Document:

Exhibit
4.3

 

ATTACHMENT

TO

ARTICLES OF AMENDMENT

OF

SPORTS ENTERTAINMENT ENTERPRISES, INC.

 

Pursuant to Section 7-106-102 of the Colorado Business Corporation
Act (the “Act”), the Board
of Directors of Sports Entertainment Enterprises, Inc., a Colorado corporation
(the “Corporation”), duly
adopted the resolution set forth herein by unanimous written consent on February 7,
2005 in accordance with Section 7-108-202 of the Act.

 

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
designate, create, authorize and provide for the issuance by the Corporation,
out of the 5,000,000 unissued shares of Preferred Stock, no par value, that the
Corporation is authorized to issue under its Articles of Incorporation, 1
Series C Convertible Preferred Share (the “Series
C Preferred Share”) with a stated value of $1.00 per share (the “Stated Value”).  The Series C Preferred Share shall have the
powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations and restrictions that are set forth
in the Articles of Incorporation and in this resolution as follows:

 

1.                                       Certain
Definitions.

 

Unless the context otherwise requires, each of the terms defined in
this Section 1 shall have, for all purposes of these Articles of
Amendment, the meaning herein specified (with terms defined in the singular
having comparable meanings when used in the plural):

 

“Articles of Amendment”
has the meaning set forth above.

 

“Articles of Incorporation”
has the meaning set forth above.

 

“Board of Directors”
means the Board of Directors of the Corporation.

 

“Business Day”
means any day other than a Saturday, a Sunday or any day on which banking
institutions in New York, New York, are required or authorized by law or other
governmental action to be closed.

 

“Capital Stock”
means any and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
equity of the Corporation, including any Preferred Shares.

 

“Common Shares”
means the Common Shares, no par value per share, of the Corporation.

 

 

“Conversion Share”
has the meaning set forth in Section 5(a).

 

“Corporation” has
the meaning set forth above.

 

“CBCA” means the
Colorado Business Corporation Act, as amended.

 

“Disposition” has
the meaning set forth in Section 13(a).

 

“Holder” means the
record holder of the Series C Preferred Share, as shown on the books and
records of the Transfer Agent.

 

“Immediate Family”
means any relationship by blood, marriage, or adoption, not more remote than
first cousin.

 

“Parity Shares” has
the meaning set forth in Section 2.

 

“Permitted Holder”
means: (i) the Holder or the beneficiary as of the date hereof of the Holder;
(ii) any member of the Immediate Family of any natural Person in clause (i),
(iii) any descendant of any natural Person identified in clause (i) or (ii) or
member of the Immediate Family of any such descendant; or (iv) or any other
trust or other similar entity formed for the direct or indirect benefit of any
natural Person identified in clauses (i) through (iii).

 

“Person” means any
individual, corporation, partnership, association, joint venture, trust or
other entity or organization or a government or any agency or political
subdivision thereof.

 

“Preferred Shares”
means Capital Stock of the Corporation of any class or classes (however
designated) that is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, over shares of Capital Stock of
any other class of the Corporation.

 

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

 

“Senior Shares” has
the meaning set forth in Section 2.

 

“Series A Preferred Shares”
means the Series A Convertible Senior Preferred Shares, no par value per share,
of the Corporation.

 

“Series B Preferred Shares”
means the Series B Voting Convertible Preferred Shares, no par value per share,
of the Corporation.

 

“Series C Director”
has the meaning set forth in Section 7(a).

 

“Stated Value” has
the meaning set forth above.

 

“Transfer Agent”
means the entity designated from time to time by the Corporation to act as the
registrar and transfer agent for the Series C Preferred Share.

 

 

2.                                       Ranking.  The Series C Preferred Share shall, with
respect to the payment of any dividend (as provided in Section 3 below) or
rights on the liquidation, winding-up and dissolution of the Corporation (as
provided in Section 4 below), rank (i) on a parity with all classes of
Common Shares and each other class of Capital Stock or series of Preferred
Shares established hereafter by the Board of Directors the terms of which
expressly provide that such class or series ranks on a parity with the Series C
Preferred Share as to the payment of dividends or rights on the liquidation,
winding-up and dissolution of the Corporation (collectively referred to as “Parity Shares”) and (ii) junior to the
Series A Preferred Shares and the Series B Preferred Shares of the Corporation
and any future class of Preferred Shares established hereafter by the Board of
Directors the terms of which expressly provide that such class or series ranks
senior to the Series C Preferred Share as to the payment of dividends or rights
on liquidation, winding-up and dissolution of the Corporation (collectively
referred to as the “Senior Shares”).

 

3.                                       Dividends.

 

(a)                                  The
Holder of the Series C Preferred Share shall be entitled to receive an amount
equal to the amount (and in the form of consideration) that such Holder would
be entitled to receive if such Holder had converted the Series C Preferred
Share fully into one Common Share immediately before the record date for the
payment of any such dividends on Common Shares.

 

(b)                                 Any
such dividends will be paid to holder of record as it appears in the
shareholder records of the Corporation at the close of business on the record
date for such dividend on Common Shares, and the Corporation shall pay each
such dividend on the applicable dividend payment date for such dividend on the
Common Shares.

 

4.                                       Liquidation
Preference.

 

(a)                                  Upon
any voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation, subject to the prior preferences and other rights of any Senior Shares,
the Holder of the Series C Preferred Share shall be entitled to be paid, on
parity with any distribution to the holders of Parity Shares, an amount equal
to the Stated Value out of the assets of the Corporation available for
distribution to its shareholders.

 

(b)                                 For
the purposes of these Articles of Amendment, the following events shall be a
considered a liquidation of the Corporation: (i) the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; or (ii) the sale,
distribution or other disposition of all or substantially all of the
Corporation’s assets.

 

5.                                       Conversion.  The Series C Preferred Share shall
automatically convert into one Common Share (the “Conversion Share”) at the
earliest to occur of the following events: (A) the Permitted Holders
beneficially own in the aggregate less than 50% of the aggregate sum of (i) the
outstanding Series B Preferred Shares of the Corporation issued as of the date
hereof plus (ii) the
outstanding Common Shares received upon conversion, if any, of such Series B
Preferred Shares, (B) there is any transfer of the Series C Preferred Share (or
the benefits thereof) to anyone other than a Permitted Transferee (other than a
pledge permitted pursuant to Section 11(b)(ii) of these Articles of Amendment)
and (C) if there has been a pledge permitted pursuant

 

 

to Section 11(b)(ii)
of these Articles of Amendment, such pledgee forecloses on its rights to, or
otherwise seeks recourse to, or attempts to exercise the rights of the Holder
under these Articles of Amendment.

 

6.                                       Voting
Rights; Amendment; Waiver.

 

(a)                                  General.
Except as otherwise required by law or expressly provided herein, the Holder
shall have full voting rights and powers, and shall be entitled to vote on all
matters put to a vote or consent of shareholders of the Corporation, voting
together with the holders of the Common Shares as a single class, with the
Holder of the Series C Preferred Share having the number of votes equal to one
share of Common Stock that such Holder would be entitled to vote if such Holder
held one Common Share as of the record date for the vote or consent which is
being taken.

 

(b)                                 Voting
With Respect to Certain Matters.  In
addition to any matters requiring a separate vote of the Series C Preferred
Share under applicable law, so long as the Series C Preferred Share is
outstanding, the Corporation shall not, without first obtaining the approval of
the Holder (by vote or written consent) of the Series C Preferred Share:

 

(i)                                     create,
authorize, designate or issue, or obligate itself to
create, authorize, designate or issue: any Series C Preferred Shares which are
in addition to the number of shares initially authorized hereunder;

 

(ii)                                  alter,
amend or repeal the Articles of Incorporation or the Corporation’s By-Laws in a
manner that would limit or eliminate the Holder’s (and any Permitted Transferee’s)
rights under these Articles of Amendment;

 

(iii)                               alter,
amend or repeal these Articles of Amendment; or

 

(iv)                              effect
a reclassification, merger, consolidation, recapitalization or similar
transaction unless the surviving corporation shall maintain outstanding these
Articles of Amendment or as a part of and as a condition to the effectiveness
of such transaction shall issue to the Holder a preferred share with terms identical
to the terms of the Series C Preferred Share.

 

7.                                       Board
Designee.  To the fullest extent
permitted by the Securities Act, the rules of any national securities exchange
or national over-the-counter market on which the Common Shares are listed or
traded and other applicable law, statute, rule or regulation:

 

(a)                                  The
Holder, voting separately as a class, shall be entitled at each annual meeting
of the shareholders of the Corporation, at each special meeting of the
shareholders of the Corporation involving the election of directors of the
Corporation, and at all other times at which shareholders of the Corporation
will have the right to or will vote for or render consent in writing regarding
the election of directors of the Corporation, subject only to (c) below, to
elect one (1) member of the Board of Directors (the “Series C Director”) and to remove from
office such director and to fill any vacancy created by the resignation or
removal of such director.  Such Series C
Director must be reasonably acceptable to the Corporation.  The Holder shall not be

 

 

entitled at
any point in time to elect more than one (1) member of the Board of Directors
pursuant to these Articles of Amendment.

 

(b)                                 At
the request of the Holder, such Series C Director shall be appointed by the
Board of Directors to serve on each and every committee of the Board of
Directors to the extent permitted by the Securities Act, the rules of any
national securities exchange or national over-the-counter market on which the
Common Shares are listed or traded and other applicable law, statute, rule or
regulation.

 

(c)                                  In
the case of any vacancy in the office of a director elected by the Holder of
the Series C Preferred Share, the Holder of the Series C Preferred Share may,
by written consent, elect a successor or successors to hold the office for the
unexpired term of the director whose place shall be vacant.

 

(d)                                 The
Series C Director shall be compensated for such director’s service or
reimbursed for out-of-pocket expenses on the Board of Directors only if and to
the extent that any non-independent director serves on the Board of Directors
and is compensated for service in respect thereof or reimbursed for
out-of-pocket expenses in respect thereof. Nothing in this paragraph (d) is
meant to limit rights to indemnification.

 

8.                                       Payment.

 

(a)                                  All
amounts payable in cash with respect to the Series C Preferred Share shall be
payable in United States dollars at the office or agency of the Corporation
maintained for such purpose within the City and State of New York or, at the
option of the Corporation, payment of dividends (if any) may be made by check
mailed to the Holder of the Series C Preferred Share at the addresses set forth
in the register of Holder of Series C Preferred Share maintained by the Transfer
Agent.

 

(b)                                 Any
payment on the Series C Preferred Share due on any day that is not a Business
Day need not be made on such day, but may be made on the next succeeding
Business Day with the same force and effect as if made on such due date,
provided that dividends shall continue to accrue until such next succeeding
Business Day.

 

(c)                                  The
Corporation will initially act as the “Transfer Agent” and the “Paying Agent.”
The Corporation may at any time terminate the appointment of any Paying Agent
and appoint additional or other Paying Agents; provided that until the Series C
Preferred Share has been delivered to the Corporation for cancellation, or
moneys sufficient to pay the liquidation preference of the Series C Preferred
Share as provided in Section 4 shall have been made available for payment
and either paid or returned to the Corporation as provided in these Articles of
Amendment, the Corporation shall maintain an office or agency in the Borough of
Manhattan, The City of New York for surrender of shares of Series C Preferred
Share for payment and exchange.

 

(d)                                 All
moneys and shares deposited by the Corporation with any Paying Agent or held by
the Corporation in trust for the payment of the liquidation preference as
provided in Section 4 on the Series C Preferred Share, which moneys and
shares remain

 

 

unclaimed at
the end of two years after such payment has become due and payable shall be
repaid to the Corporation, and the Holder of the Series C Preferred Share in
respect of which such moneys and shares were so deposited or held in trust
shall thereafter look only to Corporation for payment thereof.

 

9.                                       Reissuance
of Series C Preferred Share. If the Series C Preferred Share issued
pursuant to these Articles of Amendment has been reacquired by the Corporation
in any manner, including being purchased or redeemed or exchanged, it shall
(upon compliance with any applicable provisions of the laws of Colorado) have
the status of an authorized but unissued Preferred Shares of the Corporation
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Shares of the Corporation.

 

10.                                 Notices.  Corporation will provide to the Holder of the
Series C Preferred Share all communications sent by the Corporation to the
holders of the Common Shares..

 

11.                                 Lock-Up.

 

(a)                                  Except
as contemplated herein, the Holder will not, without the prior written consent
of the Corporation, directly or indirectly offer, sell, pledge, contract to
sell (including any short sale), grant any option to purchase, enter into any
contract to sell or otherwise dispose of or transfer the Series C Preferred
Share (each of the foregoing referred to as a “Disposition”).

 

(b)                                 Notwithstanding
the foregoing, (i) the Holder may make a Disposition of its Series C Preferred Share
to any Permitted Holder; and (ii) the Holder may pledge the Series C Preferred
Share in connection with any bona fide
financing transaction involving the pledge of a substantial portion of the
Holder’s assets.

 

(c)                                  Without
limiting the restrictions herein, any Disposition by the Holder of the Series C
Preferred Share shall remain at all times subject to applicable securities
laws, including without limitation the resale restrictions imposed by Rule 144
promulgated under the Securities Act.

 

12.                                 Headings
of Subdivisions.  The headings of the
various subdivisions hereof are for convenience of reference only and shall not
affect the interpretation of any of the provisions hereof.

 

13.                                 Severability
of Provisions.  If any powers,
preferences and relative, participating, optional and other special rights of
the Series C Preferred Share and the qualifications, limitations and
restrictions thereof set forth in these Articles of Amendment (as it may be
amended from time to time) is invalid, unlawful or incapable of being enforced
by reason of any rule or law or public policy, all other powers, preferences
and relative, participating, optional and other special rights of the Series C
Preferred Share and the qualifications, limitations and restrictions thereof set
forth in these Articles of Amendment (as so amended) which can be given effect
without the invalid, unlawful or unenforceable powers, preferences and
relative, participating, optional and other special rights of the Series C
Preferred Share and the qualifications, limitations and restrictions thereof
shall, nevertheless, remain in full force and

 

 

effect, and no
powers, preferences and relative, participating, optional or other special
rights of the Series C Preferred Share and the qualifications, limitations and
restrictions thereof herein set forth shall be deemed dependent upon any other
such powers, preferences and relative, participating, optional or other special
rights of Series C Preferred Share and qualifications, limitations and
restrictions thereof unless so expressed herein.Exhibit 4.4

 

REGISTRATION RIGHTS AGREEMENT

 

This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of February
7, 2005 by and among Sports Entertainment Enterprises, Inc., a corporation
organized and existing under the Business Corporation Act of the State of
Colorado (the “Company”) and each of the investors listed on Schedule 1
attached hereto (each an “Investor”, and collectively, the “Investors”).

 

RECITALS:

 

A.            Concurrently with the
execution of this Agreement, the Investors are acquiring from the Company
shares of the Company’s Series A Convertible Redeemable Preferred Stock,
no par value (the “Series A Preferred Stock”), shares of the Company’s
Common Stock and warrants to purchase Common Stock of the Company (the “Investor
Warrants”), pursuant to the terms and provisions of the Stock Purchase
Agreement among the Company and the Investors of even date herewith, as such
agreement may thereafter be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof (the “Purchase Agreement”).

 

B.            Pursuant to the
Purchase Agreement, the Company has agreed to grant the Holders (as defined
below) the registration rights set forth in this Agreement.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:

 

1.             Definitions.  The following terms when used in
this Agreement, including its Preamble and Recitals, shall, except
where the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):

 

(a)           “Affiliate”
as applied to any Person, means any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
such Person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, 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 the ownership of voting
securities, by contract or otherwise, and, in addition to the foregoing, a
Person shall be deemed to control another Person if the controlling Person owns
15% or more of any class of voting securities (or other ownership interest) of
the controlled Person.

 

(b)           “Agreement”
has the meaning set forth in the Preamble.

 

(c)           “Articles
of Amendment” means that certain Articles of Amendment to the Articles of
Incorporation of the Company adopted and filed with the Secretary of State of
the State of Colorado on or before the date hereof setting forth the rights,

 

 

preferences
and privileges of the Series A Preferred Stock, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

 

(d)           “Commission”
means the Securities and Exchange Commission or any other Federal agency at the
time administering the Securities Act.

 

(e)           “Common
Stock” means shares of common stock, no par value, of the Company.

 

(f)            “Company”
has the meaning set forth in the Preamble.

 

(g)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, all as the
same shall be in effect at the time.

 

(h)           “Form
S-1” means such form under the Securities Act as in effect on the date
hereof or any registration form under the Securities Act subsequently adopted
by the SEC used for the initial public offering of securities.

 

(i)            “Form
S-3” means such form under the Securities Act as in effect on the date
hereof or any registration form under the Securities Act subsequently adopted
by the SEC which permits inclusion or incorporation of substantial information
by reference to other documents filed by the Company with the SEC.

 

(j)            “Holder”
means any Person owning or having the right to acquire Registrable
Securities, or any assignee thereof in accordance with Section 11 hereof. If
the Company receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable
Securities, the Company may act upon the basis of the instructions, notice or
election received from the registered owner of such Registrable
Securities.

 

(k)           “Initial
Investors” means The Huff Alternative Fund, L.P. and The Huff Alternative
Parallel Fund, L.P.

 

(l)            “Initiating
Holders” means the Holder(s) initiating a registration request under
Section 2(a) below.

 

(m)          “Investor”
has the meaning set forth in the Preamble.

 

(n)           “Investor
Warrants” has the meaning set forth in the Recitals.

 

(o)           “Permitted Transferee” means,
with respect to any Investor, any Affiliate of such Investor.

 

(p)           “Person”
means any individual, partnership, corporation, joint venture, limited liability company, association, trust,
unincorporated organization, or government or agency or political subdivision
thereof or any other entity of whatever nature.

 

(q)           “Purchase
Agreement” has the meaning set forth in the Recitals.

 

2

 

(r)            “Register,”
“registered,” and “registration” refer to a registration effected
by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering of effectiveness
of such registration statement or document by the SEC.

 

(s)           “Registrable Securities” means, collectively,
(i) any Common Stock directly or indirectly
(A) issued to the Initial Investors on February 7, 2005 or (B) issuable or issued upon conversion of the Series A
Preferred Stock or (C) issuable or issued upon
exercise of the Investor Warrants and (ii) any shares of Common Stock
hereafter distributed by the Company as a result of a stock dividend, stock
split, reclassification, recapitalization or otherwise by virtue of the
ownership of shares or warrants described in the immediately preceding clause (i); provided, however, that any such
securities shall cease to be Registrable Securities
when (A) such securities shall have been registered under the Securities Act,
the registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall have
been disposed of pursuant to such effective registration statement; (B) such
securities shall have been otherwise transferred, if new certificates or other
evidences of ownership for them not bearing a legend restricting further
transfer and not subject to any stop transfer order or other restrictions on
transfer shall have been delivered by the Company and subsequent disposition of
such securities shall not require registration or qualification of such
securities under the Securities Act or any state securities law then in force;
(C) such securities shall cease to be outstanding; (D) the holding period that
would be applicable under Rule 144(k) of the Securities Act expires, such
securities are freely tradable by the Holder thereof under Rule 144(k) without
regard to volume limitations or other restrictions and the Company shall have removed
any restrictive legends and stop transfer restrictions with respect to such
securities; or (E) such securities are sold to the public pursuant to Rule 144
(or any similar provision then in force, but not Rule 144A) under the
Securities Act.

 

(t)            “Rule
144” means Rule 144 under the Securities Act, as such rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
Commission.

 

(u)           “Rule
144A” means Rule 144A under the Securities Act, as such rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
Commission.

 

(v)           “Securities
Act” means the Securities Act of 1933, as amended, or any similar federal
statute and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time.

 

(w)          “Series
A Request” means a request from the holders of at
least 66 2/3% of the outstanding shares of the Series A Preferred Stock as
of the date of such request.

 

(x)            “Series
A Preferred Stock” has the meaning set forth in
the Recitals.

 

(y)           “Series
B Preferred Stock” means the Series B Convertible Preferred Stock, no par
value, of the Company.

 

3

 

(z)            “Violation”
means any of the following statements, omissions or violations:  (i) any untrue
statement or alleged untrue statement of a material fact contained or
incorporated by reference in a registration statement filed under or referred
to in this Agreement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto or any documents
filed under state securities or “blue sky” laws in connection therewith, (ii)
the omission or alleged omission to state therein a material fact required to
be stated therein, including, without limitation, in any document incorporated
by reference therein, or necessary to make the statements therein, including,
without limitation, in any document incorporated by reference therein, not
misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law arising from, relating to or in connection with the offer and sale
of Registrable Securities pursuant to this Agreement.

 

2.             Demand Registration.

 

(a)           Request
for Demand Registration.  If the
Company shall receive a written Series A Request that the Company file a
registration statement under the Securities Act, then the Company shall, within
ten (10) days of the receipt thereof, give written notice of such request to
all Holders and, subject to the limitations of Sections 2(d) and 2(e) below,
shall file (as expeditiously as practicable, and in any event within sixty (60)
days of the receipt of such request) and use commercially reasonable efforts to
effect, a registration statement under the Securities Act with respect to all Registrable Securities which the Holders request to be
registered within twenty (20) days of the mailing of such notice by the Company
in accordance with Section 18 below.  In
the case of the first Series A Request, such Series A
Request must include a request to register at least 20% of the number of shares
of Common Stock which were issuable upon conversion
of the Series A Preferred Stock into Common Stock as the date of issuance of
the Series A Preferred Stock to the Initial Investors.  The Initiating Holders shall be required to
convert, on or prior to the date the registration statement with respect to the
first Series A Request becomes effective, the lesser of (i)
such number of shares of Series A Preferred Stock as will result in the
conversion of 20% of the number of shares of Common Stock which were issuable upon conversion of the Series A Preferred Stock as
of the date of issuance of the Series A Preferred Stock to the Initial
Investors (subject to adjustment for stock splits, recapitalizations, mergers,
consolidations or similar events occurring after such date that effect a change
in the capitalization of the Company), and (ii) the number of shares of Common
Stock issuable upon conversion of the Series A
Preferred Stock which are included in the registration statement in respect of
the first Series A Request.

 

(b)           If
the Initiating Holders intend to distribute the Registrable
Securities covered by their request pursuant to Section 2(a) by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to this Section 2 and the Company shall include such information in
the written notice referred to in Section 2(a). 
In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be
conditioned upon such Holder’s participation in such underwriting and the inclusion
of such Holder’s Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein.  A majority in interest of the Initiating
Holders of Registrable Securities participating in
the

 

4

 

underwriting,
in consultation with the Company, shall select the managing underwriter or
underwriters in such underwriting.

 

(c)           All
Holders proposing to distribute their securities through such underwriting
shall (together with the Company as provided in Section 4(f)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of such Initiating
Holders; provided, however, that no Holder participating in such underwriting shall be
required to make any representations, warranties or indemnities except as they
relate to such Holder’s ownership of shares and authority to enter into the
underwriting agreement and to such Holder’s intended method of distribution,
and the liability of such Holder shall be limited to an amount equal to the net
proceeds from the offering received by such Holder.

 

(d)           Notwithstanding
any other provision of this Section 2, if the underwriter advises the
Initiating Holder in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Initiating Holder shall so advise
the Company and the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the
number of shares of Registrable Securities that may
be included in the underwriting shall be allocated as follows:  (i) first, among
Holders of Registrable Securities that have elected
to participate in such underwritten offering, in proportion (as nearly as
practicable) to the aggregate amount of Registrable
Securities held by all such Holders, until such Holders have included in the
underwriting all shares requested by such Holders to be included and (ii)
second, if the holders of the Series B Preferred Stock have elected to
participate in such underwritten offering, the holders of the Series B
Preferred Stock and the holders of the Series A Preferred Stock shall be
included on a pro rata basis based upon the number of Registrable
Securities requested to be included in such underwritten offering.  Without the consent of a majority in interest
of the Holders of Registrable Securities
participating in a registration referred to in Section 2(a), no securities
other than Registrable Securities and shares of
Common Stock underlying the Series B Preferred Stock shall be covered by such
registration if the inclusion of such other securities would result in a
reduction of the number of Registrable Securities
covered by such registration or included in any underwriting or if, in the
opinion of the managing underwriter, the inclusion of such other securities
would adversely impact the marketing of such offering.

 

(e)           The
Company shall not be required to cause a registration pursuant to Section 2(a)
to be declared effective within a period of ninety (90) days of the effective
date of any registration statement of the Company effected in connection with a
Series A Request, provided the Company has not
breached its obligations under Section 2(a). Additionally, the Company shall
not be required to effect a demand registration and, upon written notice from
the Company, the holders of the Registrable
Securities will discontinue the disposition of their securities during any
blackout period (i) if the Board of Directors of the
Company determines in good faith that effecting such a registration or
continuing such disposition at such time would have a material adverse effect
upon a proposed sale of all (or substantially all) of the assets of the Company
or a merger, reorganization, recapitalization or similar current transaction
materially affecting the capital structure or equity ownership of the Company,
or (ii) if the Company is in possession of material information which the
Board of Directors of the Company determines in good faith it is not in the
best interests of the Company to disclose in a registration statement at

 

5

 

such time; provided, however,
that the Company may only delay a demand registration pursuant to this Section
2(b) by delivery of a blackout notice within thirty (30) days of delivery of
the notice requesting a demand registration and, in any case, only for a period
not exceeding ninety (90) days (or until such earlier time as such transaction
is consummated or no longer proposed or the material information has been made
public) provided that the Company is actively employing in good faith
commercially reasonable efforts to cause such registration statement to be
declared effective.  There shall not be
more than one blackout period in any twelve (12) month period.

 

(f)            The
Company shall not be obligated to effect in the case of a demand request
pursuant to a Series A Request in accordance with the provisions of Section
2(a), more than two (2) registrations, provided, however, that once the Company
has satisfied the requirements to file a Form S-3 there shall be no limit on
the number of demand requests made by the Initial Investors (or their Permitted
Transferees).  In order to count as one
of the demand registrations pursuant to Section 2(a), the registration
statement in respect thereof must have not been withdrawn and all Registrable Securities which the Holders requested to be
registered pursuant to it must have been so included and sold pursuant to an
effective registration statement.

 

3.             Piggyback Registration.  If (but
without any obligation to do so) the Company proposes to register (including
for this purpose a registration effected by the Company for stockholders other
than the Investors) any of its stock or other securities under the Securities
Act in connection with the public offering of such securities solely for cash
(other than a registration on Form S-8 (or similar or successor form) relating
solely to the sale of securities to participants in a Company stock option,
stock purchase or other stock-based compensation arrangement to the extent
includable on Form S-8 (or similar or successor form), or a registration
relating solely to a transaction under Rule 145 of the Securities Act on Form
S-4 (or similar or successor form) or a registration in which the only Common
Stock being registered is Common Stock issuable upon
conversion of debt securities or Common Stock comprising part of a unit or
otherwise sold in connection with the issuance or sale of debt securities which
are also being registered) (each such registration not withdrawn or abandoned
prior to the effective date thereof being herein called a “Piggyback
Registration”), the Company shall, at such time, promptly give each Holder
of Registrable Securities written notice of such
registration not later than forty-five (45) days prior to the anticipated
filing date of such Piggyback Registration. 
Upon the written request of each Holder of Registrable
Securities given within twenty (20) days after the delivery of such notice by
the Company in accordance with Section 18, the Company shall, subject to the
provisions of Section 8, use commercially reasonable efforts to cause to be
registered under the Securities Act all of the Registrable
Securities that each such Holder of Registrable
Securities has requested to be registered. 
The Company shall have no obligation under this Section 3 to make any
offering of its securities, or to complete an offering of its securities that
it proposes to make.  Any selling Holder
of Registrable Securities shall be permitted to
withdraw all or any part of its Registrable
Securities from any Piggyback Registration at any time prior to the effective
date of such Piggyback Registration.

 

4.             Obligations of the Company.  Whenever
required under this Agreement to effect the
registration of any Registrable Securities, the
Company shall use its commercially reasonable efforts to:

 

6

 

(a)           Prepare
and file with the SEC a registration statement with respect to such Registrable Securities and use commercially reasonable
efforts to cause such registration statement to become effective, keep such
registration statement effective for up to one hundred eighty (180) days or
until the Holders have completed the distribution referred to in such
registration statement, whichever occurs first (but in any event for at least
any period required under the Securities Act); provided  that before
filing such registration statement or any amendments thereto, the Company will
furnish to the Holders copies of all such documents proposed to be filed.

 

(b)           Prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement.

 

(c)           Furnish
to the Holders such number of copies of such registration statement and of each
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with
the requirements of the Securities Act, and such other documents as Holders may
reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

 

(d)           Use
commercially reasonable efforts to register and qualify the securities covered
by such registration statement for offer and sale under such other securities
or “blue sky” laws of such states or jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto (i) to
qualify to do business in any state or jurisdiction where it would not
otherwise be required to qualify but for the requirements of this clause (d),
or (ii) to file a general consent to service of process in any such state or
jurisdiction.

 

(e)           Use
diligent efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary by virtue
of the Company’s business or operations to enable the seller or sellers thereof
to consummate the disposition of such Registrable
Securities.

 

(f)            In
the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering.

 

(g)           Notify
each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
of which it has knowledge as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.

 

7

 

(h)           Notify
each Holder of Registrable Securities covered by such
registration statement and such Holder’s underwriters, if any, and confirm such
advice in writing:  (i)
when the registration statement has become effective, (ii) when any
post-effective amendment to the registration statement becomes effective and
(iii) of any request by the SEC for any amendment or supplement to the
registration statement or prospectus or for additional information.

 

(i)            cooperate
with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such dominations and
registered in such names as the managing underwriters may request at least two
(2) business days prior to any sale of Registrable
Securities to the underwriters.

 

(j)            if
any fact contemplated by clause (g) above shall exist, prepare a supplement or
post-effective amendment to the Registration Statement or the related
prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the Registrable Securities, the prospectus will not contain an
untrue 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.

 

(k)           Notify
each Holder of Registrable Securities if at any time
the SEC should institute or threaten to institute any proceedings for the
purpose of issuing, or should issue, a stop order suspending the effectiveness
of the Registration Statement.  Upon the
occurrence of any of the events mentioned in the preceding sentence, the
Company will use commercially reasonable efforts to prevent the issuance of any
such stop order or to obtain the withdrawal thereof as soon as possible.  The Company will advise each Holder of Registrable Securities promptly of any order or
communication of any public board or body addressed to the Company suspending
or threatening to suspend the qualification of any Registrable
Securities for sale in any jurisdiction.

 

(l)            Furnish,
to any Holder requesting registration of Registrable
Securities pursuant to this Agreement, on the date that such Registrable Securities are delivered to the underwriters
for sale in connection with a registration pursuant to this Agreement, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, an opinion, dated such date,
of the counsel representing the Company for the purposes of such registration,
in form and substance as is customarily given to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities.

 

(m)          On
the date that the registration statement with respect to such securities
becomes effective, a “comfort” letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable

 

8

 

Securities, and, if such
securities are being sold through underwriters, a reaffirmation of such letter
on the date that such Registrable Securities are
delivered to the underwriters for sale.

 

(n)           As
soon as practicable after the effective date of the registration statement, and
in any event within sixteen (16) months thereafter, have “made generally
available to its security holders” (within the meaning of Rule 158 under the
Securities Act) an earning statement (which need not be audited) covering a
period of at least twelve (12) months beginning after the effective date of the
registration statement and otherwise complying with Section 11(a) of the
Securities Act.

 

(o)           Cause all such Registrable
Securities registered pursuant hereunder to be listed on each securities
exchange or quotation system on which similar securities issued by the Company
are then listed.

 

(p)           Provide
a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the
effective date of such registration and provide the transfer agent with printed
certificates for Registrable Securities in a form
eligible for deposit with The Depositary Trust Company.

 

(q)           Make
available for inspection by a representative of the holders of a majority in
number of the Registrable Securities, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney or accountant retained by the sellers or underwriter all financial
and other records, pertinent corporate documents and properties of the Company,
and cause the Company’s officers, directors and employees to supply all
information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with the registration, with respect to
each at such time or times as the Company shall reasonably determine; subject
to reasonable restrictions and agreements to safeguard the confidentiality of
confidential information.

 

(r)            Cooperate
and assist in any filings required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter (including
any “qualified independent underwriter” that is required to be retained in
accordance with the rules and regulations of the NASD).

 

5.             Obligations of the Holders.

 

(a)           It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Agreement with respect to the Registrable
Securities of any selling Holder that such Holder shall furnish to the Company
such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder’s Registrable Securities. 
If any registration statement or comparable statement under the
Securities Act refers to an Investor or any of their respective affiliates, by
name or otherwise, as the holder of any securities of the Company then, unless
counsel to the Company advises the Company that the Securities Act requires
that such reference be included in any such statement, each such holder shall
have the right to require the deletion of such reference to itself and its
Affiliates.

 

9

 

(b)           Upon
receipt of any notice from the Company of the happening of any transaction or
occurrence of any event of the kind specified in Sections 4(g) or 4(i), such Holder will forthwith discontinue disposition of Registrable Securities pursuant to any registration
statement at issue until such Holder’s receipt of copies of a supplemented or
amended prospectus contemplated by Section 4(c) and receives notice that any
post-effective amendment (if required) has become effective or until it is
advised in writing by the Company that the use of the applicable prospectus and
registration statement may be resumed, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company’s expense) all copies in
such Holder’s possession, other than permanent file copies then in such Holder’s
possession, of the registration statement and prospectus covering such Registrable Securities current at the time of receipt of
such notice.

 

6.             Expenses of Demand Registration.  All
expenses, other than underwriting discounts and commissions relating to Registrable Securities, incurred in connection with
registrations, filings or qualifications pursuant to Section 2, including,
without limitation, all registration, filing and qualification fees, printers’
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel (selected by the Initiating
Holders) for the selling Holders shall be borne by the Company.

 

7.             Expenses of Company Registration.  The Company
shall bear and pay all expenses incurred in connection with any registration,
filing or qualification of Registrable Securities
with respect to the registrations pursuant to Section 3 for each Holder,
including without limitation all registration, filing and qualification fees,
printers’ and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel for the selling Holders
(selected by the Holders of a majority of the Registrable
Securities being registered), but excluding underwriting discounts and
commissions relating to Registrable Securities.

 

8.             Underwriting Requirements.  In
connection with any offering initiated by the Company involving an underwriting
of shares being issued by the Company, the Company shall not be required under
Section 3 to include any Holder’s securities in such underwriting unless such
Holder accepts the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it, and then only in such quantity as will not,
in the written opinion of the underwriters, exceed the largest number of
securities requested to be included in such offering which can be sold without
having an adverse effect on such offering by the Company; provided, however,
that no Holder participating in such underwriting shall be required to make any
representations, warranties or indemnities except as they relate to such Holder’s
ownership of shares and authority to enter into the underwriting agreement and
to such Holder’s intended method of distribution, and the liability of such
Holder shall be limited to an amount equal to the net proceeds from the
offering received by such Holder.  If the
total number of securities, including Registrable
Securities, requested by stockholders to be included in such offering (or in
any other offering in which Holders shall have the right to include Registrable Securities pursuant to Section 3) exceeds the
largest number of securities that, in the written opinion of the underwriters,
the underwriters reasonably believe can be sold without having an adverse
effect on such offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable
Securities, which the underwriters believe will not have an adverse effect on
such offering, in the following priority:

 

10

 

(a)           if
initiated by the Company: (i) first, securities of the Company to be
sold for the account of the Company; and (ii) second,
the Registrable Securities requested to be included
by the holders of the Series A Preferred Stock and, in the event the holders of
the Series B Preferred Stock have, pursuant to rights granted to them,
indicated that they will participate in such offering, then allocated (if
necessary) pro rata on the basis of the number of Registrable
Securities and the shares of Common Stock underlying the Series B Preferred
Stock that each such party has requested to be included in such offering; or

 

(b)           if
initiated by a Person other than the Company, the Investors or the holders of
the Series B Preferred Stock: (i) first, the securities requested to be
included by such other Person; (ii) second,
the Registrable Securities requested to be included
by the holders of the Series A Preferred Stock and, in the event the holders of
the Series B Preferred Stock have, pursuant to rights granted to them,
indicated that they will participate in such offering, then allocated (if
necessary) pro rata on the basis of the number of Registrable
Securities and shares of Common Stock underlying the Series B Preferred Stock
that each such party has requested to be included in such offering; and (iii) third, securities of the Company to be
sold for the account of the Company; or

 

(c)           if
initiated by the holders of the Series B Preferred Stock: (i)
first, the Registrable
Securities requested to be included by the holders of the Series A Preferred
Stock and the holders of the Series B Preferred Stock pro rata on the basis of
the number of Registrable Securities and shares of
Common Stock underlying the Series B Preferred Stock that each such party has
requested to be included in such offering; and (ii) second, securities of the Company to be sold for the account
of the Company.

 

For purposes of this Section 8 for
any selling stockholder which is a Holder of Registrable
Securities and which is a partnership, limited liability company or
corporation, the partners, retired partners, members and shareholders of such
Holder, or the estates and family members of any such partners, retired
partners and members and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single “selling Holder,” and any pro rata
reduction with respect to such “selling Holder” shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such “selling Holder,” as defined in this sentence.

 

9.             Indemnification.  In the event any Registrable Securities are included in a registration
statement under this Agreement:

 

(a)           To
the extent permitted by law, the Company will indemnify and hold harmless each
Holder, its heirs, personal representatives, successors and assigns, each of
such Holder’s partners, officers, directors, members, employees and affiliates,
any underwriter (as defined in the Securities Act) for such Holder and each
Person, if any, who controls such Holder or underwriter within the meaning of
the Securities Act or the Exchange Act against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon a Violation; and the Company will pay to each such
indemnified party, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such

 

11

 

loss, claim, damage, liability,
or action in enforcing this Section 9; provided, however, that
the indemnity agreement contained in this Section 9(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld, delayed or conditioned), nor shall
the Company be liable in any such case to a particular indemnified party for
any such loss, claim, damage, liability or action solely to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such indemnified party; provided, further,
that the indemnity agreement contained in this Section 9(a) shall not apply to
any underwriter to the extent that any such loss is based on or arises out of
an untrue statement or alleged untrue statement of a material fact, or an
omission or alleged omission to state a material fact, contained in or omitted
from any preliminary prospectus if the final prospectus shall correct such
untrue statement or alleged untrue statement, or such omission or alleged
omission, and a copy of the final prospectus has not been sent or given to such
Person at or prior to the confirmation of sale to such Person.

 

(b)           To
the extent permitted by law, each selling Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each Person, if any, who controls the
Company within the meaning of the Securities Act, any underwriter, any other
Person selling securities in such registration statement and any controlling
Person of any such underwriter or other Person, against any losses, claims,
damages or liabilities (joint or several) to which any of the foregoing Persons
may become subject, under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon a Violation, in each case to
the extent (and only to the extent) that such Violation solely occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred
by any Person intended to be indemnified pursuant to this Section 9(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity
agreement contained in this Section 9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; and provided further, that, in no event shall the
liability of any Holder under this Section 9(b) exceed the net proceeds from
the offering received by such Holder; provided, further, that the
indemnity agreement contained in this Section 9(b) shall not apply to any
underwriter to the extent that any such loss is based on or arises out of an
untrue statement or alleged untrue statement of a material fact, or an omission
or alleged omission to state a material fact, contained in or omitted from any
preliminary prospectus if the final prospectus shall correct such untrue
statement or alleged untrue statement, or such omission or alleged omission,
and a copy of the final prospectus has not been sent or given to such Person at
or prior to the confirmation of sale to such Person.

 

(c)           Promptly
after receipt by an indemnified party under this Section 9 of notice of the
commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 9, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the

 

12

 

indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties, acting
reasonably; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding.  The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 9 except if, and only to the extent that,
the indemnifying party is actually prejudiced thereby; and such failure to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 9.  An indemnifying party may
settle any action or claim under this Section 9 at any time without the consent
of the indemnified party so long as such settlement involves no cost or
liability to the indemnified party and includes an unconditional release of the
indemnified party from all liability with respect to such claim or action.

 

(d)           The
obligations of the Company and Holders under this Section 9 shall survive the
completion of any offering of Registrable Securities
in a registration statement under this Agreement, and otherwise.

 

(e)           Any
indemnity agreements contained herein shall be in addition to any other rights
to indemnification or contribution which any indemnified party may have
pursuant to law or contract and shall remain operative and in full force and
effect regardless of any investigation made or omitted by or on behalf of any
indemnified party.

 

(f)            If
a court of competent jurisdiction holds that the foregoing indemnity is
unavailable, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other (taking into
consideration, among other things, the fact that the provision of the
registration rights and indemnification hereunder was a material inducement to
the Investors to purchase Registrable Securities) or
(ii) if the allocation provided by clause (i) above
is not permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other
(taking into consideration, among other things, the fact that the provision of
the registration rights and indemnification hereunder is a material inducement
to the Investors to purchase Registrable Securities)
but also the relative fault of the indemnifying party and the indemnified party
as well as any other relevant equitable considerations.  The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by or on behalf of the indemnifying party or
the indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.  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

 

13

 

misrepresentation.  Notwithstanding anything to the contrary in
this Section 9, no Holder shall be required, pursuant to this Section 9, to
contribute any amount in excess of the net proceeds received by such
indemnifying party from the sale of securities in the offering to which the
losses, claims, damages, liabilities or expenses of the indemnified party
relate.

 

10.           Reports Under the Exchange Act.  With a
view to making available to the Holders the benefits of Rule 144 under the Securities
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees at all times after
90 days after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
to:

 

(a)           make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;

 

(b)           use commercially reasonable efforts (without unreasonable
expense) to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities;

 

(c)           file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and

 

(d)           furnish
to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144 under the Securities Act (at any time after the effective date of
the first registration statement filed by the Company) and the Securities Act
and Exchange Act (at any time after it has become subject to such reporting
requirements) or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time it so qualifies), (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration or
pursuant to such form.

 

11.           Assignment of Registration Rights.  The
rights to cause the Company to register Registrable
Securities pursuant to this Agreement may be assigned in whole or in part by a
Holder to one or more of its Affiliates (including, without limitation, in the
case of the Investors, transfers between them and to their respective members
and partners and any members or partners thereof) or to one or more transferees
or assignees of the Registrable Securities owned by
such Holder, provided  that (in each case) such transferee or
assignee delivers to the Company a written instrument by which such transferee
or assignee agrees to be bound by the obligations imposed on Holders under this
Agreement to the same extent as if such transferee or assignee was a party
hereto; provided, further, such assignment shall not require
registration under the Securities Act. 
Except as specifically permitted in the preceding sentence, neither this Agreement nor any Holder’s rights or privileges under
this Agreement can be assigned or transferred in whole or in part without the
prior written consent of the other parties.

 

12.           “Market Stand-Off” Agreement.  Each Holder hereby agrees that, during the
period of ninety (90) days following the effective date of a registration
statement of the

 

14

 

Company filed under the Securities
Act in connection with an underwritten offering in which securities owned by
such Holder are registered for sale, it shall not, if requested by the Company
and such underwriter, directly or indirectly sell, offer to sell, contract to
sell (including, without limitation, any short sale), grant an option to
purchase or otherwise transfer or dispose of (other than to Permitted
Transferees) any Common Stock or any securities of the Company convertible into
Common Stock held by it except Common Stock included in such registration.  No Holder shall be bound by this Section 12
unless each officer, director and other stockholder of the Company holding in
excess of 5% of the then outstanding common share equivalents of the Company
shall have entered into and complied with an agreement substantially to the
effect of this Section 12.

 

In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable
Securities of the Holders (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.

 

Notwithstanding
the foregoing, the obligations described in this Section 12 shall not apply to
a registration relating solely to employee benefit plans on Form S-1 or Form
S-8 or similar forms which may be promulgated in the future, or a registration
relating solely to a transaction under Rule 145 of Securities Act on Form S-4
or similar forms which may be promulgated in the future.

 

13.           Amendment; Waiver.  Any term
of this Agreement may be amended only with the written consent of the Company
and the Holders holding a majority of the Registrable
Securities then held by such Holders. 
The observance of any provision of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party to be charged,
provided that the Holders of a majority of the Registrable
Securities then outstanding may act on behalf of all Holders of Registrable Securities. 
Any amendment or waiver effected in accordance
with this Section 13 shall be binding upon each Holder of Registrable
Securities at the time outstanding, each future Holder of all such securities,
and the Company.

 

14.           Changes in Registrable
Securities.  If, and as often as, there are any changes in
the Registrable Securities by way of stock split,
stock dividend, combination or reclassification, or through merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions of this Agreement, as
may be required, so that the rights and privileges granted hereby shall
continue with respect to the Registrable Securities
as so changed.  Without limiting the
generality of the foregoing, the Company will require any successor by merger
or consolidation to assume and agree to be bound by the terms of this
Agreement, as a condition to any such merger or consolidation.

 

15.           Entire Agreement.  This Agreement constitutes the
entire understanding and agreement among the parties relating to the subject
matter hereof and supersedes any and all prior agreements or understandings
with respect to the subject matter hereof. 
Nothing in this Agreement, express or implied, is intended to confer
upon any Person, other than the parties hereto and their respective successors
and assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided herein.

 

15

 

16.           Governing Law.

 

(a)           This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York as applied to agreements among New York residents entered
into and to be performed entirely within New York.

 

(b)           The
jurisdiction and venue in any action brought by any party hereto pursuant to
this Agreement shall properly lie in any federal or state court located in the
State of New York.  By execution and
delivery of this Agreement, each party hereto irrevocably submits to the
jurisdiction of such courts for himself or itself and in respect of his or its
property with respect to such action. 
The parties irrevocably agree that venue would be proper in such court,
and hereby waive any objection that such court is an improper or inconvenient
forum for the resolution of such action. 
The parties further agree that the mailing by certified or registered
mail, return receipt requested, of any process required by any such court shall
constitute valid and lawful service of process against them, without necessity
for service by any other means provided by statute or rule of court.

 

(c)           WAIVER OF JURY TRIAL  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 16(C).

 

17.           Successors and Assigns.  The
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns (as provided in Section 11), heirs, executors and
administrators of the parties hereto.

 

18.           Notices.  Unless otherwise provided, any
notice required or permitted under this Agreement shall be given in writing and
shall be deemed effectively given or delivered upon receipt by the party to be
notified (including by telecopier, receipt confirmed)
or five (5) days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified (a) if to a party other than the Company, at such party’s address set
forth on Schedule 1 attached hereto or at such other address as such party
shall have furnished the Company in writing, or, until any such party so
furnishes an address to the Company, then to and at the address of the last
holder of the shares covered by this

 

16

 

Agreement who has so furnished an
address to the Company, or (b) if to the Company, at its address set forth at
the end of this Agreement, or at such other address as the Company shall have
furnished to the parties in writing.

 

19.           Severability.  The holding of any provision of
this Agreement to be invalid or unenforceable by a court of competent
jurisdiction shall not affect any other provision of this Agreement, which
shall remain in full force and effect. If any provision of this Agreement shall
be declared by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced in whole or in part, such provision shall be
interpreted so as to remain enforceable to the maximum extent permissible
consistent with applicable law and the remaining conditions and provisions or
portions thereof shall nevertheless remain in full force and effect and
enforceable to the extent they are valid, legal and enforceable, and no
provisions shall be deemed dependent upon any other covenant or provision
unless so expressed herein.

 

20.           Descriptive Headings, etc.  The
descriptive headings herein are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.  All references herein to
“Sections” shall refer to corresponding provisions of this Agreement unless
otherwise expressly noted.

 

21.           Delays or Omissions; Remedies Cumulative.  It is
agreed that no delay or omission to exercise any right, power or remedy
accruing to the parties shall impair any such right, power or remedy, nor shall
it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring.  It is further agreed that any waiver, permit,
consent or approval of any kind or character by a party of any breach or
default under this Agreement, or any waiver by a party of any provisions or
conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in writing and that all remedies, either
under this Agreement, or by law or otherwise afforded to a party, shall be
cumulative and not alternative.

 

22.           Counterparts.  This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument. 
Facsimile counterpart signatures shall be acceptable.

 

 

[SIGNATURE
PAGES FOLLOW]

 

17

 

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

 

	
   

  	
  SPORTS
  ENTERTAINMENT ENTERPRISES,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  P. Benson

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Thomas P.
  Benson

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Executive
  Vice President, Chief

  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE HUFF
  ALTERNATIVE FUND, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edwin M.
  Banks

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Edwin M.
  Banks

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Investment Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE HUFF
  ALTERNATIVE PARALLEL

  FUND, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edwin M.
  Banks

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Edwin M.
  Banks

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Investment Officer

  

 

 

[Signature page to Registration Rights
Agreement]

 

 

Schedule 1 –
Investors

 

The Huff Alternative Fund, L.P.

 

Address:

1776 On the Green

57 Park Place

Morristown, New Jersey  07960

Facsimile:  (973) 984-5818

Attention:  Bryan Bloom, Esq.

 

 

The Huff Alternative Parallel Fund, L.P.

 

Address:

1776 On the Green

57 Park Place

Morristown, New Jersey  07960

Facsimile:  (973) 984-5818

Attention:  Bryan Bloom, Esq.

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