Document:

Exhibit
4.8

 

Execution Copy

 

REGISTRATION RIGHTS AGREEMENT

 

 

                                                This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of June 7, 2006, is by and between Earth Biofuels, Inc., a Delaware
corporation (the “Company”), and each of the
entities whose names appear on the signature pages hereof.  Such entities are each referred to herein as “Purchaser” and, collectively, as the
“Purchasers”.

 

                                                The Company has
agreed, on the terms and subject to the conditions set forth in the Securities
Purchase Agreement, dated as of June 7, 2006 (the “Securities
Purchase Agreement”), to issue and sell to each Purchaser named
therein (A) an 8% Senior Note in the form attached to the Securities Purchase
Agreement (each, a “Note” and, collectively, the “Notes”) and (B) a Warrant in the
form attached to the Securities Purchase Agreement (each, a “Warrant” and, collectively, the “Warrants”).

 

                                                The Notes are
convertible, subject to the conditions specified in the Securities Purchase
Agreement, into shares (the “Conversion Shares”)
of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The Warrants are
exercisable into shares of Common Stock (the “Warrant
Shares”) in accordance with their terms.

 

                                                In order to
induce each Purchaser to enter into the Securities Purchase Agreement, the
Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended (the “Securities Act”),
and under applicable state securities laws.

 

                                                In
consideration of each Purchaser entering into the Securities Purchase
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

                                                1.                                       DEFINITIONS.

 

                                                For purposes of
this Agreement, the following terms shall have the meanings specified:

 

                                                “Business Day” means any day other
than a Saturday, a Sunday or a day on which the Commission is closed or on
which banks in the City of New York are authorized by law to be closed.

 

                                                “Commission” means the Securities and
Exchange Commission.

 

                                                “Effective Date” means the date on
which the Registration Statement is declared effective by the Commission.

 

                                                “Filing Deadline” means the date that
is the earliest of the following:  (i)
the date on which the Company files a registration statement covering any of
its securities issued on or after January 1, 2006; (ii) the date on which the
Company is contractually required to file a

 

 

registration statement
covering any of its securities (other than the Registrable Securities) issued
after the Closing Date; and (iii) the date that is the sixtieth (60th) calendar
day following the Closing Date.

 

                                                “Holder” means any person owning or
having the right to acquire, through conversion of the Notes or exercise of the
Warrants or otherwise, Registrable Securities, including initially each Purchaser
and thereafter any permitted assignee thereof.

 

                                                “Registrable Securities” means the
Conversion Shares, the Warrant Shares, and any other shares of Common Stock
issuable pursuant to the terms of the Note or the Warrants, and any shares of
capital stock issued or issuable from time to time (with any adjustments) in
replacement of, in exchange for or otherwise in respect of the Conversion
Shares and the Warrant Shares.

 

                                                “Registration Deadline” means the
earliest of (i) the one hundred and twentieth (120th) calendar day
following the Closing Date, (ii) the sixtieth (60th) calendar day
following the Filing Deadline, and (iii) the fifth (5th) Business Day after the Company learns that no review of the
Registration Statement will be made by the staff of the Commission or that the
staff of the Commission has no further comments on the Registration Statement.

 

                                                “Registration Period” has the meaning
set forth in Section 2(c) below.

 

                                                “Registration Statement” means a
registration statement or statements prepared in compliance with the Securities
Act and pursuant to Rule 415 under the Securities Act (“Rule
415”) or any successor rule providing for the offering of
securities on a continuous or delayed basis.

 

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

 

                                                2.                                       REGISTRATION.

 

                                                                                                (a)                                  Filing of
Registration Statement.  On
or before the Filing Deadline, the Company shall prepare and file with the
Commission a Registration Statement on Form SB-2 as a “shelf” registration
statement under Rule 415 covering the resale of a number of shares of
Registrable Securities equal to one hundred and fifty percent (150%) of the
number of shares of Common Stock issuable upon conversion of the Notes and
exercise of the Warrants (such number to be determined using the Conversion
Price (as defined in the Notes) and Exercise Price (as defined in the Warrants)
in effect on the date on which the Registration Statement is filed and without
regard to any restriction on such conversion or exercise). Such Registration
Statement shall state, to the extent permitted by Rule 416 under the Securities
Act, that it also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon the conversion of the Notes and exercise of
the Warrants in order to prevent dilution resulting from stock splits, stock
dividends or similar events.  The Company
shall retain Akin, Gump, Strauss, Hauer & Feld LLP or a comparable national
law firm that is reasonably satisfactory to the Purchasers to handle the
preparation of the Registration Statement and the process of getting such
Registration Statement effective.

 

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                                                                                                (b)                                 S-1/S-3
Registration Statement. 
Notwithstanding the foregoing Section 2(a),
if at the Filing Deadline the Company does not meet the eligibility
requirements for filing a Registration Statement on Form SB-2, then in each
such case the Company shall instead prepare and file with the Commission a
Registration Statement meeting the foregoing requirements on Form S-1. In the
event that the Company files a Registration Statement on Form S-1 or Form
SB-2,  and thereafter meets the
eligibility requirements to use Form S-3 for the resale of Registrable
Securities by the Purchaser, the Company shall re-file such Registration
Statement, or file a new Registration Statement covering at least the number of
shares then registered on the existing Registration Statement(s) (and not
previously sold pursuant to an existing Registration Statement or pursuant to
Rule 144 under the Securities Act (“Rule 144”)),
on Form S-3 as promptly as practicable (but in no event later than thirty (30)
days) after the Company meets such requirements.

 

                                                                                                (c)                                  Effectiveness.  The Company shall use reasonable best efforts
to cause the Registration Statement to become effective as soon as practicable
following the filing thereof, but in no event later than the Registration
Deadline.  The Company shall respond
promptly to any and all comments made by the staff of the Commission on with
respect to a Registration Statement, and shall submit to the Commission, within
two (2) Business Days after the Company learns that no review of such Registration
Statement will be made by the staff of the Commission or that the staff of the
Commission has no further comments on such Registration Statement, as the case
may be, a request for acceleration of the effectiveness of such Registration
Statement to a time and date not later than two (2) Business Days after the
submission of such request.  The Company
will maintain the effectiveness of each Registration Statement filed pursuant
to this Agreement until the earliest to occur of (i) the date on which all of the
Registrable Securities eligible for resale thereunder have been publicly sold
pursuant to either the Registration Statement or Rule 144, (ii) the date on
which all of the Registrable Securities remaining to be sold under such
Registration Statement (in the reasonable opinion of counsel to the Company)
may be immediately sold to the public under Rule 144(k) under the Securities
Act (“Rule 144(k)”) or any
successor provision and (iii) the date that is the second (2nd) anniversary of the  Effective
Date (the period beginning on the Closing Date and ending on the earliest to
occur of (i), (ii) or (iii) above being referred to herein as the “Registration Period”).

 

                                                                                                (d)                                 Registration
Default.  If (i) the Registration
Statement is not filed on or before the Filing Deadline or declared effective
by the Commission on or before the Registration Deadline, (ii) after a
Registration Statement has been declared effective by the Commission, sales of
Registrable Securities (other than such Registrable Securities as are then
freely saleable pursuant to Rule 144(k)) cannot be made by a Holder under a
Registration Statement for any reason not within the exclusive control of such
Holder, or (iii) an amendment or supplement to a Registration Statement, or a
new registration statement, required to be filed pursuant to the terms of Section 3(j) below, is not filed on
or before the date required by such section (each of the foregoing clauses (i),
(ii) and (iii) being referred to herein as a “Registration
Default”), the Company shall make cash payments to each Holder
equal to such Holder’s pro rata share
(based on the aggregate number of Registrable Securities then held by or
issuable to such Holder as of the occurrence of the Registration Deadline)
equal to one percent (1%) of the aggregate Purchase Price paid by such Holder
for such Holder’s Note and Warrants for each thirty (30) day period (pro rated
for partial periods) in which a Registration Default exists, up to a maximum of
four percent (4%) of the

 

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aggregate Purchase Price paid by such Holder
for such Holder’s Note and Warrants; provided, however, that
such maximum shall be increased to six percent (6%) of the aggregate Purchase
Price paid by such Holder if the Registration Statement is not filed on or
before August 31, 2006. Notwithstanding any provision of this Agreement to the
contrary, the Company shall be permitted to suspend the Registration Statement for
one or more periods (provided that the aggregate length of such suspension
shall not exceed ten (10) consecutive Business Days or an aggregate of twenty
(20) Business Days in any 365 day period, with at least thirty calendar days
between each such suspension) the actions required under Section
2(a) of this Agreement to the extent that the Board of Directors
of the Company concludes reasonably and in good faith that the disclosure of
information in the prospectus is not in the best interest of the Company.  Each such payment required to be made under
this Section 2(d) shall be made within
five (5) Business Days following the last day of each calendar month in which a
Registration Default exists. Any such payment made following such five (5)
Business Day window shall be subject to interest at the lower of sixteen
percent (16%) and the maximum rate permitted by applicable law. Any such
payment shall be in addition to any other remedies available to each Holder at
law or in equity, whether pursuant to the terms hereof, the Securities Purchase
Agreement, the Notes, or otherwise.

 

                                                                                                (e)                                  Allocation of
Conversion Shares and Warrant Shares. The initial number of
Conversion Shares and Warrant Shares included in any Registration Statement and
each increase in the number thereof included therein shall be allocated pro rata among the Holders based on the aggregate number of
Registrable Securities issuable to each Holder at the time the Registration
Statement covering such initial number of Registrable Securities or increase
thereof is declared effective by the Commission (such number to be determined
using the Conversion Price or Exercise Price, as applicable, in effect at such
time and without regard to any restriction on the ability of a Holder to
convert such Holder’s Note or exercise such Holder’s Warrant as of such
date).  In the event that a Holder sells
or otherwise transfers any of such Holder’s Registrable Securities, each
transferee shall be allocated the portion of the then remaining number of
Registrable Securities included in such Registration Statement allocable to the
transferor.

 

                                                                                                (f)                                    Registration of
Other Securities.  During the
period beginning on the date hereof and ending on the Effective Date, the
Company shall refrain from filing any registration statement (other than (i) a
Registration Statement filed hereunder, (ii) a registration statement on Form
S-8 with respect to stock option plans and agreements and stock plans currently
in effect and disclosed in the Securities Purchase Agreement or the schedules
thereto, or (iii) a registration statement on Form S-4 with respect to an
acquisition or other business combination involving the Company.

                                                3.                                       OBLIGATIONS OF
THE COMPANY.

 

                                                In addition to
performing its obligations hereunder, including without limitation those
pursuant to Section 2 above, the Company shall, with respect to each
Registration Statement:

 

                                                                                                (a)                                  prepare and
file with the Commission such amendments and supplements to such Registration
Statement and the prospectus used in connection with such Registration
Statement as may be necessary to comply with the provisions of the Securities
Act or to maintain the effectiveness of such Registration Statement during the
Registration Period, or as may be reasonably requested by a Holder in order to
incorporate information concerning such Holder or such Holder’s

 

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intended method of distribution and further
incorporating such additional information as may be reasonably requested by
such Holder;

 

                                                                                                (b)                                 at such time
following the Closing that the Company is eligible to do so, use commercially
reasonable efforts to secure the listing on the Principal Market of all
Registrable Securities issuable upon conversion of the Notes and exercise of
the Warrants, and at any Holder’s request, provide such Holder with reasonable
evidence thereof;

 

                                                                                                (c)                                  so long as a
Registration Statement is effective covering the resale of the applicable
Registrable Securities owned by a Holder, furnish to each Holder such number of
copies of the prospectus included in such Registration Statement, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such Holder may reasonably request in order to
facilitate the disposition of such Holder’s Registrable Securities;

 

                                                                                                (d)                                 use
commercially reasonable efforts to register or qualify the Registrable
Securities under the securities or “blue sky” laws of such jurisdictions within
the United States as shall be reasonably requested from time to time by a
Holder, and do any and all other acts or things which may reasonably be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such jurisdiction;

 

                                                                                                (e)                                  notify each
Holder immediately after becoming aware of the occurrence of (i) any request by
the SEC or any other federal/state governmental authority during the period of effectiveness of the
Registration Statement for amendments or supplements to a Registration
Statement or related prospectus or for additional information or (ii) any
other event (but shall not, without the prior written consent of such Holder,
disclose to such Holder any facts or circumstances constituting material
non-public information) as a result of which the prospectus included in such
Registration Statement, as then in effect, contains an untrue statement of material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and as promptly as practicable prepare
and file with the Commission and furnish to each Holder a reasonable number of
copies of a supplement or an amendment to such prospectus as may be necessary
so that such prospectus does not contain an untrue statement of material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing.  The parties hereto acknowledge
that the Company shall be permitted to suspend the Registration Statement for
one or more periods (provided that the aggregate length of such suspension
shall not exceed ten (10) consecutive Business Days or an aggregate of twenty
(20) Business Days in any 365 day period, with at least thirty calendar days
between each such suspension) the actions required under Section
2(a) of this Agreement to the extent that the Board of Directors
of the Company concludes reasonably and in good faith that the disclosure of
information in the prospectus is not in the best interest of the Company;

 

                                                                                                (f)                                    use
commercially reasonable efforts to prevent the issuance of any stop order or
other order suspending the effectiveness of such Registration Statement and, if
such an order is issued, to notify each Holder immediately after becoming aware
thereof and to use commercially

 

5

 

reasonable efforts obtain the withdrawal
thereof at the earliest possible time and to notify each Holder in writing of
the issuance of such order and the resolution thereof.  The parties hereto acknowledge that the
Company shall be permitted to suspend the Registration Statement for one or
more periods (provided that the aggregate length of such suspension shall not
exceed ten (10) consecutive Business Days or an aggregate of twenty (20)
Business Days in any 365 day period, with at least thirty calendar days between
each such suspension) the actions required under Section
2(a) of this Agreement to the extent that the Board of Directors
of the Company concludes reasonably and in good faith that the disclosure of
information in the prospectus is not in the best interest of the Company;

 

                                                                                                (g)                                 furnish to each
Holder, on the date that such Registration Statement, or any successor
registration statement, becomes effective, a letter, dated such date, signed by
an officer of or counsel to the Company and addressed to such Holder,
confirming such effectiveness and, to the knowledge of  such counsel, the absence of any stop order;

 

                                                                                                (h)                                 provide to each
Holder and its representatives the reasonable opportunity to conduct a
reasonable inquiry of the Company’s financial and other records during normal
business hours and make available during normal business hours and with
reasonable advance notice its officers, directors and employees for questions
regarding information which such Holder may reasonably request in order to
fulfill any due diligence obligation on its part;

 

                                                                                                (i)                                     permit counsel
for each Holder to review such Registration Statement and all amendments and
supplements thereto, and any comments made by the staff of the Commission
concerning such Holder and/or the transactions contemplated by the Transaction
Documents and the Company’s responses thereto, within a reasonable period of
time prior to the filing thereof with the Commission (or, in the case of
comments made by the staff of the Commission, within a reasonable period of
time following the receipt thereof by the Company);

 

                                                                                                (j)                                     in the event
that, at any time, the number of shares available under the Registration
Statement is insufficient to cover one hundred and twenty-five percent (125%)
of the Registrable Securities issuable under the Notes and Warrants (such
number to be determined using the Conversion Price or Exercise Price, as
applicable, in effect at such time and without regard to any restriction on the
ability of any Holder to convert such Holder’s Note or exercise such Holder’s
Warrant) the Company shall promptly amend such Registration Statement or file a
new registration statement, in any event as soon as practicable, but not later
than the tenth (10th) day following
notice from a Holder of the occurrence of such event, so that such Registration
Statement or such new registration statement, or both, covers no less than one
hundred and fifty percent (150%) of the Registrable Securities eligible for
resale thereunder and issuable under the Notes and Warrants (such number to be
determined using the Conversion Price or Exercise Price, as applicable, in
effect at the time of such amendment or filing and without regard to any
restriction on the ability of any Holder to convert such Holder’s Note or
exercise such Holder’s Warrant). The Company shall use its best efforts to
cause such amendment and/or new Registration Statement to become effective as
soon as practicable following the filing thereof. Any Registration Statement
filed pursuant to this Section 3(j)
shall state that, to the extent permitted by Rule 416 under the Securities Act,
such Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon conversion of the Note and
exercise of the Warrants in order to prevent

 

6

 

dilution
resulting from stock splits, stock dividends or similar events. Unless and
until such amendment or new Registration Statement becomes effective, each
Holder shall have the rights described in Section 2(d)
above;

                                                                                                (k)                                  cause to be
furnished to each Holder, upon request therefore, comfort letters from the
Company’s independent auditors and/or outside counsel, with respect to such
Holder’s status as an underwriter; and

 

                                                                                                (l)                                     cause to be
timely furnished to each Holder, earnings statements of the Company conforming
to the requirements of Rule 158 under the Securities Act.

 

                                                4.                                       OBLIGATIONS OF
EACH HOLDER.

 

                                                In connection
with the registration of Registrable Securities pursuant to a Registration
Statement, each Holder shall:

 

                                                                                                (a)  timely furnish to the Company (i) a completed
Shareholder Questionnaire and (ii) such information in writing regarding itself
and the intended method of disposition of such Registrable Securities as the
Company shall reasonably request in order to effect the registration thereof;

 

                                                                                                (b)  upon receipt of any notice from the Company
of the happening of any event of the kind described in Sections
3(e) or 3(f),
immediately discontinue any sale or other disposition of such Registrable
Securities pursuant to such Registration Statement until the filing of an
amendment or supplement as described in Section 3(e)
or withdrawal of the stop order referred to in Section
3(f), and use commercially reasonable efforts to maintain the
confidentiality of such notice and its contents;

 

                                                                                                (c)  to the extent required by applicable law,
deliver a prospectus to the purchaser of such Registrable Securities;

 

                                                                                                (d)  notify the Company when it has sold all of
the Registrable Securities held by it; and

 

(e)  notify the Company in the event that any
information supplied by such Holder in writing for inclusion in such
Registration Statement or related prospectus is untrue or omits to state a
material fact required to be stated therein or necessary to make such
information not misleading in light of the circumstances then existing;
immediately discontinue any sale or other disposition of such Registrable
Securities pursuant to such Registration Statement until the filing of an
amendment or supplement to such prospectus as may be necessary so that such
prospectus does not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
and use commercially reasonable efforts to assist the Company as may be
appropriate to make such amendment or supplement effective for such purpose.

 

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                                                5.                                       INDEMNIFICATION.

 

                                                In the event
that any Registrable Securities are included in a Registration Statement under
this Agreement:

 

                                                                                                (a)                                  To the extent
permitted by law, the Company shall indemnify and hold harmless each Holder,
the officers, directors, employees, agents and representatives of such Holder,
and each person, if any, who controls such Holder within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), against any losses,
claims, damages, liabilities or reasonable out-of-pocket expenses (whether
joint or several) (collectively, including reasonable legal expenses or other
expenses reasonably incurred in connection with investigating or defending
same, “Losses”), insofar as any such
Losses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement
under which such Registrable Securities were registered, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  Subject to the
provisions of Section 5(c) below, the
Company will reimburse such Holder, and each such officer, director, employee,
agent, representative or controlling person, for any reasonable legal expenses
or other out-of-pocket expenses as reasonably incurred by any such entity or
person in connection with investigating or defending any Loss; provided, however, that the foregoing indemnity shall not
apply to amounts paid in settlement of any Loss if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be obligated to indemnify any person for any
Loss to the extent that such Loss arises out of or is based upon (i) any
disclosure or any omission or alleged omission (to state a material fact
required to be stated therein or necessary to make statements therein not
misleading) that is based upon or in conformity with written information
furnished (or not furnished, in the case of an omission) by such person
expressly for use in such Registration Statement or (ii) a failure of such
person to deliver or cause to be delivered the final prospectus contained in
the Registration Statement and made available by the Company, if such delivery
is required by applicable law.

 

                                                                                                (b)                                 To the extent
permitted by law, each Holder who is named in such Registration Statement as a
selling shareholder, acting severally and not jointly, shall indemnify and hold
harmless the Company, the officers, directors, employees, agents and
representatives of the Company, and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, against
any Losses to the extent (and only to the extent) that any such Losses arise
out of or are based upon (i) any disclosure or any omission or alleged omission
(to state a material fact required to be stated therein or necessary to make
statements therein not misleading) that is based upon or in conformity with
written information furnished (or not furnished, in the case of an omission) by
such person expressly for use in such Registration Statement, or (ii) a failure
of such Holder to deliver or cause to be delivered the final prospectus
contained in the Registration Statement and made available by the Company, if
such delivery is required under applicable law. Subject to the provisions of Section 5(c) below, such Holder will
reimburse any legal or other expenses as reasonably incurred by the Company and
any such officer, director, employee, agent, representative, or controlling
person, in connection with investigating or defending any such Loss;

 

8

 

provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of such Holder (which
consent shall not be unreasonably withheld); and provided,
further, that, in no event shall any indemnity under this Section 5(b) exceed the net proceeds
resulting from the sale of the Registrable Securities sold by such Holder under
such Registration Statement.

 

                                                                                                (c)                                  Promptly after
receipt by an indemnified party under this Section 5 of notice of the
commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 5, promptly deliver to the
indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in and to assume the defense thereof
with counsel selected by the indemnifying party and reasonably acceptable to
the indemnified party; provided, however,
that an indemnified party shall have the right to retain its own counsel, with
the reasonably incurred fees and expenses of one such counsel for all
indemnified parties to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party would
be inappropriate under applicable standards of professional conduct due to
actual or potential conflicting interests between such indemnified party and
any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the
indemnifying party within a reasonable time of the delivery of notice of any
such action, to the extent prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this Section 5 with respect to such action, but the omission so to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 5 or with respect to any other action unless the indemnifying party is
materially prejudiced as a result of not receiving such notice.

 

                                                                                                (d)                                 In the event
that the indemnity provided in Sections 5(a) or
5(b) is unavailable or insufficient
to hold harmless an indemnified party for any reason, the Company and each
Holder agree, severally and not jointly, to contribute to the aggregate Losses
to which the Company or such Holder may be subject in such proportion as is
appropriate to reflect the relative fault of the Company and such Holder in
connection with the statements or omissions which resulted in such Losses; provided, however, that in no case shall such Holder be
responsible for any amount in excess of the net proceeds resulting from the
sale of the Registrable Securities sold by it under the Registration
Statement.  Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or by such Holder.  The Company and each Holder agree that it
would not be just and equitable if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above.  Notwithstanding the provisions
of this Section 5(d), 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 is
not guilty of such fraudulent misrepresentation.  For purposes of this Section 5, each person
who controls a Holder within the meaning of either the Securities Act or the
Exchange Act and each officer, director, employee, agent or representative of
such Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company within the meaning of either the Securities Act
or the Exchange Act and each officer, director, employee, agent or
representative of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this Section 5(d).

 

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                                                                                                (e)                                  The obligations
of the Company and each Holder under this Section 5 shall survive the
conversion of the Note and exercise of the Warrants in full, the completion of
any offering or sale of Registrable Securities pursuant to a Registration
Statement under this Agreement, or otherwise.

 

                                                6.                                       REPORTS.

 

                                                                                                With a view to
making available to each Holder the benefits of Rule 144 and any other similar
rule or regulation of the Commission that may at any time permit such Holder to
sell securities of the Company to the public without registration, the Company
agrees to:

 

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

 

                                                                                                (b)                                 file with the
Commission in a timely manner all reports and other documents required of the
Company under the Exchange Act; and

 

                                                                                                (c)                                  furnish to such
Holder, so long as such Holder owns any Registrable Securities, promptly upon
written request (i) a written statement by the Company, if true, that it has
complied with the reporting requirements of Rule 144 and the Exchange Act, (ii)
to the extent not publicly available through the Commission’s EDGAR database, a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company with the Commission, and
(iii) such other information as may be reasonably requested by such Holder in
connection with such Holder’s compliance with any rule or regulation of the
Commission which permits the selling of any such securities without
registration.

 

                                                7.                                     MISCELLANEOUS.

 

                                                                                                (a)                                  Expenses of
Registration; Additional Covenants of the Company.  Except as otherwise provided in the
Securities Purchase Agreement, all reasonable expenses, other than underwriting
discounts and commissions and fees and expenses of counsel and other advisors
to each Holder, incurred in connection with the registrations, filings or
qualifications described herein, including (without limitation) all registration,
filing and qualification fees, printers’ and accounting fees, the fees and
disbursements of counsel for the Company, and the fees and disbursements
incurred in connection with the opinion and letter described in Section 3(g) hereof, shall be borne
by the Company.  Except as otherwise
agreed to by such Holder, the Company shall maintain in strict confidence, all
information with respect to such Holder.

 

                                                                                                (b)                                 Amendment;
Waiver.  Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended or waived except pursuant to a written instrument
executed by the Company and the Holders of at least two-thirds (2/3) of the Registrable
Securities into which all of the Note and Warrants then outstanding are
convertible or exercisable (without regard to any limitation on such conversion
or exercise). Any amendment or waiver
effected in accordance with this Section 6(b) shall be binding upon each Holder, each future
Holder and the Company.  The

 

10

 

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

 

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

 

	
  if to the Company:

  
	
   

  	
   

  
	
   

  	
  Earth Biofuels, Inc.

  
	
   

  	
  3001 Knox Street, Suite
  403,

  
	
   

  	
  Dallas, Texas 75205

  
	
   

  	
  Telephone:

  	
  214.389.9800

  
	
   

  	
  Facsimile:

  	
  214.389.9806

  
	
   

  	
  Attention:

  	
  Dennis McLaughlin

  
	
   

  	
   

  
	
  with a copy (for
  informational purposes only) to:

  
	
   

  	
   

  
	
   

  	
  Scheef & Stone, LLP

  
	
   

  	
  Telephone:

  	
  214.706.4200

  
	
   

  	
  Facsimile:

  	
  214.706.4242

  
	
   

  	
  Attention:

  	
  Roger A. Crabb, Esq.

  

 

and if to the Holder, to the address and
facsimile number as to which the Holder has notified the Company in writing,
with a copy to the following:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York  10022

Telephone:  (212) 756-2000

Facsimile:  (212) 593-5955

Attention:  Eleazer N. Klein,
Esq.

 

 

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, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii)
above, respectively.

 

11

 

                                                                                                (d)                                 Assignment.  Upon the transfer of any Note, Warrants or
Registrable Securities by a Holder, the rights of such Holder hereunder with
respect to such securities so transferred shall be assigned automatically to
the transferee thereof, and such transferee shall thereupon be deemed to be a “Holder”
for purposes of this Agreement, as long as: (i) the Company is, within a
reasonable period of time following such transfer, furnished with written
notice of the name and address of such transferee, (ii) the transferee agrees
in writing with the Company to be bound by all of the provisions hereof, and
(iii) such transfer is made in accordance with the applicable requirements of
the Securities Purchase Agreement, the Notes or the Warrants, as applicable.

                                                                                                (e)                                  Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed one and the same instrument.  This Agreement, once executed by a party, may
be delivered to any other party hereto by facsimile transmission.

                                                                                                (f)                                    Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within the State of New York.

 

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

 

(h)                                 Entire Agreement. This Agreement and the
other Transaction Documents constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and therein.  This Agreement and the
other Transaction Documents supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

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

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

 

 

[Signature Pages to Follow]

 

12

 

                                                IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date first-above written.

 

	
  EARTH BIOFUELS, INC.

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  Castlerigg Master
  Investments Ltd.

  
	
  By: Sandell Asset Management Corp.

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  Capital Ventures
  International

  
	
  By: Heights Capital Management, Inc.

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  Radcliffe
  SPC, Ltd. for and on behalf of the Class A

  
	
  Convertible
  Crossover Segregated Portfolio

  
	
  By:
  RG Capital Management, L.P.

  
	
  By: RGC Management Company, LLC

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name: Gerald F. Stahlecker

  
	
   

  	
  Title: Managing DirectorExhibit 10.14

AMENDMENT NO. 2 TO
EMPLOYMENT AGREEMENT

AMENDMENT (this “Second Amendment”), made as of June 8,
2006 by and between DRS Technologies, Inc., a Delaware corporation (the “Company”),
and Richard A. Schneider (the “Executive”). This Second Amendment amends the
Employment Agreement (the “Employment Agreement”) made as of February 19,
1999, as amended as of August 18, 2004, between the Company and the
Executive.

1.   The Employment Agreement is hereby amended by deleting paragraph 1
and replacing it with the following:

“1.         Term of
Employment.   The initial term of employment shall begin on February 19,
1999 (the “Effective Date”) and shall continue in effect until the second
anniversary of the Effective Date (such period being the “Initial Term”). On
the first anniversary of the Effective Date and on subsequent anniversaries,
this Agreement shall automatically be renewed for successive one year periods,
unless at least ninety (90) days prior to the end of each renewal date either party
hereto gives written notice to the other party of its intention not to renew
this Agreement and, as provided below, shall remain in effect for at least two
years immediately following a Change in Control. This Agreement may be
terminated at any time during its Initial Term or during any renewal term
solely in accordance with the terms and conditions of Section 5 hereof.”

IT WITNESS WHEREOF,
the parties have duly executed this Second Amendment effective as of June 8,
2006.

	
  

  	
  DRS TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARK S. NEWMAN

  
	
   

  	
  Chairman of the Board, President and

  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ RICHARD
  A. SCHNEIDER

  
	
   

  	
  Richard A. Schneider

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