EXECUTION VERSION ALGORX PHARMAC EUTICALS, INC. SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

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Title: EXECUTION VERSION ALGORX PHARMAC EUTICALS, INC. SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
Governing Law: Delaware Date: 11/24/2004

EXECUTION VERSION ALGORX PHARMAC EUTICALS, INC. SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT, Parties: algorx pharmaceuticals in

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EXHIBIT 4.1

EXECUTION VERSION

ALGORX PHARMACEUTICALS, INC.

SECOND AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT

THIS SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the

"Agreement") is entered into as of this 17th day of February 2004, by and among

ALGORX PHARMACEUTICALS, INC., a Delaware corporation (the "Company") and the

investors listed on Exhibit A hereto, referred to hereinafter as the "Investors"

and each individually as an "Investor."

WITNESSETH

WHEREAS, the Investors listed under the caption "Series A Preferred Stock"

on Exhibit A hereto (the "Series A Investors") hold shares of the Company's

Series A Preferred Stock, par value $0.001 per share (the "Series A Preferred

Stock"), pursuant to that certain Series A Preferred Stock Purchase Agreement

(the "Series A Purchase Agreement") dated as of April 4, 2001 by and among the

Company and the Series A Investors;

WHEREAS, the Investors (other than PowderJect Research Limited) listed

under the caption "Series B Preferred Stock" on Exhibit A hereto (the "Series B

Investors") hold shares of the Company's Series B Preferred Stock, par value

$0.001 per share (the "Series B Preferred Stock"), pursuant to that certain

Series B Preferred Stock Purchase Agreement (the "Series B Purchase Agreement")

dated as of March 22, 2002 by and among the Company and the Series B Investors;

WHEREAS, PowderJect Research Limited ("PowderJect Research"), holds shares

of the Company's Series B Preferred Stock issued by the Company in connection

with the acquisition of MF Spinoff, Inc. pursuant to that certain Acquisition

Agreement (the "Acquisition Agreement") by and among the Company, PowderJect

Technologies, Inc., PowderJect Research and MF Spinoff, Inc. dated as of March

15, 2002;

WHEREAS, the Company granted the Series A Investors and the Series B

Investors registration, information rights and other rights pursuant to that

certain Amended and Restated Investor Rights Agreement, dated as of March 22,

2002 by and among the Company, the Series A Investors and the Series B Investors

(the "Original Agreement");

WHEREAS, the Investors listed under the caption "Series C Preferred Stock"

on Exhibit A hereto (the "Series C Investors") are purchasing shares of the

Company's Series C Preferred Stock, par value $0.001 per share (the "Series C

Preferred Stock" and, together with the Series A Preferred Stock and Series B

Preferred Stock, the "Preferred Stock") pursuant to that certain Series C

Preferred Stock Purchase Agreement (the "Series C Purchase Agreement") of even

date herewith (the "Series C Financing");

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WHEREAS, the obligations in the Series C Purchase Agreement are

conditioned upon the execution and delivery of this Agreement for the purpose of

setting forth the terms and conditions pursuant to which the Investors shall be

granted registration, information rights and other rights; and

WHEREAS, in connection with the consummation of the Series C Financing,

the Company and the Investors each desire to facilitate the investors' rights

set forth in this Agreement by agreeing to the terms and conditions set forth

herein.

NOW, THEREFORE, in consideration of the mutual promises and covenants set

forth herein, and for other consideration, the receipt and adequacy of which are

hereby acknowledged, the parties hereby agree that the Original Agreement shall

be superseded and replaced in its entirety by this Agreement, and the parties

hereby further agree as follows:

SECTION 1. GENERAL.

1.1 DEFINITIONS. As used in this Agreement the following terms shall

have the following respective meanings:

(a) "Exchange Act" means the Securities Exchange Act of 1934, as

amended.

(b) "Form S-3" means such form under the Securities Act as in

effect on the date hereof or any successor or similar registration form under

the Securities Act subsequently adopted by the SEC which permits inclusion or

incorporation of substantial information by reference to other documents filed

by the Company with the SEC.

Securities that have not been sold to the public or any assignee of record of

such Registrable Securities in accordance with Section 2.10 hereof.

(d) "Initial Offering" means the Company's first firm commitment

underwritten public offering of its Common Stock registered under the Securities

Act, in which (x) the per share price is at least one dollar and eighteen cents

($1.18) (as adjusted for stock splits, dividends, recapitalizations and the like

after the date hereof), and (y) the gross cash proceeds to the Company (before

underwriting discounts, commissions and fees) are at least thirty million

dollars ($30,000,000).

(e) "Register," "registered," and "registration" refer to a

registration effected by preparing and filing a registration statement in

compliance with the Securities Act, and the declaration or ordering of

effectiveness of such registration statement or document.

(f) "Registrable Securities" means (a) Common Stock of the Company

issued or issuable upon conversion of the Shares and (b) any Common Stock of the

Company issued as (or issuable upon the conversion or exercise of any warrant,

right or other security which is issued as) a dividend or other distribution

with respect to, or in exchange for or in replacement of, such above-described

securities. Notwithstanding the foregoing, Registrable Securities shall not

include any securities sold by a person to the public either pursuant to a

registration

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statement or Rule 144 or sold in a private transaction in which the transferor's

rights under Section 2 of this Agreement are not assigned.

(g) "Registrable Securities then outstanding" shall be the number

of shares determined by calculating the total number of shares of the Company's

Common Stock that are Registrable Securities and either (a) are then issued and

outstanding or (b) are issuable pursuant to then exercisable or convertible

securities.

(h) "Registration Expenses" shall mean all expenses incurred by

the Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including,

without limitation, all registration and filing fees, printing expenses, fees

and disbursements of counsel for the Company, reasonable fees and disbursements

not to exceed twenty-five thousand dollars ($25,000) of a single special counsel

for the Holders, blue sky fees and expenses and the expense of any special

audits incident to or required by any such registration (but excluding the

compensation of regular employees of the Company which shall be paid in any

event by the Company).

(i) "SEC" or "Commission" means the Securities and Exchange

Commission.

(j) "Securities Act" shall mean the Securities Act of 1933, as

amended.

(k) "Selling Expenses" shall mean all underwriting discounts and

selling commissions applicable to the sale.

(l) "Shares" shall mean the Company's Series A Preferred Stock

issued pursuant to the Series A Purchase Agreement, the Company's Series B

Preferred Stock issued pursuant to the Series B Purchase Agreement and the

Acquisition Agreement and the Company's Series C Preferred Stock issued pursuant

to the Series C Purchase Agreement and held by the Investors listed on Exhibit A

hereto and their permitted assigns.

(m) "Special Registration Statement" shall mean (i) a registration

statement relating to any employee benefit plan or (ii) with respect to any

corporate reorganization or transaction under Rule 145 of the Securities Act,

including any registration statements related to the resale of securities issued

in such a transaction or (iii) a registration related to stock issued upon

conversion of debt securities.

SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.

2.1 RESTRICTIONS ON TRANSFER

(a) Each Holder agrees not to make any disposition of all or any

portion of the Shares or Registrable Securities unless and until:

(i) There is then in effect a registration statement under

the Securities Act covering such proposed disposition and such disposition is

made in accordance with such registration statement; or

(ii) (A) The transferee has agreed in writing to be bound by

the terms of this Agreement, (B) such Holder shall have notified the Company of

the proposed disposition

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and shall have furnished the Company with a detailed statement of the

circumstances surrounding the proposed disposition, and (C) if reasonably

requested by the Company, such Holder shall have furnished the Company with an

opinion of counsel, reasonably satisfactory to the Company, that such

disposition will not require registration of such shares under the Securities

Act. It is agreed that the Company will not require opinions of counsel for

transactions made pursuant to Rule 144, except in unusual circumstances. After

its Initial Offering, the Company will not require the transferee to be bound by

the terms of this Agreement.

(iii) Notwithstanding the provisions of paragraphs (i) and

(ii) above, no such registration statement or opinion of counsel shall be

necessary for a transfer by a Holder that is (A) a partnership transferring to

its partners or former partners in accordance with partnership interests, (B) a

corporation transferring to a wholly-owned subsidiary or a parent corporation

that owns all of the capital stock of the Holder, (C) a limited liability

company transferring to its members or former members in accordance with their

interests in the limited liability company, or (D) an individual transferring to

the Holder's family member or trust for the benefit of an individual Holder,

provided that in each case the transferee will be subject to the terms of this

Agreement to the same extent as if he were an original Holder hereunder.

(b) Each certificate representing Shares or Registrable Securities

shall (unless otherwise permitted by the provisions of the Agreement) be stamped

or otherwise imprinted with a legend substantially similar to the following (in

addition to any legend required under applicable state securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR

OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND

UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN

OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT

SUCH REGISTRATION IS NOT REQUIRED.

certificates at the request of any Holder thereof if the Holder shall have

obtained an opinion of counsel (which counsel may be counsel to the Company)

reasonably acceptable to the Company to the effect that the securities proposed

to be disposed of may lawfully be so disposed of without registration,

qualification or legend.

(d) Any legend endorsed on an instrument pursuant to applicable

state securities laws and the stop-transfer instructions with respect to such

securities shall be removed upon receipt by the Company of an order of the

appropriate blue sky authority authorizing such removal.

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2.2 DEMAND REGISTRATION.

(a) Subject to the conditions of this Section 2.2, if the Company

shall receive a written request from the Holders of a majority of the

Registrable Securities (the "Initiating Holders") that the Company file a

registration statement under the Securities Act covering the registration of at

least a majority of the Registrable Securities then outstanding (or a lesser

percent if the anticipated aggregate offering price, net of underwriting

discounts and commissions, would exceed ten million dollars ($10,000,000)), then

the Company shall, within thirty (30) days of the receipt thereof, give written

notice of such request to all Holders, and subject to the limitations of this

Section 2.2, effect, as expeditiously as reasonably possible, the registration

under the Securities Act of all Registrable Securities that the Holders request

to be registered.

(b) If the Initiating Holders intend to distribute the Registrable

Securities covered by their request by means of an underwriting, they shall so

advise the Company as a part of their request made pursuant to this Section 2.2

or any request pursuant to Section 2.4 and the Company shall include such

information in the written notice referred to in Section 2.2(a) or Section

2.4(a), as applicable. In such event, the right of any Holder to include its

Registrable Securities in such registration shall be conditioned upon such

Holder's participation in such underwriting and the inclusion of such Holder's

Registrable Securities in the underwriting to the extent provided herein. All

Holders proposing to distribute their securities through such underwriting shall

enter into an underwriting agreement in customary form with the underwriter or

underwriters selected for such underwriting by a majority in interest of the

Initiating Holders (which underwriter or underwriters shall be reasonably

acceptable to the Company) Notwithstanding any other provision of this Section

2.2 or Section 2.4, if the underwriter advises the Company that marketing

factors require a limitation of the number of securities to be underwritten

(including Registrable Securities) then the Company shall so advise all Holders

of Registrable Securities which would otherwise be underwritten pursuant hereto,

and the number of shares that may be included in the underwriting shall be

allocated to the Holders of such Registrable Securities on a pro rata basis

based on the number of Registrable Securities held by all such Holders

(including the Initiating Holders); provided, however, that the number of shares

of Registrable Securities to be included in such underwriting and registration

shall not be reduced unless all other securities of the Company are first

entirely excluded from the underwriting and registration. Any Registrable

Securities excluded or withdrawn from such underwriting shall be withdrawn from

the registration.

pursuant to this Section 2.2:

(i) prior to the earlier of (A) the fourth anniversary of

the date of this Agreement or (B) one hundred eighty (180) days following the

effective date of the registration statement pertaining to the Initial Offering;

(ii) after the Company has effected two (2) registrations

pursuant to this Section 2.2, and such registrations have been declared or

ordered effective;

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(iii) during the period starting with the date of filing of,

and ending on the date one hundred eighty (180) days following the effective

date of the registration statement pertaining to the Initial Offering; provided

that the Company makes reasonable good faith efforts to cause such registration

statement to become effective;

(iv) if within thirty (30) days of receipt of a written

request from Initiating Holders pursuant to Section 2.2(a), the Company gives

notice to the Holders of the Company's intention to file a registration

statement for a public offering, other than pursuant to a Special Registration

Statement within ninety (90) days;

(v) if the Company shall furnish to Holders requesting a

registration statement pursuant to this Section 2.2, a certificate signed by the

Chairman of the Board stating that in the good faith judgment of the Board of

Directors of the Company, it would be seriously detrimental to the Company and

its stockholders for such registration statement to be effected at such time, in

which event the Company shall have the right to defer such filing for a period

of not more than one hundred twenty (120) days after receipt of the request of

the Initiating Holders; provided that such right to delay a request shall be

exercised by the Company not more than twice in any twelve (12) month period; or

(vi) if the Initiating Holders propose to dispose of shares

of Registrable Securities that may be immediately registered on Form S-3

pursuant to a request made pursuant to Section 2.4 below.

2.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of

Registrable Securities in writing at least fifteen (15) days prior to the filing

of any registration statement under the Securities Act for purposes of a public

offering of securities of the Company (including, but not limited to,

registration statements relating to secondary offerings of securities of the

Company, but excluding Special Registration Statements) and will afford each

such Holder an opportunity to include in such registration statement all or part

of such Registrable Securities held by such Holder. Each Holder desiring to

include in any such registration statement all or any part of the Registrable

Securities held by it shall, within fifteen (15) days after the above-described

notice from the Company, so notify the Company in writing. Such notice shall

state the intended method of disposition of the Registrable Securities by such

Holder. If a Holder decides not to include all of its Registrable Securities in

any registration statement thereafter filed by the Company, such Holder shall

nevertheless continue to have the right to include any Registrable Securities in

any subsequent registration statement or registration statements as may be filed

by the Company with respect to offerings of its securities, all upon the terms

and conditions set forth herein.

(a) UNDERWRITING. If the registration statement under which the

Company gives notice under this Section 2.3 is for an underwritten offering, the

Company shall so advise the Holders of Registrable Securities. In such event,

the right of any such Holder to be included in a registration pursuant to this

Section 2.3 shall be conditioned upon such Holder's participation in such

underwriting and the inclusion of such Holder's Registrable Securities in the

underwriting to the extent provided herein. All Holders proposing to distribute

their Registrable Securities through such underwriting shall enter into an

underwriting agreement in customary form with the underwriter or underwriters

selected for such underwriting by the

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Company. Notwithstanding any other provision of this Agreement, if the

underwriter determines in good faith that marketing factors require a limitation

of the number of shares to be underwritten, the number of shares that may be

included in the underwriting shall be allocated, first, to the Company; second,

to the Holders on a pro rata basis based on the total number of Registrable

Securities held by the Holders; and third, to any stockholder of the Company

(other than a Holder) on a pro rata basis. No such reduction shall reduce the

amount of securities of the selling Holders included in the registration below

twenty-five percent (25%) of the total amount of securities included in such

registration, unless such offering is the Initial Offering and such registration

does not include shares of any other selling stockholders, in which event any or

all of the Registrable Securities of the Holders may be excluded in accordance

with the immediately preceding sentence. In no event will shares of any other

selling stockholder be included in such registration that would reduce the

number of shares which may be included by Holders without the written consent of

Holders of not less than sixty-six and two thirds percent (66 2/3%) of the

Registrable Securities proposed to be sold in the offering. If any Holder

disapproves of the terms of any such underwriting, such Holder may elect to

withdraw therefrom by written notice to the Company and the underwriter,

delivered at least ten (10) business days prior to the effective date of the

registration statement. Any Registrable Securities excluded or withdrawn from

such underwriting shall be excluded and withdrawn from the registration. For any

Holder which is a partnership or corporation, the partners, retired partners and

stockholders of such Holder, or the estates and family members of any such

partners and retired partners and any trusts for the benefit of any of the

foregoing person shall be deemed to be a single "Holder," and any pro rata

reduction with respect to such "Holder" shall be based upon the aggregate amount

of shares carrying registration rights owned by all entities and individuals

included in such "Holder," as defined in this sentence.

(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the

right to terminate or withdraw any registration initiated by it under this

Section 2.3 prior to the effectiveness of such registration whether or not any

Holder has elected to include securities in such registration. The Registration

Expenses of such withdrawn registration shall be borne by the Company in

accordance with Section 2.5 hereof.

2.4 FORM S-3 REGISTRATION. In case the Company shall receive from any

Holder or Holders of Registrable Securities a written request or requests that

the Company effect a registration on Form S-3 (or any successor to Form S-3) or

any similar short-form registration statement and any related qualification or

compliance with respect to all or a part of the Registrable Securities owned by

such Holder or Holders, the Company will:

(a) promptly give written notice of the proposed registration, and

any related qualification or compliance, to all other Holders of Registrable

Securities; and

(b) as soon as practicable, effect such registration and all such

qualifications and compliances as may be so requested and as would permit or

facilitate the sale and distribution of all or such portion of such Holder's or

Holders' Registrable Securities as are specified in such request, together with

all or such portion of the Registrable Securities of any other Holder or Holders

joining in such request as are specified in a written request given within

fifteen (15) days after receipt of such written notice from the Company;

provided, however, that

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the Company shall not be obligated to effect any such registration,

qualification or compliance pursuant to this Section 2.4:

(i) if Form S-3 is not available for such offering by the

Holders, or

(ii) if the Holders, together with the holders of any other

securities of the Company entitled to inclusion in such registration, propose to

sell Registrable Securities and such other securities (if any) at an aggregate

price to the public of less than five million dollars ($5,000,000), or

(iii) if within thirty (30) days of receipt of a written

request from any Holder or Holders pursuant to this Section 2.4, the Company

gives notice to such Holder or Holders of the Company's intention to make a

public offering within ninety (90) days, other than pursuant to a Special

Registration Statement;

(iv) if the Company shall furnish to the Holders a

certificate signed by the Chairman of the Board of Directors of the Company

stating that in the good faith judgment of the Board of Directors of the

Company, it would be seriously detrimental to the Company and its stockholders

for such Form S-3 registration to be effected at such time, in which event the

Company shall have the right to defer the filing of the Form S-3 registration

statement for a period of not more than ninety (90) days after receipt of the

request of the Holder or Holders under this Section 2.4; provided, that such

right to delay a request shall be exercised by the Company not more than once in

any twelve (12) month period, or

(v) if the Company has already effected two (2)

registrations on Form S-3 for the Holders pursuant to this Section 2.4.

registration statement covering the Registrable Securities and other securities

so requested to be registered as soon as practicable after receipt of the

requests of the Holders. Registrations effected pursuant to this Section 2.4

shall not be counted as demands for registration or registrations effected

pursuant to Sections 2.2 or 2.3, respectively.

2.5 EXPENSES OF REGISTRATION. Except as specifically provided herein,

all Registration Expenses incurred in connection with any registration,

qualification or compliance pursuant to Section 2.2 or any registration under

Section 2.3 or Section 2.4 herein shall be borne by the Company. All Selling

Expenses incurred in connection with any registrations hereunder, shall be borne

by the holders of the securities so registered pro rata on the basis of the

number of shares so registered. The Company shall not, however, be required to

pay for expenses of any registration proceeding begun pursuant to Section 2.2 or

2.4, the request of which has been subsequently withdrawn by the Initiating

Holders unless (a) the withdrawal is based upon material adverse information

concerning the Company of which the Initiating Holders were not aware at the

time of such request or (b) the Holders of a majority of Registrable Securities

agree to forfeit their right to one requested registration pursuant to Section

2.2 or Section 2.4, as applicable, in which event such right shall be forfeited

by all Holders). If the Holders are required to pay the Registration Expenses,

such expenses shall be borne by the holders of securities (including Registrable

Securities) requesting such registration in proportion to the

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number of shares for which registration was requested. If the Company is

required to pay the Registration Expenses of a withdrawn offering pursuant to

clause (a) above, then the Holders shall not forfeit their rights pursuant to

Section 2.2 or Section 2.4 to a demand registration.

2.6 OBLIGATIONS OF THE COMPANY. Whenever required to effect the

registration of any Registrable Securities, the Company shall, as expeditiously

as reasonably possible:

(a) Prepare and file with the SEC a registration statement with

respect to such Registrable Securities and use all reasonable efforts to cause

such registration statement to become effective, and, upon the request of the

Holders of a majority of the Registrable Securities registered thereunder, keep

such registration statement effective for up to sixty (60) days or, if earlier,

until the Holder or Holders have completed the distribution related thereto;

provided, however, that at any time, upon written notice to the participating

Holders and for a period not to exceed sixty (60) days thereafter (the

"Suspension Period"), the Company may delay the filing or effectiveness of any

registration statement or suspend the use or effectiveness of any registration

statement (and the Initiating Holders hereby agree not to offer or sell any

Registrable Securities pursuant to such registration statement during the

Suspension Period) if the Company reasonably believes that the Company may, in

the absence of such delay or suspension hereunder, be required under state or

federal securities laws to disclose (i) any corporate development the disclosure

of which could reasonably be expected to have an adverse effect upon the Company

or its stockholders, (ii) a potentially significant transaction or event

involving the Company, or (iii) any negotiations, discussions, or proposals

directly relating thereto. No more than two (2) such Suspension Periods shall

occur in any twelve (12) month period. In the event that the Company shall

exercise its rights hereunder, the applicable time period during which the

registration statement is to remain effective shall be extended by a period of

time equal to the duration of the Suspension Period. The Company may extend the

Suspension Period for an additional consecutive sixty (60) days with the consent

of the holders of a majority of the Registrable Securities proposed to be sold

by the Initiating Holders, which consent shall not be unreasonably withheld. If

so directed by the Company, the Initiating Holders shall use their best efforts

to deliver to the Company (at the Company's expense) all copies, other than

permanent file copies then in such Initiating Holders' possession, of the

prospectus relating to such Registrable Securities current at the time of

receipt of such notice. The Company shall not be required to file, cause to

become effective or maintain the effectiveness of any registration statement

that contemplates a distribution of securities on a delayed or continuous basis

pursuant to Rule 415 under the Securities Act.

(b) Prepare and file with the SEC 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 with respect to the disposition of all securities covered by such

registration statement for the period set forth in paragraph (a) above.

including a preliminary prospectus, in conformity with the requirements of the

Securities Act, and such other documents as they may reasonably request in order

to facilitate the disposition of Registrable Securities owned by them.

<PAGE>

(d) Use its reasonable efforts to register and qualify the

securities covered by such registration statement under such other securities or

Blue Sky laws of such jurisdictions as shall be reasonably requested by the

Holders; 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 states or jurisdictions.

(e) In the event of any underwritten public offering, enter into

and perform its obligations under an underwriting agreement, in usual and

customary form, with the managing underwriter(s) of such offering. Each Holder

participating in such underwriting shall also enter into and perform its

obligations under such an agreement.

(f) Notify each Holder of Registrable Securities covered by such

registration statement at any time when a prospectus relating thereto is

required to be delivered under the Securities Act of 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 a material fact required to be stated therein or necessary to make the

statements therein not misleading in the light of the circumstances then

existing. The Company will use reasonable efforts to amend or supplement such

prospectus in order to cause such prospectus not to include any untrue statement

of a material fact or omit to state a material fact required to be stated

therein or necessary to make the statements therein not misleading in the light

of the circumstances then existing.

(g) Use its reasonable efforts to furnish, on the date that such

Registrable Securities are delivered to the underwriters for sale, if such

securities are being sold through underwriters, (i) an opinion, dated as of such

date, of the counsel representing the Company for the purposes of such

registration, in form and substance as is customarily given to underwriters in

an underwritten public offering, addressed to the underwriters, if any, and (ii)

a letter, dated as of such date, from the independent certified public

accountants of the Company, in form and substance as is customarily given by

independent certified public accountants to underwriters in an underwritten

public offering addressed to the underwriters.

2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted

under this Section 2 shall terminate and be of no further force and effect five

(5) years after the date of the Company's Initial Offering. In addition, a

Holder's registration rights shall expire if (a) the Company has completed its

Initial Offering and is subject to the provisions of the Exchange Act, (b) such

Holder (together with its affiliates) holds less than 1% of the Company's

outstanding Common Stock (treating all shares of convertible Preferred Stock on

an as converted basis) and (c) all Registrable Securities held by and issuable

to such Holder (and its affiliates) may be sold under Rule 144 (without

reference to 144(k)) during any ninety (90) day period.

2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION

(a) No Holder shall have any right to obtain or seek an injunction

restraining or otherwise delaying any such registration as the result of any

controversy that might arise with respect to the interpretation or

implementation of this Section 2.

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(b) It shall be & condition precedent to the obligations of the

Company to take any action pursuant to Section 2.2, 2.3 or 2.4 that the selling

Holders shall furnish to the Company such information regarding themselves, the

Registrable Securities held by them and the intended method of disposition of

such securities as shall be required to effect the registration of their

Registrable Securities.

registration requested pursuant to Section 2.2 or Section 2.4 if, due to the

operation of subsection 2.2(b), the number of shares or the anticipated

aggregate offering price of the Registrable Securities to be included in the

registration does not equal or exceed the number of shares or the anticipated

aggregate offering price required to originally trigger the Company's obligation

to initiate such registration as specified in Section 2.2 or Section 2.4,

whichever is applicable.

2.9 INDEMNIFICATION. In the event any Registrable Securities are

included in a registration statement under Sections 2.2, 2.3 or 2.4:

(a) To the extent permitted by law, the Company will indemnify and

hold harmless each Holder, the partners, officers and directors of each Holder,

any underwriter (as defined in the Securities Act) for such Holder and each

person, if any, who controls such Holder or underwriter within the meaning of

the Securities Act or the Exchange Act, against any losses, claims, damages, or

liabilities (joint or several) to which they may become subject under the

Securities Act, the Exchange Act or other federal or state law, insofar' as such

losses, claims, damages or liabilities (or actions in respect thereof) arise out

of or are based upon any of the following statements, omissions or violations

(collectively a "VIOLATION") by the Company: (i) any untrue statement or alleged

untrue statement of a material fact contained in such registration statement,

including any preliminary prospectus or final prospectus contained therein or

any amendments or supplements thereto, (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 in which they are

made, not misleading, or (iii) any violation or alleged violation by the Company

of the Securities Act, the Exchange Act, any state securities law or any rule or

regulation promulgated under the Securities Act, the Exchange Act or any state

securities law in connection with the offering covered by such registration

statement; and the Company will pay as incurred to each such Holder, partner,

officer, director, underwriter or controlling person for any legal or other

expenses reasonably incurred by them in connection with investigating or

defending any such loss, claim, damage, liability or action; provided however,

that the indemnity agreement contained in this Section 2.9(a) shall not apply to

amounts paid in settlement of any such loss, claim, damage, liability or action

if such settlement is effected without the consent of the Company, which consent

shall not be unreasonably withheld, nor shall the Company be liable in any such

case for any such loss, claim, damage, liability or action to the extent that it

arises out of or is based upon a Violation which occurs in reliance upon and in

conformity with written information furnished expressly for use in connection

with such registration by such Holder, partner, officer, director, underwriter

or controlling person of such Holder.

(b) To the extent permitted by law, each Holder will, if

Registrable Securities held by such Holder are included in the securities as to

which such registration qualifications or compliance is being effected,

indemnify and hold harmless the Company, each of its directors,

<PAGE>

its officers and each person, if any, who controls the Company within the

meaning of the Securities Act, any underwriter and any other Holder selling

securities under such registration statement or any of such other Holder's

partners, directors or officers or any person who controls such Holder, against

any losses, claims, damages or liabilities (joint or several) to which the

Company or any such director, officer, controlling person, underwriter or other

such Holder, or partner, director, officer or controlling person of such other

Holder may become subject under the Securities Act, the Exchange Act or other

federal or state law, insofar as such losses, claims, damages or liabilities (or

actions in respect thereto) arise out of or are based upon any Violation, in

each case to the extent (and only to the extent) that such Violation occurs in

reliance upon and in conformity with written information furnished by such

Holder under an instrument duly executed by such Holder and stated to be

specifically for use in connection with such registration; and each such Holder

will pay as incurred any legal or other expenses reasonably incurred by the

Company or any such director, officer, controlling person, underwriter or other

Holder, or partner, officer, director or controlling person of such other Holder

in connection with investigating or defending any such loss, claim, damage,

liability or action if it is judicially determined that there was such a

Violation; provided, however, that the indemnity agreement contained in this

Section 2.9(b) shall not apply to amounts paid in settlement of any such loss,

claim, damage, liability or action if such settlement is effected without the

consent of the Holder, which consent shall not be unreasonably withheld;

provided further, that in no event shall any indemnity under this Section 2.9

exceed the net proceeds from the offering received by such Holder.

Section 2.9 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 2.9, deliver to

the indemnifying party a written notice of the commencement thereof and the

indemnifying party shall have the right to participate in, and, to the extent

the indemnifying party so desires, jointly with any other indemnifying party

similarly noticed, to assume the defense thereof with counsel mutually

satisfactory to the parties; provided, however, that an indemnified party shall

have the right to retain its own counsel, with the fees and expenses to be paid

by the indemnifying party, if representation of such indemnified party by the

counsel retained by the indemnifying party would be inappropriate due to actual

or potential differing 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

commencement of any such action, if materially prejudicial to its ability to

defend such action, shall relieve such indemnifying party of any liability to

the indemnified party under this Section 2.9, 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 2.9.

(d) If the indemnification provided for in this Section 2.9 is

held by a court of competent jurisdiction to be unavailable to an indemnified

party with respect to any losses, claims, damages or liabilities referred to

herein, the indemnifying party, in lieu of indemnifying such indemnified party

thereunder, shall to the extent permitted by applicable law contribute to the

amount paid or payable by such indemnified party as a result of such loss,

claim, damage or liability in such proportion as is appropriate to reflect the

relative fault of the indemnifying party on the one hand and of the indemnified

party on the other in connection with the Violation(s)

<PAGE>

that resulted in such loss, claim, damage or liability, as well as any other

relevant equitable considerations. The relative fault of the indemnifying party

and of the indemnified party shall be determined by a court of law by reference

to, among other things, whether the untrue or alleged untrue statement of a

material fact or the omission to state a material fact relates to information

supplied by the indemnifying party or by the indemnified party and the parties'

relative intent, knowledge, access to information and opportunity to correct or

prevent such statement or omission; provided, that in no event shall any

contribution by a Holder hereunder exceed the net proceeds from the offering

received by such Holder.

(e) The obligations of the Company and Holders under this Section

2.9 shall survive completion of any offering of Registrable Securities in a

registration statement and the termination of this Agreement. No indemnifying

party, in the defense of any such claim or litigation, shall, except with the

consent of each indemnified party, consent to entry of any judgment or enter

into any settlement which does not include as an unconditional term thereof the

giving by the claimant or plaintiff to such Indemnified Party of a release from

all liability in respect to such claim or litigation.

2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company

to register Registrable Securities pursuant to this Section 2 may be assigned by

a Holder to a transferee or assignee of Registrable Securities that (a) is a

subsidiary, parent, general partner, limited partner, retired partner, member or

retired member, or stockholder of a Holder, (b) is a Holder's child, stepchild,

grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,

father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law

(such a relation, a Holder's "Immediate Family Member", which term shall include

adoptive relationships), (c) is a trust for the benefit of an individual Holder

or such Holder's immediate Family Member, (d) acquires at least fifty thousand

(50,000) shares of Registrable Securities (as adjusted for stock splits and

combinations), or (e) is an entity affiliated by common control (or other

related entity) with such Holder; provided, however, (i) the transferor shall,

within ten (10) days after such transfer, furnish to the Company written notice

of the name and address of such transferee or assignee and the securities with

respect to which such registration rights are being assigned and (ii) such

transferee shall agree to be subject to all restrictions set forth in this

Agreement. For the purposes of determining the number of shares of Registrable

Securities held by a transferee or assignee, the holdings of transferees and

assignees of (x) a partnership who are partners or retired partners of such

partnership or (y) a limited liability company who are members or retired

members of such limited liability company (including Immediate Family Members of

such partners or members who acquire Registrable Securities by gift, will or

intestate succession) shall be aggregated together and with the partnership or

limited liability company; provided that all assignees and transferees who would

not qualify individually for assignment of registration rights shall have a

single attorney-in-fact for the purpose of exercising any rights, receiving

notices or taking any action under this Section 2.

2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2

may be amended and the observance thereof may be waived (either generally or in

a particular instance and either retroactively or prospectively), only with the

written consent of the Company and the Holders of at least a majority of the

Registrable Securities then outstanding. Any amendment or waiver effected in

accordance with this Section 2.11 shall be binding upon each Holder and the

<PAGE>

Company. By acceptance of any benefits under this Section 2, Holders of

Registrable Securities hereby agree to be bound by the provisions hereunder.

2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. Other than as provided

in Section 5.11, after the date of this Agreement, the Company shall not,

without the prior written consent of the Holders of at least a majority of the

Registrable Securities then outstanding, enter into any agreement with any

holder or prospective holder of any securities of the Company that would grant

such holder registration rights senio

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