 Knox Street

  
	
   

  	
  Suite 403, Dallas, Texas 75205

  
	
   

  	
  Telephone:

  	
  214.389.9800

  
	
   

  	
  Facsimile:

  	
  214.389.9806

  
	
   

  	
  Attention:

  	
  Dennis McLaughlin

  
	
   

  	
   

  	
   

  
	
  with a copy
  (for informational purposes only) to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Scheef & Stone, LLP

  
	
   

  	
  Telephone:

  	
  214.706.4200

  
	
   

  	
  Facsimile:

  	
  214.706.4242

  
	
   

  	
  Attention:

  	
  Roger A. Crabb

  
	
   

  	
   

  	
   

  
	
  If to Legal
  Counsel:

  
	
   

  	
   

  	
   

  
	
   

  	
  Schulte Roth &
  Zabel LLP

  
	
   

  	
  919 Third Avenue

  
	
   

  	
  New York, New York
  10022

  
	
   

  	
  Telephone:

  	
  (212) 756-2000

  
	
   

  	
  Facsimile:

  	
  (212) 593-5955

  
	
   

  	
  Attention:

  	
  Eleazer Klein, Esq.

  

 

If to a Buyer, to its
address and facsimile number set forth on the Schedule of Buyers attached
hereto, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers, or to such other address and/or facsimile number and/or to
the attention of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by

 

18

 

the sender’s facsimile
machine containing the time, date, recipient facsimile number and an image of
the first page of such transmission or (C) provided by a courier or overnight
courier service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

 

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

 

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

 

(e)           This Agreement, the other Transaction
Documents (as defined in the Securities Purchase Agreement) and the instruments
referenced herein and therein constitute the entire agreement among the parties
hereto in respect of the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement, the other Transaction
Documents and the instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto in respect of the
subject matter hereof and thereof.

 

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

 

19

 

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

 

(h)           This Agreement may be executed in
identical counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.

 

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

 

(j)            All consents and other
determinations required to be made by the Investors pursuant to this Agreement
shall be made, unless otherwise specified in this Agreement, by the Required
Holders.

 

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

 

(l)            This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.

 

(m)          The obligations of each Investor
hereunder are several and not joint with the obligations of any other Investor,
and no provision of this Agreement is intended to confer any obligations on any
Investor vis-à-vis any other Investor. Nothing contained herein, and no action
taken by any Investor pursuant hereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Investors are in any way acting in
concert or as a group in respect of such obligations or the transactions
contemplated herein.

 

* * * * * *

 

20

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  EARTH BIOFUELS, INC. 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.

 

	
   

  	
  BUYERS:

  
	
   

  	
   

  
	
   

  	
  KAMUNTING STREET MASTER

  FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  Christopher Falsetta

  
	
   

  	
   

  	
  Title:  Director 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  K STREET EMERALD FUND, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  Christopher Falsetta

  
	
   

  	
   

  	
  Title:  Director 

  

 

[Signature Page to
Registration Rights Agreement]

 

 

SCHEDULE
OF BUYERS

 

 

	
  Buyer

  	
   

  	
  Buyer Address

  and Facsimile Number

  	
   

  	
  Buyer’s Representative’s Address

  and Facsimile Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kamunting Street Master
  Fund, Ltd.

  	
   

  	
  140
  East 45th Street

  15th Floor
New York, NY 10017
Attention:  Christopher Falsetta

  
Fax: (212) 490-4360

  	
   

  	
  Schulte Roth &
  Zabel LLP

  919 Third Avenue

  New York, New York 10022

  Attention: Eleazer Klein, Esq.

  Facsimile: (212) 593-5955

  Telephone: (212) 756-2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  K Street Emerald Fund, LLC

  	
   

  	
  c/o
  Kamunting Street Master Fund, Ltd.

  140 East 45th Street
15th Floor
New York, NY 10017
Attention:  Christopher Falsetta

  
Fax: (212) 490-4360

  	
   

  	
  Schulte Roth &
  Zabel LLP

  919 Third Avenue

  New York, New York 10022

  Attention: Eleazer Klein, Esq.

  Facsimile: (212) 593-5955

  Telephone: (212) 756-2376

  	
   

  

 

 

EXHIBIT
A

 

FORM
OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

[Transfer Agent]

Attention:

 

Re:          Earth Biofuels, Inc.

 

Ladies and Gentlemen:

 

[We are][I am] counsel to
Earth Biofuels, Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with
that certain Securities Purchase Agreement, dated as of April 28, 2006 (the “Securities Purchase Agreement”), entered
into by and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to which the Company
issued to the Holders its shares of the Company’s Common Stock, par value
$0.001 per share (the “Common Stock”).
Pursuant to the Securities Purchase Agreement, the Company also has entered
into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant to
which the Company agreed, among other things, to register the resale of the
Registrable Securities (as defined in the Registration Rights Agreement), under
the Securities Act of 1933, as amended (the “1933
Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on                         
      , 2006, the Company filed a Registration
Statement on Form S-1 (File No. 333-                          )
(the “Registration Statement”)
with the Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names each
of the Holders as a selling stockholder thereunder.

 

In connection with the
foregoing, [we][I] advise you that a member of the SEC’s staff has advised
[us][me] by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER
DATE OF EFFECTIVENESS] and we have
no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.

 

This letter shall serve
as our standing advice to you that you may issue or reissue shares of Common
Stock without legend to the Holders as contemplated by the Company’s
Irrevocable Transfer Agent Instructions dated May [  ], 2006 (the “Transfer
Agent Instructions”) and you need not require further letters from
us to effect any future legend-free issuance or reissuance of shares of Common
Stock to the Holders as contemplated by the Transfer Agent Instructions.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [ISSUER’S
  COUNSEL]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  

 

CC:          [LIST
NAMES OF HOLDERS]

 

 

ANNEX
I

 

SELLING
STOCKHOLDERS

 

The shares of common
stock being offered by the selling stockholders are those previously issued to
the Selling Stockholders. For additional information regarding the issuances of
common stock, see “Private Placement of Common Shares” above. We are
registering the shares of common stock in order to permit the selling
stockholders to offer the shares for resale from time to time. Except for the
ownership of the shares of common stock, the selling stockholders have not had
any material relationship with us within the past three years.

 

The table below lists the
selling stockholders and other information regarding the beneficial ownership
of the shares of common stock by each of the selling stockholders. The second
column lists the number of shares of common stock beneficially owned by each
selling stockholder, based on its ownership of the shares of common stock, as
of                 ,
2006.

 

The third column lists
the shares of common stock being offered by this prospectus by the selling
stockholders.

 

In accordance with the
terms of registration rights agreement with the holders of the shares of common
stock, this prospectus generally covers the resale of that number of shares of
common stock equal to the number of shares of common stock issued [and certain
additional shares of common stock issuable pursuant to the terms of the
Securities Purchase Agreement, determined as if such additional shares of
common stock were issued, in full, in each case,] as of the trading day
immediately preceding the date this registration statement was initially filed
with the SEC. The fourth column assumes the sale of all of the shares offered
by the selling stockholders pursuant to this prospectus.

 

The selling stockholders
may sell all, some or none of their shares in this offering. See “Plan of
Distribution.”

 

 

	
  Name of Selling Stockholder

  	
   

  	
  Number of Shares of

  Common Stock Owned

  Prior to Offering

  	
   

  	
  Maximum Number of Shares

  of Common Stock to be Sold

  Pursuant to this Prospectus

  	
   

  	
  Number of Shares of

  Common Stock Owned

  After Offering

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kamunting Street Master
  Fund, Ltd.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  K Street Emerald Fund, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

I-2

 

PLAN
OF DISTRIBUTION

 

We are registering the
shares of common stock previously issued [and certain additional shares of
common stock issuable pursuant to the terms of the Securities Purchase
Agreement, in each case,] to permit the resale of these shares of common stock
by the holders of the common stock. We will not receive any of the proceeds
from the sale by the selling stockholders of the shares of common stock. We
will bear all fees and expenses incident to our obligation to register the
shares of common stock.

 

The selling stockholders
may sell all or a portion of the shares of common stock beneficially owned by
them and offered hereby from time to time directly or through one or more
underwriters, broker-dealers or agents. If the shares of common stock are sold
through underwriters or broker-dealers, the selling stockholders will be
responsible for underwriting discounts or commissions or agent’s commissions. The
shares of common stock may be sold in one or more transactions at fixed prices,
at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale, or at negotiated prices. These sales may be
effected in transactions, which may involve crosses or block transactions,

 

•                  on
any national securities exchange or quotation service on which the securities
may be listed or quoted at the time of sale;

 

•                  in
the over-the-counter market;

 

•                  in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

 

•                  through
the writing of options, whether such options are listed on an options exchange
or otherwise;

 

•                  ordinary
brokerage transactions and transactions in which the broker-dealer solicits
purchasers;

 

•                  block
trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;

 

•                  purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;

 

•                  an
exchange distribution in accordance with the rules of the applicable exchange;

 

•                  privately
negotiated transactions;

 

•                  short
sales;

 

•                  sales
pursuant to Rule 144;

 

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

 

I-3

 

•                  a
combination of any such methods of sale; and

 

•                  any
other method permitted pursuant to applicable law.

 

If the selling
stockholders effect such transactions by selling shares of common stock to or
through underwriters, broker-dealers or agents, such underwriters, broker-dealers
or agents may receive commissions in the form of discounts, concessions or
commissions from the selling stockholders or commissions from purchasers of the
shares of common stock for whom they may act as agent or to whom they may sell
as principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in
the types of transactions involved). In connection with sales of the shares of
common stock or otherwise, the selling stockholders may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales of
the shares of common stock in the course of hedging in positions they assume. The
selling stockholders may also sell shares of common stock short and deliver
shares of common stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short sales. The selling
stockholders may also loan or pledge shares of common stock to broker-dealers
in connection with bona fide margin accounts secured by the shares of common
stock, which shares broker-dealers could in turn sell such shares if the
selling stockholders default in the performance of their secured obligations.

 

The selling stockholders
may pledge or grant a security interest in some or all of the warrants or
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 pursuant to this prospectus or any
amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act of 1933, as amended, amending, if necessary, 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 and donate the shares of common stock in other
circumstances in which case the transferees, donees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus.

 

The selling stockholders
and any broker-dealer participating in the distribution of the shares of common
stock may be deemed to be “underwriters” within the meaning of the Securities
Act, and any commission paid, or any discounts or concessions allowed to, any
such broker-dealer may be deemed to be underwriting commissions or discounts
under the Securities Act. At the time a particular offering of the shares of
common stock is made, a prospectus supplement, if required, will be distributed
which will set forth the aggregate amount of shares of common stock being
offered and the terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to broker-dealers.

 

Under the securities laws
of some states, the shares of common stock may be sold in such states only
through registered or licensed brokers or dealers. In addition, in some states
the shares of common stock may not be sold unless such shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.

 

I-4

 

There can be no assurance
that any selling stockholder will sell any or all of the shares of common stock
registered pursuant to the shelf registration statement, of which this
prospectus forms a part.

 

The selling stockholders
and any other person participating in such distribution will be subject to
applicable provisions of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, including, without limitation, Regulation
M of the Exchange Act, which may limit the timing of purchases and sales of any
of the shares of common stock by the selling stockholders and any other
participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the shares of common stock to engage in
market-making activities in respect of the shares of common stock. All of the
foregoing may affect the marketability of the shares of common stock and the
ability of any person or entity to engage in market-making activities in
respect of the shares of common stock.

 

We will pay all expenses
of the registration of the shares of common stock pursuant to the registration
rights agreement, including, without limitation, Securities and Exchange
Commission filing fees and expenses of compliance with state securities or “blue
sky” laws; provided, however, that the selling stockholders will pay all
underwriting discounts and selling commissions, if any. We will indemnify the
selling stockholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholder specifically for use in this prospectus, in
accordance with the related registration rights agreements, or we may be
entitled to contribution.

 

Once sold under the shelf
registration statement, of which this prospectus forms a part, the shares of
common stock will be freely tradable in the hands of persons other than our
affiliates.

 

I-5EXHIBIT 10.42F

Clean Harbors, Inc.

Performance-Based
Restricted Stock Award Agreement

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Employee:

  	
   

  	
  [

  	
  ]

  	
   

  
	
  Number of Shares:

  	
   

  	
  [

  	
  ]

  	
   

  
	
  Date of Award:

  	
   

  	
  [

  	
  ]

  	
   

  

 

THIS AGREEMENT
(the “Agreement”) is made as of the date of the award set forth above
(the “Award Date”) between Clean Harbors, Inc., a Massachusetts
corporation (the “Company”), and the above-referenced employee (the “Participant”).

For valuable
consideration, receipt of which is acknowledged, the parties hereto agree as
follows.

1.                                       Grant
of Shares and Vesting.

Effective as
of the Award Date, the Company hereby grants to the Participant [           ] shares (the “Shares”) of
common stock, par value $.01 per share (“Common Stock”), as an Award of
Restricted Stock pursuant to the Company’s 2000 Stock Incentive Plan, as
amended (the “Plan”). All of the terms and conditions of the Plan are
incorporated herein by reference, and any capitalized terms that are not
defined herein shall have the respective meanings ascribed to such terms in the
Plan. The Participant hereby accepts the Award and agrees to acquire and hold
the Shares subject to the terms and conditions of the Plan and the additional
terms and conditions contained herein.

During the
period (the “Vesting Period”) between the Award Date and the Termination
Date (as defined in Section 2 hereof), the Shares shall vest (and become “Vested
Shares”) in such amounts and on such dates (the “Vesting Schedule”)
as are set out in Attachment A provided that the Company shall achieve
the performance goal (the “Performance Goal”) set out in Attachment A
within the performance period (“Performance Period”) set out in Attachment
A. Notwithstanding the Vesting Schedule, one hundred (100%) percent of the
Shares shall vest in the event (i) a Change of Control of the Company
shall occur either (A) prior to December 31, [            ], or (B) if the Company shall
have satisfied the Performance Goal by December 31,  [         
], between January 1,  [           ] and the Termination Date (as
defined in Section 2), and (ii) on the date of such Change of
Control, the Participant shall continue to be employed by the Company (or any
subsidiary or parent thereof included in the term “Company” as defined in the
Plan). A Change of Control of the Company shall be deemed to have occurred if
the Company is a party to any merger, consolidation or sale of assets, or there
is a tender offer for the Company’s Common Stock, or a contested election of
the Company’s directors, and as a result of any such event, either (i) the
directors of the Company in office immediately before such event cease to
constitute a majority of the Board of Directors of the Company, or of the
company succeeding to the Company’s business, or (ii) any company, person
or entity (including one or more persons and/or entities acting in concert as a
group) other than an affiliate of the Company gains 

 1
 

 

“control” (ownership of more than fifty (50%) percent of the
outstanding voting stock of the Company) over the Company. The concept of
“control” shall be deemed to mean the direct or indirect ownership,
beneficially or of record, of voting stock of the Company.

2.                                       Forfeiture
of Unvested Shares.

If the
Participant ceases during the Vesting Period to be employed by the Company (or
any subsidiary or parent thereof included in the term “Company” as defined in
the Plan) for any reason (except as specifically provided in the following
sentence), the Company shall automatically reacquire any of the Shares which
have not vested in accordance with Section 1 (the “Unvested Shares”)
as of the effective date of such cessation (the “Termination Date”). In
such event, the Participant shall forfeit such Unvested Shares unconditionally
and shall have no further right or interest in such Unvested Shares unless the
Company agrees in writing to waive its reacquisition right as to some or all of
such Unvested Shares. However, if (i) the Participant ceases during the
Vesting Period to be so employed because of death or permanent disability (as
determined in the Committee’s sole judgment) and (ii) the Company has
satisfied the Performance Goal prior to such cessation of employment, then the
Shares which would otherwise be treated as Unvested Shares under the preceding
sentence shall instead be treated as Vested Shares. In either such event, the
Participant shall forfeit such Unvested Shares unconditionally and shall have
no further right or interest in such Unvested Shares unless the Company agrees
in writing to waive its reacquisition right as to some or all of such Unvested
Shares.

3.                                       Administration
of Stock Certificates.

(a)           Concurrently
with the execution hereof, the Company shall deliver either in certificated or
uncertificated form (as the Committee shall elect) to American Stock Transfer &
Trust Company (such company or any other agent as the Committee may select
during the Vesting Period being referred to hereafter as the “Administrative
Agent”). During the Vesting Period, the Administrative Agent shall hold the
Shares for the benefit of the Participant, but subject to the provisions of
this Agreement. Notwithstanding such deposit of the Shares with the
Administrative Agent, the Participant shall retain during the Vesting Period
the right to vote and enjoy all other rights and incidents of ownership of the
Shares except as may be restricted hereunder.

(b)           During
the Vesting Period, the Administrative Agent shall keep true and accurate
records of all the Shares. The Company shall indemnify and hold harmless the
Administrative Agent against any and all costs or expenses (including attorneys’
fees and expenses), judgments, fines, losses, claims, damages, liabilities and
amounts paid in settlement in connection with any claim, action, suit,
proceeding or investigation arising out of or pertaining to this Agreement.

(c)           Following
the close of each calendar quarter during which any of the Shares shall become
Vested Shares, the Administrative Agent shall, upon the written request of the
Participant but subject to potential delivery to the Company of a portion of
such Vested Shares to the extent required to pay withholding taxes in
accordance with Section 7 hereof, deliver to the Participant stock
certificates representing such number of Vested Shares which ceased to be
Unvested Shares during such calendar quarter. Following the close of the
calendar quarter in which there shall remain on deposit with the Administrative
Agent no Shares which have not yet become Vested Shares or been forfeited to
the Company, but subject to potential delivery to the Company of a portion of
such Vested Shares to the extent required to pay withholding taxes in 

 

 2
 

 

accordance with Section 7 hereof, the Administrative Agent shall
deliver to the Participant stock certificates representing the Vested Shares
(if any) remaining in the possession of the Administrative Agent. The
Participant hereby authorizes the Administrative Agent to deliver to the
Company any and all Shares that are forfeited under the provisions of this
Agreement or that are required to pay withholding taxes in accordance with Section 7
hereof.

4.                                       Restrictions
on Transfer.

The
Participant shall not sell, assign, transfer, pledge, hypothecate or otherwise
dispose of, by gift, sale, operation of law or otherwise (collectively “transfer”),
any Unvested Shares or any interest therein.

5.                                       Effect
of Prohibited Transfer.

The Company
shall not be required (a) to transfer on its books any of the Shares which
shall have been sold or transferred in violation of any of the restrictions
imposed by this Agreement, or (b) to treat as owner of such Shares or to
pay dividends to any transferee to whom any such Shares shall have been so sold
or transferred.

6.                                       Adjustments
for Stock Splits, Stock Dividends, Etc.

If from time
to time there is any stock split-up, stock dividend, stock distribution or
other reclassification of the Common Stock of the Company, any and all new,
substituted or additional securities to which the Participant is entitled by
reason of Participant’s ownership of Shares shall be immediately subject to the
restrictions on transfer and other provisions of this Agreement in the same
manner and to the same extent as such Shares.

7.                                       Withholding
Taxes.

(a)           The
Participant acknowledges and agrees that in the case of the issuance of
Restricted Stock that is “substantially vested” (within the meaning of Treasury
Regulations Section 1.83-3(b)), the Committee may require the
Participant to remit to the Company an amount sufficient to satisfy any
federal, foreign, state or local withholding tax requirements (or make other
arrangements satisfactory to the Company with regard to such taxes, including
withholding from regular cash compensation, providing other security to the
Company, or remitting or foregoing the receipt of Shares having a fair market
value on the date of delivery sufficient to satisfy such obligations prior to
the issuance of any Shares pursuant to the grant of Restricted Stock).

(b)           The
Participant acknowledges and agrees that in the case of Restricted Stock that
is not “substantially vested” upon issuance, if the Committee determines that
under applicable law and regulations the Company could be liable for the
withholding of any federal, foreign, state or local tax with respect to such
Shares, the Committee may require the Participant to remit to the Company an
amount sufficient to satisfy any such potential liability (or make other
arrangements satisfactory to the Company with respect to such taxes, including
withholding from regular cash compensation providing other security to the
Company, or remitting or foregoing the receipt of Shares having a fair market
value on the date of delivery sufficient to satisfy such obligations). The
Participant shall remit such amount to the Company at either (i) the time
the Participant makes an election under Section 83(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), with respect to such
Shares, or (ii) at the time such Shares become “substantially vested.” The Participant acknowledges that the Shares of
Restricted Stock are 

 3
 

 

subject to the forfeiture obligation under Section 2
of this Agreement and such forfeiture obligation may be treated as a
substantial risk of forfeiture within the meaning of Section 83 of the
Code, and that, in the absence of an election under Section 83(b) of
the Code, such treatment could delay the determination of the tax consequences
of the Participant’s receipt of the Shares for both the Company and the
Participant (possibly to the Participant’s detriment). If the Participant files
a timely election under Section 83(b) of the Code, the Participant
shall provide the Company with an original copy of such timely filed election
and a certified mail or overnight courier receipt of such filing within 10 days
of the time the election is filed.

8.                                       Severability.

The invalidity
or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, and each
other provision of this Agreement shall be severable and enforceable to the
extent permitted by law.

9.                                       Waiver;
Termination.

Any provision
contained in this Agreement may be waived, either generally or in any
particular instance, by the Company. This Agreement may be terminated as
provided in the Plan.

10.                                 Binding
Effect.

This Agreement
shall be binding upon and inure to the benefit of the Company and the Participant
and their respective heirs, executors, administrators, legal representatives,
successors and assigns, subject to the restrictions on transfer set forth in Section 4
of this Agreement.

11.                                 Notice.

All notices
required or permitted hereunder shall be in writing and deemed effectively
given (i) upon personal delivery (ii) one (1) day after delivery
to an overnight courier service which provides for a receipt upon delivery, or (iii) three
(3) days after deposit with the United States Post Office, by registered
or certified mail, postage prepaid, addressed, if to the Company, to Clean
Harbors, Inc., 1501 Washington Street, P.O. Box 859048, Braintree,
Massachusetts 02185-9048, Attention: Treasurer; if to the Administrative
Agent, to the Company’s aforesaid address, Attention: Treasurer; and if to the
Participant, to the address shown beneath his or her respective signature to
this Agreement, or at such other address or addresses as either party shall
designate to the other in accordance with this Section 11.

12.                                 Pronouns.

Whenever the
context may require, any pronouns used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural, and vice-versa.

13.                                 Entire
Agreement.

This
Agreement, together with Attachment A hereto and the Plan, constitutes
the entire agreement between the parties, and supersedes all prior agreements
and understandings relating to the subject matter of this Agreement.

 4
 

 

14.                                 Amendment.

This Agreement
may be amended or modified only by a written instrument executed by both the
Company and the Participant.

15.                                 Governing
Law.

This Agreement
shall be construed, interpreted and enforced in accordance with the laws of the
Commonwealth of Massachusetts.

 5
 

 

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

	
   Clean
  Harbors, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name: [                  ]

  	
   

  	
   

  
	
   

  	
  Title:   [                  ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   (Signature of
  Participant)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   (Printed Name
  of Participant)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   (Residence
  Street Address)

  	
   

  	
   

  
	
   

  	
   

  
	
   (City)

  	
  (State)

  	
  (Zip Code)

  	
   

  
						

 

 6
 

 

Attachment A

Performance
Goal

[                                                    
]

Performance
Period

[                                                    
]

Vesting
Schedule

[                                                    
]

 

	
   Clean Harbors, Inc.

  	
   

  	
  Participant

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   Name:[                                          ]

  	
   

  	
  Name: [                              ]

  
	
   

  	
   

  	
   

  
	
   Title:[                                            ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

 7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]