Exhibit 10.1

EXCHANGE AGREEMENT

EXCHANGE AGREEMENT, dated as of August 18, 2009 (this “Agreement”), between
X-Rite, Incorporated, a Michigan corporation (the “Company”), OEPX, LLC, a
Delaware limited liability company (“OEP”), Sagard Capital Partners, L.P., a
Delaware limited partnership, (“Sagard”), and Tinicum Capital Partners II, L.P.,
a Delaware limited partnership, Tinicum Capital Partners II Parallel Fund, L.P.,
a Delaware limited partnership, and Tinicum Capital Partners II Executive Fund,
L.L.C., a Delaware limited liability company (collectively, “Tinicum” and,
together with OEP and Sagard and any of their permitted assignees, the
“Investors”).

RECITALS:

A. Company Securities. As of the date hereof, the Company has 100,000,000
authorized shares of common stock, par value $0.10 per share (“Common Stock”),
of which, as of August 13, 2009, 77,699,550 shares were issued and outstanding
and 5,000,000 authorized shares of preferred stock, par value $0.10 per share
(“Company Preferred Stock”), of which, as of August 13, 2009, no shares were
issued and outstanding and 776,995.5 shares of Preferred Stock have been
designated as Junior Participating Company Preferred Stock, without par value,
reserved or to be made available for issuance upon the exercise of rights
granted under the Shareholder Protection Rights Agreement, dated as of March 29,
2002, as amended August 20, 2008 and August 18, 2009 (the “Rights Plan”) between
the Company and Computershare Trust Company, N.A. (formerly known as EquiServe
Trust Company, N.A.).

B. The First Lien Credit Agreement. The Company is a party to that certain First
Lien Credit and Guaranty Agreement, dated October 24, 2007, by and among the
Company and the other parties thereto (the “First Lien Credit Agreement”), which
as of the date hereof has outstanding $168,891,877 of unpaid principal and
$1,615,411 of unpaid interest. The Company has entered into the Consent and
Amendment No. 2 to First Lien Credit and Guaranty Agreement and Amendment No. 1
to Pledge and Security Agreement (First Lien) (the “First Lien Amendment”)
substantially in the form set forth in Exhibit A.

C. The Second Lien Credit Agreement. The Company is a party to that certain
Second Lien Credit and Guaranty Agreement, dated October 24, 2007, by and among
the Company and the other parties thereto (the “Second Lien Credit Agreement”),
which as of the date hereof has outstanding $67,762,864 of unpaid principal and
$1,147,590 of unpaid interest. The Company has entered into the Consent, Limited
Waiver and Amendment No. 2 to Second Lien Credit and Guaranty Agreement and
Amendment No. 1 to Pledge and Security Agreement (Second Lien) (the “Second Lien
Amendment”) substantially in the form set forth in Exhibit B. Certain parties
under the Second Lien Credit Agreement have assigned $41,561,223.12 outstanding
principal amount of the loans (the “Canceled Loans”) under the Second Lien
Credit Agreement to the Investors pursuant to an Assignment and Assumption
Agreement (the “Assignment and Assumption Agreements”) with each Investor in the
form set forth as Exhibit C.

D. The Exchange. The Company intends to deliver to each respective Investor, and
each respective Investor intends to acquire, severally and not jointly, from the
Company, such number of shares of Series A Cumulative Preferred Stock, par value
$0.10 per share (the “Series A Preferred Stock”) as set forth opposite such
Investor’s name under the heading “Number of Shares of Series A Preferred Stock”
on Annex A and warrants substantially in the form attached hereto as Exhibit D
(collectively, with respect to all Investors, the “Warrants”) to acquire such
number of shares of Common Stock as set forth opposite such Investor’s name
under the heading “Number of Shares of Common Stock Exercisable

--------------------------------------------------------------------------------

Pursuant to Warrants” on Annex A (collectively, with respect to all Investors,
the “Warrant Shares”) in consideration for the cancellation by the Investors,
severally and not jointly, of such amount of Canceled Loans as set forth
opposite such Investor’s name under the heading “Amount of Canceled Loans” on
Annex A. The Series A Preferred Stock shall be evidenced by a share certificate
incorporating the terms set forth in a Certificate of Designation, Preferences
and Rights of Series A Preferred Stock of the Company (the “Certificate of
Designation”) in the form attached as Exhibit E. The Series A Preferred Stock
and Warrants to be acquired by the Investors, severally and not jointly,
pursuant to this Agreement are collectively called the “Exchanged Securities”.

E. Certificate of Designation; Redemption Shares. The Certificate of Designation
also provides for the delivery, in certain instances, of shares of Common Stock
upon redemption or repurchase of the Series A Preferred Stock (the “Redemption
Shares”).

F. Other Agreements. The Company and OEP also intend to enter into an Amendment
No. 1 to the Investment Agreement, dated August 20, 2008, between the Company
and OEPX, LLC (the “OEP Investment Agreement Amendment”) in the form attached
hereto as Exhibit F and the Company, Sagard and Tinicum also intend to enter
into an Amendment No. 1 to the Investment Agreement, dated August 20, 2009,
between the Company, Sagard Capital Partners, L.P., Tinicum Capital Partners II,
L.P., Tinicum Capital Partners II Parallel Fund, L.P. and Tinicum Capital
Partners II Executive Fund, L.L.C. (the “Other Investors’ Investment Agreement
Amendment”, and together with the OEP Investment Agreement Amendment,
“Investment Agreement Amendments”) in the form attached hereto as Exhibit G, to,
among other things, under certain circumstances described therein, permit the
Investors to purchase their pro rata portion of shares of Common Stock following
a redemption of the Series A Preferred Stock entirely in cash as set forth in
the Investment Agreement Amendments (the “Redemption Purchase Shares”, and
together with the Warrant Shares and Redemption Shares, the “Investor Shares”).
For purposes of this Agreement, the term “Transaction Documents” refers
collectively to the Certificate of Designation, the Investment Agreement
Amendments, the Warrants and the Registration Rights Agreement Amendment (as
hereinafter defined), in each case as amended, modified or supplemented from
time to time in accordance with their respective terms.

NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:

ARTICLE I

EXCHANGE; CLOSINGS

1.1 Exchange. On the terms and subject to the conditions set forth herein, at
the Closing (as hereinafter defined), each Investor, severally and not jointly,
will acquire from the Company, and the Company will issue to each such Investor,
(i) such number of shares of Series A Preferred Stock as set forth opposite such
Investor’s name under the heading “Number of Shares of Series A Preferred Stock”
on Annex A and (ii) a Warrant to acquire such number of shares of Common Stock
as set forth opposite such Investor’s name under the heading “Number of Shares
of Common Stock Exercisable Pursuant to Warrants” on Annex A in consideration
for the cancellation by such Investor, severally and not jointly, of such amount
of Canceled Loans as set forth opposite such Investor’s name under the heading
“Amount of Canceled Loans” on Annex A.

1.2 Closing.

(a) Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, the closing of the delivery of the Exchanged Securities by the
Company to the Investors in consideration for cancellation by the Investors,
severally and not jointly, of their respective portion of the Canceled

 

2

--------------------------------------------------------------------------------

Loans pursuant hereto (the “Closing”) shall occur at the offices of Simpson
Thacher & Bartlett LLP located at 425 Lexington Avenue, New York, New York, as
soon as practicable, but in no event later than the second business day after
the satisfaction or waiver of the conditions set forth herein (excluding
conditions that, by their terms, cannot be satisfied until the Closing) or on
such other date or at such other place as may otherwise be agreed by the Company
and each of the Investors. The date of the Closing is referred to as the
“Closing Date.”

(b) Subject to the satisfaction or waiver on the Closing Date of the applicable
conditions to Closing in Section 1.2(c), at the Closing (i) each Investor,
severally and not jointly, hereby agrees that such amount of Canceled Loans as
set forth opposite such Investor’s name under the heading “Amount of Canceled
Loans” on Annex A is cancelled and is deemed to no longer be outstanding and
(ii) the Company will deliver to each such Investor:

(A) certificates representing such number of shares of Series A Preferred Stock
as set forth opposite such Investor’s name under the heading “Number of Shares
of Series A Preferred Stock” on Annex A; and

(B) a Warrant to acquire such number of Warrant Shares as set forth opposite
such Investor’s name under the heading “Number of Shares of Common Stock
Exercisable Pursuant to Warrants” on Annex A.

(c) Closing Conditions. (i) The respective obligations of each of the Investors,
on the one hand, and the Company, on the other hand, to consummate the Closing
are subject to the fulfillment or written waiver by each of the Investors and
the Company prior to the Closing of the following conditions:

(A) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the Closing and no lawsuit shall have
been commenced by a Governmental Entity seeking to effect any of the foregoing;
and

(B) any required approvals or authorizations of or notices to (or expiration or
termination of any applicable waiting periods of) Governmental Entities shall
have been received or made (or have occurred) as applicable.

(ii) The obligation of each Investor to consummate the Closing is also subject
to the fulfillment or written waiver by the applicable Investor at or prior to
the Closing of each of the following conditions:

(A) (x) the representations and warranties of the Company set forth in this
Agreement (excluding the representations and warranties of the Company set forth
in Sections 2.2(b), 2.2(g) and 2.2(k)) shall be true and correct (without regard
to “materiality” or “Material Adverse Effect” qualifications included therein)
as of the date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date (other than representations and warranties that by
their terms speak as of another date, which representations and warranties shall
be true and correct as of such other date), except to the extent that the
failure of such representations and warranties to be so true and correct,
individually or in the aggregate, does not have and would not be reasonably
likely to have a Material Adverse Effect and (y) the representations and
warranties of the Company set forth in Sections 2.2(b), 2.2(g) and 2.2(k) shall
be

 

3

--------------------------------------------------------------------------------

true and correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date (other than
representations and warranties that by their terms speak as of another date,
which representations and warranties shall be true and correct in all material
respects as of such other date);

(B) the Company shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing
Date;

(C) the Company shall have duly executed and delivered to OEP the OEP Investment
Agreement Amendment and to Sagard and Tinicum the Other Investors’ Investment
Agreement Amendment;

(D) the Company shall have duly executed and delivered to the Investor the
Amendment to the Registration Rights Agreement in the form attached hereto as
Exhibit H (the “Registration Rights Agreement Amendment”);

(E) the Administrative Committee of the board of directors of the Company (the
“Board of Directors”) shall have been established and members thereof elected in
accordance with the Certificate of Designation;

(F) Warner Norcross & Judd LLP, as counsel to the Company, shall have delivered
to the Investors an opinion, dated as of the Closing Date, in the form attached
hereto as Exhibit I; and

(G) the Company shall have taken all such steps as may be required to cause any
dispositions of Series A Preferred Stock and/or Common Stock (including
derivative securities with respect thereto) or acquisitions of Series A
Preferred Stock and Common Stock resulting from the transactions contemplated
hereby by each individual who is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to the Company, to be exempt
under Rule 16b-3 promulgated under the Exchange Act (such steps as taken in
accordance with the interpretive guidance set forth by the SEC (as hereinafter
defined)).

(iii) The obligation of the Company to consummate the Closing is also subject to
the fulfillment or written waiver by the Company at or prior to the Closing of
each of the following conditions:

(A) (x) the representations and warranties of each Investor set forth in this
Agreement (excluding the representations and warranties of such Investor set
forth in Section 2.3(d) and 2.3(e)) shall be true and correct (without regard to
“materiality” or “Material Adverse Effect” qualifications included therein) as
of the date of this Agreement and as of the Closing Date as though made on and
as of the Closing Date (other than representations and warranties that by their
terms speak as of another date, which representations and warranties shall be
true and correct as of such other date), except to the extent that the failure
of such representations and warranties to be so true and correct would not
reasonably be expected to materially adversely affect such Investor’s ability to
perform its obligations under this Agreement or consummate the transactions
contemplated

 

4

--------------------------------------------------------------------------------

hereby on a timely basis, and (y) the representations and warranties of each
Investor set forth in Section 2.3(d) and 2.3(e) shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date (other than representations and
warranties that by their terms speak as of another date, which representations
and warranties shall be true and correct in all material respects as of such
other date);

(B) each Investor shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing;

(C) OEP shall have duly executed and delivered to the Company the OEP Investment
Agreement Amendment and Sagard and Tinicum shall have executed and delivered to
the Company the Other Investors’ Investment Agreement Amendment; and

(D) the Investors shall have duly executed and delivered to the Company the
Registration Rights Agreement Amendment.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1 Disclosure. (a) On or prior to the date hereof, the Company delivered to the
Investors, and the Investors delivered to the Company, a schedule (“Disclosure
Schedule”) setting forth, among other things, items the disclosure of which is
necessary or appropriate either in response to an express disclosure requirement
contained in a provision hereof or as an exception to one or more
representations or warranties contained in Section 2.2 with respect to the
Company, or in Section 2.3 with respect to the Investors, or to one or more of
its covenants contained in Article III.

(b) As used in this Agreement, the term “Material Adverse Effect” means any
circumstances, events, changes, developments or effects that, individually or in
the aggregate, (1) are material and adverse to the business, assets, results of
operations or financial condition of the Company and Company Subsidiaries taken
as a whole or (2) would materially impair the ability of the Company to perform
its obligations under this Agreement or to consummate the Closing; provided,
however, that in determining whether a Material Adverse Effect has occurred,
there shall be excluded any effect to the extent resulting from the following:
(A) changes, after the date hereof, in generally accepted accounting principles
or regulatory accounting principles generally applicable to the industries in
which the Company or its Subsidiaries operate, (B) changes, after the date
hereof, in laws, rules and regulations of general applicability or
interpretations thereof by Governmental Entities, (C) actions of the Company
expressly required by the terms of this Agreement or taken with the prior
written consent of the Investors, (D) changes in general economic, financial
market or global or national political conditions, including the outbreak or
escalation of war or acts of terrorism, (E) events, circumstances, changes or
effects that generally affect the graphic arts and printing systems industry
(including legal or regulatory changes), (F) changes arising from the
consummation of the transactions contemplated by, or the announcement of the
execution of, this Agreement (provided that the exception in this clause (F)
shall not apply to that portion of any representation or warranty to the extent
the purpose of such representation or warranty is to specifically address the
consequences resulting from the execution of this Agreement or consummation of
the transactions contemplated by this Agreement) and (G) any failure to meet
internal or published projections, forecasts, performance measures, operating
statistics or revenue or earnings predictions for any period, in and of itself,
or a decline in the price or trading volume of the Common Stock, in and of
itself (it being understood that the facts or occurrences giving rise or
contributing to such failure that are

 

5

--------------------------------------------------------------------------------

not otherwise excluded from the definition of “Material Adverse Effect” may be
taken into account in determining whether there has been a Material Adverse
Effect); except with respect to clauses (A), (B), (D) and (E) to the extent that
such changes, events, circumstances, or effect have a disproportionate effect on
the Company and the Company Subsidiaries, taken as a whole, relative to other
companies operating in the graphic arts and printing systems industry.

(c) “Previously Disclosed” with regard to (1) a party means information set
forth on its Disclosure Schedule, provided, however, that disclosure in any
section of such Disclosure Schedule shall apply only to the indicated section of
this Agreement except to the extent that it is reasonably apparent from the face
of such disclosure that such disclosure is relevant to another section of this
Agreement, and (2) the Company means information publicly disclosed by the
Company in (A) its Annual Report on Form 10-K for the fiscal year ended
January 3, 2009 (the “Company 10-K), as filed by it with the Securities and
Exchange Commission (“SEC”) on March 19, 2009, (B) its Quarterly Reports on
Form 10-Q for the fiscal quarter ended April 4, 2009, as filed with the SEC on
May 14, 2009 and the fiscal quarter ended July 4, 2009, as filed with the SEC on
August 13, 2009, (C) its Definitive Proxy Statement on Schedule 14A, as filed by
it with the SEC on May 20, 2009 or (D) any Current Report on Form 8-K filed or
furnished by it with the SEC since March 19, 2009, and publicly available prior
to the date of this Agreement (excluding any risk factor disclosures contained
in such documents under the heading “Risk Factors” and any disclosure of risks
included in any “forward-looking statements” disclaimer or other statements that
are similarly non-specific and are predictive or forward-looking in nature).

2.2 Representations and Warranties of the Company. Except as Previously
Disclosed, the Company represents and warrants to the Investors that:

(a) Organization and Authority. The Company is a corporation duly organized and
validly existing under the laws of the State of Michigan, is duly qualified to
do business and is in good standing in all jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified and where failure to be so qualified would have a Material Adverse
Effect, and has the corporate power and authority to own its properties and
assets and to carry on its business as it is now being conducted. The Company
has furnished to each Investor true, correct and complete copies of the
Company’s restated articles of incorporation and amended and restated bylaws as
in effect on the date of this Agreement. Each Company Subsidiary is duly
organized and validly existing under the laws of its jurisdiction of
organization, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and where failure to be so qualified
would have a Material Adverse Effect, and has the corporate power and authority
and governmental authorizations to own its properties and assets and to carry on
its business as it is being conducted. As used herein, “Subsidiary” means, with
respect to any person, any corporation, partnership, joint venture, limited
liability company or other entity (x) of which such person or a subsidiary of
such person is a general partner or (y) of which a majority of the voting
securities or other voting interests, or a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or persons performing similar functions with
respect to such entity, is directly or indirectly owned by such person and/or
one or more subsidiaries thereof; “Company Subsidiary” means any Subsidiary of
the Company.

(b) Capitalization. (i) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 5,000,000 shares of Company Preferred
Stock, of which 776,995.5 have been designated as Junior Participating Preferred
Stock and 84,729.26362 shares have been designated as Series A Preferred Stock.
As of the close of business on August 13, 2009 (the “Capitalization Date”),
there were 77,699,550 shares of Common Stock outstanding and no shares of
Company Preferred Stock outstanding. Since the Capitalization Date, the Company
has not issued any

 

6

--------------------------------------------------------------------------------

shares of Company Preferred Stock, or any shares of Common Stock except pursuant
to the valid exercise or conversion of the securities set forth in
Section 2.2(b) of the Disclosure Schedule. As of the close of business on the
Capitalization Date and immediately prior to the Closing, no shares of Common
Stock or Company Preferred Stock were reserved or to be made available for
issuance, except for (1) (A) 5,910,128 shares of Common Stock reserved for
issuance upon the exercise of options outstanding as of the Capitalization Date,
(B) 519,000 shares of Common Stock reserved for future issuance upon the vesting
of restricted stock unit awards granted under the Company’s 2008 Omnibus Long
Term Incentive Plan as of the Capitalization Date and (C) 2,639,609 shares of
Common Stock reserved for future issuance under the Company’s 2008 Omnibus Long
Term Incentive Plan and 2004 Amended and Restated Employee Stock Purchase Plan,
and (2) 776,995.5 shares of Company Preferred Stock designated as Junior
Participating Preferred Stock, without par value, reserved or to be made
available for issuance upon the exercise of rights granted under the Rights
Plan. All of the issued and outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights of any shareholder of the Company other than the Investors. No
bonds, debentures, notes or other indebtedness which, by their terms, have the
right to vote on any matters on which the shareholders of the Company may vote
(“Voting Debt”) are issued and outstanding.

(ii) Set forth in Section 2.2(b)(ii) of the Disclosure Schedule is a true and
complete list of all Indebtedness of the Company and its Subsidiaries as of the
date of this Agreement with an outstanding principal amount in excess of
$1,000,000 individually, including for each such item of Indebtedness, the
outstanding principal amount, interest rate as in effect between the date of
this Agreement and the maturity date thereof, and the schedule of the principal
payments, and any Liens that relate to such Indebtedness. For the purposes of
this Agreement, “Indebtedness“ shall mean, with respect to any person, (a) all
liabilities of such person for borrowed money, whether contingent, current or
funded, secured or unsecured, (b) all liabilities of such person for the
deferred purchase price of property or services, (c) all liabilities of such
person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property),
(e) all liabilities of such person as lessee under leases that have been or are
required to be, in accordance with GAAP as of the date hereof, recorded as
capital leases, (f) all obligations, contingent or otherwise, of such person
under bankers’ acceptance, letter of credit or similar facilities, (g) any other
amounts required to be considered as indebtedness for purposes of GAAP as of the
date hereof, (h) all Indebtedness of others referred to in clauses (a) through
(g) above guaranteed in any manner by such person, and (i) all Indebtedness
referred to in clauses (a) through (g) above secured by any Lien on property
(including accounts and contract rights) owned by such person, even though such
person has not assumed or become liable for the payment of such Indebtedness;
provided, that clauses (a) through (i) shall include all accrued interest,
premiums and penalties upon prepayment of such outstanding Indebtedness;
provided, further, that for the avoidance of doubt, (x) ordinary course accounts
payable and (y) and indebtedness between the Company and any of its wholly-owned
Subsidiaries or between wholly-owned Subsidiaries of the Company shall not be
considered Indebtedness.

(iii) As of the date of this Agreement, except as set forth in Section 2.2(b) of
the Disclosure Schedule (which Section also sets forth the strike or exercise
prices, and other term or expiration date, of the relevant securities), the
Company does not have and is not bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the purchase or issuance of, or securities or rights convertible into or
exchangeable for, any shares of Common Stock or Company Preferred Stock or any
other Equity Securities of the Company or any securities representing the right
to purchase or otherwise receive any shares of capital stock of the Company
(including any rights plan or agreement).

 

7

--------------------------------------------------------------------------------

(c) Company’s Subsidiaries. The Company owns, directly or indirectly, all of the
issued and outstanding shares of capital stock of or all other equity interests
in each of the Company Subsidiaries, free and clear of any liens, charges,
encumbrances, adverse rights or claims and security interests whatsoever
(“Liens”), and all of such shares or equity interests are duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof. No Company
Subsidiary has or is bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of capital stock, any other equity security or any Voting
Debt of such Company Subsidiary or any securities representing the right to
purchase or otherwise receive any shares of capital stock, any other equity
security or Voting Debt of such Company Subsidiary.

(d) Authorization; No Conflicts.

(i) The Company has the corporate power and authority to enter into this
Agreement and the Transaction Documents and to carry out its obligations
hereunder and thereunder. The execution, delivery and performance by the Company
of this Agreement and the Transaction Documents and the consummation by the
Company of the transactions contemplated hereby and thereby have been duly
approved and authorized by the Board of Directors. This Agreement and the
Transaction Documents have been duly and validly executed and delivered by the
Company and, assuming due authorization, execution and delivery by each Investor
and the other parties thereto, this Agreement and the Transaction Documents are
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to the effect of any applicable bankruptcy,
insolvency (including all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting creditors’ rights generally
and subject to the effect of general principles of equity (regardless of whether
considered in a proceeding at law or in equity). No other corporate proceedings
are necessary for the execution and delivery by the Company of this Agreement or
the Transaction Documents, the performance by it of its obligations hereunder
and thereunder or the consummation by it of the transactions contemplated hereby
and thereby, subject, in the case of issuance of the Warrant Shares, to approval
of the proposal to approve the issuance of the Warrant Shares for purposes of
the NASDAQ Marketplace Rules (the “Shareholder Proposal”) by the Company
Requisite Vote. Other than as set forth in Section 2.2(d)(i) of the Disclosure
Schedule (the “Company Requisite Vote”), no vote of the shareholders or the
Company is required to approve the Agreement, the Transaction Documents or the
transactions contemplated hereby or thereby.

(ii) Neither the execution and delivery by the Company of this Agreement or the
Transaction Documents, nor the consummation of the transactions contemplated
hereby and thereby, nor compliance by the Company with any of the provisions
hereof and thereof will (A) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the material properties or assets of
the Company or any Company Subsidiary under any of the terms, conditions or
provisions of (i) its restated articles of incorporation (as amended), amended
and restated bylaws or certificates of designation or the articles of
incorporation, charter, bylaws, certificates of designation or other governing
instrument of any Company Subsidiary or (ii) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by

 

8

--------------------------------------------------------------------------------

which it may be bound, or to which the Company or any Company Subsidiary or any
of the properties or assets of the Company or any Company Subsidiary may be
subject, or (B) violate any law, statute, ordinance, rule, regulation, permit,
concession, grant, franchise or any judgment, ruling, order, writ, injunction or
decree applicable to the Company or any Company Subsidiary or any of their
respective properties or assets, except in the case of clause (A)(ii) and (B),
as would not have a Material Adverse Effect.

(e) Governmental Consents. Other than as set forth in Section 2.2(e) of the
Disclosure Schedule, and the securities or blue sky laws of the various states,
no notice to, registration, declaration or filing with, exemption or review by,
or authorization, order, consent or approval of, any Governmental Entity, nor
expiration or termination of any statutory waiting periods, is necessary for the
consummation by the Company of the transactions contemplated by the Transaction
Documents or the performance of the Company’s obligations thereunder. As used
herein, “Governmental Entity” means any court, administrative agency or
commission or other governmental authority or instrumentality, whether federal,
state, local or foreign, and any applicable industry self-regulatory
organization.

(f) Offering of Securities. Neither the Company nor any person acting at its
direction has taken any action (including any offering of any securities of the
Company under circumstances which would require the integration of such offering
with the offering of any of the Exchanged Securities or Warrant Shares or
Redemption Shares to be issued (or may be issued) pursuant to this Agreement
under the Securities Act and the rules and regulations of the SEC thereunder)
which would subject the offering, issuance, exchange or sale of any of the
Exchanged Securities or Warrant Shares or Redemption Shares to the Investors
pursuant to this Agreement to the registration requirements of the Securities
Act.

(g) Status of Securities. The Exchanged Securities have been duly authorized by
all necessary corporate action. When issued and exchanged against receipt of the
consideration therefor as provided in this Agreement, such Exchanged Securities
will be validly issued, fully paid and nonassessable, free and clear of all
Liens (other than Liens imposed as a result of actions taken by an Investor or
its Affiliates) and will not be subject to preemptive rights of any shareholder
of the Company other than the Investors. The Warrant Shares will be (upon
receipt of the Company Requisite Vote) duly authorized by all necessary
corporate action and when so issued upon such exercise be validly issued, fully
paid and nonassessable, will not subject the holders thereof to personal
liability and will not be subject to preemptive rights of any shareholder of the
Company other than the Investors. The Redemption Shares have been duly
authorized by all necessary corporate action and when so issued in accordance
with the Certificate of Designation, will be validly issued, fully paid and
nonassessable, will not subject the holders thereof to personal liability and
will not be subject to preemptive rights of any shareholder of the Company other
than the Investors.

(h) Anti-takeover Provisions Not Applicable. Assuming the accuracy of the
representations and warranties of the Investors, no “moratorium,” “control
share,” “fair price,” “takeover,” “business combination” or “interested
shareholder” or other similar anti-takeover statute or regulation (including any
provision of the Company’s restated articles of incorporation, as amended, or
amended and restated bylaws) is applicable to the transactions contemplated by
(and the Company and its Board of Directors have taken all necessary action, if
any, in order to render any such statute, regulation or provision inapplicable
to the Investor) this Agreement or the Transaction Documents.

(i) Rights Plan. The Company has taken all actions necessary to amend the Rights
Plan in the form attached hereto as Exhibit J, so as to render it inapplicable
to this Agreement and the Transaction Documents and the transactions
contemplated hereby and thereby.

 

9

--------------------------------------------------------------------------------

(j) Brokers and Finders. Except as set forth in Section 2.2(j) of the Disclosure
Schedule, neither the Company nor any Company Subsidiary nor any of their
respective officers or directors has employed any broker or finder or incurred
any liability for any financial advisory fees, brokerage fees, commissions or
finder’s fees, and no broker or finder has acted directly or indirectly for the
Company or any Company Subsidiary, in connection with this Agreement or the
transactions contemplated hereby.

(k) Acknowledgment Regarding Investor’s Acquisition of Exchanged Securities. The
Company acknowledges and agrees that each Investor is acting solely in the
capacity of arm’s length purchaser with respect to this Agreement and the
Transaction Documents and the transactions contemplated hereby and thereby. The
Company further acknowledges that each Investor is not acting as a financial
advisor or fiduciary of the Company or any Company Subsidiary (or in any similar
capacity) with respect to this Agreement or the Transaction Documents and the
transactions contemplated hereby and thereby, and any advice given by any such
Investor or any of its investment bankers, attorneys, accountants, agents and
other representatives (“Representatives“) in connection with this Agreement
and/or Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to such Investor’s acquisition of Exchanged
Securities. The Company further represents to each Investor that the Company’s
decision to enter into this Agreement and the Transaction Documents has been
based solely on the independent evaluation by the Company and its
Representatives.

2.3 Representations and Warranties of the Investor. Except as Previously
Disclosed, each Investor hereby represents and warrants to the Company, as of
the date of this Agreement and as of the Closing Date, that:

(a) Organization and Authority. Such Investor is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and where failure to be so qualified
would be reasonably expected to materially adversely affect Investor’s ability
to perform its obligations under this Agreement or consummate the transactions
contemplated hereby on a timely basis, and Investor has the corporate or other
power and authority and governmental authorizations to own its properties and
assets and to carry on its business as it is now being conducted.

(b) Authorization; No Conflicts.

(i) Such Investor has the corporate or other power and authority to enter into
this Agreement and the Transaction Documents and to carry out its obligations
hereunder and thereunder. The execution, delivery and performance of the
Agreement and the Transaction Documents by such Investor and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
such Investor’s board of directors, general partner or managing members, as the
case may be, and no further approval or authorization by any of its
shareholders, partners or other equity owners, as the case may be, is required.
This Agreement and the Transaction Documents to which it is a party have been
duly and validly executed and delivered by such Investor and, assuming due
authorization, execution and delivery by the Company, this Agreement and the
Transaction Documents to which it is a party are a valid and binding obligation
of such Investor enforceable against such Investor in accordance with their
terms, subject to the effect of any applicable bankruptcy, insolvency (including
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors’ rights generally and subject to the effect of
general principles of equity (regardless of whether considered in a proceeding
at law or in equity). No other corporate proceedings are necessary for the
execution and delivery by such Investor of this Agreement or the Transaction
Documents to which it is a party, the performance by it of its obligations
hereunder and thereunder or the consummation by it of the transactions
contemplated hereby and thereby.

 

10

--------------------------------------------------------------------------------

(ii) Neither the execution, delivery and performance by such Investor of this
Agreement or the Transaction Documents to which it is a party, nor the
consummation of the transactions contemplated hereby and thereby, nor compliance
by such Investor with any of the provisions hereof or thereof, will (A) violate,
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of,
or result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of such Investor under any of the terms,
conditions or provisions of (i) its articles of incorporation or bylaws, its
certificate of limited partnership or partnership agreement, its limited
liability company agreement or its similar governing documents or (ii) any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which such Investor is a party or by which it may be
bound, or to which such Investor or any of the properties or assets of such
Investor may be subject, or (B) subject to compliance with the statutes and
regulations referred to in the next paragraph, violate any law, statute,
ordinance, rule or regulation, permit, concession, grant, franchise or any
judgment, ruling, order, writ, injunction or decree applicable to such Investor
or any of its properties or assets except in the case of clauses (A)(ii) and
(B) for such violations, conflicts and breaches as would not reasonably be
expected to materially adversely affect such Investor’s ability to perform its
obligations under this Agreement or consummate the transactions contemplated
hereby on a timely basis.

(iii) Other than as set forth in Section 2.2(e) of the Disclosure Schedule of
the Company, and the securities or blue sky laws of the various states, no
notice to, registration, declaration or filing with, exemption or review by, or
authorization, order, consent or approval of, any Governmental Entity, nor
expiration or termination of any statutory waiting period, is necessary for the
consummation by such Investor of the transactions contemplated by this
Agreement.

(c) Exchange for Investment. Such Investor acknowledges that the Exchanged
Securities and Redemption Shares have not been registered under the Securities
Act or under any state securities laws. Such Investor (1) is acquiring the
Exchanged Securities and Redemption Shares (if applicable) pursuant to an
exemption from registration under the Securities Act solely for investment with
no present intention to distribute any of the Exchanged Securities to any
person, (2) will not sell or otherwise dispose of any of the Exchanged
Securities or Redemption Shares, except in compliance with this Agreement and
the Transaction Documents and the registration requirements or exemption
provisions of the Securities Act and any other applicable securities laws,
(3) has such knowledge and experience in financial and business matters and in
investments of this type that it is capable of evaluating the merits and risks
of its investment in the Exchanged Securities and of making an informed
investment decision and (4) is an “accredited investor” (as that term is defined
by Rule 501 of the Securities Act).

(d) Brokers and Finders. Neither such Investor nor its Affiliates or any of
their respective officers or directors has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees,
commissions or finder’s fees, and no broker or finder has acted directly or
indirectly for such Investor, in connection with this Agreement or the
transactions contemplated hereby. The Company will not be responsible for any
brokerage, finder’s or other fee or commission to any broker, finder or
investment banker in connection with the transactions contemplated by this
Agreement or the Transaction Documents based upon arrangements made by or on
behalf of such Investor or its Affiliates.

 

11

--------------------------------------------------------------------------------

(e) Interest in Canceled Loans. Such Investor shall have at the Closing the sole
right, title and interest in and to, the Canceled Loans set forth opposite such
Investor’s name under the heading “Amount of Canceled Loans” on Annex A, subject
to the terms of such Investor’s Assignment and Assumption Agreement.

ARTICLE III

COVENANTS

3.1 Filings; Other Actions.

(a) Each Investor, on the one hand, severally and not jointly, and the Company,
on the other hand, will cooperate and consult with the other and use reasonable
best efforts to identify, prepare and file all necessary documentation, to
identify and effect all necessary applications, notices, petitions, filings and
other documents, and to obtain all necessary permits, consents, orders,
approvals and authorizations of, or any exemption by, all Governmental Entities,
and the expiration or termination of any applicable waiting periods, necessary
or advisable to consummate the transactions contemplated by this Agreement, to
perform the covenants contemplated by this Agreement, and to consummate the
delivery of the Investor Shares contemplated by the Warrants and/or Certificate
of Designation. Each of the Investors, severally and not jointly, and the
Company shall use commercially reasonable efforts and cooperate with one another
with a view to obtaining the consents or approvals of any third parties (other
than Governmental Entities) necessary or advisable to consummate the
transactions contemplated hereby and the delivery of the Investor Shares
contemplated by the Warrants and/or Certificate of Designation; provided, that
neither party shall be required to pay any fees or consideration (other than
filing fees) to any person in order to obtain any such third party consents or
approvals. Each Investor, on the one hand, severally and not jointly, and the
Company, on the other hand, shall execute and deliver both before and after the
Closing such further certificates, agreements and other documents and take such
other actions as the other may reasonably request, from time to time, to
consummate or implement such transactions and delivery of shares or to evidence
such events or matters. In particular, the Company will, upon reasonable request
by any Investor, from time to time, use its reasonable best efforts to promptly
obtain or submit the approvals and authorizations of, filings and registrations
with, and notifications to, or expiration or termination of any applicable
waiting period, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the “HSR Act”) or applicable competition or merger control laws of other
jurisdictions. Such requests of the Company by any Investor should be made only
when the Investor reasonably anticipates that such Investor will meet or exceed
a reporting threshold under the HSR Act or applicable competition or merger
control laws of other jurisdictions with a subsequent redemption or repurchase
of Series A Preferred Stock by the Company or the exercise of a Warrant by such
Investor, and for which the parties have not observed the applicable waiting
period(s). Further, each Investor will, upon reasonable request by the Company,
from time to time, use its reasonable best efforts to promptly obtain or submit
the approvals and authorizations of, filings and registrations with, and
notifications to, or expiration or termination of any applicable waiting period,
under the HSR Act or applicable competition or merger control laws of other
jurisdictions. Without limiting the foregoing, the Company and each Investor
shall prepare and file a Notification and Report Form pursuant to the HSR Act
and other similar filings with respect to any other applicable competition or
merger control laws of other jurisdictions promptly upon reasonable request by
(x) in the case of a filing to be made by the Company, any Investor and (y) in
the case of a filing to be made by any Investor, the Company, from time to time.
Each Investor and the Company will have the right to review in advance, and to
the extent practicable each will consult with the other, in each case subject to
applicable laws relating to the exchange of information, all the information
relating to such other party, and any of its respective Affiliates, which
appears in any filing made with, or written materials submitted to, any third
party or any Governmental Entity in connection with the transactions
contemplated by this Agreement and the Transaction Documents. In exercising the
foregoing right, each of the parties hereto agrees to act reasonably and as
promptly as practicable. Each Investor, on

 

12

--------------------------------------------------------------------------------

the one hand, severally and not jointly, and the Company, on the other hand,
agrees to keep the other apprised of the status of matters referred to in this
Section 3.1(a). Each Investor, on the one hand, severally and not jointly, and
the Company, on the other, shall promptly furnish each other, with copies of
written communications received by it or its Subsidiaries from, or delivered by
any of the foregoing to, any Governmental Entity in respect of the transactions
contemplated by this Agreement (other than any portions thereof that relate to
confidential supervisory matters).

(b) The Company shall call a special meeting of shareholders (the “Shareholders’
Meeting”) to be held as promptly as practicable following the Closing Date and
submit the Shareholder Proposal to a vote of the Company’s shareholders. The
Board of Directors shall recommend to the Company’s shareholders that such
shareholders vote in favor of the Shareholder Proposal (the “Board
Recommendation”). In connection with such meeting, the Company shall, as
promptly as practicable following the Closing Date, prepare (and each Investor
will reasonably cooperate with the Company to prepare) and file with the SEC a
preliminary proxy statement, shall use its reasonable best efforts to respond to
any comments of the SEC or its staff and to cause a definitive proxy statement
related to such Shareholders’ Meeting to be mailed to the Company’s shareholders
promptly after clearance thereof by the SEC, and shall use its reasonable best
efforts to solicit proxies for such shareholder approval. The Company shall
notify each Investor promptly of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or supplements
to such proxy statement or for additional information and will supply each
Investor with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to such proxy statement. If at any time prior to such Shareholders’
Meeting there shall occur any event that is required to be set forth in an
amendment or supplement to the proxy statement, the Company shall as promptly as
reasonably practicable prepare and mail to its shareholders such an amendment or
supplement and each Investor shall cooperate with the Company in taking such
actions. Each Investor and the Company agree promptly to correct any information
provided by it or on its behalf for use in the proxy statement if and to the
extent that such information shall have become false or misleading in any
material respect, and the Company shall as promptly as reasonably practicable
prepare and mail to its shareholders an amendment or supplement to correct such
information to the extent required by applicable laws and regulations. The
Company shall consult with each Investor prior to filing any proxy statement or
any amendment or supplement thereto, and provide each Investor with a reasonable
opportunity to comment thereon.

(c) Each of the Investors, on the one hand, severally and not jointly, and the
Company, on the other hand, agrees, upon request, to furnish the other party
with all information concerning itself, its Affiliates, directors, officers,
partners and shareholders and such other matters as may be reasonably necessary
or advisable in connection with the proxy statement in connection with any such
Shareholders’ Meeting and any other statement, filing, notice or application
made by or on behalf of such other party or any of its Subsidiaries to any
Governmental Entity in connection with the Closing, the delivery of any of the
Investor Shares and the other transactions contemplated by this Agreement.

(d) Neither the Board of Directors of the Company nor any committee thereof
shall withdraw or modify, or publicly propose to withdraw or modify the Board
Recommendation.

(e) From and after the date hereof, the Company and each Investor, severally and
not jointly, will use their reasonable best efforts in good faith to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable, so as to permit the delivery of
the Exchanged Securities, Warrant Shares and Redemption Shares to the Investors
as promptly as practicable and otherwise to enable consummation of the
transactions contemplated hereby subject to the terms and conditions hereof.

 

13

--------------------------------------------------------------------------------

ARTICLE IV

ADDITIONAL AGREEMENTS

4.1 Legend. (a) Each Investor agrees that all certificates or other instruments
representing the Series A Preferred Stock subject to this Agreement will bear a
legend substantially to the following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.

(b) Upon the reasonable request of any Investor, at a time when such legend is
no longer required under the Securities Act and applicable state laws, the
Company shall promptly cause the legend to be removed from any of such
Investor’s certificates for any Series A Preferred Stock. Each Investor
acknowledges that the Exchanged Securities have not been registered under the
Securities Act or under any state securities laws and agrees that it will not
sell or otherwise dispose of any shares of Series A Preferred Stock, except in
compliance with the registration requirements or exemption provisions of the
Securities Act and any other applicable securities laws.

4.2 Exchange Listing. The Company shall use its reasonable best efforts to cause
the Warrant Shares and Redemption Shares (including, for the avoidance of doubt,
all shares of Common Stock reserved for issuance) to be approved for listing on
the NASDAQ National Market System (“NASDAQ”), subject to official notice of
issuance, as promptly as practicable following the Closing Date, and in any
event, prior to the Shareholders’ Meeting (and in any event, with respect to the
Redemption Shares, prior to the Company’s mandatory redemption of the Series A
Preferred Stock as set forth in the Certificate of Designation, and/or the
Company’s exercise of its right to optionally redeem the Series A Preferred
Stock as set forth in the Certificate of Designation).

4.3 Reservation for Issuance. From and after the date hereof, the Company will
reserve, and maintain as reserved, that number of shares of Common Stock
sufficient for issuance of the Warrant Shares and/or the Redemption Shares.

4.4 Certain Transactions. The Company will not merge or consolidate into, or
sell, transfer or lease all or substantially all of its property or assets to,
any other party unless the successor, transferee or lessee party, as the case
may be (if not the Company), expressly assumes the due and punctual performance
and observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.

4.5 Certificate of Designation. In connection with the Closing and in any event
no later than immediately prior to the Closing, the Company shall file the
Certificate of Designation in the State of Michigan, and such Certificate of
Designation shall continue to be in full force and effect as of the Closing
until such time that no shares of Series A Preferred Stock remain outstanding.

 

14

--------------------------------------------------------------------------------

ARTICLE V

TERMINATION

5.1 Termination. This Agreement may be terminated prior to the Closing by mutual
written agreement of the Company and each of the Investors.

5.2 Effects of Termination. In the event of any termination of this Agreement as
provided in Section 5.1, this Agreement (other than this Section 5.2 and
Article VI, which shall remain in full force and effect) shall forthwith become
wholly void and of no further force and effect; provided, that nothing herein
shall relieve any party from liability for intentional breach of this Agreement
or fraud.

ARTICLE VI

MISCELLANEOUS

6.1 Survival. Each of the representations and warranties set forth in this
Agreement shall terminate at the Closing. Except as otherwise provided herein,
all covenants and agreements contained herein, other than those which by their
terms are to be performed in whole or in part after the Closing, shall terminate
as of the Closing. Nothing contained in this Agreement shall preclude any
Investor from commencing a claim against the Company asserting a violation of
Rule 10b-5 under the Exchange Act in respect of any matter that was not
otherwise Previously Disclosed.

6.2 Expenses. Notwithstanding anything herein to the contrary, the Company shall
bear and pay all costs and expenses in connection with the transactions
contemplated pursuant to this Agreement, the Transaction Documents and the
transactions contemplated hereby and thereby, and shall, upon any Investor’s
request, promptly reimburse each such Investor for its reasonable out-of-pocket
costs and expenses incurred in connection with due diligence, and/or the
negotiation and preparation of this Agreement and undertaking of the
transactions contemplated pursuant to this Agreement, the Transaction Documents
and the transactions contemplated hereby and thereby (including, for the
avoidance of doubt, fees and expenses of counsel and HSR Act filing fees
incurred by or on behalf of any Investor or its Affiliates in connection with
the transactions contemplated pursuant to this Agreement) and/or the Transaction
Documents. In addition, at, or prior to, the Closing, the Company shall pay to
each assigning lender, as applicable, all accrued and unpaid interest with
respect to the Canceled Loans under the Second Lien Credit Agreement.

6.3 Amendment. No amendment or waiver of any provision of this Agreement will be
effective with respect to any party unless made in writing and signed by an
officer of a duly authorized representative of such party. No failure or delay
by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.

6.4 Waivers. The conditions to each party’s obligation to consummate the Closing
are for the sole benefit of such party and may be waived by such party in whole
or in part to the extent permitted by applicable law. No waiver of any party to
this Agreement, as the case may be, will be effective unless it is in a writing
signed by a duly authorized officer of the waiving party that makes express
reference to the provision or provisions subject to such waiver.

6.5 Counterparts and Facsimile. For the convenience of the parties hereto, this
Agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
will together constitute the same agreement. Executed signature pages to this
Agreement may be delivered by facsimile and such facsimiles will be deemed as
sufficient as if actual signature pages had been delivered.

 

15

--------------------------------------------------------------------------------

6.6 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State. The parties hereby irrevocably
and unconditionally consent to submit to the exclusive jurisdiction of the state
and federal courts located in the Borough of Manhattan, State of New York for
any actions, suits or proceedings arising out of or relating to this Agreement
and the transactions contemplated hereby.

6.7 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

6.8 Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to
have been duly given (a) on the date of delivery if delivered personally or by
telecopy or facsimile, upon confirmation of receipt, (b) on the first business
day following the date of dispatch if delivered by a recognized next-day courier
service, or (c) on the third business day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice.

(a) If to OEP:

OEPX, LLC

c/o One Equity Partners

320 Park Avenue, 18th Floor

New York, NY 10022

Tel: (212) 277-1500

Facsimile: (212) 277-1572

Attention: David M. Cohen

         Colin M. Farmer

with a copy (which copy alone shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Tel: (212) 455-7295

Facsimile: (212) 455-2502

Attention: William R. Dougherty, Esq.

(b) If to Sagard:

Sagard Capital Partners, L.P.

325 Greenwich Avenue

Greenwich, Connecticut 06830

Tel: (203) 629-6700

Facsimile: (203) 629-6781

 

16

--------------------------------------------------------------------------------

Attention: Daniel Friedberg

with a copy (which copy alone shall not constitute notice) to:

Finn Dixon & Herling LLP

177 Broad Street

Stamford, Connecticut 06901

Tel: (203) 325-5000

Facsimile: (203) 325-5001

Attention: Charles J. Downey III, Esq.

(c) If to Tinicum:

Tinicum Capital Partners II, L.P.

800 Third Avenue

40th Floor

New York, NY 10022

Tel: (212) 446-9300

Facsimile: (212) 750-9264

Attention: Robert J. Kelly

with a copy (which copy alone shall not constitute notice) to:

Sullivan & Cromwell LLP

1888 Century Park East

Suite 2100

Los Angeles, CA 90067

Tel: (310) 712-6600

Facsimile: (310) 712-8800

Attention: Alison S. Ressler, Esq.

(d) If to the Company:

X-Rite, Incorporated

4300 44th Street SE

Grand Rapids, MI 49512

Tel: (616) 803-2309

Facsimile: (616) 803-2530

Attention: Thomas Vacchiano

with copies (which copies alone shall not constitute notice) to:

McDermott Will & Emery LLP

227 West Monroe

Chicago, IL 60606

Tel: (312) 984-7563

Facsimile: (312) 983-7700

Attention: Helen Friedli, Esq.

6.9 Entire Agreement, Etc. (a) This Agreement (including the Exhibits, Schedules
and Disclosure Schedule hereto) constitutes the entire agreement, and supersedes
all other prior agreements,

 

17

--------------------------------------------------------------------------------

understandings, representations and warranties, both written and oral, among the
parties, with respect to the subject matter hereof; and (b) this Agreement will
not be assignable by operation of law or otherwise (any attempted assignment in
contravention hereof being null and void); provided, that any Investor may
assign its rights and obligations under this Agreement to any Affiliate of such
Investor who agrees in writing to be bound by the terms of this Agreement
(provided, that no such assignment shall relieve the Investor of its obligations
hereunder). Without limiting the foregoing, and other than with respect to
transfers to such Affiliates (as such term in defined in this Section 6.9), none
of the rights of any of the Investors hereunder shall be assigned to, or
enforceable by, any person to whom the Investor may transfer, sell, assign or
otherwise dispose of Exchanged Securities.

6.10 Other Definitions. Wherever required by the context of this Agreement, the
singular shall include the plural and vice versa, and the masculine gender shall
include the feminine and neuter genders and vice versa, and references to any
agreement, document or instrument shall be deemed to refer to such agreement,
document or instrument as amended, supplemented or modified from time to time.

(a) unless otherwise indicated, the term “Affiliate” means, with respect to any
person, any person directly or indirectly controlling, controlled by or under
common control with, such other person. For purposes of this definition,
“control” (including, with correlative meanings, the terms “controlled by” and
“under common control with”) when used with respect to any person, means the
possession, directly or indirectly, of the power to cause the direction of
management or policies of such person, whether through the ownership of voting
securities by contract or otherwise;

(b) the term “Benefit Plan” means any employee welfare benefit plan within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), any employee pension benefit plan within the meaning of
Section 3(2) of ERISA and any bonus, incentive, deferred compensation, vacation,
stock purchase, stock option, severance, employment, change of control,
consulting or fringe benefit plan, program, agreement or policy.

(c) “business day” means any day except Saturday, Sunday and any day which shall
be a legal holiday or a day on which banking institutions in the State of New
York or in the State of Michigan generally are authorized or required by law or
other governmental actions to close;

(d) the terms “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision;

(e) the words “including,” “includes,” “included” and “include” are deemed to be
followed by the words “without limitation”; and

(f) the word “or” is not exclusive;

(g) “person” has the meaning given to it in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act;

(h) all article, section, paragraph or clause references not attributed to a
particular document shall be references to such parts of this Agreement, and all
exhibit, annex and schedule references not attributed to a particular document
shall be references to such exhibits, annexes and schedules to this Agreement.

6.11 Captions. The article, section, paragraph and clause captions herein are
for convenience of reference only, do not constitute part of this Agreement and
will not be deemed to limit or otherwise affect any of the provisions hereof.

 

18

--------------------------------------------------------------------------------

6.12 Severability. If any provision of this Agreement or the application thereof
to any person (including, the officers and directors of the Investor and the
Company) or circumstance is determined by a court of competent jurisdiction to
be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, will remain in full force and
effect and shall in no way be affected, impaired or invalidated thereby, so long
as the economic or legal substance of the transactions contemplated hereby is
not affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.

6.13 No Third Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to confer upon any person or entity other than
the parties hereto, any benefit, right or remedies.

6.14 Time of Essence. Time is of the essence in the performance of each and
every term of this Agreement.

6.15 Public Announcements. Subject to each party’s disclosure obligations
imposed by law or regulation or the rules of any stock exchange upon which its
securities are listed, each of the parties hereto will cooperate with each other
in the development and distribution of all news releases and other public
information disclosures with respect to this Agreement and any of the
transactions contemplated by this Agreement, and no party hereto will make any
such news release or public disclosure without first consulting with the other
party hereto and receiving its consent (which shall not be unreasonably withheld
or delayed) and each party shall coordinate with the other with respect to any
such news release or public disclosure.

6.16 Specific Performance. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly agreed that the parties
shall be entitled to seek specific performance of the terms hereof, this being
in addition to any other remedies to which they are entitled at law or equity.

6.17 Memorandum of Agreement. The Company has determined that this Agreement
shall satisfy the requirement set forth in Section (B)(1) of Article VI of the
Company’s restated articles of incorporation (as amended) for the Company to
enter into a memorandum of understanding setting forth the principal terms of
the transaction to be entered into, and, this Agreement shall be deemed to be a
“memorandum of understanding” for all purposes of such Article VI.

[Remainder of page intentionally left blank]

 

19

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties hereto as of the date first herein above
written.

 

X-RITE, INCORPORATED By:  

/s/ Thomas J. Vacchiano Jr.

Name:   Thomas J. Vacchiano Jr. Title:   Chief Executive Officer

--------------------------------------------------------------------------------

OEPX, LLC By:  

/s/ Colin M. Farmer

Name:   Colin M. Farmer Title:   Authorized Signatory

--------------------------------------------------------------------------------

SAGARD CAPITAL PARTNERS, L.P. By:   Sagard Capital Partners GP, Inc.,   its
general partner By:  

/s/ Daniel Friedberg

Name:   Daniel Friedberg Title:   Chief Executive Officer

--------------------------------------------------------------------------------

TINICUM CAPITAL PARTNERS II, L.P. By:   Tinicum Lantern II L.L.C.,   its general
partner By:  

/s/ Robert J. Kelly

Name:   Robert J. Kelly Title:   Member

TINICUM CAPITAL PARTNERS II PARALLEL FUND, L.P.

By:   Tinicum Lantern II L.L.C.,   its general partner By:  

/s/ Robert J. Kelly

Name:   Robert J. Kelly Title:   Member

TINICUM CAPITAL PARTNERS II EXECUTIVE FUND L.L.C.

By:   Tinicum Lantern II L.L.C.,   its managing member By:  

/s/ Robert J. Kelly

Name:   Robert J. Kelly Title:   Member

--------------------------------------------------------------------------------

Annex A

 

Investor

   Number of Shares of
Series A Preferred Stock    Number of Shares of
Common Stock Exercisable
Pursuant to Warrants    Amount of Canceled Loans

OEPX, LLC

   25,316.48088    4,568,527.88063    $ 25,316,480.87693                 

Sagard Capital Partners, L.P.

   8,042.62421    1,451,345.19708    $ 8,042,624.20797                 

Tinicum Capital Partners II, L.P.

   8,135.47088    1,468,099.99871    $ 8,135,470.88121

Tinicum Capital Partners II Parallel Fund, L.P.

   42.31017    7,635.15211    $ 42,310.16803

Tinicum Capital Partners II Executive Fund, L.L.C.

   24.33699    4,391.77147    $ 24,336.98587                 

Tinicum (total)

   8,202.11804    1,480,126.92229    $ 8,202,118.03510                 

Total

   41,561.22312    7,500,000.00000    $ 41,561,223.12000