Document:

EXHIBIT 10.39

THIS WARRANT (THIS  "WARRANT") HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT
OF 1933,  AS AMENDED  (THE "ACT"),  OR ANY STATE  SECURITIES  LAW.  NEITHER THIS
WARRANT NOR ANY SHARES OF COMMON STOCK  ISSUABLE  UPON  EXERCISE  HEREOF NOR ANY
INTEREST OR PARTICIPATION  HEREIN OR THEREIN MAY BE SOLD,  ASSIGNED,  MORTGAGED,
PLEDGED, HYPOTHECATED,  ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE ACT AND APPLICABLE STATE SECURITIES LAWS.

UNIGENE LABORATORIES, INC.

WARRANT

Warrant No. _________                   Original Issue Date: March 30, 2001

 This Warrant is issued in connection  with and pursuant to that certain  Common
Stock Purchase  Agreement (the  "Purchase  Agreement")  dated as of December 18,
2000,  as amended as of the date hereof,  by and between  UNIGENE  LABORATORIES,
INC., a Delaware  corporation  (the  "Company")  and FUSION CAPITAL FUND II, LLC
(the "Buyer").

     FOR VALUE  RECEIVED,  the  Buyer,  the  registered  holder  hereof,  or its
permitted  assigns  (the  "Holder"),  is entitled to purchase  from the Company,
during  the  period  specified  in  this  Warrant,   1,000,000  fully  paid  and
non-assessable  shares (subject to adjustment as hereinafter provided) of Common
Stock (the  "Warrant  Shares"),  of the Company at the purchase  price per share
provided in Section 1.2 of this  Warrant (the  "Warrant  Exercise  Price"),  all
subject to the terms and  conditions  set forth in this  Warrant.  All terms not
otherwise defined herein shall have the meaning ascribed to them in the Purchase
Agreement.

Section 1. Period for Exercise and Exercise Price.

     1.1 Period for  Exercise.  The right to purchase  shares of Warrant  Shares
represented by this Warrant shall be immediately  exercisable,  and shall expire
at 5:00 p.m., Chicago local time, March 31, 2006 (the "Expiration  Date").  From
and after the  Expiration  Date  this  Warrant  shall be null and void and of no
further force or effect whatsoever.

     1.2 Warrant Exercise Price. The Warrant Exercise Price per share of Warrant
Shares shall be $0.50 per share (subject to adjustment as hereinafter provided).

<PAGE>

Section 2. Exercise of Warrant.

     2.1 Manner of Exercise.  The Holder may exercise this Warrant,  in whole or
in part, immediately,  but not after the Expiration Date, during normal business
hours on any  business  day by  surrendering  this Warrant to the Company at the
principal  office of the  Company,  accompanied  by a Warrant  Exercise  Form in
substantially  the form annexed hereto duly executed by the Buyer and by payment
of the  Warrant  Exercise  Price for the number of shares of Warrant  Shares for
which this  Warrant is then  exercisable,  either (i) in  immediately  available
funds, (ii) by delivery of an instrument  evidencing  indebtedness  owing by the
Company  to the  Holder in the  appropriate  amount,  (iii) by  authorizing  the
Company to retain shares of Common Stock which would  otherwise be issuable upon
exercise  of this  Warrant  having  a fair  market  value  (defined  as the last
reported  Closing  Sale  Price  of the  Common  Stock  on the  date  immediately
preceding the date of the subscription  notice) on the date of delivery equal to
the aggregate  Warrant  Exercise Price, or (iv) in a combination of (i), (ii) or
(iii) above, provided, however, that in no event shall the Holder be entitled to
exercise this Warrant for a number of Warrant Shares in excess of that number of
Warrant  Shares  which,  upon giving  effect to such  exercise,  would cause the
aggregate number of shares of Common Stock  beneficially owned by the Holder and
its  affiliates  to exceed 9.9% of the  outstanding  shares of the Common  Stock
following such exercise.  For purposes of the foregoing  proviso,  the aggregate
number of  shares  of Common  Stock  beneficially  owned by the  Holder  and its
affiliates  shall  include the number of shares of Common  Stock  issuable  upon
exercise of this Warrant with respect to which  determination of such proviso is
being made, but shall exclude the shares of Common Stock which would be issuable
upon (i) exercise of the remaining,  unexercised Warrants  beneficially owned by
the Holder and its affiliates and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of the Company beneficially owned
by the Holder  and its  affiliates  subject to a  limitation  on  conversion  or
exercise  analogous to the limitation  contained herein.  Except as set forth in
the preceding  sentence,  for purposes of this paragraph,  beneficial  ownership
shall be calculated in accordance with Section 13(d) of the Securities  Exchange
Act of 1934,  as  amended.  The Holder  may waive the  foregoing  limitation  by
written  notice to the Company upon not less than 61 days prior  written  notice
(with such waiver taking  effect only upon the  expiration of such 61 day notice
period).

     2.2 When Exercise Effective.  Each exercise of this Warrant shall be deemed
to have been effected on the day on which all  requirements of Section 2.1 shall
have been met with  respect to such  exercise.  At such time the person in whose
name any  certificate  for shares of Warrant  Shares shall be issuable upon such
exercise shall be deemed for all corporate purposes to have become the Holder of
record  of such  shares,  regardless  of the  actual  delivery  of  certificates
evidencing such shares.

     2.3  Delivery  of Stock  Certificates.  As soon as  practicable  after each
exercise  of this  Warrant,  and in any event no later  than 3 days  after  such
exercise, the Company at its expense will issue Warrant Shares via credit to the
Buyer's account with DTC for the number of Warrant Shares to which such Buyer is
entitled upon such Buyer's  submission

<PAGE>

of the  applicable  Warrant  Exercise  Form  or,  if the  Transfer  Agent is not
participating  in The DTC Fast Automated  Securities  Transfer  Program and DWAC
system,  issue and surrender to the address as specified in the Warrant Exercise
Form,, a certificate,  registered in the name of the Buyer or its designee,  for
the number of shares of Common  Stock to which the Buyer  shall be  entitled  to
upon such exercise.

Section 3.  Adjustment  of  Purchase  Price and Number of  Shares.  The  Warrant
Exercise Price and the kind of securities  issuable upon exercise of the Warrant
shall be adjusted from time to time as follows:

     3.1 Subdivision or Combination of Shares (Stock Splits).  If the Company at
any time effects a subdivision or combination  of the  outstanding  Common Stock
(through a stock  split or  otherwise),  the number of shares of Warrant  Shares
shall be  increased,  in the case of a  subdivision,  or the number of shares of
Warrant  Shares shall be decreased,  in the case of a  combination,  in the same
proportions  as the  Common  Stock  is  subdivided  or  combined,  in each  case
effective  automatically upon, and simultaneously with, the effectiveness of the
subdivision or combination which gives rise to the adjustment.

     3.2 Stock Dividends.  If the Company at any time pays a dividend,  or makes
any other  distribution,  to holders of Common Stock payable in shares of Common
Stock, or fixes a record date for the  determination  of holders of Common Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock,  then the number of shares of Warrant Shares in effect  immediately prior
to such action shall be proportionately  increased so that the Holder hereof may
receive upon  exercise of the Warrant the  aggregate  number of shares of Common
Stock which he or it would have owned  immediately  following such action if the
Warrant had been  exercised  immediately  prior to such action.  The  adjustment
shall  become  effective  immediately  as of the date the  Company  shall take a
record of the  holders of its Common  Stock for the  purpose of  receiving  such
dividend or distribution (or if no such record is taken, as of the effectiveness
of such dividend or distribution).

     3.3 Reclassification,  Consolidation or Merger. If at any time, as a result
of:

     (a) a capital reorganization or reclassification (other than a subdivision,
combination or dividend provided for elsewhere in this Section 3), or

     (b) a merger or  consolidation  of the  Company  with  another  corporation
(whether or not the Company is the surviving corporation),

the Common Stock issuable upon exercise of the Warrants shall be changed into or
exchanged  for the same or a different  number of shares of any class or classes
of  stock  of  the  Company  or  any  other  corporation,  or  other  securities
convertible  into  such  shares,   then,  as  a  part  of  such  reorganization,
reclassification, merger or consolidation,

<PAGE>

appropriate  adjustments  shall be made in the terms of the  Warrants (or of any
securities  into which the Warrants are  exercised or for which the Warrants are
exchanged), so that:

     (y)  the  Holders  of  Warrants  or of  such  substitute  securities  shall
thereafter  be  entitled to receive,  upon  exercise of the  Warrants or of such
substitute securities, the kind and amount of shares of stock, other securities,
money and property  which such Holders  would have  received at the time of such
capital  reorganization,  reclassification,  merger, or  consolidation,  if such
Holders  had  exercised  their  Warrants   immediately  prior  to  such  capital
reorganization, reclassification, merger, or consolidation, and

     (z) the Warrants or such substitute securities shall thereafter be adjusted
on  terms  as  nearly  equivalent  as may  be  practicable  to  the  adjustments
theretofore provided in this Section 3.3.

No consolidation or merger in which the Company is not the surviving corporation
shall be consummated  unless the surviving  corporation shall agree, in writing,
to the  provisions of this Section 3.3. The provisions of this Section 3.3 shall
similarly  apply  to  successive  capital  reorganizations,   reclassifications,
mergers and consolidations.

     3.4 Other Action  Affecting  Common Stock. If at any time the Company takes
any action affecting its Common Stock,  other than an action described in any of
Sections  3.1 - 3.3  which,  in the  opinion  of the Board of  Directors  of the
Company (the "Board"),  would have an adverse effect upon the exercise rights of
the Warrants, the Warrant Exercise Price or the kind of securities issuable upon
exercise of the Warrants,  or both, shall be adjusted in such manner and at such
time  as  the  Board  may  in  good  faith  determine  to be  equitable  in  the
circumstances; provided, however, that the purpose of this Section is to prevent
the Company  from taking any action  which has the effect of diluting the number
of shares of Warrant Shares issuable upon exercise of this Warrant.

     3.5 Notice of  Adjustment  Events.  Whenever the Company  contemplates  the
occurrence of an event which would give rise to  adjustments  under this Section
3, the Company shall mail to each Warrant Holder,  at least 20 days prior to the
record  date  with  respect  to such  event  or,  if no  record  date  shall  be
established,  at least 20 days prior to such event, a notice  specifying (i) the
nature of the contemplated  event, and (ii) the date on which any such record is
to be taken for the  purpose  of such  event,  and (iii) the date on which  such
event is expected to become effective, and (iv) the time, if any is to be fixed,
when the  holders  of  record of Common  Stock  (or other  securities)  shall be
entitled to exchange  their  shares of Common  Stock (or other  securities)  for
securities or other property deliverable in connection with such event.

     3.6  Notice of  Adjustments.  Whenever  the kind or  number  of  securities
issuable upon exercise of the Warrants,  or both, shall be adjusted  pursuant to
Section 3, the Company shall deliver a certificate signed by its Chief Executive
Officer and by its Chief Financial Officer, setting forth, in reasonable detail,
the event requiring the adjustment,  the amount of the adjustment, the method by
which such  adjustment was

<PAGE>

calculated  (including  a  description  of the basis on which the Board made any
determination  hereunder),  and the  Warrant  Exercise  Price  and  the  kind of
securities  issuable upon  exercise of the Warrants  after giving effect to such
adjustment,  and shall cause copies of such  certificate  to be mailed (by first
class  mail  postage  prepaid)  to  each  Warrant  Holder  promptly  after  each
adjustment.

Section 4. Reservation of Stock,  etc. The Company  covenants and agrees that it
will at all times  have  authorized,  reserve  and keep  available,  solely  for
issuance and delivery upon the exercise of this Warrant, the number of shares of
Warrant Shares from time to time issuable upon the exercise of this Warrant. The
Company  further  covenants  and agrees that this  Warrant is, and any  Warrants
issued in  substitution  for or  replacement  of this  Warrant  and all  Warrant
Shares,  will upon issuance be duly  authorized  and validly  issued and, in the
case of Warrant Shares,  upon issuance will be fully paid and non-assessable and
free from all preemptive  rights of any stockholder,  and from all taxes,  liens
and charges with respect to the issue thereof  (other than transfer  taxes) and,
if the Common  Stock of the  Company is then listed on any  national  securities
exchanges  (as defined in the  Exchange Act of 1934,  as amended (the  "Exchange
Act")) or quoted on NASDAQ,  shall be, subject to the  restrictions set forth in
Section 5, duly listed or quoted thereon,  as the case may be. In the event that
the number of authorized  but unissued  shares of such Common Stock shall not be
sufficient  to effect the exercise of this entire  Warrant into Warrant  Shares,
then in addition to such other  remedies as shall be  available to the Holder of
this Warrant,  the Company shall promptly take such  corporate  action as may be
necessary to increase its authorized but unissued shares of such Common Stock to
such number of shares as shall be sufficient for such purpose.

Section 5. Ownership, Transfer and Substitution of Warrants.

     5.1  Ownership of Warrants.  The Company may treat the person in whose name
any Warrant is registered  on the register  kept at the principal  office of the
Company as the owner and Holder  thereof for all purposes,  notwithstanding  any
notice to the contrary,  but in all events  recognizing  any  transfers  made in
accordance with the terms of this Warrant.

     5.2 Transfer and Exchange of Warrants.  Upon the  surrender of any Warrant,
properly endorsed, for registration of transfer or for exchange at the principal
office of the  Company,  the Company at its expense  will execute and deliver to
the Holder thereof,  upon the order of such Holder, a new Warrant or Warrants of
like tenor,  in the name of such  Holder or as such Holder may direct,  for such
number of shares with  respect to each such  Warrant,  the  aggregate  number of
shares in any event not to exceed the number of shares for which the  Warrant so
surrendered had not been exercised.

     5.3 REGISTRATION  RIGHTS. THE HOLDER OF THIS WARRANT IS ENTITLED TO CERTAIN
REGISTRATION  RIGHTS WITH RESPECT TO THE WARRANT  SHARES  ISSUABLE UPON EXERCISE
THEREOF.  SAID  REGISTRATION  RIGHTS  ARE SET  FORTH  IN A  REGISTRATION  RIGHTS

<PAGE>

AGREEMENT DATED AS OF MARCH 30, 2001, BY AND BETWEEN THE BUYER AND THE COMPANY.

5.4  Exemption  from  Registration.  If an  opinion  of  counsel  provides  that
registration  is not  required  for the  proposed  exercise  or transfer of this
Warrant or the  proposed  transfer of the Warrant  Shares and that the  proposed
exercise or transfer in the absence of registration would require the Company to
take any action including executing and filing forms or other documents with the
Securities and Exchange  Commission (the "SEC") or any state securities  agency,
or delivering to the Holder any form or document in order to establish the right
of the Holder to  effectuate  the  proposed  exercise or  transfer,  the Company
agrees promptly, at its expense, to take any such action; and provided, further,
that the Company will  reimburse the Holder in full for any expenses  (including
but not limited to the fees and  disbursements  of such  counsel,  but excluding
brokers'  commissions) incurred by the Holder or owner of Warrant Shares on his,
her or its behalf in connection with such exercise or transfer of the Warrant or
transfer of Warrant Shares.

Section 6. No Rights or Liabilities as  Shareholder.  Nothing  contained in this
Warrant shall be construed as conferring  upon the Holder hereof any rights as a
shareholder  of the Company or as  imposing  any  liabilities  on such holder to
purchase  any  securities  or as a  shareholder  of the  Company,  whether  such
liabilities are asserted by the Company or by creditors of the Company.

Section 7. Rule 144 Sales.  At the  request of any Holder who  proposes  to sell
securities  in  compliance  with  Rule  144 of the  SEC,  the  Company  will (i)
forthwith  furnish to such Holder a written  statement  of  compliance  with the
filing  requirements  of the SEC as set forth in Rule 144,  as such rules may be
amended from time to time and (ii) make  available to the public and such Holder
such information as will enable the Holder to make sales pursuant to Rule 144.

Section 8. Miscellaneous.

     8.1 Amendment and Waiver.  This Warrant may be amended with, and only with,
the  written  consent of the  Company  and the  Holder.  Any waiver of any term,
covenant, agreement or condition contained in this Warrant shall not be deemed a
waiver of any other term,  covenant,  agreement or condition,  and any waiver of
any default in any such term,  covenant,  agreement  or  condition  shall not be
deemed a waiver of any later  default  thereof  or of any  default  of any other
term, covenant, agreement or condition.

     8.2 Representations and Warranties to Survive Closing. All representations,
warranties  and  covenants  contained  herein shall  survive the  execution  and
delivery  of this  Warrant  and the  issuance  of any  Warrant  Shares  upon the
exercise hereof.

     8.3 Severability. In the event that any court or any governmental authority
or agency declares all or any part of any Section of this Warrant to be unlawful
or invalid,

<PAGE>

such  unlawfulness or invalidity shall not serve to invalidate any other Section
of this  Warrant,  and in the event  that only a portion  of any  Section  is so
declared to be unlawful or invalid,  such  unlawfulness or invalidity  shall not
serve to invalidate the balance of such Section.

     8.4 Binding Effect;  No Third Party  Beneficiaries.  All provisions of this
Warrant  shall be binding upon and inure to the benefit of the parties and their
respective heirs, legatees,  executors,  administrators,  legal representatives,
successors,  and  permitted  transferees  and assigns.  No person other than the
holder of this Warrant and the Company shall have any legal or equitable  right,
remedy or claim under or in respect of, this Warrant.

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

If to the Company:
      Unigene Laboratories, Inc.
      110 Little Falls Road
      Fairfield, New Jersey 07004
      Telephone:      973-882-0860
      Facsimile:      973-227-6088
      Attention:      Dr. Warren Levy

With a copy to:
      Covington & Burling
      1201 Pennsylvania Avenue, N.W.
      Washington, D.C. 20004
      Telephone:      202-662-5276
      Facsimile:       202-778-5276
      Attention:       D. Michael Lefever

If to the Buyer:
      Fusion Capital Fund II, LLC
      222 Merchandise Mart Plaza, Suite 9-112
      Chicago, IL 60654
      Telephone:      312-644-6644
      Facsimile:      312-644-6244
      Attention:      Steven G. Martin

<PAGE>

If to the Transfer Agent:
      Registrar & Transfer Company
      10 Commerce Drive
      Cranford, NJ 07016
      Telephone:      908-497-2300
      Facsimile:      908-497-2310
      Attention: Ms. Florence Bogaenko

or at 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  three (3)  Trading  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 containing the time,
date, and recipient facsimile number or (C) provided by a nationally  recognized
overnight  delivery service,  shall be rebuttable  evidence of personal service,
receipt by facsimile or receipt from a nationally  recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.

     8.6 Taxes,  Costs and  Expenses.  The Company  covenants and agrees that it
will pay when due and payable any and all federal,  state and local taxes (other
than  income  taxes) and any other  costs and  expenses  which may be payable in
respect of the preparation,  issuance, delivery, exercise, surrender or transfer
of this  Warrant  pursuant to the terms of this  Warrant or the  issuance of any
shares  of  Warrant  Shares  as a  result  thereof.  If any  suit or  action  is
instituted  or attorneys  employed to enforce this Warrant or any part  thereof,
the  Company  promises  and  agrees  to pay all costs  and  expenses  associated
therewith, including reasonable attorneys' fees and court costs.

     8.7 Governing  Law;  Jurisdiction;  Jury Trial.  The corporate  laws of the
State of Delaware shall govern all issues  concerning the relative rights of the
Company and its shareholders.  All other questions  concerning the construction,
validity,  enforcement and  interpretation  of this Warrant shall be governed by
the internal laws of the State of Illinois,  without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Illinois or
any other  jurisdictions)  that would cause the  application  of the laws of any
jurisdictions  other than the State of Illinois.  Each party hereby  irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of Chicago,  for the adjudication of any dispute hereunder or under the
other Transaction Documents or in connection herewith or therewith,  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

<PAGE>

any right to serve  process in any manner  permitted  by law.  EACH PARTY HEREBY
IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE,  AND AGREES  NOT TO  REQUEST,  A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

     8.8 Loss of Warrant.  Upon  receipt by the  Company of evidence  reasonably
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Warrant,  and (in the case of loss, theft or destruction) of  indemnification in
form and substance acceptable to the Company in its reasonable  discretion,  and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.

     8.9  Entire  Agreement.  This  Warrant,  the  Purchase  Agreement  and  the
Registration  Rights  Agreement  of even  date  herewith  represent  the  entire
agreement and  understanding  between the parties  concerning the subject matter
hereof and supercede all prior and contemporaneous  agreements,  understandings,
representations and warranties with respect thereto.

     8.10 Headings.  The headings used herein are used for convenience  only and
are not to be considered in construing or interpreting this Warrant.

                                COMPANY:

                                UNIGENE LABORATORIES, INC.

                                By:______________________________
                                   Name: Warren Levy
                                   Title: Chief Executive Officer

<PAGE>

                             WARRANT EXERCISE FORM

                                                        Date:_____________

----------------------
----------------------
----------------------

Ladies and Gentlemen:

The  undersigned,  being the  registered  holder of your Warrant  number  ______
accompanying this letter,  hereby  irrevocably  exercises such Warrant for _____
shares of  Warrant  Shares (as  defined in said  Warrant),  and  herewith  makes
payment  therefor in the amount of ($___________  )(via "cash-less  exercise" in
accordance with the Warrant), and requests that such shares of Warrant Shares be
issued    in   the   name   of,    and    delivered    to   (the    undersigned)
(_________________________),  at the  address  shown  below the  signature  line
hereof.

If said number of shares shall not be all the shares  issuable  upon exercise of
the  attached  Warrant,  a new  Warrant  is to be  issued  in  the  name  of the
undersigned  for the balance  remaining  of such  shares less any  fraction of a
share paid in cash.

-------------------------
Printed Name of Registered Warrant Holder

-------------------------
Signature of Registered Warrant Holder

-------------------------
-------------------------
-------------------------
Address

<PAGE>

                FORM OF COMPANY CONFIRMATION OF WARRANT EXERCISE

     Reference is made to the Common Stock Purchase Agreement (the "Common Stock
Purchase  Agreement")  between  UNIGENE  LABORATORIES,  INC. (the "Company") and
FUSION  CAPITAL FUND II, LLC dated December 18, 2000, as amended March 30, 2001.
In  accordance  with and pursuant to the Common Stock  Purchase  Agreement,  the
Company  has  issued to  FUSION  CAPITAL  FUND II,  LLC a  Warrant  to  Purchase
1,000,000  shares of common stock, par value $.01 per share (the "Common Stock")
of the Company. The undersigned hereby confirms that FUSION CAPITAL FUND II, LLC
has  exercised  the  Warrant  to  purchase  _____  shares  of  Common  stock and
authorizes  the issuance of ______  shares of common  stock,  par value $.01 per
share (the  "Common  Stock") of the  Company,  in  connection  with the  Warrant
Exercise  Notice  Specifically,   the  Company  hereby  confirms  the  following
information:

  Number of shares of Common Stock to be issued:
  Remaining Number of shares

  Subject to Exercise:                  ______________________________________
  Exercise Price:                       $.50/share  of  Common  Stock (Subject
                                        to Adjustment pursuant to the Warrant)

The shares of Common Stock shall be issued in the name and to the address as set
forth in the applicable Warrant Exercise Notice.

Authorized Signature                   _______________________________________
                                       Name:__________________________________
                                       Title:_________________________________
                                       Phone #:_______________________________
                                       Fax #:_________________________________<PAGE>

                                                                     EXHIBIT 4.1

================================================================================

                         REGISTRATION RIGHTS AGREEMENT

                                  by and among

                              IVI CHECKMATE CORP.

                                      and

                                 INGENICO S.A.

                                 _____________

                           Dated as of April 6, 2001

================================================================================
<PAGE>

                                TABLE OF CONTENTS

Section                                                                     Page

1. Definitions..............................................................  1

2. Registration Under the Securities Act....................................  4

   (a) Required Registration................................................  4
   (b) Required Shelf Registration..........................................  6
   (c) Incidental Registration..............................................  8
   (d) Expenses.............................................................  9
   (e) Effective Registration Statement; Suspension......................... 10
   (f) Selection of Underwriters............................................ 10

3. Restrictions on Public Sale by the Company............................... 11

4. Registration Procedures.................................................. 11

5. Indemnification; Contribution............................................ 16

   (a) Indemnification by the Company....................................... 16
   (b) Indemnification by Holders........................................... 16
   (c) Conduct of Indemnification Proceedings............................... 17
   (d) Contribution......................................................... 18

6. Miscellaneous............................................................ 19

   (a) No Inconsistent Agreements........................................... 19
   (b) Amendments and Waivers............................................... 19
   (c) Notices.............................................................. 20
   (d) Successors and Assigns............................................... 20
   (e) Recapitalizations, Exchanges, etc., Affecting Registrable Securities. 20
   (f) Counterparts......................................................... 21
   (g) Descriptive Headings, Etc............................................ 21
   (h) Severability......................................................... 21
   (i) Governing Law........................................................ 21
   (j) Specific Performance................................................. 21
   (k) Entire Agreement..................................................... 21

                                      (i)
<PAGE>

          REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of April 6,
                                              ---------
2001, by and between IVI Checkmate Corp., a Delaware corporation (the
"Company"), Ingenico S.A., a societe anonyme organized under the laws of France
 -------
("Parent") and any other Person (as hereinafter defined) that shall from and
  ------
after the date hereof acquire or otherwise be the transferee of any Registrable
Securities (as hereinafter defined) and who shall be a Permitted Transferee (as
hereinafter defined) of Parent (herein referred to collectively as the "Holders"
                                                                        -------
and individually as a "Holder", and each term shall be deemed to include Parent
                       ------
unless otherwise specified).

          WHEREAS, the Company has entered into an Agreement and Plan of Merger,
dated as of April 6, 2001 (the "Merger Agreement"), with Parent and Idaho
                                ----------------
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), providing for, among other things, a merger of Merger Sub
         ----------
with and into the Company (the "Merger"), whereby each issued share of the
                                ------
Company's common stock (the "Common Stock") shall be converted into the right to
                             ------------
receive $3.30 in cash without interest thereon, upon the terms and subject to
the conditions set forth in the Merger Agreement;

          WHEREAS, Parent beneficially owns 4,164,869 shares of Common Stock;
and

          WHEREAS, in order to induce Parent to enter into the Merger Agreement,
the Company has agreed to provide registration rights on the terms and subject
to the conditions provided herein;

          NOW THEREFORE, in consideration of the promises and the
representations, warranties and agreements contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:

          Section 1.  Definitions.

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

          "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
           ---------
under the Exchange Act.

          "Blackout Period" shall have the meaning set forth in Section
           ---------------
2(a)(iv).

          "Common Stock" shall have the meaning set forth in the preamble.
           ------------

          "Company" shall have the meaning set forth in the preamble and shall
           -------
also include the Company's successors.

          "Equity Investment" shall have the meaning set forth in the preamble.
           -----------------

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
           ------------
amended from time to time.

<PAGE>

          "Holder" shall have the meaning set forth in the preamble.
           ------

          "Incidental Registration" shall mean a registration required to be
           -----------------------
effected by the Company pursuant to Section 2(c).

          "Incidental Registration Statement" shall mean a Registration
           ---------------------------------
Statement of the Company, as provided in Section 2(c), which covers any of the
Registrable Securities on an appropriate form in accordance with the Securities
Act and all amendments and supplements to such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.

          "Majority Holders" shall mean Holders of Common Stock representing in
           ----------------
the aggregate a majority of the aggregate number of outstanding Common Stock
beneficially owned by Holders.

          "Merger" shall have the meaning set forth in the preamble.
           ------

          "Merger Agreement" shall have the meaning set forth in the preamble.
           ----------------

          "Merger Sub" shall have the meaning set forth in the preamble.
           ----------

          "NASD" shall mean the National Association of Securities Dealers, Inc.
           ----

          "Notice of Request" shall have the meaning set forth in Section
           -----------------
2(a)(i).

          "Permitted Transferee" shall mean any Person which would be a
           --------------------
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act.

          "Person" shall mean any individual, limited or general partnership,
           ------
corporation, trust, joint venture, association, joint stock company or
unincorporated organization.

          "Prospectus" shall mean the prospectus included in a Registration
           ----------
Statement, including any preliminary Prospectus, and any such Prospectus as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities and by all other
amendments and supplements to such Prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.

          "Registrable Securities" shall mean shares of Common Stock
           ----------------------
beneficially owned by any Holder, but shall not include any share of Common
Stock (i) which has been effectively registered under the Securities Act and
disposed of in accordance with a Registration Statement covering such security
or (ii) which has been distributed to the public pursuant to Rule 144 under the
Securities Act.

          "Registration Expenses" shall mean (i) all registration, listing,
           ---------------------
qualification and filing fees (including NASD filing fees), (ii) fees and
disbursements of separate counsel for each

                                      -2-
<PAGE>

of the Company on the one hand and all of the Holders on the other hand, (iii)
accounting fees incident to any such registration, (iv) blue sky fees and
expenses (including counsel fees in connection with the preparation of a Blue
Sky Memorandum and legal investment survey), (v) all expenses of any Persons in
preparing or assisting in preparing, printing, distributing, mailing and
delivering any Registration Statement, any Prospectus, any underwriting
agreements, transmittal letters, securities sales agreements, securities
certificates and other documents relating to the performance of and compliance
with this Agreement, (vi) the expenses incurred in connection with making road
show presentations and holding meetings with potential investors to facilitate
the distribution and sale of Registrable Securities which are customarily borne
by the issuer, and (v) all internal expenses of the Company (including all
salaries and expenses of officers and employees performing legal or accounting
duties); provided, however, Registration Expenses shall not include any Selling
Expenses.

          "Registration Statement" shall mean any registration statement of the
           ----------------------
Company which covers any Registrable Securities and all amendments and
supplements to any such registration statement, including post-effective
amendments,  in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.

          "Required Registration" shall mean a registration required to be
           ---------------------
effected pursuant to Section 2(a).

          "Required Registration Statement" shall mean a Registration Statement
           -------------------------------
which covers the Registrable Securities requested to be included therein
pursuant to the provisions of Section 2(a) on an appropriate form (in accordance
with Section 4(a) hereof) pursuant to the Securities Act, and which form shall
be available for the sale of the Registrable Securities in accordance with the
intended method or methods of distribution thereof, and all amendments and
supplements to such Registration Statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.

          "Required Shelf Registration" shall have the meaning set forth in
           ---------------------------
Section 2(b)(ii).

          "Required Shelf Registration Statement" shall have the meaning set
           -------------------------------------
forth in Section 2(b)(i).

          "SEC" shall mean the Securities and Exchange Commission.
           ---

          "Securities Act" shall mean the Securities Act of 1933, as amended
           --------------
from time to time.

          "Selling Expenses" shall mean underwriting discounts, selling
           ----------------
commissions and stock transfer taxes applicable to the shares registered by the
Holders.

          "Shelf Registration Statement" shall have the meaning set forth in
           ----------------------------
Section 2(b)(i).

                                      -3-
<PAGE>

          "Shelf Request" shall have the meaning set forth in Section 2(b)(ii).
           -------------

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

          "Underwritten Offering" shall mean a sale of securities of the Company
           ---------------------
to an Underwriter or Underwriters for reoffering to the public.

          "Withdrawn Request" shall have the meaning set forth in Section
           -----------------
2(a)(iii).

          "Withdrawn Required Registration" shall have the meaning set forth in
           -------------------------------
Section 2(a)(iii).

          (b)  Capitalized terms used herein and not otherwise defined shall
have the meanings assigned such terms in the Merger Agreement.

          Section 2.  Registration Under the Securities Act.

          (a)  Required Registration.
               ---------------------

          (i) At any time after the termination of the Merger Agreement, one or
more Holders of Registrable Securities shall have the right to request in
writing (a "Request") (which Request shall specify the Registrable Securities
            -------
intended to be disposed of by such Holders and the intended method of
distribution thereof) that the Company register such Holders' Registrable
Securities by filing with the SEC a Required Registration Statement.  Upon the
receipt of such a Request, the Company will, by the fifth business day
thereafter, give written notice of such Request to all Holders (a "Notice of
                                                                   ---------
Request"), and, not later than the 20th calendar day after the receipt of such
-------
Request by the Company, the Company will cause to be filed with the SEC a
Required Registration Statement covering the Registrable Securities which the
Company has been so requested to register in such Request and all other
Registrable Securities which the Company has been requested to register by
Holders thereof (other than the Holder(s) initiating the Request) by written
request given to the Company within 6 business days after the giving of such
Notice of Request, providing for the registration under the Securities Act of
the Registrable Securities which the Company has been so requested to register
by all such Holders, to the extent necessary to permit the disposition of such
Registrable Securities so to be registered in accordance with the intended
methods of distribution thereof specified in such Request or further requests,
and shall use its reasonable best efforts to have such Required Registration
Statement declared effective by the SEC as soon as reasonably practicable
thereafter (but in no event later than the 90th calendar day after the receipt
of such a Request) and to keep such Required Registration Statement continuously
effective for a period of at least 60 calendar days (or, in the case of an
Underwritten Offering, such period as the Underwriters shall reasonably require)
following the date on which such Required Registration Statement is declared
effective (or such shorter period which will terminate when all of the
Registrable Securities covered by such Required Registration Statement have been
sold pursuant thereto), including, if necessary, by filing with the SEC a post-
effective amendment or a supplement to the Required Registration Statement or
the related Prospectus or any document  incorporated therein by reference or by
filing any other required document or otherwise supplementing or amending the
Required

                                      -4-
<PAGE>

Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Required
Registration Statement or by the Securities Act, the Exchange Act, any state
securities or blue sky laws or any rules and regulations thereunder.

          (ii)  The Company shall not be required to effect, pursuant to this
Section 2(a), (x) the initial Required Registration hereunder unless Parent, or
Holders beneficially owning at least 500,000 shares of Common Stock, have
initiated or joined in such Request, and (y) any subsequent Required
Registration hereunder unless initiated or joined in by Parent, or Holders
beneficially owning at least 250,000 shares of Common Stock.

          (iii) A Request may be withdrawn prior to the filing of the Required
Registration Statement by Parent where Parent made such Request (a "Withdrawn
                                                                    ---------
Request") and a Required Registration Statement may be withdrawn prior to the
-------
effectiveness thereof by the Holders of a majority of the Registrable Securities
included therein (a "Withdrawn Required Registration"), and, in either such
                     -------------------------------
event, such withdrawal shall not be treated as a Required Registration  for
purposes of Section 2(a)(v).

          (iv)  Notwithstanding the foregoing, the Company may delay the filing
of a Registration Statement required pursuant to this Section 2(a) or suspend
sales under the shelf Registration Statement if the Board of Directors of the
Company, by a majority vote, determines that such filing would adversely affect
any contemplated corporate event (including, without limitation, causing
premature disclosure of corporate information) or if the Company in good faith
intends to raise capital in the public or capital markets within 30 days;
provided, however, that such delay shall not exceed 90 days (a "Blackout
                                                                --------
Period"); provided further that after any initial Blackout Period the Company
------
may not invoke a subsequent Blackout Period until 12 months elapse from the end
of any previous Blackout Period and the number of days in each Blackout Period
shall be deemed to effect a day-for-day extension of the three-year period
referred to in the first sentence of this Section 2(a) and the first sentence of
Section 2(b), and the three-year period referred to in the proviso to the second
sentence of Section 6(a); and provided further that no delay in filing a
Registration Statement or suspension of sales under the shelf Registration
Statement shall be permitted as a result of the Company's good faith intention
to raise capital in the public or capital markets during the first six months
following effectiveness of the shelf Registration Statement (such six month
period to be extended for the number days during which the Company invokes any
Blackout Period pursuant to the Board of Directors of the Company, by a majority
vote, determining that such filing would adversely affect any contemplated
corporate event (including, without limitation, causing premature disclosure of
corporate information)).

          (v)   The Holders shall be entitled to a total of 3 Required
Registrations during the term of this Agreement.  The Holders, in their sole
discretion, may make one such Required Registration a Required Shelf
Registration in accordance with Section 2(b).

          (vi)  If a Required Registration pursuant to this Section 2(a)
involves an Underwritten Offering, and the sole Underwriter or the lead managing
Underwriter, as the case may be, of such Underwritten Offering shall advise the
Company in writing (with a copy to each

                                      -5-
<PAGE>

Holder requesting registration) on or before the date 5 days prior to the date
then scheduled for such offering that, in its opinion, the amount of Registrable
Securities requested to be included in such Required Registration exceeds the
amount which can be sold in such offering without adversely affecting the
distribution of the Registrable Securities being offered, the Company will
include in such Required Registration only the amount of Registrable Securities
that the Company is so advised can be sold in such offering; provided, however,
that the Company shall be required to include in such Required Registration
first, all Registrable Securities requested to be included in the Required
Registration by the Holders and, to the extent not all such Registrable
Securities can be included in such Required Registration, the number of
Registrable Securities to be included shall be allocated pro rata on the basis
of the number of shares of Common Stock beneficially owned at that time by all
the Holders requesting to participate in the Required Registration or on such
other basis as shall be agreed among the Holders, by agreement of the Majority
Holders; and second, if all Registrable Securities requested to be included in
the Required Registration by the Holders can be so included, all other
securities requesting, in accordance with any registration rights which are
granted in compliance with Section 6(a), to be included in such Required
Registration which are of the same class as the Registrable Securities and, to
the extent not all such securities can be included in such Required
Registration, the number of securities to be included shall be allocated pro
rata among the holders thereof requesting inclusion in such Required
Registration on the basis of the number of securities requested to be included
by all such Holders.

          (vii) The registration rights granted pursuant to the provisions of
this Section 2(a) shall be in addition to the registration rights granted
pursuant to the other provisions of this Section 2.

          (b)  Required Shelf Registration.
               ---------------------------

          (i)  The Company agrees that, as promptly as practical after the
termination of the Merger Agreement, and in any event no later than 90 days
thereafter, after the date on which the Merger Agreement is terminated, the
Company shall use its reasonable best efforts to prepare and file with the
Commission a "shelf" Registration Statement on Form S-1 or Form S-3 for an
offering to be made on a continuous basis pursuant to Rule 415 (or any successor
rule) (the "Shelf Registration Statement") covering all of the Registrable
            ----------------------------
Securities.  The Company will use its reasonable best efforts to have such Shelf
Registration Statement declared effective by the SEC on or as soon as
practicable after the date hereof.  The Company shall use its reasonable best
efforts to keep the Shelf Registration Statement continuously effective until
the earlier of (A) the date the Holders can sell all their shares of Registrable
Securities without any restrictions under Rule 144 and (B) the date on which no
Registrable Securities remain outstanding.  In the event the Company has
complied with this Section by using a Form S-3 and becomes ineligible to use
such Form, it shall use its reasonable best efforts to substitute therefor, as
soon as practicable, a Form S-1 covering the Registrable Securities.

          (ii) If the Company shall at any time receive a request in writing (a
"Shelf Request") from Parent, or from any Holder or Holders holding a minimum of
 -------------
10% of the Registrable Securities then outstanding (but in no event less than
200,000 shares (which number

                                      -6-
<PAGE>

shall be adjusted in accordance with all splits, pro rata stock dividends or
reclassifications of the Common Stock)) requesting an Underwritten Offering of
Registrable Securities under the Shelf Registration Statement that has
anticipated aggregate proceeds at the time of the request (net of underwriting
discounts, commissions and expenses) in excess of $2 million (a "Required Shelf
                                                                 --------------
Registration"), the Company shall, subject to the terms and conditions hereof,
------------
be obligated to use its reasonable best efforts to facilitate such proposed
Underwritten Offering pursuant to the terms of this Agreement.

          (iii) Following receipt of a Shelf Request, the Company shall
promptly, but in no event later than the fifth business day following receipt of
such Shelf Request, give a Notice of Offering to all Holders (other than the
Holder or Holders that made the Shelf Request), which shall set forth the right
of such Holders to include any or all shares of Registrable Securities held by
such Holders in the proposed offering, subject to the terms of this Agreement.

          (iv)  If at any time any of the Holders of the Registrable Securities
covered by the Shelf Registration Statement desire to sell Registrable
Securities in an Underwritten Offering (which for the purposes of this Agreement
shall not be deemed to include block trades) in accordance with the limitations
of this Section 2(b)(iv), the investment banker or investment bankers that will
manage the offering will be nationally recognized underwriters selected jointly
by the Company, the Holder initiating such underwritten offering and the Holders
owning a majority of the Registrable Securities held by Holders included in such
offering.

          (v)   If a Required Shelf Registration pursuant to this Section 2(b)
involves an Underwritten Offering, and the sole Underwriter or the lead managing
Underwriter, as the case may be, of such Underwritten Offering shall advise the
Company in writing (with a copy to each Holder requesting registration) on or
before the date 5 days prior to the date then scheduled for such offering that,
in its opinion, the amount of Registrable Securities requested to be included in
such Required Shelf Registration exceeds the amount which can be sold in such
offering without adversely affecting the distribution of the Registrable
Securities being offered, the Company will include in such Required Shelf
Registration only the amount of Registrable Securities that the Company is so
advised can be sold in such offering; provided, however, that the Company shall
be required to include in such Required Shelf Registration first, all
Registrable Securities requested to be included in the Required Shelf
Registration by the Holders and, to the extent not all such Registrable
Securities can be included in such Required Shelf Registration, the number of
Registrable Securities to be included shall be allocated pro rata on the basis
of the number of shares of Common Stock beneficially owned at that time by all
the Holders requesting to participate in the Required Shelf Registration or on
such other basis as shall be agreed among the  Holders, by agreement of the
Majority Holders; and second, if all Registrable Securities requested to be
included in the Required Shelf Registration by the Holders can be so included,
all other securities requesting, in accordance with any registration rights
which are granted in compliance with Section 6(a) of this Agreement, to be
included in such Required Shelf Registration which are of the same class as the
Registrable Securities and, to the extent not all such securities can be
included in such Required Shelf Registration, the number of securities to be
included shall be allocated pro rata among the holders thereof requesting
inclusion in such

                                      -7-
<PAGE>

Required Shelf Registration on the basis of the number of securities requested
to be included by all such Holders.

          (vi)  A Shelf Request may be withdrawn prior to the filing of the
Shelf Registration Statement by Parent where Parent made such Request (a
"Withdrawn Shelf Request"), and a Required Shelf Registration Statement may be
 -----------------------
withdrawn prior to the effectiveness thereof by the Holders of a majority of the
Registrable Securities included therein (a "Withdrawn Required Shelf
                                            ------------------------
Registration"), and, in either such event, such withdrawal shall not be treated
------------
as a Required Registration or a Required Shelf Registration  for purposes of
Section 2(a)(v).

          (vii) The registration rights granted pursuant to the provisions of
this Section 2(b) shall be in addition to the registration rights granted
pursuant to the other provisions of this Section 2.

          (c)  Incidental Registration.
               -----------------------

          (i)  If at any time after the date hereof, the Company proposes to
register any of its Common Stock under the Securities Act (other than (A) any
registration of public sales or distributions solely by and for the account of
the Company of securities issued (x) pursuant to any employee benefit or similar
plan or any dividend reinvestment plan or (y) in any acquisition by the Company,
or (B) pursuant to Sections 2(a) or (b) hereof), either in connection with a
primary offering for cash for the account of the Company or a secondary
offering, the Company will,  each time it intends to effect such a registration,
give written notice to all Holders of Registrable Securities at least 10
business days prior to the initial filing of a Registration Statement with the
SEC pertaining thereto, informing such Holders of its intent to file such
Registration Statement and of the Holders' rights to request the registration of
the Registrable Securities held by the Holders under this Section 2(c) (the
"Company Notice").  Upon the written request of any Holder made within 5
---------------
business days after any such Company Notice is given (which request shall
specify the Registrable Securities intended to be disposed of by such Holder and
such Holder's Permitted Transferees and, unless the applicable registration is
intended to effect a primary offering of Common Stock for cash for the account
of the Company, the intended method of distribution thereof), the Company will
use its reasonable best efforts to effect the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register by such Holders to the extent required to permit the disposition (in
accordance with the intended methods of distribution thereof or, in the case of
a registration which is intended to effect a primary offering for cash for the
account of the Company, in accordance with the Company's intended method of
distribution) of the Registrable Securities so requested to be registered,
including, if necessary, by filing with the SEC a post-effective amendment or a
supplement to the Incidental Registration Statement or the related Prospectus or
any document incorporated therein by reference or by filing any other required
document or otherwise supplementing or amending the Incidental Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Incidental Registration
Statement or by the Securities Act, any state securities or blue sky laws, or
any rules and regulations thereunder; provided, however, that if, at any time
after giving

                                      -8-
<PAGE>

written notice of its intention to register any securities and prior to the
effective date of the Incidental Registration Statement filed in connection with
such registration, the Company shall determine for any reason not to register or
to delay registration of such securities, the Company may, at its election, give
written notice of such determination to each Holder of Registrable Securities
and, thereupon, (A) in the case of a determination not to register, the Company
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses incurred in connection therewith), and (B) in the case of
a determination to delay such registration, the Company shall be permitted to
delay registration of any Registrable Securities requested to be included in
such Incidental Registration Statement for the same period as the delay in
registering such other securities.

          (ii)  If a registration pursuant to this Section 2(b) involves an
Underwritten Offering of the securities so being registered, whether or not for
sale for the account of the Company, and the sole Underwriter or the lead
managing Underwriter, as the case may be, of such Underwritten Offering shall
advise the Company in writing (with a copy to each Initial Holder of Registrable
Securities requesting registration) on or before the date 5 days prior to the
date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in (or during the time of)
such offering without adversely affecting the distribution of the securities
being offered, then the Company will include in such registration first, all the
securities entitled to be sold pursuant to such Registration Statement without
reference to the incidental registration rights of any holder (including
Holders), and second, the amount of other securities (including Registrable
Securities) requested to be included in such registration that the Company is so
advised can be sold in (or during the time of)  such offering, allocated, if
necessary, pro rata among the holders (including the Holders) thereof requesting
such registration on the basis of the number of the securities (including
Registrable Securities) beneficially owned at the time by the holders (including
Holders) requesting inclusion of their securities; provided, however, that in
the event the Company will not, by virtue of this paragraph, include in any such
registration all of the Registrable Securities of any Holder requested to be
included in such registration, such Holder may, upon written notice to the
Company given within 3 days of the time such Holder first is notified of such
matter, reduce the amount of Registrable Securities it desires to have included
in such registration, whereupon only the Registrable Securities, if any, it
desires to have included will be so included and the Holders not so reducing
shall be entitled to a corresponding increase in the amount of Registrable
Securities to be included in such registration.

          (iii) The registration rights granted pursuant to the provisions of
this Section 2(c) shall be in addition to the registration rights granted
pursuant to the other provisions of this Section 2.

          (d) Expenses.  The Company agrees to pay all Registration Expenses in
              --------
connection with (i) each of the registrations requested pursuant to Section 2(a)
and Section 2(b) and (ii) each registration as to which Holders request
inclusion of Registrable Securities pursuant to Section 2(c).  All Selling
Expenses relating to securities registered on behalf of Holders shall

                                      -9-
<PAGE>

be borne by the Holders of shares included in such registration, other selling
stockholders and the Company pro rata on the basis of the number of shares of
Common Stock so registered.

          (e) Effective Registration Statement; Suspension.  Subject to Sections
              --------------------------------------------
2(a)(iii) and 2(b)(vi), as applicable, a Registration Statement pursuant to
Section 2(a), 2(b) or 2(c), as the case may be, will not be deemed to have
become effective (and the related registration will not be deemed to have been
effected) unless it has been declared effective by the SEC prior to a request by
the Holders of a majority of the Registrable Securities included in such
registration that such Registration Statement or Shelf Registration Statement,
as the case may be, be withdrawn; provided, however, that if, after it has been
declared effective, the offering of any Registrable Securities pursuant to such
Registration Statement or Shelf Registration Statement, as the case may be, is
interfered with by any stop order, injunction or other order or requirement of
the SEC or  any other governmental agency or court, such Registration Statement
or Shelf Registration Statement, as the case may be, will be deemed not to have
become effective and the related registration will not be deemed to have been
effected.

          Any period during which the Company fails to keep any Required
Registration Statement or Shelf Registration Statement, as the case may be,
effective and usable for resale of Registrable Securities shall be referred to
as a "Suspension Period."  A Suspension Period shall commence on and include the
      -----------------
date that the Company gives notice that any Required Registration Statement or
Shelf Registration Statement, as the case may be, is no longer effective or
usable for resale of Registrable Securities to and including the date when each
Holder of Registrable Securities covered by such Required Registration Statement
or Shelf Registration Statement, as the case may be, either receives the copies
of the supplemented or amended Prospectus contemplated by Section 4(j) or is
advised in writing by the Company that the use of the Prospectus may be resumed.
In the event of one or more Suspension Periods, the applicable time period
referenced in the first paragraph of Section 2(a)(i)) shall be extended by the
number of days included in each such Suspension Period, and, in the event any
Suspension Period occurs sooner than 30 days after the end of the previous
Suspension Period or 30 days after the initial effectiveness of any Required
Registration Statement or Shelf Registration Statement, as the case may be, none
of the days between such Suspension Periods or prior to such Suspension Period
shall be included in computing such applicable time period.

          (f) Selection of Underwriters.  At any time or from time to time, the
              -------------------------
Holders of a majority of the Registrable Securities covered by a Required
Registration Statement or Shelf Registration Statement, as the case may be, may
elect to have such Registrable Securities sold in an Underwritten Offering and
may select the investment banker or investment bankers and manager or managers
that will serve as lead and co-managing Underwriters with respect to the
offering of such Registrable Securities, subject to the consent of the Company
which shall not be unreasonably withheld.  No Holder may participate in any
Underwritten Offering hereunder unless such Holder (a) agrees to sell such
Holder's securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, custody
agreements, indemnities, underwriting agreements and other documents required
under the terms of such Underwritten Offering.

                                      -10-
<PAGE>

          Section 3.  Restrictions on Public Sale by the Company.

          If requested by the sole Underwriter or lead managing Underwriter(s)
in such Underwritten Offering, the Company agrees not to effect any public sale
or distribution (other than, in the case of the Company, public sales or
distributions solely by and for the account of the Company of securities issued
pursuant to any employee benefit or similar plan or any dividend reinvestment
plan) of any securities during the period commencing on the date the Company
receives a Request from Parent and continuing until 90 days after the
commencement of an Underwritten Offering (or for such shorter period as the sole
or lead managing Underwriter shall request) unless earlier terminated by the
sole Underwriter or lead managing Underwriter(s) in such Underwritten Offering.

          Section 4.  Registration Procedures.

          In connection with the obligations of the Company pursuant to Section
2, the Company shall use its reasonable best efforts to effect or cause to be
effected the registration of the Registrable Securities under the Securities Act
to permit the sale of such Registrable Securities by the Holders in accordance
with their intended method or methods of distribution, and the Company shall:

          (a) (i)  prepare and file a Registration Statement with the SEC which
(x) shall be on Form S-3 (or any successor to such form), if available, (y)
shall be available for the sale or exchange of the Registrable Securities in
accordance with the intended method or methods of distribution by the selling
Holders thereof, and (z) shall comply as to form with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith and all other information reasonably requested by the lead
managing Underwriter or sole Underwriter, if applicable, to be included therein,
(ii) use its reasonable best efforts to cause such Registration Statement to
become effective and remain effective in accordance with Section 2, (iii) use
its reasonable best efforts to not take any action that would cause a
Registration Statement to contain a material misstatement or omission or to be
not effective and usable for resale of Registrable Securities during the period
that such Registration Statement is required to be effective and usable, and
(iv) cause each Registration Statement and the related Prospectus and any
amendment or supplement thereto, as of the effective date of such Registration
Statement, amendment or supplement (x) to comply in all material respects with
any requirements of the Securities Act and the rules and regulations of the SEC
and (y) not to 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 not misleading;

          (b) subject to paragraph (j) of this Section 4, prepare and file with
the SEC such amendments and post-effective amendments to each such Registration
Statement, as may be necessary to keep such Registration Statement effective for
the applicable period; cause each such Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance with the
intended method or

                                      -11-
<PAGE>

methods of distribution by the selling Holders thereof, as set forth in such
Registration Statement;

          (c) furnish to each Holder of Registrable Securities and to each
Underwriter of an Underwritten Offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder or Underwriter may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities; the Company
hereby consents to the use of the Prospectus, including each preliminary
Prospectus, by each Holder of Registrable Securities and each Underwriter of an
Underwritten Offering of Registrable Securities, if any, in connection with the
offering and sale of the Registrable Securities covered by the Prospectus or the
preliminary Prospectus (the Holders hereby agreeing not to make a broad public
dissemination of a form of preliminary Prospectus which is designed to be a
"quiet filing" without the Company's consent, such consent to not be withheld
unreasonably);

          (d) (i)  use its reasonable best efforts to register or qualify the
Registrable Securities, no later than the time the applicable Registration
Statement is declared effective by the SEC, under all applicable state
securities or "blue sky" laws of such jurisdictions as each Underwriter, if any,
or any Holder of Registrable Securities covered by a Registration Statement,
shall reasonably request; (ii) use its reasonable best efforts to keep each such
registration or qualification effective during the period such Registration
Statement is required to be kept effective; and (iii) do any and all other acts
and things which may be reasonably necessary or advisable to enable each such
Underwriter, if any, and Holder to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to  consent to be subject to general service of process (other
than service of process in connection with such registration or qualification or
any sale of Registrable Securities in connection therewith) in any such
jurisdiction;

          (e) notify each Holder of Registrable Securities promptly, and, if
requested by such Holder, confirm such advice in writing, (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of the issuance by the
SEC or any state securities authority of any stop order, injunction or other
order or requirement suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose, (iii) if, between the
effective date of a Registration Statement and the closing of any sale of
securities covered thereby pursuant to any agreement to which the Company is a
party, the representations and warranties of the Company contained in such
agreement cease to be true and correct in all material respects or if the
Company receives any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and (iv) of the happening of any
event during the period a Registration Statement is effective as a result of
which such Registration Statement or the related Prospectus contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading;

                                      -12-
<PAGE>

          (f) furnish counsel for each such Underwriter, if any, and for the
Holders of Registrable Securities copies of any request by the SEC or any state
securities authority for amendments or supplements to a Registration Statement
and Prospectus or for additional information;

          (g) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible time;

          (h) upon request, furnish to the sole Underwriter or lead managing
Underwriter of an Underwritten Offering of Registrable Securities, if any,
without charge, at least one signed copy of each Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits; and furnish to
each Holder of Registrable Securities, without charge, at least one conformed
copy of each Registration Statement and any post-effective amendment  thereto
(without documents incorporated therein by reference or exhibits thereto, unless
requested);

          (i) cooperate with the selling Holders of Registrable Securities and
the sole Underwriter or lead managing Underwriter of an Underwritten Offering of
Registrable Securities, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations (consistent with the provisions of the governing documents
thereof) and registered in such names as the selling Holders or the sole
Underwriter or lead managing Underwriter of an Underwritten Offering of
Registrable Securities, if any, may reasonably request at least three business
days prior to any sale of Registrable Securities;

          (j) upon the occurrence of any event contemplated by paragraph (e)(iv)
of this Section, use its reasonable best efforts to prepare a supplement or
post-effective amendment to a Registration Statement or the related Prospectus,
or any document incorporated therein by reference, or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will 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 light of the circumstances under which
they were made, not misleading;

          (k) enter into customary agreements (including, in the case of an
Underwritten Offering, underwriting agreements in customary form, and including
provisions with respect to indemnification and contribution in customary form
and consistent with the provisions relating to indemnification and contribution
contained herein) and take all other customary and appropriate actions in order
to expedite or facilitate the disposition of such Registrable Securities and in
connection therewith:

          (1) make such representations and warranties to the Holders of such
     Registrable Securities and the Underwriters, if any, in form, substance and
     scope as are customarily made by issuers to underwriters in similar
     underwritten offerings;

          (2) obtain opinions of counsel to the Company and updates thereof
     (which counsel and opinions (in form, scope and substance) shall be
     reasonably satisfactory

                                      -13-
<PAGE>

     to the lead managing Underwriter, if any, and the holders of a majority of
     the Registrable Securities being sold) addressed to each selling Holder and
     the Underwriters, if any, covering the matters customarily covered in
     opinions requested in sales of securities or underwritten offerings and
     such other matters as may be reasonably requested by such Holders and
     Underwriters;

          (3) obtain "cold comfort" letters and updates thereof from the
     Company's independent certified public accountants addressed to the selling
     Holders of Registrable Securities, if permissible, and the Underwriters, if
     any, which letters shall be customary in form and shall cover matters of
     the type customarily covered in "cold comfort" letters to underwriters in
     connection with primary underwritten offerings;

          (4) to the extent requested and customary for the relevant
     transaction, enter into a securities sales agreement with the Holders and
     such representative of the selling Holders as the Majority Holders of the
     Registrable Securities covered by any Registration Statement relating to
     the Registration and providing for, among other things, the appointment of
     such representative as agent for the selling Holders for the purpose of
     soliciting purchases of Registrable Securities, which agreement shall be
     customary in form, substance and scope and shall contain customary
     representations, warranties and covenants; and

          (5) deliver such customary documents and certificates as may be
     reasonably requested by the Majority Holders of the Registrable Securities
     being sold or by the managing Underwriters, if any.

The above shall be done (i) at the effectiveness of such Registration Statement
(and each post-effective amendment thereto) in connection with any registration,
and (ii) at each closing under any underwriting or similar agreement as and to
the extent required thereunder;

          (l) make available for inspection by representatives of the Holders
and any Underwriters participating in any disposition pursuant to a Registration
Statement and any counsel or accountant retained by such Holders or
Underwriters, all relevant financial and other records, pertinent corporate
documents and properties of the Company and cause the respective officers,
directors and employees of the Company to supply all information reasonably
requested by any such representative, Underwriter, counsel or accountant in
connection with a Registration Statement;

          (m) (i)  within a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a Registration
Statement or amendment or supplement to a Prospectus, provide copies of such
document to the Holders and the Holders' counsel and to the Underwriter or
Underwriters of an Underwritten Offering of Registrable Securities, if any;
fairly consider such reasonable changes in any such document prior to or after
the filing thereof as the counsel to the Holders or the Underwriter or the
Underwriters may request and not file any such document in a form to which the
holders of a majority of the Registrable Securities being registered or any
Underwriter shall reasonably object; and make such of the representatives of the
Company as shall be reasonably requested by the Holders of

                                      -14-
<PAGE>

Registrable Securities being registered or any Underwriter available for
discussion of such document;

              (ii) within a reasonable time prior to the filing of any document
which is to be incorporated by reference into a Registration Statement or a
Prospectus, provide copies of such document to counsel for the Holders; fairly
consider such reasonable changes in such document prior to or after the filing
thereof as counsel for such Holders or such Underwriter shall request; and make
such of the representatives of the Company as shall be reasonably requested by
such counsel available for discussion of such document;

          (n) cause all Registrable Securities to be qualified for inclusion in
or listed on the Nasdaq Stock Market or any securities exchange on which
securities of the same class issued by the Company are then so qualified or
listed if so requested by the Majority Holders of Registrable Securities covered
by a Registration Statement, or if so requested by the Underwriter or
Underwriters of an Underwritten Offering of Registrable Securities, if any;

          (o) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, including making available to its
security holders an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;

          (p) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
Underwriter in an Underwritten Offering; and

          (q) use its reasonable best efforts to facilitate the distribution and
sale of any Registrable Securities to be offered pursuant to this Agreement,
including without limitation by making road show presentations, holding meetings
with potential investors and taking such other actions as shall be requested by
the Majority Holders of Registrable Securities covered by a Registration
Statement or the lead managing Underwriter of an Underwritten Offering.

          Each selling Holder of Registrable Securities as to which any
registration is being effected pursuant to this Agreement agrees, as a condition
to the registration obligations with respect to such Holder provided herein, to
furnish to the Company such information regarding such Holder required to be
included in the Registration Statement, the ownership of Registrable Securities
by such Holder and the proposed distribution by such Holder of such Registrable
Securities as the Company may from time to time reasonably request in writing.

          Each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in paragraph (e)(iv) of this
Section, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the affected Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus, contemplated by
paragraph (j) of this Section, and, if so directed by the Company, such Holder
will deliver to the Company (at the expense of the Company), all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities which was current at the
time of receipt of such notice.

                                      -15-
<PAGE>

          Section 5.  Indemnification; Contribution.

          (a) Indemnification by the Company.  The Company agrees to indemnify
              ------------------------------
and hold harmless each Person who participates as an underwriter (any such
Person being an "Underwriter"), each Holder and their respective partners,
                 -----------
directors, officers and employees and each Person, if any, who controls any
Holder or Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act as follows:

          (i)   against any and all losses, liabilities, claims, damages,
     judgments and reasonable expenses whatsoever, as incurred, arising out of
     any untrue statement or alleged untrue statement of a material fact
     contained in any Registration Statement pursuant to which Registrable
     Securities were registered under the Securities Act, including all
     documents incorporated therein by reference, or the omission or alleged
     omission therefrom of a material fact required to be stated therein or
     necessary to make the statements therein not misleading or arising out of
     any untrue statement or alleged untrue statement of a material fact
     contained in any Prospectus, including all documents incorporated therein
     by reference, or the omission or alleged omission therefrom of a material
     fact necessary in order to make the statements therein, in the light of the
     circumstances under which they were made, not misleading;

          (ii)  against any and all losses, liabilities, claims, damages,
     judgments and reasonable expenses whatsoever, as incurred, to the extent of
     the aggregate amount paid in settlement of any litigation, investigation or
     proceeding by any governmental agency or body, commenced or threatened, or
     of any other claim whatsoever based upon any such untrue statement or
     omission, or any such alleged untrue statement or omission, if such
     settlement is effected with the written consent of the Company; and

          (iii) against any and all reasonable expense whatsoever, as incurred
     (including fees and disbursements of counsel), incurred in investigating,
     preparing or defending against any litigation, investigation or proceeding
     by any governmental agency or body, commenced or threatened, in each case
     whether or not such Person is a party, or any claim whatsoever based upon
     any such untrue statement or omission, or any such alleged untrue statement
     or omission, to the extent that any such expense is not paid under sub-
     paragraph (i) or (ii) above;

provided, however, that this indemnity agreement does not apply to any Holder or
Underwriter with respect to any loss, liability, claim, damage, judgment or
expense to the extent arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus, or the omission or
alleged omission therefrom of a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in any such case made in reliance upon and in conformity with
written information furnished to the Company by such Holder or Underwriter
expressly for use in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto).

          (b) Indemnification by Holders.  (i)  Each selling Holder severally
              ---------------------------
agrees to indemnify and hold harmless the Company, each Underwriter and the
other selling Holders, and

                                      -16-
<PAGE>

each of their respective partners, directors, officers and employees (including
each officer of the Company who signed the Registration Statement), and each
Person, if any, who controls the Company, any Underwriter or any other selling
Holder within the meaning of Section 15 of the Securities Act, against any and
all losses, liabilities, claims, damages, judgments and expenses described in
the indemnity contained in paragraph (a) of this Section (provided that any
settlement of the type described therein is effected with the written consent of
such selling Holder), as incurred, but only with respect to untrue statements or
alleged untrue statements of a material fact contained in any Prospectus or the
omissions, or alleged omissions therefrom of a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, in any such case made in reliance upon and in conformity
with written information furnished to the Company by such selling Holder
expressly for use in such Registration Statement (or any amendment thereto) or
such Prospectus (or any amendment or supplement thereto).

          (c) Conduct of Indemnification Proceedings.  Each indemnified party or
              --------------------------------------
parties shall give reasonably prompt notice to each indemnifying party or
parties of any action or proceeding commenced against it in respect of which
indemnity may be sought hereunder, but failure so to notify an indemnifying
party or parties shall not relieve it or them from any liability which it or
they may have under this indemnity agreement, except to the extent that the
indemnifying party is materially prejudiced by such failure to give notice.  If
the indemnifying party or parties so elects within a reasonable time after
receipt of such notice, the indemnifying party or parties may assume the defense
of such action or proceeding at such indemnifying party's or parties' expense
with counsel chosen by the indemnifying party or parties and approved by the
indemnified party defendant in such action or proceeding, which approval shall
not be unreasonably withheld; provided, however, that, if such indemnified party
or parties determine in good faith that a conflict of interest exists and that
therefore it is advisable for such indemnified party or parties to be
represented by separate counsel or that, upon advice of counsel, there may be
legal defenses  available to it or them which are different from or in addition
to those available to the indemnifying party, then the indemnifying party or
parties shall not be entitled to assume such defense and the indemnified party
or parties shall be entitled to separate counsel (limited in each jurisdiction
to one counsel for all Underwriters and another counsel for all other
indemnified parties under this Agreement) at the indemnifying party's or
parties' expense.  If an indemnifying party or parties is not so entitled to
assume the defense of such action or does not assume such defense, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party or parties will pay the reasonable fees and expenses of
counsel for the indemnified party or parties (limited in each jurisdiction to
one counsel for all Underwriters and another counsel for all other indemnified
parties under this Agreement).  No indemnifying party or parties will be liable
for any settlement effected without the written consent of such indemnifying
party or parties, which consent shall not be unreasonably withheld.  If an
indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, such indemnifying party
or parties shall not, except as otherwise provided in this subsection (c), be
liable for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action or proceeding.

                                      -17-
<PAGE>

          (d)  Contribution.
               ------------

          (i)   In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section is
for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms in respect of any losses, liabilities,
claims, damages, judgments and expenses suffered by an indemnified party
referred to therein, each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, liabilities, claims, damages,
judgments and expenses in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of the liable selling Holders
(including, in each case, that of their respective officers, directors,
employees and agents) on the other in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages, judgments
or expenses, as well as any other relevant equitable considerations.  The
relative fault of the Company on the one hand and of the liable selling Holders
(including, in each case, that of their respective officers, directors,
employees and agents) on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue  statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by or on behalf of the
selling Holders, on the other, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.  The amount paid or payable by a party as a result of the losses,
liabilities, claims, damages, judgments and expenses referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (c) of this
Section, any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim.

          (ii)  The Company and each Holder of Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this paragraph
(d) were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in sub-
paragraph (i) above.  Notwithstanding the provisions of this paragraph (d), in
the case of distributions to the public, an indemnifying Holder shall not be
required to contribute any amount in excess of the amount by which (A) the total
price at which the Registrable Securities sold by such indemnifying Holder and
its affiliated indemnifying Holders and distributed to the public were offered
to the public exceeds (B) the amount of any damages which such indemnifying
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.  No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

          (iii) For purposes of this Section, each Person, if any, who controls
a Holder or an Underwriter within the meaning of Section 15 of the Securities
Act (and their respective partners, directors, officers and employees) shall
have the same rights to contribution as such Holder or Underwriter; and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each Person, if any, who controls the Company within the

                                      -18-
<PAGE>

meaning of Section 15 of the Securities Act, shall have the same rights to
contribution as the Company.

          Section 6.  Miscellaneous.

          (a) No Inconsistent Agreements.  The Company will not on or after the
              --------------------------
date of this Agreement enter into any  agreement which conflicts with the
provisions of this Agreement or which grants registration or similar rights nor
has the Company entered into any such agreement, except for the registration
rights which have been granted heretofore pursuant to (i) that certain Asset
Purchase Agreement by and between IVI Checkmate Corporation, DataCard Financial
Systems Corporation, and DataCard Corporation dated April 1, 1999 and the
related Series D Preferred Stock issued pursuant to such Asset Purchase
Agreement and having the rights as set forth in the Certificate of the Powers,
Designations, Preferences and Rights of the Series D Preferred Stock of IVI
Checkmate Corp, including the registration rights agreement made part thereof
and (ii) that certain Compromise Agreement, dated March 29, 2000, by and
between, IVI Checkmate Corporation and or its affiliates and Mr. Nicholas
Michael and Rowe & Langley & Co, including the registration rights agreement
made part thereof, and the Company will not on or after the date of this
Agreement modify in any manner adverse to the Holders such existing agreements;
provided, however, that nothing in this sentence shall prohibit the Company from
granting registration rights to any Person (a "Third Party") who becomes an
                                               -----------
owner of Common Stock after the termination of the Merger Agreement (including
granting incidental registration rights with respect to any Registration
Statement required to be filed or maintained hereunder) if, and only if, (i) the
Third-Party's registration rights (including, without limitation, demand
registration rights) provide to the Holders of Registrable Securities who seek
to participate in such registration (whether or not such registration is
initiated hereunder) rights no less favorable to such Holders than those rights
provided to the Holders hereunder as if such registration were a Required
Registration (including, without limitation, the priority provisions contained
in Sections 2(a)(vi)), provided further however, that if such registration is
not initiated by the Initial Holders such registration shall not be deemed one
of the three Required Registrations for purposes of the limitations contained in
the second paragraph of Section 2(a)(v), and (ii) require the Third Party to
enter into the agreements provided for in Section 3 hereof (as if it were the
Company) on the terms and for the period applicable to the Company (including
preventing sales pursuant to Rule 144 under the Securities Act) if requested by
the sole Underwriter or lead managing Underwriter in an Underwritten Offering
initiated by Holders of Registrable Securities pursuant to Section 2(a). The
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.

          (b) Amendments and Waivers.  The provisions of this Agreement,
              ----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of a
majority of the Holders and, if any such amendment, modification, supplement,
waiver or consent would adversely affect the rights of any Holder hereunder, the
written consent of each Holder which is affected shall be obtained; provided,
however, that nothing herein shall prohibit any amendment, modification,
supplement, waiver or

                                      -19-
<PAGE>

consent the effect of which is limited only to those Holders who have agreed to
such amendment, modification, supplement, waiver or consent.

          (c) Notices.  All notices and other communications provided for or
              -------
permitted hereunder shall be made in writing by hand delivery, telex,
telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder,
at the most current address given by such Holder to the Company by means of a
notice given in accordance with the provisions of this paragraph (c), which
address initially is, with respect to each Holder as of the date hereof, the
address set forth next to such Holder's name on the signature pages hereof with
a copy to David A. Katz, Esq. and David C. Karp, Esq., telecopier number (212)
403-2000, and with respect to each Holder who becomes such after the date
hereof, the address of such Holder in the stock or warrant records of the
Company, or (ii) if to the Company at 1003 Mansell Road, Roswell, Georgia 30076
Attention:  Chief Executive Officer, and thereafter at such other address,
notice of which is given in accordance with the provisions of this paragraph
(c), with a copy to Scott M. Hobby, Esq. and W. Tinley Anderson, III, Esq.,
telecopier number (404) 888-4190.  Notwithstanding the foregoing, the Company
shall not be obligated to provide any notice to any other than Parent except
with respect to a Required, Required Shelf or Incidental Registration Statement
which has been filed and pursuant to which such Holder is identified as a
selling stockholder.

          All such notices and communications shall be deemed to have been duly
given:  at the time delivered by hand, if  personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
business day if timely delivered to a courier guaranteeing overnight delivery.
Notwithstanding the foregoing, nothing in this Section 6(d) is intended to
enlarge the class of Persons which are Holders, as defined in the preamble of
this Agreement, and thus entitled to the rights granted hereunder.

          (d) Successors and Assigns.  This Agreement shall inure to the benefit
              ----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without the need for an express assignment, subsequent
Holders.  If any successor, assignee or transferee of any Holder shall acquire
Registrable Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and to receive the benefits hereof.
Notwithstanding the foregoing, nothing in this Section 6(d) is intended to
enlarge the class of Persons which are Holders, as defined in the preamble of
this Agreement, and thus entitled to the rights granted hereunder.  For purposes
of this Agreement, "successor" for any entity other than a natural person shall
mean a successor to such entity as a result of such entity's merger,
consolidation, liquidation, dissolution, sale of substantially all of its
assets, or similar transaction.

          (e) Recapitalizations, Exchanges, etc., Affecting Registrable
              ---------------------------------------------------------
Securities.  The provisions of this Agreement shall apply, to the full extent
----------
set forth herein with respect to the Registrable Securities, to any and all
securities or capital stock of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which

                                      -20-
<PAGE>

may be issued in respect of, in exchange for, or in substitution of such
Registrable Securities, by reason of any dividend, split, issuance, reverse
split, combination, recapitalization, reclassification, merger, consolidation or
otherwise.  Upon the occurrence of any of such events, Common Share amounts
hereunder shall be appropriately adjusted if necessary.

          (f) Counterparts.  This Agreement may be executed in two or more
              ------------
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.

          (g) Descriptive Headings, Etc.  The headings in this Agreement are for
              -------------------------
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.  Unless the context of this Agreement
otherwise requires:  (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section and paragraph references are to the Articles,
Sections and paragraphs to this Agreement unless otherwise specified; (4) the
word "including" and words of similar import when used in this Agreement shall
mean "including, without limitation," unless otherwise specified; (5) "or" is
                                                                       --
not exclusive; and (6) provisions apply to successive events and transactions.

          (h) Severability.  In the event that any one or more of the
              ------------
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.

          (i) Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
              -------------
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF).

          (j) Specific Performance.  The parties hereto acknowledge that there
              --------------------
would be no adequate remedy at law if any party fails to perform in any material
respect any of its obligations hereunder, and accordingly agree that each party,
in addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of any other
party under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.

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

                  *                    *                    *

                                      -21-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.

                              IVI CHECKMATE CORP.

                              By: /s/ John J. Neubert
                              Name:  John J. Neubert
                              Title:  Executive Vice President - Finance and
                              Administration, Chief Financial Officer, Treasurer
                              and Secretary

                              INGENICO S.A.

                              By:/s/ Jean-Jacques Poutrel
                              Name: Jean-Jacques Poutrel
                              Title: President and Chief Executive Officer

                                      -22-

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