Document:

Ex-4.2

 

EXHIBIT
4.2

 

 

	The following abbreviations, when used in the inscription on the face of this certificate,
shall be construed as though they were written out in full according to applicable laws or
regulations: TEN COM -as tenants in common UNIF GIFT MIN ACT -Custodian TEN ENT -as tenants by the
entireties (Cust) (Minor) under Uniform Gifts to Minors JT TEN -as joint tenants with right of Act
survivorship and not as tenants in common (State) ‘ Additional abbreviations may also be used
though not in the above list. For value ‘ received, hereby sell, assign and transfer unto PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND
ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE) NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. Shares represented by the within Certificate, and
do hereby irrevocably constitute and appoint Attorney to transfer the said Shares on the books of
the within named Corporation with full power of substitution in the premises. Dated In presence of
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE . UNITED STATES. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THOSE LAWS.Ex-4.5

 

EXHIBIT
4.5

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

by and among

NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.,

NEW MOUNTAIN PARTNERS, L.P.,

and

NEW MOUNTAIN AFFILIATED INVESTORS, L.P.

dated as of

March 19, 2004

 

 

     REGISTRATION RIGHTS AGREEMENT, dated as of March 19, 2004, by and among National Medical Health
Card Systems, Inc., a Delaware corporation (the “Company”), New Mountain Partners, L.P., a Delaware
limited partnership (“New Mountain”) New Mountain Affiliated Partners, L.P., a Delaware limited
partnership (together with New Mountain, the “Purchasers”) and such other persons who become
signatories hereto from time to time as provided for herein.

     WHEREAS, pursuant to the Amended and Restated Preferred Stock Purchase Agreement, dated as of
November 26, 2003 (the “Purchase Agreement”), by and between the Company and New Mountain, upon the
terms and subject to the conditions contained therein, the Company will issue and sell to the
Purchasers 6,956,522 shares of Series A Preferred Stock, par value $0.10 per share, of the Company
(the “Series A Preferred Stock”);

     WHEREAS, to induce New Mountain to execute and deliver the Purchase Agreement and as a condition to
New Mountain consummating the transactions contemplated thereby, the Company has agreed to provide
the Purchasers with the rights set forth in this Agreement.

     Accordingly, the parties hereto agree as follows:

     SECTION 1. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:

     1.1. “Affiliate” means with respect to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common control with such
specified Person.

     1.2. “Assignee” has the meaning set forth in Section 4.2.

     1.3. “Board of Directors” means the board of directors of the Company.

     1.4. “Common Stock” means any shares of common stock, par value $0.001
per share, of the Company, now or hereafter authorized to be issued, and any and all
securities of any kind whatsoever of the Company or any successor thereof which may be issued on or
after the date hereof in respect of, in exchange for, or upon conversion of shares of Common Stock
pursuant to a merger, consolidation, stock split, reverse split, stock dividend, recapitalization
of the Company or otherwise.

     1.5. “Company” shall mean National Medical Health Card Systems, Inc., a Delaware
corporation, and shall include any successor thereto by merger, consolidation, acquisition of
substantially all the assets thereof, or otherwise.

     1.6. “Convertible Securities” shall mean (i) any options or warrants to purchase
or other rights to acquire Common Stock, (ii) any securities by their terms convertible into or
exchangeable for Common Stock, and (iii) any options or warrants to purchase or other rights to
acquire any such convertible or exchangeable securities.

 

 

     1.7. “Demand Exercise Notice” has the meaning set forth in Section 2.1(a).

     1.8. “Demand Registration” has the meaning set forth in Section 2.1(h).

     1.9. “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar
federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the time. Reference to a particular section of the Exchange Act,shall include a reference
to the comparable section, if any, of any such similar federal statute.

     1.10. “Form S-3” means a Form S-3 registration statement under the Securities Act, and any
successor or similar form thereto.

     1.11. “Holder” means any of the Purchasers and any Assignee.

     1.12. “Holder Demand” has the meaning set forth in Section 2.1 (a).

     1.13. “indemnified party” means any Person seeking indemnification pursuant to Section 2.6.

     1.14. “indemnifying party” means any Person from whom indemnification is sought pursuant to
Section 2.6.

     1.15. “Indemnitees” has the meaning set forth in Section 2.6(a).

     1.16. “Initiating Holder” means the party or parties delivering a Holder Demand as provided
for under Section 2.1 (a).

     1.17. “Losses” has the meaning set forth in Section 2.6(a).

     1.18. “Majority Participating Holders” means, at any time, Participating Holders holding
more than 50% of the Registrable Securities proposed to be included in any offering of Registrable
Securities by such Participating Holders pursuant to Section 2.1 or Section 2.2.

     1.19. “NASD” means National Association of Securities Dealers, Inc.

     1.20. “Nasdaq” has the meaning set forth in Section 2.3(a)(x).

     1.21. “Participating Holders” means any Holder participating in any offering of Registrable
Securities pursuant to Section 2.1 or Section 2.2.

     1.22. “Partner Distribution” has the meaning set forth in Section 2.1 (a).

     1.23. “Person” means an individual, a corporation, a partnership, a limited liability
company, a business, an association, a trust, an individual, or any other entity or organization,
including a government or political subdivision or an agency or instrumentality thereof.

     1.24. “Postponement Period” has the meaning set forth in Section 2.1(j).

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     1.25. “Purchase Agreement” has the meaning set forth in the recitals.

     1.26. “Purchasers” has the meaning set forth in the introduction.

     1.27. “Registrable Securities” means any of the following when held by a Holder: (i) any shares of Common Stock issued upon the conversion of the Series A Preferred Stock, (ii) any shares of Common Stock acquired by the Holders from the Company after the date hereof, including shares of Common Stock acquired upon exercise or conversion of Convertible
Securities that are acquired by the Holders from the Company after the date hereof, and (iii)
any shares of the Series A Preferred Stock. For purposes of this Agreement, a Person will be
deemed to a Holder of Registrable Securities whenever such Person has the right to acquire,
directly or indirectly, such Registrable Securities (upon conversion, exercise or exchange of
any Convertible Securities but disregarding any restrictions or limitations upon the exercise
of such right), whether or not such acquisition has actually been effected, and such Person
shall not be required to convert, exercise or exchange such Convertible Security (or otherwise
acquire such Registrable Security) to participate on any registered offering hereunder until
the closing of such offering. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (a) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration statement or (b)
when such securities shall have been sold pursuant to Rule 144 under the Securities Act or
similar rule then in effect.

     1.28. “Registration Expenses” means all fees and expenses incurred in
connection with the Company’s performance of or compliance with Section 2 hereof, including,
without limitation, (i) all registration, filing and applicable SEC fees, NASD fees, national
securities exchange or inter-dealer quotation system fees, and fees and expenses of complying with
state securities or blue sky laws (including fees and disbursements of counsel to the underwriters
and the Participating Holders in connection with “blue sky” qualification of the Registrable
Securities and determination of their eligibility for investment under the laws of the various
jurisdictions), (ii) all printing (including printing certificates for the Registrable Securities
in a form eligible for deposit with The Depository Trust Company and printing preliminary and final
prospectuses), word processing, duplicating, telephone and facsimile expenses, and messenger and
delivery expenses, (iii) all fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of “cold comfort” letters or any special
audits required by, or incident to, such registration, (iv) all reasonable fees and expenses of one
law firm or other counsel selected by the Majority Participating Holders for the benefit of all of
the Participating Holders, (v) all reasonable fees and expenses of any special experts or other
Persons retained by the Company in connection with any registration, (vi) Securities Act liability
insurance or similar insurance if the Company so desires or the underwriters so require in
accordance with then-customary underwriting practices, (vii) all applicable rating agency fees with
respect to the Registrable Securities, (viii) reasonable fees and expenses of a Qualified
Independent Underwriter (as such term is defined in Schedule E to the By-Laws of the NASD) and its
counsel, (ix) all fees and disbursements of the underwriters (other than underwriting discounts and
commissions but, including reasonable fees and disbursements of one counsel for such underwriters),
(x) all transfer taxes, and (xi) all expenses incurred in connection with promotional efforts or
“roadshows” (as negotiated by the Company

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with the underwriters); provided, however, that Registration Expenses shall
exclude, and the Participating Holders shall pay ratably, underwriting discounts and commissions in
respect of the Registrable Securities being registered for such Participating Holders.

     1.29. “SEC” means the Securities and Exchange Commission or any other federal agency at the
time administering the Securities Act.

     1.30. “Section 2.2 Sale Amount” has the meaning set forth in Section 2.2(c).

     1.31. “Securities Act” means the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at
the time. References to a particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar federal statute.

     1.32. “Selected Courts” has the meaning set forth in Section 4.4(b).

     1.33. “Series A Preferred Stock” has the meaning set forth in the recitals.

     SECTION 2. Registration Under Securities Act.

     2.1. Registration on Demand.

          (a) Demand. At any time or from time to time, a Holder or Holders holding a majority
of Registrable Securities then outstanding may require the Company to effect the registration under
the Securities Act of all or part of their respective Registrable Securities, by delivering a
written request (a “Holder Demand”) therefor to the Company specifying the number of shares
of Registrable Securities to be registered and the intended method of distribution thereof. As
promptly as practicable, but no later than 10 days after receipt of a Holder Demand, the Company
shall give written notice (the “Demand Exercise Notice”) of the Holder Demand to all
Holders of Registrable Securities. Such Holders shall have the option, within 20 days after the
receipt of the Demand Exercise Notice (or, 10 days if, at the request of the Initiating Holder, the
Company states in such written notice or gives telephonic notice to each Holder, with written
confirmation to follow promptly thereafter, stating that (i) such registration will be on Form S-3
and (ii) such shorter period of time is required because of a planned filing date), to request, in
writing, that the Company include in such registration any Registrable Securities held by such
Holder (which request shall specify the maximum number of Registrable Securities intended to be
disposed of by such Holder). The Company shall as expeditiously as possible use its best efforts to
effect the registration under the Securities Act of the Registrable Securities which the Company
has been so requested to register by the Initiating Holder and any other Holders which have made
such written request. The Company shall (i) use its best efforts to effect the registration of
Registrable Securities for distribution in accordance with the intended method of distribution set
forth in a written request delivered by the Majority Participating Holders, which may include, at
the option of such Majority Participating Holders, a distribution to, and resale by, the partners
of such Holder or Holders (a “Partner Distribution”), and (ii) if requested by the Majority
Participating Holders, obtain acceleration of the effective date of the registration statement
relating to such registration.

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          (b) Partner Distributions. Notwithstanding anything contained herein to the contrary, the
Company shall, at the request of any Participating Holder seeking to effect a Partner Distribution,
file any prospectus supplement or post-effective amendments and shall otherwise take any action
necessary to include such language, if such language was not included in the initial registration
statement, or revise such language if deemed necessary by such Participating Holder, to effect such
Partner Distribution.

          (c) Registration Statement Form. Registrations under this Section 2.1 shall be on such
appropriate form of the SEC (i) as shall be selected by the Company and as shall be reasonably
acceptable to the Majority Participating Holders and (ii) as shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods of disposition specified
in such Participating Holders’ requests for such registration, including, without
limitation, a Partner Distribution or a continuous or delayed basis offering pursuant to Rule 415
under the Securities Act, The Company agrees to include in any such registration statement all
information which, in the opinion of counsel to the Participating Holders and counsel to the
Company, is necessary or desirable to be included therein.

          (d) Expenses. The Company shall pay, and shall be responsible for, all Registration
Expenses in connection with any registration requested pursuant to this Section 2.1,
Notwithstanding the foregoing, the provisions of this Section 2.1(d) shall be deemed amended to the
extent necessary to cause these expense provisions to comply with “blue sky” laws of each state or
the securities laws of any other jurisdiction in the United States and its territories in which the
offering is made.

          (e) Effective Registration Statement. A registration requested pursuant to this
Section 2.1 shall not be deemed a Demand Registration (including for purposes of Section 2.1(h))
unless a registration statement with respect thereto has become effective and has been kept
continuously effective for the period set forth in Section 2.3(a)(i) or, if such registration
statement relates to an underwritten offering, such longer period as in the opinion of counsel for
the underwriter or underwriters a Prospectus is required by law to be delivered in connection with
sales of Registrable Securities by an underwriter or dealer. Should a Demand Registration not
become effective due to the failure of a Participating Holder to perform its obligations under this
Agreement, or in the event the Majority Participating Holders withdraw or do not pursue the
request for the Demand Registration as provided for in Section 2.1(g) (in each of the foregoing
cases, provided that at such time the Company is in compliance in all material respects with its
obligations under this Agreement), then, such Demand Registration shall be deemed to have been
effected (including for purposes of Section 2.1(h)); provided, that, if (i) the
Demand Registration does not become effective because a material adverse change has occurred, or is
reasonably likely to occur, in the condition (financial or otherwise), prospects, business, assets
or results of operations of the Company and its subsidiaries taken as a whole subsequent to the
date of the delivery of the Demand Exercise Notice, (ii) after the Demand Registration has become
effective, such registration is interfered with by any stop order, injunction, or other order or
requirement of the SEC or other governmental agency or court, (iii) the Demand Registration is
withdrawn at the request of the Majority Participating Holders due to the advice of the managing
underwriter(s) that the Registrable Securities covered by the registration statement could not be
sold in such offering within a price range acceptable to the Majority Participating

5

 

Holders, (iv) the Demand Registration is withdrawn for any reason at any time during a Postponement
Period or within ten days thereafter, or (v) the Participating Holders reimburse the Company for
any and all Registration Expenses incurred by the Company in connection with such request for a
Demand Registration that was withdrawn or not pursued, then the Demand Registration shall not be
deemed to have been effected and will not count as a Demand Registration).

          (f) Selection of Underwriters. The underwriters of each underwritten offering of the
Registrable Securities pursuant to this Section 2.1 shall be selected by the Majority Participating
Holders, which underwriters shall be reasonably acceptable to the Company.

          (g) Right to Withdraw. Any Participating Holder shall have the right to withdraw its
request for inclusion of Registrable Securities in any registration statement pursuant to this
Section 2.1 at any time prior to the effective date of such registration statement (but in no event
less than 24 hours prior to such date) by giving written notice to the Company of its request to
withdraw. Upon receipt of notices from the Majority Participating Holders to such effect, the
Company shall cease all efforts to obtain effectiveness of the applicable registration statement,
and whether the Initiating Holder’s request for registration pursuant to this Section 2.1 shall be
counted as a Demand Registration for purposes of Section 2.1(h) shall be determined in accordance
with Section 2.1(e) above.

          (h) Limitations on Registration on Demand. The Holders shall be entitled to require
the Company to effect, and the Company shall be required to effect, four (4) registrations in the
aggregate pursuant to this Section 2.1 (each, a “Demand Registration”): provided,
however, that the Company shall not be required to have a registration statement declared
effective pursuant to a Demand Registration until at least 90 days after the effective date of any
other registration statement filed by the Company pursuant to a previous Demand Registration. The
aggregate offering value of the shares to be registered pursuant to any such registration shall be
at least $5 million (determined as of the date the demand is made), unless the registration is of
the balance of the Registrable Securities held by the Holders.

          (i) Priority in Registrations on Demand. Whenever the Company effects a registration
pursuant to this Section 2.1 in connection with an underwritten offering by Holders, no securities
other than Registrable Securities shall be included among the securities covered by such
registration unless the Majority Participating Holders consent in writing to the inclusion therein
of such other securities, which consent may be subject to terms and conditions determined by the
Majority Participating Holders in their sole discretion. If any registration pursuant to a Holder
Demand involves an underwritten offering and the managing underwriter(s) of such offering shall
inform the Company in writing of its belief that the number of Registrable Securities requested to
be included in such registration pursuant to this Section 2.1, when added to the number of any
other securities to be offered in such registration, would materially adversely affect such
offering, then the Participating Holders shall be entitled to participate on a pro rata basis based
on the number of shares of Registrable Securities requested to be included in the offering by each
such Participating Holder prior to the inclusion of any securities other than Registrable
Securities.

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          (j) Postponement. The Company shall be entitled once in any twelvemonth period to
postpone for a reasonable period of time (but not exceeding 90 days) (the “Postponement Period”)
the filing of any registration statement required to be prepared and filed by it pursuant to this
Section 2.1 if the Company determines, in its reasonable judgment, upon advice of counsel, as
authorized by a resolution of the Board of Directors, that such registration and offering would
require premature disclosure of any material financing, material corporate reorganization or other
material transaction involving the Company, and promptly gives the Participating Holders written
notice of such determination, containing a specific statement of the reasons for such postponement
and an approximation of the anticipated delay.

     2.2. Incidental Registration.

          (a) Right to Include Registrable Securities. If the Company at any time proposes to
register any of its equity securities under the Securities Act by registration on Form S-l, S-2 or
S-3, or any successor or similar form(s) (except registrations (i) pursuant to Section 2.1, (ii)
solely for registration of equity securities in connection with an employee benefit plan (as
defined in 405 of the Securities Act) or dividend reinvestment plan on Form S-8 or any successor
form thereto or (iii) in connection with any acquisition or merger on Form S-4 or any successor
form thereto), whether or not for sale for its own account, it will each such time give prompt
written notice (but in no event less than 30 days prior to the initial filing of a registration
statement with respect thereto) to each of the Holders of its intention to do so and such notice
shall offer the Holders of such Registrable Securities the opportunity to register under such
registration statement such number of Registrable Securities as each such Holder may request in
writing. Upon the written request of any of the Holders (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by such Holder), made as promptly as
practicable and in any event within 20 days after the receipt of any such notice (or, 10 days if
the Company states in such written notice or gives telephonic notice to each Holder, with written
confirmation to follow promptly thereafter, stating that (i) such registration will be on Form S-3
and (ii) such shorter period of time is required because of a planned filing date), the Company
shall include in such registration under the Securities Act all Registrable Securities which the
Company has been so requested to register by each Holder; provided, however, that
if, at any time after giving written notice of its intention to register any equity securities and
prior to the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to delay registration
of such equity securities, the Company shall give written notice of such determination and its
reasons therefor to the Holders and (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection with such
registration (but not from any obligation of the Company to pay the Registration Expenses in
connection therewith as provided for in Section 2.2(d)), without prejudice, however, to the rights
of the Holders to request that such registration be effected as a registration under Section 2.1
and (ii) in the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in registering such other
securities. No registration effected under this Section 2.2 shall relieve the Company of its
obligation to effect any registration upon request under Section 2.1.

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          (b) Right to Withdraw; Option to Participate in Shelf Takedowns. Any Holder shall have the
right to withdraw its request for inclusion of Registrable Securities in any registration statement
pursuant to this Section 2.2 at any time prior to the effective date of such registration statement
(but in no event less than 24 hours prior to such date) by giving written notice to the Company of
its request to withdraw. In the event that the Holder has requested inclusion of Registrable
Securities in a shelf registration, the Holder shall have the right, but not the obligation, to
participate in any offering of the Company’s equity securities under such shelf registration.

          (c) Priority in Incidental Registrations. If any registration pursuant to this Section 2.2
involves an underwritten offering and the managing underwriter(s) of such offering shall inform the
Company in writing of its belief that the number of Registrable Securities requested to be included
in such registration or offering, when added to the number of other equity securities to be offered
in such registration or offering, would materially adversely affect such offering, then the Company
shall include in such registration or offering, to the extent of the number and type which the
Company is so advised can be sold in (or during the time of) such registration or offering without
so materially adversely affecting such registration or offering (the “Section 2.2 Sale
Amount”), (i) all of the securities proposed by the Company to be sold for its own account;
(ii) thereafter, to the extent the Section 2.2 Sale Amount is not exceeded, the Registrable
Securities requested by the Participating Holders (provided that if all of the Registrable
Securities requested by the Participating Holders may not be included, the Participating Holders
shall be entitled to participate on a pro rata basis based on the aggregate number of shares of
Registrable Securities requested by the Participating Holders to be registered); and (iii)
thereafter, to the extent the Section 2.2 Sale Amount is not
exceeded, any other securities of the
Company requested to be included by Company stockholders holding other such registration rights.

          (d) Expenses. The Company shall pay, and shall be responsible for, all Registration
Expenses in connection with any registration requested pursuant to this Section 2.2.
Notwithstanding the foregoing, the provisions of this Section 2.2(d) shall be deemed amended to the
extent necessary to cause these expense provisions to comply with “blue sky” laws of each state or
the securities laws of any other jurisdiction in the United States and its territories in which the
offering is made.

          (e) Selection of Underwriters. The underwriters of each underwritten offering of the
Registrable Securities pursuant to this Section 2.2 shall be selected by the Company provided that
the Majority Participating Holders shall have the right to select a co-managing underwriter.

          (f) Plan of Distribution: Partner Distributions. Any participation by Holders in a
registration by the Company shall be in accordance with the Company’s plan of distribution, which
shall include, upon the written request of such Holder or Holders, a Partner Distribution.
Notwithstanding anything contained herein to the contrary, the Company shall, at the request of any
Holder seeking to effect a Partner Distribution, file any prospectus supplement or post-effective
amendments and otherwise take any action necessary to include such language,

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if such language was not included in the initial registration statement, or revise such language if
deemed reasonably necessary by such Holder to effect such Partner Distribution.

          (g) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the
effectiveness of such registration, whether or not any Holder has elected to include Registrable
Securities in such registration.

     2.3. Registration Procedures.

          (a) If and whenever the Company is required to effect the registration of any Registrable
Securities under the Securities Act pursuant to either Section 2.1 or Section 2.2 hereof, the
Company shall as expeditiously as possible:

               (i) prepare and file with the SEC as soon as practicable (and in the case of a demand
pursuant to Section 2.1, within 30 days after receipt by the Company of a Demand Exercise Notice) a
registration statement on an appropriate registration form of the SEC for the disposition of such
Registrable Securities in accordance with the intended method of disposition thereof (including,
without limitation, a Partner Distribution) which registration statement shall comply as to form in
all material respects with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and thereafter use its best efforts to cause
such registration statement to become and remain effective (A) with respect to an underwritten
offering, for a period of at least 90 days or until all shares subject to such.registration
statement have been sold and (B) with respect to a shelf registration, until the earlier of (1) the
sale of all Registrable Securities thereunder and (2) the earlier of the tenth anniversary of the
date of this Agreement and the third anniversary of the effective date of such shelf registration;

               (ii) prepare and file with the SEC any amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such registration statement in
accordance with the intended methods of disposition by the Participating Holders set forth in such
registration statement for such period as provided for in Section 2.3(a)(i) above;

               (iii) furnish, without charge, to each Participating Holder and each underwriter such number
of conformed copies of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and summary prospectus) and any
other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements
of the Securities Act, and such other documents, as the Majority Participating Holders and such
underwriters may request (it being understood that the Company consents to the use of such
prospectus or any amendment or supplement thereto by each Participating Holder and the underwriters
in connection with the

9

 

offering and sale of the Registrable Securities covered by such prospectus or any amendment or
supplement thereto);

               (iv) use its best efforts (A) to register or qualify all Registrable Securities and other
securities covered by such registration statement under such state securities or blue sky laws
where an exemption is not available and as the Majority Participating Holders or any managing
underwriter shall reasonably request, (B) to keep such registration or qualification in effect for
so long as such registration statement remains in effect, and (C) to take any and all other actions
which may be necessary or advisable to enable the Participating Holders or underwriters to
consummate the disposition in such jurisdictions of the securities to be sold by the Participating
Holders or underwriters, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not,
but for the requirements of this Section 2.3(a)(iv), be obligated to be so qualified;

               (v) use its best efforts to cause all Registrable Securities covered by such registration
statement to be registered with or approved by such other governmental agencies or authorities as
may be necessary in the opinion of counsel to the Company and counsel to the Participating Holders
to consummate the disposition of such Registrable Securities;

               (vi) furnish to each Participating Holder and each underwriter a signed counterpart of (A) an
opinion of counsel for the Company and (B) a “comfort” letter signed by the independent public
accountants who have certified the Company’s financial statements included or incorporated by
reference in such registration statement, in each case, addressed to each Participating Holder and
each underwriter covering matters with respect to such registration statement (and the prospectus
included therein) as such Majority Participating Holders and managing underwriter(s) shall request;

               (vii) promptly notify each Participating Holder and each managing underwriter (A) when such
registration statement, any pre-effective amendment, the prospectus or any prospectus supplement
related thereto or post-effective amendment to such registration statement has been filed, and,
with respect to such registration statement or any post-effective amendment, when the same has
become effective; (B) of the receipt by the Company of any comments from the SEC or receipt of any
request by the SEC for additional information with respect to any registration statement or the
prospectus related thereto or any request by the SEC for amending or supplementing the registration
statement and the prospectus used in connection therewith; (C) of the issuance by the SEC of any
stop order suspending the effectiveness of such registration statement or the initiation of any
proceedings for that purpose; (D) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any of the Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction or the initiation of any proceeding for such
purpose; and (E) at any time when a prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that, or upon the happening of any event as a result of which,
the prospectus included in such registration statement, as then in effect, includes an 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

10

 

misleading, in the light of the circumstances under which they were made, and in the case of this
clause (E), promptly prepare and furnish, at the Company’s expense, to each Participating Holder
and each managing underwriter a number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an 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 in the light of the circumstances under which they were made; and (F) at any time when
the representations and warranties of the Company contemplated by Section 2.4(a) or (b) hereof
cease to be true and correct;

               (viii) otherwise comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as practicable (and in any event within 16 months after the
effective date of the registration statement), an earnings statement covering the period of at
least twelve (12) consecutive months beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall satisfy the
provisions of Section 1l(a) of the Securities Act and Rule 158 promulgated thereunder;

               (ix) provide and cause to be maintained a transfer agent and registrar for all Registrable
Securities covered by such registration statement from and after a date not later than the
effective date of such registration statement;

               (x) (A) use its best efforts to cause all Registrable Securities covered by such
registration statement to be listed on the principal securities exchange on which similar
securities issued by the Company are then listed (if any), if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (B) if no similar securities are
then so listed, use its best efforts to (1) cause all such Registrable Securities to be listed on a
national securities exchange or (2) secure designation of all such Registrable Securities as a
National Association of Securities Dealers, Inc. Automated Quotation System (“Nasdaq”)
“national market system security” within the meaning of
Rule 11Aa2-l of the SEC or (3) failing that,
to secure Nasdaq authorization for such shares and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with respect to such
shares with the NASD;

               (xi) deliver promptly to counsel to the Participating Holders and each, underwriter, if any,
participating in the offering of the Registrable Securities, copies of all correspondence between
the SEC and the Company, its counsel or auditors and all memoranda relating to discussions with the
SEC or its staff with respect to such registration statement;

               (xii) use its best efforts to obtain the withdrawal of any order suspending the effectiveness of
the registration statement;

               (xiii) provide a CUSIP number for all Registrable Securities, no
later than the effective date of the registration statement and provide the applicable transfer
agents with printed certificates for the Registrable Securities which are in a form eligible for
deposit with The Depository Trust Company; and

11

 

               (xiv) cause its officers and employees to participate in, and to otherwise facilitate and
cooperate with the preparation of the registration statement and prospectus and any amendments or
supplements thereto (including participating in meetings, drafting sessions, due diligence sessions
and the marketing of the Registrable Securities covered by the registration statement (including,
without limitation, participation in “road shows”) taking into account the Company’s business
needs;

               (xv) enter into and perform its obligations under such customary agreements (including, without
limitation, if applicable, an underwriting agreement as provided for in Section 2.4 herein) and
take such other actions as the Majority Participating Holders or managing underwriter(s) shall
reasonably request in order to expedite or facilitate the disposition of such Registrable
Securities;

               (xvi) promptly incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter(s) or Majority Participating Holders reasonably request to
be included therein relating to the plan of distribution with respect to such Registrable
Securities; and make all required filings of such prospectus supplement or post-effective amendment
as soon as practicable after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment;

               (xvii) cooperate with each Participating Holder and each underwriter, and their respective
counsel in connection with any filings required to be made with the NASD, New York Stock Exchange,
or any other securities exchange on which such Registrable Securities are traded or will be traded;

               (xviii) promptly prior to the filing of any document which is to be incorporated by reference into
the registration statement or the prospectus contained therein (after the initial filing of such
registration statement) provide copies of such document to counsel for the Participating Holders
and to each managing underwriter, and make the Company’s representatives available for discussion
of such document and make such changes in such document concerning the Participating Holders prior
to the filing thereof as counsel for such Participating Holders or underwriters may request;

               (xix) furnish to each Participating Holder and each managing underwriter(s), without charge, at
least one signed (which may be a conforming signature) copy of the registration statement and any
post-effective amendments thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those incorporated by reference);

               (xx) cooperate with the Participating Holders and the managing underwriter(s) to facilitate the
timely preparation and delivery of certificates not bearing any restrictive legends representing
the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such
denominations and registered in such names in accordance with the underwriting agreement prior to
any sale of Registrable Securities to the underwriters or, if not an underwritten offering, in
accordance with the instructions of the Participating Holders at

12

 

least five business days prior to any sale of Registrable Securities and instruct any transfer
agent or registrar of Registrable Securities to release any stop transfer orders in respect
thereof;

               (xxi) to the extent required by the rules and regulations of the
NASD, retain a Qualified Independent Underwriter, which shall be reasonably acceptable to the
Majority Participating Holders; and

               (xxii) take no direct or indirect action prohibited by Regulation M under the Exchange Act;
provided, however, that to the extent that any prohibition is applicable to the
Company, the Company will take such action as is necessary to make any such prohibition
inapplicable.

          (b) Each Participating Holder agrees that upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.3(a)(vii)(C) or (E), each Participating
Holder will, to the extent appropriate, discontinue its disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities until, in the case
of Section 2.3(a)(vii)(E), its receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.3(a)(vii)(E) and, if so directed by the Company, will deliver to the
Company (at the Company’s expense) all copies, other than permanent file copies, then in its
possession, of the prospectus relating to such Registrable Securities current at the time of
receipt of such notice. If the disposition by a Participating Holder of its securities is
discontinued pursuant to the foregoing sentence, the Company shall extend the period of
effectiveness of the registration statement by the number of days during the period from and
including the date of the giving of such notice to and including the date when the Participating
Holder shall have received copies of the supplemented or amended prospectus contemplated by Section
2.3(a)(vii)(E); and, if the Company shall not so extend such period, the Participating Holder’s
request pursuant to which such registration statement was filed shall not be counted for purposes
of the requests for registration to which the Participating Holder is entitled pursuant to Section
2.1 hereof. If for any other reason the effectiveness of any registration statement filed pursuant
to Section 2.1 or Section 2.2 is suspended or interrupted prior to the expiration of the time
period regarding the maintenance of the effectiveness of such Registration Statement required by
Section 2.3(a)(i) so that Registrable Securities may not be sold pursuant thereto, the applicable
time period shall be extended by the number of days equal to the number of days during the period
beginning with the date of such suspension or interruption to and ending with the date when the
sale of Registrable Securities pursuant to such registration statement may be resumed.

          (c) If any such registration statement or comparable statement under “blue sky” laws refers to any
Holder by name or otherwise as the Holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and substance satisfactory
to such Holder and the Company, to the effect that the holding by such Holder of such securities is
not to be construed as a recommendation by such Holder of the investment quality of the Company’s
securities covered thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as advised by counsel,
required by the Securities Act or any similar federal

13

 

statute or any state “blue sky” or securities law then in force, the deletion of the reference to
such Holder.

          (d) Holders may seek to register different types of Registrable
Securities simultaneously and the Company shall use its reasonable best efforts to effect such
registration and sale in accordance with the intended method or methods of disposition specified by
such holders.

     2.4. Underwritten Offerings.

          (a) Demanded Underwritten Offerings. If requested by the underwriters for any underwritten
offering by the Participating Holders pursuant to a registration requested under Section 2.1, the
Company shall enter into a customary underwriting agreement with the managing underwriter(s)
selected by the Majority Participating Holders (in accordance with Section 2.l(f) hereto). Such
underwriting agreement shall be reasonably satisfactory in form and substance to the Majority
Participating Holders and shall contain such representations and warranties by, and such other
agreements on the part of, the Company and such other terms as are generally prevailing in
agreements of that type, including, without limitation, customary provisions relating to
indemnification and contribution which are no less favorable to the recipient than those provided
in Section 2.6 hereof. Each Participating Holder shall be a party to such underwriting agreement
and may, at their option, require that any or all of the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of each Participating Holder and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of each Participating Holder. No Participating Holder shall be
required to make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such Participating
Holder, its ownership of and title to the Registrable Securities, and its intended method of
distribution; and any liability of any Participating Holder to any underwriter or other person
under such underwriting agreement shall be limited to liability arising from breach of its
representations and warranties and shall be limited to an amount equal to the proceeds (net of
expenses and underwriting discounts and commissions) that it derives from such registration.

          (b) Incidental Underwritten Offerings. In the case of a registration pursuant to Section
2.2 hereof, if the Company shall have determined to enter into an underwriting agreement in
connection therewith, all of the Registrable Securities to be included in such registration shall
be subject to such underwriting agreements. The Participating Holders may, at their option, require
that any or all of the representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made to and for the benefit
of the Participating Holders and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent to the obligations of
the Participating Holders. None of the Participating Holders shall be required to make any
representations or warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Participating Holder, its ownership of and
title to the Registrable Securities and its intended

14

 

method of distribution; and any liability of any Participating Holder to any underwriter or other
Person under such underwriting agreement shall be limited to liability arising from breach of its
representations and warranties and shall be limited to an amount equal to the proceeds (net of
expenses and underwriting discounts and commissions) that it derives from such registration.

          (c) Participation in Underwritten Registrations. In the case of an underwritten
registration pursuant to Section 2.1 or Section 2.2 hereof, as the Company may, from time to time
reasonably request in writing, the Company may require the Participating Holders (i) to furnish the
Company such information regarding such Participating Holders and the distribution of the
Registrable Securities to enable the Company to comply with the requirements of applicable laws or
regulations in connection with such registration and (ii) to complete and execute all customary
questionnaires, powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements. The Company shall not be
obligated to effect the registration of any Registrable Securities of a particular Participating
Holder unless such information and documents regarding such Participating Holder and the
distribution of such Participating Holder’s Registrable Securities is provided to the Company.

     2.5. Preparation; Reasonable Investigation. In connection with the preparation and filing
of each registration statement under the Securities Act pursuant to this Agreement, the Company
will give the Participating Holders, the managing underwriter(s), and their respective counsel,
accountants and other representatives and agents the opportunity to participate in the preparation
of such registration statement, each prospectus included therein or filed with the SEC, and each
amendment thereof or supplement thereto or comparable statements under securities or blue sky laws
of any jurisdiction, and give each of the foregoing parties access to its books and records, all
financial and other records, pertinent corporate documents and properties of the Company and its
subsidiaries, and such opportunities to discuss the business of the Company and its subsidiaries
with their respective directors, officers and employees and the independent public accountants who
have certified the Company and its subsidiaries’ financial statements, and supply all other
information and respond to all inquiries requested by such Participating Holders, managing
underwriter(s), or their respective counsel, accountants or other representatives or agents in
connection with such registration statement, as shall be necessary or appropriate, in the opinion
of counsel to such Participating Holder or managing underwriter(s), to conduct a reasonable
investigation within the meaning of the Securities Act, and the Company shall not file any
registration statement or amendment thereto or any prospectus or supplement thereto to which the
Majority Participating Holders or the managing underwriter(s) shall object.

     2.6. Indemnification.

          (a) Indemnification by the Company. The Company agrees that in the event of any
registration of any Registrable Securities under the Securities Act, the Company shall, and hereby
does, indemnify and hold harmless, to the fullest extent permitted by law, (i) each of the Holders
and their Affiliates, (ii) each of the Holders’ and their Affiliates’ respective Affiliates,
officers, directors, successors, assigns, members, partners, shareholders, employees, advisors,
representatives, and agents, (iii) each other Person who participates as an underwriter or
Qualified Independent Underwriter in the offering or sale of such securities, (iv) each Person

15

 

who controls (within the meaning of the Securities Act or the Exchange Act) any of the Persons
listed in clauses (i), (ii), (iii) or (iv), and (v) any representative (legal or otherwise) of any
of the Persons listed in clauses (i), (ii), (iii) or (iv)
(collectively, the “Indemnitees”). from
and against any losses, penalties, fines, liens, judgments, suits, claims, damages, liabilities,
costs and expenses (including reasonable attorney’s fees and any amounts paid in any settlement
effected in compliance with Section 2.6(e)) or liabilities, joint or several (or actions or
proceedings, whether commenced or threatened, in respect thereof, and whether or not such
Indemnitee is a party thereto) (“Losses”), to which such Indemnitee has become or may become
subject under the Securities Act or otherwise, insofar as such Losses arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the Securities Act, or any
preliminary prospectus, final prospectus or summary prospectus contained therein, any amendment or
supplement thereto, or any documents incorporated by reference therein, (ii) any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (iii) any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company and relating to action required of
or inaction by the Company in connection with any such registration, and the Company shall
reimburse such Indemnitee for any reasonable legal or any other fees or expenses incurred by it in
connection with investigating or defending any such Loss; provided that the Company shall
not be liable to an Indemnitee to the extent that any such Loss arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement, or document incorporated by reference, in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such Indemnitee, which
specifically states that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or supplement.

          (b) Indemnification by Participating Holders. As a condition to including any
Registrable Securities in any registration statement, the Company shall have received an
undertaking reasonably satisfactory to it from each Participating Holder so including any
Registrable Securities to, severally and not jointly, to the fullest extent permitted by law,
indemnify and hold harmless (i) the Company, each director and officer of the Company (including
each officer of the Company that signed the registration statement), employees and agents and each
other Person, if any, who controls the Company within the meaning of the Securities Act or Exchange
Act and (ii) any underwriters of the Registrable Securities, their officers and directors and each
person who controls such underwriters (within the meaning of the Securities Act or the Exchange
Act), with respect to any statement or alleged statement in or omission or alleged omission from
such registration statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, but only to the extent such statement or
alleged statement or omission or alleged omission was made in reliance upon and in conformity with
written information furnished by such Participating Holder to the Company specifically for use in
the preparation of such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement and such Participating Holder shall reimburse such indemnified
party for any reasonable legal or any

16

 

other fees or expenses reasonably incurred by them in connection with investigating or defending
any such Loss; provided, however, that the liability of such indemnifying party
under this Section 2.6(b) shall be limited to the amount of proceeds (net of expenses and
underwriting discounts and commissions) received by such indemnifying party in the offering giving
rise to such liability. Each Participating Holder shall also indemnify and hold harmless all other
prospective sellers and Participating Holders, their respective Affiliates, officers, directors,
successors, assigns, members, partners, shareholders, employees, advisors, representatives, and
agents, and each Person who controls (within the meaning of the Securities Act or the Exchange Act)
any such seller or Participating Holder to the same extent as provided above with respect to
indemnification of the Company and underwriters.

          (c) Notices of Claims. Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in Section 2.6(a) or Section
2.6(b), such indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to such indemnifying party of the commencement of such
action or proceeding; provided, however, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of its obligations under
Section 2.6(a) or Section 2.6(b), except to the extent that the indemnifying party is actually and
materially prejudiced by such failure to give notice, and shall not relieve the indemnifying party
from any liability which it may have to the indemnified party otherwise than under this Section
2.6.

          (d) Defense of Claims. In case any such action or proceeding is brought against an
indemnified party, except as provided for in the next sentence, the indemnifying party shall be
entitled to participate therein and assume the defense thereof, jointly with any other indemnifying
party, with counsel reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the defense thereof and
approval by the indemnified party of such counsel, the indemnifying party shall not be liable to
such indemnified party for any legal expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than costs of investigation and the indemnified party
shall be entitled to participate in such defense at its own expense. If (i) the indemnifying party
fails to notify the indemnified party in writing, within 15 days after the indemnified party has
given notice of the action or proceeding, that the indemnifying party will indemnify the
indemnified party from and against all Losses the indemnified party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the claim, (ii) the indemnifying party
fails to provide the indemnified party with evidence acceptable to the indemnified party that the
indemnifying party will have the financial resources to defend against the claim or proceeding and
fulfill its indemnification obligations hereunder, (iii) the indemnifying party fails to defend
diligently the action or proceeding within 15 days after receiving notice of such failure from such
indemnified party; (iv) such indemnified party reasonably shall have concluded (upon advice of its
counsel) that there may be one or more legal defenses available to such indemnified party or other
indemnified parties which are not available to the indemnifying party; or (v) if such indemnified
party reasonably shall have concluded (upon advice of its counsel) that, with respect to such
claims, the indemnified party and the indemnifying party may have different, conflicting, or
adverse legal positions or interests then, in

17

 

any such case, the indemnified party shall have the right to assume or continue its own defense and
the indemnifying party shall be liable for any fees and expenses therefor.

          (e) Consent to Entry of Judgment and Settlements. No indemnifying party shall be liable for
any settlement of any action or proceeding effected without its written consent, which consent
shall not be unreasonably withheld, provided, that, in the case where the indemnifying
party shall have failed to take any of the actions listed in clauses (i), (ii) or (iii) of the last
sentence of Section 2.6(d), the indemnified party shall have the right to compromise or settle such
action on behalf of and for the account, expense, and risk of the indemnifying party and the
indemnifying party will remain responsible for any Losses the indemnified party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the action or
proceeding to the fullest extent provided in this Section 2.6. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or not the indemnified party
is an actual or potential party to such action or claim) unless such settlement, compromise or
judgment (A) includes an unconditional release of the indemnified party from all liability arising
out of such action or claim, (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party and (C) does not require
any inaction or action other than the payment of money by the indemnifying party.

          (f) Contribution. If for any reason the indemnification provided for in Sections 2.6(a),
(b) or (g) is unavailable to an indemnified party or insufficient in respect of any Losses referred
to therein, then, in lieu of the amount paid or payable under Sections 2.6(a), (b) or (g), the
indemnifying party shall contribute to the amount paid or payable by the indemnified party as a
result of such Loss (i) in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand, and the indemnified party on the other, with respect to the
statements or omissions which resulted in such Loss, as well as any other relevant equitable
considerations, or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law or if the allocation provided in this clause (ii) provides a greater amount to the
indemnified party than clause (i) above, in such proportion as shall be appropriate to reflect not
only the relative fault but also the relative benefits received by the indemnifying party and the
indemnified party from the offering of the securities covered by such registration statement as
well as any other relevant equitable considerations. The relative fault 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
indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant to this Section
2.6(f) were to be determined by pro rata allocation or by any other method of allocation which does
not take into account the equitable considerations referred to in the preceding sentence of this
Section 2.6(f). No Person guilty of fraudulent misrepresentation (within the meaning of Section 1l(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. The amount paid or payable by an indemnified party as a result
of the Losses referred to in Sections 2.6(a), (b) or (g) shall be deemed to include,

18

 

subject to the limitations set forth in Sections 2.6(a), (b) and (g), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding anything in this Section 2.6(f) to the contrary, no
Participating Holder shall be required to contribute any amount in excess of the proceeds (net of
expenses and underwriting discounts and commissions) received by such Participating Holder from the
sale of the Registrable Securities in the offering to which the Losses of the indemnified parties
relate.

          (g) Other Indemnification. Indemnification and contribution similar to that specified
in the preceding subsections of this Section 2.6 (with appropriate modifications) shall be given by
the Company and the Participating Holders with respect to any required registration or other
qualification of securities under state or blue sky law or regulation. The indemnification
agreements contained in this Section 2.6 shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant to law or contract
and shall remain operative and in full force and effect regardless of any investigation made by or
on behalf of any Indemnitee or other indemnified party and shall survive the transfer of any of the
Registrable Securities by any such party.

          (h) Indemnification Payments. The indemnification and contribution required by this
Section 2.6 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or a Loss is incurred.

     2.7. Limitation on Sale of Securities.

          (a) For the Company and Others. If the Company receives a request for registration
pursuant to an underwritten offering of Registrable Securities pursuant to Section 2.1 or 2.2
hereof, and if such a request is being implemented or has not been withdrawn or abandoned, the
Company agrees that (i) the Company shall not effect any public or private offer, sale,
distribution or other disposition of any of its equity securities or of any security convertible
into or exchangeable or exercisable for any equity security of the Company or effect any
registration of any of such securities under the Securities Act (in each case, other than (x)
option grants to employees pursuant to the Company’s option plan, (y) as part of such registration
and (z) as a registration using Form S-8 or any successor or similar form which is then in effect),
whether or not for sale for its own account, during the period beginning on the date the Company
receives such request until 90 days after the effective date of such registration (or such shorter
period as the managing underwriter(s) may require) and (ii) the Company shall use its reasonable
best efforts to obtain from each of its officers, directors and beneficial owners of 5% or more of
Common Stock, an agreement not to effect any public or private offer, sale, distribution or other
disposition of Common Stock, or any securities that are convertible or exchangeable or exercisable
for Common Stock, during the period referred to in clause (i) of this paragraph, including, without
limitation, a sale pursuant to Rule 144 under the Securities Act, The Company agrees to cause each
holder of Common Stock, or any securities that are convertible or exchangeable or exercisable for
Common Stock, purchased or otherwise acquired from the Company (other than in a public offering) at
any time after the date of this Agreement to agree not to effect any public or private offer, sale,
distribution or other disposition of any such

19

 

securities during the period referred to in clause (i) of the preceding sentence, including,
without limitation, a sale pursuant to Rule 144 under the Securities Act

          (b) For the Holders. If the Company receives a request for registration pursuant to
an underwritten offering of Registrable Securities pursuant to Section 2.1 or 2.2 hereof,
and if such a request is being implemented or has not been withdrawn or abandoned, each
Holder agrees that, to the extent requested in writing by the managing underwriter(s); it
will not effect any public or private offer, sale, distribution or other disposition of any
Registrable Securities, or any securities convertible into or exchangeable or exercisable
for such Registrable Securities (other than the conversion of shares of the Series A
Preferred Stock), including, without limitation, any sale pursuant to Rule 144 under the
Securities Act, during the 90-day period beginning on the effective date of such
registration statement (or such shorter period as the managing underwriter(s) may require),
provided, that each Holder has received the written notice required by Sections 2.1
(a) and 2.2(a); and further, provided, that in connection with such
underwritten offering each officer and director of the Company is subject to restrictions
substantially equivalent to those imposed on the Holders.

     2.8. No Required Sale. Nothing in this Agreement shall be deemed to create an independent
obligation on the part of any of the Holders to sell any Registrable Securities pursuant to any
effective registration statement.

     2.9. Rule 144; Rule 144A; Regulation S. The Company covenants that, at its own expense, it
will file the reports required to be filed by it under the Securities Act and the Exchange Act, and
it will take such further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rules 144, 144A or
Regulation S under the Securities Act or (ii) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of a Holder, the Company, at its own expense, will promptly deliver to
such Holder (i) a written statement as to whether it has complied with such requirements (and such
Holder shall be entitled to rely upon the accuracy of such written statement), (ii) a copy of the
most recent annual or quarterly report of the Company and (iii) such other reports and documents as
such Holder may reasonably request in order to avail itself of any rule or regulation of the SEC
allowing it to sell any Registrable Securities without registration.

     2.10. Adjustments. At the request of any Holder, in the event of any change in the
capitalization of the Company as a result of any stock split, stock dividend, reverse split,
combination, recapitalization, merger, consolidation, or otherwise, the provisions of this Section
2 shall be appropriately adjusted. The Company agrees that it shall not effect or permit to occur
any combination or subdivision of shares which would adversely affect the ability of the Holders to
include any Registrable Securities in any registration contemplated by this Agreement or the
marketability of such Registrable Securities in any such registration. The Company agrees, upon
obtaining necessary approval, that it will take all steps necessary to effect a combination or
subdivision of shares if in the reasonable judgment of the Purchasers, or in connection with an
offering pursuant to a Demand Registration or incidental registration under this Section 2, the
Majority Participating Holders or managing underwriter(s) determine that such combination or
subdivision would enhance the marketability of the Registrable Securities.

20

 

     SECTION 3. Subsequent Registration Rights; No Inconsistent Agreements.

     3.1. Limitations on Subsequent Registration Rights. From and after the date of this
Agreement until the Holders and their respective assigns shall no longer hold any Registrable
Securities, without the prior written consent of each of the Purchasers, the Company shall not
enter into an agreement that grants a holder or prospective holder of any securities of the Company
demand or incidental registration rights that by their terms are not subordinate to the
registration rights granted to the Holders in this Agreement. Notwithstanding the foregoing, if
after the date of this Agreement the Company enters into any other agreement with respect to the
registration of any of its equity securities, and the terms contained therein are more favorable
to, or less restrictive on, the other party thereto than the terms and conditions contained in this
Agreement (insofar as they are applicable) with respect to the Holders, then the terms of this
Agreement shall immediately be deemed to have been amended without further action by the Company or
the Holders so that the Holders shall be entitled to the benefit of any such more favorable or less
restrictive terms or conditions.

     3.2. No Inconsistent Agreements. The Company will not, on or after the date of this
Agreement, enter into any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders in Section 2 or otherwise conflicts with the provisions of Section 2,
other than any customary lock-up agreement with the underwriters in connection with any offering
effected hereunder, pursuant to which the Company shall agree not to register for sale, and the
Company shall agree not to sell or otherwise dispose of, Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, for a specified period (not to exceed 180
days) following such offering. Except as set forth on Schedule 3.6 of the Company Disclosure
Schedules, the Company warrants that the rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with any other agreements to which the Company is a party or
by which it is bound. Except as set forth on Schedule 3,6 the Company Disclosure Schedules, the
Company has not previously entered into any agreement with respect to its securities granting any
registration rights to any Person.

     SECTION 4. Miscellaneous.

     4.1. Amendments and Waivers. This Agreement and any of the provisions hereof may be
amended, waived (either generally or in a particular instance and either retroactively or
prospectively), modified or supplemented, in whole or in part, only by written agreement of the
Company (by an independent committee of the Board of Directors) and the Purchasers;
provided, however, that any amendment, waiver, modification or supplement of
Section 2.6 shall require the written agreement of the Company and all Holders; and
provided, further, that the observance of any provision of this Agreement may be
waived in writing by the party that will lose the benefit of such provision as a result of such
waiver. The waiver by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a waiver of any
other or subsequent breach, except as otherwise explicitly provided for in such waiver. Except as
otherwise expressly provided herein, no failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at
law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of
such right, power or

21

 

remedy by such party preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The execution of a counterpart signature page to this Agreement after the
date hereof by any Person as provided for herein shall not require consent of any party hereto and
shall not be deemed an amendment to this Agreement.

     4.2. Assignment; Third Party Beneficiaries. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and any of their respective successors,
personal representatives and permitted assigns who agree in writing to be bound by the terms
hereof. The Company may not assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the Holders. Any Holder may, at its election and at
any time or from time to time, assign its rights and delegate its duties under this Agreement, in
whole or in part, to an Affiliate, to a partner of such Holder or Affiliate or to any Person to
whom the Holder sells, assigns or otherwise transfers any of its Registrable Securities (an
“Assignee”); provided that, no such assignment shall be binding upon or obligate
the Company to any such Assignee unless and until the Assignee delivers to the Company (i) a
written notice stating the name and address of the Assignee and identifying the securities with
respect to which such rights are being assigned, if any, and (ii) a written instrument by which
such Assignee agrees to be bound by the obligations imposed upon Holders under this Agreement to
the same extent as if such Assignee were a party hereto (or executes and delivers to the Company a
counterpart to this Agreement and agrees to be treated as a “Holder” for all purposes of this
Agreement).

     4.3. Notice. Unless otherwise provided herein, all notices, requests, demands, claims and
other communications provided for under the terms of this Agreement shall be in writing and shall
be delivered personally, telecopied or sent by certified, registered or express mail, postage
prepaid. Any such notice shall be deemed given if delivered personally or telecopied, on the date
of such delivery, or if sent by reputable overnight courier, on the first business day following
the date of such mailing, as follows:

	 	(a)	 	If to any of the Holders, to:
	 
	 	 	 	New Mountain Partners, L.P.

712 Fifth Avenue, 23rd Floor

New York, NY 10019

Facsimile: (212) 582-2277

Attention: Steven B. Klinsky
	 
	 	 	 	With a copy to (which shall not constitute notice):
	 
	 	 	 	Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Facsimile: (212) 859-4000

Attention: Aviva F. Diamant, Esq.

22

 

	 	(b)	 	If to the Company, to:
	 
	 	 	 	National Medical Health Card Systems, Inc.

26 Harbor Park Drive

Port Washington, New York 11050

Facsimile: (516)626-8002

Attention: Chief Financial Officer
	 
	 	 	 	With a copy to (which shall not constitute notice):
	 
	 	 	 	Fulbright & Jaworski L.L.P.

666 Fifth Avenue

New York, New York 10103

Facsimile: (212) 318-3400

Attention: Steven I. Suzzan, Esq.

     Any party may by notice given in accordance with this Section 4.3 designate another address or
person for receipt of notices hereunder.

     4.4. Governing Law; Venue: Service of Process; Waiver of Jury Trials.

          (a) Governing Law. This Agreement shall be construed and enforced in accordance with, and
the rights and obligations of the parties hereto shall be governed by, the laws of the State of New
York, without giving effect to the principles of conflicts of laws except for §5-1401 and §5-1402
of the General Obligations Law Provisions of the State of New York.

          (b) Venue and Service of Process. By execution and delivery of this Agreement, each of the
parties hereto hereby irrevocably and unconditionally (i) consents to submit to the exclusive
jurisdiction of the courts of the State of New York in New York county and the United States
District Court for the Southern District of New York (the “Selected Courts”) for any action
or proceeding arising out of or relating to this Agreement and the transactions contemplated
hereby, and agrees not to commence any action or proceeding relating thereto except in the Selected
Courts, provided, that, a party may commence any action or proceeding in a court other than
a Selected Court solely for the purpose of enforcing an order or judgment issued by one of the
Selected Courts; (ii) consents to service of any process, summons, notice or document in any action
or proceeding by registered first-class mail, postage prepaid, return receipt requested or by
nationally recognized courier guaranteeing overnight delivery in accordance with Section 4.3 hereof
and agrees that such service of process shall be effective service of process for any action or
proceeding brought against it in any such court, provided, that, nothing herein shall
affect the right of any party hereto to serve process in any other manner permitted by law; (iii)
waives any objection to the laying of venue of any action or proceeding arising out of this
Agreement or the transactions contemplated hereby in the Selected Courts; and (iv) waives and
agrees not to plead or claim in any court that any such action or proceeding brought in any such
Selected Court has been brought in an inconvenient forum.

23

 

          (c) Waiver of Jury Trial. With respect to any action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby, each of the parties hereby
irrevocably, to the extent not prohibited by applicable law that cannot be waived, waives, and
covenants that it will not assert (whether as plaintiff, defendant or otherwise), any right to
trial by jury in any action arising in whole or in part under or in connection with this Agreement
or the transactions contemplated hereby, whether now existing or hereafter arising, and whether
sounding in contract, tort or otherwise, and agrees that any of them may file a copy of this
paragraph with any court as written evidence of the knowing, voluntary and bargained-for agreement
among the parties irrevocably to waive its right to trial by jury in any action or proceeding
whatsoever between them relating to this Agreement or the transactions contemplated hereby. Such
action or proceeding shall instead be tried in a Selected Court by a judge sitting without a jury.

     4.5. Remedies. The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with its specific
terms or was otherwise breached and further agree that money damages or other remedy at law would
not be a sufficient or adequate remedy for any breach or violation of, or a default under, this
Agreement by them and that, in addition to all other remedies available to them, each of them shall
be entitled to an injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including, without limitation, specific
performance of the terms and provisions of this Agreement. Any requirements for the securing or
posting of any bond with respect to such remedy are hereby waived by each of the parties hereto.
Each party further agrees that, in the event of any action for an injunction or other equitable
remedy in respect of such breach or enforcement of specific performance, it will not assert the
defense that a remedy at law would be adequate. In any action or proceeding brought to enforce any
provision of this Agreement (including the indemnification provisions thereof), or where any
provision hereof is validly asserted as a defense, the successful party to such action or
proceeding shall be entitled to recover, to the extent permitted by applicable law, attorneys’ fees
in addition to its costs and expenses and any other available remedy.

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

     4.7. Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

     4.8. Entire Agreement. This Agreement, the Purchase Agreement and the documents referred to
herein or therein or delivered pursuant hereto or thereto, are intended by

24

 

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 and therein. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein or therein. This Agreement, the Purchase Agreement
and the documents referred to herein or therein or delivered pursuant hereto or thereto, supersede
all prior agreements and understandings between the parties with respect to such subject matter.

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

     4.10. Defaults. A default by any party to this Agreement in such party’s compliance with
any of the conditions or covenants hereof or performance of any of the obligations of such party
hereunder shall not constitute a default by any other party.

     4.11. General Interpretive Principles. Whenever used in this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to
include the plural as well as the singular and to cover all genders. The headings of the sections,
paragraphs, subparagraphs, clauses and subclauses of this Agreement are for convenience of
reference only and shall not in any way affect the meaning or interpretation of any of the
provisions hereof. Unless otherwise specified, the terms “hereof,” “herein” and similar terms refer
to this Agreement as a whole, and references herein to Sections refer to Sections of this
Agreement. Words of inclusion shall not be construed as terms of limitation herein, so that
references to “include”, “includes” and “including” shall not be limiting and shall be regarded as
references to non-exclusive and non-characterizing illustrations.

25

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their
respective officers thereunto duly authorized.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ James J. Brigl	 	 
	 	 	 	 	 	 	 
	 	 	 	 	James J. Brigl	 	 
	 	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	NEW MOUNTAIN PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	New Mountain Investments, L.P.,

its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	New Mountain GP, LLC,

its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Steven B. Klinsky	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Steven B. Klinsky	 	 
	 

	 	 	 	 	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	NEW MOUNTAIN AFFILIATED INVESTORS, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	New Mountain GP, LLC,

its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Steven B. Klinsky	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Steven B. Klinsky	 	 
	 	 	 	 	 	 	Chief Executive Officer	 	 

Registration Rights Agreement

26

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