ex102to8k05558_08172009.htm


    Exhibit 10.2

     

    
      
         

         

          
            

          

        

         

      

      REGISTRATION
RIGHTS AGREEMENT



       

      by and
between



       

      Kien Huat
Realty III Limited



       

      and



       

      Empire
Resorts, Inc.



       

       

       

      _____________________



       

      Dated as
of August 19, 2009

       

       

      
         

        
          

        

      

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      TABLE
OF CONTENTS

       

      
        
          
            
              
                	 	 	
                        Page

                      
	
                        Section
      1

                      	
                        Certain
      Definitions

                      	
                        1

                      
	
                        Section
      2

                      	
                        Registration

                      	
                        5

                      
	
                        Section
      3

                      	
                        Piggyback
      Registrations

                      	
                        8

                      
	
                        Section
      4

                      	
                        Suspension
      Periods

                      	
                        9

                      
	
                        Section
      5

                      	
                        Holdback
      Agreements

                      	
                        10

                      
	
                        Section
      6

                      	
                        Registration
      Procedures

                      	
                        10

                      
	
                        Section
      7

                      	
                        Registration
      Expenses

                      	
                        15

                      
	
                        Section
      8

                      	
                        Indemnification

                      	
                        15

                      
	
                        Section
      9

                      	
                        Securities
      Act Restrictions

                      	
                        18

                      
	
                        Section
      10

                      	
                        Transfers
      of Rights

                      	
                        18

                      
	
                        Section
      11

                      	
                        Miscellaneous

                      	
                        19

                      
	 
      	 
      	 
      
	
                        Annex
      A

                      	
                        Form
      of Opinions of Counsel

                      	 
      


              

            

          

        

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is made and entered into as of August 19, 2009, by and between Kien Huat Realty
III Limited, an Isle of Man corporation (the “Investor”),
and Empire Resorts, Inc., a Delaware corporation (the “Company”).

       

      WHEREAS,
the Company and the Investor are parties to that certain Investment Agreement,
dated August 19, 2009 (the “Investment
Agreement”), pursuant to which the Company has agreed to issue an
aggregate of up to 34,506,040 shares of common stock, par value $.01 per share
(the “Company
Shares”) in exchange for the Purchase Price (as defined in the Investment
Agreement); and

       

      WHEREAS,
in connection with the consummation of the transactions contemplated by the
Investment Agreement, the parties desire to enter into this Agreement in order
to create certain registration rights for the Investor as set forth
below.

       

      NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valid consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:

      
         

        SECTION
1


         

        CERTAIN
DEFINITIONS

         

        1.1           As
used in this Agreement, the terms below shall have the meanings specified
below:

         

        “Adverse
Effect” shall have the meaning specified in Section
2(d).

         

        “Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person.  For purposes of this definition, “control”
(including, with correlative meaning, the terms “controlling”
and “controlled”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.

         

        “Agreement”
shall have the meaning specified in the preamble to this Agreement.

         

        “Availability
Default” shall have the meaning specified in Section
2(g).

         

        “beneficially
own” means, with respect to any Person, securities of which such Person
or any of such Person’s Affiliates, directly or indirectly, has “beneficial
ownership” as determined pursuant to Rule 13d-3 and Rule 13d-5
of the Exchange Act, including securities beneficially owned by others with whom
such Person or any of its Affiliates has agreed to act together for the purpose
of acquiring, holding, voting or disposing of such securities; provided
that a Person shall not be deemed to “beneficially
own” (a) securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person’s Affiliates until such tendered
securities are accepted for payment, purchase or exchange; (b) any security
as a result of an oral or written agreement, arrangement or understanding to
vote such security if such agreement, arrangement or
understanding:  (i) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and (ii) is
not also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report).

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        “Business
Day” means a day other than a Saturday, a Sunday or a day on which
commercial banking institutions in the State of New York are authorized or
obligated by law to close.

         

        “Company”
shall have the meaning specified in the preamble to this Agreement.

         

        “Company
Shares” shall have the meaning specified in the first recital to this
Agreement.

         

        “Effectiveness
Default” shall have the meaning specified in Section
2(g).

         

        “Exchange
Act” means the Securities Exchange Act of 1934 and the rules promulgated
by the SEC thereunder.

         

        “Filing
Default” shall have the meaning specified in Section
2(g).

         

        “FINRA”
means the Financial Industry Regulatory Authority created in July 2007 through
the consolidation of the National Association of Securities Dealers and the
member regulation, enforcement and arbitration functions of the
NYSE.

         

        “Form S-3”
means a registration statement on Form S-3 under the Securities Act or such
successor forms thereto permitting registration of securities under the
Securities Act.

         

        “Governmental
Entity” means any federal, state, local or foreign court, government or
political subdivision or department thereof, or any governmental administrative
or regulatory body.

         

        “Holdback
Agreement” shall have the meaning specified in Section 5.

         

        “Holdback
Period” shall have the meaning specified in Section 5.

         

        “Indemnified
Party” shall have the meaning specified in Section 8(c).

         

        “Indemnifying
Party” shall have the meaning specified in Section 8(c).

         

        “Initial
Registration Request” shall have the meaning specified in Section 2(a).

         

        “Investor”
shall have the meaning specified in the preamble to this
Agreement.  References herein to the Investor shall apply to Permitted
Transferees who obtains the rights of the Investor pursuant to Section
10, provided
that (a) all obligations of the Investor and its Permitted Transferees hereunder
shall be several, and not joint and several; and (b) for purposes of all
thresholds and limitations herein, the actions of the Investor and any Permitted
Transferees shall be aggregated.

         

        “Investment
Agreement” means the agreement specified in the first recital hereto, as
such agreement may be amended, supplemented or otherwise modified from time to
time.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        “IRA”
means that certain Investor Rights Agreement, dated as of July 27, 2009, by and
among the Company and the Warrantholders.

         

        “Minimum
Amount” means, at any time, 5% of the total Company Shares then
outstanding.

         

        “Park
Avenue Holders” means (a) each of the persons who executes the IRA as
“Warrantholders”; and (b) any other person (i) who is a transferee, directly or
indirectly, of shares registrable pursuant to the IRA from a Warrantholder and
(ii) who shall have become a party to the IRA in accordance with its
terms.

         

        “Person”
means an individual, corporation, partnership, trust, limited liability company,
branch of any legal entity, unincorporated organization, joint stock company,
joint venture, association, other entity or Governmental Entity.

         

        “Permitted
Transferee” means any Affiliate of the Investor to whom rights and
obligations are transferred under this Agreement.

         

        “Piggyback
Registration” shall have the meaning specified in Section 3(a).

         

        “Prospectus”
means the prospectus or prospectuses (whether preliminary or final) included in
any Registration Statement and relating to Registrable Securities, as amended or
supplemented, and including all material incorporated by reference in such
prospectus or prospectuses.

         

        “Purchase
Price” shall have the meaning specified in the Investment
Agreement.

         

        “Registrable
Securities” means, at any time, (a) Company Shares issued to the Investor
pursuant to the terms of the Investment Agreement or acquired and held by the
Investor whether or not from the Company; and (b) any Company Shares or any
other security issued by the Company after the date hereof in respect of the
Company Shares referenced in (a) by way of a share dividend or share split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization, until, in respect of any Company Shares, the earliest
to occur of the date on which (i) the resale of such Company Shares has been
registered pursuant to the Securities Act and such Company Shares have been
disposed of in accordance with the Registration Statement relating to such
resale; (ii) such Company Shares are sold to the Company; and (iii) the entire
amount of the Registrable Securities held by the Investor may be sold in a
single sale pursuant to Rule 144 of the Securities Act.

         

        “Registration”
shall have the meaning specified in Section
2(a).

         

        “Registration
Expenses” shall have the meaning specified in Section 7(a).

         

        “Registration
Statement” means any registration statement of the Company which covers
any of the Registrable Securities pursuant to the provisions of this Agreement
whether or not pursuant to a request of the Investor, including the Prospectus,
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all documents incorporated by
reference in such Registration Statement.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        “S-3
Shelf Registration Statement” means a Registration Statement (including
any amendment or supplement thereto) on Form S-3 for the continuous sale or
resale of securities including Registrable Securities.

         

        “SEC”
means the Securities and Exchange Commission.

         

        “Securities
Act” means the Securities Act of 1933 and the rules promulgated by the
SEC thereunder.

         

        “Suspension
Period” shall have the meaning specified in Section 4.

         

        “Termination
Date” means the first date on which there are no Registrable
Securities.  For the avoidance of doubt, this Agreement shall not
terminate upon the termination of the Investment Agreement.

         

        “underwritten
offering” means a registered offering in which securities of the Company
are sold to one or more underwriters on a firm commitment basis for offering to
the public.

         

        1.2           Interpretation.  When
a reference is made in this Agreement to an article, section, exhibit or
schedule, such reference shall be to an article or section of, or an
exhibit or schedule to, this Agreement unless otherwise
indicated.  The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.  Whenever the words
“include,”
“includes”
or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.”  Unless the context otherwise requires, the
words “hereof,”
“herein”
and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.  All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.  The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine genders of
such term.  Any agreement, instrument or statute defined or referred
to herein or any agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended, modified,
supplemented or replaced, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor agreements, instruments or statutes.  Any agreement or
instrument referred to herein shall include reference to all exhibits, schedules
and other documents or agreements attached thereto or incorporated
therein.

         

        SECTION
2


         

        REGISTRATION

         

        (a)           Right
to Request Registration.  Subject to the provisions of this
Agreement, at any time until the Termination Date, the Investor may request that
the Company register (a “Registration”)
for public resale by the Investor all or any portion of the Registrable
Securities held by the Investor; provided,
however,
that immediately upon execution of this Agreement, the Investor shall be deemed
to have requested that the Company register all of the Company Shares issued to
the Investor pursuant to the terms of the Investment Agreement on an S-3 Shelf
Registration Statement (the “Initial
Registration Request”).  Upon such request, and subject to
Sections
4 and 6,
the Company shall use reasonable best efforts (i) to, at any time when the
Company is eligible to use Form S-3, file an S-3 Shelf Registration Statement
(or any amendment or supplement thereto) covering the number of Registrable
Securities specified in such request under the Securities Act for public resale
in accordance with the method of disposition specified in such request within 15
Business Days after the date of the Investor’s written request therefor; (ii) if
the Company is not eligible to file an S-3 Shelf Registration Statement, to file
a Registration Statement (other than an S-3 Shelf Registration Statement)
registering for resale such number of Registrable Securities as requested to be
so registered pursuant to this Section
within 20 Business Days after the date of the Investor’s request therefor; and
(iii) to cause such Registration Statement to be declared effective by the SEC
as soon as practicable thereafter.  If permitted under the Securities
Act, such Registration Statement shall be one that is automatically effective
upon filing.  Notwithstanding anything contained herein to the
contrary, the Company shall not be obligated to (i) effect a Registration
pursuant to this Section
2(a) within 120 days after the effective date of a previous Registration;
(ii) to effect a Registration pursuant to this Section
2(a) unless the request is for a number of Registrable Securities with a
market value that is equal to at least $100,000 as of the date of such request;
or (iii) to effect more than five Registrations pursuant to this Section
2(a).

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        (b)           Underwritten
Offerings.  At the request of the Investor, any sale of
Registrable Securities, whether pursuant to a Registration or an existing S-3
Shelf Registration Statement, shall be an underwritten offering; provided, however,
that (based on the then-current outstanding Company Shares) the number of
Registrable Securities included in such offering would be at least equal to the
Minimum Amount; and provided
further,
that the Company shall not be required to provide for or cooperate with a sale
of Registrable Securities, whether pursuant to a Registration or an existing S-3
Shelf Registration Statement, pursuant to an underwritten offering as requested
by the Investor, on more than two occasions in any 12-month period unless
consented to by the Company.

         

        (c)           Selection
of Underwriters.  If any of the Registrable Securities are to
be sold in an underwritten offering initiated by the Investor, the Investor
shall select the managing underwriter or underwriters to lead the offering,
subject to the reasonable consent of the Company.

         

        (d)           Priority.  The
Company may include Company Shares other than Registrable Securities in a
Registration for any accounts (including for the account of the Company) on the
terms provided in this Agreement.  For any underwritten offering, the
Company may include Company Shares other than Registrable Securities for any
accounts (including for the account of the Company), but only with the consent
of the managing underwriters of such offering.  If the managing
underwriters of the requested offering advise the Company and the Investor that
in their opinion the number of Company Shares proposed to be included in the
offering exceeds the number of Company Shares that can be sold in such
underwritten offering without having the effect of materially delaying or
jeopardizing the success of the offering (including the price per share of
Company Shares proposed to be sold in such offering) (an “Adverse
Effect”), the Company shall include in such offering (i) first, the
number of Registrable Securities that the Investor proposes to sell; (ii)
second, the number of Company Shares proposed to be included therein by any Park
Avenue Holder thereof, pro rata among such Park Avenue Holders on the basis of
the number of Company Shares owned by each such Park Avenue Holder; and (iii)
third, the number of Company Shares proposed to be included therein by any other
Persons (including Company Shares to be sold for the account of the Company)
allocated among such Persons in such manner as the Company may
determine.  If the number of Company Shares that the managing
underwriters determine can be sold in such underwritten offering without having
an Adverse Effect is less than the number of Company Shares proposed to be
registered pursuant to clause (i) above by the Investor, the full amount of
Company Shares to be sold shall be allocated to the Investor.

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

        (e)           Right
to Effect Sales.  The Investor shall be entitled, at any time
and from time to time when an S-3 Shelf Registration Statement is effective and
until the Termination Date, to offer and sell such Registrable Securities as are
then registered pursuant to such Registration Statement, but only upon not less
than 10 Business Days’ prior written notice to the Company (if such sale is to
be underwritten) or such other period as may be reasonably necessary for the
Company to comply with the covenants contained in Section
6(a), in each case to the extent relevant to such
offering.  The Investor shall give the Company prompt written notice
of the consummation of each such sale (whether or not
underwritten).

         

        (f)           Effective
Period of Registration Statements.

         

        (i)           The
Company shall use reasonable best efforts to keep the Registration Statement
effective for a period of 366 days, in the case of an S-3 Shelf Registration
Statement, or 180 days in the case of any other Registration Statement or, if
shorter in each case, until the first to occur of (x) the date on which all
Registrable Securities covered by such Registration Statement shall have been
sold by the Investor; and (y) the Termination Date, provided
that such period in (x) shall be extended by the number of days in any
Suspension Period commenced pursuant to Section
4 during such period (as it may be so extended) and by the number of days
in any period commenced during such period (as it may be so
extended).

         

        (g)           Liquidated
Damages.  Subject to the terms and conditions of this Agreement
(including Sections
4 and 6
hereof), if the Company does not (i) file an S-3 Shelf Registration Statement
(or such other Registration Statement as may be appropriate in the
circumstances) as and when required under this Agreement with respect to any
Registrable Securities, other than as a result of the SEC being unable to accept
such filings (a “Filing
Default”); or (ii) cause (A) such S-3 Shelf Registration Statement (or
such other Registration Statement) to be declared effective by the SEC; and (B)
such Registrable Securities to be approved for listing on NASDAQ within 10
Business Days of the Investor request (an “Effectiveness
Default”), then the Company shall pay the Investor (or, if applicable,
the relevant Permitted Transferee(s)) cash in an amount equal to 1% of the value
of such Registrable Securities held by the Investor (or, if applicable, the
relevant Permitted Transferee(s)) at the close of business on the second
Business Day following such Filing Default or Effectiveness
Default.  Following effectiveness of the Registration Statement and
listing of the Registrable Securities on NASDAQ, subject to the terms and
conditions of this Agreement (including Sections
4 and 6
hereof), if at any time the Registration Statement ceases to be effective and
available for resale of the Registrable Securities covered by such Registration
Statement (an “Availability
Default”), the Company shall pay the Investor (or such Permitted
Transferee(s)) cash in an amount equal to 1% of the value of the Registrable
Securities subject to such Registration Statement (or, if applicable, the
relevant Permitted Transferees) for each month that such Availability Default
continues (pro rated for any partial month).  Payment of liquidated
damages resulting from an Availability Default shall be made on the first day of
each month or such earlier date as such Availability Default shall have been
cured.  Any amount due but not paid by the Company pursuant to this
subsection shall bear interest at a daily compounded rate equal to 12% per annum
or the highest rate permitted by applicable law, whichever is lower, from and
including the due date therefor through but excluding the date of
payment.  Liquidated damages payable hereunder shall be paid by wire
transfer of immediately available funds to an account designated in writing by
the Investor to the Company.

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        (h)           Investment
Agreement Restrictions.  Nothing in this Agreement shall affect
the provisions of the Investment Agreement related to Company Shares, which
shall apply independently hereof in accordance with the terms
thereof.

         

        SECTION
3


         

        PIGGYBACK
REGISTRATIONS

         

        (a)           Right
to Piggyback.  Whenever prior to the Termination Date the
Company proposes to register any Company Shares under the Securities Act (other
than on a registration statement on Form S-8 or S-4), whether for its own
account or for the account of one or more holders of Company Shares (other than
the Investor), and the form of registration statement to be used may be used for
any registration of Registrable Securities (a “Piggyback
Registration”), the Company shall give written notice to the Investor of
its intention to effect such a registration and, subject to Sections 3(b)
and 3(c),
shall include in such registration statement and in any offering of Company
Shares to be made pursuant to that registration statement all Registrable
Securities with respect to which the Company has received a written request for
inclusion therein from the Investor within five Business Days after the
Investor’s receipt of the Company’s notice or, in the case of a primary
offering, such shorter time as is reasonably specified by the Company in light
of the circumstances (provided
that only Registrable Securities of the same class or classes as Company Shares
being registered may be requested to be included).  The Company shall
have no obligation to proceed with any Piggyback Registration and may abandon,
terminate and/or withdraw such registration for any reason at any
time.  If the Company or any other Person other than the Investor
proposes to sell Company Shares in an underwritten offering pursuant to a
registration statement on Form S-3 under the Securities Act, such offering shall
be treated as a primary or secondary underwritten offering pursuant to a
Piggyback Registration.

         

        (b)           Priority
on Primary Piggyback Registrations.  If a Piggyback
Registration is initiated as a primary underwritten offering on behalf of the
Company and the managing underwriters advise the Company and the Investor (if
the Investor has elected to include Registrable Securities in such Piggyback
Registration) that in their opinion the number of Company Shares proposed to be
included in such offering exceeds the number of Company Shares (of any class)
which can be sold in such offering without having an Adverse Effect, the Company
shall include in such registration and offering (i) first, the number of
Company Shares that the Company proposes to sell; and (ii) second, the
number of Company Shares proposed to be included therein by any Park Avenue
Holder thereof, pro rata among such Park Avenue Holders on the basis of the
number of Company Shares owned by each such Park Avenue Holder; and (iii) third,
the number of Company Shares requested to be included therein by other holders
of Company Shares, including the Investor (if the Investor has elected to
include Registrable Securities in such Piggyback Registration), pro rata among
all such other holders on the basis of the number of Company Shares requested to
be included therein by all such other holders or as such other holders and the
Company may otherwise agree (with allocations among different classes of Company
Shares, if more than one are involved, to be determined by the
Company).  If the number of Company Shares that may be sold is less
than the number of Company Shares proposed to be registered pursuant to clause
(i) above by the Company, the full amount of Company Shares to be sold shall be
allocated to the Company.

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

        (c)           Priority
on Secondary Piggyback Registrations.  If a Piggyback
Registration is initiated as an underwritten registration on behalf of a holder
of Company Shares other than the Investor (and the Investor has elected to
include Registrable Securities in such Piggyback Registration), and the managing
underwriters advise the Company that in their opinion the number of Company
Shares proposed to be included in such registration exceeds the number of
Company Shares (of any class) which can be sold in such offering without having
an Adverse Effect, then the Company shall include in such registration
(i) first, the number of Company Shares requested to be included therein by
the holder(s) initially requesting such registration; (ii) second, the
number of Company Shares requested to be included therein by other holders of
Company Shares, including the Investor (if the Investor has elected to include
Registrable Securities in such Piggyback Registration), pro rata among such
holders on the basis of the number of Company Shares requested to be included
therein by such holders or as such holders and the Company may otherwise agree
(with allocations among different classes of Company Shares, if more than one
are involved, to be determined by the Company); and (iii) third, the number
of Company Shares that the Company proposes to sell.

         

        (d)           Selection
of Underwriters.  If any Piggyback Registration is a primary or
secondary underwritten offering, the Company, subject to the rights of the Park
Avenue Holders pursuant to the IRA, shall have the right to select the managing
underwriter or underwriters to administer any such offering.

         

        (e)           Basis
of Participation.  The Investor may not sell Registrable
Securities in any offering pursuant to a Piggyback Registration unless it (i)
agrees to sell such Company Shares on the same basis provided in the
underwriting or other distribution arrangements approved by the Company and that
apply to the Company and/or any other holders involved in such Piggyback
Registration; and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, lockups and other documents
required under the terms of such arrangements.

         

        SECTION
4


         

        SUSPENSION
PERIODS

         

        The
Company may (i) delay the filing or effectiveness of a Registration
Statement in conjunction with a Registration or (ii) prior to the pricing of any
underwritten offering or other offering of Registrable Securities pursuant to a
Registration, delay such underwritten or other offering (and, if it so chooses,
withdraw any Registration Statement that has been filed), but in each case
described in clauses (i) and (ii) only if the Company determines in its
reasonable judgment (A) that proceeding with such an offering would require the
Company to disclose material information that would not otherwise be required to
be disclosed at that time and that the disclosure of such information at that
time would not be in the Company’s best interest; or (B) that the registration
or offering to be delayed would, if not delayed, materially adversely affect the
Company and its subsidiaries taken as a whole or materially interfere with, or
jeopardize the success of, any pending or proposed material transaction,
including any debt or equity financing, any acquisition or disposition, any
recapitalization or reorganization or any other material transaction, whether
due to commercial reasons, a desire to avoid premature disclosure of information
or any other reason.  Any period during which the Company has delayed
a filing, effectiveness or an offering pursuant to this Section is herein called
a “Suspension
Period.”  The Company shall provide prompt written notice to
the Investor of the commencement and termination of any Suspension Period (and
any withdrawal of a Registration Statement pursuant to this Section) but shall
not be obligated under this Agreement to disclose the reasons
therefor.  The Investor shall keep the existence of any Suspension
Period confidential and refrain from making offers and sales of Registrable
Securities (and direct any other Affiliates making such offers and sales to
refrain from doing so) during each Suspension Period.  In no event (x)
may the Company deliver notice of a Suspension Period to the Investor more than
two times in any calendar year; (y) shall a Suspension Period or Suspension
Periods be in effect for an aggregate of 60 days or more in any calendar year
and (z) may the Company deliver notice of a Suspension Period to the Investor or
otherwise attempt to exercise its rights pursuant to clauses (i) and (ii) of
this Section
4 in connection with the Initial Registration Request.

         

        
          
            
            

          

          
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        SECTION
5


         

        HOLDBACK
AGREEMENTS

         

        The
restrictions in this Section shall apply for as long as the Investor is the
beneficial owner of any Registrable Securities.  If the Company sells
Company Shares or other securities convertible into or exchangeable for (or
otherwise representing a right to acquire) Company Shares in a primary
underwritten offering pursuant to any registration statement under the
Securities Act (but only if the Investor is provided its piggyback rights, if
any, in accordance with Sections
3(a) and 3(b)),
or if any other Person sells Company Shares in a secondary underwritten offering
pursuant to a Piggyback Registration in accordance with Sections
3(a) and 3(c),
and if the managing underwriters for such offering advise the Company (in which
case the Company promptly shall notify the Investor) that a public sale or
distribution of Company Shares outside such offering would materially adversely
affect such offering, then, if requested by the Company, the Investor shall
agree, as contemplated in this Section, not to sell, or request the registration
of, any Registrable Securities (or any securities of any Person that are
convertible into or exchangeable for, or otherwise represent a right to acquire,
any Registrable Securities) for a period (each such period, a “Holdback
Period”) beginning on the 15th day
before the pricing date for the underwritten offering and extending through the
earlier of (a) the 90th day
after such pricing date (subject to customary extensions); and (b) such
earlier day (if any) as may be designated for this purpose by the managing
underwriters for such offering (each such agreement of the Investor, a “Holdback
Agreement”).  Each Holdback Agreement shall be in writing in
form and substance satisfactory to the Company and the managing
underwriters.  Notwithstanding the foregoing, the Investor shall not
be obligated to make a Holdback Agreement unless the Company and each selling
shareholder in such offering also execute agreements substantially similar to
such Holdback Agreement relating to public sales or distributions of Company
Shares outside the applicable offering.

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

        SECTION
6


         

        REGISTRATION
PROCEDURES

         

        (a)           Whenever
the Investor requests that any Registrable Securities be registered pursuant to
this Agreement, the Company shall use reasonable best efforts to effect, as soon
as practicable and otherwise as and when provided herein, the registration and
(if applicable) the sale of such Registrable Securities in accordance with the
intended methods of disposition thereof, and, pursuant thereto, the Company
shall, as soon as practicable as provided herein:

         

        (i)           subject
to the other provisions of this Agreement, use reasonable best efforts to
prepare and file with the SEC a Registration Statement with respect to such
Registrable Securities and cause such Registration Statement to become effective
(unless it is automatically effective upon filing);

         

        (ii)           use
reasonable best efforts to prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the applicable requirements of the
Securities Act and to keep such Registration Statement effective for the
relevant period required hereunder, but no longer than is necessary to complete
the distribution of Company Shares covered by such Registration Statement, and
to comply with the applicable requirements of the Securities Act with respect to
the disposition of all Company Shares covered by such Registration Statement
during such period in accordance with the intended methods of disposition set
forth in such Registration Statement;

         

        (iii)           use
reasonable best efforts to obtain the withdrawal of any order suspending the
effectiveness of any Registration Statement, or the lifting of any suspension of
the qualification or exemption from qualification of any Registrable Securities
for sale in any jurisdiction in the United States;

         

        (iv)           deliver,
without charge, such number of copies of the preliminary and final Prospectus
and any supplement thereto as the Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities of the Investor covered
by such Registration Statement in conformity with the requirements of the
Securities Act;

         

        (v)           use
reasonable best efforts to register or qualify such Registrable Securities under
such other securities or blue sky laws of such U.S. jurisdictions as the
Investor reasonably requests and continue such registration or qualification in
effect in such jurisdictions for as long as the applicable Registration
Statement may be required to be kept effective under this Agreement; provided
that the Company will not be required to (A) qualify generally to do
business in any jurisdiction where it or any of its subsidiaries would not
otherwise be required to qualify but for this subparagraph (v);
(B) subject itself or any of its subsidiaries to taxation in any such
jurisdiction; or (C) consent to general service of process for itself or
any of its subsidiaries in any such jurisdiction;

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

         

        (vi)           notify
the Investor and each distributor of such Registrable Securities identified by
the Investor, at any time when a Prospectus relating thereto would be required
under the Securities Act to be delivered by such distributor, of the occurrence
of any event as a result of which the Prospectus included in such Registration
Statement contains an untrue statement of a material fact or omits a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and, at the request of the Investor,
the Company shall use reasonable best efforts to prepare, as soon as practical,
a supplement or amendment to such Prospectus so that, as thereafter delivered to
any prospective purchasers of such Registrable Securities, such Prospectus shall
not contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;

         

        (vii)           on
the effective date of any Registration Statement filed pursuant to Section
2(a), the Company shall cause to be delivered to the Investor (i) an
opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP, counsel for the
Company (or such other counsel reasonably acceptable to the Investor), dated the
effective date and addressed to the Investor, substantially to the effect set
forth in Annex
A hereto and otherwise in form and substance reasonably satisfactory to
the Investor; and (ii) to the extent allowed pursuant to professional standards,
a customary comfort letter of Friedman LLP, independent accountants to the
Company, dated the effective date and addressed to the Investor, confirming that
they are independent accountants within the meaning of the Securities Act and
the Exchange Act and the respective applicable rules and regulations adopted by
the SEC thereunder and otherwise in form and substance reasonably satisfactory
to the Investor;

         

        (viii)                      in
the case of any block trade (whether on a principal or agency basis) involving
Registrable Securities, whether pursuant to a Registration Statement or
otherwise, take all such other customary and reasonable actions as the Investor
or the relevant dealer may request in order to facilitate the disposition of
such Registrable Securities pursuant to such block trade, including the entry
into any agreement for the indemnification of such dealer and the provision of
opinions of counsel and comfort letters that are consistent with customary and
reasonable practices for such transactions;

         

        (ix)           in
the case of an underwritten offering in which the Investor participates pursuant
to a Registration or a Piggyback Registration, enter into an underwriting
agreement in substantially the form used by the Company at that time for
underwritten offerings of that kind, with appropriate modification, containing
such provisions (including provisions for indemnification, lockups, opinions of
counsel and comfort letters), and take all such other customary and reasonable
actions as the managing underwriters of such offering may request in order to
facilitate the disposition of such Registrable Securities (including, making
members of senior management of the Company available at reasonable times and
places to participate in  “road-shows” that the managing underwriter
determines are necessary to effect the offering);

         

        (x)           to
the extent not prohibited by applicable law, (A) make reasonably available,
for inspection by the Investor, a prospective purchaser in case of a block
trade, or the managing underwriters in case of an underwritten offering and any
attorneys and accountants acting for the Investor, such prospective purchaser or
such managing underwriters, pertinent corporate documents and financial and
other records of the Company and its subsidiaries; (B) cause the Company’s
officers and employees to supply information reasonably requested by the
Investor, such prospective purchaser or such managing underwriters or attorneys
in connection with such offering; (C) make the Company’s independent
accountants available for the Investor’s, such prospective purchaser’s or such
managing underwriter’s due diligence and have them provide customary comfort
letters to the Investor  or such managing underwriters in connection
therewith; and (D) cause the Company’s counsel to furnish customary legal
opinions to the Investor or such  managing underwriters in connection
therewith; provided,
however,
that such records and other information shall be subject to such confidential
treatment as is customary for  due diligence reviews;

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        (xi)           use
reasonable best efforts to cause all such Registrable Securities to be listed on
NASDAQ or any successor primary securities exchange (if any) on which Company
Shares are then listed;

         

        (xii)           provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such Registration Statement and, a reasonable time
before any proposed sale of Registrable Securities pursuant to a Registration
Statement, provide the transfer agent with printed certificates for the
Registrable Securities to be sold or such other applicable evidence of such
Registrable Securities, subject to the provisions of Section 10;

         

        (xiii)                      make
generally available to its shareholders a consolidated earnings statement (which
need not be audited unless required by law, including the Securities Act) for a
period of 12 months beginning after the effective date of the Registration
Statement as soon as reasonably practicable after the end of such period, which
earnings statement shall satisfy the requirements of an earning statement under
Section 11(a) of the Securities Act and Rule 158 thereunder;
and

         

        (xiv)                      promptly
notify the Investor and the managing underwriters of any underwritten offering,
if any:

         

        (A)           when
the Registration Statement, any pre-effective amendment, the Prospectus or any
Prospectus supplement or any post-effective amendment to the Registration
Statement has been filed and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective;

         

        (B)           of
any request by the SEC for amendments or supplements to the Registration
Statement or the Prospectus or for any additional information regarding the
Investor;

         

        (C)           of
the notification to the Company by the SEC of its initiation of any proceeding
with respect to the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement; and

         

        (D)           of
the receipt by the Company of any notification with respect to the suspension of
the qualification of any Registrable Securities for sale under the applicable
securities or blue sky laws of any jurisdiction.

         

        For the
avoidance of doubt, the provisions of clauses (ix), (xiii) and (xiv) of
this Section shall apply only in respect of an underwritten offering and only if
the number of Registrable Securities to be sold in the offering would (based on
the then-current outstanding Company Shares) be at least equal to the Minimum
Amount.

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

        (b)           No
Registration Statement (including any amendments thereto) shall contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein not misleading,
and no Prospectus (including any supplements thereto) shall 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, in each case, except for any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission of a
material fact made in reliance on and in conformity with written information
furnished to the Company by or on behalf of the Investor or any underwriter or
other distributor specifically for use therein.

         

        (c)           At
all times after the Company has filed a Registration Statement with the SEC
pursuant to the requirements of the Securities Act and until the Termination
Date, the Company shall use reasonable best efforts to continuously maintain in
effect the registration of Company Shares under Section 12 of the Exchange
Act and to use reasonable best efforts to file all reports required to be filed
by it under the Securities Act and the Exchange Act.

         

        (d)           The
Company may require the Investor and each distributor of Registrable Securities
as to which any Registration is being effected to furnish to the Company
documentation and information regarding such Person and the distribution of such
securities as the Company may from time to time reasonably request in connection
with such Registration.

         

        (e)           The
Investor agrees by having Company Shares treated as Registrable Securities
hereunder that, upon being advised in writing by the Company of the occurrence
of an event pursuant to Section 6(a)(vi),
the Investor will immediately discontinue (and direct any other Affiliates
making offers and sales of Registrable Securities to immediately discontinue)
offers and sales of Registrable Securities pursuant to any Registration
Statement (other than those pursuant to a plan that is in effect prior to such
time and that complies with Rule 10b5-1 of the Exchange Act) until it is advised
in writing by the Company that the use of the Prospectus may be resumed and is
furnished with a supplemented or amended Prospectus as contemplated by Section 6(a)(vi),
and, if so directed by the Company, the Investor will deliver to the Company all
copies, other than permanent file copies then in the Investor’s possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.

         

        (f)           The
Company may prepare and deliver an issuer free writing prospectus (as such term
is defined in Rule 405 under the Securities Act) in lieu of any supplement
to a Prospectus, and references herein to any “supplement” to a Prospectus shall
include any such issuer free-writing prospectus.  Neither the Investor
nor any other seller of Registrable Securities may use a free writing prospectus
to offer or sell any such shares without the Company’s prior written
consent.

         

        (g)           It
is understood and agreed that any failure of the Company to file a registration
statement or any amendment or supplement thereto or to cause any such document
to become or remain effective or usable within or for any particular period of
time as provided in Section 2,
3,
or 6
or otherwise in this Agreement, due to reasons that are not reasonably within
its control, or due to any refusal of the SEC to permit a registration statement
or prospectus to become or remain effective or to be used because of unresolved
SEC comments thereon (or on any documents incorporated therein by reference)
despite the Company’s good faith and reasonable best efforts to resolve those
comments, shall not be a breach of this Agreement (and will not trigger any
liquidated damages under Section
2(g)).

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

        (h)           It
is further understood and agreed that the Company shall not have any obligations
under this Section at any time on or after the Termination Date, unless an
underwritten offering in which the Investor participates has been priced but not
completed prior to the Termination Date, in which event the Company’s
obligations under this Section shall continue with respect to such offering
until it is so completed (but not more than 90 days after the commencement of
the offering).

         

        (i)           Notwithstanding
anything to the contrary in this Agreement, the Company shall not be required to
file a Registration Statement or include Registrable Securities in a
Registration Statement unless it has received from the Investor, at least five
Business Days prior to the anticipated filing date of the Registration
Statement, information and documents reasonably required by the Company to be
provided by the Investor.

         

        SECTION
7


         

        REGISTRATION
EXPENSES

         

        (a)           All
reasonable expenses incident to the Company’s performance of or compliance with
this Agreement, including all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, FINRA filing fees, listing
application fees, printing expenses, transfer agent’s and registrar’s fees, cost
of distributing Prospectuses in preliminary and final form as well as any
supplements thereto, and fees and disbursements of counsel for the Company and
all independent certified public accountants and other Persons retained by the
Company (but not including any underwriting discounts or commissions
attributable to the sale of Registrable Securities or fees and expenses of
counsel and any other advisors representing any underwriters or other
distributors), shall be borne by the Company (such expenses being herein called
“Registration
Expenses”).  The Investor shall bear the cost of all
underwriting discounts and commissions associated with any sale of Registrable
Securities and shall pay all of its own costs and expenses of any sale under
this Agreement, including all fees and expenses of any counsel (and any other
advisers) representing the Investor and any stock transfer taxes.

         

        (b)           The
obligation of the Company to bear the expenses described in Section 7(a)
shall apply irrespective of whether a registration, once properly demanded or
requested becomes effective or is withdrawn or suspended; provided,
however,
that Registration Expenses for any Registration Statement withdrawn solely at
the request of the Investor (unless withdrawn following commencement of a
Suspension Period pursuant to Section 4)
shall be borne by the Investor.

         

        
          SECTION
8


           

          INDEMNIFICATION

           

          (a)           The
Company shall indemnify, to the fullest extent permitted by law, the Investor
and each Person who controls the Investor (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities, judgments, costs
(including reasonable costs of investigation) and expenses (including reasonable
attorneys’ fees) arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus or any amendment thereof or supplement thereto (including any “free
writing prospectus” filed by the Company (as defined in Rule 433 under the
Securities Act)) or arising out of or based upon any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are made in
reliance and in conformity with information furnished in writing to the Company
by the Investor expressly for use therein.  In connection with an
underwritten offering in which the Investor participates conducted pursuant to a
registration effected hereunder, the Company shall indemnify each participating
underwriter and each Person who controls such underwriter (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the Investor.

        

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

         

        (b)           In
connection with any Registration Statement in which the Investor is
participating, the Investor shall furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
such Registration Statement or Prospectus, or amendment or supplement thereto,
and shall indemnify, to the fullest extent permitted by law, the Company, its
officers and directors and each Person who controls the Company (within the
meaning of the Securities Act) against all losses, claims, damages, liabilities,
judgments, costs (including reasonable costs of investigation) and expenses
(including reasonable attorneys’ fees) arising out of or based upon any untrue
or alleged untrue statement of material fact contained in the Registration
Statement or Prospectus, or any amendment or supplement thereto (including any
“free writing prospectus” (as defined in Rule 405 of the Securities Act and
required to be filed by the Company with the SEC or retained by the Company
under Rule 433 of the Securities Act), or arising out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that the same are made in reliance and in conformity with information furnished
in writing to the Company by or on behalf of the Investor expressly for use
therein.  The Investor agrees that, unless it has or shall have
obtained the prior written consent of the Company, it has not made and will not
make any offer relating to the Registrable Securities that would constitute a
“free writing prospectus”  (as defined in Rule 405 of the Securities
Act).

         

        (c)           Any
Person entitled to indemnification hereunder (an “Indemnified
Party”) shall give written notice to the party indemnifying it (the
“Indemnifying
Party”) of any claim with respect to which it seeks indemnification
promptly after discovery by such Indemnified Party of any matters giving rise to
a claim for indemnification.  Such notice shall describe such claim in
reasonable detail.  Failure to so notify the Indemnifying Party shall
not relieve the Indemnifying Party from any liability that it may have to an
Indemnified Party except to the extent that the Indemnifying Party is actually
prejudiced thereby.  The Indemnified Party shall permit such
Indemnifying Party to assume the defense of such claim with counsel reasonably
satisfactory to the Indemnified Party.  An Indemnifying Party who is
entitled to, and elects to, assume the defense of a claim shall not be obligated
to pay the fees and expenses of more than one counsel (in addition to one local
counsel) for Persons indemnified (hereunder or otherwise) by such Indemnifying
Party with respect to such claim (and all other claims arising out of the same
circumstances), unless in the reasonable judgment of any Indemnified Party there
may be one or more legal or equitable defenses available to such Indemnified
Party which are in addition to or may conflict with those available to another
Indemnified Party with respect to such claim, in which case such maximum number
of counsel for all Indemnified Parties shall be two rather than
one.  If any Indemnifying Party is entitled to, and elects to, assume
the defense of a claim, the Indemnified Party shall continue to be entitled to
participate in the defense thereof, with counsel of its own choice, but, except
as set forth above, the Indemnifying Party shall not be obligated to reimburse
the Indemnified Party for the costs thereof.  If the Indemnifying
Party assumes the defense of any claim, all Indemnified Parties shall deliver to
the Indemnifying Party copies of all notices and documents (including court
papers) received by the Indemnified Party related to the claim, and each
Indemnified Party shall cooperate in the defense or prosecution of such
claim.  Such cooperation shall include the retention and (upon the
Indemnifying Party’s request) the provision to the Indemnifying Party of records
and information that are reasonably relevant to such claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder.  The Indemnifying
Party shall not be subject to any liability for any settlement made by the
Indemnified Party without the Indemnifying Party's written consent (but such
consent will not be unreasonably withheld or delayed).  The
Indemnifying Party shall not consent to the entry of any judgment or enter into
or agree to any settlement relating to a claim or action for which any
Indemnified Party would be entitled to indemnification by any Indemnifying Party
hereunder unless such judgment or settlement imposes no ongoing obligations on
any such Indemnified Party and includes as an unconditional term the giving, by
all relevant claimants and plaintiffs to such Indemnified Party, of a release,
reasonably satisfactory in form and substance to such Indemnified Party, from
all liabilities in respect of such claim or action for which such Indemnified
Party would be entitled to such indemnification.  The Indemnifying
Party shall not be liable hereunder for any amount paid or payable or incurred
pursuant to or in connection with any judgment entered or settlement effected
with the consent of an Indemnified Party unless the Indemnifying Party has also
consented to such judgment or settlement.

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

         

        (d)           The
indemnification provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Party or any officer, director or controlling Person of such Indemnified Party
and shall survive the transfer of securities and the Termination Date but only
with respect to offers and sales of Registrable Securities made before the
Termination Date or during the period following the Termination Date referred to
in Section
6(h).

         

        (e)           If
the indemnification provided for in or pursuant to this Section is due in
accordance with the terms hereof, but is held by a court to be unavailable or
unenforceable in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions which result
in such losses, claims, damages, liabilities or expenses as well as any other
relevant equitable considerations.  The relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Indemnifying
Party or by the Indemnified Party, and by such Party’s relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.  In no event shall the liability of the
Indemnifying Party be greater in amount than the amount for which such
Indemnifying Party would have been obligated to pay by way of indemnification if
the indemnification provided for under Section 8(a)
or 8(b)
hereof had been available under the circumstances.

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

        SECTION
9


         

        SECURITIES
ACT RESTRICTIONS

         

        The
Registrable Securities are restricted securities under the Securities Act and
may not be offered or sold except pursuant to an effective registration
statement or an available exemption from registration under the Securities
Act.  Accordingly, the Investor shall not, directly or through others,
offer or sell any Registrable Securities except pursuant to a Registration
Statement or pursuant to an exemption from, or a transaction not subject to,
registration under the Securities Act.

         

        SECTION
10


         

        TRANSFERS
OF RIGHTS  

         

        If the
Investor transfers any Registrable Securities to an Affiliate, such Affiliate
shall be a Permitted Transferee and such Permitted Transferee shall, together
with all other such Permitted Transferees and the Investor, also have the rights
of the Investor under this Agreement with respect to such Registrable Securities
(including all of the Investor’s rights in Section
8), but only if the Permitted Transferee signs and delivers to the
Company a written acknowledgment that it has joined with the Investor and the
other Permitted Transferees as a party to this Agreement and has assumed,
severally but not jointly, the rights and obligations of the Investor hereunder
with respect to the Registrable Securities transferred to it by the
Investor.  Each such transfer shall be effective when (but only when)
the Permitted Transferee has signed and delivered the written acknowledgment to
the Company's reasonable satisfaction.  Upon any such effective
transfer, the Permitted Transferee shall automatically have the rights so
transferred, and the Investor’s obligations under this Agreement, and the rights
with respect to the Registrable Securities not so transferred, shall
continue.  Notwithstanding any other provision of this Agreement, no
Person who acquires securities transferred in violation of this Agreement or the
Investment Agreement, or who acquires securities that are not or upon
acquisition cease to be Registrable Securities, shall have any rights under this
Agreement with respect to such securities, and such securities shall not have
the benefits afforded hereunder to Registrable Securities.

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

         

        SECTION
11


         

        MISCELLANEOUS

         

        (a)           Notices.  All
notices, requests, demands, consents and other communications given or required
to be given under this Agreement and under the related documents shall be in
writing and delivered to the applicable party at the address indicated
below:

         

        (i)           If
to the Investor:

         

        Kien Huat
Realty III Limited

        c/o Kien
Huat Realty Sdn Bhd.

        22nd
Floor Wisma Genting

        Jalan
Sultan Ismail

        50250
Kuala Lumpur

        Malaysia

        Attention:  Gerard
Lim

        Fax:  +603
2162 4951

         

        with a
copy to:

         

        Cleary
Gottlieb Steen & Hamilton LLP

        One
Liberty Plaza

        New York,
NY 10006

        Attention:  Steven
L. Wilner

        Fax:  (212)
225-3999

         

        (ii)           If
to the Company:

         

        Empire
Reports, Inc.

        Monticello
Casino and Raceway

        Route
17B, P.O. Box 5013

        Monticello,
NY  12701

        Attention:  Joseph
Bernstein

        Fax:  (845)
807-0000

         

        with a
copy to:

         

        Olshan
Grundman Frome Rosenzweig & Wolosky LLP

        Park
Avenue Tower

        65 East
55th Street

        New York,
NY 10022

        Attention:  Robert
H. Friedman

        Fax:  (212)
451-2222

         

         

        or, as to
each party at such other address as shall be designated by such party in a
written notice to the other parties complying as to delivery with the terms of
this subsection.  All notices may be sent by facsimile, or registered
or certified mail, return receipt requested, postage prepaid.  Notice
shall be effective upon actual receipt thereof at designated
address.

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

         

        (b)           No
Waivers.  Any term, condition or provision of this Agreement
may be waived to the extent permitted by law in writing at any time by the party
that is entitled to the benefits thereof.  The waiver of any breach of
any provision under this Agreement by any party shall not be deemed to be a
waiver of any preceding or subsequent breach under this Agreement.  No
such waiver shall be effective unless in writing.

         

        (c)           Assignment.  Neither
this Agreement nor any right, remedy, obligation nor liability arising hereunder
or by reason hereof shall be assignable by any party hereto without the prior
written consent of the other party, and any attempt to assign any right, remedy,
obligation or liability hereunder without such consent shall be void, except an
assignment, in the case of a merger or consolidation where such party is not the
surviving entity, or a sale of substantially all of its assets, to the entity
which is the survivor of such merger or consolidation or the purchaser in such
sale; provided,
however,
that the Investor shall have the right to assign its rights and obligations
hereunder to one or more of its Affiliates in connection with a transfer to such
Affiliate(s) of Registrable Securities.

         

        (d)           No
Third-Party Beneficiaries.  Except as provided in Section
8, nothing contained in this Agreement, expressed or implied, is intended
to confer upon any person or entity other than the Company and the Investor (and
any Permitted Transferee to which an assignment is made in accordance with this
Agreement), any benefits, rights, or remedies.

         

        (e)           Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial,
Etc.  This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.  The parties hereto
agree that any suit, action or proceeding brought by either party seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby shall be brought in
any federal or state court located in New York County, New York.  Each
of the parties hereto submits to the jurisdiction of any such court in any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of, or in connection with, this Agreement or the transactions
contemplated hereby and hereby irrevocably waives the benefit of jurisdiction
derived from present or future domicile or otherwise in such action or
proceeding.  Each party hereto irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.

         

        (f)           Counterparts;
Effectiveness.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto.

         

        (g)           Entire
Agreement.  This Agreement contains the entire understanding of
and all agreements between the parties hereto with respect to the subject matter
hereof and supersedes any prior or contemporaneous agreements or understandings,
oral or written, pertaining to any such matters which agreements or
understandings shall be of no force or effect for any purpose.

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

        (h)           Severability.  If
any provision of this Agreement, as applied to any part or circumstance, shall
be adjudged by a court of competent jurisdiction to be void, invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of any such provision and any other circumstances or
the validity or enforceability of the other provisions of this
Agreement.

         

        (i)           Amendments.  The
provisions of this Agreement, including the provisions of this sentence, may be
amended, modified or supplemented, only with the prior written consent of the
Company and the Investor.

         

        [Execution
Page Follows]

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

         

        IN
WITNESS WHEREOF, this Agreement has been duly executed by each of the parties
hereto as of the date first written above.

         

        
          
            	 
      	
                    Empire
      Reports, Inc.

                  
	 
      	 
      
	 
      	
                    By:

                  	/s/
      Joseph E. Bernstein
	 
      	 
      	
                    Name:

                  	Joseph
      E. Bernstein  
	 
      	 
      	
                    Title:

                  	Chief
      Executive Officer


          

          

             

            
              
                	 
      	
                        
                          Kien
      Huat Realty III Limited

                        

                      
	 
      	 
      
	 
      	
                        By:

                      	/s/
      Gerard Lim
	 
      	 
      	
                        Name:

                      	Gerard
      Lim
	 
      	 
      	
                        Title:

                      	Authorized
      Signatory  


              

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

               

            

          

        

        Annex
A

        Form of
Opinions of Counsel

         

        (i)                      The
Company is validly existing as a corporation under the laws of its jurisdiction
of organization, with corporate power to own its properties and conduct its
business as described in the Registration Statement and the prospectus included
therein, as amended or supplemented to the effective date of the Registration
Statement (the “Final
Prospectus”) and to perform its obligations under the Investment
Agreement and the Registration Rights Agreement;

         

        (ii)                      The
execution and delivery of the Investment Agreement and the Registration Rights
Agreement (the “Transaction
Documents”) have been duly authorized by the Company, and the Transaction
Documents are the valid and binding agreements of the Company, enforceable
against the Company in accordance with their operative terms;

         

        (iii)                      The
Registration Statement has become effective under the Securities Act; any
required filing of the Final Prospectus and any amendments or supplements
thereto pursuant to Rule 424(b) under the Securities Act has been made in
the manner and within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use has been issued by the
SEC, no proceedings for that purpose have been instituted or threatened by the
SEC, and the Registration Statement and the Final Prospectus (other than the
financial statements and related notes, financial statement schedules and other
financial, accounting and statistical information contained therein or omitted
thereunder, as to which such counsel need express no opinion) comply as to form
in all material respects with the applicable requirements of the Securities Act
and the rules thereunder; and although counsel is not passing upon and does not
assume responsibility for the independent review or verification or accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Final Prospectus, such counsel has no reason to believe that on
the effective date the Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Final Prospectus as of its date included any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading (in
each case, other than the financial statements and other financial and
statistical information contained therein, as to which such counsel need express
no opinion);

         

        (iv)                      The
Company’s authorized equity capitalization as
of                ,
20   is as set forth in the Registration Statement and the Final
Prospectus; the statement under the caption “Description of Capital Stock” in
the Registration Statement, to the extent they constitute matters of law or
legal conclusions, constitute an accurate summary in all material respects of
such matters and conclusions; the shares of the Company common stock to be sold
pursuant to the Transaction Documents have been duly and validly authorized and,
when issued and delivered in accordance with the Transaction Documents, will be
validly issued, fully paid and nonassessable; the certificate for the Company’s
common stock complies in all material respects with the applicable statutory
requirements; and, to the knowledge of such counsel, the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Registrable Securities;

         

        
          
            
            

          

          
            A-1

            
              

            

          

          
            
            

          

        

         

        (v)                      None
of the issue of such Registrable Securities, the consummation of any other of
the transactions contemplated by the Investment Agreement and the Registration
Rights Agreement, or the fulfillment of the terms thereof will conflict with,
result in a breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its subsidiaries
pursuant to, (i) the charter or by-laws of the Company or its subsidiaries,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or its subsidiaries is a party or
bound or to which its or their property is subject, which documentation is filed
or incorporated by reference as an exhibit to the Registration Statement, or
(iii) any federal or New York statute, law, rule or regulation, or any
judgment, order or decree known to us to be applicable to the Company or its
subsidiaries of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or its
subsidiaries or any of its or their properties, except in the case of clauses
(ii) and (iii) for any conflicts, breaches, violations or impositions which
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, taken as a whole;
and

         

        (vi)                      No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental authority or agency under any applicable
law, is required in connection with the Company’s execution and performance of
its obligations under the Investment Agreement and the Registration Rights
Agreement, except such as have been obtained and such as may be required under
the Securities Act, the Exchange Act, applicable rules under the Securities Act
and the Exchange Act and applicable Nasdaq listing standards (provided that
counsel provides no opinion as to any necessary qualification under state
securities or blue sky laws of the various jurisdictions in which the
Registrable Securities are being offered and no opinion with respect to FINRA
rules and regulations).

         

        
          
            
            

          

          
            A-2