Document:

exv4w1

Exhibit 4.1

FORM OF WARRANT

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER
(IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

EMISPHERE TECHNOLOGIES, INC.

WARRANT

			
	 	 	 
	Warrant No. A-[XX]
	 	Original Issue Date: ______, 2011

     EMISPHERE TECHNOLOGIES, INC., a Delaware corporation (the “Company”), hereby certifies
that, for value received, [NAME OF HOLDER] or its permitted registered assigns (the
“Holder”), is entitled to purchase from the Company up to a total of [NUMBER] shares of
Common Stock (as defined below) of the Company (each such share, a “Warrant Share” and all
such shares, the “Warrant Shares”) at an
exercise price equal to $1.09 per share (as
adjusted from time to time as provided herein, the “Exercise Price”), at any time and from
time to time on or after the Original Issue Date and through and including the Expiration Date (as
defined below), and subject to the following terms and conditions:

     This Warrant is one of a series of warrants issued pursuant to that certain Securities
Purchase Agreement dated June 30, 2011 (the “Subscription Date"), by and between the
Company and each of the purchasers identified therein (the “Purchase Agreement”). All such
warrants are referred to herein, collectively, as the “Warrants.”

     1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
Section 19.

     2. List of Warrant Holders. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name of the
record Holder (which shall include the initial Holder or, as the case may be, any registered
assignee to which this Warrant is permissibly assigned hereunder from time to time). The

 

 

Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof
for the purpose of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.

     3. List of Transfers; Restrictions on Transfer.

     (a) This Warrant may be offered for sale, sold, transferred or assigned without the consent of
the Company, except as may otherwise be required by Section 2(g) of the Purchase Agreement.

     (b) The Company shall register any such transfer of all or any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly
completed and signed, to the Company at its address specified herein. Upon any such registration
or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (in
accordance with Section 3(e)), evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a new Warrant evidencing the remaining portion of this Warrant not so
transferred, if any, shall be issued to the transferring Holder. The acceptance of the new Warrant
by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights
and obligations in respect of the new Warrant that the Holder has in respect of this Warrant.

     (c) This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Warrant or Warrants (in accordance with Section 3(e)) representing
in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant,
and each such new Warrant will represent the right to purchase such portion of such Warrant Shares
as is designated by the Holder at the time of such surrender; provided, however, no warrants for
fractional shares of Common Stock shall be given.

     (d) If, at the time of the surrender of this Warrant in connection with any transfer of this
Warrant, transfer of this Warrant shall not be registered pursuant to an effective registration
statement under the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of
this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such transfer may be made without registration under the
Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or
transferee execute and deliver to the Company an investment letter in form and substance acceptable
to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act.

     (e) Whenever the Company is required to issue a new Warrant pursuant to the terms of this
Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as
indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying
this Warrant (or in the case of a new Warrant being issued pursuant to this Section 3 or Section 7,
the Warrant Shares designated by the Holder which, when added to the number of shares of Common
Stock underlying the other new Warrants issued in connection with such issuance, does not exceed
the number of Warrant Shares then underlying this Warrant), (iii) shall

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have an issuance date, as indicated on the face of such new Warrant which is the same as the
Original Issue Date, and (iv) shall have the same rights and conditions as this Warrant.

     4. Exercise and Duration of Warrants.

     (a) All or any part of this Warrant shall be exercisable by the registered Holder in any
manner permitted by Section 4 of this Warrant at any time and from time to time on or after the
Original Issue Date and through and including the Expiration Date. Subject to Section 11 hereof,
at 5:00 p.m., New York City time, on the Expiration Date, the portion of this Warrant not exercised
prior thereto shall be and become void and of no value and this Warrant shall be terminated and no
longer outstanding. In addition, if cashless exercise would be permitted under Section 4(c) of
this Warrant, then all or part of this Warrant may be exercised by the registered Holder utilizing
such cashless exercise provisions at any time, or from time to time, on or after the Original Issue
Date and through and including the Expiration Date.

     (b) The Holder may exercise this Warrant by delivering to the Company an exercise notice, in
the form attached hereto (the “Exercise Notice”), completed and duly signed. If such
Holder is not utilizing the cashless exercise provisions set forth in this Warrant, within one (1)
Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to
the Company of an amount equal to the Exercise Price for the number of Warrant Shares as to which
this Warrant is being exercised (the “Aggregate Exercise Price”). The date the Exercise
Notice is delivered to the Company (as determined in accordance with the notice provisions hereof)
is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in
order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have
the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing
the right to purchase the remaining number of Warrant Shares. Additionally, at the request of the
Holder, if this Warrant shall have been exercised in part and the Holder shall have surrendered
this Warrant certificate, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant
shall in all other respects be identical with this Warrant.

     (c) Notwithstanding anything contained herein to the contrary (other than Section 11 below),
if at the time of exercise hereof, but not prior to six months after the Original Issue Date, a
Registration Statement (as defined in the Registration Rights Agreement (as defined in the Purchase
Agreement)) is not effective (or the prospectus contained therein is not available for use) for the
resale by the Holder of all of the Warrant Shares, then the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock
determined according to the following formula (a “Cashless Exercise”):

	 	 	 	 	 

	Net Number =

	 	(A x B) - (A x C)
	 	 
	 

	 	 	 	 
	 

	 	B	 	 

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               For purposes of the foregoing formula:

	 	A= 	 	 the total number of shares with respect to which this Warrant
is then being exercised.
	 
	 	B= 	 	 as applicable: (i) the Closing Sale Price of the Common Stock
on the Trading Day immediately preceding the date of the applicable Exercise
Notice if such Exercise Notice is (1) both executed and delivered pursuant to
Section 4 hereof on a day that is not a Trading Day or (2) both executed and
delivered pursuant to Section 4 hereof on a Trading Day prior to the opening of
“regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS
promulgated under the federal securities laws) on such Trading Day, (ii) the
Bid Price of the Common Stock as of the time of the Holder’s execution of the
applicable Exercise Notice if such Exercise Notice is executed during “regular
trading hours” on a Trading Day and is delivered within two (2) hours
thereafter pursuant to Section 4 hereof and (iii) the Closing Sale Price of the
Common Stock on the date of the applicable Exercise Notice if the date of such
Exercise Notice is a Trading Day and such Exercise Notice is both executed and
delivered pursuant to Section 4 hereof after the close of “regular trading
hours” on such Trading Day.
	 
	 	C=  	 	the Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.

     (d) In the case of a dispute as to the determination of the Exercise Price or the arithmetic
calculation of the number of Warrant Shares to be issued pursuant to the terms hereof, the Company
shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 16.

     5. Delivery of Warrant Shares.

     (a) On or before the first (1st) Trading Day following the date on which the
Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail
an acknowledgment of confirmation of receipt of such Exercise Notice, to the Holder and the
Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd)
Trading Day following the date on which the Company has received such Exercise Notice, the Company
shall (X) provided that the Transfer Agent is participating in The Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program and the Warrant Shares can be issued
without restrictive legends, upon the request of the Holder, credit such aggregate number of shares
of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if
the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or
the Warrant Shares cannot be issued without restrictive legends, issue and deliver to the Holder
or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent or designee, in
each case, sent by reputable overnight courier to the address as specified in the applicable
Exercise Notice, a certificate, registered in the Company’s share register in the name

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of the Holder or its designee (as indicated in the applicable Exercise Notice), for the number
of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery
of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the
holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date
of delivery of the certificates evidencing such Warrant Shares (as the case may be). The Holder,
or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to
have become the holder of record of such Warrant Shares as of the Exercise Date. Notwithstanding
the foregoing, except in the case where an exercise of this Warrant is validly made pursuant to a
cashless exercise, the Company’s failure to deliver Warrant Shares to the Holder on or prior to the
later of (x) the close of the third Trading Day after delivery of an Exercise Notice and (y) the
Trading Day in which the Company’s receives the Aggregate Exercise Price (such later date, the
“Share Delivery Deadline”) shall not be deemed to be a breach of this Warrant.

     (b) If by the Share Delivery Deadline, the Company fails to deliver to the Holder a
certificate representing the required number of Warrant Shares in the manner required pursuant to
Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares,
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall, within three Trading
Days after the Holder’s request and in the Holder’s sole discretion, either (i) pay in cash to the
Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Warrant Shares) shall terminate
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit the Holder’s balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any)
of the Buy-In Price over the product of (A) such number of shares of Common Stock times (B) the
Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the
applicable Exercise Notice.

     (c) To the extent permitted by law, the Company’s obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any
action or inaction by the Holder to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of any other
circumstance that might otherwise limit such obligation of the Company to the Holder in connection
with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any
other remedies available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

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     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue
or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax that may be payable in
respect of any transfer involved in the registration of any certificates for Warrant Shares or
Warrants in a name other than that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a new Warrant (in accordance
with Section 3(e)), but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable indemnity (which shall not include a
surety bond), if requested. Applicants for a new Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a new Warrant is requested as a result of a
mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the new Warrant.

     8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares that are then issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (taking into account the adjustments
and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. If,
notwithstanding the foregoing, and not in limitation thereof, at any time while any of the Warrants
remain outstanding the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of the
Warrants at least a number of shares of Common Stock equal to the number of shares of Common Stock
as shall from time to time be necessary to effect the exercise of all of the Warrants then
outstanding (the “Required Reserve Amount”, and such reservation failure, an
“Authorized Share Failure”), then the Company shall promptly take all action necessary to
increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for all the Warrants then outstanding. Without
limiting the generality of the foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the
occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use
its best efforts to solicit its stockholders’ approval of such increase in authorized shares of
Common Stock and to cause its board of directors to recommend to the stockholders that they approve
such proposal.

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     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this Section
9.

     (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock
split, stock dividend, recapitalization or otherwise) outstanding shares of Common Stock into a
larger number of shares, or (iii) combines (by combination, reverse stock split or otherwise)
outstanding shares of Common Stock into a smaller number of shares, then in each such case the
Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such event. Any adjustment
made pursuant to clause (i) of this paragraph shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution, and
any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective
immediately after the effective date of such subdivision or combination. If any event requiring an
adjustment under this paragraph occurs during the period that an Exercise Price is calculated
hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.

     (b) Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to all holders of Common Stock for no consideration (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock covered by Section
9(a)), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset
(in each case, “Distributed Property”), then, upon any exercise of this Warrant that occurs
after the record date fixed for determination of stockholders entitled to receive such
distribution, the Holder shall be entitled to receive, in addition to the Warrant Shares otherwise
issuable upon such exercise (if applicable) (without regard to any limitations on exercise hereof,
including without limitation, the Maximum Percentage), the Distributed Property that such Holder
would have been entitled to receive in respect of such number of Warrant Shares had the Holder been
the record holder of such Warrant Shares immediately prior to such record date (provided, however,
to the extent that the issuance of any Distributed Property would result in the Holder exceeding
the Maximum Percentage, then the Holder shall not be entitled to receive such Distributed Property
to such extent (or the beneficial ownership of any such shares of Common Stock as a result of
issuance of Distributed Property to such extent) and the Holder’s right to receive such Distributed
Property to such extent shall be held in abeyance for the benefit of the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).

     (c) Fundamental Transactions. If, at any time while this Warrant is outstanding (i)
the Company effects any merger or consolidation of the Company with or into another Person, in
which the shareholders of the Company as of immediately prior to the transaction own less than a
majority of the outstanding stock of the surviving entity, (ii) the Company effects any sale of all
or substantially all of its assets in one or a series of related transactions, (iii) any tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for other securities,

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cash or property, or (iv) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (each, a “Fundamental Transaction”), then
the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same
amount and kind of securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this
Warrant (the “Alternate Consideration”). The Company shall not effect any such Fundamental
Transaction unless prior to or simultaneously with the consummation thereof, any successor to the
Company, surviving entity or the corporation purchasing or otherwise acquiring such assets or other
appropriate corporation or entity shall assume the obligation to deliver to the Holder, such
Alternate Consideration as, in accordance with the foregoing provisions, the Holder may be entitled
to purchase, and the other obligations under this Warrant. The provisions of this paragraph (c)
shall similarly apply to subsequent transactions analogous to a Fundamental Transaction.

     (d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise
Price pursuant to paragraphs (a) and (b) of this Section 9, the number of Warrant Shares that may
be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that
after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of
Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to
such adjustment.

     (e) Calculations. All calculations under this Section 9 shall be made to the nearest
cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.

     (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will, at the written request of the Holder, promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or
type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in detail the facts upon
which such adjustment is based. Upon written request, the Company will promptly deliver a copy of
each such certificate to the Holder and to the Company’s Transfer Agent.

     (g) Notice of Events. The Company will give written notice to the Holder at least two
(2) days prior to the date on which the Company closes its books or takes a record (A) with respect
to any dividend or distribution upon the shares of Common Stock, or (B) for determining rights to
vote with respect to any Fundamental Transaction, dissolution or liquidation. Notwithstanding the
foregoing, the failure deliver such notice or any defect therein shall not affect the validity of
the corporate action required to be described in such notice. To the extent that any notice
provided hereunder constitutes, or contains, material, non-public information regarding the Company
(including its subsidiaries), the Company shall simultaneously file such notice with the SEC (as
defined in the Purchase Agreement) pursuant to a Current Report on

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Form 8-K. It is expressly understood and agreed that the time of execution specified by the
Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the
Company.

     10. Payment of Exercise Price. The Holder shall pay the Exercise Price by delivering
immediately available funds to the Company unless the Holder has specified a “Cashless Exercise” in
the applicable Exercise Notice.

     11. Limitations on Exercise. Notwithstanding anything to the contrary contained in
this Warrant, this Warrant shall not be exercisable by the Holder (other than Bai Feng) hereof to
the extent (but only to the extent) that such Holder or any of its affiliates would beneficially
own in excess of 4.9% (the “Maximum Percentage”) of the Common Stock. To the extent the above
limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis other
convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates)
and of which such securities shall be exercisable (as among all such securities owned by the
Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the
first submission to the Company for conversion, exercise or exchange (as the case may be). No prior
inability to exercise this Warrant pursuant to this paragraph shall have any effect on the
applicability of the provisions of this paragraph with respect to any subsequent determination of
exercisability. For the purposes of this paragraph, beneficial ownership and all determinations and
calculations (including, without limitation, with respect to calculations of percentage ownership)
shall be determined in accordance with Section 13(d) of the 1934 Act (as defined in the Purchase
Agreement) and the rules and regulations promulgated thereunder. The provisions of this paragraph
shall be implemented in a manner otherwise than in strict conformity with the terms of this
paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Maximum Percentage beneficial ownership limitation herein contained or to make
changes or supplements necessary or desirable to properly give effect to such Maximum Percentage
limitation. The limitations contained in this paragraph shall apply to a successor Holder of this
Warrant. The holders of Common Stock shall be third party beneficiaries of this paragraph and the
Company may not waive this paragraph without the consent of holders of a majority of its Common
Stock. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding, including by virtue of any prior conversion or exercise of
convertible or exercisable securities into Common Stock, including, without limitation, pursuant to
this Warrant or securities issued pursuant to the Purchase Agreement. For any reason at any time,
upon the written or oral request of the Holder, the Company shall within one (1) Business Day
confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding,
including by virtue of any prior conversion or exercise of convertible or exercisable securities
into Common Stock, including, without limitation, pursuant to this Warrant or securities issued
pursuant to the Purchase Agreement.

     12. No Fractional Shares. No fractional Warrant Shares will be issued in connection
with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be
issuable, the Company shall pay cash equal to the product of such fraction multiplied by the
Closing Bid Price of one Warrant Share on the applicable Exercise Date.

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     13. Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) upon confirmation of receipt, if such notice or communication
is delivered via facsimile or electronic mail at the facsimile number or e-mail address specified
in this Section at or prior to 5:00 p.m. (New York City time) on a Trading Day (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party), (ii) the next Trading Day after the date of confirmation of receipt, if such notice
or communication is delivered via facsimile or electronic mail at the facsimile number or e-mail
address specified in this Section on a day that is not a Trading Day or later than 5:00 p.m. (New
York City time) on any Trading Day (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party), (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be given. The addresses for such
notices or communications shall be: if to the Company, to Emisphere Technologies, Inc., 240 Cedar
Knolls Road, Suite 200, Cedar Knolls, New Jersey 07927. Attention: Chief Financial Officer,
Facsimile No.: (973) 532-8121, e-mail address: mgarone@emisphere.com (or such other address as the
Company shall indicate in writing in accordance with this Section) or (ii) if to the Holder, to the
address, facsimile number or e-mail address appearing on the Warrant Register (or such other
address as the Company shall indicate in writing in accordance with this Section).

     14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this Warrant without any
further act. Any such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s
last address as shown on the Warrant Register.

     15. Noncircumvention. The Company hereby covenants and agrees that the Company will
not, by amendment of its Articles of Incorporation, as amended, its Bylaws as amended or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, and will at all times in good faith carry out
all the provisions of this Warrant and take all action as may be required to protect the rights of
the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase
the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and
unissued shares of Common Stock, solely for the purpose of effecting the exercise of the Warrants,
the maximum number of shares of Common Stock as shall from time to time be necessary to effect the
exercise of the Warrants then outstanding (without regard to any limitations on exercise).

10

 

     16. Dispute Resolution. In the case of a dispute as to the determination of the
Exercise Price, the Closing Bid Price, the Closing Sale Price, the Bid Price or fair market value
or the arithmetic calculation of the number of Warrant Shares (as the case may be), the Company or
the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations
(as the case may be) via facsimile (i) within two (2) Business Days after receipt of the applicable
notice giving rise to such dispute to the Company or the Holder (as the case may be) or (ii) if no
notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving
rise to such dispute. If the Holder and the Company are unable to agree upon such determination or
calculation (as the case may be) of the Exercise Price, the Closing Bid Price, the Closing Sale
Price, the Bid Price or fair market value or the number of Warrant Shares (as the case may be)
within three (3) Business Days of such disputed determination or arithmetic calculation being
submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2)
Business Days submit via facsimile (a) the disputed determination of the Exercise Price, the
Closing Bid Price, the Closing Sale Price, the Bid Price or fair market value (as the case may be)
to an independent, reputable investment bank selected by the Company and approved by the Holder or
(b) the disputed arithmetic calculation of the number of Warrant Shares to the Company’s
independent, outside accountant. The Company shall cause the investment bank or the accountant (as
the case may be) to perform the determinations or calculations (as the case may be) and notify the
Company and the Holder of the results no later than ten (10) Business Days from the time it
receives such disputed determinations or calculations (as the case may be). Such investment bank’s
or accountant’s determination or calculation (as the case may be) shall be binding upon all parties
absent demonstrable error. If a disputed determination or arithmetic calculation is submitted to
the investment bank or the accountant (as the case may be) pursuant to this Section 16, then the
prevailing party in such determination or calculation shall be reimbursed by the other party for
its costs and expenses (including any and all fees and expenses charged by the investment back or
accountant) incurred in connection with the determination or calculation (as the case may be).

     17. Remedies, Characterization, Other Obligations, Breaches and Injunctive Relief. The
remedies provided in this Warrant shall be cumulative and in addition to all other remedies
available under this Warrant and the other Transaction Documents, at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing herein shall limit the
right of the Holder to pursue actual damages for any failure by the Company to comply with the
terms of this Warrant. The Company covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided
for herein with respect to payments, exercises and the like (and the computation thereof) shall be
the amounts to be received by the Holder and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall
be entitled, in addition to all other available remedies, to an injunction restraining any breach,
without the necessity of showing economic loss and without any bond or other security being
required. The Company shall provide all information and documentation to the Holder that is
requested by the Holder that is reasonably necessary to enable the Holder to confirm the Company’s
compliance with the terms and conditions of this Warrant. The issuance of shares and certificates
for shares as contemplated

11

 

hereby upon the exercise of this Warrant shall be made without charge to the Holder or such
shares for any issuance tax or other costs in respect thereof, provided that the Company shall not
be required to pay any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than the Holder or its agent on its behalf.

     18. Miscellaneous.

     (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant
shall be construed to give to any Person other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in
writing signed by the Company and the Holder, or their successors and assigns. No waiver shall be
effective unless it is in writing and signed by an authorized representative of the waiving party.

     (b) This Warrant shall be governed by and construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance of this Warrant
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. The parties 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. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. THE PARTIES HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

     (c) If any provision of this Warrant is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise
be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability of such provision
shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant
as so modified continues to express, without material change, the original intentions of the
parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or
reciprocal obligations of the parties or the practical realization of the benefits that would
otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to
replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect
of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).

12

 

     (d) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.

     (e) In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provision
in this Warrant.

     (f) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of by being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

     19. Certain Definitions. For purposes of this Warrant, the following terms shall have
the following meanings:

     (a) “Bid Price” means, for any security as of the particular time of determination, the bid
price for such security on the Principal Market as reported by Bloomberg as of such time of
determination, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg as of such time of
determination, or if the foregoing does not apply, the bid price of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg
as of such time of determination, or, if no bid price is reported for such security by Bloomberg as
of such time of determination, the average of the bid prices of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.)
as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as
of such time of determination shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved in accordance with the procedures in Section 16.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.

     (b) “Bloomberg” means Bloomberg, L.P.

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

     (d) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing trade price (as
the case may be) then the last bid price or last trade price, respectively, of such security prior
to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the
principal securities exchange or trading market for such security, the last closing bid price or
last

13

 

trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price
or the Closing Sale Price (as the case may be) of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then such dispute shall be
resolved in accordance with the procedures in Section 16. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.

     (e) “Common Stock” means (i) the Company’s shares of common stock, $0.01 par value per share,
and (ii) any capital stock into which such common stock shall have been changed or any share
capital resulting from a reclassification of such common stock.

     (f) “Eligible Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global
Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the Principal Market.

     (g) “Expiration Date” means the date that is the fifth (5th) anniversary of the
Original Issue Date or, if such date falls on a day other than a Business Day or on which trading
does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday.

     (h) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the
applicable Person and whose common stock or equivalent equity security is quoted or listed on an
Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the
Fundamental Transaction.

     (i) “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity or a government or any
department or agency thereof.

     (j) “Principal Market” means the OTC Bulletin Board.

     (k) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected
by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered
into.

     (l) “Trading Day” means any day on which the Common Stock is traded on the Principal Market,
or, if the Principal Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common

14

 

Stock is then traded, provided that “Trading Day” shall not include any day on which the
Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day
that the Common Stock is suspended from trading during the final hour of trading on such exchange
or market (or if such exchange or market does not designate in advance the closing time of trading
on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such
day is otherwise designated as a Trading Day in writing by the Holder and the Company.

     (m) “Voting Stock” of a Person means capital stock of such Person of the class or classes
pursuant to which the holders thereof have the general voting power to elect, or the general power
to appoint, at least a majority of the board of directors, managers or trustees of such Person
(irrespective of whether or not at the time capital stock of any other class or classes shall have
or might have voting power by reason of the happening of any contingency).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

15

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.

	 	 	 	 	 	 	 

	 

	 	 EMISPHERE TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	  

Michael
R. Garone
	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 

16

 

EXERCISE NOTICE

EMISPHERE TECHNOLOGIES, INC.

WARRANT NO. A-[XX] DATED                     , 2011

Ladies and Gentlemen:

     (1) Form of Exercise Price. The Holder intends that payment of the Exercise Price
shall be made as:

	 	 	 	 	 	 	 

	 

	 	                    
	 	a “Cash
Exercise” with respect to

Warrant Shares; and/or
	 	                    
	 
	 	 	 	 	 	 
	 

	 	                    
	 	a “Cashless
Exercise” with respect to

Warrant Shares.
	 	                    

     In the event that the Holder has elected a Cashless Exercise with respect to some or all of
the Warrant Shares to be issued pursuant hereto, the Holder hereby represents and warrants that (i)
this Exercise Notice was executed by the Holder at                      [a.m.][p.m.] on the date set forth
below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice
was $                    .

     (2) Payment of Exercise Price. In the event that the Holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
shall pay the Aggregate Exercise Price in the sum of $                                         to the Company in
accordance with the terms of the Warrant.

     (3) Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee
or agent as specified below,                     Warrant Shares in accordance with the terms of the Warrant.
Delivery shall be made to Holder, or for its benefit, to the following address:

	 	 	 	 	 

	 

	 	 
 

	 	 
	 
	 	 	 	 
	 

	 	 
 

	 	 
	 
	 	 	 	 
	 

	 	 
 

	 	 
	 
	 	 	 	 
	 

	 	 
 

	 	 

     (4) Limitations on Exercise. By its delivery of this Exercise Notice, the undersigned
represents and warrants to the Company that in giving effect to the exercise evidenced hereby the
Holder will not beneficially own in excess of the number of shares of Common Stock (as determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned
under Section 11 of this Warrant to which this notice relates.

	 	 	 	 	 	 	 

	 	 	HOLDER	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Print name)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

17

 

WARRANT ORIGINALLY ISSUED                     , 2011

WARRANT NO. A-[XX]

FORM OF ASSIGNMENT

To be completed and signed only upon transfer of Warrant

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                     
the right represented by the within Warrant to purchase
                                         shares of Common
Stock to which the within Warrant relates and appoints
                                         attorney to transfer said
right on the books of the Company with full power of substitution in the premises.

	 	 	 	 	 	 	 	 	 	 	 

	Dated:	 	 	 	 	 	TRANSFEROR:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Print name)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TRANSFEREE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Print name)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Address of Transferee)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	In the presence of:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 

18exv4w2

Exhibit
4.2

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of ___________, 2011, is by
and among Emisphere Technologies, Inc., a Delaware corporation with headquarters located at 240
Cedar Knolls Rd, Suite 200, Cedar Knolls, New Jersey 07927 (the “Company”), and each of the
undersigned buyers (each, a “Buyer,” and collectively, the “Buyers”).

RECITALS

     A. In connection with the Securities Purchase Agreement by and among the parties hereto, dated
as of June 30, 2011 (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 to each Buyer
(i) shares (the “Common Shares”) of the Company’s common stock, $0.01 par value (the “Common
Stock”) and (ii) the Warrants (as defined in the Securities Purchase Agreement) which will be
exercisable to purchase Warrant Shares (as defined in the Securities Purchase Agreement) in
accordance with the terms of the Warrants.

     B. To induce the Buyers to consummate the transactions contemplated by 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.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and
for 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.

          Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. 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 New York, New York are authorized or required by law to remain closed.

     (b) “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.

     (c) “Effective Date” means the date that the applicable Registration Statement has been
declared effective by the SEC.

     (d) “Effectiveness Deadline” means (i) with respect to the initial Registration Statement
required to be filed pursuant to Section 2(a), the earlier of the (A) 60th calendar day
after the Closing Date (or the 90th calendar day after the Closing Date in the event
that such

 

 

Registration Statement is subject to review by the SEC) and (B) 2nd Business Day
after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that
such Registration Statement will not be reviewed or will not be subject to further review and (ii)
with respect to any additional Registration Statements that may be required to be filed by the
Company pursuant to this Agreement, the earlier of the (A) 40th calendar day following
the date on which the Company was required to file such additional Registration Statement (or the
90th calendar day after such date in the event that such Registration Statement is
subject to review by the SEC) and (B) 2nd Business Day after the date the Company is
notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement
will not be reviewed or will not be subject to further review.

     (e) “Filing Deadline” means (i) with respect to the initial Registration Statement required to
be filed pursuant to Section 2(a), the 20th calendar day after the Closing Date and (ii)
with respect to any additional Registration Statements that may be required to be filed by the
Company pursuant to this Agreement, the date on which the Company was required to file such
additional Registration Statement pursuant to the terms of this Agreement.

     (f) “Investor” means a Buyer or any transferee or assignee of any Registrable Securities or
Warrants, as applicable, to whom a Buyer assigns its rights under this Agreement 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 any Registrable Securities or Warrants, as
applicable, assigns its rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section 9.

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

     (h) “Register,” “Registered,” and “Registration” refer to a registration effected by preparing
and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule
415 and the declaration of effectiveness of such Registration Statement(s) by the SEC.

     (i) “Registrable Securities” means (i) the Common Shares, (ii) the Warrant Shares and (iii)
any capital stock of the Company issued or issuable with respect to the Common Shares, the Warrant
Shares or the Warrants, including, without limitation, (1) as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital stock
of the Company into which the shares of Common Stock are converted or exchanged and shares of
capital stock of a Successor Entity (as defined in the Warrants) into which the shares of Common
Stock are converted or exchanged, in each case, without regard to any limitations on exercise of
the Warrants.

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

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

2

 

     (l) “Required Registration Amount” means the sum of (i) the Common Shares issued and (ii) the
maximum number of Warrant Shares issued and issuable pursuant to the Warrants as of the Trading Day
(as defined in the Warrants) immediately preceding the applicable date of determination (without
taking into account any limitations on the exercise of the Warrants set forth therein), all subject
to adjustment as provided in Section 2(d).

     (m) “Rule 144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be
amended from time to time, or any other similar or successor 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.

     (n) “Rule 415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be
amended from time to time, or any other similar or successor rule or regulation of the SEC
providing for offering securities on a continuous or delayed basis.

     (o) “SEC” means the United States Securities and Exchange Commission or any successor thereto.

2. Registration.

     (a) Mandatory Registration. The Company shall prepare and, as soon as practicable,
but in no event later than the Filing Deadline, file with the SEC an initial Registration Statement
on Form S-3 covering the resale of all of the Registrable Securities, provided that such initial
Registration Statement shall register for resale at least the number of shares of Common Stock
equal to the Required Registration Amount as of the date such Registration Statement is initially
filed with the SEC, provided further that if Form S-3 is unavailable for such a registration, the
Company shall use such other form as is required by Section 2(c). Such initial Registration
Statement, and each other Registration Statement required to filed pursuant to the terms of this
Agreement, shall contain (except if otherwise directed by the Required Holders) the “Selling
Stockholders” and “Plan of Distribution” sections in substantially the form attached
hereto as Exhibit A. The Company shall use its reasonable best efforts to have such initial
Registration Statement, and each other Registration Statement required to filed pursuant to the
terms of this Agreement, declared effective by the SEC as soon as practicable, but in no event
later than the applicable Effectiveness Deadline for such Registration Statement.

     (b) Legal Counsel. Subject to Section 5 hereof, the Investor holding the largest
amount of Registrable Securities to be registered on the applicable Registration Statement (the
“Lead Investor”) shall have the right to select one (1) legal counsel to review and oversee, solely
on its behalf, any registration pursuant to this Section 2 (the “Legal Counsel”).

     (c) Ineligibility to Use Form S-3. In the event that Form S-3 is not available for the
registration of the resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form reasonably acceptable to the
Required Holders and (ii) undertake to register the resale of the Registrable Securities on Form
S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness
of all Registration Statements then in effect until such time as a Registration Statement on Form
S-3 covering the resale of all the Registrable Securities has been declared effective by the SEC.

3

 

     (d) Sufficient Number of Shares Registered. In the event the number of shares
available under any Registration Statement is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement, the Company shall amend such
Registration Statement (if permissible), or file with the SEC a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least the Required
Registration Amount as of the Trading Day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable, but in any event not
later than fifteen (15) days after the necessity therefor arises (but taking account of any
position of the staff of the SEC (the “Staff”) with respect to the date on which the Staff will
permit such amendment to the Registration Statement and/or such new Registration Statement (as the
case may be) to be filed with the SEC). The Company shall use its reasonable best efforts to cause
such amendment to such Registration Statement and/or such new Registration Statement (as the case
may be) to become effective as soon as practicable following the filing thereof with the SEC, but
in no event later than the applicable Effectiveness Deadline for such Registration Statement. 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” if at any time the number
of shares of Common Stock available for resale under the applicable Registration Statement is less
than the product determined by multiplying (i) the Required Registration Amount as of such time by
(ii) 0.90. The calculation set forth in the foregoing sentence shall be made without regard to any
limitations on exercise of the Warrants (and such calculation shall assume that the Warrants are
then fully exercisable for shares of Common Stock at the then-prevailing applicable Exercise
Price).

     (e) Registrable Securities. Any security issued by the Company that constitutes a
Registrable Security shall cease to be a Registrable Security upon the earlier to occur of (i) the
sale of such security pursuant to a Registration Statement or (ii) the first date on which such
security may be sold without restriction pursuant to Rule 144 (including, without limitation,
volume restrictions) and without the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) (assuming, for purposes of the foregoing determination,
“cashless exercise” of all Warrants).

     (f) Offering. Notwithstanding anything to the contrary contained in this Agreement, in
the event the Staff or the SEC seeks to characterize any offering pursuant to a Registration
Statement filed pursuant to this Agreement as constituting an offering of securities by, or on
behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such
Registration Statement to become effective and used for resales in a manner that does not
constitute such an offering and that permits the continuous resale at the market by the Investors
participating therein (or as otherwise may be acceptable to each Investor) without being named
therein as an “underwriter,” then the Company shall reduce the number of shares to be included in
such Registration Statement by all Investors until such time as the Staff and the SEC shall so
permit such Registration Statement to become effective as aforesaid. In making such reduction, the
Company shall reduce the number of shares to be included by all Investors on a pro rata basis
(based upon the number of Registrable Securities otherwise required to be included for each
Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors
are resulting in the Staff or the SEC’s “by or on behalf of the Company” offering position, in
which event the shares held by such Investor or set of Investors shall be the only shares subject
to reduction (and if by a set of Investors on a pro rata basis by such Investors or on such other
basis

4

 

as would result in the exclusion of the least number of shares by all such Investors). In
addition, in the event that the Staff or the SEC requires any Investor seeking to sell securities
under a Registration Statement filed pursuant to this Agreement to be specifically identified as
an “underwriter” in order to permit such Registration Statement to become effective, and such
Investor does not consent to being so named as an underwriter in such Registration Statement, then,
in each such case, the Company shall reduce the total number of Registrable Securities to be
registered on behalf of such Investor, until such time as the Staff or the SEC does not require
such identification or until such Investor accepts such identification and the manner thereof. Any
reduction pursuant to this paragraph will first reduce all Registrable Securities other than those
issued pursuant to the Securities Purchase Agreement. In the event of any reduction in Registrable
Securities pursuant to this paragraph, an affected Investor shall have the right to require, upon
delivery of a written request to the Company signed by such Investor, the Company to file a
registration statement within thirty (30) days of such request (subject to any restrictions imposed
by Rule 415 or required by the Staff or the SEC) for resale by such Investor in a manner acceptable
to such Investor, and the Company shall following such request cause to be and keep effective such
registration statement in the same manner as otherwise contemplated in this Agreement
for registration statements hereunder, in each case until such time as: (i) all Registrable
Securities held by such Investor have been registered and sold pursuant to an effective
Registration Statement in a manner acceptable to such Investor or (ii) all Registrable Securities
may be resold by such Investor without restriction (including, without limitation, volume
limitations) pursuant to Rule 144 (taking account of any Staff position with respect to “affiliate”
status) and without the need for current public information required by Rule 144(c)(1) (or Rule
144(i)(2), if applicable) (assuming, for purposes of the foregoing determination, “cashless
exercise” of all Warrants), or (iii) such Investor agrees to be named as an underwriter in any such
Registration Statement in a manner acceptable to such Investor as to all Registrable Securities
held by such Investor and that have not theretofore been included in a Registration Statement under
this Agreement (it being understood that the special demand right under this sentence may be
exercised by an Investor multiple times and with respect to limited amounts of Registrable
Securities in order to permit the resale thereof by such Investor as contemplated above).

     (g) [Intentionally Omitted]

     (h) Allocation of Registrable Securities. The initial number of Registrable Securities
included in any Registration Statement and any 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 such 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 or assignee (as the case may be) that becomes an Investor shall be allocated a pro rata
portion of the then-remaining number of Registrable Securities included in such Registration
Statement for such transferor or assignee (as the case may be). Any shares of Common Stock included
in a 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.

5

 

3. Related Obligations.

     The Company shall use its reasonable best efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition thereof, and, pursuant
thereto, the Company shall have the following obligations:

     (a) The Company shall promptly prepare and file with the SEC a Registration Statement with
respect to all the Registrable Securities (but in no event later than the applicable Filing
Deadline) and use its reasonable best efforts to cause such Registration Statement to become
effective as soon as practicable after such filing (but in no event later than the Effectiveness
Deadline). Subject to Allowable Grace Periods (as defined below), the Company shall keep each
Registration Statement effective (and the prospectus contained therein available for use) pursuant
to Rule 415 for resales by the Investors on a delayed or continuous basis at then-prevailing market
prices (and not fixed prices) at all times until the earlier of (i) the date as of which all of the
Investors may sell all of the Registrable Securities required to be covered by such Registration
Statement (disregarding any reduction pursuant to Section 2(f)) without restriction pursuant to
Rule 144 (including, without limitation, volume restrictions) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) (assuming, for
purposes of the foregoing determination, “cashless exercise” of all Warrants) or (ii) the date on
which the Investors shall have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”). Notwithstanding anything to the contrary contained in this
Agreement, the Company shall ensure that, when filed and at all times while effective, each
Registration Statement (including, without limitation, all amendments and supplements thereto) and
the prospectus (including, without limitation, all amendments and supplements thereto) used in
connection with such Registration Statement (1) 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 and (2) will disclose (whether directly or through incorporation by
reference to other SEC filings to the extent permitted) all material information regarding the
Company and its securities. The Company shall submit to the SEC, within one (1) Business Day after
the later of the date that the Company learns that no review of a particular Registration Statement
will be made by the Staff or that the Staff 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 forty-eight (48) hours after the submission of such
request.

     (b) Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC
such amendments (including, without limitation, post-effective amendments) and supplements to each
Registration Statement and the prospectus used in connection with each such Registration Statement,
which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep each such Registration Statement effective at all times during the Registration
Period for such Registration Statement, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the Company required to
be 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; provided, however, by 8:30 a.m. (New
York time) on the Business Day immediately following

6

 

each Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under
the 1933 Act the final prospectus to be used in connection with sales pursuant to the applicable
Registration Statement (whether or not such a prospectus is technically required by such rule). In
the case of amendments and supplements to any Registration Statement which are required to be filed
pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason
of the Company filing a report on Form 10-Q or Form 10-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 promptly after the 1934 Act report is filed which created
the requirement for the Company to amend or supplement such Registration Statement.

     (c) The Company shall permit Legal Counsel to review and comment upon (i) each Registration
Statement at least three (3) calendar days prior to its filing with the SEC and (ii) all amendments
and supplements to each Registration Statement (including, without limitation, the prospectus
contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, 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. The Company shall promptly furnish to Legal Counsel, without charge,
(i) copies of any correspondence from the SEC or the Staff to the Company or its representatives
relating to each Registration Statement, provided that such correspondence shall not contain any
material, non-public information regarding the Company, (ii) at the written request of any
Investor, after the same is prepared and filed with the SEC, one (1) copy of each Registration
Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by reference, if requested by such
Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one (1)
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 promptly furnish to any Investor whose Registrable Securities are
included in any Registration Statement, without charge, upon the written request of such Investor,
(i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration
Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by reference, if requested by such
Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each
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 from time to time) and (iii) such other documents, including, without
limitation, copies 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

7

 

jurisdictions, such amendments (including, without limitation, 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, the Company shall not
be required in connection therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y)
subject itself to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and
each Investor who holds Registrable Securities of the receipt by the Company of any notification
with respect to 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 of the happening of
any event, as promptly as practicable after becoming aware of such event, as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an 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, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material, non-public
information regarding the Company), and, subject to Section 3(r), promptly prepare a supplement or
amendment to such Registration Statement and such prospectus contained therein to correct such
untrue statement or omission and deliver ten (10) copies 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 supplement or post-effective amendment has been
filed, 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 or e-mail on the same day of such effectiveness and by overnight mail), and when the
Company receives written notice from the SEC that a Registration Statement or any post-effective
amendment will be reviewed by the SEC, (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information, (iii) of the Company’s
reasonable determination that a post-effective amendment to a Registration Statement would be
appropriate; and (iv) of the receipt of any request by the SEC or any other federal or state
governmental authority for any additional information relating to the Registration Statement or any
amendment or supplement thereto or any related prospectus. The Company shall respond as promptly as
practicable to any comments received from the SEC with respect to each Registration Statement or
any amendment thereto.

     (g) The Company shall (i) use its reasonable best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of each Registration Statement or the use of any
prospectus contained therein, or the suspension of the qualification, or the loss of an exemption
from 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 at the
earliest possible moment and (ii) notify Legal Counsel and each Investor who holds Registrable
Securities of the issuance of such order and the resolution thereof or its receipt of

8

 

actual notice of the initiation or threat of any proceeding for such purpose.

     (h) If any Investor may be required under applicable securities law to be described in any
Registration Statement as an underwriter and such Investor consents to so being named an
underwriter, at the request of any Investor, the Company shall furnish to such Investor, on the
date of the effectiveness of such 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) If any Investor may be required under applicable securities law to be described in any
Registration Statement as an underwriter and such Investor consents to so being named an
underwriter, upon the written request of such Investor, the Company shall make available for
inspection by (i) such Investor, (ii) legal counsel for such Investor and (iii) one (1) firm of
accountants or other agents retained by such Investor (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, each Inspector shall agree in writing to hold
in strict confidence and not to make any disclosure (except to such Investor) or use of any Record
or other information which the Company’s board of directors determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless (1) 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, (2) 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 (3) the information in such Records has been made generally available to the
public other than by disclosure in violation of this Agreement or any other Transaction Document
(as defined in the Securities Purchase Agreement). Such Investor agrees that it shall, upon
learning that disclosure of such Records 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 Company and such Investor, if any) shall be deemed to limit
any Investor’s 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 or is otherwise
required to be disclosed in such Registration Statement pursuant to the 1933 Act, (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

9

 

of this Agreement or any other Transaction Document. 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 such Investor’s expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, such information.

     (k) Without limiting any obligation of the Company under the Securities Purchase Agreement,
the Company shall use its reasonable best efforts either to (i) cause all of the Registrable
Securities covered by each 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, (ii)
secure designation and quotation of all of the Registrable Securities covered by each Registration
Statement on the OTC Bulletin Board, or (iii) if, despite the Company’s reasonable best efforts to
satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding
clauses (i) or (ii), without limiting the generality of the foregoing, to use its reasonable best
efforts to arrange for at least two market makers to register with the Financial Industry
Regulatory Authority (“FINRA”) as such with respect to such Registrable Securities. In addition,
the Company shall cooperate with each Investor and any broker or dealer through which any such
Investor proposes to sell its Registrable Securities in effecting a filing with FINRA pursuant to
FINRA Rule 5110 as requested by such Investor. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 3(k).

     (l) The Company shall cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, 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 from time to
time and registered in such names as the Investors may request.

     (m) If requested by an Investor, the Company shall as soon as practicable after receipt of
notice from such Investor and subject to Section 3(r) hereof, (i) 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 with respect to 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) 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) supplement or
make amendments to any Registration Statement or prospectus contained therein if reasonably
requested by an Investor holding any Registrable Securities.

     (n) The Company shall use its reasonable best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.

     (o) The Company shall make generally available to its security holders as soon as

10

 

practical, but not later than ninety (90) days after the close of the period covered 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 applicable Effective Date of each Registration
Statement.

     (p) 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.

     (q) Within one (1) Business Day after a 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.

     (r) Notwithstanding anything to the contrary herein (but subject to the last sentence of this
Section 3(r)), at any time after the Effective Date of a particular Registration Statement, the
Company may delay the disclosure of material, non-public information concerning the Company the
disclosure of which at the time is not, in the good faith opinion of the board of directors of the
Company, in the best interest of the Company and, in the opinion of counsel to the Company,
otherwise required (a “Grace Period”), provided that the Company shall promptly notify the
Investors in writing of the (i) existence of material, non-public information giving rise to a
Grace Period (provided that in each such notice the Company shall not disclose the content of such
material, non-public information to any of the Investors) and the date on which such Grace Period
will begin and (ii) date on which such Grace Period ends, provided further that (I) no Grace Period
shall exceed thirty (30) consecutive days and during any three hundred sixty five (365) day period
all such Grace Periods shall not exceed an aggregate of ninety (90) days, and (II) 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, such Grace Period shall begin on and include the date the Investors receive the
notice referred to in clause (i) above and shall end on and include the later of the date the
Investors receive the notice referred to in clause (ii) above and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any
Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again be bound by
the first sentence of Section 3(f) with respect to the information giving rise thereto unless such
material, non-public information is no longer applicable. Notwithstanding anything to the contrary
contained in this Section 3(r), 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 with respect to
which such Investor has entered into a contract for sale, and delivered a copy of the prospectus
included as part of the particular Registration Statement to the extent applicable, prior to such
Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.

     (s) If at any time after the date hereof the Company shall become eligible to use Form S-3 for
the registration of the resale of all the Registrable Securities, thereafter the

11

 

Company shall use its reasonable best efforts to maintain eligibility for use of Form S-3 (or
any successor form thereto) for the registration of the resale of all the Registrable Securities.

     (t) The Company shall take all other reasonable actions necessary to expedite and facilitate
disposition by each Investor of its Registrable Securities pursuant to each Registration Statement.

4. Obligations of the Investors.

     (a) At least five (5) Business Days prior to the first anticipated filing date of each
Registration Statement under this Agreement, the Company shall notify each Investor in writing of
the information the Company requires from each such Investor with respect to such Registration
Statement. It shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to 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 each 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 notice from the Company of the happening of
any event of the kind described in Section 3(g) or the first sentence of 3(f), such Investor will
immediately discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of
the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of
Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding
anything to the contrary in this Section 4(c), 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
with respect to which such Investor has entered into a contract for sale prior to the Investor’s
receipt of a notice from the Company of the happening of any event of the kind described in Section
3(g) or the first sentence of Section 3(f) and for which such Investor has not yet settled.

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

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,

12

 

including, without limitation, all registration, listing and qualifications fees, printers and
accounting fees, FINRA filing fees (if any) and fees and disbursements of counsel for the Company
shall be paid by the Company. The Company shall also reimburse the Lead Investor 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 $10,000.

6. Indemnification.

     (a) In the event any Registrable Securities are included in any Registration Statement under
this Agreement, to the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor and each of its directors, officers,
shareholders, members, partners, employees, agents, advisors, representatives (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding the
lack of such title or any other title) and each Person, if any, who controls such Investor within
the meaning of the 1933 Act or the 1934 Act and each of the directors, officers, shareholders,
members, partners, employees, agents, advisors, representatives (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding the lack of such title
or any other title) of such controlling Persons (each, an “Indemnified Person”), against any
losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties,
charges, costs (including, without limitation, court costs, reasonable attorneys’ fees and costs of
defense and investigation), amounts paid in settlement 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, whether or not an indemnified party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a 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 or (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 light of the circumstances
under which the statements therein were made, not misleading (the matters in the foregoing clauses
(i) through (ii) 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 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 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

13

 

connection with the preparation of such Registration Statement or any such amendment thereof
or supplement thereto and (ii) shall not be available to a particular Investor to the extent such
Claim is based on a failure of such Investor to deliver or to cause to be delivered the prospectus
made available by the Company (to the extent applicable), including, without limitation, a
corrected prospectus, if such prospectus or corrected prospectus was timely made available by the
Company pursuant to Section 3(d) and then only if, and to the extent that, following the receipt of
the corrected prospectus no grounds for such Claim would have existed; and (iii) 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 any of the Registrable Securities by any of
the Investors pursuant to Section 9.

     (b) In connection with any Registration Statement in which an Investor is participating, such
Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), 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 or the 1934 Act (each, an “Indemnified Party”), against
any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the
1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon
any Violation, in each case, 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 such Investor
expressly for use in connection with such Registration Statement; and, subject to Section 6(c) and
the below provisos in this Section 6(b), such Investor will reimburse an Indemnified Party any
legal or other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such Claim; provided, however, the indemnity agreement contained in
this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably withheld or delayed,
provided further that such 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 applicable sale of Registrable Securities pursuant to such Registration Statement. 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 any of the Registrable
Securities by any of the Investors pursuant to Section 9.

     (c) Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be)
under this Section 6 of notice of the commencement of any action or proceeding (including, without
limitation, any governmental action or proceeding) involving a Claim, such Indemnified Person or
Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of
the commencement thereof, and 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, an Indemnified Person or Indemnified Party (as

14

 

the case may be) shall have the right to retain its own counsel with the fees and expenses of
such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in
writing to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to
assume the defense of such Claim and to employ counsel reasonably satisfactory to such Indemnified
Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to
any such Claim (including, without limitation, any impleaded parties) include both such Indemnified
Person or Indemnified Party (as the case may be) and the indemnifying party, and such Indemnified
Person or such Indemnified Party (as the case may be) shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent such Indemnified
Person or such Indemnified Party and the indemnifying party (in which case, if such Indemnified
Person or such Indemnified Party (as the case may be) notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying party, then the
indemnifying party shall not have the right to assume the defense thereof and such counsel shall be
at the expense of the Indemnifying Party, provided further that in the case of clause (iii) above
the indemnifying party shall not be responsible for the reasonable fees and expenses of more than
one (1) separate legal counsel for such Indemnified Person or Indemnified Party (as the case may
be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate
with the indemnifying party in connection with any negotiation or defense of any such action or
Claim by the indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person (as the case may be) which
relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person (as the case may be) 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 or proceeding effected without its prior written consent;
provided, however, 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 (as the case may be), 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 (as the case may be)
of a release from all liability in respect to such Claim 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 (as the case may be) with respect to 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 (as the case may be) under this Section 6, except to the
extent that the indemnifying party is materially and adversely prejudiced in its ability to defend
such action.

     (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 1933 Act) in connection with such
sale shall be entitled to indemnification from any Person involved in such sale of Registrable
Securities who is not guilty of 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

15

 

bills are received or Indemnified Damages are incurred, provided that each Indemnified Person
shall promptly reimburse the Company for all such payments received by such Indemnified Person to
the extent (but only to the extent) that a court of competent jurisdiction determines that such
Indemnified Person was not entitled to such payments.

     (f) The indemnity and contribution 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.

7. Contribution.

          To the extent any indemnification by an indemnifying party is prohibited or limited by law,
the indemnifying party agrees to make the maximum contribution with respect to any amounts for
which it would otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however: (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 involved in such sale of
Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution
by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds
received by such seller from the applicable sale of such Registrable Securities pursuant to such
Registration Statement. Notwithstanding the provisions of this Section 7, no Investor shall be
required to contribute, in the aggregate, any amount in excess of the amount by which the net
proceeds actually received by such Investor from the applicable sale of the Registrable Securities
subject to the Claim exceeds the amount of any damages that such Investor has otherwise been
required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue
or alleged untrue statement or omission or alleged omission.

8. Reports Under the 1934 Act.

          With a view to making available to the Investors the benefits of Rule 144, the Company agrees
to:

     (a) make and keep public information available, as those terms are understood and defined in
Rule 144;

     (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 (it being understood and agreed that nothing herein shall limit any obligations of the
Company under the Securities Purchase Agreement) 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, submission and posting requirements of Rule 144 and the 1934 Act, (ii) a copy of

16

 

the most recent annual or quarterly report of the Company and such other reports and documents
so filed by the Company with the SEC if such reports are not publicly available via EDGAR, 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.

     All or any portion of the rights under this Agreement shall be automatically assignable by
each Investor to any transferee or assignee (as the case may be) of all or any portion of such
Investor’s Registrable Securities or Warrants if: (i) such Investor agrees in writing with such
transferee or assignee (as the case may be) to assign all or any portion of such rights, and a copy
of such agreement is furnished to the Company within a reasonable time after such transfer or
assignment (as the case may be); (ii) the Company is, within a reasonable time after such transfer
or assignment (as the case may be), furnished with written notice of (a) the name and address of
such transferee or assignee (as the case may be), and (b) the securities with respect to which such
registration rights are being transferred or assigned (as the case may be); (iii) immediately
following such transfer or assignment (as the case may be) the further disposition of such
securities by such transferee or assignee (as the case may be) is restricted under the 1933 Act or
applicable state securities laws if so required; (iv) at or before the time the Company receives
the written notice contemplated by clause (ii) of this sentence such transferee or assignee (as the
case may be) agrees in writing with the Company to be bound by all of the provisions contained
herein; (v) such transfer or assignment (as the case may be) shall have been made in accordance
with the applicable requirements of the Securities Purchase Agreement and the Warrants (as the case
may be); and (vi) such transfer or assignment (as the case may be) shall have been conducted in
accordance with all applicable federal and state securities laws.

10. Amendment of Registration Rights.

     Provisions of this Agreement may be amended only with the written consent of the Company and
the Required Holders. Any amendment effected in accordance with this Section 10 shall be binding
upon each Investor and the Company. No waiver shall be effective unless it is in writing and signed
by an authorized representative of the waiving party. No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of this Agreement
unless the same consideration also is offered to all of the parties to this Agreement.

11. Miscellaneous.

     (a) Solely for purposes of this Agreement, 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
with respect to the same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from 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

17

 

delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile or electronic mail (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); (iii) with respect to Section
3(c), by electronic mail (provided confirmation of transmission is electronically generated and
kept on file by the sending party); or (iv) one (1) Business Day after deposit with a nationally
recognized overnight delivery service with next day delivery specified, 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:

Emisphere Technologies, Inc.

240 Cedar Knolls, Suite 200

Cedar Knolls, New Jersey 07927

Telephone: (973) 532-8000

Facsimile: (973) 532-8115

Attention: Chief Financial Officer

Email: mgarone@emisphere.com

With a copy (for informational purposes only) to:

Brown Rudnick LLP

One Financial Center

Boston, Massachusetts 02111

Telephone: (617) 856-8200

Facsimile: (617) 856-8201

Attention: Timothy C. Maguire, Esq.

Email: tmaguire@brownrudnick.com

If to the Transfer Agent:

The Bank of New York Mellon – Shareowner Services

111 Founders Plaza, Suite 1100

East Harford, Connecticut 06108

Telephone: (860) 282-3513

Facsimile: (860) 528-6472

Attention: John Boryczki

Email:

If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached to
the Securities Purchase Agreement, 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 the sender’s facsimile machine or electronic mail transmission
containing the time, date, recipient facsimile number or electronic mail address 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

18

 

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. The
Company and each Investor acknowledge and agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by
any other party hereto and to enforce specifically the terms and provisions hereof (without the
necessity of showing economic loss and without any bond or other security being required), this
being in addition to any other remedy to which any party may be entitled by law or equity.

     (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 TO, 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, the schedules and exhibits attached
hereto and thereto and the instruments referenced herein and therein constitute the entire
agreement among the parties hereto and thereto solely with respect to 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, the
schedules and exhibits attached hereto and thereto and the instruments referenced herein and
therein supersede all prior agreements and understandings among the parties hereto solely with
respect to the subject matter hereof and thereof; provided, however, nothing contained in this
Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect

19

 

on any agreements any Investor has entered into with the Company prior to the date hereof with
respect to any prior investment made by such Investor in the Company, (ii) waive, alter, modify or
amend in any respect any obligations of the Company or any rights of or benefits to any Investor or
any other Person in any agreement entered into prior to the date hereof between or among the
Company and any Investor and all such agreements shall continue in full force and effect or (iii)
limit any obligations of the Company under any of the other Transaction Documents.

     (f) Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.
This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person,
other than the parties hereto, their respective permitted successors and assigns and the Persons
referred to in Sections 6 and 7 hereof.

     (g) The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof. Unless the context clearly indicates otherwise, each
pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural
forms thereof. The terms “including,” “includes,” “include” and words of like import shall be
construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the
provision in which they are found.

     (h) This Agreement may be executed in two or more identical counterparts, all of which shall
be considered one and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. In the event that any signature is delivered
by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of
an executed signature page, such signature page shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as
if such signature page were an original thereof.

     (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) 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. Notwithstanding anything to the contrary set forth in Section 10, terms used in this
Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such
terms on the Closing Date in such other Transaction Documents unless otherwise consented to in
writing by each Investor.

     (k) 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.

20

 

     (l) The obligations of each Investor under this Agreement and the other Transaction Documents
are several and not joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other Investor under this
Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as, and the Company acknowledges that the Investors do not so constitute,
a partnership, an association, a joint venture or any other kind of group or entity, or create a
presumption that the Investors are in any way acting in concert or as a group or entity with
respect to such obligations or the transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Investors are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the
transactions contemplated by this Agreement or any of the other the Transaction Documents. Each
Investor shall be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and
it shall not be necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The use of a single agreement with respect to the obligations of the
Company contained herein was solely in the control of the Company, not the action or decision of
any Investor, and was done solely for the convenience of the Company and not because it was
required or requested to do so by any Investor. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction Document is between the Company
and an Investor, solely, and not between the Company and the Investors collectively and not between
and among Investors.

[signature pages follow]

21

 

     IN WITNESS WHEREOF, 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:
	 
	 	 	 	 
	 	 	EMISPHERE TECHNOLOGIES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 

	 

	 	 	 	Name: Michael R. Garone
	 

	 	 	 	Title: Chief Financial Officer

 

 

     IN WITNESS WHEREOF, 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:
	 
	 	 	 	 
	 	 	HUAIDONG WANG
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Huaidong Wang
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	SHIPMAN & GOODWIN LLP
	 	 	PROFIT SHARING RETIREMENT TRUST
	 	 	FBO JAMES T. BETTS
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
James T. Betts
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	HF H VICTOR UW VICTOR ART 7
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Lawrence Remmel
	 

	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 
	 	 	FREESTONE ADVANTAGE PARTNERSHIP
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Keith Goodman
	 

	 	 	 	Title: Authorized Signatory

 

 

	 	 	 	 	 

	 	 	CRANSHIRE CAPITAL LP
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Keith A. Goodman
	 

	 	 	 	Title: COO-Downsview Capital, Inc.
	 

	 	 	 	          The General Partner
	 
	 	 	 	 
	 	 	BAI YE FENG
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Bai Ye Feng
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	KINGSBROOK OPPORTUNITIES MASTER FUND LP
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Adam J. Chill
	 

	 	 	 	Title: Managing Member
	 
	 	 	 	 
	 	 	PINE LODGE CAPITAL COMPANY LTD.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Barry Freeman
	 

	 	 	 	Title: Director

 

 

	 	 	 	 	 

	 	 	EOS HOLDINGS LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Joseph W. Ramelli
	 

	 	 	 	Title: Director
	 
	 	 	 	 
	 	 	SON NAM NGUYEN
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Son Nam Nguyen
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	IROQUOIS MASTER FUND LTD.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Joshua Silverman
	 

	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 
	 	 	ANSON INVESTMENTS MASTER FUND LP
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 Name:
Adam Spears
	 

	 	 	 	Title: Portfolio Manager

 

 

EXHIBIT A

SELLING STOCKHOLDERS

     The shares of common stock being offered by the selling stockholders are those previously
issued to the selling stockholders and those issuable to the selling stockholders upon exercise of
the warrants. For additional information regarding the issuance of common stock and the warrants,
see “Private Placement of Common Shares and Warrants” 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 common stock and the warrants issued pursuant to the
Securities Purchase Agreement, 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 (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder) of the shares of common stock held by each of the selling
stockholders. The second column lists the number of shares of common stock beneficially owned by
the selling stockholders, based on their respective ownership of shares of common stock and
warrants, as of ________, 2011, assuming exercise of the warrants held by each such selling
stockholder on that date but taking account of any limitations on exercise set forth therein.

     The third column lists the shares of common stock being offered by this prospectus by the
selling stockholders and does not take in account any limitations on exercise of the warrants set
forth therein.

     In accordance with the terms of a registration rights agreement with the holders of the common
stock and the warrants, this prospectus generally covers the resale of the sum of (i) the number of
shares of common stock issued in connection with the Securities Purchase Agreement and (ii) maximum
number of shares of common stock issuable upon exercise of the warrants, in each case, determined
as if the outstanding warrants were exercised in full (without regard to any limitations on
exercise contained therein) as of the trading day immediately preceding the date this registration
statement was initially filed with the SEC. Because the exercise price of the warrants may be
adjusted, the number of shares that will actually be issued may be more or less than the number of
shares being offered by this prospectus. The fourth column assumes the sale of all of the shares
offered by the selling stockholders pursuant to this prospectus.

     Under the terms of the warrants, a selling stockholder may not exercise the warrants to the
extent (but only to the extent) such selling stockholder or any of its affiliates would
beneficially own a number of shares of our common stock which would exceed 4.99%. The number of
shares in the second column reflects these limitations. The selling stockholders may sell all, some
or none of their shares in this offering. See “Plan of Distribution.”

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Maximum Number of	 	 
	 	 	Number of Shares of	 	Shares of Common Stock to	 	Number of Shares of
	 	 	Common Stock Owned	 	be Sold Pursuant to this	 	Common Stock of Owned
	Name of Selling Stockholder	 	Prior to Offering	 	Prospectus	 	After Offering
	 	 	 	 	 	 	 

 

 

PLAN OF DISTRIBUTION

     We are registering the shares of common stock previously issued and the shares of common stock
issuable upon exercise of the warrants to permit the resale of these shares of common stock by the
holders of the common stock and warrants from time to time after the date of this prospectus. 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 held 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, pursuant to one or more of the following methods:

	 	•	 	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 or settlement 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 made after the date the Registration Statement is declared effective by
the SEC;
	 
	 	•	 	agreements entered into between broker-dealers and a selling securityholder to sell
a specified number of such shares at a stipulated price per share;

 

 

	 	•	 	a combination of any such methods of sale; and
	 
	 	•	 	any other method permitted pursuant to applicable law.

     The selling stockholders may also sell shares of common stock under Rule 144 promulgated under
the Securities Act of 1933, as amended, if available, rather than under this prospectus. In
addition, the selling stockholders may transfer the shares of common stock by other means not
described in this prospectus. 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 that in turn may sell such shares.

     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 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.

     To the extent required by the Securities Act and the rules and regulations thereunder, 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 re-allowed 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.

     There can be no assurance that any selling stockholder will sell any or all of the shares of
common stock registered pursuant to the 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, to the extent applicable, 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. To the extent
applicable, 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 with respect to 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 with respect to 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, estimated to be $[ ] in total, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with state securities or
“blue sky” laws; provided, however, a selling stockholder 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 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.

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