Exhibit
10.2


 


EXECUTION
COPY


 


 


REGISTRATION
RIGHTS AGREEMENT


 


Dated as of
May 13, 2004


 


by and between


 


SHUFFLE
MASTER, INC.


 


and


 


CASINOS AUSTRIA AG


 

















 


TABLE OF
CONTENTS


 


	
  1.

  	
  Definitions.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Shelf Registration.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Liquidated Damages.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Registration Procedures.

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registration Expenses.

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Indemnification.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Rules 144 and 144A.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Underwritten Registrations.

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Miscellaneous.

  	
   

  



 


i

















 


REGISTRATION
RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”)
is dated as of May 13, 2004, by and between Shuffle Master, Inc., a
Minnesota corporation (the “Company”), and Casinos Austria AG (“Initial
Shareholder”).


 


This Agreement is entered into in connection
with the Stock Purchase Agreement dated May 13, 2004 (the “Stock
Purchase Agreement”) by and between Shuffle Master Management-Service GmbH
and Shuffle Master GmbH, on the one hand, and Casinos Austria
Aktiengesellschaft and CAI Casinovest Middle East GmbH, on the other hand,
which provides for the acquisition of CARD Casinos Austria Research and
Development GmbH & Co. KG (“CARD”) by the Company and, among other
transactions, provides for the issuance by the Company to the Initial
Shareholder of 767,076 shares of common stock, par value $.01 per share, of the
Company (the “Shares”), together with the rights evidenced by such
Shares to the extent provided for in the Shareholder Rights Agreement dated as
of June 26, 1998 between the Company and Norwest Bank Minnesota, N.A., as
Rights Agent.


 


In order to induce the Initial Shareholder to
enter into the Stock Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial
Shareholder and subsequent holders of the Shares as provided herein.  The execution and delivery of this Agreement
is a condition to the Initial Shareholder’s obligation to acquire the Shares
pursuant to the Stock Purchase Agreement.


 


The parties hereto hereby agree as follows:


 


1.             Definitions.  As used in this Agreement, the following
terms shall have the following meanings:


 


“Agreement”:  See the first introductory paragraph hereto.


 


“Amendment Effectiveness Deadline Date”:  See Section 2(d)(i) hereof.


 


“Business Day”:  Any day that is not a Saturday, Sunday or a
day on which banking institutions in the City of New York are authorized or
required by law or executive order to be closed.


 


“CARD”:  See the second introductory paragraph hereto.


 


“Closing Date”:  May 13, 2004.


 


“Company”:  See the first introductory paragraph hereto.


 


“Controlling Person”:  See Section 6 hereof.


 


“Deferral Period”:  See Section 3(b) hereof.


 


“Designated Counsel”:  One nationally recognized firm of counsel
experienced in securities laws matters chosen by the Holders of a majority of
the Registrable Securities to be


 

















 


included in a Registration Statement for a
Shelf Registration, with the consent of the Company (which consent will not be
unreasonably withheld).


 


“Effectiveness Date”:  The 210th day after the Closing
Date.


 


“Effectiveness Period”:  See Section 2(a) hereof.


 


“Exchange Act”:  The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.


 


“Filing Date”:  The 120th day after the Closing
Date.


 


“Holder”:  Any beneficial owner from time to time of Registrable Securities.


 


“Indemnified Holder”:  See Section 6 hereof.


 


“Indemnified Person”:  See Section 6 hereof.


 


“Indemnifying Person”:  See Section 6 hereof.


 


“Initial Shareholder”:  See the first introductory paragraph hereto.


 


“Initial Shelf Registration”:  See Section 2(a) hereof.


 


“Inspectors”:  See Section 4(k) hereof.


 


“Liquidated Damages”:  See Section 3(a) hereof.


 


“Liquidated Damages Payment Date”:  See Section 3(c) hereof.


 


“Notice and Questionnaire”: means a
written notice delivered to the Company containing substantially the
information called for by the Form of Selling Securityholder Notice and
Questionnaire attached as Appendix A hereto.


 


“Person”: An individual, partnership,
corporation, limited liability company, unincorporated association, trust or
joint venture, or a governmental agency or political subdivision thereof.


 


“Prospectus”: The prospectus included
in any Registration Statement (including, without limitation, any prospectus
subject to completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement
in reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.


 


“Records”:  See Section 4(k) hereof.


 


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“Registrable Securities”:  All Shares upon original issuance thereof
and at all times subsequent thereto, together with (a) any additional shares of
SMI common stock issued or distributed by way of a dividend, stock split or
other distribution in respect of the Shares, and (b) any shares of SMI common
stock acquired by way of any rights offering or similar offering made in
respect of the Shares (all shares of SMI common stock so issued, distributed or
acquired pursuant to clauses (a) or (b), “Additional Shares”); provided, that all such Shares and
Additional Shares shall cease to be Registerable Securities, in any case, upon
the earliest to occur of (i) a Registration Statement covering such Shares or
such Additional Shares having been declared effective by the SEC and such
Shares or such Additional Shares having been disposed of in accordance with
such effective Registration Statement, (ii) such Shares or such Additional
Shares having been sold in compliance with Rule 144 or being able to (except
with respect to affiliates of the Company within the meaning of the Securities
Act) be sold in compliance with Rule 144(k), or (iii) such Shares or such
Additional Shares ceasing to be outstanding.


 


“Registration Default”:  See Section 3(a) hereof.


 


“Registration Statement”: Any
registration statement of the Company filed with the SEC pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits and all documents incorporated by reference or deemed
to be incorporated by reference in such registration statement.


 


“Rule 144”: Rule 144 promulgated under
the Securities Act, as such Rule may be amended from time to time, or any
similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC
providing for offers and sales of securities made in compliance therewith
resulting in offers and sales by subsequent holders that are not affiliates of
an issuer of such securities being free of the registration and prospectus
delivery requirements of the Securities Act.


 


“Rule 144A”: Rule 144A promulgated
under the Securities Act, as such Rule may be amended from time to time, or any
similar rule (other than Rule 144) or regulation hereafter adopted by the SEC.


 


“Rule 415”: Rule 415 promulgated under
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.


 


“SEC”:  The U.S. Securities and Exchange Commission.


 


“Securities Act”:  The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.


 


“Selling Holder”: On any date, any
Holder that has delivered a Notice and Questionnaire to the Company on or prior
to such date.


 


“Shares”:  See the second introductory paragraph hereto.


 


“Shelf Registration”:  See Section 2(b) hereof.


 


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“Shelf Registration Statement”:  See Section 2(b) hereof.


 


“Stock Purchase Agreement”:  See the second introductory paragraph
hereto.


 


“Subsequent Shelf Registration”:  See Section 2(b) hereof.


 


“Underwritten Registration” or “Underwritten
Offering”: A registration in which Registrable Securities are sold to an
underwriter for reoffering to the public.


 


2.             Shelf Registration.


 


(a)         Shelf Registration.  The Company shall file with the SEC a
Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Registrable Securities (the “Initial
Shelf Registration”) on or prior to the Filing Date.


 


The Initial Shelf Registration shall be on
Form S-3 or another appropriate form permitting registration of the Registrable
Securities for resale by Holders in the manner or manners designated by them (excluding
Underwritten Offerings) and set forth in the Initial Shelf Registration.  The Company shall not permit any securities
other than the Registrable Securities to be included in the Initial Shelf
Registration or any Subsequent Shelf Registration (as defined below).


 


The Company shall use its commercially
reasonable efforts to cause the Initial Shelf Registration to be declared
effective under the Securities Act on or prior to the Effectiveness Date and to
keep the Initial Shelf Registration continuously effective under the Securities
Act until the date (A) that is two years after the Closing Date (such period,
as it may be shortened pursuant to clauses (i), (ii) or (iii) immediately
following, the “Effectiveness Period”), or such shorter period ending when
(i) all of the Registrable Securities covered by the Initial Shelf Registration
have been sold in the manner set forth and as contemplated in the Initial Shelf
Registration, (ii) the date on which all the Registrable Securities (x) held by
Persons who are not affiliates of the Company may be resold pursuant to Rule
144(k) under the Securities Act or (y) cease to be outstanding, (iii) all the
Registrable Securities have been resold pursuant to Rule 144 under the
Securities Act or (B) a Subsequent Shelf Registration covering all of the
Registrable Securities has been declared effective under the Securities Act.


 


(b)        Subsequent Shelf
Registrations.  If the Initial Shelf
Registration ceases to be effective for any reason at any time during the
Effectiveness Period (other than because of the sale of all of the Registrable
Securities registered thereunder), the Company shall use its commercially
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 45 days of such cessation
of effectiveness amend the Initial Shelf Registration in a manner reasonably
expected by the Company to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional “shelf” Registration Statement
pursuant to Rule 415 covering all of the Registrable Securities (a “Subsequent
Shelf Registration”).  If a
Subsequent Shelf Registration is filed, the Company shall use its commercially
reasonable efforts to cause the Subsequent Shelf Registration to be declared
effective under the Securities Act as soon as practicable after such filing (or
if filed during a Deferral Period, after expiration of such Deferral Period)
and to keep such Registration


 


4

















 


Statement
continuously effective for the balance of the Effectiveness Period.  As used herein, the term “Shelf
Registration” means the Initial Shelf Registration or any Subsequent Shelf
Registration and the term “Shelf Registration Statement” means any
Registration Statement filed in connection with a Shelf Registration.


 


(c)         Supplements
and Amendments.  The Company shall
promptly supplement and amend a Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority of the Registrable Securities covered by
such Shelf Registration Statement.


 


(d)        Notice
and Questionnaire.  Each Holder agrees
that if such Holder wishes to sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus, it will do so only in accordance
with this Section 2(d) and Section 4A hereof.  Each Holder wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus
when the Initial Shelf Registration Statement first becomes effective agrees to
deliver a Notice and Questionnaire to the Company at least five (5) Business
Days prior to the date that the Initial Shelf Registration is declared
effective under the Securities Act. 
From and after the date the Initial Shelf Registration Statement is
declared effective, the Company shall, as promptly as practicable after the
date a fully completed and legible Notice and Questionnaire, together with such
other information as the Company may reasonably request, is received by the
Company, and in any event upon the later of (x) forty-five (45) days after such
date or (y) ten (10) Business Days after the expiration of any Deferral Period
in effect when the Notice and Questionnaire is received by the Company:


 


(i)            if
required by applicable law, file with the SEC a post-effective amendment to the
Shelf Registration Statement  or a
Subsequent Shelf Registration or prepare and, if required by applicable law,
file a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named as a
selling securityholder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities (subject to the rights of the Company
under Section 3(b) to create a Deferral Period) in accordance with
applicable law and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement, use its commercially reasonable efforts to cause
such post-effective amendment to be declared effective under the Securities Act
as promptly as reasonably practicable, but in any event by the date (the “Amendment
Effectiveness Deadline Date”) that is forty-five (45) days after the date
such post-effective amendment is required by this clause to be filed;


 


(ii)           provide
such Holder copies of any documents filed pursuant to Section 2(d)(i); and


 


5

















 


(iii)          notify
such Holder as promptly as practicable after the effectiveness under the Securities
Act of any post-effective amendment filed pursuant to Section 2(d)(i); provided
that if such Notice and Questionnaire is delivered during a Deferral Period,
the Company shall so inform the Holder delivering such Notice and Questionnaire
and shall take the actions set forth in clauses (i) and (ii) above upon
expiration of the Deferral Period. 
Notwithstanding anything contained herein to the contrary, (i) the
Company shall be under no obligation to name any Holder that has not delivered
a fully complete and legible Notice and Questionnaire to the Company, together
with such other information as the Company may reasonably request, in
accordance with this Section 2(d) and (ii) the Amendment Effectiveness
Deadline Date shall be extended by up to ten (10) Business Days from the
expiration of a Deferral Period (and the Company shall incur no obligation to
pay Liquidated Damages during such extension) if such Deferral Period shall be
in effect on the Amendment Effectiveness Deadline Date.


 


3.             Liquidated Damages.


 


(a)         The
Company and the Initial Shareholder agree that the Holders of Registrable
Securities will suffer damages if the Company fails to fulfill its obligations
under Section 2 hereof and that it would not be feasible to ascertain the
extent of such damages with precision. 
Accordingly, the Company agrees to pay liquidated damages on the
Registrable Securities (“Liquidated Damages”) under the circumstances
and to the extent set forth below (each of which shall be given independent
effect; each a “Registration Default”):


 


(i)            if
the Initial Shelf Registration is not filed on or prior to the Filing Date,
then commencing on the day after the Filing Date;


 


(ii)           if
a Shelf Registration is not declared effective by the SEC on or prior to the
Effectiveness Date, then commencing on the day after the Effectiveness Date;


 


(iii)          if
a Shelf Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period (other than
as permitted under Section 3(b)), then commencing on the day after the
date such Shelf Registration ceases to be effective;


 


(iv)          if
any post-effective amendment filed pursuant to Section 2(d)(i) has not
become effective under the Securities Act on or prior to the Amendment
Effectiveness Deadline Date, then commencing on the day after the Amendment
Effectiveness Deadline Date; and


 


(v)           if
the aggregate duration of Deferral Periods in any period exceeds the number of
days permitted in respect of such period pursuant to Section 3(b), then
commencing on the day that caused the limit on the aggregate duration of
Deferral Periods to be exceeded,


 


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Liquidated
Damages shall accrue on the Registrable Securities (in the case of clauses (i),
(ii), (iii) and (v)), or solely on the Registrable Securities that are
registered by such post-effective amendment in the case of clause (iv), at a
rate of US$0.05 per annum per
share of Registrable Securities (based on the number of shares of the Company’s
common stock issued and outstanding on the Closing Date, to be adjusted
appropriately for stock splits, stock dividends, stock recombinations and the
like) for the first 90 days (whether or not consecutive) during which a
Registration Default exists, and at a rate of US$0.10 per annum per share of Registrable
Securities (based on the number of shares of the Company’s common stock issued
and outstanding on the Closing Date, to be adjusted appropriately for stock
splits, stock dividends, stock recombinations and the like) thereafter if a
Registration Default exists for more than 90 days (whether or not consecutive);
provided
that Liquidated Damages on the Registrable Securities may not accrue under more
than one of the foregoing clauses (i), (ii), (iii), (iv) and (v) at any one
time; and provided
further that (1) upon the filing of the Initial Shelf Registration
as required hereunder (in the case of clause (a)(i) of this Section 3),
(2) upon the effectiveness of a Shelf Registration as required hereunder (in
the case of clause (a)(ii) of this Section 3), (3) upon the effectiveness
of a Shelf Registration which had ceased to remain effective (in the case of
clause (a)(iii) of this Section 3), (4) upon the effectiveness of a
post-effective amendment as required hereunder (in the case of clause (a)(iv)
of this Section 3), or (5) upon the termination of the Deferral Period
that caused the limit on the aggregate duration of Deferral Periods to be
exceeded (in the case of clause (a)(v) of this Section 3), Liquidated
Damages on the Registrable Securities as a result of such clause shall cease to
accrue.  It is understood and agreed
that, notwithstanding
any provision to the contrary, no Liquidated Damages shall accrue on any
Registrable Securities that are then covered by, and may be sold under, an
effective Shelf Registration Statement. 
Notwithstanding the foregoing, no Liquidated Damages shall accrue as to
any security from and after the earlier of (x) the date such security ceases to
be a Registrable Security and (y) expiration of the Effectiveness Period.


 


(b)        Notwithstanding
Section 3(a), the Company, upon written notice to the Holders, shall be
permitted to suspend the availability of a Registration Statement covering the
Registrable Securities for any bona fide reason whatsoever for up to 30
consecutive days (the “Deferral Period”) in any 90-day period without
being obligated to pay Liquidated Damages; provided
that Deferral Periods may not total more than 90 days in the
aggregate in any twelve-month period. 
The Company shall not be required to specify in the written notice to
the Holders the nature of the event giving rise to the Deferral Period.


 


(c)         So
long as the Shares remain outstanding, the Company shall notify the Holders
within five Business Days after each and every date on which an event occurs in
respect of which Liquidated Damages are required to be paid.  Any amounts of Liquidated Damages due
pursuant to clause (a)(i), (a)(ii), (a)(iii), (a)(iv) or (a)(v) of this Section 3
will be payable in cash on April 15 and October 15 of each year
(each, a “Liquidated Damages Payment Date”), commencing with the first
such Liquidated Damages Payment Date occurring after any such Liquidated
Damages commences to accrue, to holders of record of the applicable Registrable
Securities on the immediately preceeding April 1 and October 1,
whether or not such day is a Business Day. 
The amount of Liquidated Damages for Registrable Securities will be
determined by multiplying the applicable rate of Liquidated Damages by the
number of shares of Registrable Securities outstanding on the first Liquidated
Damages Payment Date


 


7

















 


following such
Registration Default in the case of the first such payment of Liquidated
Damages with respect to a Registration Default (and thereafter at the next
succeeding Liquidated Damages Payment Date until the cure of such Registration
Default), multiplied by a fraction, the numerator of which is the number of
days such Liquidated Damages rate was applicable during such period (determined
on the basis of a 360-day year comprised of twelve 30-day months and, in the
case of a partial month, the actual number of days elapsed), and the
denominator of which is 360.  The parties
agree that the sole monetary damages payable for a violation of the terms of
this Agreement with respect to which Liquidated Damages are expressly provided
shall be such Liquidated Damages.


 


4.             Registration
Procedures.


 


In connection with its registration
obligations pursuant to Section 2 hereof, the Company shall:


 


(a)         Prepare and file
with the SEC, on or prior to the Filing Date, a Registration Statement or
Registration Statements as prescribed by Section 2 hereof, and use its
commercially reasonable efforts to cause each such Registration Statement to
become effective and remain effective as provided herein;  provided
that before filing any Registration Statement or Prospectus or any amendments
or supplements thereto, the Company shall furnish to and afford the Initial
Shareholder a reasonable opportunity to review copies of all such documents
proposed to be filed (in each case, where possible, at least three Business
Days prior to such filing, or such later date as is reasonable under the
circumstances) and the Initial Shareholder shall have the right to object to
any information pertaining to the Initial Shareholder that is contained therein
and the Company will make the corrections reasonably requested by the Initial
Shareholder with respect to such information prior to filing any such documents.


 


(b)        Prepare
and file with the SEC such amendments and post-effective amendments to each
Shelf Registration as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period; cause the related
Prospectus to be supplemented by any prospectus supplement required by
applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) promulgated under the Securities Act; and
comply with the provisions of the Securities Act applicable to it with respect
to the disposition of all Registrable Securities covered by such Registration
Statement during the Effectiveness Period in accordance with the intended
methods of distribution set forth in such Registration Statement as so amended
or in such Prospectus as so supplemented.


 


(c)         Notify
the Selling Holders and Designated Counsel, if any, promptly (but in any event
within five Business Days), (i) when a Prospectus or any prospectus supplement
or post-effective amendment to a Registration Statement has been filed, and,
with respect to a Registration Statement or any post-effective amendment, when
the same has become effective under the Securities Act (including in such
notice a written statement that any Holder may, upon request, obtain, at the
sole expense of the Company, one conformed copy of such Registration Statement
or post-effective amendment, including financial statements and schedules,
documents incorporated or deemed to be incorporated by reference and exhibits),
(ii)


 


8

















 


of the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of any Prospectus or the initiation of any proceedings for
that purpose, (iii) of the happening of any event, the existence of any
condition or any information becoming known but not the nature or details
concerning such event, condition or information that makes any statement made
in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires the making of any changes in or amendments or
supplements to such Registration Statement, Prospectus or documents so that, in
the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and that
in the case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided, however, that no notice of the Company pursuant to
this clause (iii) shall be required in the event that the Company promptly
files a prospectus supplement to update the Prospectus or a Current Report on
Form 8-K or other appropriate Exchange Act report that is incorporated by
reference into the Registration Statement, which, in either case, contains the
requisite information with respect to such event, condition or information that
results in such Registration Statement no longer containing any untrue
statement of a material fact or omitting to state a material fact necessary to
make the statements contained therein not misleading and promptly furnishes to
the Selling Holders and Designated Counsel a reasonable number of copies of
such prospectus supplement) and (iv) of the Company’s determination that a
post-effective amendment to a Registration Statement would be appropriate which
notice may in any case, at the discretion of the Company state that it
constitutes a notice of deferral under Section 3(b) hereof.


 


(d)        Use
its commercially reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus and, if any such order is
issued, to use its commercially reasonable efforts to obtain the withdrawal of
any such order at the earliest possible moment or if any such order or
suspension is during any Deferral Period, at the earliest possible time after
such Deferral Period ends, and provide prompt notice to the Selling Holders of
the withdrawal of any such order.


 


(e)         Furnish
as promptly as reasonably practicable after the filing of such documents with
the SEC to each Selling Holder and Designated Counsel, if any, upon request and
at the sole expense of the Company, such number of conformed copies of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and all
documents incorporated or deemed to be incorporated therein by reference and
all exhibits as such Selling Holder and Designated Counsel may reasonably
request.


 


(f)         Deliver
during the Effectiveness Period (except during any Deferral Period) to each
Selling Holder and Designated Counsel, if any, at the sole expense of the
Company, as many copies of the Prospectus (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference


 


9

















 


therein as such Persons may reasonably request; and, subject to
Sections 4A(a) and 4A(c) hereof, the Company hereby consents (except during any
Deferral Period) to the use of such Prospectus and each amendment or supplement
thereto by each of the Selling Holders of Registrable Securities and dealers,
if any, in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto in the
manner set forth therein.


 


(g)        Cause
the Company’s counsel to perform Blue Sky law investigations and to file
registrations and qualifications required to be filed in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities or offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Selling Holder reasonably requests, use its commercially reasonable efforts
to keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept
effective in connection with such Holder’s offer and sale of Registrable
Securities pursuant to such registration or qualification (or exemption
therefrom) and do any and all other acts or things reasonably necessary or
advisable under Blue Sky laws to enable the disposition in such jurisdictions
of the Registrable Securities in the manner set forth in the Registration
Statement; provided that the
Company shall not be required to (i) qualify generally to do business or as a
dealer in any jurisdiction where it is not then so qualified, (ii) take any
action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or (iii) subject itself to
taxation in any such jurisdiction where it is not then so subject.


 


(h)        Cooperate
with the Selling Holders and their respective counsel to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold, which certificates shall not bear any restrictive legends and shall be in
a form eligible for provision to the transfer agent and registrar; and enable
such Registrable Securities to be in such denominations and registered in such
names as the Selling Holders may reasonably request at least two (2) Business
Days prior to any sale of such Registrable Securities.


 


(i)          Upon
the occurrence of any event contemplated by Sections 4(c)(ii), 4(c)(iii) or
4(c)(iv) hereof, as promptly as practicable prepare and (subject to
Section 4(a) hereof) file with the SEC, at the sole expense of the
Company, a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, any such Prospectus will not contain 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, in the light
of the circumstances under which they were made, not misleading.


 


(j)          Prior
to the effective date of the first Registration Statement relating to the
Registrable Securities, (i) provide the transfer agent and registrar with
certificates for the Registrable Securities and (ii) provide a CUSIP number for
the Registrable Securities.


 


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(k)         During
the Effectiveness Period, if requested in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make available at
reasonable times for inspection by one or more representatives of the Selling
Holders and any attorney or accountant retained by any such Selling Holders
(collectively, the “Inspectors”), at the offices where normally kept,
during reasonable business hours, at such time or times as shall be mutually
convenient for the Company and the Inspectors, all financial and other records,
pertinent corporate documents and instruments of the Company and its
subsidiaries (collectively, the “Records”) as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the
Company and its subsidiaries to supply all information reasonably requested by
any such Inspector in connection with such Registration Statement in accordance
with this Section; provided that
the Company shall have no obligation to provide any such information prior to
the execution by the party receiving such information of a confidentiality
agreement in a form reasonably acceptable to the Company.  Records that the Company determines, in good
faith, to be confidential and any Records that it notifies the Inspectors are
confidential shall not be used for any purpose other than satisfying “due
diligence” obligations under the Securities Act and exercising rights under
this Agreement and shall not be disclosed by any Inspector unless (i) the
disclosure of such Records is necessary to avoid or correct a material
misstatement or material omission in such Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction, (iii) disclosure of such information is, in
the opinion of counsel for the Selling Holder or any Inspector, necessary or
advisable in connection with any action, claim, suit or proceeding, directly
involving or potentially involving such Selling Holder or Inspector and arising
out of, based upon, relating to, or involving this Agreement or any
transactions contemplated hereby or arising hereunder or (iv) the information
in such Records has been made generally available to the public other than
through the acts of such Inspector in breach of this Agreement; provided that prior notice shall be
provided as soon as practicable to the Company of the potential disclosure of
any information by such Inspector pursuant to clauses (ii) or (iii) of this
sentence to permit the Company to obtain a protective order (or waive the
provisions of this Section 4(k)). 
Each Inspector shall take such actions as are reasonably necessary to
protect the confidentiality of such information (if practicable) to the extent
such actions are otherwise not inconsistent with, an impairment of or in
derogation of the rights and interests of the Holder or any Inspector, unless
and until such information in such Records has been made generally available to
the public other than as a result of a breach of this Agreement (it being
understood that “reasonably necessary” for the purposes of this sentence will
be defined by reference to those actions taken by such Inspector in protecting
the confidentiality of its own information).


 


(l)          During
the Effectiveness Period, comply with all rules and regulations of the SEC
applicable to any Registration Statement and make generally available to its
security holders as soon as reasonably practicable earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) commencing on the
first day of the first fiscal quarter of the Company after the effective date
of a Registration Statement, which statements shall cover said 12-month
periods.


 


11

















 


(m)        If
requested by Designated Counsel, if any, or the Holders of a majority of the
Registrable Securities, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the Designated Counsel, if any, or
such Holders reasonably determine is necessary to be included therein, (ii)
make all required filings of such prospectus supplement or such post-effective
amendment as soon as reasonably practicable after the Company has received
notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment and (iii) supplement or make amendments to such
Registration Statement.


 


(n)        Use
its commercially reasonable efforts to take all other steps necessary or
advisable to effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby; provided that the Company shall not be required to take any
action in connection with an Underwritten Offering.


 


(o)        Beginning
not later than the effective date of the first Registration Statement relating
to the Registrable Securities, use its commercially reasonable efforts to cause
such Shares (in each case, that are then eligible for listing) to be listed on
any national securities exchange or automated quotation system upon which the
Company’s common stock is then listed.


 


(p)        Use
its commercially reasonable efforts to notify the Holders at least ten (10)
Business Days prior to the anticipated effective date of the first Registration
Statement relating to the Registrable Securities.


 


4A.          Holders’
Obligations. (a) Each Holder agrees, by acquisition of the Registrable
Securities, that no Holder shall be entitled to sell any of such Registrable
Securities pursuant to a Registration Statement or to receive a Prospectus
relating thereto, unless such Holder has furnished the Company with a Notice
and Questionnaire as required pursuant to Section 2(d) hereof (including
the information required to be included in such Notice and Questionnaire) and
the information set forth in the next sentence.  Each Selling Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information
previously furnished to the Company by such Selling Holder not misleading and
any other information regarding such Selling Holder and the distribution of
such Registrable Securities as the Company may from time to time reasonably
request.  Any sale of any Registrable
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of
distribution is as set forth in the Prospectus delivered by such Holder in
connection with such disposition, that such Prospectus does not as of the time
of such sale contain any untrue statement of a material fact relating to or
provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating
to or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.


 


(b)           The
Company may require each Selling Holder of Registrable Securities as to which
any registration is being effected to furnish to the Company such additional
information regarding such Holder and its plan of distribution of such
Registrable Securities as


 


12

















 


the Company may, from time to
time, reasonably request to the extent necessary or advisable to comply with
the Securities Act.  The Company may
exclude from such registration the Registrable Securities of any Selling Holder
if such Holder fails to furnish such additional information within five (5) Business
Days after receiving such request.  Each
Selling Holder as to which any Shelf Registration is being effected agrees to
furnish promptly to the Company all information required to be disclosed so
that the information previously furnished to the Company by such Holder is not
materially misleading and does not omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made.


 


(c)           Each
Holder of Registrable Securities agrees by acquisition of such Registrable
Securities that, upon actual receipt of any notice from the Company suspending
the availability of the Registration Statement pursuant to Section 3(b)
hereof, or upon the happening of any event of the kind described in Section 4(c)(ii),
4(c)(iii) or 4(c)(iv) hereof (each Holder agrees to keep any such notice
confidential), such Holder will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus
until such Holder’s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 4(i) hereof, or until it is advised in
writing by the Company that the use of the applicable Prospectus may be
resumed, and it has received copies of any additional or supplemental filings
that are incorporated or deemed incorporated by reference in such Prospectus
thereto.


 


5.             Registration
Expenses.


 


(a)         All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company, including, without
limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses of compliance with state securities or Blue Sky
laws, including, without limitation, reasonable fees and disbursements of its
counsel in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as provided in
Section 4(g) hereof), (ii) printing expenses, including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for provision to the transfer agent and registrar and of printing
prospectuses if the printing of prospectuses is requested by the Holders of a
majority of the Registrable Securities included in any Registration Statement,
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements
of counsel for the Company, (v) Securities Act liability insurance, if the
Company desires such insurance, (vi) fees and expenses of all other Persons
retained by the Company, (vii) internal expenses of the Company (including,
without limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties), (viii) the expense of any
annual audit, (ix) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange, if
applicable, and any NASD fees and (x) the expenses relating to printing, word processing
and distributing all Registration Statements and any other documents necessary
in order to comply with this Agreement. 
Notwithstanding anything in this Agreement to the contrary, each Holder
shall pay all brokerage commissions with respect to any Registrable Securities
sold by it and, except as set forth in Section 5(b) below, the Company
shall not be responsible for the fees and expenses of any counsel, accountant
or advisor for the Holders.


 


13

















 


(b)        The
Company shall bear or reimburse the Holders of the Registrable Securities being
registered in a Shelf Registration for the reasonable fees and disbursements of
Designated Counsel.


 


6.             Indemnification.


 


(a)           The Company agrees to indemnify and
hold harmless (x) each Holder (which, for the absence of doubt, for purposes of
this Section 6 shall include the Initial Shareholder), (y) each Person, if
any, who controls any Holder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act) (any of the Persons
referred to in this clause (y) being hereinafter referred to as a “Controlling
Person”) and (z) the respective officers, directors, partners, employees,
representatives and agents of any Holder (including any predecessor holder) or
any Controlling Person (any person referred to in clause (x), (y) or (z) may
hereinafter be referred to as an “Indemnified Holder”), against any
losses, claims, damages, expenses or liabilities, joint or several, to which
such Indemnified Holder may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, expenses or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement or Prospectus, or any amendment or supplement
thereto or any related preliminary prospectus or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a Prospectus, in the
light of the circumstances under which they were made), in each case, not
misleading; provided that the
Company will not be liable under this Section 6(a), (x) to the extent that
any such loss, claim, damage, expense or liability 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 or Prospectus, or any
amendment or supplement thereto or any related preliminary prospectus in
reliance upon and in conformity with written information relating to any Holder
furnished to the Company by or on behalf of such Holder specifically for use
therein, (y) with respect to any untrue statement or alleged untrue statement,
or omission or alleged omission made in any preliminary prospectus if the
person asserting any such loss, claim, damage, expense or liability who
purchased Registrable Securities which are the subject thereof did not receive
a copy of the Prospectus (or the preliminary prospectus as then amended or
supplemented if the Company shall have furnished such Indemnified Holder with
such amendment or supplement thereto on a timely basis) at or prior to the
written confirmation of the sale of such Registrable Securities to such person
and, in any case where such delivery is required by applicable law and the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact made in such preliminary prospectus was corrected in the
Prospectus (or the preliminary prospectus as then amended or supplemented if
the Company shall have furnished such Indemnified Holder with such amendment or
supplement thereto on a timely basis) or (z) arising from the offer or sale of
Registrable Securities during any Deferral Period, if notice thereof was given
to such Holder.  The Company shall
notify such Indemnified Holder promptly of the institution, threat or assertion
of any claim, proceeding (including any governmental investigation) or
litigation in connection with the matters addressed by this Agreement that
involves the Company or such Indemnified Holder.


 


14

















 


(b)        Subject to
Section 6(d) below, the Company agrees to reimburse each Indemnified
Holder upon demand for any reasonable legal or other out-of-pocket expenses
reasonably incurred by such Indemnified Holder in connection with investigating
or defending any such loss, claim, damage, expense or liability, action or
proceeding or in responding to a subpoena or governmental inquiry related to
the offering of the Registrable Securities, whether or not such Indemnified
Holder is a party to any action or proceeding.  In the event that
it is finally judicially determined that an Indemnified Holder was not entitled
to receive payments for legal and other expenses pursuant to this
Section 6, such Indemnified Holder will promptly return all sums that had
been advanced pursuant hereto.


 


(c)         Each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, each of
its directors and officers and each Person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) to the same extent as the indemnity
provided in Section 6(a) from the Company to each Holder, provided, however, that such Holder will
be liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in any Registration Statement or Prospectus, or any amendment or
supplement thereto or any related preliminary prospectus, in reliance upon and
in conformity with written information furnished to the Company by such Holder
specifically for use in the preparation thereof.  The liability of any Holder under this Section 6(c) shall in
no event exceed the proceeds received by such Holder from sales of Registrable
Securities giving rise to such obligation.


 


(d)        In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to
Section 6(a) or  (c), such Person
(the “Indemnified Person”) shall promptly notify the Person or Persons
against whom such indemnity may be sought (each an “Indemnifying Person”)
in writing.  No indemnification provided
for in Section 6(a) or  (c) shall
be available to any Person who shall fail to give notice as provided in this
Section 6(d) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice, but the failure to give such
notice shall not relieve the Indemnifying Person or Persons from any liability
which it or they may have to the Indemnified Person for contribution or
otherwise than on account of the provisions of Section 6(a) or (c).  In case any such proceeding shall be brought
against any Indemnified Person and it shall notify the Indemnifying Person of
the commencement thereof, the Indemnifying Person shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other Indemnifying Person similarly notified, to assume the defense thereof,
with counsel satisfactory to such Indemnified Person and shall pay as incurred
(or within 30 days of presentation) the fees and disbursements of such counsel
related to such proceeding.  In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel at its own expense. 
Notwithstanding the foregoing, the Indemnifying Person shall pay as
incurred (or within 30 days of presentation) the reasonable fees and expenses
of the counsel retained by the Indemnified Person in the event (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to
the retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be


 


15

















 


inappropriate
due to actual or potential differing interests between them or (iii) the
Indemnifying Person shall have failed to assume the defense and employ counsel
acceptable to the Indemnified Person within a reasonable period of time after
notice of commencement of the action. 
It is understood that the Indemnifying Person shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for all
such Indemnified Persons.  Such firm
shall be designated in writing by Holders of a majority of the Registrable
Securities in the case of parties indemnified pursuant to Section 6(a) and
by the Company in the case of parties indemnified pursuant to
Section 6(c).  The Indemnifying
Person shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees to indemnify
the Indemnified Person from and against any loss or liability by reason of such
settlement or judgment.  In addition,
the Indemnifying Person will not, without the prior written consent of the
Indemnified Person, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any Indemnified Person
is an actual or potential party to such claim, action or proceeding) unless
such settlement, compromise or consent includes an unconditional release of
each Indemnified Person from all liability arising out of such claim, action or
proceeding.


 


(e)         To the extent the indemnification
provided for in this Section 6 is unavailable to or insufficient to hold
harmless an Indemnified Person under Section 6(a) or (c) in respect of any
losses, claims, damages, expenses or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each Indemnifying Person shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages, expenses or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Indemnifying Person on the one hand and
the Indemnified Person on the other hand from the issuance and sale of the
Shares pursuant to the Stock Purchase Agreement and the Registrable Securities
pursuant to any Shelf Registration.  If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each Indemnifying Person shall contribute to
such amount paid or payable by such Indemnified Person in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Indemnifying Person on the one hand and the Indemnified Person on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages, expenses or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations.  The relative benefits received by the
Company shall be deemed to be equal to the total net proceeds (before deducting
expenses) received by the Company under the Stock Purchase Agreement from the
offering and sale of the Registrable Securities giving rise to such
obligations.  The relative benefits received
by any Holder shall be deemed to be equal to the value of receiving
registration rights for the Registrable Securities under this Agreement.  The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand,
such Indemnified Holder on the other, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.


 


16

















 


(f)         The Company and
the Initial Shareholder agree that it would not be just and equitable if
contribution pursuant to Section 6(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in Section 6(e).  The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages, expenses or liabilities (or
actions or proceedings in respect thereof) referred to in Section 6(e)
shall be deemed to include any reasonable legal or other expenses reasonably
incurred by such Indemnified Person in connection with investigating or
defending any such action or claim.  Notwithstanding
the provisions of Section 6(e) and (f), (i) in no event shall any Holder
be required to contribute any amount in excess of the amount by which the net
proceeds received by such Holder from the offering or sale of the Registrable
Securities pursuant to a Shelf Registration Statement exceeds the amount of
damages which such Holder would have otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission and
(ii) 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.


 


(g)        In any proceeding
relating to any Registration Statement or Prospectus or any supplement or
amendment thereto or any related preliminary prospectus, each party against
whom contribution may be sought under this Section 6 hereby consents to
the jurisdiction of any court having jurisdiction over any other contributing
party, agrees that process issuing from such court may be served upon it by any
other contributing party and consents to the service of such process and agrees
that any other contributing party may join it as an additional defendant in any
such proceeding in which such other contributing party is a party.


 


(h)        Any losses, claims,
damages, liabilities or expenses for which an Indemnified Person is entitled to
indemnification or contribution under this Section 6 shall be paid by the
Indemnifying Person to the Indemnified Person as such losses, claims, damages,
liabilities or expenses are incurred.


 


(i)          The remedies provided
for in this Section 6 are not exclusive and shall not limit any rights or
remedies that may otherwise be available to any indemnified party at law or in
equity.


 


(j)          The indemnity and
contribution agreements contained in this Section 6 shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Holder or any
Person controlling any Holder or by or on behalf of the Company, its officers
or directors or any other Person controlling the Company and (iii) sale under
the Registration Statement of any of the Registrable Securities.  A successor to any Holder or Controlling
Person, or to the Company, its directors or officers or any person controlling
the Company, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 6.


 


7.             Rules 144 and 144A.


 


The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC


 


17

















 


thereunder in
a timely manner in accordance with the requirements of the Securities Act and
the Exchange Act and, if at any time before the expiration of the Effectiveness
Period the Company is not required to file such reports, it will, upon the
request of any Holder, make available such information necessary to permit
sales pursuant to Rule 144A under the Securities Act.  The Company further covenants that until the Effectiveness Period
has expired, it will use all reasonable efforts to take such further action as
any Holder of Registrable Securities 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 Rule 144 and Rule 144A under the Securities Act, as such
rules may be amended from time to time. 
The Company will provide a copy of this Agreement to prospective
purchasers of Registrable Securities identified to the Company by the Initial
Shareholder upon request.  Upon the
request of any Holder, the Company shall deliver to such Holder a written
statement as to whether it is subject to and has complied with such reporting
requirements.  Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the
Company to register any of its securities pursuant to the Exchange Act.


 


8.             Underwritten
Registrations.


 


No Holder of Registrable Securities may participate
in any Underwritten Registration hereunder.


 


9.             Miscellaneous.


 


(a)         No
Inconsistent Agreements.  The
Company has not, as of the date hereof, and the Company shall not, after the
date of this Agreement, enter into any agreement with respect to any of its
securities that conflicts with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.


 


(b)        Adjustments
Affecting Registrable Securities. 
The Company shall not take any action with respect to the Registrable
Securities as a class with the intent of adversely affecting the ability of the
Holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement.


 


(c)         Amendments
and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, otherwise than with
the prior written consent of the Company and the Holders of not less than a
majority of the Registrable Securities; provided
that Section 6 and this Section 9(c) may not be amended, modified or
supplemented without the prior written consent of the Company and each Holder
(including, in the case of an amendment, modification or supplement of
Section 6, any Person who was a Holder of Registrable Securities disposed
of pursuant to any Registration Statement). 
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders pursuant to such Registration Statement.


 


18

















 


Each Holder of Registrable Securities outstanding at the time of any
amendment, modification, supplement, waiver, or consent or thereafter shall be
bound by any such amendment, modification, supplement, waiver, or consent
effected pursuant to this Section, whether or not any notice of such amendment,
modification, supplement, waiver, or consent is delivered to such Holder.


 


(d)        Notices.  All notices, requests and other
communications provided for or permitted hereunder shall be made in writing and
delivered by hand-delivery, registered first-class mail, next-day air courier
or facsimile:


 


(1)           if
to a Holder of Registrable Securities, at the most current address of such
Holder set forth on the stock ledger of the Company, unless any Holder shall
have provided notice information in a Notice and Questionnaire or any amendment
thereto, in which case such information shall control.


 


(2)           if
to the Initial Shareholder:


 


CASINOS AUSTRIA AG

Dr. Karl Lueger Ring 14, A-1010

Vienna, Austria

Facsimile No.: +43-1-53440 515

Attention: Managing Board


 


with a copy to:


 


Milbank, Tweed, Hadley & McCloy

Frankfurter Welle

An der Welle 4 

60422 Frankfurt, Germany

Facsimile No.: 49-69-7593-8303

Attention:              Helfried J.
Schwarz


 


(3)           if
to the Company:


 


Shuffle Master, Inc.


1106 Palms Airport Drive


Las Vegas, Nevada 89119


Facsimile No.: (702) 270-5161

Attention: General Counsel


 


with a copy to:


 


Latham & Watkins LLP 

885 Third Avenue

New York, New York 10022

Facsimile No.: (212) 751-4864

Attention:              Kirk A. Davenport
II


 


19

















 


All such notices, requests and communications shall
be deemed to have been duly given: when delivered by hand, if personally
delivered; the earlier of the date indicated on the notice of receipt and five
(5) Business Days after being deposited in the mail, postage prepaid, if
mailed; one Business Day after being timely delivered to a next-day air courier;
and when the addressor receives facsimile confirmation, if sent by facsimile
during normal business hours, and otherwise on the next Business Day during
normal business hours.


 


(e)         Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto, including the Holders; provided
that this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and except to the extent such successor
or assign holds Registrable Securities.


 


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


 


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


 


(h)        Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION
OF THE FEDERAL AND NEW YORK STATE COURTS SITTING IN MANHATTAN, NEW YORK CITY,
THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT.


 


(i)          Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.


 


(j)          Securities
Held by the Company or Its Affiliates. 
Whenever the consent or approval of Holders of a specified percentage of
the Registrable Securities is required hereunder, Registrable Securities held
by the Company or its affiliates (as such term is defined in Rule 405 under the
Securities Act) other than the Initial Shareholder or Holders deemed to be
affiliates solely by reason of their holdings of such Registrable Securities
shall not be counted


 


20

















 


in determining whether such consent or approval was given by the
Holders of such required percentage; provided
that Registrable Securities that the Company or an affiliate of the Company
offers to purchase or acquires pursuant to an offer, exchange offer, tender
offer or otherwise shall not be deemed to be held by the Company or such
affiliate until legal title to such Registrable Securities passes to the
Company or such affiliate, as the case may be.


 


(k)         Third-Party
Beneficiaries.  Holders of
Registrable Securities are intended third party beneficiaries of this Agreement
and this Agreement may be enforced by such Persons.


 


(l)          Entire
Agreement.  This Agreement, together
with the Stock Purchase Agreement, is intended by the parties as a final and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein and any and all
prior oral or written agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Initial Shareholder on
the one hand and the Company on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof
are merged herein and replaced hereby.


 


21

















 


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


 


	
   

  	
  SHUFFLE
  MASTER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mark
  Yoseloff

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark
  Yoseloff

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CASINOS
  AUSTRIA AG

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Paul
  Herzfeld

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paul
  Herzfeld

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CASINOS
  AUSTRIA AG

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Leo
  Wallner

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Leo Wallner

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
						



 


[Signature Page to Registration
Rights Agreement]


 

















 


APPENDIX A


 


SHUFFLE MASTER, INC.


 


Form of Selling Securityholder Notice and
Questionnaire


 


The
undersigned beneficial holder of shares of common stock, par value $.01 per
share (the “Common Stock”), of Shuffle Master, Inc., a Minnesota
corporation (the “Company”), understands that the Company has filed or
intends to file with the Securities and Exchange Commission a registration
statement (the “Shelf Registration Statement”) for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended, of the
Registrable Securities in accordance with the terms of the Registration Rights
Agreement, dated on or about May 13, 2004 (the “Registration Rights
Agreement”), between the Company and Casinos Austria AG. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Registration Rights Agreement.


 


Each
beneficial owner of Registrable Securities is entitled to the benefits of the
Registration Rights Agreement. In order to sell or otherwise dispose of any
Registrable Securities pursuant to the Shelf Registration Statement, a
beneficial owner of Registrable Securities generally will be required to be
named as a selling securityholder in the related prospectus, deliver a
prospectus to purchasers of Registrable Securities and be bound by those
provisions of the Registration Rights Agreement applicable to such beneficial
owner (including certain indemnification provisions, as described below).
Beneficial owners that do not complete this Notice and Questionnaire and
deliver it to the Company as provided below will not be named as selling
securityholders in the prospectus and therefore will not be permitted to sell
any Registrable Securities pursuant to the Shelf Registration Statement.
Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Shelf Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus at the time of effectiveness. Upon receipt of a completed Notice
and Questionnaire from a beneficial owner following the effectiveness of the
Shelf Registration Statement, the Company will prepare and file (a) a
prospectus supplement as soon as practicable or (b) if required, such
amendments to the Shelf Registration Statement or an additional Shelf
Registration Statement within 45 days of the receipt of such questionnaire, in
either case as are necessary to permit such holder to deliver such prospectus
to purchasers of Registrable Securities. The Company has agreed to pay
liquidated damages pursuant to the Registration Rights Agreement under certain
circumstances as set forth therein.


 


Certain legal
consequences arise from being named as a selling securityholder in the Shelf
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and the
related prospectus.


 


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NOTICE


 


The
undersigned beneficial owner (the “Selling Securityholder”) of
Registrable Securities hereby gives notice to the Company that it may sell or
otherwise dispose of Registrable Securities beneficially owned by it and listed
below in Item 3 (unless otherwise specified under Item 3) pursuant to the Shelf
Registration Statement. The undersigned, by signing and returning this Notice
and Questionnaire, understands that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement.


 


If you need
more space for these responses, please attach additional sheets of paper.
Please be sure to indicate you name and the number of the item being responded
to on each such additional sheet of paper, and to sign each such additional
sheet of paper before attaching it to this Questionnaire. Please note that you
may be asked to answer additional questions depending on your responses to the
following questions.


 


The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:


 


QUESTIONNAIRE


 


1.             (a)  Full Legal Name of Selling Securityholder:


 


 


(b)           Full Legal Name of Registered Holder
(if not the same as (a) above) through which Registrable Securities listed in
Item (3) below are held:


 


 


(c)           Full Legal Name of DTC Participant
(if applicable and if not the same as (b) above) through which Registrable Securities
listed in Item (3) below are held:


 


 


2.             Address for Notices to Selling
Securityholder:


 


 


Telephone:


 


Fax:


 


A-2

















 


Contact Person:


 


3.             Number of shares of Registrable
Securities beneficially owned:


 


 


4.             Nature of Your Beneficial
ownership:


 


(a)           If the name of the beneficial owner
of the Registrable Securities set forth in your response to Item 1(a) above is
that of a limited partnership, state the names of the general partners of such
limited partnership:


 


 


 


(b)           With respect to each general partner
listed in Item 4(a) above who is not a natural person, and is not publicly
held, name each shareholder (or holder of partnership interests, if applicable)
of such general partner. If any of these named shareholders are not natural
persons or publicly held entities, please provide the same information. This
process should be repeated until you reach natural persons or a publicly held
entity.


 


 


 


(c)           If you are not publicly held, name
the entity that exercises voting and dispositive power over the Registrable
Securities set forth in Item 3 above (the “Controlling Entity”). If the
Controlling Entity is not a natural person or a publicly held entity, please
name the entity that controls such Controlling Entity and provide the same
information for the entity controlling the Controlling Entity. This process
should be repeated until you reach natural persons or a publicly held entity.


 


(i)            Full legal name of Controlling
Entity(ies) or natural person(s) who have sole or shared voting or dispositive
power over the Registrable Securities:


 


 


(ii)           Business address (including street
address) (or residence if no business address), telephone number and facsimile
number of such person(s):


 


Address:                


 


A-3

















 


Telephone:


Fax:


 


(iii)          Name(s) of shareholders:


 


5.             Beneficial Ownership of other of
the Company’s securities owned by the Selling Securityholder:


 


Except as set forth below in this Item (5), the undersigned is not the
beneficial or registered owner of any securities of the Company other than the
Registrable Securities listed above in Item (3).


 


(a)           Type and Amount of other securities
beneficially owned by the Selling Securityholder:


 


 


(b)           CUSIP No(s). of such other securities
beneficially owned:


 


 


6.             Relationship with the Company:


 


Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equityholders (5% or more) has
held any position or office or has had any other material relationship with the
Company (or its predecessors or affiliates) during the past three years.


 


State any
exceptions here:


 


 


7.             Plan of Distribution:


 


Except as set forth below, the undersigned (including its donees or
pledgees) may distribute the Registrable Securities listed above in Item (3)
pursuant to the Shelf Registration Statement only as follows (if at all):
Subject to the limitations and restricitions set forth in the Stock Purchase
Agreement, such Registrable Securities may be sold from time to time directly
by


 


A-4

















 


the undersigned or, alternatively, through underwriters, broker-dealers
or agents. If the Registrable Securities are sold through underwriters or
broker-dealers, the Selling Securityholder will be responsible for underwriting
discounts or commissions or agents’ commissions. Subject to the limitations and
restricitions set forth in the Stock Purchase Agreement, such Registrable
Securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. Such sales may be effected in
transactions (which may involve cross or block transactions) (i) on any
national securities exchange or quotation service on which the Registrable
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or services or in the over-the-counter market, or (iv) through the writing of
options. Subject to the limitations and restricitions set forth in the Stock
Purchase Agreement, the undersigned may also sell the Company’s Common Stock
short and deliver Registrable Securities to close out such short positions, or
loan or pledge Registrable Securities to broker-dealers that in turn may sell
such securities.


 


State any
exceptions here:


 


 


Note:      In no event will such method(s) of
distribution take the form of an underwritten offering of the Registrable
Securities without the prior agreement of the Company.


 


By signing
below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items (1) through (7) above and the inclusion of such
information in the Shelf Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the
Company in connection with the preparation or amendment of the Shelf
Registration Statement and the related prospectus.


 


Once this
Notice and Questionnaire is executed by the undersigned and received by the
Company, the terms of this Notice and Questionnaire, and the representations
and warranties contained herein, shall be binding on, shall inure to the
benefit of and shall be enforceable by the respective successors, heirs,
personal representatives, and assigns of the Company and the undersigned with
respect to the Registrable Securities beneficially owned by the undersigned and
listed in Item (3) above. THIS NOTICE AND QUESTIONNAIRE SHALL BE GOVERNED IN ALL
RESPECTS BY THE LAWS OF THE STATE OF NEW YORK.


 


A-5

















 


IN WITNESS
WHEREOF, the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Beneficial Owner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
						



 


 


PLEASE RETURN THE COMPLETED AND EXECUTED
NOTICE

AND QUESTIONNAIRE TO:


 


Shuffle Master, Inc.

1106 Palms Airport Drive

Las Vegas, Nevada 89119

Attention: Jerome R. Smith

Fax: (702) 270-5161


 


A-6