Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of March 6,
2006 by and among TRC Companies, Inc., a Delaware corporation (the “Company”),
and certain purchasers of the Company’s common stock listed on the signature
pages hereto (the “Holders”).

 

WITNESSETH

 

WHEREAS, the Company and the Holders entered into a Purchase Agreement as of
March 6, 2006 (the “Purchase Agreement”), providing, among other things, for the
Holders’ purchase of 2,162,162 shares (the “Shares”) of the Company’s Common
Stock, $0.10 par value (“Common Stock”); and

 

WHEREAS, in consideration of the purchase of the Shares pursuant to the Purchase
Agreement, the Company agreed to grant certain rights to the Holders as set
forth in this Agreement.

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.                                       Registration Rights. The Company
covenants and agrees as follows:

 

1.1                                 DEFINITIONS. TERMS DEFINED IN THE PURCHASE
AGREEMENT AND NOT OTHERWISE DEFINED HEREIN ARE USED HEREIN WITH THE SAME
MEANINGS AS DEFINED IN THE PURCHASE AGREEMENT. AS USED IN THIS AGREEMENT, THE
FOLLOWING CAPITALIZED DEFINED TERMS SHALL HAVE THE FOLLOWING MEANINGS:

 

“Advice” has the meaning set forth in Section 1.3(b).

 

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or is under common control with such
Person. For the purposes of this definition, “control”, when used with respect
to any Person, means possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of the such Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms of “affiliated”, “controlling” and “controlled” have meanings correlative
to the foregoing.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
banking institutions in New York, New York are permitted or required by any
applicable law to close.

 

“Commission” means the Securities and Exchange Commission.

 

“Company” has the meaning set forth in the Preamble and also includes the
Company’s successors.

 

“Delay Notice” has the meaning set forth in Section 1.2(c).

 

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“Delay Period” has the meaning set forth in Section 1.2(c).

 

“Effectiveness Period” has the meaning set forth in Section 1.2(b).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.

 

“Holder” or “Holders” has the meaning set forth in the Preamble or each Person
to whom a Holder Transfers Registrable Securities in accordance with
Section 1.8.

 

“Inspectors” has the meaning set forth in Section 1.3(a)(xii).

 

“NASD” means the National Association of Securities Dealers, Inc.

 

“Person” means an individual, partnership, corporation, limited liability
company, trust, estate, unincorporated organization, or other entity, or a
government or agency or political subdivision thereof.

 

“Prospectus” shall mean the prospectus included in a Shelf Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and, in each case, including all documents incorporated by reference
therein.

 

 “Registrable Securities” means the Shares, excluding in all cases, however,
(i) any Shares sold by a person in a transaction in which such person’s rights
under this Agreement are not assigned, (ii) any Shares sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction or (iii) any Shares that may be sold in a single transaction
pursuant to Rule 144(k) under the Securities Act or a similar exemption under
the Securities Act.

 

“Rule 144” and “Rule 145” mean Rule 144 and Rule 145 promulgated under the
Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time.

 

“Shelf Registration” shall mean a registration effected pursuant to
Section 1.2(a).

 

“Shelf Registration Statement” shall mean a “shelf” registration statement of
the Company pursuant to the provisions of Section 1.2 which covers all of the
Registrable Securities, on an appropriate form under Rule 415 under the
Securities Act, or any successor or similar rule that may be adopted by the
Commission, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all documents incorporated by
reference therein.

 

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

 

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“S-3 Eligibility Date” means the earlier of (i) the first date after the date
hereof on which the Company becomes eligible to file a Registration Statement
for a transaction involving a secondary offering on Form S-3 and (ii) June 1,
2007.

 

“Transfer” means and includes the act of selling, giving, transferring, creating
a trust (voting or otherwise), assigning or otherwise disposing of (other than
pledging, hypothecating or otherwise transferring as security or any transfer
upon any merger or, consolidation) (and correlative words shall have correlative
meanings); provided, however, that any transfer or other disposition upon
foreclosure or other exercise of remedies of a secured creditor after an event
of default under or with respect to a pledge, hypothecation or other transfer as
security shall constitute a Transfer.

 

“Violation” has the meaning set forth in Section 1.4(a).

 

1.2                                 REGISTRATION.

 

(A)                                  REGISTRATION REQUIREMENT. THE COMPANY SHALL
FILE WITH THE COMMISSION A SHELF REGISTRATION STATEMENT MEETING THE REQUIREMENTS
OF THE SECURITIES ACT WITHIN 30 DAYS FOLLOWING THE S-3 ELIGIBILITY DATE, AND
WILL USE ITS BEST EFFORTS TO CAUSE THE SHELF REGISTRATION STATEMENT TO BE
DECLARED EFFECTIVE BY THE COMMISSION AS SOON AS REASONABLY PRACTICABLE
THEREAFTER AND IN ANY EVENT NOT LATER THAN 180 DAYS AFTER THE S-3 ELIGIBILITY
DATE. EACH HOLDER AGREES TO FURNISH TO THE COMPANY ALL INFORMATION WITH RESPECT
TO SUCH HOLDER NECESSARY TO MAKE THE INFORMATION SET FORTH IN THE SHELF
REGISTRATION STATEMENT OR PROSPECTUS NOT MATERIALLY MISLEADING.

 

(B)                                 EFFECTIVENESS REQUIREMENT. THE COMPANY
AGREES TO USE ITS BEST EFFORTS TO KEEP THE SHELF REGISTRATION STATEMENT
CONTINUOUSLY EFFECTIVE AND THE PROSPECTUS USABLE FOR RESALES FOR A PERIOD
COMMENCING ON THE DATE THAT SUCH SHELF REGISTRATION STATEMENT IS INITIALLY
DECLARED EFFECTIVE BY THE COMMISSION AND TERMINATING ON THE DATE WHEN ALL OF THE
REGISTRABLE SECURITIES COVERED BY SUCH SHELF REGISTRATION STATEMENT HAVE BEEN
SOLD PURSUANT TO SUCH SHELF REGISTRATION STATEMENT OR CEASE TO BE REGISTRABLE
SECURITIES (THE “EFFECTIVENESS PERIOD’); PROVIDED, HOWEVER, THE COMPANY IS
PERMITTED TO SUSPEND SALES OF THE REGISTRABLE SECURITIES DURING ANY DELAY
PERIOD. THE COMPANY WILL BE DEEMED NOT TO HAVE USED ITS BEST EFFORTS TO CAUSE
THE SHELF REGISTRATION STATEMENT TO BECOME, OR TO REMAIN, EFFECTIVE DURING THE
REQUISITE PERIOD IF IT VOLUNTARILY TAKES ANY ACTION OR OMITS TO TAKE ANY ACTION
THAT WOULD RESULT IN THE SHELF REGISTRATION STATEMENT NOT BEING DECLARED
EFFECTIVE OR THAT WOULD RESULT IN THE HOLDERS OF REGISTRABLE SECURITIES COVERED
THEREBY NOT BEING ABLE TO OFFER AND SELL SUCH REGISTRABLE SECURITIES DURING THAT
PERIOD, UNLESS SUCH ACTION OR OMISSION IS REQUIRED BY APPLICABLE LAW AND EXCEPT
DURING ANY DELAY PERIOD.

 

(C)                                  DELAY PERIOD. THE TERM “DELAY PERIOD”
MEANS, WITH RESPECT TO ANY OBLIGATION TO KEEP ANY SHELF REGISTRATION STATEMENT
OR PROSPECTUS USABLE FOR RESALES PURSUANT TO THIS SECTION 1.2, THE SHORTEST
PERIOD OF TIME DETERMINED IN GOOD FAITH BY THE COMPANY’S BOARD OF DIRECTORS TO
BE NECESSARY FOR SUCH PURPOSE WHEN THERE EXIST CIRCUMSTANCES RELATING TO A
MATERIAL PENDING DEVELOPMENT, INCLUDING, BUT NOT LIMITED TO, A PENDING OR
CONTEMPLATED MATERIAL ACQUISITION OR MERGER OR OTHER MATERIAL TRANSACTION OR
SIMILAR EVENT, WHICH WOULD REQUIRE DISCLOSURE BY THE COMPANY IN SUCH SHELF
REGISTRATION STATEMENT OR PROSPECTUS OF MATERIAL NON-

 

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PUBLIC INFORMATION WHICH THE COMPANY DETERMINES IN GOOD FAITH UPON THE ADVICE OF
ITS COUNSEL THAT IT HAS A BONA FIDE BUSINESS PURPOSE FOR KEEPING CONFIDENTIAL
AND NON-PUBLIC AND THE NON-DISCLOSURE OF WHICH IN SUCH SHELF REGISTRATION
STATEMENT OR PROSPECTUS MIGHT CAUSE SUCH SHELF REGISTRATION STATEMENT OR
PROSPECTUS TO FAIL TO COMPLY WITH APPLICABLE DISCLOSURE REQUIREMENTS. A DELAY
PERIOD SHALL COMMENCE ON AND INCLUDE THE DATE THAT THE COMPANY GIVES WRITTEN
NOTICE (A “DELAY NOTICE”) TO THE HOLDERS THAT THE PROSPECTUS IS NO LONGER USABLE
AS A RESULT OF A MATERIAL PENDING DEVELOPMENT AND SHALL END ON THE DATE WHEN THE
HOLDERS ARE ADVISED IN WRITING BY THE COMPANY THAT THE CURRENT DELAY PERIOD HAS
TERMINATED (IT BEING UNDERSTOOD THAT THE COMPANY SHALL GIVE SUCH NOTICE TO ALL
HOLDERS PROMPTLY UPON MAKING THE DETERMINATION THAT THE DELAY PERIOD HAS ENDED);
PROVIDED, HOWEVER, AND NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY THE
COMPANY IS ONLY ENTITLED TO FOUR (4) DELAY PERIODS HAVING DURATIONS OF NOT MORE
THAN 30 DAYS EACH DURING ANY CONSECUTIVE 12 MONTH PERIOD, AND NOT TO EXCEED MORE
THAN 90 DAYS IN THE AGGREGATE IN ANY CONSECUTIVE 12 MONTH PERIOD. THE COMPANY
COVENANTS AND AGREES THAT IT WILL NOT DELIVER A DELAY NOTICE WITH RESPECT TO A
DELAY PERIOD UNLESS COMPANY OFFICERS AND DIRECTORS AND THEIR AFFILIATES AND ANY
OTHER HOLDERS OF REGISTRATION RIGHTS WITH RESPECT TO THE COMPANY’S COMMON STOCK
ARE ALSO PROHIBITED BY THE COMPANY FOR THE DURATION OF SUCH DELAY PERIOD FROM
EFFECTING ANY PUBLIC SALES OF SHARES OF COMMON STOCK BENEFICIALLY OWNED BY THEM.
THE COMPANY REPRESENTS THAT IT HAS NO KNOWLEDGE OF ANY CIRCUMSTANCE THAT WOULD
REASONABLY BE EXPECTED AT THE TIME OF THE EFFECTIVENESS OF THE SHELF
REGISTRATION STATEMENT PURSUANT TO SECTION 1.2(A) TO CAUSE THE COMPANY TO
EXERCISE ITS RIGHTS UNDER THIS SECTION 1.2(C). WITHOUT LIMITING ANY OF THE
FOREGOING, BUT FOR THE PURPOSE OF ADDITIONAL CLARITY, THE COMPANY SHALL NOT
COMMENCE ANY DELAY PERIOD UNTIL AFTER THE SHELF REGISTRATION STATEMENT IS FILED
WITH THE COMMISSION.

 

(D)                                 NOTICE. THE COMPANY WILL, IN THE EVENT A
SHELF REGISTRATION STATEMENT IS DECLARED EFFECTIVE, PROVIDE TO EACH HOLDER A
REASONABLE NUMBER OF COPIES OF THE PROSPECTUS WHICH IS A PART OF SUCH SHELF
REGISTRATION STATEMENT, NOTIFY EACH SUCH HOLDER WHEN SUCH SHELF REGISTRATION
STATEMENT HAS BECOME EFFECTIVE AND TAKE SUCH OTHER ACTIONS AS ARE REQUIRED TO
PERMIT UNRESTRICTED RESALES OF THE REGISTRABLE SECURITIES. THE COMPANY FURTHER
AGREES TO SUPPLEMENT OR AMEND EACH SHELF REGISTRATION STATEMENT IF AND AS
REQUIRED BY THE RULES, REGULATIONS OR INSTRUCTIONS APPLICABLE TO THE
REGISTRATION FORM USED BY THE COMPANY FOR SUCH SHELF REGISTRATION STATEMENT OR
BY THE SECURITIES ACT OR BY ANY OTHER RULES AND REGULATIONS THEREUNDER FOR SHELF
REGISTRATIONS, AND THE COMPANY AGREES TO FURNISH TO THE HOLDERS OF REGISTRABLE
SECURITIES COPIES OF ANY SUCH SUPPLEMENT OR AMENDMENT PROMPTLY AFTER ITS BEING
USED OR FILED WITH THE COMMISSION.

 

(E)                                  LIQUIDATED DAMAGES. IF THE SHELF
REGISTRATION STATEMENT IS NOT EFFECTIVE BY THE 180TH DAY AFTER THE S-3
ELIGIBILITY DATE, THEN THE COMPANY WILL PAY TO EACH HOLDER AS LIQUIDATED DAMAGES
AND NOT A PENALTY, AN AMOUNT IN CASH EQUAL TO 0.50% OF THE PURCHASE PRICE PAID
FOR THE SHARES BY EACH SUCH HOLDER (PURSUANT TO THE PURCHASE AGREEMENT) FOR EACH
30-DAY PERIOD OR PART THEREOF THAT SUCH SHELF REGISTRATION STATEMENT IS NOT SO
EFFECTIVE. IF A STOP ORDER, INJUNCTION OR OTHER ORDER OR REQUIREMENT OF THE
COMMISSION OR ANY OTHER GOVERNMENTAL AGENCY OR COURT IS IMPOSED OR IF FOR ANY
OTHER REASON THE EFFECTIVENESS OF THE SHELF REGISTRATION STATEMENT IS SUSPENDED,
THEN THE COMPANY SHALL PAY LIQUIDATED DAMAGES TO EACH HOLDER, AS LIQUIDATED
DAMAGES AND NOT A PENALTY, AN AMOUNT IN CASH EQUAL TO 0.50% OF THE PURCHASE
PRICE PAID FOR THE SHARES BY EACH SUCH HOLDER (PURSUANT TO THE PURCHASE
AGREEMENT) FOR EACH 30-DAY PERIOD OR PART THEREOF THAT SUCH SHELF REGISTRATION
STATEMENT IS NOT SO EFFECTIVE. NOTWITHSTANDING THE PRECEDING

 

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SENTENCE, THE HOLDERS WILL NOT BE ENTITLED TO RECEIVE LIQUIDATED DAMAGES UNDER
THIS SECTION 1.2(E) DURING A DELAY PERIOD (SUBJECT TO THE DURATION RESTRICTIONS
IN SECTION 1.2(C)). LIQUIDATED DAMAGES SHALL BE DEEMED TO COMMENCE ACCRUING ON
THE DAY ON WHICH THE EVENT TRIGGERING SUCH LIQUIDATED DAMAGES OCCURS. THE
LIQUIDATED DAMAGES TO BE PAID TO THE HOLDERS PURSUANT TO THIS
SECTION 1.2(E) SHALL CEASE TO ACCRUE (I) WITH RESPECT TO THE LIQUIDATED DAMAGES
FOR FAILURE TO HAVE THE SHELF REGISTRATION STATEMENT DECLARED EFFECTIVE ON OR
PRIOR TO THE 180TH DAY AFTER THE S-3 ELIGIBILITY DATE, ON THE DAY AFTER THE
HOLDERS HAVE RECEIVED NOTICE FROM THE COMPANY THAT THE SHELF REGISTRATION
STATEMENT IS DECLARED EFFECTIVE, OR (II) WITH RESPECT TO THE LIQUIDATED DAMAGES
FOR THE SUSPENSION OF EFFECTIVENESS OF THE SHELF REGISTRATION STATEMENT, ON THE
DAY AFTER THE HOLDERS HAVE RECEIVED NOTICE FROM THE COMPANY REGARDING THE
REINSTATEMENT OF EFFECTIVENESS OF THE SHELF REGISTRATION STATEMENT. LIQUIDATED
DAMAGES SHALL BE PAID TO THE HOLDERS BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE
FUNDS TO THE ACCOUNTS DESIGNATED BY THE HOLDERS WITHIN TWO BUSINESS DAYS OF THE
END OF EACH 30-DAY PERIOD. THE PARTIES HERETO AGREE THAT THE LIQUIDATED DAMAGES
PROVIDED FOR IN THIS SECTION 1.2(E) CONSTITUTE A REASONABLE ESTIMATE OF THE
DAMAGES THAT WILL BE SUFFERED BY THE HOLDERS BY REASON OF THE FAILURE OF THE
SHELF REGISTRATION STATEMENT TO BE DECLARED EFFECTIVE AND/OR TO REMAIN
EFFECTIVE, AS THE CASE MAY BE, IN ACCORDANCE WITH THIS AGREEMENT. THE PARTIES
HERETO AGREE AND ACKNOWLEDGE THAT THE PAYMENT OF LIQUIDATED DAMAGES, PURSUANT TO
THIS SECTION 1.2(E), WILL BE THE HOLDERS’ SOLE REMEDY FOR ANY BREACH BY THE
COMPANY OF A PROVISION FOR WHICH LIQUIDATED DAMAGES ARE AVAILABLE.

 

1.3                                 REGISTRATION PROCEDURES.

 

(A)                                  OBLIGATIONS OF THE COMPANY. IN CONNECTION
WITH ITS OBLIGATIONS UNDER SECTION 1.2 WITH RESPECT TO THE SHELF REGISTRATION
STATEMENT, THE COMPANY SHALL, AS EXPEDITIOUSLY AS PRACTICABLE:

 

(I)                                     PREPARE AND FILE WITH THE COMMISSION A
SHELF REGISTRATION STATEMENT AS PRESCRIBED BY SECTION 1.2(A) WITHIN THE RELEVANT
TIME PERIOD SPECIFIED IN SECTION 1.2(A) ON A FORM CHOSEN BY THE COMPANY, WHICH
FORM SHALL (A) BE AVAILABLE FOR THE SALE OF THE REGISTRABLE SECURITIES BY THE
SELLING HOLDERS THEREOF AND (B) COMPLY AS TO FORM IN ALL MATERIAL RESPECTS WITH
THE REQUIREMENTS OF THE APPLICABLE FORM AND INCLUDE ALL FINANCIAL STATEMENTS
REQUIRED BY THE COMMISSION TO BE FILED THEREWITH; THE COMPANY SHALL USE ITS BEST
EFFORTS TO CAUSE SUCH SHELF REGISTRATION STATEMENT TO BECOME EFFECTIVE AND
REMAIN EFFECTIVE AND THE PROSPECTUS USABLE FOR RESALES IN ACCORDANCE WITH
SECTION 1.2, SUBJECT TO THE PROVISO CONTAINED IN SECTION 1.2(B); PROVIDED,
HOWEVER, THAT, BEFORE FILING ANY SHELF REGISTRATION STATEMENT OR PROSPECTUS OR
ANY AMENDMENTS OR SUPPLEMENTS THERETO, THE COMPANY SHALL FURNISH TO AND AFFORD
THE HOLDERS OF THE REGISTRABLE SECURITIES COVERED BY SUCH SHELF REGISTRATION
STATEMENT AND THEIR COUNSEL A REASONABLE OPPORTUNITY TO REVIEW COPIES OF ALL
SUCH DOCUMENTS (INCLUDING COPIES OF ANY DOCUMENTS TO BE INCORPORATED BY
REFERENCE THEREIN AND ALL EXHIBITS THERETO) PROPOSED TO BE FILED; AND THE
COMPANY SHALL NOT FILE ANY SHELF REGISTRATION STATEMENT OR PROSPECTUS OR ANY
AMENDMENTS OR SUPPLEMENTS THERETO IN RESPECT OF WHICH THE HOLDERS MUST BE
AFFORDED AN OPPORTUNITY TO REVIEW PRIOR TO THE FILING OF SUCH DOCUMENT, OTHER
THAN FILINGS REQUIRED UNDER THE EXCHANGE ACT, IF THE HOLDERS OR THEIR COUNSEL
SHALL REASONABLY OBJECT IN A TIMELY MANNER; AND PROVIDED FURTHER, HOWEVER, THE
PLAN OF DISTRIBUTION DISCLOSED IN THE SHELF REGISTRATION STATEMENT SHALL BE
SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT A, WITH SUCH CHANGES AS THE
HOLDERS MAY REASONABLY REQUEST;

 

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(II)                                  PREPARE AND FILE WITH THE COMMISSION SUCH
AMENDMENTS AND POST-EFFECTIVE AMENDMENTS TO THE SHELF REGISTRATION STATEMENT AS
MAY BE NECESSARY TO KEEP THE SHELF REGISTRATION STATEMENT EFFECTIVE FOR THE
EFFECTIVENESS PERIOD, SUBJECT TO THE PROVISO CONTAINED IN SECTION 1.2(B) OR AS
REASONABLY REQUESTED BY THE HOLDERS OF A MAJORITY OF REGISTRABLE SECURITIES, AND
CAUSE EACH PROSPECTUS TO BE SUPPLEMENTED, IF SO DETERMINED BY THE COMPANY OR
REQUESTED BY THE COMMISSION, BY ANY REQUIRED PROSPECTUS SUPPLEMENT AND AS SO
SUPPLEMENTED TO BE FILED PURSUANT TO RULE 424 (OR ANY SIMILAR PROVISION THEN IN
FORCE), UNDER THE SECURITIES ACT, RESPOND AS SOON AS REASONABLY PRACTICABLE TO
ANY COMMENTS RECEIVED FROM THE COMMISSION WITH RESPECT TO THE SHELF REGISTRATION
STATEMENT, OR ANY AMENDMENT, POST-EFFECTIVE AMENDMENT OR SUPPLEMENT RELATING
THERETO, AND COMPLY WITH THE PROVISIONS OF THE SECURITIES ACT, THE EXCHANGE ACT
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER APPLICABLE TO IT WITH
RESPECT TO THE DISPOSITION OF ALL REGISTRABLE SECURITIES COVERED BY THE SHELF
REGISTRATION STATEMENT DURING THE EFFECTIVENESS PERIOD IN ACCORDANCE WITH THE
INTENDED METHOD OR METHODS OF DISTRIBUTION BY THE SELLING HOLDERS THEREOF
DESCRIBED IN THIS AGREEMENT;

 

(III)                               REGISTER OR QUALIFY THE REGISTRABLE
SECURITIES UNDER ALL APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS OF SUCH
JURISDICTIONS BY THE TIME THE APPLICABLE SHELF REGISTRATION STATEMENT IS
DECLARED EFFECTIVE BY THE COMMISSION AS ANY HOLDER OF REGISTRABLE SECURITIES
COVERED BY THE SHELF REGISTRATION STATEMENT SHALL REASONABLY REQUEST IN WRITING
IN ADVANCE OF SUCH DATE OF EFFECTIVENESS, AND DO ANY AND ALL OTHER ACTS AND
THINGS WHICH MAY BE REASONABLY NECESSARY OR ADVISABLE TO ENABLE SUCH HOLDER TO
CONSUMMATE THE DISPOSITION IN EACH SUCH JURISDICTION OF SUCH REGISTRABLE
SECURITIES OWNED BY SUCH HOLDER; PROVIDED, HOWEVER, THAT THE COMPANY SHALL NOT
BE REQUIRED TO (A) QUALIFY AS A FOREIGN CORPORATION OR AS A DEALER IN SECURITIES
IN ANY JURISDICTION WHERE IT WOULD NOT OTHERWISE BE REQUIRED TO QUALIFY BUT FOR
THIS SECTION 1.3(A)(III), (B) FILE ANY GENERAL CONSENT TO SERVICE OF PROCESS IN
ANY JURISDICTION WHERE IT WOULD NOT OTHERWISE BE SUBJECT TO SUCH SERVICE OF
PROCESS OR (C) SUBJECT ITSELF TO ANY MATERIAL TAXATION IN ANY SUCH JURISDICTION
IF IT IS NOT THEN SO SUBJECT;

 

(IV)                              PROMPTLY (BUT IN ANY EVENT WITHIN ONE
(1) BUSINESS DAY) NOTIFY EACH HOLDER OF REGISTRABLE SECURITIES AND ITS COUNSEL,
AND PROMPTLY CONFIRM SUCH NOTICE IN WRITING (A) WHEN THE SHELF REGISTRATION
STATEMENT COVERING SUCH REGISTRABLE SECURITIES HAS BECOME EFFECTIVE AND WHEN ANY
POST-EFFECTIVE AMENDMENTS THERETO BECOME EFFECTIVE, (B) OF ANY REQUEST BY THE
COMMISSION OR ANY STATE SECURITIES AUTHORITY FOR AMENDMENTS AND SUPPLEMENTS TO
SUCH SHELF REGISTRATION STATEMENT OR PROSPECTUS OR FOR ADDITIONAL INFORMATION
AFTER SUCH SHELF REGISTRATION STATEMENT HAS BECOME EFFECTIVE, (C) OF THE
ISSUANCE OR THREATENED ISSUANCE BY THE COMMISSION OR ANY STATE SECURITIES
AUTHORITY OF ANY STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH SHELF
REGISTRATION STATEMENT OR THE QUALIFICATION OF THE REGISTRABLE SECURITIES IN ANY
JURISDICTION DESCRIBED IN SECTION 1.3(A)(III) OR THE INITIATION OF ANY
PROCEEDINGS FOR THAT PURPOSE, (D) IF, BETWEEN THE EFFECTIVE DATE OF SUCH SHELF
REGISTRATION STATEMENT AND THE CLOSING OF ANY SALE OF REGISTRABLE SECURITIES
COVERED THEREBY, THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY CONTAINED IN
THE PURCHASE AGREEMENT CEASE TO BE TRUE AND CORRECT, (E) OF THE HAPPENING OF ANY
EVENT OR THE FAILURE OF ANY EVENT TO OCCUR OR THE DISCOVERY OF ANY FACTS, DURING
THE EFFECTIVENESS PERIOD, WHICH MAKES ANY STATEMENT MADE IN SUCH SHELF
REGISTRATION STATEMENT OR THE RELATED PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT
OR WHICH

 

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CAUSES SUCH SHELF REGISTRATION STATEMENT OR PROSPECTUS TO OMIT TO STATE A
MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF
THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING AND (F) OF THE
REASONABLE DETERMINATION OF THE COMPANY UPON ADVICE OF ITS COUNSEL THAT A
POST-EFFECTIVE AMENDMENT TO SUCH SHELF REGISTRATION STATEMENT WOULD BE
APPROPRIATE;

 

(V)                                 TAKE BEST EFFORTS TO PREVENT THE ENTRY OF
ANY STOP ORDER SUSPENDING THE EFFECTIVENESS OF ANY SHELF REGISTRATION STATEMENT,
OR IF ENTERED, TO OBTAIN THE WITHDRAWAL OF ANY SUCH STOP ORDER OR TO AVOID THE
ISSUANCE OF, OR, IF ISSUED, OBTAIN THE WITHDRAWAL OF ANY SUSPENSION OF THE
QUALIFICATION (OR EXEMPTION FROM QUALIFICATION) OF ANY OF THE REGISTRABLE
SECURITIES FOR SALE IN ANY JURISDICTION AT THE EARLIEST POSSIBLE MOMENT;

 

(VI)                              FURNISH TO EACH HOLDER OF REGISTRABLE
SECURITIES INCLUDED WITHIN THE COVERAGE OF A SHELF REGISTRATION STATEMENT,
WITHOUT CHARGE, A NUMBER OF CONFORMED COPIES OF THE SHELF REGISTRATION STATEMENT
RELATING TO SUCH SHELF REGISTRATION AND ANY POST-EFFECTIVE AMENDMENT THERETO
(WITHOUT DOCUMENTS INCORPORATED THEREIN BY REFERENCE OR EXHIBITS THERETO, UNLESS
REQUESTED) AS SUCH HOLDER MAY REASONABLY REQUEST;

 

(VII)                           DELIVER TO EACH SELLING HOLDER OF REGISTRABLE
WITHOUT CHARGE, AS MANY COPIES OF THE APPLICABLE PROSPECTUS (INCLUDING EACH
PRELIMINARY PROSPECTUS) AS SUCH HOLDER MAY REASONABLY REQUEST (IT BEING
UNDERSTOOD THAT THE COMPANY CONSENTS TO THE USE OF THE PROSPECTUS BY EACH OF THE
SELLING HOLDERS OF REGISTRABLE IN CONNECTION WITH THE OFFERING AND SALE OF THE
REGISTRABLE SECURITIES COVERED BY THE PROSPECTUS), SUCH OTHER DOCUMENTS
INCORPORATED BY REFERENCE THEREIN AND ANY EXHIBITS THERETO AS SUCH SELLING
HOLDER MAY REASONABLY REQUEST IN ORDER TO FACILITATE THE DISPOSITION OF THE
REGISTRABLE SECURITIES BY SUCH HOLDER;

 

(VIII)                        COOPERATE WITH THE SELLING HOLDERS OF REGISTRABLE
SECURITIES TO FACILITATE THE TIMELY PREPARATION AND DELIVERY OF CERTIFICATES
REPRESENTING REGISTRABLE SECURITIES TO BE SOLD AND NOT BEARING ANY RESTRICTIVE
LEGENDS AND REGISTERED IN SUCH NAMES AS THE SELLING HOLDERS MAY REASONABLY
REQUEST AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE CLOSING OF ANY SALE OF
REGISTRABLE SECURITIES PURSUANT TO THE SHELF REGISTRATION STATEMENT RELATING
THERETO;

 

(IX)                                AS SOON AS PRACTICABLE AFTER THE RESOLUTION
OF ANY MATTER OR EVENT SPECIFIED IN SECTIONS 1.3(A)(IV)(B), 1.3(A)(IV)(C),
1.3(A)(IV)(E) (SUBJECT TO THE PROVISO CONTAINED IN SECTION 1.2(B)) AND
1.3(A)(IV)(F)), PREPARE A SUPPLEMENT OR POST-EFFECTIVE AMENDMENT TO THE
APPLICABLE SHELF 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, SUCH PROSPECTUS WILL NOT INCLUDE ANY UNTRUE STATEMENT OF A MATERIAL
FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING;

 

(X)                                   A REASONABLE TIME PRIOR TO THE FILING OF
ANY DOCUMENT WHICH IS TO BE INCORPORATED BY REFERENCE INTO A SHELF REGISTRATION
STATEMENT OR A PROSPECTUS AFTER THE

 

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INITIAL FILING OF SUCH SHELF REGISTRATION STATEMENT, PROVIDE A REASONABLE NUMBER
OF COPIES OF SUCH DOCUMENT TO THE HOLDERS AND MAKE SUCH OF THE REPRESENTATIVES
OF THE COMPANY AS SHALL BE REASONABLY REQUESTED BY THE HOLDERS OF REGISTRABLE
SECURITIES AVAILABLE FOR DISCUSSION OF SUCH DOCUMENT;

 

(XI)                                COMPLY WITH ALL APPLICABLE RULES AND
REGULATIONS OF THE COMMISSION SO LONG AS ANY PROVISION OF THIS AGREEMENT SHALL
BE APPLICABLE;

 

(XII)                             COOPERATE WITH EACH SELLER OF REGISTRABLE
SECURITIES COVERED BY A SHELF REGISTRATION STATEMENT IN CONNECTION WITH ANY
FILINGS REQUIRED TO BE MADE WITH THE NASD;

 

(XIII)                          TAKE ALL OTHER STEPS NECESSARY TO EFFECT THE
REGISTRATION OF THE REGISTRABLE SECURITIES COVERED BY A SHELF REGISTRATION
STATEMENT CONTEMPLATED HEREBY; AND

 

(XIV)                         NOTWITHSTANDING ANY OTHER PROVISION OF THIS
SECTION 1.3, IF THE COMPANY BECOMES INELIGIBLE TO USE THE REGISTRATION FORM ON
WHICH THE SHELF REGISTRATION STATEMENT IS FILED AND DECLARED EFFECTIVE PURSUANT
TO SECTION 1.2(A), THEREBY PRECLUDING ANY HOLDER FROM USING THE RELATED
PROSPECTUS, THE COMPANY SHALL USE BEST EFFORTS TO PREPARE AND FILE EITHER A POST
EFFECTIVE AMENDMENT TO THE SHELF REGISTRATION STATEMENT TO CONVERT SUCH
REGISTRATION STATEMENT TO, OR A NEW SHELF REGISTRATION STATEMENT ON, ANOTHER
REGISTRATION FORM WHICH THE COMPANY IS ELIGIBLE TO USE WITHIN THIRTY (30) DAYS
AFTER THE DATE THAT THE COMPANY BECOMES INELIGIBLE, PROVIDED SUCH OTHER
REGISTRATION FORM SHALL BE AVAILABLE FOR THE SALE OF THE REGISTRABLE SECURITIES
BY THE SELLING HOLDERS THEREOF AND SUCH AMENDED OR NEW SHELF REGISTRATION
STATEMENT SHALL REMAIN SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF THIS
SECTION 1.3.

 

(B)                                 HOLDERS’ OBLIGATIONS.

 

(I)                                     EACH HOLDER AGREES THAT, UPON RECEIPT OF
ANY NOTICE FROM THE COMPANY OF THE OCCURRENCE OF ANY EVENT SPECIFIED IN SECTIONS
1.3(A)(IV)(B), 1.3(A)(IV)(C), 1.3(A)(IV)(E), 1.3(A)(IV)(F) OR ANY DELAY NOTICE,
SUCH HOLDER WILL FORTHWITH DISCONTINUE DISPOSITION OF REGISTRABLE SECURITIES
PURSUANT TO THE SHELF REGISTRATION STATEMENT AT ISSUE UNTIL SUCH HOLDER’S
RECEIPT OF THE COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS CONTEMPLATED BY
SECTION 1.3(A)(IX) OR UNTIL IT IS ADVISED IN WRITING (THE “ADVICE”) BY THE
COMPANY THAT THE USE OF THE APPLICABLE PROSPECTUS 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 PROSPECTUS COVERING SUCH
REGISTRABLE SECURITIES CURRENT AT THE TIME OF RECEIPT OF SUCH NOTICE.

 

(II)                                  EACH HOLDER AGREES THAT THE COMPANY
MAY REQUIRE EACH SELLER OF REGISTRABLE SECURITIES AS TO WHICH ANY REGISTRATION
IS BEING EFFECTED TO FURNISH TO IT SUCH INFORMATION REGARDING SUCH SELLER AS
MAY BE REQUIRED BY THE STAFF OF THE COMMISSION TO BE INCLUDED IN THE APPLICABLE
SHELF REGISTRATION STATEMENT, THE COMPANY MAY EXCLUDE FROM SUCH REGISTRATION THE
REGISTRABLE SECURITIES OF ANY SELLER WHO FAILS TO FURNISH SUCH

 

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INFORMATION WHICH IS NOT OTHERWISE READILY AVAILABLE TO THE COMPANY WITHIN TEN
(10) BUSINESS DAYS AFTER RECEIVING SUCH REQUEST, AND THE COMPANY SHALL HAVE NO
OBLIGATION TO REGISTER UNDER THE SECURITIES ACT THE REGISTRABLE SECURITIES OF A
SELLER WHO SO FAILS TO FURNISH SUCH INFORMATION.

 

1.4                                 INDEMNIFICATION. IN THE EVENT ANY
REGISTRABLE SECURITIES ARE INCLUDED IN A SHELF REGISTRATION STATEMENT UNDER THIS
SECTION 1:

 

(A)                                  TO THE FULLEST EXTENT PERMITTED BY LAW, THE
COMPANY WILL INDEMNIFY AND HOLD HARMLESS EACH HOLDER, ANY UNDERWRITER (AS
DEFINED IN THE SECURITIES ACT) FOR SUCH HOLDER AND EACH PERSON, IF ANY,  WHO
CONTROLS A HOLDER OR UNDERWRITER WITHIN THE MEANING OF THE SECURITIES ACT OR THE
EXCHANGE ACT AND EACH OFFICER, DIRECTOR, AGENT, AFFILIATE AND EMPLOYEE OF EACH
HOLDER, UNDERWRITER AND CONTROLLING PERSON, 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, STATE OR PROVINCIAL LAW,
INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT
THEREOF) ARISE OUT OF OR ARE BASED UPON ANY OF THE FOLLOWING (COLLECTIVELY A
“VIOLATION”):  (I) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A
MATERIAL FACT CONTAINED IN SUCH SHELF REGISTRATION STATEMENT, INCLUDING ANY
PRELIMINARY PROSPECTUS OR FINAL PROSPECTUS CONTAINED THEREIN, ANY DOCUMENT
INCORPORATED BY REFERENCE IN SUCH SHELF REGISTRATION STATEMENT OR ANY AMENDMENTS
OR SUPPLEMENTS THERETO, (II) THE 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 (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 OR PROVINCIAL SECURITIES LAW DIRECTLY RELATED TO, OR IN CONNECTION
WITH, THE SHELF REGISTRATION STATEMENT OR THE RELATED OFFERING; AND THE COMPANY
WILL PAY TO A HOLDER, UNDERWRITER OR CONTROLLING PERSON OR OFFICER, DIRECTOR,
AGENT, AFFILIATE OR EMPLOYEE OF A HOLDER, UNDERWRITER OR CONTROLLING PERSON, AS
INCURRED, ANY LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY THEM IN CONNECTION
WITH INVESTIGATING OR DEFENDING ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR
ACTION; PROVIDED, HOWEVER, THAT THE INDEMNITY AGREEMENT CONTAINED IN THIS
SECTION 1.4(A) DOES NOT APPLY TO (X) 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 MAY NOT BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED; PROVIDED, HOWEVER, THAT THE COMPANY WILL NOT BE LIABLE
IN ANY SUCH CASE TO THE EXTENT THAT ANY SUCH LOSS, CLAIM, DAMAGE OR LIABILITY
ARISES OUT OF OR IS BASED UPON ANY SUCH UNTRUE STATEMENT OR ALLEGED UNTRUE
STATEMENT OR OMISSION OR ALLEGED OMISSION MADE IN A SHELF REGISTRATION STATEMENT
OR FINAL PROSPECTUS OR ANY AMENDMENT OR SUPPLEMENT THERETO OR ANY RELATED
PRELIMINARY PROSPECTUS, IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN
INFORMATION FURNISHED TO THE COMPANY BY THE HOLDER SPECIFICALLY FOR INCLUSION
THEREIN OR (Y) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF MATERIAL FACT
OR OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT IN ANY
PRELIMINARY PROSPECTUS, IF A COPY OF THE FINAL PROSPECTUS IN WHICH SUCH UNTRUE
STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION WAS
CORRECTED WAS REQUIRED TO BE SENT OR GIVEN BUT HAD NOT BEEN SENT OR GIVEN TO
SUCH PERSON PRIOR TO THE SETTLEMENT OF THE SALE, SO LONG AS THE FINAL PROSPECTUS
AND ANY AMENDMENTS OR SUPPLEMENTS THERETO WERE PROVIDED BY THE COMPANY TO THE
INDEMNIFIED HOLDER IN THE REQUISITE QUANTITY AND ON A TIMELY BASIS TO PERMIT
PROPER DELIVERY ON OR PRIOR TO THE SETTLEMENT OF THE SALE. THE COMPANY SHALL
NOTIFY THE HOLDERS PROMPTLY OF THE INSTITUTION, THREAT OR ASSERTION OF ANY
ACTION, CLAIM, SUIT, INVESTIGATION OR PROCEEDING OF WHICH THE COMPANY IS AWARE
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

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(B)                                 TO THE FULLEST EXTENT PERMITTED BY LAW, EACH
HOLDER, SEVERALLY AND NOT JOINTLY, WILL INDEMNIFY AND HOLD HARMLESS THE COMPANY,
EACH OF ITS DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES, EACH PERSON, IF ANY,
WHO CONTROLS THE COMPANY WITHIN THE MEANING OF THE SECURITIES ACT, ANY
UNDERWRITER, ANY OTHER STOCKHOLDER SELLING SECURITIES IN SUCH SHELF REGISTRATION
STATEMENT AND ANY CONTROLLING PERSON OF ANY SUCH UNDERWRITER OR OTHER
STOCKHOLDER, 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, STATE OR PROVINCIAL LAW,
INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT
THERETO) ARISE OUT OF OR ARE BASED UPON ANY VIOLATION, IN EACH CASE TO THE
EXTENT THAT SUCH VIOLATION OCCURS IN RELIANCE UPON AND IN CONFORMITY WITH
WRITTEN INFORMATION FURNISHED BY SUCH HOLDER EXPRESSLY FOR USE IN SUCH SHELF
REGISTRATION STATEMENT, INCLUDING ANY PRELIMINARY PROSPECTUS OR FINAL PROSPECTUS
CONTAINED THEREIN OR ANY AMENDMENTS OR SUPPLEMENTS THERETO; AND SUCH HOLDER WILL
PAY, AS INCURRED, ANY LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY ANY PERSON
INTENDED TO BE INDEMNIFIED PURSUANT TO THIS SECTION 1.4(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 1.4(B) DOES 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 SUCH HOLDER, WHICH CONSENT MAY NOT BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED; AND FURTHER PROVIDED, THAT, IN NO EVENT WILL ANY
INDEMNITY UNDER THIS SECTION 1.4(B) EXCEED THE NET PROCEEDS RECEIVED BY SUCH
HOLDER FROM THE SALE OF REGISTRABLE SECURITIES GIVING RISE TO SUCH
INDEMNIFICATION OBLIGATION.

 

(C)                                  PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED
PARTY UNDER THIS SECTION 1.4 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 1.4, DELIVER TO THE INDEMNIFYING PARTY A WRITTEN NOTICE OF THE
COMMENCEMENT THEREOF AND THE INDEMNIFYING PARTY WILL HAVE THE RIGHT TO
PARTICIPATE IN, AND, TO THE EXTENT THE INDEMNIFYING PARTY SO DESIRES, JOINTLY
WITH ANY OTHER INDEMNIFYING PARTY SIMILARLY NOTICED, TO ASSUME THE DEFENSE
THEREOF, INCLUDING THE EMPLOYMENT OF COUNSEL REASONABLY SATISFACTORY TO THE
INDEMNIFIED PARTY, IF (I) THE INDEMNIFYING PARTY ACKNOWLEDGES ITS OBLIGATION TO
INDEMNIFY THE INDEMNIFIED PARTY FOR ANY LOSSES, DAMAGES OR LIABILITIES RESULTING
FROM SUCH CLAIM AND PROVIDE REASONABLE EVIDENCE TO THE INDEMNIFIED PARTY OF ITS
FINANCIAL ABILITY TO SATISFY SUCH OBLIGATION; (II) THE CLAIM DOES NOT SEEK TO
IMPOSE ANY LIABILITY OR OBLIGATION ON THE INDEMNIFIED PARTY OTHER THAN FOR MONEY
DAMAGES; AND (III) THE CLAIM DOES NOT RELATE TO THE INDEMNIFIED PARTY’S
RELATIONSHIP WITH ITS CUSTOMERS OR EMPLOYEES. AN INDEMNIFIED PARTY SHALL HAVE
THE RIGHT TO EMPLOY SEPARATE COUNSEL IN ANY SUCH ACTION, CLAIM, SUIT,
INVESTIGATION OR PROCEEDING AND TO PARTICIPATE IN THE DEFENSE THEREOF, BUT THE
FEES AND EXPENSES OF SUCH COUNSEL SHALL BE AT THE EXPENSE OF SUCH INDEMNIFIED
PARTY OR PARTIES UNLESS:  (1) THE INDEMNIFYING PARTY HAS AGREED IN WRITING TO
PAY SUCH FEES AND EXPENSES; (2) THE INDEMNIFYING PARTY SHALL HAVE FAILED
PROMPTLY TO ASSUME THE DEFENSE OF SUCH ACTION, CLAIM, SUIT, INVESTIGATION OR
PROCEEDING AND TO EMPLOY COUNSEL REASONABLY SATISFACTORY TO SUCH INDEMNIFIED
PARTY IN ANY SUCH ACTION, CLAIM, SUIT, INVESTIGATION OR PROCEEDING; (3) THE
INDEMNIFYING PARTY IS NOT ENTITLED TO ASSUME AND CONTROL THE DEFENSE OF ANY SUCH
ACTION, CLAIM, SUIT, INVESTIGATION OR PROCEEDING PURSUANT TO CLAUSES (II) OR
(III) OF THE IMMEDIATELY PRECEDING SENTENCE; OR (4) SUCH INDEMNIFIED PARTY SHALL
HAVE BEEN ADVISED BY COUNSEL THAT A CONFLICT OF INTEREST IS LIKELY TO EXIST IF
THE SAME COUNSEL WERE TO REPRESENT SUCH INDEMNIFIED PARTY AND THE INDEMNIFYING
PARTY (IN WHICH CASE, IF SUCH INDEMNIFIED PARTY NOTIFIES THE INDEMNIFYING PARTY
IN WRITING THAT IT ELECTS TO EMPLOY SEPARATE COUNSEL AT THE EXPENSE OF THE

 

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INDEMNIFYING PARTY, THE INDEMNIFYING PARTY SHALL NOT HAVE THE RIGHT TO ASSUME
THE DEFENSE THEREOF AND THE REASONABLE FEES AND EXPENSES OF ONE SEPARATE COUNSEL
FOR ALL INDEMNIFIED PARTIES SHALL BE AT THE EXPENSE OF THE INDEMNIFYING
PARTY).THE INDEMNIFYING PARTY WILL NOT BE LIABLE FOR ANY SETTLEMENT OF ANY
ACTION, CLAIM, SUIT, INVESTIGATION OR PROCEEDING EFFECTED WITHOUT ITS CONSENT,
WHICH CONSENT MAY NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED. NO
INDEMNIFYING PARTY SHALL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE 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 AN UNCONDITIONAL RELEASE FROM ALL
LIABILITY IN RESPECT OF SUCH CLAIM OR LITIGATION. THE FAILURE BY THE INDEMNIFIED
PARTY 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 OBLIGATION OR LIABILITY TO THE INDEMNIFIED PARTY UNDER THIS
SECTION 1.4, EXCEPT (AND ONLY) TO THE EXTENT THAT SUCH FAILURE SHALL HAVE
PREJUDICED THE INDEMNIFYING PARTY.

 

(D)                                 IF THE INDEMNIFICATION PROVIDED FOR IN THIS
SECTION 1.4 IS HELD BY A COURT OF COMPETENT JURISDICTION TO BE UNAVAILABLE TO AN
INDEMNIFIED PARTY WITH RESPECT TO ANY LOSS, LIABILITY, CLAIM, DAMAGE OR EXPENSE
REFERRED TO THEREIN, THEN THE INDEMNIFYING PARTY, IN LIEU OF INDEMNIFYING SUCH
INDEMNIFIED PARTY HEREUNDER, WILL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY
SUCH INDEMNIFIED PARTY AS A RESULT OF SUCH LOSS, LIABILITY, CLAIM, DAMAGE OR
EXPENSE IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT THE RELATIVE FAULT OF
THE INDEMNIFYING PARTY ON THE ONE HAND AND OF THE INDEMNIFIED PARTY ON THE OTHER
IN CONNECTION WITH THE STATEMENTS OR OMISSIONS THAT RESULTED IN SUCH LOSS,
LIABILITY, CLAIM, DAMAGE OR EXPENSE AS WELL AS ANY OTHER RELEVANT EQUITABLE
CONSIDERATIONS; PROVIDED, THAT, IN NO EVENT WILL ANY CONTRIBUTION BY A HOLDER
UNDER THIS SECTION 1.4(D) EXCEED THE NET PROCEEDS RECEIVED BY A HOLDER FROM THE
SALE OF REGISTRABLE SECURITIES GIVING RISE TO SUCH INDEMNIFICATION OBLIGATION.
THE RELATIVE FAULT OF THE INDEMNIFYING PARTY AND OF THE INDEMNIFIED PARTY WILL
BE DETERMINED BY REFERENCE TO, AMONG OTHER THINGS, WHETHER THE UNTRUE OR ALLEGED
UNTRUE STATEMENT OF A MATERIAL FACT OR THE OMISSION TO STATE A MATERIAL FACT
RELATES TO INFORMATION SUPPLIED BY THE INDEMNIFYING PARTY OR BY THE INDEMNIFIED
PARTY AND THE PARTIES’ RELATIVE INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND
OPPORTUNITY TO CORRECT OR PREVENT SUCH STATEMENT OR OMISSION. THE PARTIES HERETO
AGREE THAT IT WOULD NOT BE JUST AND EQUITABLE IF CONTRIBUTION PURSUANT TO THIS
SECTION 1.4(D) WERE DETERMINED BY PRO RATA ALLOCATION OR BY ANY OTHER METHOD OF
ALLOCATION THAT DOES NOT TAKE INTO ACCOUNT THE EQUITABLE CONSIDERATIONS REFERRED
TO IN THE IMMEDIATELY PRECEDING SENTENCE. NO PERSON GUILTY OF FRAUDULENT
MISREPRESENTATION (WITHIN THE MEANING OF SECTION 11(F) OF THE SECURITIES ACT)
SHALL BE ENTITLED TO CONTRIBUTION FROM ANY PERSON WHO WAS NOT GUILTY OF SUCH
FRAUDULENT MISREPRESENTATION. THE AMOUNT PAID OR PAYABLE BY A PARTY AS A RESULT
OF ANY LOSS, LIABILITY, CLAIM, DAMAGE OR EXPENSE SHALL BE DEEMED TO INCLUDE,
SUBJECT TO THE LIMITATIONS SET FORTH IN SECTION 1.4(C), ANY REASONABLE
ATTORNEYS’ OR OTHER REASONABLE FEES OR EXPENSES INCURRED BY SUCH PARTY IN
CONNECTION WITH ANY ACTION, CLAIM, SUIT, INVESTIGATION OR PROCEEDING TO THE
EXTENT SUCH PARTY WOULD HAVE BEEN INDEMNIFIED FOR SUCH FEES OR EXPENSES IF THE
INDEMNIFICATION PROVIDED FOR IN THIS SECTION WAS AVAILABLE TO SUCH PARTY IN
ACCORDANCE WITH ITS TERMS.

 

(E)                                  THE OBLIGATIONS OF THE COMPANY AND HOLDERS
UNDER THIS SECTION 1.4 WILL SURVIVE THE COMPLETION OF ANY OFFERING OF
REGISTRABLE SECURITIES IN THE SHELF REGISTRATION STATEMENT UNDER THIS SECTION 1
AND OTHERWISE.

 

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1.5                                 REPORTS UNDER THE EXCHANGE ACT.

 

(A)                                  BEGINNING ON JUNE 1, 2006, THE COMPANY
SHALL USE ALL COMMERCIALLY REASONABLE EFFORTS TO FILE AS AND WHEN APPLICABLE, ON
A TIMELY BASIS, ALL REPORTS REQUIRED TO BE FILED BY IT UNDER THE EXCHANGE ACT.
IF THE COMPANY IS NOT REQUIRED TO FILE REPORTS PURSUANT TO THE EXCHANGE ACT,
UPON THE REQUEST OF ANY HOLDER OF REGISTRABLE SECURITIES, THE COMPANY SHALL MAKE
PUBLICLY AVAILABLE THE INFORMATION SPECIFIED IN SUBPARAGRAPH (C)(2) OF RULE 144.
THE COMPANY SHALL TAKE SUCH FURTHER ACTION AS MAY BE REASONABLY REQUIRED FROM
TIME TO TIME AND AS MAY BE WITHIN THE REASONABLE CONTROL OF THE COMPANY, TO
ENABLE THE HOLDERS TO TRANSFER REGISTRABLE SECURITIES WITHOUT REGISTRATION UNDER
THE SECURITIES ACT WITHIN THE LIMITATION OF THE EXEMPTIONS PROVIDED BY RULE 144
OR ANY OTHER EXEMPTION FROM REGISTRATION. UPON THE REQUEST OF ANY HOLDER OF
REGISTRABLE SECURITIES, THE COMPANY WILL DELIVER TO SUCH HOLDER A WRITTEN
STATEMENT AS TO WHETHER IT HAS COMPLIED WITH SUCH REQUIREMENTS AND, IF NOT, THE
SPECIFICS THEREOF.

 

(B)                                 IN CONNECTION WITH ANY SALE, TRANSFER OR
OTHER DISPOSITION BY A HOLDER OF ANY REGISTRABLE SECURITIES PURSUANT TO
RULE 144, THE COMPANY SHALL COOPERATE WITH SUCH HOLDER TO FACILITATE THE TIMELY
PREPARATION AND DELIVERY OF CERTIFICATES REPRESENTING REGISTRABLE SECURITIES TO
BE SOLD AND NOT BEARING ANY SECURITIES ACT LEGEND, AND ENABLE CERTIFICATES FOR
SUCH REGISTRABLE SECURITIES TO BE FOR SUCH NUMBER OF SHARES AND REGISTERED IN
SUCH NAMES AS THE HOLDER MAY REASONABLY REQUEST AT LEAST TWO (2) BUSINESS DAYS
PRIOR TO ANY SALE OF REGISTRABLE SECURITIES.

 

(C)                                  SO LONG AS THE SHELF REGISTRATION STATEMENT
IS EFFECTIVE COVERING THE RESALE OF REGISTRABLE SECURITIES OWNED BY A HOLDER,
UPON THE REQUEST OF THE HOLDER, THE COMPANY WILL FURNISH TO SUCH HOLDER, AS SOON
AS PRACTICABLE AFTER IT IS AVAILABLE, ONE COPY OF (1) ITS ANNUAL REPORT TO
STOCKHOLDERS (WHICH ANNUAL REPORT SHALL CONTAIN FINANCIAL STATEMENTS AUDITED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES BY A NATIONAL FIRM OF
CERTIFIED PUBLIC ACCOUNTANTS), (2) ITS ANNUAL REPORT ON FORM 10-K AND (3) ITS
QUARTERLY REPORTS ON FORM 10-Q (THE FOREGOING, IN EACH CASE, EXCLUDING
EXHIBITS).

 

1.6                                 REGISTRATION EXPENSES. THE COMPANY SHALL
BEAR AND PAY ALL EXPENSES INCURRED IN CONNECTION WITH ANY REGISTRATION, FILING,
OR QUALIFICATION OF REGISTRABLE SECURITIES WITH RESPECT TO A SHELF REGISTRATION
STATEMENT FOR EACH SELLING HOLDER, INCLUDING ALL REGISTRATION, EXCHANGE LISTING,
ACCOUNTING, FILING AND NASD FEES, ALL FEES AND EXPENSES OF COMPLYING WITH
SECURITIES OR BLUE SKY LAWS, ALL WORD PROCESSING, DUPLICATING AND PRINTING
EXPENSES, MESSENGER AND DELIVERY EXPENSES, THE REASONABLE FEES AND DISBURSEMENTS
OF COUNSEL FOR THE COMPANY, AND OF THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTANTS
AND COMPLIANCE AND REASONABLE FEES AND DISBURSEMENTS OF ONE FIRM OF COUNSEL FOR
THE HOLDERS. HOLDERS SHALL BE RESPONSIBLE FOR ANY DISCOUNTS AND COMMISSIONS AND
TAXES OF ANY KIND (INCLUDING WITHOUT LIMITATION, TRANSFER TAXES) RELATING TO ANY
DISPOSITION, SALE OR TRANSFER OF REGISTRABLE SECURITIES.

 

1.7                                 PIGGY-BACK REGISTRATIONS; OTHER
REGISTRATIONS. IF AT ANY TIME DURING THE EFFECTIVENESS PERIOD THERE IS NOT AN
EFFECTIVE SHELF REGISTRATION STATEMENT COVERING ALL OF THE REGISTRABLE
SECURITIES AND THE COMPANY SHALL DETERMINE TO PREPARE AND FILE WITH THE
COMMISSION A REGISTRATION STATEMENT RELATING TO AN OFFERING FOR ITS OWN ACCOUNT
OR THE ACCOUNT OF OTHERS UNDER THE SECURITIES ACT OF ANY OF ITS EQUITY
SECURITIES, OTHER THAN ON FORM S-4 OR FORM S-8 (EACH AS PROMULGATED UNDER THE
SECURITIES ACT) OR THEIR THEN EQUIVALENTS RELATING TO EQUITY SECURITIES TO BE
ISSUED SOLELY IN CONNECTION WITH ANY ACQUISITION OF ANY ENTITY OR BUSINESS OR
EQUITY SECURITIES

 

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ISSUABLE IN CONNECTION WITH THE STOCK OPTION OR OTHER EMPLOYEE BENEFIT PLANS,
THEN THE COMPANY SHALL SEND TO EACH HOLDER A WRITTEN NOTICE OF SUCH
DETERMINATION AND, IF WITHIN TEN (10) DAYS AFTER THE DATE OF SUCH NOTICE, ANY
SUCH HOLDER SHALL SO REQUEST IN WRITING, THE COMPANY SHALL INCLUDE IN SUCH
REGISTRATION STATEMENT ALL OR ANY PART OF SUCH REGISTRABLE SECURITIES SUCH
HOLDER REQUESTS TO BE REGISTERED, SUBJECT TO CUSTOMARY UNDERWRITER CUTBACKS
APPLICABLE TO ALL HOLDERS OF REGISTRATION RIGHTS. IN NO EVENT AT ANY TIME BEFORE
THE SHELF REGISTRATION STATEMENT BECOMES EFFECTIVE WITH RESPECT TO THE SHARES
SHALL THE COMPANY PUBLICLY ANNOUNCE OR FILE ANY OTHER, REGISTRATION STATEMENT,
OTHER THAN REGISTRATIONS ON FORM S-8 WITHOUT THE CONSENT OF THE HOLDERS OF A
MAJORITY OF THE REGISTRABLE SECURITIES.

 

1.8                                 ASSIGNMENT OF RIGHTS.

 

(A)                                  EXCEPT AS EXPRESSLY PROVIDED IN THIS
SECTION 1.8, THE RIGHTS OF THE PARTIES HERETO CANNOT BE ASSIGNED AND ANY
PURPORTED ASSIGNMENT OR TRANSFER TO THE CONTRARY SHALL BE VOID AB INITIO. SO
LONG AS THE TERMS OF THIS SECTION 1.8 ARE FOLLOWED, UPON WRITTEN CONSENT OF THE
COMPANY, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR
CONDITIONED, ANY HOLDER MAY ASSIGN ITS RIGHTS UNDER THIS AGREEMENT TO ANY
PERSON, INCLUDING, WITHOUT LIMITATION, AN AFFILIATE OF SUCH HOLDER, TO WHOM SUCH
HOLDER TRANSFERS ANY REGISTRABLE SECURITIES OR ANY RIGHTS TO ACQUIRE REGISTRABLE
SECURITIES SO LONG AS SUCH TRANSFER IS NOT MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR PURSUANT TO RULE 144 OR RULE 145 (OR ANY SUCCESSOR
PROVISIONS) OR IN ANY OTHER MANNER THE EFFECT OF WHICH IS TO CAUSE THE
TRANSFERRED SECURITIES TO BE FREELY TRANSFERABLE WITHOUT REGARD TO THE VOLUME
AND MANNER OF SALE LIMITATIONS SET FORTH IN RULE 144 (OR ANY SUCCESSOR
PROVISION) IN THE HANDS OF THE TRANSFEREE AS OF THE DATE OF SUCH TRANSFER.

 

(B)                                 THE NATURE AND EXTENT OF ANY RIGHTS ASSIGNED
SHALL BE AS AGREED TO BETWEEN THE ASSIGNING PARTY AND THE ASSIGNEE. NO PERSON
MAY BE ASSIGNED ANY RIGHTS UNDER THIS AGREEMENT UNLESS (I) THE COMPANY IS GIVEN
WRITTEN NOTICE BY THE ASSIGNING PARTY AT THE TIME OF SUCH ASSIGNMENT STATING THE
NAME AND ADDRESS OF THE ASSIGNEE AND IDENTIFYING THE SECURITIES OF THE COMPANY
AS TO WHICH THE RIGHTS IN QUESTION ARE BEING ASSIGNED, (II) SUCH ASSIGNMENT IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (III) AND
THE ASSIGNEE AGREES IN WRITING TO BE BOUND BY AND SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE PROVISIONS OF
THIS SECTION 1.8.

 

2.                                       Miscellaneous Provisions.

 

2.1                                 WAIVERS AND AMENDMENTS. ANY TERM OF THIS
AGREEMENT MAY BE AMENDED AND THE OBSERVANCE OF ANY TERM 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 COMPANY AND EACH HOLDER OF
THEN OUTSTANDING REGISTRABLE SECURITIES. ANY AMENDMENT OR WAIVER EFFECTED IN
ACCORDANCE WITH THIS SECTION 2.1 IS BINDING UPON HOLDERS AND THE COMPANY.

 

2.2                                 NOTICES. ALL NOTICES AND OTHER
COMMUNICATIONS REQUIRED OR PERMITTED HEREUNDER MUST BE IN WRITING AND, EXCEPT AS
OTHERWISE NOTED HEREIN, MUST BE ADDRESSED AS FOLLOWS:

 

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(A)                                  IF TO THE COMPANY, TO:

 

TRC Companies, Inc.

21 Griffin Road North

Windsor, Connecticut 06095

Attention:                 Chief Financial Officer
General Counsel

Telephone:            (860) 298-9692

Facsimile:                  (860) 298-6291

 

(B)                                 IF TO ANY HOLDER, AT THE ADDRESS SHOWN ON
SUCH HOLDERS SIGNATURE PAGE HERETO, MARKED FOR ATTENTION AS THERE INDICATED, TO:

 

or to such other address as the party to whom notice is to be given may have
furnished to the other in writing in accordance with the provisions of this
Section 2.2. Any such notice or communication will be deemed to have been
received: (i) in the case of telecopy or personal delivery, on the date of such
delivery; (ii) in the case of nationally-recognized overnight courier, on the
next business day after the date sent; and (iii) if by registered or certified
mail, on the third business day following the date postmarked.

 

2.3                                 DESCRIPTIVE HEADINGS AND REFERENCES. THE
DESCRIPTIVE HEADINGS HEREIN HAVE BEEN INSERTED FOR CONVENIENCE ONLY AND ARE NOT
DEEMED TO LIMIT OR OTHERWISE AFFECT THE CONSTRUCTION OF ANY PROVISIONS HEREOF
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED, ANY REFERENCE TO ANY SECTION WILL BE
DEEMED TO REFER TO SUCH SECTION OF THIS AGREEMENT.

 

2.4                                 GOVERNING LAW. THE CONSTRUCTION, VALIDITY
AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.

 

2.5                                 COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED
IN ONE OR MORE COUNTERPARTS, EACH OF WHICH IS FOR ALL PURPOSES DEEMED TO BE AN
ORIGINAL AND ALL OF WHICH CONSTITUTE THE SAME INSTRUMENT, BUT ONLY ONE OF WHICH
NEED BE PRODUCED.

 

2.6                                 EQUITABLE REMEDIES. THE COMPANY RECOGNIZES
AND AGREES THAT EACH HOLDER OF REGISTRABLE SECURITIES WILL NOT HAVE AN ADEQUATE
REMEDY IF THE COMPANY FAILS TO COMPLY WITH THE TERMS AND PROVISIONS OF THIS
AGREEMENT AND THAT DAMAGES WILL NOT BE READILY ASCERTAINABLE, AND THE COMPANY
EXPRESSLY AGREES THAT, IN THE EVENT OF SUCH FAILURE, IT SHALL NOT OPPOSE AN
APPLICATION BY ANY HOLDER OF REGISTRABLE SECURITIES OR ANY OTHER PERSON ENTITLED
TO THE BENEFITS OF THIS AGREEMENT REQUIRING SPECIFIC PERFORMANCE OF ANY AND ALL
PROVISIONS HEREOF OR ENJOINING THE COMPANY FROM CONTINUING TO COMMIT ANY SUCH
BREACH OF THIS AGREEMENT.

 

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2.7                                 SUCCESSORS AND ASSIGNS. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT, THIS AGREEMENT SHALL BENEFIT AND BIND THE
SUCCESSORS, ASSIGNS, HEIRS, EXECUTORS AND ADMINISTRATORS OF THE PARTIES TO THIS
AGREEMENT.

 

2.8                                 ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER
WITH THE PURCHASE AGREEMENT, CONSTITUTES THE FULL AND ENTIRE UNDERSTANDING AND
AGREEMENT BETWEEN THE PARTIES WITH REGARD TO THE SUBJECT MATTER HEREOF AND
THEREOF.

 

2.9                                 SEPARABILITY; SEVERABILITY. UNLESS EXPRESSLY
PROVIDED IN THIS AGREEMENT, THE RIGHTS OF EACH HOLDER UNDER THIS AGREEMENT ARE
SEVERAL RIGHTS, NOT RIGHTS JOINTLY HELD WITH ANY OTHER HOLDERS. ANY INVALIDITY,
ILLEGALITY OR LIMITATION ON THE ENFORCEABILITY OF THIS AGREEMENT WITH RESPECT TO
ANY HOLDER DOES NOT AFFECT THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THIS
AGREEMENT WITH RESPECT TO .THE OTHER HOLDERS. IF ANY PROVISION OF THIS AGREEMENT
IS JUDICIALLY DETERMINED TO BE INVALID, ILLEGAL OR UNENFORCEABLE, THE VALIDITY,
LEGALITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS WILL NOT BE AFFECTED OR
IMPAIRED.

 

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
on the day and year first set forth above.

 

 

TRC Companies, Inc.

 

 

 

 

 

By:

/s/ Martin H. Dodd

 

 

 

Name: Martin H. Dodd

 

 

 

Title: Senior Vice President

 

 

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FEDERAL PARTNERS, L.P..

 

By Ninth Floor Corporation, its General
Partner

 

 

 

 

 

By:

/s/ Stephen M. Duff

 

 

Name:

Stephen M. Duff

 

Title:

Treasurer

 

 

 

 

 

Address for Notice:

 

One Rockefeller Plaza, 1st Floor

 

New York, New York 10022

 

Telephone: (212) 977-3441

 

Facsimile: (212) 977-3424

 

 

 

 

 

With copies to:

 

Patterson, Belknap, Webb & Tyler LLP

 

1133 Avenue of the Americas

 

New York, New York 10036-6710

 

Attention: Jeffrey E. La Gueux, Esq.

 

Telephone: (212) 336-2684

 

Facsimile: (212) 336-2222

 

 

 

 

 

/s/ Peter R. Kellogg

 

 

Peter R. Kellogg

 

 

 

 

 

/s/ Lee I. Kellogg

 

 

Lee I. Kellogg

 

 

 

 

 

/s/ Charles Kirkland Kellogg

 

 

Charles Kirkland Kellogg

 

 

 

 

 

Address for Note:

 

48 Wall Street, 30th Floor

 

New York, NY 1005

 

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ANNEX A

 

Plan of Distribution

 

Each Selling Stockholder (the “Selling Stockholders”) of the common stock
(“Common Stock”) of TRC Companies, Inc., a Delaware corporation (the “Company”)
and any of their pledgees, assignees and successors-in-interest may, from time
to time, sell any or all of their shares of Common Stock on the Trading Market
or any other stock exchange, market or trading facility on which the shares are
traded or in private transactions. These sales may be at fixed or negotiated
prices. A Selling Stockholder may use any one or more of the following methods
when selling shares:

 

•                  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;

 

•                  settlement of short sales entered into after the date of this
prospectus;

 

•                  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;

 

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

 

•                  any other method permitted pursuant to applicable law.

 

The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.

 

Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. Each Selling Stockholder does not expect these commissions and
discounts relating to its sales of shares to exceed what is customary in the
types of transactions involved.

 

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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 Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.

 

The Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.

 

Because Selling Stockholders may be deemed to be “underwriters” within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than under this prospectus. Each Selling
Stockholder has advised us that they have not entered into any agreements,
understandings or arrangements with any underwriter or broker-dealer regarding
the sale of the resale shares. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Stockholders.

 

We agreed to keep this prospectus effective until the earlier of (i) the date on
which the shares may be resold by the Selling Stockholders without registration
and without regard to any volume limitations by reason of Rule 144(e) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to the prospectus or Rule 144 under the Securities Act
or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.

 

Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement

 

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of the distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of our common stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale.

 

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