Exhibit 10.1

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT, dated as of February 7, 2012 by and among
Affinity Gaming, LLC, a Nevada limited liability company, and the parties set
forth on the signature page hereto.

 

WHEREAS, each Holder (i) held 10% or more of the Equity Securities on the date
on which the plan of reorganization of the Company’s predecessor entity was
consummated and (ii) pursuant to Section 4.1 of this Agreement agrees to consent
(if its consent is sought) to the Company’s conversion from a limited liability
company to a corporation (the “Incorporation”); and

 

WHEREAS, to induce each Holder to consent to the Incorporation, the Company has
agreed to provide each Holder with the registration rights set forth in this
Agreement.

 

NOW THEREFORE, 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
common control with such specified Person, where “control” means the possession,
directly or indirectly, of the power to direct the management and policies of a
Person whether through the ownership of voting securities, contract or
otherwise.

 

1.2.                            “Agreement” means this Registration Rights
Agreement, as this agreement may be amended, modified, supplemented or restated
from time to time after the date hereof.

 

1.3.                            “Assignee” has the meaning set forth in
Section 5.2(c).

 

1.4.                            “automatic shelf registration statement” has the
meaning set forth in Section 2.1(k)(i).

 

1.5.                            “Beneficially Own(ed)” means beneficially owned
as determined under Rule 13d-3 promulgated under the Exchange Act.

 

1.6.                            “Board” means the board of directors of the
Company.

 

1.7.                            “Business Day” means any day of the year on
which national banking institutions located in New York, New York are open to
the public for conducting business and are not required or authorized to close. 
If the time to perform any action hereunder falls on a day that is not a
Business Day, such time will be extended to the next Business Day.

 

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1.8.                            “Company” means Affinity Gaming, LLC and shall
include any successor thereto by merger, consolidation or acquisition of
substantially all the assets thereof (including the entity surviving the
Incorporation), or otherwise, including any parent or subsidiary entity that
undertakes a public offering in lieu of the Company.

 

1.9.                            “counsel to the Participating Holders” means one
law firm selected by the Majority Participating Holders.

 

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

 

1.11.                     “Demand Registration” has the meaning set forth in
Section 2.1(a).

 

1.12.                     “Demand Registration Statement” means a registration
statement filed pursuant to Section 2.1(a).

 

1.13.                     “Equity Securities” means, any and all limited
liability company units or shares of common stock or other equivalents of
(however designated) the equity of the Company, either prior to or after the
Incorporation.

 

1.14.                     “Exchange Act” means the Securities Exchange Act of
1934, as amended, as the same shall be in effect at the time.

 

1.15.                     “FINRA” means the Financial Industry Regulatory
Authority, Inc.

 

1.16.                     “Gaming Authority” means the Nevada Gaming Commission,
the Missouri Gaming Commission, the Iowa Racing and Gaming Commission and any
agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever of the United States or foreign
government, any state, province or any city or other political subdivision,
whether now or hereafter existing, or any officer or official thereof,
including, without limitation, any other agency with authority to regulate any
gaming operation (or proposed gaming operation) owned, managed or operated by
the Company any of its subsidiaries.

 

1.17.                     “Holder” means any Person who is a party to this
Agreement or any Assignee.

 

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

 

1.19.                     “Incorporation” has the meaning set forth in the
recitals.

 

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

 

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

 

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

 

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1.23.                     “Initiating Holder” means the Holder delivering a
Holder Demand as provided for under Section 2.1(a).

 

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

 

1.25.                     “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.

 

1.26.                     “Marketed Underwritten Offering” has the meaning set
forth in Section 2.4(b).

 

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

 

1.28.                     “Person” means any individual, corporation,
association, partnership (general or limited), joint venture, trust, estate,
limited liability company, or other legal entity or organization.

 

1.29.                     “Piggyback Registration Statement” has the meaning set
forth in Section 2.2(a).

 

1.30.                     “Qualified Public Offering” means a sale pursuant to a
firm commitment underwriting of Equity Securities pursuant to a registration
statement under the Securities Act that results in aggregate cash proceeds to
the Company of at least $20 million (net of underwriting discounts and
commissions).

 

1.31.                     “Registrable Securities” means any Equity Securities
now or hereafter held by a Holder.  Registrable Securities shall include any
shares of capital stock, limited liability company units, warrants or other
securities of the Company issued as a dividend or other distribution with
respect to or in exchange for or in replacement of Registrable Securities.  As
to any particular Registrable Securities, such Equity Securities shall cease to
be Registrable Securities when (a) a registration statement with respect to the
sale of such Equity Securities shall have become effective under the Securities
Act and such Equity Securities shall have been sold, transferred or disposed of
in accordance with such registration statement, (b) such Equity Securities have
been sold in sales that comply with Rule 144, (c) the Holder who holds such
Equity Securities has the right (as reasonably determined by such Holder) to
immediately sell, in a single transaction, all of such Holder’s Equity
Securities in a sale that complies with Rule 144, without compliance with the
volume limitations, manner of sale, or notice requirements of Rule 144, (d) the
Holder who holds such Equity Securities has, in its sole discretion, provided
notice to the Company that such Equity Securities shall not be deemed
Registrable Securities or (e) the Equity Securities shall have ceased to be
outstanding.

 

1.32.                     “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, FINRA fees,

 

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                                                national securities exchange or
inter-dealer quotation system fees, foreign stock exchange fees and fees and
expenses of complying with state, federal or foreign securities or blue sky laws
(including fees and disbursements of counsel to the underwriters in connection
with “blue sky” or foreign 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 (if they are to be certificated) in a form eligible for
deposit with The Depository Trust Company and printing preliminary and final
prospectuses or other offering documents), duplicating, telephone, and messenger
and delivery expenses, (iii) all fees and disbursements of counsel to the
Company and of its independent public accountants, including the expenses of
“cold comfort” letters required by, or incident to, such registration, (iv) all
fees and expenses of any special experts or other Persons retained by the
Company in connection with any registration, and (v) all transfer taxes;
provided, however, that (i) Registration Expenses shall exclude, and the
Participating Holders shall pay, underwriting discounts and commissions in
respect of the Registrable Securities being registered for such Participating
Holder, (ii) if the managing underwriter for an offering of Registrable
Securities requests that senior management of the Company participate in a
“roadshow” pursuant to Section 2.4(b), the Participating Holders for such
offering shall pay, or reimburse the Company for, any third party costs and
expenses incurred by the Company or its officers and directors in connection
with such “roadshow” and (iii) Registration Expenses shall exclude, and the
Initiating Holder shall pay, any expenses that the Initiating Holder has agreed
to pay pursuant to Section 2.1(a), Section 2.1(d) or Section 2.1(j).

 

1.33.                     “Regulation S” means Regulation S promulgated by the
SEC under the Securities Act and any successor regulation.

 

1.34.                     “Rule 144” means Rule 144 promulgated by the SEC under
the Securities Act and any successor provision.

 

1.35.                     “Rule 144A” means Rule 144A promulgated by the SEC
under the Securities Act and any successor provision.

 

1.36.                     “SEC” means the Securities and Exchange Commission.

 

1.37.                     “Section 2.2 Sale Amount” has the meaning set forth in
Section 2.2(d).

 

1.38.                     Securities Act” means the Securities Act of 1933, as
amended, as the same shall be in effect at the time.

 

1.39.                     “Selected Courts” has the meaning set forth in
Section 5.4(b).

 

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SECTION. 2.                         Registration Under Securities Act.

 

2.1.                            Registration on Demand.

 

(a)                                 Demand.  At any time following the
Incorporation, each Holder holding Registrable Securities may require the
Company to effect the registration under the Securities Act of all or part of
its Registrable Securities (a “Demand Registration”), by delivering a written
request (a “Holder Demand”) therefor to the Company specifying the number of
Registrable Securities to be registered (which, for the sake of clarity, may be
all Registrable Securities held or that may be held by the Holder) and the
intended method of distribution thereof (which, if not set forth in such Holder
Demand, shall be as set forth in Section 2.1(c)); provided that, each Holder
shall have the right to deliver only one Holder Demand, it being understood that
a Holder Demand shall not count as a Holder Demand and a registration requested
pursuant to this Section 2.1 shall not be deemed a Demand Registration and the
Company shall not be deemed to have satisfied its obligations hereunder
(i) unless (x) the Holder Demand results in the relevant Demand Registration
Statement being declared effective by the SEC, (y) the Demand Registration
Statement remains effective until all Registrable Securities held by the
Initiating Holder cease to be Registrable Securities or such longer period as
required by Section 2.1(e), and (z) the Company has complied with all of its
obligations under this section, or (ii) if after the Demand Registration
Statement has become effective, (x) such registration is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental authority or court, (y) the Demand Registration Statement is
withdrawn for any reason other than upon the request of the Initiating Holder
(in which case it shall not be deemed a Demand Registration if the Initiating
Holder pays the Registration Expenses incurred by the Company in connection with
such Demand Registration).  For the sake of clarity, it is understood that any
Holder may submit a Holder Demand at any time following the Incorporation and,
in such case, the Company is obligated, subject to the terms and conditions
hereof, to file and maintain the effectiveness of the relevant Demand
Registration Statement until all Registrable Securities held by the Initiating
Holding cease to be Registrable Securities or for such longer period as required
by Section 2.1(e).

 

(b)                                 The Company shall give written notice (the
“Demand Exercise Notice”) of the Holder Demand to all other Holders such that
each such Holder shall have the option, within 10 days after the receipt of the
Demand Exercise Notice (or five 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

 

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                                                Company shall use its reasonable
best efforts to (i) file a registration statement under the Securities Act
within 60 days following receipt of the Demand Exercise Notice covering 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
in a timely manner in accordance with the prior sentence and (ii) cause such
registration to be declared effective by the SEC within 120 days following
receipt of the Demand Exercise Notice.  The Company shall (x) use its reasonable
best efforts to effect the registration of Registrable Securities for
distribution in accordance with the intended method of distribution set forth in
the Holder Demand, or if not set forth in the Holder Demand, as set forth in
Section 2.1(c) and (y) obtain acceleration of the effective date of the
registration statement relating to such registration to the earliest date
practicable, or such other date as is requested by the Initiating Holder.

 

(c)                                  Registration Statement Form.  Registrations
under this Section 2.1 shall be on such registration statement to which the
Company is eligible (i) as shall be selected by the Initiating Holder and as
shall be reasonably acceptable to the Company and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in the Holder Demand, which, unless
otherwise specified in such request, shall be a continuous or delayed basis
offering pursuant to Rule 415 under the Securities Act and contemplate a sale by
the Initiating Holder in any manner permitted by law, including an underwritten
or otherwise marketed offering (subject to Section 2.4(b)) or the use of a
placement agent, initial purchaser or broker, or a block trade.

 

(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, regardless of whether the
registration statement is declared effective.  Notwithstanding the foregoing
(i) 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 or any foreign jurisdiction in which the offering is made
and (ii) to the extent that a Participating Holder offers to sell or sells
Registrable Securities pursuant to a Demand Registration Statement in a non-U.S.
jurisdiction in which the Registrable Securities have not previously been
offered by the Company for its own account, all expenses arising from such
offers or sales shall be borne by the Participating Holder whose offer or sales
gave rise to such expenses rather than the Company.

 

(e)                                  Effective Registration Statement.  The
Company will use its reasonable best efforts to maintain the effectiveness of
any Demand Registration Statement until all of the Registrable Securities
included in such

 

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                                                registration statement cease to
be Registrable Securities or, if such registration statement relates to an
underwritten offering, such longer period as in the opinion of counsel to the
managing underwriter or underwriters, a prospectus is required by law to be
delivered in connection with offers and sales of Registrable Securities by an
underwriter or dealer.  If any Demand Registration Statement may not be kept
effective beyond a specific period of time pursuant to SEC rules or otherwise,
the Company shall use its reasonable best efforts to (i) file and cause to
become effective another registration statement, as soon as practicable, and
(ii) maintain the effectiveness of the registration statement referred to in the
prior clause, in each case, until all Registrable Securities registered on such
Demand Registration Statement are no longer Registrable Securities.

 

(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 Initiating Holder with the
consent of the Company, not to be unreasonably withheld or delayed.

 

(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 by giving
written notice to the Company of its request to withdraw at any time prior to
the effective date of such registration statement or otherwise in accordance
with the process established in connection with the offering.  Upon receipt of
notice from the Initiating Holder to such effect, the Company shall cease all
efforts to obtain effectiveness of the applicable registration statement.

 

(h)                                 Limitations on Registration on Demand.  The
Company shall not be obligated to file any Demand Registration Statement upon
the request of a Holder pursuant to this Section 2.1 within 180 days after the
effective date of a Piggyback Registration Statement in which such Holder was
permitted to register, and actually sold pursuant to such Piggyback Registration
Statement, at least 67% of the Registrable Securities requested to be included
therein by such Holder.

 

(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, only Registrable Securities
shall be covered by such registration statement.  If any registration pursuant
to a Holder Demand involves an underwritten offering and the managing
underwriter(s) of such offering shall inform the Company of its belief that the
number of Registrable Securities requested to be included in such registration
pursuant to this Section 2.1 exceeds the largest number that can be sold in an
orderly manner in such underwritten offering within a price range acceptable to
the Initiating Holder, then the Participating Holders shall be entitled to
participate on a pro rata basis based on the number of

 

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                                                Registrable Securities requested
to be included in the offering by each such Participating Holder.

 

(j)                                    Postponement.  If the Board determines,
in its reasonable judgment, that registration pursuant to the Demand
Registration Statement would:

 

(i)                         materially impede, interfere or delay any material
financing (including an underwritten public offering), acquisition, sale, merger
or other similar business transaction involving the Company or the negotiations
thereof;

 

(ii)                      require premature disclosure of material information
that the Company has a valid business purpose for preserving as confidential;

 

(iii)                   render the Company unable to comply with requirements
under the Securities Act or Exchange Act;

 

(iv)                  require the Company to prepare (a) audited financial
statements as of a date other than its fiscal year end (unless the Initiating
Holder or one or more other Participating Holders agrees to pay the reasonable
costs and expenses of this audit) or (b) pro forma financial statements that are
required to be included in a registration statement (unless the Initiating
Holder or one or more other Participating Holders agrees to pay the reasonable
costs and expenses relating to the preparation of such pro forma financial
statements); or

 

(v)                     within 90 days of the date of this Agreement, have a
material adverse effect on the Company,

 

then (x) the Company may postpone filing the Demand Registration Statement (but
not its preparation) until such reason no longer exists, but not to a date later
than (A) in the case of a postponement pursuant to clause (i) — (iv) above, 90
days from the date of the initial request to file the Demand Registration
Statement, and (B) in the case of a postponement pursuant to clause (v) above,
90 days from the date of this Agreement and (y) if the Demand Registration
Statement has been filed, but not declared effective, the Company may postpone
requesting the effectiveness of the Demand Registration Statement, but not to a
date later than (A) in the case of a postponement pursuant to clause (i) —
(iv) above, 120 days following the date of the initial request to file the
Demand Registration Statement and (B) in the case of a postponement pursuant to
clause (v) above, 90 days from the date of this Agreement; provided, that in the
case of such postponement the Initiating Holder shall be entitled to withdraw
such Holder Demand and, if such Holder Demand is withdrawn, such Demand
Registration Statement shall not count as a Demand Registration.

 

(k)                                 Additional Registrable Securities.  If at
any time after submission of a Holder Request or the filing or effectiveness of
a Demand Registration Statement, the Initiating Holder acquires additional
Registrable Securities, such Initiating Holder may provide notice to the Company
that it wishes to

 

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                                                have such additional Registrable
Securities registered on the relevant Demand Registration Statement and, in such
case, the Company shall, as soon as practicable, use its reasonable best efforts
to take whatever actions are necessary to do so, including filing any prospectus
supplement or post-effective amendments to such Demand Registration Statement;
provided, however, that the Company shall not be required to file any prospectus
supplement or post-effective amendment that registers Registrable Securities
with a value of less than $100,000 (which shall be determined by the number of
Registrable Securities multiplied by the then fair market value of such share of
Equity Securities) at the time of such filing.

 

2.2.                            Incidental Registration.

 

(a)                                 Right to Include Registrable Securities.  If
the Company at any time proposes to register any Equity Securities under the
Securities Act by registration on Form S-1 or S-3, or any successor or similar
form(s) (except registrations (i) solely for registration in connection with an
employee benefit plan on Form S-8 or any successor form thereto or (ii) 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 or the account of another
Person, it will each such time give prompt written notice (but in no event less
than 15 days prior to the effectiveness 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 (each, a “Piggyback 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), within 15 days after the receipt of any such notice (or five
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 offering 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
(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), without prejudice, however, to the rights of
the

 

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                                                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 Equity 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.

 

(b)                                 Right to Withdraw.  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 by giving written notice to
the Company of its request to withdraw at any time prior to the effective date
of such registration statement or otherwise in accordance with the process
established in connection with the offering (and, for the sake of clarity, in
the case of such withdrawal, such Holder shall not be obligated to reimburse the
Company for any expenses incurred in connection with such registration
statement).  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 Equity Securities under such shelf
registration.

 

(c)                                  Right to Postpone or Withdraw by the
Company.  The Company may postpone or withdraw the filing or the effectiveness
of the Piggyback Registration at any time in its sole discretion.

 

(d)                                 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 of its
belief that the number of Registrable Securities requested to be included in
such registration or offering, when added to the number of Equity Securities, if
any, to be offered by the Company in such registration or offering exceeds the
largest number that can be sold in an orderly manner in such underwritten
offering within a price range acceptable to the Company and the Majority
Participating Holders (the “Section 2.2 Sale Amount”), then the Company shall
include in such registration or offering first, pro rata among the Company, the
Holder requesting inclusion of Registrable Securities in such registration and
the other Holders, on a pro rata basis based on the number of shares of Equity
Securities each proposes to register and second, pro rata among any other
selling security holders on a pro rata basis based on the number of shares of
Equity Securities each proposes to register; provided, that if such offering is
initiated by and for the account of the Company, then the Company shall include,
first, the number of Equity Securities that the Company proposes to register,
second, the Registrable Securities requested to be included in such offering,
which will be allocated on a pro rata basis among the Holders based on the
number of shares of Registrable Securities each proposes to register and, third,
the number of Equity Securities requested to be

 

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                                                included by any other selling
security holders, which will be allocated on a pro rata basis among any other
selling security holders based on the number of Equity Securities each proposes
to register.

 

(e)                                  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(e) 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 or any foreign jurisdiction in which the
offering is made.

 

(f)                                   Selection of Underwriters.  The
underwriters of each underwritten offering which may include Registrable
Securities pursuant to this Section 2.2 shall be selected by a majority of the
participating holders included in such underwritten offering, with the consent
of the Company, not to be unreasonably withheld or delayed; provided that if the
Company initiates a registration pursuant to this Section 2.2, the Company shall
select the managing underwriter in connection with the offering of Equity
Securities pursuant to such registration statement.

 

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 use its
reasonable best efforts to:

 

(i)                                     prepare and file with the SEC (and in
the case of a demand pursuant to Section 2.1, within 60 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 Equity
Securities or Registrable Securities in accordance with the intended method of
disposition thereof 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 or incorporated by
reference therewith, and thereafter use its reasonable best efforts to cause
such registration statement to become and remain effective (in the case of a
demand pursuant to Section 2.1, within 120 days after receipt by the Company of
a Demand Exercise Notice) until (A) with respect to a demand pursuant to
Section 2.1, as set forth in Section 2.1(e) and (B) with respect to any other
offering, until the sale of all Registrable Securities thereunder.

 

(ii)                                  in connection with a demand pursuant to
Section 2.1, take any actions contemplated by that section, including
Section 2.1(e);

 

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(iii)                               prepare and file with the SEC any amendments
and supplements to such registration statement and the prospectus used in
connection therewith, or any free writing prospectus related thereto, 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;

 

(iv)                              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 any
other prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, each free writing prospectus
utilized in connection therewith (it being understood that the Company consents
to the use of such prospectus or any amendment or supplement thereto or free
writing prospectus by each Participating Holder and the underwriters in
connection with the offering and sale of the Registrable Securities covered by
such prospectus or any amendment or supplement thereto), which documents will be
subject to the review and comment of such Participating Holders and
underwriter(s) in connection with such sale, if any, for a period of at least
three Business Days.  Notwithstanding the foregoing, the Company shall not be
required to take any actions under this section that are not, in the reasonable
opinion of counsel for the Company, in compliance with applicable law;

 

(v)                                 use its reasonable best efforts (A) to
register or qualify all Registrable Securities and other Equity Securities
covered by such registration statement under such state, federal or foreign
securities or blue sky laws where an exemption is not available and as the
Majority Participating Holders or any managing underwriter shall request, (B) to
keep such registration or qualification in effect for so long as such
registration statement remains in effect, (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
Registrable Securities to be sold by the Participating Holders or underwriters
or (D) to cause all Registrable Securities covered by such registration
statement to be registered with or approved by such other local, state, federal,
or foreign 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; provided that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 2.3, (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction;

 

(vi)                              use commercially reasonable efforts to obtain
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, in customary form and covering such
matters of the kind customarily covered by comfort letters as the managing
underwriter therefor or the Majority Participating Holders  reasonably request;

 

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(vii)                           use its reasonable best efforts to furnish, upon
the request of a Participating Holder, to each underwriter and a signed
counterpart to each Participating Holder, an opinion of counsel to the Company
in customary form and covering such matters of the type customarily covered by
legal opinions of such nature;

 

(viii)                        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, any
post-effective amendment to such registration statement or any free writing
prospectus has been filed, 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; (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, any
document incorporated therein by reference, any free writing prospectus or
information conveyed to any purchaser, 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 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 Equity 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;

 

(ix)                              otherwise comply with all applicable rules and
regulations of the SEC, and make available to holders of Equity Securities, 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 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 11(a) of the Securities Act and Rule 158
promulgated thereunder;

 

(x)                                 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;

 

(xi)                              (A) use its reasonable best efforts to cause
all Registrable Securities covered by such registration statement to be listed
on the principal exchange on which

 

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similar Equity 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) subject to Section 4.2, if no similar Equity Securities are
then so listed, use its reasonable best efforts to cause all such Registrable
Securities to be listed on a national securities exchange;

 

(xii)                           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;

 

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

 

(xiv)                       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;

 

(xv)                          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, subject to Section 2.4(b),
participation in “road shows”);

 

(xvi)                       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;

 

(xvii)                    promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter(s) or
Majority Participating Holders 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;

 

(xviii)                 cooperate with each Participating Holder and the
managing underwriter, and its respective counsel in connection with any filings
required to be made with FINRA, the New York Stock Exchange, the NASDAQ Stock
Market, or any other securities exchange on which such Registrable Securities
are traded or are to be traded;

 

(xix)                       cooperate with the Participating Holders and the
managing underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such

 

14

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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, subject to applicable securities laws, of
the Participating Holders at 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,
subject to applicable securities laws;

 

(xx)                          take all reasonable action to ensure that any free
writing prospectus utilized in connection with any registration covered by
Section 2.1 or 2.2 complies in all material respects with the Securities Act, is
filed in accordance with the Securities Act to the extent required thereby, is
retained in accordance with the Securities Act to the extent required thereby
and, when taken together with the related prospectus, prospectus supplement and
related documents, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; and

 

(xxi)                       in connection with any underwritten offering
(whether or not off a shelf registration statement), if at any time the
information conveyed to a purchaser at the time of sale includes any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, promptly file with the SEC such amendments or
supplements to such information as may be necessary so that the statements as so
amended or supplemented will not, in light of the circumstances, be misleading.

 

(b)                                 Each Holder agrees that, in connection with
any offering pursuant to this Agreement, it will not prepare or use or refer to,
any “free writing prospectus” (as defined in Rule 405 of the Securities Act)
without the prior written authorization of the Company (which authorization
shall not be unreasonably withheld), and will not distribute any written
materials in connection with the offer or sale of the Registrable Securities
pursuant to any registration statement hereunder other than the Prospectus and
any such free writing prospectus so authorized.

 

(c)                                  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)(viii)(C) or (E), each Participating Holder will
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)(viii)(C), its receipt of notice from the Company that
such stop order or suspension of effectiveness is no longer in effect, and in
the case of Section 2.3(a)(viii)(E), its receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2.3(a)(viii)(E) (such
period, the “Suspension Period”).

 

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(d)                                 In connection with an underwritten offering
related to a shelf take down, the Company will comply with all of these
registration procedures as reasonably appropriate for the relevant Demand
Registration Statement.

 

2.4.                            Underwritten Offerings.

 

(a)                                 Demand Underwritten Offerings.  If requested
by the underwriter, placement agent or initial purchaser for any offering
pursuant to a registration requested under Section 2.1, the Company shall enter
into a customary underwriting agreement, placement agent agreement or initial
purchaser agreement with the managing underwriter(s), placement agent or initial
purchaser selected by the Initiating Holder pursuant to Section 2.1(f).  Such
agreement shall be reasonably satisfactory in form and substance to the Company
and the Initiating Holder for the applicable Demand Registration Statement 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.  The Initiating Holder may,
at its 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, placement agent or initial purchaser 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 underwriter, placement agent or
initial purchaser under the relevant agreement be conditions precedent to the
obligations of each Participating Holder; provided, however, that the Company
shall not be required to make any representations or warranties with respect to
written information specifically provided by a Participating Holder for
inclusion in the registration statement.  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, its intended method of distribution, and disclosures
related to the foregoing; and any liability of any Participating Holder to any
underwriter, placement agent or initial purchaser or other Person under such
underwriting agreement, placement agent agreement or initial purchaser 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
underwriting discounts and commissions) that it derives from such registration.

 

(b)                                 Limitation on Marketed Demand Underwritten
Offerings.  A Holder will not have the right to effect a sale of Registrable
Securities pursuant to a registration statement filed pursuant to Section 2.1
using a prospectus in a

 

16

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customary underwritten marketed offering until after the Company has completed a
Qualified Public Offering (such underwritten offering, a “Marketed Underwritten
Offering”).  Subject to any lock-up agreement entered into pursuant to
Section 2.7(b), following the date on which the Company has completed a
Qualified Public Offering, each Holder will have the right to sell securities
pursuant to a Marketed Underwritten Offering using a Demand Registration
Statement or Piggyback Registration Statement (as determined by such Holder) up
to two times per year until it no longer holds any Registrable Securities.  For
the avoidance of doubt, (i) any Holder may submit a Holder Demand, and, subject
to the terms and conditions herein, the Company shall be obligated to file a
Demand Registration Statement, have such Demand Registration Statement declared
effective, maintain the effectiveness of such registration statement, and comply
with its other obligations hereunder prior to a Qualified Public Offering and
(ii) any Participating Holder may offer for sale and sell Registrable Securities
pursuant to a Demand Registration Statement using a placement agent or broker
(which shall not constitute a Marketed Underwritten Offering) or any method
other than a Marketed Underwritten Offering from time to time, without
limitation on amount of times, prior to and following a Qualified Public
Offering.  In a Marketed Underwritten Offering, (i) the underwriter(s) will be
selected by the Initiating Holder in accordance with Section 2.1(e) and (ii)
upon the request of the managing underwriter for such offering, appropriate
senior management of the Company (including the chief executive officer and
chief financial officer) will participate in any “roadshow” reasonably requested
by such underwriter, subject to reasonable notice to such participant; provided,
however, that such Holder shall bear any third party costs and expenses of the
“roadshow”, including, for the avoidance of doubt, the third party costs and
expenses incurred by the Company or its officers and directors in connection
with the “roadshow.”

 

(c)                                  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 agreement.  The Majority 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; provided, however,
that the Company shall not be required to make any representations or warranties
with respect to written information specifically provided by a Participating
Holder for inclusion in the

 

17

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registration statement.  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,
its intended method of distribution and disclosures related to the foregoing;
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 underwriting discounts and commissions) that it
derives from such registration.

 

(d)                                 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 customary 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
timely 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

 

18

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reasonable investigation within the meaning of the Securities Act, and include
such information in such document prior to the filing thereof as such
Participating Holders or managing underwriter(s), if any, reasonably may
request; provided that any Participating Holder or representative thereof
requesting or receiving such information shall agree to be bound by reasonable
confidentiality agreements and procedures with respect thereto.

 

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 Participating
Holders and their Affiliates, (ii) each of the Participating Holders and their
Affiliate’s respective officers, directors, members, partners, equity holders,
employees, representatives and agents and (iii) each Person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) any Person referred to in clause (i) or (ii) (any Person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as the
“Indemnitees”), from and against any losses, penalties, fines, liens, judgments,
suits, claims, damages, liabilities, costs and expenses (including 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, relate to or are based upon (A) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Equity Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus contained therein, any amendment or
supplement thereto, any documents incorporated by reference therein, or any free
writing prospectus or road show utilized in connection therewith, (B) 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
(C) any violation by the Company of any applicable 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 its reasonable legal and other fees
and 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 any such
registration statement, any such preliminary prospectus, final prospectus, any
amendment or supplement thereto or document

 

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incorporated by reference therein, or any such free writing prospectus or road
show, in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Indemnitee for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
amendment, supplement, document or free writing prospectus or out of sales of
Registrable Securities made during a Suspension Period after notice is given
pursuant to Section 2.3(c) hereof and such notice is provided in accordance with
Section 5.3(c) hereof.

 

(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, indemnify and hold harmless, to the
fullest extent permitted by law the Company, each director and officer of the
Company, and any Person controlling (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) the Company and its
Affiliates, and the Company and its Affiliates respective officers, directors,
partners, employees, representatives and agents of each such Person, to the same
extent as the foregoing indemnity from the Company to each of the Indemnitees,
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 for use in the
preparation of such registration statement, any preliminary prospectus, final
prospectus contained therein, any amendment or supplement thereto, or any free
writing prospectus or road show utilized in connection therewith, and such
Participating Holder shall reimburse such indemnified party for any reasonable
legal or any other fees or expenses reasonably incurred by them in connection
with investigating or defending any such Loss; provided, however, that the
aggregate liability of such indemnifying party under this Section 2.6(b) shall
be limited to the amount of proceeds (net of 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, equity holders, employees, advisors, representatives (legal or
otherwise), 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

 

20

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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) after electing to participate in
and assume the defense of such action or proceeding, the indemnifying party
fails to defend diligently the action or proceeding within 10 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 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

 

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without its written consent, which consent shall not be unreasonably withheld,
delayed, or conditioned, 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 action other than the payment of money by the
indemnifying party.

 

(f)                                   Contribution.  If for any reason the
indemnification provided for in Section 2.6(a), Section 2.6(b) or
Section 2.6(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 Section 2.6(a), Section 2.6(b) or Section 2.6(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 hand, 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 Equity Securities covered by such
registration statement as well as any other relevant equitable considerations. 
The relative fault shall be determined by a Selected Court with 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

 

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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 11(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 Section 2.6(a), Section 2.6(b) or
Section 2.6(g) shall be deemed to include, subject to the limitations set forth
in Section 2.6(a), Section 2.6(b) and Section 2.6(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 Equity Securities under any state, federal or foreign
securities or blue sky laws.  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 Equity Securities.

 

(a)                                 For the Company.  If the Company receives
notice from a Holder that it intends to effect a sale of Registrable Securities
pursuant to an underwritten offering (including without limitation a Marketed
Underwritten Offering), the Company agrees that, upon the reasonable request of
the managing underwriter for such offering, the Company shall not effect any
public sale, distribution or other disposition of any of its

 

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Equity Securities or effect any registration of any of such Equity Securities
under the Securities Act (in each case, except registrations (i) solely for
registration of Equity Securities in connection with an employee benefit plan on
Form S-8 or any successor form thereto or (ii) 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, beginning on the date the Company receives such
request until 90 days after the effective date of such sale, plus any customary
extension periods (or such shorter period as the managing underwriter(s) may
require).

 

(b)                                 For the Holders.  In connection with an
underwritten primary sale by the Company of Equity Securities for its own
account, each Holder agrees that for so long as this Agreement is in effect with
respect to such Holder, it will to the extent reasonably requested in writing by
the managing underwriter(s) for such sale, enter into a customary lock-up
agreement; provided, however, that (i) such obligation shall apply only with
respect to a Holder if the same lock-up agreement is entered into by both
(x) all other persons who Beneficially Owns 2% or more of the Equity Securities
and (y) persons who in the aggregate Beneficially Own 80% of the Equity
Securities and (ii) the obligations under such lock-up agreement shall terminate
and be of no further force in effect with respect to a Holder at such time as
such Holder no longer holds Registrable Securities (or such earlier time as set
forth in such lock-up agreement).

 

2.8.                            No Required Sale.  Nothing in this Agreement
shall be deemed to create an independent obligation on the part of any Holder 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, if any Holder
shall desire to transfer any Registrable Securities pursuant to Rule 144, the
Company 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 (a) Rule 144, Rule 144A or Regulation S
under the Securities Act or (b) 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 (which may be by e-mail)
as to whether it has complied with the reporting requirements of the Securities
Act and Exchange Act, (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.

 

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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, conversion,
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 Equity Securities if
such combination or subdivision (i) disproportionately affects any Holder
without regard to such Holder’s size of holdings of Equity Securities or
(ii) would materially 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.

 

SECTION. 3.        Subsequent Registration Rights; No Inconsistent Agreements.

 

3.1.                            No Inconsistent Agreements.  Without the prior
written consent of each Holder, the Company will not, on or after the date of
this Agreement, enter into any agreement with respect to its Equity Securities
that is inconsistent in any respect with the rights granted to the Holders in
Section 2 or otherwise conflicts with the provisions of Section 2.  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.

 

SECTION. 4.        Other Agreements.

 

4.1.                            Consent. Each Holder hereby agrees with the
Company that if the Company seeks such Holder’s consent to approve the
Incorporation, and as a result of such Incorporation, the rights of such Holder
as a holder of Equity Securities are not disproportionately affected or
materially impaired or materially adversely affected, such Holder will provide
its consent to such Incorporation, such consent to be in the form acceptable to
a majority of the lenders party to the Credit Agreement, dated as of
December 31, 2010, by and among Herbst Gaming, LLC, Wilmington Trust Company, as
administrative agent, and the lenders party thereto, as amended or supplemented
from time to time.

 

4.2.                            Listing of Equity Securities.

 

At any time after October 1, 2012, a Holder holding Registrable Securities may
require the Company to effect the listing of the Equity Securities on the NASDAQ
Stock Market or the New York Stock Exchange by delivering a written request (the
“Listing Demand Notice”) to the Company.  If and whenever the Company is
required to effect the listing of the Equity Securities under this Section 4.2
hereof, the Company shall use its reasonable best efforts to consummate the
listing of the Equity Securities (including all Registrable Securities) on the
NASDAQ Stock Market or the New York Stock Exchange within 365 days after receipt
by the Company of the Listing Demand Notice.

 

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SECTION. 5.        Miscellaneous.

 

5.1.                            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 and
each Holder, unless such amendment, waiver, modification or supplement affects
only the Company and a particular Holder, in which case only the written
agreement of the Company and such Holder is required.  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 remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

 

5.2.                            Assignment; Third Party Beneficiaries.

 

(a)                                 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. 
Any Holder that ceases to own beneficially any Registrable Securities shall
cease to be subject to the terms hereof (other than (i) the provisions of
Section 2.6 applicable to such Holder with respect to any offering of
Registrable Securities completed before the date such Holder ceased to own any
Registrable Securities and (ii) this Section 5).

 

(b)                                 The Company may not assign any of its rights
or delegate any of its duties under this Agreement without the prior written
consent of each Holder.

 

(c)                                  Any Holder may, at its election and at any
time or from time to time, assign some or all of its rights and delegate some or
all of its duties under this Agreement, in whole or in part, (i) to an Affiliate
or (ii) to any Person to whom the Holder sells, assigns or otherwise transfers
any Equity Securities if following such transfer (but not before such transfer)
such Person would Beneficially Own 10% or more of the Equity Securities (each,
along with a Person described in clause (d) below, an “Assignee”); provided,
that, no such assignment shall be binding upon or obligate the Company to any
such Assignee (i) unless and until the Assignee delivers to the Company (A) a
written notice stating the name and address of the Assignee and identifying the
Equity Securities with respect to which such rights are being assigned, if any,
(B) 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

 

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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) or
(ii) if such sale, assignment other transfer of any Equity Securities is
prohibited by a Gaming Authority.

 

(d)                                 Subject to Section 2.2, if, prior to the
time at which a Demand Registration Statement is declared effective, a Holder
sells, assigns or otherwise transfers any Equity Securities to any Person who
(i) is not treated as an Assignee pursuant to clause (c)(ii) above and
(ii) immediately after such transfer may not freely sell all such Equity
Securities without any limitation under the Securities Act, the Company shall
include such Equity Securities in such Demand Registration Statement and, with
respect to such Demand Registration Statement, such Person shall be treated as
an Assignee and have the rights of a Holder under this Agreement (which, for the
avoidance of doubt, shall not include the right to be an Initiating Holder).

 

(e)                                  Each Indemnitee shall be a third party
beneficiary of the provisions of Section 2.6 and shall be entitled to enforce
such provisions directly.

 

5.3.                            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.  Any notice, request, demand,
claim or other communication hereunder shall be sent (i) by personal delivery
(including receipted courier service) or overnight delivery service, (ii) if to
the Company, by facsimile during normal business hours, with confirmation of
receipt, to the number indicated, (iii) by reputable commercial overnight
delivery service courier or (iv) by registered or certified mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below:

 

(a)                                 If to any of the Holders, to the addresses
set forth on this signature page hereto.

 

(b)                                 If to the Company, to:

 

Affinity Gaming, LLC

3440 West Russell Road

Las Vegas, Nevada  89118

Attention:  General Counsel

Facsimile: (702) 227-9498

 

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with a copy (which shall not constitute notice) to:

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attention:  Jason K. Zachary

Facsimile:  (212) 446-6460

 

All such notices, requests, consents and other communications shall be deemed to
have been given when received.  Any party may change its facsimile number or its
address to which notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other parties hereto notice in the
manner then set forth.

 

5.4.                            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 conflicts of law principles thereof.

 

(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
federal and state courts located in the State of New York in New York County
(collectively, 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 5.3 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.  The court shall have the authority to award reasonable
legal fees and court costs to the prevailing party.

 

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(c)                                  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

5.5.                              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 hereof), 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.

 

5.6.                              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.

 

5.7.                              Severability.  Whenever possible, each
provision or portion of any provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law but the invalidity
or unenforceability of any provision or portion of any provision of this
Agreement in any jurisdiction shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision or portion of any
provision, in any other jurisdiction.  Upon such a determination, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner so
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.

 

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5.8.                              Entire Agreement.  This Agreement constitutes
the entire agreement between the parties, and supersedes all prior agreements
and understandings, oral and written, between the parties hereto with respect to
the subject matter hereof.

 

5.9.                              Termination.  This Agreement (including, for
the avoidance of doubt, any obligation to enter into any lock-up agreement)
shall terminate with respect to any Holder when such Holder no longer owns any
Registrable Securities; provided that any rights of a Holder or any other
Indemnitee under Section 2.6 shall continue indefinitely.

 

5.10.                        Confidentiality.  This Agreement shall be treated
as confidential by the parties hereto and shall not be used or disclosed to
third parties except as permitted under this Agreement or as required by law or
by or through a judicial, administrative, governmental or self-regulatory
organization, or in connection with any process, investigation, inquiry or
proceeding thereby.

 

5.11.                        Counterparts.  This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument.

 

5.12.                        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. References to statutory
provisions shall be deemed to include successor provisions.  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.

 

[Remainder of Page Intentionally Left Blank]

 

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

 

 

AFFINITY GAMING, LLC

 

 

 

 

 

By:

/s/ David D. Ross

 

 

Name:

David D. Ross

 

 

Title:

Chief Executive Officer

 

REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE

 

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HOLDERS:

 

 

 

SPH INVESTMENT, LLC

 

 

 

 

 

By:

/s/ Frederick H. Fogel

 

 

Name:

Frederick H. Fogel

 

 

Title:

Authorized Signatory

 

 

 

Copies of all notices to each of the above holders must be

 

sent to each of:

 

 

 

Vick Sandhu

 

vsandhu@silverpointcapital.com

 

Tel: 203-542-4255

 

Fax: 203-542-4355

 

c/o Silver Point Capital

 

2 Greenwich Plaza, 1st Floor

 

Greenwich, CT 06830

 

 

 

Credit Admin

 

creditadmin@silverpointcapital.com

 

Tel: 203-542-4436

 

Fax: 203-542-4536

 

c/o Silver Point Capital

 

2 Greenwich Plaza, 1st Floor

 

Greenwich, CT 06830

 

 

 

Tim Lavelle

 

tlavelle@silverpointcapital.com

 

Tel: 203-542-4214

 

Fax: 203-542-4314

 

c/o Silver Point Capital

 

22 W Washington, Ste 1500

 

Chicago, IL 60657

 

 

 

with a copy (which shall not constitute notice) to:

 

 

 

Fried, Frank, Harris, Shriver & Jacobson LLP

 

One New York Plaza

 

New York, New York 10004

 

Attn: Jonathan S. Adler

 

REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE

 

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