Document:

ex102to8k06113_02132009.htm

    Exhibit
10.2

     

    New
Century Equity Holdings Corp.

    200
Crescent Court, Suite 1400

    Dallas,
Texas 75201

     

    

     

    February
13, 2009

     

    

    Horst
Dieter Esch

    1090
Primrose Place

    Park
City, UT 84098

    

    Dear
Dieter:

     

    Reference
is hereby made to:

     

    (a) that
certain Loan Agreement, dated as of December 21, 2005, as amended, modified or
supplemented, from time to time (the “Loan Agreement”, and together with all
documents ancillary to the Loan Agreement, the “Loan Documents”), between
Wilhelmina International Ltd., a New York corporation (the “Company”), and
Signature Bank (“Signature Bank”);

     

    (b) that
certain agreement, dated as of August 25, 2008 (the “Acquisition Agreement”), by
and among New Century Equity Holdings Corp., a Delaware corporation (“NCEH” or
“we”), Wilhelmina Acquisition Corp., a New York corporation (“Wilhelmina
Acquisition”), Dieter Esch (“Esch” or “you”), Lorex Investments AG, a Swiss
corporation, Brad Krassner (“Krassner”), Krassner Family Investments Limited
Partnership, a Nevada limited partnership, the Company, Wilhelmina – Miami,
Inc., a Florida corporation (“Wilhelmina Miami”), Wilhelmina Artist Management
LLC, a New York limited liability company (“WAM”), Wilhelmina Licensing LLC, a
Delaware limited liability company (“Wilhelmina Licensing”), Wilhelmina Film
& TV Productions LLC, a New York limited liability company (“Wilhelmina TV”,
and together with the Company, Wilhelmina Miami, WAM and Wilhelmina Licensing,
the “Wilhelmina Companies”), Sean Patterson, and the shareholders of Wilhelmina
Miami; and

     

    (c) that
certain allocation letter dated August 25, 2008 (the “Allocation Letter”)
between Esch and Krassner directing NCEH with respect to the payment of proceeds
under Section 2.3(d) of the Acquisition Agreement.

     

    Capitalized
terms used but not defined herein shall have the respective meanings given to
such terms in the Acquisition Agreement unless the context otherwise
requires.

     

    For good
and valuable consideration (including in order to facilitate a mutually
beneficial closing under the Acquisition Agreement), the receipt and sufficiency
of which is hereby acknowledged, you and we hereby agree as
follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                A.

              	
                Escrow

              

      

    

     

    Notwithstanding the provisions of
Section 2.3 of the Acquisition Agreement and the directions set forth in the
Allocation Letter, one million seven hundred and fifty thousand dollars ($1.75
million) of the cash proceeds to be paid to Esch at Closing (taking into account
the terms of the Allocation Letter) (such amount, “Bank Holdback Amount”) shall
instead be paid to and  held in escrow by the Escrow Agent until the
occurrence of either (a) a Holdback Release Event (as defined below) or (b) Bank
Payoff Event (as defined below).  Funds held in escrow pursuant to the
foregoing shall remain strictly in the custody and control of the Escrow Agent
until any release pursuant to Section B below and shall be invested in a money
market fund invested principally in US Treasuries.  The “Escrow Agent”
shall initially be Olshan Grundman Frome Rosenzweig & Wolosky LLP (“Olshan”)
(to whom the Bank Holdback Amount proceeds shall be remitted promptly following
Closing, and no later then three (3) Business Days thereafter to enable
preparation of an appropriate account); provided that, within fifteen (15) days
following the Closing, Esch and NCEH shall use their reasonable best efforts to
select a mutually acceptable third party escrow agent, which third party shall
become the “Escrow Agent” hereunder upon execution of an applicable assignment
from Olshan or a similar document which includes the precise obligations
hereunder (which other escrow document may include such other customary terms
applicable to escrow agents as are mutually acceptable to the
parties).

    
       

      
        
          	 	
                  B.

                	
                        
                    Release

                  

                

        

      

    

     

    Upon the occurrence of a Holdback
Release Event, the Escrow Agent shall pay directly to you by check or wire (at
your election) from escrow all or any remaining portion (as applicable) of the
Bank Holdback Amount then held in escrow by the Escrow Agent.  For the
avoidance of doubt, in the event that a Bank Payoff Event occurred and all or a
portion of the Bank Holdback Amount was paid by the Escrow Agent to Signature
Bank, NCEH shall have no liability to Esch for proceeds payable under the
Acquisition Agreement (which proceeds were escrowed hereunder and paid to
Signature Bank) other than in respect of amounts set forth in any issued Notes
(as defined below) in accordance with the terms thereof.

     

    A
“Holdback Release Event” shall mean (1) the closing of (and initial funding to
NCEH under) a new revolving bank facility (other than under the Loan Documents)
for NCEH or the Company which provides committed working capital financing to
NCEH or the Company on terms acceptable to NCEH in its absolute discretion and
of a size materially comparable to the bank facility (including the term loan)
under the Loan Documents or (2) the extension by Signature Bank of the Loan
Documents (including the maturity of the revolving credit note) for a term
extending to December 31, 2009 or later without (a) any adverse change in the
terms of the Loan Documents (as of the date hereof) that is not immaterial (it
being understood and agreed that an increase in the rate of interest by 1% or
less shall be deemed immaterial) and (b) any requirement that additional equity
capital in NCEH or the Company (or any of its subsidiaries) be contributed or
raised.

     

     Upon the occurrence of a Bank
Payoff Event (which may occur one or more times), the Escrow Agent shall release
and pay from escrow all or such portion (as determined by NCEH upon written
notice to the Escrow Agent) of the Bank Holdback Amount in cash to Signature
Bank in satisfaction of all or a portion of amounts (principal and/or interest)
outstanding due to Signature Bank under the Loan Documents; provided that, if
Esch and NCEH deliver a Mutual Deferral Notice, then the Escrow Agent shall
release such funds only upon subsequent direction by NCEH (provided that a Bank
Payoff Event continues to apply).  A “Mutual Deferral Notice” shall
mean a notice signed by both Esch and NCEH directing the Escrow Agent to not
release all or any portion of the Bank Holdback Notice until further notice by
NCEH.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    A “Bank
Payoff Event” shall mean:

     

    (1)
written notification by Signature Bank to the Company of the occurrence of any
Event of Default (as defined in the Loan Documents) under the Loan
Documents;

     

    (2)
written notification to the Company by Signature Bank of the termination of the
Loan Agreement (or any termination or reduction in the committed financing
thereunder) and/or notification of any mandatory repayment of principal by the
Company under any of the Loan Documents (including the revolving credit note) or
acceleration thereof;

     

    (3)
Signature Bank’s failure to acknowledge in a writing reasonably satisfactory to
NCEH that Signature Bank does not possess liens on, or security interests in,
any shares of stock in the Company or Wilhelmina Miami or any membership or
other equity interests in the other Wilhelmina Transferred Companies, or
Signature Bank’s failure or refusal to release any such liens held by Signature
Bank on such shares of stock or on any membership or other equity interests
(through the return of share certificates to the Company or other appropriate
action as reasonably requested by Purchaser’s counsel) and, in either case, such
failure (or refusal to release) continues for a period of thirty calendar days
following the Closing Date; or

     

    (4)
written notification to NCEH or the Company by Signature Bank of
any  requirement by Signature Bank that, in order to extend the term
of the Loan Agreement, additional equity capital in NCEH or the Company (or any
of its subsidiaries) is required to be contributed or raised.

     

    An email
communication shall be deemed written notification described in the foregoing
clauses (1)-(4).

    
      
         

        
          
            	 	
                    C.

                  	
                          
                            
                        Issuance
      of
Notes

                      

                    

                  

          

        

      

    

     

               In
the event that the Escrow Agent pays Signature Bank any portion of the Bank
Holdback Amount from escrow (any such payment, a “Payback Amount”) upon a Bank
Payoff Event, NCEH shall promptly issue to Esch, in replacement thereof, a
promissory note (a “Note”) in the form set forth as Exhibit A hereto in the
principal amount of such Payback Amount.  NCEH may issue one or more
such Notes to Esch, not to exceed an aggregate principal amount (between all
such Notes) equal to the Bank Holdback Amount.  Notes shall be issued
directly to Esch and shall not be held in escrow.

    
      
         

        
          
            	 	
                    D.

                  	
                          
                            
                        Termination

                      

                    

                  

          

        

      

       

    

    This letter agreement shall terminate
upon the release and payment by the Escrow Agent to Esch and/or to Signature
Bank of all remaining amounts held in escrow pursuant to Section
A.  The termination of this letter agreement shall have no effect on
any Notes issued by NCEH pursuant to paragraph C above, which Notes shall remain
in full force and effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        
          
            	 	
                    E.

                  	
                          
                            
                        Other

                      

                    

                  

          

        

      

    

     

    THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW
PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION OTHER
THAN THE STATE OF NEW YORK.  EACH OF ESCH AND NCEH HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE PERSONAL AND SUBJECT MATTER JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE SUPREME
COURT OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN OVER ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.  EACH OF ESCH AND NCEH HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW (A) ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT; AND (B) ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

     

    EACH OF
ESCH AND NCEH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

     

      This
letter agreement and any Note issued pursuant to the terms hereof shall
constitute the entire understanding between NCEH and Esch with respect to the
subject matter hereof and supersedes all other agreements and understandings
among NCEH and Esch with respect hereto. NCEH and Esch acknowledge and agree
that the agreement set forth herein does not require any amendment to the
Acquisition Agreement and shall operate as a standalone side agreement between
NCEH and Esch.  Each of NCEH and Esch is represented by counsel in
connection with the negotiation and execution hereof.

    

    Please
execute below to indicate your agreement to the terms hereof.

    

    [Signature Page
Follows]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [Signature
Page to Esch Letter re Bank Holdback Amount]

    

    Regards,

    

    
      
        
          	
                  New
      Century Equity Holdings Corp.

                
	 
      
	 
      
	
                  
                    /s/
      John Murray

                  

                
	
                  Name:
      John Murray

                
	
                  Title:
      Chief Financial Officer

                
	 
      

        

      

    

    

    
      
        	
                Acknowledged
      and Agreed:

              
	 
      
	 
      
	
                
                  /s/
      Horst Dieter Esch

                

              
	
                Horst
      Dieter Eschex103to8k06113_02132009.htm

    Exhibit
10.3

     

    REGISTRATION
RIGHTS AGREEMENT

     

    THIS REGISTRATION RIGHTS
AGREEMENT (the “Agreement”) is entered into
as of February 13, 2009, by and between New Century Equity Holdings
Corp., a Delaware corporation (the “Company”), and Newcastle Partners, L.P., a Texas limited
partnership (the
“Investor”).

     

    R
E C I T A L S :

     

    WHEREAS, concurrently with the
execution hereof, the Company is consummating a transaction (the “Acquisition”) to acquire
Wilhelmina International, Ltd. and certain affiliated companies pursuant to an
Agreement dated August 25, 2008, 2008 (the “Acquisition Agreement”);
and

     

    WHEREAS, the Company has
entered into that certain Purchase Agreement, dated August 25, 2008 (the “Purchase Agreement”), with
the Investor pursuant to which the Investor has agreed to purchase from the
Company, and the Company has agreed to issue and sell to the Investors, shares
of the Company’s common stock, par value $.01 (the “Common Stock”), in order to
provide financing in connection with consummating the Acquisition;
and

     

    WHEREAS, the Company has
agreed to grant certain registration rights with respect to the shares of Common
Stock issued to the Investor under the Purchase Agreement (including those
shares of Common Stock issued thereunder following the Closing) (the “Shares”); and

     

    NOW, THEREFORE, in
consideration of the foregoing and of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:

     

    ARTICLE
1

    DEFINITIONS

     

    Capitalized
terms used but not defined herein shall have the respective meanings given to
them in the Purchase Agreement.

     

    As used
herein, the following terms shall have the following respective
meanings:

     

    1.1           “Affiliate” shall have the
meaning set forth in Rule 144.

     

    1.2           “Commission” shall mean the
U.S. Securities and Exchange Commission or any other successor federal agency at
the time administering the Securities Act.

     

    1.3            “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, or any successor federal statute,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.

     

    1.4           “Holders” shall mean and
include the Investor and any person or entity who holds Registrable Securities
of record and is a permitted transferee hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.5           “Priority Securities” shall
mean (1) the Registrable Securities and (2) the shares of Common Stock or other
securities subject to contractual demand registration rights held by persons or
entities who have been granted such rights pursuant to the Wilhelmina
Registration Rights Agreement.

     

    1.6           “Register,” “registered” and “registration” refer to a
registration effected by preparing and filing with the Commission a registration
statement in compliance with the Securities Act, and the declaration or ordering
by the Commission of the effectiveness of such registration
statement.

     

    1.7           “Registrable Securities” means
any and all shares of Common Stock (i) held by Investor (including the Shares
and any other shares of Common Stock previously held by Investor or subsequently
purchased by it) and (ii) issued or issuable with respect to the Common Stock
referred to in clause (i) above upon any stock split, stock dividend,
recapitalization, reclassification, exchange, merger or other similar
event.  The term “Registrable Securities” shall exclude in all cases,
however, such shares of Common Stock (i) following their sale by a Holder to the
public pursuant to a registered offering or pursuant to Rule 144 or (ii) sold in
a private transaction in which the Holder’s registration rights under this
Agreement are not assigned.

     

    1.8           “Registration Expenses” shall
mean all reasonable and customary expenses incurred by the Company in complying
with Articles 2, 3 and 5 hereof, including, without limitation, all
registration, qualification and Commission, National Association of Securities
Dealers, Inc., stock exchange and other filing fees, printing expenses,
duplication expenses relating to copies of any registration statement or
prospectus delivered to any Holders, escrow fees, fees and disbursements of
legal counsel for the Company, fees and disbursements of the Company’s
accountants and blue sky fees and expenses.  The Registration Expenses
shall not include the Selling Expenses.

     

    1.9           “Rule 144” shall mean Rule 144
under the Securities Act or any other successor rule or regulation then in
effect.

     

    1.10           “Securities Act” shall mean
the Securities Act of 1933, as amended, or any successor federal statute and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.

     

    1.11           “Selling Expenses” shall mean
all underwriting fees, selling broker or dealer manager fees, discounts and
selling commissions applicable to the Registrable Securities registered on
behalf of the Holders and the fees and expenses of any special counsel engaged
by the Holders.

     

    1.12           “Wilhelmina Registration Rights
Agreement” shall mean that certain Registration Rights Agreement executed
and delivered by the Company pursuant to the Acquisition Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    ARTICLE
2

    REQUIRED
REGISTRATION

     

    2.1           Request for
Registration.

     

    (a)           At
any time following the one year anniversary of the date hereof, the Investor may
make a written request to the Company to file a registration statement under the
Securities Act covering all or part of the Registrable Securities.  As
soon as reasonably practicable following its receipt of such written request
(the “Demand Registration
Filing Date”), the Company will prepare and file with the Commission a
registration statement under the Securities Act covering all of the Registrable
Securities requested to be included therein, and the Company will use its
commercially reasonable efforts to obtain the effectiveness of such registration
as soon as practicable as would permit or facilitate the resale and distribution
of all securities requested to be registered.

     

    (b)           Notwithstanding
the foregoing, the Company shall not be required to file a registration
statement pursuant to Section 2.1(a) under any of the following
circumstances:

     

    (i)           within
90 days after the effective date of a registration statement filed in connection
with an underwritten public offering of securities of the Company;

     

    (ii)           the
Company promptly delivers written notice (“Delay Notice”) to Holder that
it:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (1) has
determined (whether before or within 30 days after receiving any request
pursuant to Section 2.1(a)) to file a registration statement for an underwritten
public offering of securities as to which the Company expects to receive net
proceeds of at least $12,500,000 (after deducting all costs, discounts,
commissions, and other expenses of the offering), or (2) has initiated bona fide
discussions with underwriters in preparation for a public offering of its
securities as to which it expects to receive net proceeds of at least
$12,500,000 (after deducting all costs discounts, commissions, and other
expenses of the offering) and its underwriters reasonably believe (as evidenced
by a letter to the Company) that such public offering would be materially
adversely affected by a registration pursuant to Section 2.1(a); provided,
however, that the Company may postpone the filing of a registration statement
pursuant to this clause (iii) no longer than (X) 120 days after the effective
date of the registration statement to be filed by the Company as stated in the
Delay Notice, if such registration statement is filed within 45 days after the
date of delivery of the Delay Notice and becomes effective within 90 days after
the date of delivery of the Delay Notice, (Y) 90 days after the date of delivery
of the Delay Notice, if such registration statement is filed within 45 days
after the date of delivery of the Delay Notice but does not become effective
within such 90-day period, or (Z) 45 days after the date of delivery of the
Delay Notice if such registration statement is not filed within 45 days after
the date of delivery of the Delay Notice; and provided further, that the Company
may exercise the rights in this clause (1) no more than once in any 24-month
period; or

     

    (2)           is
in possession of material information that it reasonably deems advisable not to
disclose in a registration statement; provided, however, that the Company may
postpone the filing of a registration statement in connection with
a  registration pursuant to Section 2.1(a) under this clause (2) for
so long as such information continues to be material and non-public, but in no
event longer than 90 days after the request for such registration or for more
than an aggregate of 90 days during any 24-month period;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (iii)           the
Company promptly delivers written notice (“Prior Registration Notice”) to
the Investor that the Company has filed and is using reasonable efforts to have
declared effective, or at the time of receipt of the request for a registration
pursuant to Section 2.1(a) is required to file, a registration statement
pursuant to demand registration rights granted to any person or entity;
provided, however that the Company may postpone the filing of a registration
statement pursuant to Section 2.1(a) for a period of no longer than (1) 120 days
after the effective date of such other registration statement if such other
registration statement was filed before the date of delivery of the Prior
Registration Notice or within 45 days thereafter and in either case becomes
effective within 90 days after the date of delivery of the Prior Registration
Notice; (2) 90 days after the date of delivery of the Prior Registration Notice,
if such other registration statement was filed before the date of delivery of
the Prior Registration Notice or within 45 days thereafter but, in either case,
does not become effective within such 90-day period; or (3) 45 days after the
date of delivery of the Prior Registration Notice, if such other registration
statement was not filed before the date of delivery of the Prior Registration
Notice and is not filed within 45 days thereafter;

     

    (iv)           the
Chief Executive Officer of the Company prior to the Demand Registration Filing
Date stating that, in the good faith judgment of the Board of Directors of the
Company, (1) it would be seriously detrimental to the Company and its
stockholders for such registration statement to be filed by reason of a material
pending transaction (other than any financing (whether a primary or resale
distribution) contemplated by (i), (ii) or (iii) above) or (2) the filing of
such registration statement would require the disclosure of material information
which the Company has a bona fide business purpose for preserving as
confidential, then the Company shall have the right to defer such filing for a
period of not more than 90 days after the Demand Registration Filing Date;
or

     

    (v)           the
Registrable Securities are expected to have an aggregate disposition price
(before deductions for underwriting discounts and commissions) of at least
$12,500,000.

     

    (c)             Any
registration statement filed pursuant to Section 2.1(a) shall contain (unless
the Investor otherwise directs) substantially the “Plan of Distribution”
attached hereto as Annex A. A
registration shall be deemed to have been effected (and the demand right
therefore exercised pursuant to Section 2.1(a)) if the applicable registration
has become effective, unless it results in a (A) Limited Registration (as
defined in Section 2.3(d)) or (B) a Failed Registration (as defined in Section
2.1(d)). Subject to the foregoing, the Investor may revoke any registration
request made pursuant to Section 2.1(a) and/or withdraw securities from an
applicable registration.

     

    (d)           The
Company shall be obligated to effect only one registration pursuant to this
Section 2.1, subject to the provisions of Section 2.2.  If any
registration is commenced pursuant to this Section 2.1 and a sale of the
Registrable Shares thereunder is not consummated for any reason whatsoever (a
“Failed Registration”),
such Failed Registration shall not be deemed to constitute a registration under
this Section 2.1 and the Investor shall retain its rights pursuant to this
Section 2.1.  Any expenses in connection with a Failed Registration
shall be paid in accordance with Article 4 hereof.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    2.2           Shelf
Registration.  At any time from and after the date hereof and
from time to time, the Investor may make a written request to the Company to
prepare and file with the Commission a shelf registration statement under the
Securities Act covering all of the Registrable Securities then outstanding on a
delayed or continuous basis pursuant to Section 415 of the Securities Act (a
“Shelf
Registration”).  The Company will use its commercially
reasonable efforts to prepare and file with the Commission, no later than 45
days following its receipt of such written request (the “Shelf Registration Filing
Date”), a registration statement under the Securities Act covering all of
the Registrable Securities requested to be included therein and the Company will
use its reasonable best efforts to obtain the effectiveness of such registration
as soon as practicable as would permit or facilitate the original issuance or
subsequent resale and distribution of all securities requested to be registered
hereunder.  Notwithstanding the foregoing, however, the Company may
defer the filing of such registration statement pursuant to and in accordance
with the provisions of Section 2(i)(b).  Such registration statement
shall contain (unless the Holders otherwise direct) substantially the “Plan of
Distribution” attached hereto as Annex
A.   Notwithstanding anything to the contrary, in the case
of any shelf registration pursuant to this Section 2.2, the Company shall use
its reasonable best efforts to keep the relevant registration statement
effective until the earlier of (i) a period of two years or (ii) the date as of
which all the securities requested to be registered (including whether or not
subsequently transferable under Rule 144) under the shelf registration statement
have been disposed of in a manner described therein; provided further that the
Company shall be obligated to re-file a Shelf Registration at the request of
Investor if such registration expires and not all securities requested to be
registered thereunder have been disposed of.  Notwithstanding anything
to the contrary, in the event that the Company is not eligible to effect a Shelf
Registration, (a) this Section 2.2 shall not apply and (b) the Investor shall
have the right on two (as opposed to one) occasions to make a request for the
Company to file a registration statement pursuant to Section 2.1; provided that
the Company shall not be obligated to effect more than one such demand
registration pursuant to Section 2.1 in any 12 consecutive calendar
months.

     

    2.3           Underwriting.

     

    (a)           The
distribution of the Registrable Securities covered by a registration statement
referred to in Section 2.1 shall be effected by means of the method of
distribution reasonably selected by the stockholder participants holding a
majority in interest of the Priority Securities that have been properly elected
to be included in the relevant registration (the “Majority in Interest”).
Subject to the foregoing, the Majority in Interest may also change the resale
distribution method from time to time (subject to amendment of the registration
statement at the expense of the relevant stockholder participants as required to
describe such changes).

     

    (b)           Any
resale distribution of securities (including Registrable Securities) covered by
a registration statement filed pursuant to Section 2.2 above shall be effected
by means of the method of distribution and timing reasonably selected by the
Holders.

     

    (c)           If
a distribution is effected by means of an underwriting, the Company (together
with all Holders proposing to distribute their securities through such
underwriting) shall enter into an underwriting agreement in customary form with
a managing underwriter of regional or national recognized standing selected for
such underwriting by a Majority in Interest (in the case of a registration
pursuant to Section 2.1) or by the Holders (in the case of a registration
pursuant to Section 2.2), and in each case approved by the Company (such consent
not to be unreasonably withheld).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (d)           Notwithstanding
any other provision of this Article 2, with respect to a distribution of
securities covered by a registration statement filed pursuant to either Section
2.1 or Section 2.2, if the managing underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten, the
Company shall so advise all Holders of Registrable Securities, and the number of
shares of Registrable Securities to be included in the underwriting shall be
allocated (i) first, among the holders of Priority Securities, pro rata
according to the number of Priority Securities that have been properly elected
to be included in the relevant registration, and (ii) second, in the event that
the number of shares that the managing underwriter believes may be underwritten
has not been reached pursuant to (i), pro rata according to the number of other
securities offered to be included in such underwriting.

     

    (e)           In
the event that, as a result of the “cutback” provisions of Section 2.3(d), the
Investor making a request pursuant to Section 2.1 is unable to register more
than 66 2/3rds% of the Registrable Securities which the Investor has properly
requested to be registered in accordance with the provisions of this Agreement
(such limited registration, a “Limited Registration”), than
the requesting Holder shall not be deemed to have made a request pursuant to
Section 2.1 and, notwithstanding the effectiveness of the applicable
registration, shall preserve its right to make a request pursuant to Section 2.1
in the future, subject in all cases to the provisions of this
Agreement.

     

    (f)           If
any Holder disapproves of the terms of the underwriting, such Holder may elect
to withdraw therefrom by written notice to the Company, the managing underwriter
and the other Holders, and the applicable registration shall be deemed to be a
Failed Registration (and the Investor shall retain its demand rights) for
purposes of  Section 2.1(b) hereof. The Registrable Securities so
withdrawn shall also be withdrawn from registration.

     

    ARTICLE
3

    COMPANY
REGISTRATION

     

    3.1           Notice of Registration to
Investor.  If at any time or from time to time from and after
the date hereof and ending on the eighth anniversary of the date hereof, the
Company shall determine to register any of its securities, either for its own
account or the account of any security holder or holders, other than (i) a
registration relating solely to employee benefit plans on Form S-8 (or any
successor form) or relating to a dividend reinvestment plan, stock option plan
or other compensation plan, (ii) a registration on Form S-4 (or any successor
form) or other registration in connection with mergers, acquisitions, exchange
offers or similar transactions, (iii) a registration on any form that does not
permit secondary sales or (iv) a registration relating solely to a subscription
offering or rights offering, the Company will:

     

    (a)           promptly
give to the Investor written notice thereof; and

     

    (b)           include
in such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all of the Registrable
Securities specified in a written request, made within 15 days after receipt of
such written notice from the Company described in Section 3.1(a), by the
Investor, but only to the extent that the original issuance or resale
distribution of such Registrable Securities is not already covered by an
effective registration statement under Article 2 above.

     

    
      
        
        

      

      
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    3.2           Underwriting.

     

    (a)           If
the registration of which the Company gives notice is for an offering involving
an underwriting, the Company shall so advise the Investor as part of the written
notice given pursuant to Section 3.1(a).  In such event, the right of
the Investor to registration pursuant to this Article 3 shall be conditioned
upon the Investor’s participation in such underwriting and the inclusion of the
Investor’s Registrable Securities in the underwriting to the extent provided
herein.  The Investor shall (together with the Company) enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company; provided, however, that the liability of
the Investor thereunder shall in no event exceed the lesser of (i) the
Investor’s pro-rata portion of the liability based on the Investor’s shares sold
in the offering as compared to the total number of shares sold in the offering,
and (ii)  an amount equal to the net proceeds from the offering
received by the Investor.

     

    (b)           Notwithstanding
any other provision of this Article 3, if the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the Company shall so advise the Investor, and the number of shares
of Common Stock to be included in such registration shall be allocated as
follows:  (i) first, for the account of the Company, all shares of
Common Stock proposed to be sold by the Company; and (ii) second, for the
account of the Investor and any other stockholders of the Company participating
in such registration who have contractual rights to be included in such
registration similar to the rights of the Investor, the number of shares of
Common Stock requested to be included in the registration by the Investor and
such other stockholders in proportion, as nearly as practicable, to the
respective number of shares that are proposed to be offered and sold by the
Investor and such other stockholders at the time of filing the registration
statement.  No Registrable Securities or other shares of Common Stock
excluded from the underwriting in this Article 3 by reason of the underwriters’
marketing limitation shall be included in such registration.

     

    (c)           The
Company shall so advise the Investor and the other stockholders distributing
their securities through such underwriting of any such foregoing limitation and
the number of shares that may be included in the registration.  If the
Investor disapproves of the terms of any such underwriting, the Investor may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter.  Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration; provided that the
Company may determine, at its election, to  increase, on a pro rata
basis for the securities of stockholders then included in the registration
(giving effect to the withdrawal), the number of shares of the other
stockholders participating in the registration.

     

    (d)           The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Article 3 prior to the effectiveness of such registration,
whether or not the Investor has elected to include Registrable Securities in
such registration; provided that the Investor shall have the right to convert
such registration into a demand registration covered by Section 2.1
hereof.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    ARTICLE
4

    EXPENSES
OF REGISTRATION

     

    All
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Articles 2, 3 and 5, the reasonable fees
of one counsel for the Holders of Registrable Securities (up to a maximum of
$10,000) in the case of a registration in which a Holder participates and any
other similar out-of-pocket expenses incurred by any Holder or Holders pursuant
to any applicable underwriting agreement in connection with a registration
hereunder shall, in each case, be borne by the Company.  All Selling
Expenses relating to Registrable Securities registered on behalf of a Holder
shall be borne by such Holder.

     

    ARTICLE
5

    REGISTRATION
PROCEDURES

     

    (a)           In
the case of each registration effected by the Company pursuant to this
Agreement, the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof.  The
Company will use its commercially reasonable efforts to effect or cause such
registration to permit the sale of the Registrable Securities covered thereby in
accordance with the intended method or methods of distribution thereof described
in such registration statement.  In connection with any registration
of any Registrable Securities, the Company shall:

     

    (i)           prepare
and file with the Commission a registration statement with respect to such
Registrable Securities and use its commercially reasonable efforts to cause such
registration statement to become effective;

     

    (ii)           prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus included therein as may be necessary
to effect and maintain the effectiveness of such registration statement pursuant
to the applicable rules and regulations of the Commission and the instructions
applicable to the form of such registration statement (provided, however, that
the Company shall not be obliged to maintain the effectiveness of such
registration statement longer than through the earlier of (A) six months (or two
years in the case of a Shelf Registration) following the effective date of such
registration statement and (B) such time as all Registrable Securities
registered thereunder have been sold pursuant to such registration statement),
and furnish to the Holders of the Registrable Securities covered thereby copies
of any such supplement or amendment prior to its use and/or filing with the
Commission;

     

    (iii)           permit
one legal counsel for the Holders whose Registrable Securities are to be
included in a registration statement hereunder to review and comment upon a
registration statement, and all amendments and supplements thereto, within a
reasonable amount of time prior to its filing with the Commission, and not file
any registration statement, or amendment or supplement thereto, in a form to
which such legal counsel reasonably and timely objects.  The Company
shall furnish to such legal counsel, without charge, copies of any
correspondence from the Commission to the Company or its representatives
relating to any registration statement;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (iv)           promptly
notify the Holders whose Registrable Securities are to be included in a
registration statement hereunder, the sales or placement agent, if any, therefor
and the managing underwriter of the securities being sold, and confirm such
advice in writing, (A) when such registration statement or the prospectus
included therein or any prospectus amendment or supplement or post-effective
amendment has been filed and, with respect to such registration statement or any
post-effective amendment, when the same has become effective, (B) of the
issuance by the Commission of any stop order suspending the effectiveness of
such registration statement or the initiation of any proceedings for that
purpose, (C) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (D) of any request by the Commission for any amendment or supplement to
a registration statement or related prospectus or related information or (E) if,
at any time when a prospectus is required to be delivered under the Securities
Act, such registration statement or prospectus, or any document incorporated by
reference in any of the foregoing, contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made.  In the case of clause (E),
the Company shall promptly prepare a supplement or amendment to such
registration statement to correct such untrue statement or
omission;

     

    (v)           use
its commercially reasonable efforts to obtain at the earliest practicable date
the withdrawal of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such registration statement for sale in
any jurisdiction;

     

    (vi)           furnish
to each Holder of Registrable Securities to be included in such registration
statement, each placement or sales agent, if any, therefor and each underwriter,
if any, thereof, without charge, a conformed copy of such registration statement
and any amendment and supplement thereto (in each case including all exhibits
and documents incorporated by reference) and such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus, any summary prospectus and any free writing prospectus), and any
amendment or supplement thereto, as such Holder, agent, if any, and underwriter,
if any, may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Holder, sold by such agent or underwritten
by such underwriter and to permit such Holder, agent and underwriter to satisfy
the prospectus delivery requirements of the Securities Act;

     

    (vii)           use
its commercially reasonable efforts to (A) register or qualify the Registrable
Securities to be included in such registration statement under such other
securities laws or blue sky laws of such states of the United States or the
District of Columbia as may be reasonably requested by the Holders of a majority
of such Registrable Securities participating in such registration, each
placement or sales agent, if any, therefor or the managing underwriter, if any,
thereof, (B) keep such registrations or qualifications in effect and comply with
such laws at all times during the period described in Section 5(a)(ii) above,
and (C) take any and all such actions as may be reasonably necessary to enable
such Holder, agent, if any, and underwriter, if any, to consummate the
disposition in such jurisdictions of such Registrable Securities; provided,
however, that in order to fulfill the foregoing obligations under this Section
5(a)(vii), the Company shall not (unless otherwise required to do so in any
jurisdiction) be required to (1) qualify generally to do business as a foreign
company or a broker-dealer, (2) execute a general consent to service of process
or (3) subject itself to taxation;

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (viii)                      furnish,
at the request of the Holders of a majority of such Registrable Securities
participating in such registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, 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, (i) an opinion, dated as of such date, of 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 and reasonably satisfactory to a majority in interest of the Holders,
addressed to the underwriters, if any, and to such Holders and (ii) a letter,
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders, addressed to
the underwriters, if any, and, if permitted by applicable accounting standards,
to such Holders; and

     

    (ix)           otherwise
use its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission in connection with any such
registration.

     

    (b)           The
Company may require each Holder of Registrable Securities as to which any
registration is being effected to furnish in writing to the Company such
information regarding such Holder and such Holder’s method of distribution of
such Registrable Securities as the Company may from time to time reasonably
request or as is required to be included in any registration to be included in
any registration statement filed pursuant to the terms of this
Agreement.  Each such Holder agrees to notify the Company as promptly
as practicable of any inaccuracy or change in information previously furnished
by such Holder to the Company or of the occurrence of any event as a result of
which any prospectus relating to such registration contains an untrue statement
of a material fact regarding such Holder or the distribution of such Registrable
Securities or omits to state any material fact regarding such Holder or the
distribution of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and promptly to furnish to the Company
any additional information required to correct and update any previously
furnished information or required so that such prospectus shall not contain,
with respect to such Holder or the distribution of such Registrable Securities,
an untrue statement or a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances under which they were made.

     

    (c)           Each
of the Holders will comply with the provisions of the Securities Act with
respect to disposition of the Registrable Securities to be included in any
registration statement filed by the Company.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (d)           Notwithstanding
anything to the contrary, in connection with any offering of securities of the
Company (including without limitation any offering contemplated by Article 2 or
Article 3 of this Agreement), each Holder agrees that if its Registrable
Securities are included in the applicable registration, it will consent and
agree to comply with any “hold back” restriction relating to shares of Common
Stock or any other securities of the Company then owned by such Holder (and its
controlled Affiliates), that may be reasonably requested by the underwriter(s)
or placement or other selling agent(s) of such offering, not to exceed one
hundred eighty (180) days, provided, however, that such Holder need not enter
into any such arrangement unless each of the Company’s principal officers and
its directors (and/or the respective stockholders designating such directors
pursuant to any contract or agreement and their respective controlled
Affiliates, if any) enter into agreements that contain substantially the same
“hold back” restrictions and/or agreements (it being understood that this
proviso shall not apply if a board designee of the Investor refuses to enter
into such arrangement).  Without limitation to the foregoing, each
Holder shall, upon the request of such underwriter(s) or agent(s), agree not to
effect any public sale or distribution, including any sale pursuant to Rule 144,
of any Registrable Securities, and not effect any such public sale or
distribution of any other equity security of the Company or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (in each case, other than as part of such underwritten public offering)
during the 30 days prior to, and during the 180-day period beginning on, the
effective date of such registration statement.

     

    ARTICLE
6

    INDEMNIFICATION

     

    6.1           The
Company will indemnify each Holder, each of its officers, directors and
partners, such Holder’s legal counsel and independent accountants, if any, each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act against all
expenses (including reasonable attorneys fees), claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement or prospectus, or any amendment or
supplement thereto, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities laws
applicable to the Company and relating to action or inaction by the Company in
connection with any such registration, qualification or compliance, and will
reimburse each such Holder, each of its officers, directors and partners, such
Holder’s legal counsel and independent accountants, each person controlling such
Holder, each such underwriter and each person who controls any such underwriter
for any legal and other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such expense, claim, loss, damage, liability or action
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by such Holder expressly for use in such
registration statement or prospectus, or any amendment or supplement
thereto.

     

    
      
        
        

      

      
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    6.2           Each
Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being
effected, severally indemnify the Company, each of its directors and officers,
partners and Affiliates, its legal counsel and independent accountants, each
underwriter, if any, of the Company’s securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each other such Holder, each of
its officers, directors, partners, legal counsel and independent accountants, if
any, and each person controlling such Holder within the meaning of Section 15 of
the Securities Act, against all expenses (including reasonable attorneys fees),
claims, losses, damages and liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement or prospectus, or any amendment or supplement thereto, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company, such Holders, such directors, officers, partners, legal
counsel, independent accountants, underwriters and control persons for any legal
and other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement or prospectus or amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Holder regarding such Holder and/or such Holder’s method of distribution
expressly for use in such registration statement or prospectus, or any amendment
or supplement thereto; provided, however, that the obligations of each Holder
hereunder shall be limited to an amount equal to the net proceeds to such Holder
of Registrable Securities sold pursuant to such registration
statement.

     

    6.3           Each
party entitled to indemnification under this Article 6 (the “Indemnified Party”) shall
give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld, conditioned or delayed).  The
Indemnified Party may participate in such defense at such Indemnified Party’s
expense; provided, however, that the Indemnifying Party shall bear the expense
of such defense of the Indemnified Party if representation of both parties by
the same counsel would be inappropriate due to actual or potential conflicts of
interest.  The failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement, unless and then only to the extent such failure is
materially prejudicial to the ability of the Indemnifying Party to defend the
action.  No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    6.4           If
the indemnification provided for in Section 6.1 or 6.2 is unavailable or
insufficient to hold harmless an Indemnified Party, then each Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Party as a
result of the expenses, claims, losses, damages or liabilities (or actions or
proceedings in respect thereof) referred to in Section 6.1 or 6.2, in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Holders of Registrable Securities on the other hand in
connection with statements or omissions which resulted in such expenses, claims,
losses, damages or liabilities (or actions or proceedings in respect thereof),
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 the Company
or the Holders of Registrable Securities and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission.  The Company and the Holders agree that
it would not be just and equitable if contributions pursuant to this Section 6.4
were to be determined by pro rata allocation (even if all Holders of Registrable
Securities were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this Section 6.4.  The amount
paid by an Indemnified Party as a result of the expenses, claims, losses,
damages or liabilities (or actions or proceedings in respect thereof) referred
to in the first sentence of this Section 6.4 shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any claim, action or proceeding which
is the subject of this Section 6.4.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  The obligations of Holders of
Registrable Securities to contribute pursuant to this Section 6.4 shall be
several in proportion to the respective amount of Registrable Securities sold by
them pursuant to a registration statement, and shall be limited to an amount
equal to the net proceeds to each such Holder of Registrable Securities sold
pursuant to such registration statement.

     

    ARTICLE
7

    RULE
144 REPORTING

     

    With a
view to making available the benefits of certain rules and regulations of the
Commission that may at any time permit the sale of securities of the Company to
the public without registration, the Company agrees to use its commercially
reasonable efforts to:

     

    7.1           Make
and keep public information regarding the Company available, as those terms are
understood and defined in Rule 144, at all times after the date hereof;
and

     

    7.2           File
with the Commission in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act, in each case until
the earlier of (A) six months after such date as all of the Registrable
Securities may be resold pursuant to Rule 144 or any other rule of similar
effect or (B) such date as all of the Registrable Securities shall have been
sold by the Holders.

     

    
      
        
        

      

      
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    ARTICLE
8

    TRANSFER
OF REGISTRATION RIGHTS

     

    The
rights to cause the Company to register Registrable Securities under Sections
2.1 and 2.2 of this Agreement, together with all related rights and obligations,
may be assigned by a Holder to either (a) an Affiliate of such Holder or (b) a
third party which purchases at least 50% of the Shares purchased by the Investor
pursuant to the Purchase Agreement; provided, however, that (A) the right
to cause the Company to register Registrable Securities under Section 2.1 may
only be held by one person or entity with respect to the Registrable Securities
owned by him or it, (B) the transferor shall furnish to the Company written
notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned prior to such
transfer, and (C) such transferee shall agree in writing to be subject to
all applicable restrictions set forth in this Agreement.  In each
case, such rights may only be transferred together with the underlying
Registrable Securities in a transfer permitted by the Securities Act and
applicable state securities laws.

     

    ARTICLE
9

    LIMITATIONS
ON REGISTRATION RIGHTS GRANTED TO OTHER SECURITIES

     

    From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Investor, enter into any agreement with any holder or
prospective holder of any securities of the Company providing for the grant to
such holder of registration rights superior to those granted herein; provided
that the foregoing shall not apply to the Wilhelmina Registration Rights
Agreement; provided further that amendments (other than immaterial technical
amendments) to Wilhelmina Registration Rights Agreement shall require the
Investor’s consent.

     

    ARTICLE
10

    MISCELLANEOUS

     

    10.1           Governing Law;
Forum.  The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law.  EACH OF THE PARTIES TO THIS AGREEMENT CONSENTS TO SUBMIT TO THE
PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF NEW
YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
AGREES THAT ALL CLAIMS IN RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT, AND AGREES NOT TO BRING ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY OTHER COURT. EACH OF THE
PARTIES TO THIS AGREEMENT AGREES NOT TO ASSERT IN ANY ACTION OR PROCEEDING
ARISING OUT OF RELATING TO THIS AGREEMENT THAT THE VENUE IS IMPROPER, AND WAIVES
ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING
SO BROUGHT AND WAIVES ANY BOND, SURETY OR OTHER SECURITY THAT MIGHT BE REQUIRED
OF ANY OTHER PARTY WITH RESPECT THERETO.  Each of the parties hereto
waives any right to request a trial by jury in any litigation with respect to
this Agreement and represents that counsel has been consulted specifically as to
this waiver.

     

    
      
        
        

      

      
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    10.2           Termination. This Agreement
and all rights and obligations hereunder (other than Article 6 which shall
survive) shall terminate upon the earlier of (a) eight years following the date
hereof or (b) at such time the Holders no longer hold any shares of Common
Stock.

     

    10.3           Successors and
Assigns.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors and assigns of each of the parties hereto and shall inure to the
benefit of and be binding upon each Holder of any Registrable
Securities.

     

    10.4           Entire
Agreement.  This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.

     

    10.5           Notices. All notices,
requests, consents and other communications hereunder shall be made in writing
and shall be deemed given (i) when made if made by hand delivery, (ii) one
business day after being deposited with an overnight courier if made by courier
guaranteeing overnight delivery, (iii) on the date indicated on the notice of
receipt if made by first-class mail, return receipt requested or (iv) on the
date of confirmation of receipt of transmission by facsimile, addressed as
follows:

     

    (a)           if
to the Company, at

     

    New
Century Equity Holdings Corp.

    200
Crescent Court, Suite 1400

    Dallas,
Texas 75230

    Facsimile:
(214) 661-7475

    Attention:  Chief
Financial Officer

    

    

    (b)           if
to the Investor, in care of:

     

    Newcastle
Partners, L.P.

    200
Crescent Court, Suite 1400

    Dallas,
TX  75201

    Facsimile:  (214)
661-7475

    Attention:  Evan
D. Stone, Esq.

    

    

    (c)           if
to a Holder, to the address reflected on the records of the Company, or such
other address or addresses as shall have been furnished in writing by such party
to the Company and to the other parties to this Agreement.

     

    10.6           Severability.  The
invalidity, illegality or unenforceability of one or more of the provisions of
this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    10.7           Titles and
Subtitles.  The titles of the articles, sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

     

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

     

    10.9           Amendment and
Modification.  This Agreement may be amended, modified or
supplemented in any respect only by written agreement by the Company and Holders
representing at least a majority of the Registrable Securities, voting together
as a single class;  provided, that no such amendment shall unfairly
discriminate against a particular Holder relative to the other
Holders.  Any action taken by the Holders, as provided in this Section
10.9, shall bind all Holders.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the
undersigned have hereunto affixed their signatures.

    

    

    
      	
              New
      Century Equity Holdings Corp.

            	 
      	
              Newcastle
      Partners, L.P.

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              By:

            	
              Newcastle
      Capital Management,

              L.P.,
      its general partner

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By

            	
              
                /s/
      John Murray

              

            	 
      	
              By

            	
              
                /s/
      Evan Stone

              

            
	 
      	 
      	 
      	 
      	 
      
	
              Its

            	
              
                Chief
      Financial Officer

              

            	 
      	
              Its

            	
              
                General
      Counsel

              

            

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    ANNEX
A

    PLAN
OF DISTRIBUTION

     

    We are
registering the shares offered by this prospectus on behalf of the selling
stockholders. The selling stockholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling shares of common
stock or interests in shares of common stock received after the date of this
prospectus from a selling stockholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions.  These
dispositions may be at fixed prices, at prevailing market prices at the time of
sale, at prices related to the prevailing market price, at varying prices
determined at the time of sale or at negotiated prices.

     

    The
selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:

     

    
      	
               
      

            	
              ·

            	
              ordinary
      brokerage transactions and transactions in which the broker-dealer
      solicits purchasers;

            

    

     

    
      	
               
      

            	
              ·

            	
              block
      trades in which the broker-dealer will attempt to sell the shares as
      agent, but may position and resell a portion of the block as principal to
      facilitate the transaction;

            

    

     

    
      	
               
      

            	
              ·

            	
              purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;

            

    

     

    
      	
               
      

            	
              ·

            	
              an
      exchange distribution in accordance with the rules of the applicable
      exchange;

            

    

     

    
      	
               
      

            	
              ·

            	
              privately
      negotiated transactions;

            

    

     

    
      	
               
      

            	
              ·

            	
              short
      sales;

            

    

     

    
      	
               
      

            	
              ·

            	
              through
      the writing or settlement of options or other hedging transactions,
      whether through an options exchange or
  otherwise;

            

    

     

    
      	
               
      

            	
              ·

            	
              broker-dealers
      may agree with the selling stockholders to sell a specified number of such
      shares at a stipulated price per
share;

            

    

     

    
      	
               
      

            	
              ·

            	
              a
      combination of any such methods of sale;
and

            

    

     

    
      	
               
      

            	
              ·

            	
              any
      other method permitted pursuant to applicable
  law.

            

    

    

    The
selling stockholders may, from time to time, pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock, from time to time, under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.  The selling
stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this
prospectus.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    In
connection with the sale of our common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume.  The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities.  The
selling stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).

     

    The
aggregate proceeds to the selling stockholders from the sale of the common stock
offered by them will be the purchase price of the common stock less discounts or
commissions, if any.  Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents.  We will not receive any of the proceeds from this
offering.

     

    The
selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.

     

    The
selling stockholders and any broker-dealers that act in connection with the sale
of securities might be deemed to be “underwriters” within the meaning of Section
2(11) of the Securities Act of 1933, and any commissions received by such
broker-dealers and any profit on the resale of the securities sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act of 1933.

     

    To the
extent required, the shares of our common stock to be sold, the names of the
selling stockholders, the respective purchase prices and public offering prices,
the names of any agent, dealer or underwriter, and any applicable commissions or
discounts with respect to a particular offer, will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this
prospectus.

     

    In order
to comply with the securities laws of some states, if applicable, the common
stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers.  In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.

     

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    We have
advised the selling stockholders that the anti-manipulation rules of Regulation
M under the Securities Exchange Act of 1934 may apply to sales of shares in the
market and to the activities of the selling stockholders and their
affiliates.  In addition, we will make copies of this prospectus (as
it may be supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act of 1933.  The selling stockholders may indemnify
any broker-dealer that participates in transactions involving the sale of the
shares against certain liabilities, including liabilities arising under the
Securities Act of 1933.

     

    We have
agreed to indemnify the selling stockholders against liabilities, including
liabilities under the Securities Act of 1933 and state securities laws, relating
to the registration of the shares offered by this prospectus.

     

    We have
agreed with the selling stockholders to keep the registration statement that
includes this prospectus effective until the earlier of (1) two years following
the effective date of the registration statement and (2) such time as all shares
of common stock covered by this prospectus have been sold pursuant to this
prospectus; provided that the limitation set forth in clause (1) shall not apply
in the case of any shelf registration.

     

    

    
      
        
        

      

      
        3

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