EXHIBIT 10.1



 






EXHIBIT 10.1




      



      



      



RECAPITALIZATION AGREEMENT




dated as
of August 17, 2005




among




DIAMOND TRIUMPH AUTO GLASS, INC.,




KENNETH LEVINE




and




GREEN EQUITY INVESTORS II, L.P.




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 1.01.	 	Definitions	 	 	2	 
	 
	 	Section 1.02.	 	General Interpretive Principles	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II RECAPITALIZATION	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 2.01.	 	Recapitalization	 	 	4	 
	 
	 	Section 2.02.	 	Recapitalization Closing	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 3.01.	 	Organization; Powers	 	 	4	 
	 
	 	Section 3.02.	 	Authorization; Enforceability	 	 	4	 
	 
	 	Section 3.03.	 	Governmental Approvals; No Conflicts	 	 	4	 
	 
	 	Section 3.04.	 	Capitalization; Securities	 	 	4	 
	 
	 	Section 3.05.	 	Exemption from Registration	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LEVINE	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 4.01.	 	Enforceability	 	 	4	 
	 
	 	Section 4.02.	 	Purpose of Investment	 	 	4	 
	 
	 	Section 4.03.	 	Ownership of Levine Preferred Shares	 	 	4	 
	 
	 	Section 4.04.	 	Financial Status	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF GEI	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 5.01.	 	Organization	 	 	4	 
	 
	 	Section 5.02.	 	Authorization; Enforceability	 	 	4	 
	 
	 	Section 5.03.	 	Purpose of Investment	 	 	4	 
	 
	 	Section 5.04.	 	Ownership of GEI Preferred Shares and GEI Common Shares	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI PRE-CLOSING COVENANTS	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 6.01.	 	Taking of Necessary Action	 	 	4	 
	 
	 	Section 6.02.	 	Notifications	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII ADDITIONAL COVENANTS	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 7.01.	 	Legend	 	 	4	 






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	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII CONDITIONS	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 8.01.	 	Conditions to Levine's Obligations with Respect to the Recapitalization	 	 	4	 
	 
	 	Section 8.02.	 	Conditions to GEI's Obligations with Respect to the Recapitalization	 	 	4	 
	 
	 	Section 8.03.	 	Conditions to the Company's Obligations with Respect to the Recapitalization	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX TERMINATION	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 9.01.	 	Termination of Agreement	 	 	4	 
	 
	 	Section 9.02.	 	Effect of Termination	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE X MISCELLANEOUS	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 10.01.	 	Fees and Expenses	 	 	4	 
	 
	 	Section 10.02.	 	Survival of Representations and Warranties	 	 	4	 
	 
	 	Section 10.03.	 	Specific Performance	 	 	4	 
	 
	 	Section 10.04.	 	Notices	 	 	4	 
	 
	 	Section 10.05.	 	Entire Agreement	 	 	4	 
	 
	 	Section 10.06.	 	Amendment	 	 	4	 
	 
	 	Section 10.07.	 	Counterparts	 	 	4	 
	 
	 	Section 10.08.	 	Governing Law	 	 	4	 
	 
	 	Section 10.09.	 	Successors and Assigns	 	 	4	 
	 
	 	Section 10.10.	 	No Third-Party Beneficiaries	 	 	4	 
	 
	 	Section 10.11.	 	Termination of Management Services Agreement	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	EXHIBIT
	 	A	 	Charter Amendment	 	 	A-1	 
	EXHIBIT
	 	B	 	Stockholders Agreement	 	 	B-1	 






 ii 




 









 





RECAPITALIZATION AGREEMENT




     THIS
RECAPITALIZATION AGREEMENT (the “Agreement”), dated as of August 17, 2005, is
entered into by and among Diamond Auto Triumph Glass, Inc., a Delaware corporation (the
“Company”), Kenneth Levine, an individual (“Levine”), and Green Equity Investors
II, L.P., a Delaware limited partnership (“GEI”).



WITNESSETH:




     WHEREAS, each of the Company, Levine and GEI has determined to enter into this Agreement for
the purpose of recapitalizing the Company;



     WHEREAS, pursuant to and in accordance with the terms of this Agreement (i) Levine has agreed
to exchange 7,000 shares (the “Levine Preferred Shares”) of the Company’s 12% Senior
Redeemable Cumulative Preferred Stock, par value $0.01 per share (the “Preferred Stock”),
for 350,000 shares of the Company’s Common Stock, par value $0.01 per share (the “Common
Stock”), and (ii) GEI has agreed to exchange 28,000 shares (the “GEI Preferred Shares”)
of Preferred Stock for 1,400,000 shares of Common Stock (collectively, the “Exchange
Transactions”);



     WHEREAS, pursuant to and in accordance with the terms of this Agreement, (i) Levine has agreed
to purchase from the Company, and the Company has agreed to sell to Levine, 833,333 shares of
Common Stock at a purchase price of $15.00 per share and (ii) Levine has agreed to purchase from
GEI, and GEI has agreed to sell to Levine, 500,000 shares of Common Stock (the “GEI Common Shares”)
at a purchase price of $15.00 per share (collectively, the “Stock Purchase Transactions”
and together with the Exchange Transactions, the “Recapitalization Transactions”);



     WHEREAS, concurrently with the execution of this Agreement and in connection with the
Recapitalization Transactions, the Company is commencing a tender offer to purchase for cash (the
“Tender Offer”) from the holders of the Company’s outstanding 91/4% Senior Notes due 2008
(the “Notes”), upon the terms and subject to the conditions set forth in an Offer to
Purchase and Consent Solicitation Statement dated August 17, 2005, as amended from time to time
(the “Statement”), and in the accompanying Letter of Transmittal and Consent, up to
$22,000,000 aggregate principal amount of the Notes, at a price not less than $730 nor greater than
$830 per $1,000 principal amount, plus accrued and unpaid interest thereon to, but not including,
the date of purchase at a purchase price determined by the “Modified Dutch Auction” procedure set
forth in the Statement;



     WHEREAS, in conjunction with the Tender Offer, the Company is soliciting consents (the
“Consent Solicitation”) to an amendment to the Indenture, dated as of March 31, 1998,
between the Company and U.S. Bank National Association (as successor in interest to State Street
Bank and Trust Company), as trustee (the “Indenture”), pursuant to which the Notes were issued, to
amend Section 4.08 of the Indenture;



     WHEREAS, immediately following the execution of this Agreement, the Company will amend its
Amended and Restated Certificate of Incorporation, as amended from



1









 







time to time (the “Certificate of Incorporation”) to increase the number of authorized
shares of Common Stock from 1,100,000 to 4,000,000 shares;



     WHEREAS, for United States federal income tax purposes, it is intended that the Exchange
Transactions, taken together with the contribution of cash by Levine in exchange for newly issued
shares of Common Stock, will qualify as transactions described in Section 368 of the Internal
Revenue Code of 1986, as amended;



     WHEREAS, the consummation of the Recapitalization Transactions is a condition to the
consummation of the Tender Offer and the Consent Solicitation;



     WHEREAS, the consummation of the Tender Offer and the Consent Solicitation is a condition to
the consummation of the Recapitalization Transactions; and



     WHEREAS, the Company, Levine and GEI desire to make certain representations, warranties,
covenants and agreements in connection with the transactions contemplated herein.



     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants and agreements contained herein, the parties hereto agree as follows:



ARTICLE I




DEFINITIONS




     SECTION 1.01. Definitions. As used in this Agreement, the following terms shall have
the meanings set forth below:



     “Affiliate” has the meaning set forth in Rule 12b-2 under the Exchange Act as in
effect on the date hereof. The term “Affiliated” has a correlative meaning.



     “Agreement” has the meaning set forth in the preamble hereto.



     “Board of Directors” means the board of directors of the Company.



     “Business Day” means any day, other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated by law or executive
order to close.



     “By-laws” means the By-laws of the Company, as amended from time to time.



     “Certificate of Incorporation” has the meaning set forth in the recitals hereto.



     “Charter Amendment” means a Certificate of Amendment in the form attached hereto as
Exhibit A, amending the Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 1,100,000 to 4,000,000 shares.



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     “Closing” has the meaning set forth in Section 2.02.



     “Closing Date” has the meaning set forth in Section 2.02.



     “Commission” means the U.S. Securities and Exchange Commission.



     “Common Stock” has the meaning set forth in the recitals hereto.



     “Company” has the meaning set forth in the preamble hereto.



     “Consent Solicitation” has the meaning set forth in the recitals hereto.



     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. The terms “Controlling” and
“Controlled” have meanings correlative thereto.



     “Exchange Transactions” has the meaning set forth in the recitals hereto.



     “DGCL” means the Delaware General Corporation Law.



     “Equity Interests” means, as to any Person, shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial interests in a trust or
other interests of such Person that are denominated, or have substantially the characteristics of,
equity interests.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder from time to time.



     “GAAP” means generally accepted accounting principles in the United States of America
consistently applied.



     “GEI” has the meaning set forth in the preamble hereto.



     “GEI” Common Shares” has the meaning set forth in the recitals hereto.



     “GEI Preferred Shares” has the meaning set forth in the recitals hereto.



     “GEI Purchase Price” has the meaning set forth in Section 2.02(b)(vii).



     “Governmental Authority” means the government of the United States of America or any
political subdivision thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to government.



     “Law” means any law, treaty, statute, ordinance, code, rule, regulation, judgment,
decree, order, writ, award, injunction, directive or determination of any Governmental Authority.



3









 





     “Levine” has the meaning set forth in the preamble hereto.



     “Levine Preferred Shares” has the meaning set forth in the recitals hereto.



     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.



     “Notes” has the meaning set forth in the recitals hereto.



     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.



     “Private Placement Legend” has the meaning set forth in Section 7.01.



     “Proceeding” means any claim, suit, action, proceeding, arbitration or investigation
by or before any Governmental Authority.



     “Recapitalization Transactions” has the meaning set forth in the recitals hereto.



     “Representatives” means, with respect to any Person, any of such Person’s officers,
directors, employees, agents, attorneys, accountants, consultants, equity financing partners or
financial advisors or other Person associated with, or acting on behalf of, such Person.



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



     “Statement” has the meaning set forth in the recitals hereto.



     “Stock Purchase Transactions” has the meaning set forth in the recitals hereto.



     “Stockholders’ Agreement” has the meaning set forth in Section 2.01(e).



     “Stockholder Approval” means any necessary approval by the stockholders of the Company
relating to this Agreement or consummation of the transactions contemplated hereby.



     “subsidiary” means, with respect to the Company, at any date, any corporation or other
entity the accounts of which would be consolidated with those of the Company in the consolidated
financial statements if such financial statements were prepared in accordance with GAAP as of such
date.



     “Subsidiary” means any subsidiary of the Company.



     “Taxes” means any and all current or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.



4









 





     “Tender Offer” has the meaning set forth in the recitals hereto.



     SECTION 1.02. General Interpretive Principles. Whenever used in this Agreement,
except as otherwise expressly provided or unless the context otherwise requires, any noun or
pronoun shall be deemed to include the plural as well as the singular and to cover all genders.
The name assigned this Agreement and the Section captions used herein are for convenience of
reference only and shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, the terms “hereof,” “herein” and similar terms refer to this Agreement
as a whole (including the exhibits hereto), and references herein to Articles or Sections refer to
Articles or Sections of this Agreement. Words of inclusion shall not be construed as terms of
limitation herein, so that references to “include”, “includes” and “including” shall not be
limiting and shall be regarded as references to non-exclusive illustrations. Any agreement,
certificate or other document defined in this Agreement shall also include, in each case, any
amendment or restatement thereof or any supplement thereto.



ARTICLE II




RECAPITALIZATION




     SECTION 2.01. Recapitalization. Upon the terms and subject to the conditions set
forth in this Agreement, and in reliance upon the representations and warranties hereinafter set
forth, at the Closing (as hereinafter defined):



     (a) Levine will exchange the Levine Preferred Shares, free and clear of all Liens, in return
for the issuance by the Company to Levine of 350,000 shares of Common Stock, free and clear of all
Liens;



     (b) GEI will exchange the GEI Preferred Shares, free and clear of all Liens, in return for the
issuance by the Company to GEI of 1,400,000 shares of Common Stock, free and clear of all Liens;



     (c) Levine will purchase from the Company, and the Company will sell to Levine, 833,333 shares
of Common Stock, free and clear of all Liens, at a purchase price of $15.00 per share;



     (d) Levine will purchase from GEI, and GEI will sell to Levine, 500,000 shares of Common
Stock, free and clear of all Liens, at a purchase price of $15.00 per share; and



     (e) Levine, GEI and the Company will enter into an Amended and Restated Stockholders
Agreement, substantially in the form attached as Exhibit B hereto (the “Stockholders Agreement”).



     SECTION 2.02. Recapitalization Closing.



     (a) The closing of the transactions described in Section 2.01 (the “Closing”) shall
take place at the offices of Latham & Watkins LLP, Los Angeles, California., at 7:00 a.m., Pacific
Standard Time, no later than the third Business Day following satisfaction or, if permissible,
waiver, of the conditions set forth in Sections 8.01, 8.02 and 8.03 hereof, or at such



5









 







other time and place as the parties may agree (the date on which the Closing occurs, the “Closing
Date”).



     (b) At the Closing:



          (i) The Company shall deliver or cause to be delivered to Levine certificates representing the
shares of Common Stock to be issued to Levine pursuant to Sections 2.01(a) and (c) (registered in
the names and in the denominations designated by Levine at least two Business Days prior to the
Closing Date);



          (ii) Levine shall deliver or cause to be delivered to the Company in full payment for the
shares of Common Stock to be issued to Levine pursuant to Section 2.01(a), one or more Certificates
representing the Levine Preferred Shares;



          (iii) Levine shall pay the Company, against delivery of the shares of Common Stock to be
acquired by, and issued to, Levine pursuant to Section 2.01(c), $12,499,995 (the “Company
Purchase Price”) by wire transfer of immediately available funds to an account designated by
the Company at least two Business Days prior to the Closing Date;



          (iv) The Company shall deliver or cause to be delivered to GEI certificates representing the
shares of Common Stock to be issued to GEI pursuant to Section 2.01(b) (registered in the names and
in the denominations designated by GEI at least two Business Days prior to the Closing Date);



          (v) GEI shall deliver or cause to be delivered to the Company in full payment for the shares
of Common Stock to be issued to GEI pursuant to Section 2.01(b), one or more Certificates
representing the GEI Preferred Shares;



          (vi) GEI shall deliver or cause to be delivered to Levine a certificate representing the
shares of Common Stock to be issued to Levine pursuant to Section 2.01(d), duly endorsed for
transfer or with a separate stock power duly endorsed in blank; and



          (vii) Levine shall pay GEI, against delivery of the shares of Common Stock to be acquired by,
and issued to, Levine pursuant to Section 2.01(d), $7,500,000 (the “GEI Purchase Price”) by
wire transfer of immediately available funds to an account designated by GEI at least two Business
Days prior to the Closing Date.



ARTICLE III




REPRESENTATIONS AND WARRANTIES OF THE COMPANY




     The Company hereby represents and warrants to, and agrees with, each of Levine and GEI as of
the date hereof and as of the Closing Date as follows:



     SECTION 3.01. Organization; Powers. The Company and each of its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the



6









 







jurisdiction of its
organization, has all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.



     SECTION 3.02. Authorization; Enforceability.



     (a) This Agreement is within the corporate power of the Company and has been duly authorized
by all necessary corporate action. This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding in equity or at law.
The Board of Directors has approved the execution and delivery of this Agreement by the Company
and has approved the consummation of the transactions contemplated by this Agreement.



     SECTION 3.03. Governmental Approvals; No Conflicts.



     (a) The execution, delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby (i) do not require any consent or approval of, registration or
filing with, or any other action by or before, any Governmental Authority, except for such as will
be obtained or made and as will be in full force and effect at the Closing, (ii) will not violate
any applicable Law, or the charter or by-laws of the Company or any of its Subsidiaries or any
order of any Governmental Authority, (iii) will not violate or result in a default under any
material indenture, agreement or other instrument binding upon the Company or any of its
Subsidiaries or any of their assets, or give rise to a right thereunder to require any payment to
be made by the Company or any of its Subsidiaries, (iv) will not result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries and (v) will not give
rise to any preemptive rights, rights of first refusal or other similar rights on behalf of any
Person under any applicable Law or any provision of the charter by-laws or other organizational
documents or any agreement or instrument applicable to the Company of any of its Subsidiaries.



     (b) Other than the Stockholder Approval, no consent or approval of the Company’s stockholders
is required by Law, the Certificate of Incorporation or the By-laws for the execution, delivery and
performance by the Company of this Agreement and the consummation of the transactions contemplated
hereby.



     SECTION 3.04. Capitalization; Securities.



     (a) As of the date hereof, the authorized capital stock of the Company consists of (i)
1,100,000 shares of Common Stock, of which 1,011,366 shares are outstanding, and (ii) 100,000
shares of preferred stock, $0.01 par value, of which 35,000 shares are outstanding and designated
as Preferred Stock. All of such outstanding shares of Common Stock and Preferred Stock were duly
authorized and validly issued and are fully paid and non-assessable.



     (b) Subject to the filing of the Charter Amendment with the Delaware Secretary of State, the
shares of Common Stock to be issued pursuant to this Agreement have



7









 







been duly and validly
authorized and, when issued as contemplated by this Agreement, will have been validly issued and
will be fully paid and non-assessable.



     SECTION 3.05. Exemption from Registration. Assuming the representations and
warranties of Levine and GEI set forth in Articles IV and V are true and correct in all material
respects, the issuance and delivery of the Common Stock pursuant to this Agreement and the
acquisition of the Common Stock upon exchange of each of the Levine Preferred Shares and the GEI
Preferred Shares will be in compliance with the Securities Act and any applicable state securities
laws and will be exempt from the registration requirements of the Securities Act and such state
securities laws.



ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF LEVINE




     Levine represents and warrants to and agrees with, each of the Company and GEI as of the date
hereof and as of the Closing Date as follows:



     SECTION 4.01. Enforceability. This Agreement has been duly executed and delivered by
Levine and constitutes a legal, valid and binding obligation of Levine, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors’ rights generally and subject to general principles of equity, regardless
of whether considered in a proceeding in equity or at law.



     SECTION 4.02. Purpose of Investment. Levine is acquiring the Common Stock being
issued by the Company and sold by GEI, in each case pursuant to the terms of this Agreement, for
his own account as principal solely for the purpose of investment and not with a view to, or for
sale in connection with, any distribution thereof in violation of the Securities Act. Levine acknowledges that the Common
Stock to be acquired by him pursuant to the terms of this Agreement has not been registered under
the Securities Act and may be sold or disposed of in the absence of such registration only pursuant
to an exemption from the registration requirements of the Securities Act.



     SECTION 4.03. Ownership of Levine Preferred Shares. Levine is the sole record and
beneficial owner of the Levine Preferred Shares, free and clear of Liens other than Liens created
by or under this Agreement and the Stockholders Agreement, dated as of March 31, 1998, among
Levine, Richard Rutta, GEI and the Company (the “Original Stockholders Agreement”).



     SECTION 4.04. Financial Status. Levine is an Accredited Investor as defined in Rule
501 under the Securities Act. Levine is able to bear the economic risk of the investment in the
shares of Common Stock contemplated by this Agreement and the Stockholders Agreement, has adequate
means of providing for his current financial needs and personal contingencies, has no need for
liquidity in the investment in the shares of Common Stock contemplated hereby or thereby,
understands that he may not be able to liquidate his investment in the Company and can afford a
complete loss of the investment.



8









 





ARTICLE V

REPRESENTATIONS AND WARRANTIES OF GEI




     GEI represents and warrants to and agrees with, each of the Company and Levine as of the date
hereof and as of the Closing Date as follows:



     SECTION 5.01. Organization. GEI is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has all requisite
partnership power and authority to carry on its business as now conducted.



     SECTION 5.02. Authorization; Enforceability. This Agreement is within GEI’s
partnership powers and has been duly authorized by all necessary partnership action. This
Agreement has been duly executed and delivered by GEI and constitutes a legal, valid and binding
obligation of GEI, enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and
subject to general principles of equity, regardless of whether considered in a proceeding in equity
or at law.



     SECTION 5.03. Purpose of Investment. GEI is acquiring the Common Stock being issued
by the Company pursuant to the terms of this Agreement for its own account solely for the purpose
of investment and not with a view to, or for sale in connection with, any distribution thereof in
violation of the Securities Act. GEI acknowledges that the Common Stock has not been registered under the
Securities Act and may be sold or disposed of in the absence of such registration only pursuant to
an exemption from the registration requirements of the Securities Act.



     SECTION 5.04. Ownership of GEI Preferred Shares and GEI Common Shares. GEI is the
sole record and beneficial owner of the GEI Preferred Shares and the GEI Common Shares, free and
clear of Liens other than Liens created by or under this Agreement and the Original Stockholders’
Agreement.



ARTICLE VI




PRE-CLOSING COVENANTS




     SECTION 6.01. Taking of Necessary Action. Each of the parties hereto agrees to use
its best efforts promptly to take or cause to be taken all actions and promptly to do or cause to
be done all things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement in accordance with
the terms of the Agreement. Without limiting the foregoing, (i) the Company will use its best
efforts to file the Charter Amendment with the Delaware Secretary of State and (ii) each of Levine,
GEI and the Company will use his or its best efforts to make all filings with respect to, and to
obtain, all Regulatory Approvals necessary or, in the opinion of Levine, GEI, the Company or their
respective counsel, advisable, in order to permit the consummation of the transactions contemplated
hereby.



     SECTION 6.02. Notifications. At all times prior to the Closing Date, each of Levine,
GEI and the Company shall promptly notify the other parties hereto in writing of any



9









 







fact, change,
condition, circumstance or occurrence or nonoccurrence of any event which will or is reasonably
likely to result in the failure to satisfy the conditions to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 6.02 shall not limit or otherwise affect the remedies available hereunder to any party
receiving such notice.



ARTICLE VII




ADDITIONAL COVENANTS




     SECTION 7.01. Legend.



     (a) Each of Levine and GEI agrees to the placement of a legend (the “Private Placement
Legend”) substantially in the form as set forth below on (i) any certificates representing
Common Stock issued pursuant to the terms of this Agreement and (ii) any certificate issued at any
time in exchange or substitution for any certificate bearing such legend. The Private Placement
Legend is substantially as follows:




THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND PROVISIONS OF AN AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDERS NAMED THEREIN, AS
AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED UPON REQUEST TO THE HOLDER OF RECORD OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN
ACCORDANCE THEREWITH.



     (b) The Private Placement Legend shall be removed from a certificate representing Common Stock
if the securities represented thereby are sold pursuant to an effective registration statement
under the Securities Act or there is delivered to the Company such satisfactory evidence, which may
include an opinion of independent counsel, as reasonably may be requested by the Company, to
confirm that neither such legend nor the restrictions on transfer set forth therein are required to
ensure that transfers of such securities will not violate the registration and prospectus delivery
requirements of the Securities Act.



10









 





ARTICLE VIII




CONDITIONS




     SECTION 8.01. Conditions to Levine’s Obligations with Respect to the
Recapitalization. The obligation of Levine at the Closing, to (i) deliver to the Company
the Levine Preferred Shares, (ii) pay to the Company the Company Purchase Price and (iii) pay to
GEI the GEI Purchase Price, in each case pursuant to Section 2.01, is subject to satisfaction or
waiver of each of the following conditions precedent:



     (a) Company Representations and Warranties; Covenants. The representations and
warranties of the Company set forth in Article III shall have been true and correct in all material
respects on and as of the date hereof and as of the Closing as if made on the Closing Date. The
Company shall have performed in all material respects all obligations and complied with all
agreements, undertakings, covenants and conditions required hereunder to be performed by it at or
prior to the Closing.



     (b) GEI Representations and Warranties; Covenants. The representations and warranties
of GEI set forth in Article V shall have been true and correct in all material respects
on and as of the date hereof and as of the Closing as if made on the Closing Date. GEI shall
have performed in all material respects all obligations and complied with all agreements,
undertakings, covenants and conditions required hereunder to be performed by it at or prior to the
Closing.



     (c) Stockholders’ Agreement. The Company and GEI shall have executed and delivered
the Stockholders’ Agreement.



     (d) Compliance with Laws; No Adverse Action or Decision. Since the date hereof, (i)
no Law shall have been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of this Agreement; (ii) no
preliminary or permanent injunction or other order by any Governmental Authority that restrains,
enjoins, prevents, delays, prohibits or otherwise makes illegal the performance of this Agreement
shall have been issued and remain in effect; and (iii) no Governmental Authority shall have
instituted any Proceeding that seeks to restrain, enjoin, prevent, delay, prohibit or otherwise
make illegal the performance of this Agreement.



     (e) Consents. All Regulatory Approvals from any Governmental Authority and all
consents, waivers or approvals from any other Person required for or in connection with the
execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby shall have been obtained or made on terms reasonably satisfactory to Levine.



     (f) Tender Offer and Consent Solicitation. The Company shall have accepted Notes for
purchase in the Tender Offer and obtained the Requisite Consents (as defined in the Statement).



     SECTION 8.02. Conditions to GEI’s Obligations with Respect to the
Recapitalization. The obligation of GEI at the Closing to (i) deliver to the Company the
GEI



11









 







Preferred Shares and (ii) deliver to Levine the GEI Common Shares, in each case pursuant to
Section 2.01, is subject to satisfaction or waiver of each of the following conditions precedent:



     (a) Company Representations and Warranties; Covenants. The representations and
warranties of the Company set forth in Article III shall have been true and correct in all material
respects on and as of the date hereof and as of the Closing as if made on the Closing Date. The
Company shall have performed in all material respects all obligations and complied with all
agreements, undertakings, covenants and conditions required hereunder to be performed by it at or
prior to the Closing.



     (b) Levine Representations and Warranties; Covenants. The representations and
warranties of Levine set forth in Article IV shall have been true in all material respects on and
as of the date hereof and as of the Closing as if made on the Closing Date. Levine shall have
performed in all material respects all obligations and complied with all agreements, undertakings,
covenants and conditions required hereunder to be performed by him at or prior to the Closing.



     (c) Stockholders’ Agreement. The Company and Levine shall have executed and delivered
the Stockholders’ Agreement.



     (d) Compliance with Laws; No Adverse Action or Decision. Since the date hereof, (i)
no Law shall have been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of this Agreement; (ii) no
preliminary or permanent injunction or other order by any Governmental Authority that restrains,
enjoins, prevents, delays, prohibits or otherwise makes illegal the performance of this Agreement
shall have been issued and remain in effect; and (iii) no Governmental Authority shall have
instituted any Proceeding that seeks to restrain, enjoin, prevent, delay, prohibit or otherwise
make illegal the performance of this Agreement.



     (e) Consents. All Regulatory Approvals from any Governmental Authority and all
consents, waivers or approvals from any other Person required for or in connection with the
execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby shall have been obtained or made on terms reasonably satisfactory to GEI.



     (f) Tender Offer and Consent Solicitation. The Company shall have accepted Notes for
purchase in the Tender Offer and obtained the Requisite Consents (as defined in the Statement).



     SECTION 8.03. Conditions to the Company’s Obligations with Respect to the
Recapitalization. The obligation of the Company at the Closing to (i) issue to Levine
Common Stock and (ii) issue to GEI Common Stock, in each case pursuant to Section 2.01, is subject
to satisfaction or waiver of each of the following conditions precedent:



     (a) Levine and GEI Representations and Warranties; Covenants. The representations and
warranties of Levine set forth in Article IV and of GEI set forth in Article V shall have been true
and correct in all respects, and on and as of the date hereof and as of the Closing as if made on
the Closing Date. Levine and GEI shall have performed in all material



12









 







respects all obligations and
complied with all agreements, undertakings, covenants and conditions required by him or it to be
performed at or prior to the Closing.



     (b) Stockholders’ Agreement. Levine and GEI shall have executed and delivered the
Stockholders’ Agreement.



     (c) Compliance with Laws; No Adverse Action or Decision. Since the date hereof, (i)
no Law shall have been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of this Agreement; (ii) no
preliminary or permanent injunction or other order by any Governmental Authority that restrains,
enjoins, prevents, delays, prohibits or otherwise makes illegal the performance of this Agreement
shall have been issued and remain in effect; and (iii) no Governmental Authority shall have
instituted any action, claim, suit, investigation or other proceeding that seeks to restrain,
enjoin, prevent, delay, prohibit or otherwise make illegal the performance of this Agreement.



     (d) Tender Offer and Consent Solicitation. The Company shall have accepted Notes for
purchase in the Tender Offer and obtained the Requisite Consents (as defined in the Statement).



ARTICLE IX




TERMINATION




     SECTION 9.01. Termination of Agreement. Subject to Section 9.02, this Agreement may
be terminated by notice in writing at any time prior to the Closing by:



     (a) Levine, GEI or the Company, if the Closing shall not have occurred on or before October
17, 2005; provided, however, that the right to terminate this Agreement under this
Section 9.01(a) shall not be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or
before such date;



     (b) Levine, GEI or the Company, if any Governmental Authority of competent jurisdiction shall
have issued any judgment, injunction, order, ruling or decree or taken any other action
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
by this Agreement and such judgment, injunction, order, ruling, decree or other action becomes
final and non-appealable; provided that the party seeking to terminate this Agreement
pursuant to this clause (c) shall have used its best efforts to have such judgment, injunction,
order, ruling or decree lifted, vacated or denied; or



     (c) mutual written agreement of Levine, GEI and the Company.



     SECTION 9.02. Effect of Termination. If this Agreement is terminated in accordance
with Section 9.01 and the transactions contemplated hereby are not consummated, this Agreement
shall become null and void and of no further force and effect except that (i) the terms and
provisions of this Section 9.02 and Article X shall remain in full force and effect and



13









 







(ii) any termination of this Agreement shall not relieve any party hereto from any liability for any breach
of its obligations hereunder.



ARTICLE X




MISCELLANEOUS




     SECTION 10.01. Fees and Expenses.



     (a) The Company shall be responsible for the payment of all expenses incurred in connection
with this Agreement and the transactions contemplated hereby.



     SECTION 10.02. Survival of Representations and Warranties. Notwithstanding any
investigation conducted or notice or knowledge obtained by or on behalf of any party hereto, no
representation or warranty in this Agreement shall survive the Closing.



     SECTION 10.03. Specific Performance. The parties hereto specifically acknowledge that
monetary damages are not an adequate remedy for violations of this Agreement, and that any party
hereto may, in its sole discretion, apply to a court of competent jurisdiction for specific
performance or injunctive or such other relief as such court may deem just and proper in order to
enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable
law and to the extent the party seeking such relief would be entitled on the merits to obtain such
relief, each party waives any objection to the imposition of such relief.



     SECTION 10.04. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given, if delivered personally, by facsimile or sent
by overnight courier or by first class mail, postage prepaid, as follows:




(i) If to the Company, to:




Diamond Triumph Auto Glass, Inc.

220 Division Street

Kingston, Pennsylvania 18704

Attention: Chief Executive Officer

Facsimile: (570) 287-2149




With a copy to:




Latham & Watkins LLP

885 Third Avenue, Suite 1000

New York, New York 10022

Attention: Howard A. Sobel, Esq.

Facsimile: 212-751-4864



14









 






(ii) If to Levine, to:




Kenneth Levine

405 Whitetail Road

Dalton, PA 18414

Facsimile: (570) 586-7733




With a copy to:




Terrence J. Herron

Hourigan, Kluger & Quinn

600 Third Avenue

Kingston, PA 18704

Facsimile: (570) 287-8005




(iii) If to GEI, to:




Green Equity Investors II, L.P.

11111 Santa Monica Boulevard

Suite 2000

Los Angeles, California 90025

Attention: Jonathan A. Seiffer

Facsimile: 310-954-0404




With a copy to:




Latham & Watkins LLP

885 Third Avenue, Suite 1000

New York, New York 10022

Attention: Howard A. Sobel, Esq.

Facsimile: 212-751-4864


If to any other holder of shares of Common Stock addressed to such holder at the address of such
holder in the record books of the Company; or to such other address or addresses as shall be
designated in writing. All notices shall be effective when received.




     SECTION 10.05. Entire Agreement. This Agreement and the documents described herein or
attached or delivered pursuant hereto set forth the entire agreement between the parties hereto
with respect to the transactions contemplated by this Agreement.



     SECTION 10.06. Amendment. Any provision of this Agreement may only be amended,
modified or supplemented in whole or in part at any time by an agreement in writing among the
parties hereto executed in the same manner as this Agreement. No failure on the part of any party
to exercise, and no delay in exercising, any right shall operate as a waiver thereof, nor shall any
single or partial exercise by either party of any right preclude any other or future exercise
thereof or the exercise of any other right. No investigation by Levine or GEI of the



15









 







Company prior
to or after the date hereof shall stop or prevent Levine or GEI from exercising any right hereunder
or be deemed to be a waiver of any such right.



     SECTION 10.07. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed
to constitute an original, but all of which together shall constitute one and the same document.



     SECTION 10.08. Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Delaware applicable to contracts made and to be performed
in that State without reference to its conflict of laws rules.



     SECTION 10.09. Successors and Assigns.



     Except as otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the Company’s successors and assigns. Neither this Agreement nor
any rights hereunder may be assigned by any party hereto in whole or in part without the prior
written consent of the other party hereto; provided, however, that either Levine or
GEI may assign all or part of its interest in this Agreement and its rights hereunder to any of its
Affiliates and, thereafter, the term “Levine” or “GEI,” as applied to the assigning party, shall
include any such Affiliate to the extent of such assignment and shall mean the assigning party and
such Affiliates taken collectively.



     SECTION 10.10. No Third-Party Beneficiaries. This Agreement is for the sole benefit
of the parties hereto and their respective successors and permitted assigns and nothing herein,
express or implied, is intended or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.



     SECTION 10.11. Termination of Management Services Agreement. The parties hereto agree
and acknowledge that, effective as of the Closing Date, the Management Services Agreement dated as
of March 31, 1998, as in effect on the date hereof, shall be terminated in its entirety and shall
thereafter have no further force and effect.



[Signature Page Follows]




16









 





     IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties hereto by their
respective duly authorized officers, all as of the date first above written.



	 	 	 	 	 
	 	DIAMOND TRIUMPH AUTO GLASS, INC.

 	 
	 	By:  	/s/
Kenneth Levine
 	 
	 	 	Name:  	Kenneth Levine 	 
	 	 	Title:  	Chairman 	 
	 



	 	 	 	 	 
	 

	 	KENNETH LEVINE	 	 
	 

	 	 	 	 
	 

	 	 
 

	 	 






	 	 	 	 	 
	 	 	GREEN EQUITY INVESTORS II, L.P.
	 

	 	 	 	 
	 

	 	By:
	 	Grand Avenue Capital Partners, L.P.,
	 

	 	 	 	its general partner






	 	 	 	 	 
	 	 	 
	 	By:  	              /s/ Jonathan Seiffer
 	 
	 	 	Name:  	Jonathan Seiffer 	 
	 	 	Title:  	Partner 	 
	 



 S-1 





 









 





EXHIBIT A




CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

OF

DIAMOND TRIUMPH AUTO GLASS, INC.




     DIAMOND TRIUMPH AUTO GLASS, INC., a corporation organized and existing under and by virtue of
the Delaware General Corporation Law (the “Corporation”), DOES HEREBY CERTIFY:



     1. That the name of the Corporation is Diamond Triumph Auto Glass, Inc.



     2. That the name under which the company was originally incorporated is Triumph Auto Glass of
Ohio, Inc.



     3. That the Certificate of Incorporation of the Corporation was filed in the office of the
Secretary of State of the State of Delaware on the 8th day of April, 1994.



     4. The first paragraph of Article FOURTH of the Certificate of Incorporation of the
Corporation, as amended, is hereby further amended to read in its entirety as follows:




“The total number of shares of all class of stock which the Company
shall have the authority to issue is four million one hundred
thousand (4,100,000) of which one hundred thousand (100,000) shall
be designated Preferred Stock, par value $.01 per share (hereinafter
the “Preferred Stock”), and four million (4,000,000) shall
be designated Common Stock, par value $.01 per share (hereinafter
the “Common Stock”).”



     5. That, by written consent of the Board of Directors of the Corporation as of August 16,
2005, resolutions were duly adopted setting forth a proposed amendment to the Certificate of
Incorporation of the Corporation, declaring such amendment to be advisable and



 









 







directing its officers to submit the proposed amendment to the Certificate of Incorporation to
the stockholders of the Corporation for their due consideration thereof.



     6. That, thereafter by written consent of the holders of more than fifty percent (50%) of the
issued and outstanding shares of capital stock of the Corporation, the necessary number of shares
required by statute was voted in favor of the amendment to the Certificate of Incorporation.



     7. That said amendment was duly adopted in accordance with the provisions of Section 242(b) of
the Delaware General Corporation Law.



2









 





     IN WITNESS WHEREOF, DIAMOND TRIUMPH AUTO GLASS, INC. has caused this Certificate of Amendment
to be signed by Michael A. Sumsky, its President, Chief Operating Officer and General Counsel, this
16th day of August, 2005.



	 	 	 	 	 
	 	DIAMOND TRIUMPH AUTO GLASS, INC.

 	 
	 	By:  	/s/ Michael A. Sumsky
 	 
	 	 	Name:  	Michael A. Sumsky 	 
	 	 	Title:  	President, Chief Operating Officer and

General Counsel 	 
	 




 









 






Exhibit B





AMENDED AND RESTATED

STOCKHOLDERS AGREEMENT




DATED AS OF _______ ___, 2005




by

and

among




GREEN EQUITY INVESTORS II, L.P.,




KENNETH LEVINE




and




DIAMOND TRIUMPH AUTO GLASS, INC.




 









 








AMENDED AND RESTATED STOCKHOLDERS AGREEMENT




     THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this “Agreement”) is entered into as of
___, 2005, by and among Green Equity Investors II, L.P., a Delaware limited partnership
(“GEI”), Kenneth Levine (the “Executive”), and Diamond Triumph Auto Glass, Inc., a Delaware
corporation (the “Company”). Each of the parties to this Agreement (other than the Company) and
any other individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization or government or any agency or
political subdivision thereof (a “Person”) who shall become a party to or agree to be bound by the
terms of this Agreement after the date hereof, including any GEI Transferee or Executive
Transferee, is sometimes hereinafter referred to as a “Stockholder.” Kenneth Levine, together with
his Permitted Transferees (as defined in Section 2.2(a)), is sometimes hereinafter referred to as
the “Executive Stockholders.” GEI, together with its Permitted Transferees, is sometimes
hereinafter referred to as the “GEI Parties.”



     In consideration of the premises and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as follows:



ARTICLE I.




ORGANIZATIONAL MATTERS




            Section 1.1 Election of Directors.



            (a) The Board of Directors of the Company and each Subsidiary shall consist of five members.



            (b) The Executive Stockholders and, to the extent nomination rights have been assigned
thereto, the Executive Transferees (as defined in Section 3.3), collectively, shall have the right
to designate three individuals as nominees for election as directors of the Company and as
directors of each direct or indirect subsidiary of the Company (each, a “Subsidiary”). Each
individual nominated by the Executive Stockholders and/or Executive Transferees for election as a
director of the Company pursuant to this Section 1.1(b) is hereinafter called an “Executive
Director” and, collectively, such individuals are called the “Executive Directors.”



            (c) GEI and, to the extent nomination rights have been assigned thereto, the GEI Transferees
(as defined in Section 3.3), collectively, shall have the right to designate two individuals as
nominees for election as directors of the Company and as directors of each Subsidiary. Each
individual nominated by GEI and/or the GEI Transferees for election as a director of the Company
pursuant to this Section 1.1(c) is hereinafter called a “GEI Director” and, collectively, such
individuals are called the “GEI Directors.”



            (d) For the avoidance of doubt, each Executive Director must be reasonably acceptable to (i)
GEI, so long as GEI has retained the right to nominate at least one GEI Director and/or (ii) any
GEI Transferee who is entitled to nominate at least one GEI Director. Each GEI



 









 







Director must be reasonably acceptable to (x) the Executive Stockholders so long as they have
retained the right to nominate at least one Executive Director and/or (y) any Executive Transferee
who is entitled to nominate at least one Executive Director. For the avoidance of doubt, (A) the
individuals named in Section 1.2 shall be deemed acceptable by GEI, the GEI Transferees, the
Executive Stockholders and the Executive Transferees, as applicable, and (B) any individual who is
an employee, director, member or partner of GEI or any of its Affiliates (other than a limited
partner of GEI) shall be deemed acceptable to the Executive Stockholders and the Executive
Transferees, as applicable.



            (e) The GEI Parties and GEI Transferees hereby agree to vote their shares of Common Stock in
favor of the election of the Executive Directors. The Executive Stockholders and Executive
Transferees hereby agree to vote their shares of Common Stock in favor of the election of the GEI
Directors.



            (f) If, at any time, any Stockholder entitled to nominate at least one director pursuant to
Section 1.1(b) or Section 1.1(c) shall notify the Company and the other Stockholders in writing of
such Stockholder’s desire to have removed from the board of directors of the Company (the “Board of
Directors”), with or without cause, any director such stockholder so nominated, (i) the Company
shall seek action by written consent within two business days following such request to remove such
director from the Board of Directors, and the Stockholders shall execute and deliver to the Company
any such consent within two business days of receipt thereof or request therefor or (ii) if action
by written consent of stockholders is not then permitted by the certificate of incorporation and
bylaws of the Company, the Company shall cause a special meeting of stockholders to be held
proposing the removal of such director from the Board of Directors as promptly as practicable, and
the Stockholders shall, at such meeting, vote their shares of Common Stock in favor of such
removal.



            (g) In the event that, following the Release Date (as defined in Section 2.1(b)), any GEI
Party Transfers (as defined in Section 2.1) Common Stock to a GEI Transferee in accordance with the
provisions of Section 3.3 of this Agreement, GEI may assign the right to nominate one or more GEI
Directors pursuant to Section 1.1(c) to such GEI Transferee; provided, that (i) such
Transfer is made in accordance with the provisions of this Agreement and (ii) GEI notifies the
Company and the other Stockholders of the identity of the GEI Transferee to whom the right to
nominate one or more GEI Directors has been assigned and the number of GEI Directors such GEI
Transferee shall have the right to nominate for election. In the event that, following the Release
Date, any GEI Transferee to whom a right to nominate one or more GEI Directors has been assigned
(a transferring party) Transfers Common Stock to another GEI Transferee (a subsequent transferee)
in accordance with the provisions of Section 3.3 of this Agreement, the transferring party may
assign any right it may have to nominate one or more GEI Directors pursuant to Section 1.1(c) to
such subsequent transferee; provided, that (i) such Transfer is made in accordance with the
provisions of this Agreement and (ii) the transferring party notifies the Company and the other
Stockholders of the identity of the subsequent transferee to whom the right to nominate one or more
GEI Directors has been assigned and the number of GEI Directors such subsequent transferee shall
have the right to nominate for election. In the event that, following the Release Date, any
Executive Stockholder Transfers Common Stock to an Executive Transferee in accordance with the
provisions of Section 3.3 of this Agreement, the Executive Stockholders may assign the right to
nominate one or more Executive



2









 







Directors pursuant to Section 1.1(b) to such Executive Transferee; provided, that (i)
such Transfer is made in accordance with the provisions of this Agreement and (ii) the Executive
Stockholders notify the Company and the other Stockholders of the identity of the Executive
Transferee to whom the right to nominate one or more Executive Directors has been assigned and the
number of Executive Directors such Executive Transferee shall have the right to nominate for
election. In the event that, following the Release Date, any Executive Transferee to whom a right
to nominate one or more Executive Directors has been assigned (a transferring party) Transfers
Common Stock to another Executive Transferee (a subsequent transferee) in accordance with the
provisions of Section 3.3 of this Agreement, the transferring party may assign any right it may
have to nominate one or more Executive Directors pursuant to Section 1.1(b) to such subsequent
transferee; provided, that (i) such Transfer is made in accordance with the provisions of
this Agreement and (ii) the transferring party notifies the Company and the other Stockholders of
the identity of the subsequent transferee to whom the right to nominate one or more Executive
Directors has been assigned and the number of Executive Directors such subsequent transferee shall
have the right to nominate for election.



            (h) The composition of each committee of the board of directors (or similar body) of the
Company and each Subsidiary shall include a number of GEI Directors proportionate to the number of
GEI Directors then serving on the Board of Directors and a number of Executive Directors
proportionate to the number of Executive Directors then serving on the Board of Directors.



            Section 1.2 Board of Directors and Senior Management.



            (a) Immediately following the execution of this Agreement, the Board of Directors shall
consist of the following members:



	 	 	 
	Name of Director	 	Type of Nominee
	Kenneth Levine

	 	Executive Director
	Norm Harris

	 	Executive Director
	Meyer Levine

	 	Executive Director
	Jonathan D. Sokoloff

	 	GEI Director
	Jonathan A. Seiffer

	 	GEI Director





Each of such persons shall hold his or her office until his or her death, resignation or removal or
until his or her successor shall have been duly elected and qualified. Each of the parties by
signing this Agreement hereby consents to the election of the nominees to such initial Board of
Directors as listed above, effective as of immediately following the execution of this Agreement.
Except as otherwise agreed by a majority of the Executive Directors and a majority of the GEI
Directors, the boards of directors of each Subsidiary shall consist of the same individuals as the
Board of Directors of the Company referred to above.




            (b) Immediately following the execution of this Agreement, the senior management of the
Company shall consist of the following officers:



3









 





	 	 	 
	Name	 	Title
	Kenneth Levine

	 	Chairman of the Board
	Norm Harris

	 	Chief Executive Officer
	Michael Sumsky

	 	President and Chief Operating Officer
	Douglas Boyle

	 	Chief Financial Officer






            Section 1.3 Vacancies; Action by Stockholders. If a vacancy is created on the Board
of Directors by reason of the death, disability, removal or resignation of any director, the party,
if any, which under Section 1.1 is entitled to nominate the director whose death, disability,
removal or resignation resulted in such vacancy shall be entitled to designate a new nominee to
serve as director and (a) the Company shall seek action by written consent, as promptly as
practicable following the identification of such nominee, to the election of such nominee as a
member of the Board of Directors, and the Stockholders shall join in executing any such consent as
promptly as practicable following such request or (b) if action by written consent of stockholders
is not then permitted by the certificate of incorporation and bylaws of the Company, the Company
shall cause a special meeting of stockholders to be held proposing the election of such nominee to
the Board of Directors, and the Stockholders shall, at such meeting, vote their shares of Common
Stock in favor of such election.



            Section 1.4 Conduct of Business. Notwithstanding the fact that no vote of the Board
of Directors or the Board of Directors of any Subsidiary may be required by applicable law or the
certificate of incorporation or bylaws of the Company or such Subsidiary, or that a lesser
percentage vote may be specified by law, by the certificate of incorporation or bylaws of the
Company or such Subsidiary, by any agreement with any national securities exchange or otherwise,
except as otherwise provided or contemplated in this Agreement, the Company shall not and shall not
permit any Subsidiary, directly or indirectly, to take or consummate any of the actions referred to
in clauses (a) through (y) of this Section 1.4 without the approval of a majority of the Board of
Directors and the affirmative approval of the GEI Directors then in office:



            (a) the making, alteration, amendment or repeal of the certificate of incorporation, articles
of incorporation, bylaws, partnership agreement, limited liability company agreement, operating
agreement, membership agreement or other constituent documents of the Company or any Subsidiary,
including the designations of any preferred stock or resolutions establishing any preferred stock;



            (b) (i) the sale of the Company or any Subsidiary or (ii) the merger, consolidation or other
business combination of the Company or any Subsidiary with or into any other Person or a statutory
share exchange between the Company or any Subsidiary and any other Person;



            (c) (i) the acquisition by the Company or any Subsidiary in any one transaction or series of
related transactions, by purchase of securities or assets or otherwise, of



4









 







any Person, business or other enterprise, or any assets, for an amount in excess of $1,000,000
(other than acquisitions of assets in the ordinary course of business), (ii) the making of any
investment (exclusive of amounts on deposit with banks or lending institutions and short term
investments of excess cash) in any Person (or group of related Persons) in excess of $1,000,000 in
any one transaction or series of related transactions (whether by way of exchange, purchase,
capital contribution or otherwise), (iii) authorizing, or making, any loans, advances or guarantees
to or for the benefit of any Persons in excess of $1,000,000, in the aggregate, or (iv) the
acquisition by the Company or any Subsidiary of an option to make any such acquisition or
investment;



            (d) the sale or divestiture in any one transaction or series of related transactions of any
division or other business enterprise, or any assets, of the Company or any Subsidiary for an
amount in excess of $1,000,000 (other than the sale of inventory and other assets in the ordinary
course of business);



            (e) the creation of any material joint venture, partnership or other non-wholly owned entity;



            (f) the declaration, setting aside or payment of any dividend or distribution (whether in
cash, stock or property) or capital return in respect of any capital stock of the Company or any
redemption, purchase or other acquisition by the Company or any Subsidiary of any shares of capital
stock (other than (i) repurchases of capital stock from employees pursuant to the terms of any
agreement entered into by the Company or any Subsidiary after the date hereof, provided that such
agreement has been approved pursuant to Section 1.4(i), (ii) repurchases of Common Stock pursuant
to Section 3.1 and 3.2 and (iii) repurchases of Common Stock pursuant to Article IX;



            (g) the issuance, delivery, sale, grant, pledge, encumbrance or transfer, whether through the
issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or
otherwise, of any shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of capital stock or other equity interests (including,
without limitation, partnership or membership interests or any other interest or participation that
confers on a Person the right to receive a share of the profits and losses, or distributions of
assets) (collectively, “Equity Interests”) or any securities convertible into or exercisable for
Equity Interests, other than the issuance of Common Stock pursuant to options approved in
accordance with Section 1.4(h);



            (h) the issuance or grant of any stock option or other stock related rights or equity-based
rewards pursuant to the Company Stock Option Plan (as defined below) and the approval of any
proposed transfer by the employee of any Common Stock acquired thereunder for so long as such
transfer is restricted under the terms of the Company Stock Option Plan;



            (i) the grant, enactment, implementation or authorization of any compensation plan or
arrangement, including any incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), severance benefits and post-employment or
retirement benefits (including compensation, pension, health, medical or life insurance benefits)
for the members of senior management of the Company or any Subsidiary



5









 




(which shall be deemed to include the Executive Stockholders) or entering into any agreement
that provides for the acquisition by the Company or any Subsidiary of any shares of Common Stock;




            (j) (i) the election, appointment, removal or other termination of any member of senior
management or change in any material respect the duties of such member, or (ii) the entry into,
amendment or termination of, or waiver of any material provisions under, any employment, severance,
consulting or other agreement with any member of senior management;



            (k) (i) the incurrence, creation, assumption, guarantee or otherwise becoming liable with
respect to any indebtedness for borrowed money (including, without limitation, capitalized lease
obligations) in excess of $1,000,000 aggregate principal amount, except pursuant to the Company’s
existing revolving credit facility (the “Credit Agreement”), (ii) the amendment or modification of,
or seeking or obtaining of any waiver under, the Credit Agreement, (iii) the issuance or sale of
any debt securities of the Company or any Subsidiary, (iv) the assumption, guarantee or
endorsement, or otherwise becoming liable or responsible (whether directly, contingently or
otherwise) for, the obligations of any Person (other than as permitted in Section 1.4(c)(iii),
obligations of Subsidiaries, and the endorsements of negotiable instruments for collection in each
such case in the ordinary course of business), (v) refinancing, refunding, substituting or renewing
existing indebtedness, or (vi) entering into or materially amending any contract, agreement,
commitment or arrangement to effect any of the transactions prohibited by this clause (k);



            (l) the creation, incurrence, assumption of, or the suffering to exist of, any lien, pledge,
charge, security interest or encumbrance of any kind (“Lien”) upon assets of the Company having an
aggregate fair market value in excess of $1,000,000 (excluding Liens pursuant to the Credit
Agreement upon the assets of the Company or any Subsidiary);



            (m) (i) the approval or amendment of the consolidated annual operating and capital budgets of
the Company and its Subsidiaries or (ii) the making of any capital expenditures not otherwise
provided for in the approved capital budget in excess of $1,000,000 in the aggregate;



            (n) engaging in any business which was not being conducted by the Company or any Subsidiary as
of the date of this Agreement, other than reasonably related extensions of the businesses conducted
by the Company and any Subsidiary on the date of this Agreement, or ceasing to be engaged in any
material line of business engaged in by the Company or any Subsidiary as of the date of this
Agreement;



            (o) entering into, amending, modifying, terminating or making any determination with respect
to the extension or termination of any agreement, contract or arrangement with GEI, any Executive
Stockholder, any GEI Transferee, any Executive Transferee or any of their respective Affiliates (as
defined in Section 2.6(a));



            (p) engaging, retaining, paying or agreeing to pay the fees or expenses of any third party
consultant or advisor other than in the ordinary course of business consistent with past practice;



6









 





            (q) instituting, voluntarily dismissing, terminating or settling any litigation or arbitration
against the Company, any Subsidiary or any other Person involving claims or damages to the Company
or any Subsidiary in excess of $250,000;



            (r) filing any petition by or on behalf of the Company or any Subsidiary seeking relief, or
consenting to the institution of any proceeding against the Company or any Subsidiary seeking to
adjudicate it as bankrupt or insolvent, under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors;



            (s) liquidating, dissolving, reorganizing or recapitalizing the Company or any Subsidiary;



            (t) selecting, or changing, the auditors of the Company or any Subsidiary or changing or
modifying the accounting policies of the Company or any Subsidiary other than as required by United
States generally accepted accounting principles (“GAAP”);



            (u) entering into any contract or other agreement or arrangement (or series of related
contracts, agreements or arrangements) involving anticipated receipts or expenditures or otherwise
having a total value over the term of such contract, agreement or arrangement (without any present
value discount) greater than $1,000,000, except for those contracts or other agreements or
arrangements entered into by the Company or any Subsidiary in the ordinary course of business;



            (v) any increase or decrease in the number of persons constituting the Board of Directors of
the Company or any Subsidiary;



            (w) the authorization of any public offering of securities of the Company for the account of
the Company or any other person;



            (x) (i) the approval of the provision of indemnification on behalf of any officer or director
of the Company or its Subsidiaries or (ii) the selection or approval of counsel to the Company; or



            (y) except as otherwise contemplated by this Section 1.4, the entering into of any contract,
agreement, arrangement or commitment to do, the authorization, approval, ratification or
confirmation of, or the delegation of the power to act on behalf of the Company or any Subsidiary
or the Board of Directors in respect of, any of the foregoing.


For purposes of this Agreement, “Company Stock Option Plan” means a stock option plan which may be
adopted by the Company relating to the issuance of options (to acquire Common Stock of the Company)
to employees of the Company or a Subsidiary.




            Section 1.5 Meetings of Board of Directors. The Board of Directors shall meet on a
regular basis, but in no event less than once every calendar quarter.



            Section 1.6 Information Reporting. The Company will deliver, or cause to be delivered
to GEI, each Executive Stockholder and each GEI Transferee or Executive Transferee, if applicable,
(a) as promptly as practicable, such financial and operating information as each



7









 







shall reasonably request and (b) as promptly as practicable, but in no event later than the
date specified with respect to the relevant report, financial or other information in the Company’s
Credit Agreement, such reports, financial and other information required to be delivered by the
Company or any Subsidiary to the lenders pursuant to the Company’s Credit Agreement. In the event
the Company’s Credit Agreement is terminated, the Company will continue to deliver such reports,
financial and other information to GEI, each Executive Stockholder and each GEI Transferee or
Executive Transferee, if applicable, on the timetable that would have been applicable had the
Company’s Credit Agreement not been terminated. The recipients of such reports, financial and
other information shall keep such materials and information confidential.



ARTICLE II.




RESTRICTIONS ON TRANSFER




            Section 2.1 Restrictions on Transfer.



            (a) Each Stockholder agrees that it will not, directly or indirectly, sell, hypothecate, give,
convey, bequeath, transfer, assign, pledge or in any other way whatsoever encumber or dispose of
(any such event, a “Transfer”) any shares of Common Stock now owned or hereafter acquired by such
Person (or any interest therein) to any other Person, except as expressly permitted by this
Agreement.



            (b) Any GEI Party or GEI Transferee may Transfer Common Stock if (i) (a) the Transfer occurs
subsequent to the first anniversary of this Agreement (the “Release Date”), (b) such GEI Party or
GEI Transferee complies with the other terms and conditions of this Agreement (including Article
III) and (c) such Transfer is for consideration consisting solely of cash and/or Marketable
Securities or (ii) the Transfer is pursuant to Article IX hereof.



            (c) Any Executive Stockholder or Executive Transferee may Transfer Common Stock if (a) the
Transfer occurs subsequent to the Release Date, (b) such Executive Stockholder or Executive
Transferee complies with the other terms and conditions of this Agreement (including Article III)
and (c) such Transfer is for consideration consisting solely of cash and/or Marketable Securities.



            Section 2.2 Permitted Transfers.



            (a) Notwithstanding anything to the contrary contained in this Agreement (but subject to
Section 2.3 and Section 2.4 hereof), the Executive or a GEI Party may, without complying with the
obligations of Sections 3.1-3.3 hereof or Article IV hereof, Transfer Common Stock to any Permitted
Transferee (as hereinafter defined) of such Stockholder; provided, however, that
such Transfer shall be subject to the Permitted Transferee’s delivery to the Company and the other
Stockholders of a duly executed agreement to be bound by the terms of this Agreement to the same
extent applicable to the transferor and to Transfer the Transferred Common Stock back to the
transferor if the Permitted Transferee ceases to be a Permitted Transferee of such Stockholder.
“Permitted Transferee” means (a) in the case of the Executive, (i) any successor by death, (ii) any
corporation or other entity at least fifty-one percent (51%) of the equity securities of which are
owned, beneficially and of record, by the Executive and over which the Executive has the sole right
to elect or appoint at least a majority



8









 







of the members of the board of directors or Persons performing similar functions, or (iii) any
trust, partnership, limited liability company or other entity established for the benefit of the
Executive and/or members of the Executive’s immediate family, provided that the Executive or his
current spouse is the sole trustee of (or are the only individuals having similar controlling
positions with respect to) such trust or other entity and (b) in the case of a GEI Party, an
Affiliate of GEI. Any notice or/other document required to be delivered to a Permitted Transferee
pursuant to this Agreement shall be deemed delivered for all purposes if delivered to the
Stockholder who Transferred Common Stock to such Permitted Transferee. Each Permitted Transferee
shall be deemed a Stockholder for all purposes of this Agreement.



            (b) Notwithstanding anything to the contrary contained in this Agreement (but subject to
Section 2.3 and Section 2.4 hereof), an Executive Transferee or GEI Transferee may, without
complying with the obligations of Sections 3.1-3.3 hereof or Article IV hereof, Transfer Common
Stock to any controlled Affiliate of such an Executive Transferee or GEI Transferee;
provided, however, that such Transfer shall be subject to the transferee’s delivery
to the Company and the other Stockholders of a duly executed agreement to be bound by the terms of
this Agreement to the same extent applicable to the transferor and to Transfer the Transferred
Common Stock back to the transferor if such transferee ceases to be a controlled Affiliate of the
transferor.



            Section 2.3 Compliance with Securities Laws. No Stockholder shall Transfer any Common
Stock, and the Company shall not transfer on its books any shares of Common Stock, unless:



            (a) (i) such Transfer is pursuant to an effective registration statement under the Securities
Act of 1933, as amended (together with the rules and regulations promulgated thereunder, the
“Securities Act”), and is in compliance with any applicable state securities or blue sky laws or
(ii) such Stockholder shall have furnished the Company with an opinion of counsel, which opinion
and counsel shall be reasonably satisfactory to the Company, to the effect that no such
registration is required because of the availability of an exemption from registration under the
Securities Act and any applicable state securities or blue sky laws and such Transfer shall not
require the Company to register (or result in the Company being required to register) any
securities (or any Transfer thereof) pursuant to the Securities Act or the Securities Exchange Act
of 1934, as amended, together with the rules and regulations promulgated by the U.S. Securities and
Exchange Commission (the “Commission”) thereunder (the “Exchange Act”); and



            (b) the certificates, if any, representing such Common Stock issued to the transferee shall
bear the following legend (or one to substantially similar effect):




“The shares represented by this certificate (the “Shares”) have not been
registered under the U.S. Securities Act of 1933, as amended (the
“Securities Act”). The Shares have been acquired for investment and may not
be sold, pledged or hypothecated in the United States in the absence of an
effective registration statement for the Shares under the Securities Act or
an exemption thereunder. The Shares are subject to restrictions contained
in a Stockholders Agreement, dated as of August ___, 2005. The



9









 







Stockholders Agreement contains, among other things, certain provisions
relating to the transfer of the Shares. No transfer, sale, assignment,
pledge, hypothecation or other disposition of the Shares, directly or
indirectly, may be made except in accordance with the provisions of such
Stockholders Agreement. The holder of this certificate, by acceptance of
this certificate, agrees to be bound by all of the provisions of such
Stockholders Agreement applicable to the Shares.”


provided, however, that the conditions set forth in Section 2.3(b) shall not apply
to any sale of Common Stock pursuant to (x) an effective registration statement under the
Securities Act or (y) Rule 144 promulgated under the Securities Act (“Rule 144”); provided,
that such sale is not made prior to a Public Offering Event (as defined in Section 5.1).




            Section 2.4 Improper Transfer. Any attempt to Transfer or otherwise encumber any
Common Stock in violation of this Agreement shall be null and void and neither the Company nor any
registrar or transfer agent of such Common Stock shall give any effect to such attempted Transfer
or encumbrance in its stock records.



            Section 2.5 Involuntary Transfer. In the case of any Transfer of title or beneficial
ownership of Common Stock upon default, foreclosure, forfeit, court order or otherwise than by a
voluntary decision on the part of a Stockholder (an “Involuntary Transfer”), such Stockholder, as
the case may be (or such Stockholder’s legal representatives, as the case may be) shall promptly
(but in no event later than two (2) business days after such Involuntary Transfer) furnish written
notice to the Company and the other Stockholders, indicating that the Involuntary Transfer has
occurred, specifying the name of the Person to whom such Common Stock has been Transferred, giving
a detailed description of the circumstances giving rise to, and stating the legal basis for, the
Involuntary Transfer. Nothing in this Section 2.5 shall be deemed to vest any Person who becomes a
holder of Common Stock pursuant to an Involuntary Transfer with any rights under this Agreement. A
Transfer effected by GEI pursuant to Article XI hereof shall not constitute an Involuntary Transfer
hereunder.



            Section 2.6 Certain Definitions. For purposes of this Agreement:



            (a) An “Affiliate” of any Person means any other Person directly or indirectly controlling,
controlled by or under common control with the first Person.



            (b) The term “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether though the ownership of voting securities, by
contract or otherwise. For the avoidance of doubt, an individual human being cannot be “controlled
by” another Person and no Executive Stockholder shall be deemed an Affiliate of any GEI Party.



            (c) “Marketable Securities” means any securities that are freely tradable by the holder
thereof on one or more established public markets, including, but not limited to, any securities
(A) which are listed or traded on a United States national securities exchange or the



10









 







NASDAQ Stock Market or (B) quoted on an established quotation system within or outside the
United States that supports sufficient trading activity and volume to allow for the orderly
disposition of such securities by the holders thereof.



ARTICLE III.




TRANSFER PROCEDURE; RIGHT OF FIRST REFUSAL




            Section 3.1 Right of First Refusal.



            (a) If, (i) following the Release Date, the Executive shall have received, and desires to
accept, a bona fide arms’ length written offer (a “Bona Fide Offer”) from one or more Outside
Parties (as hereinafter defined) for the purchase of Common Stock, (or the Executive shall have
made a Bona Fide Offer for the sale of Common Stock and one or more Outside Parties desires to
accept such Bona Fide Offer) for consideration consisting of cash or Marketable Securities, or (ii)
an Executive Stockholder permits or suffers an Involuntary Transfer of any or all of such Executive
Stockholder’s shares of Common Stock of the Company, then such Stockholders shall give a notice in
writing (the “Transfer Notice”) to the Company and GEI setting forth such desire or providing
notice of such Involuntary Transfer, which notice, in the case of a Bona Fide Offer, shall include
the name and address of the Outside Party or Outside Parties making such Bona Fide Offer and the
price and other material terms and conditions thereof and shall be accompanied by a copy of the
Bona Fide Offer and, in the case of an Involuntary Transfer, shall contain the information required
to be set forth in such notice by Section 2.5. Upon receipt of such Transfer Notice, GEI shall
have an option to purchase, in the aggregate, all (but not part) of the Common Stock described in
the Transfer Notice (i) in the case of a Bona Fide Offer, at the per share cash price specified in
the Transfer Notice or, if the Transfer Notice describes a Transfer of Common Stock for Marketable
Securities, for a cash price to be determined in accordance with Section 3.5 (the “Share Price”) or
(ii) in the case of an Involuntary Transfer, at a purchase price (the “Involuntary Transfer Price”)
equal to (A) prior to a Public Offering Event, the fair market value of such shares, as determined
by the Board of Directors in good faith or (B) if there shall be a public market for the Common
Stock, the average of the daily market prices for each day during the 30 consecutive trading days
commencing 45 business days before such date as of which such a price can be established in the
manner set forth in the following sentence. The market price for each such business day shall be
the last sale price on such day as reported in the consolidated last sale reporting system or as
quoted in the National Association of Securities Dealers Automated Quotation System, or if such
last sale price is not available, the average of the closing bid and asked prices as reported, or
in any other case the highest bid price quoted for such day as reported by The Wall Street Journal
and the National Quotation Bureau pink sheets. If GEI desires to exercise the option set forth in
the preceding sentences, it shall deliver a notice (an “Election Notice”) to the relevant
Stockholder and the Company within twenty (20) days of receipt of the Transfer Notice (the
“Election Period”). In the event GEI does not deliver an Election Notice before the end of the
Election Period, then the Company shall have the option to purchase, in the aggregate, all (but not
part) of the Common Stock described in the Transfer Notice at the Share Price or Involuntary
Transfer Price, as applicable, by delivery of an Election Notice to the relevant Stockholder within
ten (10) days after the expiration of the Election Period. For the avoidance of doubt, GEI may
assign the right to exercise all or part of the option to purchase Common Stock described in



11









 







a particular Transfer Notice to one or more of its Affiliates, in which case (a) the Election
Notice shall specify the Persons exercising such option and the number of shares of Common Stock to
be acquired by each such assignee (provided that, in any event, all shares of Common Stock
specified in the relevant Transfer Notice shall be purchased) and (b) references to GEI in this
Article III shall be deemed to refer to such assignees (or GEI and such assignees, as applicable)
as appropriate to reflect such assignment. With respect to any Stockholder, an “Outside Party”
means a third Person who is not an Affiliate of such Stockholder.



            (b) If, (i) following the Release Date, any GEI Party shall have received, and desires to
accept, a Bona Fide Offer from one or more Outside Parties for the purchase of Common Stock, (or
any GEI Party shall have made a Bona Fide Offer for the sale of Common Stock and one or more
Outside Parties desires to accept such Bona Fide Offer) for consideration consisting of cash or
Marketable Securities or (ii) a GEI Party permits or suffers an Involuntary Transfer of any or all
of such GEI Party’s shares of Common Stock of the Company, then such Stockholders shall give a
Transfer Notice to the Company and the Executive setting forth such desire or providing notice of
such Involuntary Transfer, which notice, in the case of a Bona Fide Offer, shall include the name
and address of the Outside Party or Outside Parties making such Bona Fide Offer and the price and
other material terms and conditions thereof and shall be accompanied by a copy of the Bona Fide
Offer and, in the case of an Involuntary Transfer, shall contain the information required to be set
forth in such notice by Section 2.5. Upon receipt of such Transfer Notice, the Executive shall
have an option to purchase, in the aggregate, all (but not part) of the Common Stock described in
the Transfer Notice at the Share Price or Involuntary Transfer Price, as applicable. If the
Executive desires to exercise the option set forth in the preceding sentence, he shall deliver an
Election Notice to GEI and the Company within the Election Period. In the event the Executive does
not deliver an Election Notice before the end of the Election Period, then the Company shall have
the option to purchase, in the aggregate, all (but not part) of the Common Stock described in the
Transfer Notice at the Share Price or Involuntary Transfer Price, as applicable, by delivery of an
Election Notice to GEI within ten (10) days after the expiration of the Election Period. For the
avoidance of doubt, the Executive may assign the right to exercise all or part of the option to
purchase Common Stock described in a particular Transfer Notice to one or more Permitted
Transferees of the Executive, in which case (a) the Election Notices shall specify the Persons
exercising such option and the number of shares of Common Stock to be acquired by each such
assignee (provided that, in any event, all shares of Common Stock specified in the relevant
Transfer Notice shall be purchased) and (b) references to the Executive in this Article III shall
be deemed to refer to such assignees as appropriate to reflect such assignment.



            (c) In the event that the Executive or GEI (an “Assignor”) assigns the right to exercise all
or any part of a right of first refusal described in this Section 3.1 to an Affiliate or Permitted
Transferee, the ability of such Affiliate or Permitted Transferee to exercise the right of first
refusal and purchase Common Stock pursuant thereto shall be subject to such Affiliate’s or such
Permitted Transferee’s agreement to be bound by the terms and conditions of this Agreement to the
same extent as the Assignor and to Transfer any Common Stock so acquired back to the Assignor in
the event that the Affiliate or Permitted Transferee ceases to be an Affiliate or Permitted
Transferee of the Assignor.



12









 





            (d) Any determination (a “Purchase Determination”) to be made by the Company with respect to
whether the Company will exercise the right to purchase shares of Common Stock pursuant to Section
3.1 and Section 3.2 shall be made (i) by a majority of the GEI Directors, in the case of a proposed
Transfer by any Executive Stockholder and (ii) by a majority of the Executive Directors in the
case of a proposed Transfer by any GEI Party. In the event the approval of a greater number of
members of the Board of Directors is required under applicable law in order for the Company to make
a Purchase Determination, then (x) in the case of a proposed Transfer by any Executive Stockholder,
each Executive Director shall vote in the same manner as the majority of the GEI Directors votes in
respect of such Purchase Determination and (y) in the case of a proposed Transfer by any GEI
Party, each GEI Director shall vote in the same manner as the majority of Executive Directors votes
in respect of such Purchase Determination. The GEI Parties and the Executive Stockholders shall
cause each of the GEI and Executive Directors, respectively, to comply with the provisions of this
Section 3.1(d).



            Section 3.2 Obligation to Purchase and Sell; Closing. If any Executive Stockholder,
GEI or the Company delivers an Election Notice, then it shall be obligated to purchase, and the
relevant Stockholder shall be obligated to sell, the Common Stock described in such Election Notice
at the cash price and on the other terms indicated in the Bona Fide Offer (subject to Section 3.5),
except that the closing of such purchase and sale shall be held on the twentieth business day after
the expiration of the Election Period at 10:30 a.m., local time, at the principal executive office
of the Company in Pennsylvania, or at such other time and place as the parties to such purchase and
sale may mutually agree.



            Section 3.3 Transfer to Outside Party. In the event that, following the Release Date,
a Stockholder has complied with the provisions of Section 3.1 and no Election Notice is delivered
pursuant thereto, such Stockholder may, subject to the provisions of Section 2.2 and Section 2.3
hereof and compliance with the provisions of Article IV hereof, Transfer the Common Stock described
in the Transfer Notice to the Outside Party specified therein, but only for consideration
consisting solely of cash and/or Marketable Securities and on terms and conditions that are no more
favorable in any material respect to the Outside Party than those specified in such Transfer
Notice; provided, that (a) such Outside Party shall duly execute and deliver to the Company
and the other Stockholders an agreement to be bound by the terms of this Agreement as a “GEI
Transferee” or “Executive Transferee”, as applicable (and not as an Executive Stockholder or GEI
Party), and (b) the closing of such Transfer takes place within ninety (90) business days of the
termination of the Election Period. In addition, subject to the limitations contained in Section
5.2(a), in connection with any such Transfer to an Outside Party, the transferring Stockholder may
assign the right to effect Demands (as defined in Section 5.2) and/or participate in piggyback
registrations pursuant to Article V hereof. Any election by the Company or a Stockholder not to
exercise its rights under this Article III in any particular instance, shall not constitute a
waiver of its rights under Article II or this Article III in connection with any other proposed
Transfer of Common Stock. For purposes of this Agreement, “GEI Transferee” means any Outside Party
to whom a GEI Party (or a prior GEI Transferee) Transfers Common Stock pursuant to this Section
3.3, and “Executive Transferee” means any Outside Party to whom an Executive Stockholder (or a
prior Executive Transferee) Transfers Common Stock pursuant to this Section 3.3.



            Section 3.4 Actions at Closing. At any closing held pursuant to this Article III:



13









 





            (a) The purchase price for the purchase for the relevant shares of Common Stock shall be paid
in cash (by wire transfer of immediately available funds to an account specified in writing by the
recipients thereof at least three (3) business days prior to the date of such closing) or by
certified or official bank check.



            (b) The relevant Stockholders shall deliver all certificates, if any, which represent the
shares of Common Stock to be sold at such closing, duly endorsed for transfer with signatures
guaranteed, to the purchasers thereof and shall authorize the Company (or the Company’s transfer
agent, if any) to record in the Company’s books and records the transfer to such purchasers of the
shares of Common Stock to be sold, including any shares of Common Stock not evidenced by
certificates.



            (c) The relevant Stockholders shall take all actions the purchasers shall reasonably request
as necessary to vest in the applicable purchasers all shares of Common Stock being sold, whether in
certificated or uncertificated form, free and clear of all liens, charges and encumbrances of any
kind.



            (d) In the event a purchase of Common Stock pursuant to Section 3.2 by the Company shall be
prohibited by law or would cause a default under the terms of any indenture or loan agreement or
other instrument to which the Company or any of its Subsidiaries may be a party, the obligations of
the Executive, GEI and the Company pursuant to this Article III shall be suspended until the
earlier of (i) the date that is the date that is 180 days after the delivery of the Election
Notice, and (ii) such time as such prohibition first lapses or is waived and no such default would
be caused.



            Section 3.5 Consideration. If a Transfer Notice or Preemptive Rights Notice (as
defined in Section 4.7(c)) specifies consideration consisting of Marketable Securities, then such
consideration shall be valued based upon the closing price for such Marketable Securities on the
primary market therefor on the day prior to the date of the Transfer Notice or Preemptive Rights
Notice, as applicable.



ARTICLE IV.




TAG-ALONG RIGHTS




            Section 4.1 Right to Participate in Sale.



            (a) Subject to Section 4.6, if any Executive Stockholder or GEI Party (a “Transferring Party”)
proposes to Transfer shares of Common Stock (a “Tag-Along Sale”) to a third party that is not a
Permitted Transferee and such shares are not acquired pursuant to Section 3.1 or Section 3.2, then
the Transferring Party shall afford the relevant Tag-Along Stockholders (as hereinafter defined)
the opportunity to participate proportionately in such Tag-Along Sale in accordance with this
Article IV. “Tag-Along Stockholder” means (i) with respect to any proposed Transfer by an
Executive Stockholder, the GEI Parties, GEI Transferees, the other Executive Stockholders and any
Executive Transferee to whom tag-along rights were granted in connection with the Transfer of
Common Stock to such Executive Transferee and (ii) with respect to any proposed Transfer by a GEI
Party, the Executive Stockholders, Executive Transferees, the other GEI Parties and any GEI
Transferee to whom tag-along rights were



14









 







granted in connection with the Transfer of Common Stock to such GEI Transferee. Each
Tag-Along Stockholder shall have a proportionate right, but not the obligation, to participate in
such Tag-Along Sale. The number of shares of Common Stock (the “Tag-Along Allotment”), that each
Tag-Along Stockholder will be entitled to include in such Tag-Along Sale shall be determined by
multiplying (a) the number of shares of Common Stock beneficially owned by such Tag-Along
Stockholder as of the close of business on the day immediately prior to the Tag-Along Notice Date
by (b) a fraction (the “Tag-Along Fraction”), the numerator of which shall equal the number of
shares of Common Stock proposed by the Transferring Party to be sold or otherwise disposed of
pursuant to the Tag-Along Sale and the denominator of which shall equal the total number of shares
of Common Stock that are beneficially owned by the Transferring Party (and, to the extent Common
Stock has been Transferred thereto by the Transferring Party, its Permitted Transferees or
Affiliates, as applicable) as of the close of business on the day immediately prior to the
Tag-Along Notice Date.



            Section 4.2 Sale Notice. The Transferring Party shall provide each Tag-Along
Stockholder with written notice (the “Tag-Along Sale Notice”) not more than sixty (60) nor less
than twenty-five (25) days prior to the proposed date of the Tag-Along Sale (the “Tag-Along Sale
Date”). Each Tag-Along Sale Notice shall set forth: (i) the number of shares of Common Stock
proposed to be transferred or sold by the Transferring Party; (ii) the proposed amount and form of
consideration to be paid for such shares and the terms and conditions of payment offered by each
proposed purchaser; (iii) the aggregate number of shares of Common Stock held of record by the
Transferring Party as of the close of business on the day immediately preceding the date of the
Tag-Along Notice (the “Tag-Along Notice Date”); (iv) such Tag-Along Stockholder’s Tag-Along
Allotment(s) assuming such Stockholder elected to sell the maximum number of shares of Common Stock
as possible; (v) confirmation that the proposed purchaser or transferee has been informed of the
“Tag-Along Rights” provided for in this Article IV and has agreed to purchase the Common Stock in
accordance with the terms hereof; and (vi) the Tag-Along Sale Date.



            Section 4.3 Tag-Along Notice.



            (a) If a Stockholder entitled to do so wishes to participate in the Tag-Along Sale, such
Stockholder shall provide written notice (the “Tag-Along Notice”) to the Transferring Stockholder
with copies to the other Tag-Along Stockholders at the address for notices determined in accordance
with Article VII, within fifteen (15) days following the receipt of the Tag-Along Sale Notice. The
Tag-Along Notice shall set forth the number of shares of Common Stock, that such Stockholder elects
to include in the Tag-Along Sale, which shall not exceed such Stockholder’s Tag-Along Allotment.
The Tag-Along Notice shall also specify the aggregate number of additional shares of Common Stock,
as applicable, owned of record as of the close of business on the day immediately preceding the
Tag-Along Notice Date by such Stockholder, if any, which such Stockholder desires also to include
in the Tag-Along Sale (“Additional Shares”) in the event there is any under-subscription for the
entire amount of all Stockholders’ Tag-Along Allotments. The Tag-Along Notice given by each
Stockholder shall constitute such Stockholder’s binding agreement to sell the Common Stock
specified in such Tag-Along Notice (including any Additional Shares to the extent such Additional
Shares are to be included in the Tag-Along Sale pursuant to the apportionment described herein) on
the terms and conditions applicable to the Tag-Along Sale, subject to the provisions of Section
4.4;



15









 




provided, however, that in the event that there is any material change in the
terms and conditions of such Tag-Along Sale applicable to any Stockholder after such Stockholder
gives its Tag-Along Notice, then, notwithstanding anything herein to the contrary, such Stockholder
shall have the right to withdraw from participation in the Tag-Along Sale with respect to all of
its Common Stock affected thereby.




            (b) If the aggregate number of shares of Common Stock proposed to be included by the
Stockholders in any Tag-Along Sale (without taking into account any Additional Shares) is less than
the aggregate Tag-Along Allotments of all of the Stockholders entitled to participate therein (such
difference, the “Excess Allotment”), then the Excess Allotment shall be allocated among the
Transferring Party and the Stockholders who have indicated a desire to sell Additional Shares
pursuant to a Tag-Along Notice pro rata based upon the number of shares of Common Stock
beneficially owned by each of them as of the close of business on the day immediately prior to the
Tag-Along Notice Date; provided that if application of the foregoing provision does not
result in allocation of the entire Excess Allotment, then the balance shall be allocated among the
Transferring Party and the Stockholders with remaining Additional Shares pro rata based upon the
number of shares of Common Stock, beneficially owned by each of them as of the close of business on
the day immediately prior to the Tag-Along Notice Date and so on until the entire Excess Allotment
has been allocated. The Transferring Party shall notify each Stockholder with Additional Shares to
be included in the Tag-Along Sale of the number of such Additional Shares to be so included no
later than the fifth (5th) day prior to the Tag-Along Sale Date.



            (c) If a Tag-Along Notice is not received by a Transferring Party from any Stockholder within
the 15-day period specified above, the Transferring Party shall have the right to sell or otherwise
transfer the number of shares specified in the Tag-Along Notice to the proposed purchaser or
transferee without any participation by such Stockholder, but only on terms and conditions which
are no more favorable in any material respect to the Transferring Party, as applicable, than as are
stated in the Tag-Along Notice and only if such Tag-Along Sale occurs on a date within sixty (60)
business days of the Tag-Along Sale Date. If such Tag-Along Sale does not occur within such
sixty-day period, the Common Stock that was to be subject to such Tag-Along Sale thereafter shall
continue to be subject to all of the provisions of this Article IV.



            (d) All calculations and allocations of Tag-Along Allotments and Excess Allotments shall be
made by aggregating shares of Common Stock held by the Transferring Party and, to the extent Common
Stock has been Transferred thereto by the Transferring Party, its Permitted Transferees and/or
Affiliates, on the one hand, and any particular Stockholder and, to the extent Common Stock has
been Transferred thereto by such Stockholder, its Permitted Transferees and/or Affiliates, on the
other hand. Once such calculation and/or allocation has been determined, the particular
Stockholder and its Permitted Transferees and/or Affiliates may determine among themselves, which
shall participate in any particular Tag-Along Sale and the number of shares of Common Stock (within
the relevant allotment) to be sold by each of them; provided, that such allocation shall be
specified in the Tag-Along Notice.



            Section 4.4 Terms of Tag-Along Sale; Cooperation. The participating Stockholders
shall cooperate in good faith with the Transferring Party and the Company in



16









 







connection with the consummation of any Tag-Along Sale. Any sales of Common Stock by a
Stockholder as a result of the “Tag-Along Rights” provided under this Article IV shall be on the
same terms and conditions as the proposed Tag-Along Sale by the Transferring Party;
provided that no Stockholder seeking to sell its Common Stock in a Tag-Along Sale shall be
required to make representations and warranties other than with respect to title to such
Stockholder’s Common Stock, authority to enter into the relevant transaction and other customary
matters as to which a seller of a minority interest would make representations and warranties in a
similar situation.



            Section 4.5 Authority to Record Transfer/Delivery of Certificates. On the Tag-Along
Sale Date, each Stockholder, if a participant in the applicable Tag-Along Sale, (a) authorizes the
Company (or the Company’s transfer agent, if any) to record in the Company’s books and records the
transfer of all of such Stockholder’s Common Stock included in such Tag-Along Sale which are not
represented by one or more certificates, from the Stockholder to the purchaser in the Tag-Along
Sale and (b) shall deliver all certificates, if any, which represent Common Stock owned by such
Stockholder included in such Tag-Along Sale, duly endorsed for transfer with signatures guaranteed,
to the purchaser in the Tag-Along Sale, in the manner and at the address indicated in the Tag-Along
Notice, in each case against delivery of the purchase price for such shares. In addition, each
Stockholder, if a participant in the applicable Tag-Along Sale, shall take all action the
Transferring Party or the purchaser in the Tag-Along Sale shall reasonably request as necessary to
vest in the purchaser in the Tag-Along Sale all Common Stock owned by such Stockholder included in
such Tag Along Sale, whether in certificated or uncertificated form, free and clear of all liens,
charges and encumbrances of any kind.



            Section 4.6 Exempt Transfers. The provisions of this Article IV shall not apply to
(a) any sale of Common Stock in an underwritten public offering of Common Stock pursuant to an
effective registration statement under the Securities Act, either in connection with or following
the consummation of a Public Offering Event, or following the consummation of a Public Offering
Event, pursuant to Rule 144 thereunder or as trades effected on any stock exchange or quotation
system after the restrictions of Rule 144 no longer apply; (b) any GEI Distribution (as defined in
Article XI) or any transaction pursuant to Article IX.



            Section 4.7 Preemptive Rights.



            (a) In the event of a Company Preemptive Rights Transaction (as defined below), the Executive
Stockholders, the GEI Parties and each GEI Transferee and Executive Transferee (the “Preemptive
Rights Holders”) shall have the preemptive right (the “Preemptive Right”) to purchase Covered
Securities (as defined below) on the terms and subject to the conditions of this Section 4.7. The
Company agrees that it will not issue or sell Covered Securities in a Company Preemptive Rights
Transaction without first complying with the provisions of this Section 4.7.



            (b) For purposes of this Section 4.7:




          (i) The “Aggregate Percentage” of a Preemptive Rights Holder with respect to
Common Stock, as of a specified date, means the percentage determined by dividing
(A) the aggregate number of outstanding shares of



17









 







Common Stock held by such Preemptive Rights Holder on such date by (B) the
aggregate number of outstanding shares of Common Stock, (other than treasury shares)
as of such date.




          (ii) A “Company Preemptive Rights Transaction” means any issuance by the
Company of Covered Securities (other than the sale of Common Stock to the Executive
on the date hereof) prior to the occurrence of a Public Offering Event;
provided, however, that none of the following shall be deemed to be
a Company Preemptive Rights Transaction: (A) the issuance to directors, officers,
employees and consultants of the Company and Subsidiaries of restricted Common Stock
and/or stock options exercisable for shares of Common Stock pursuant to the Company
Stock Option Plan, as well as the issuance of Common Stock upon the exercise of such
options; or (B) the issuance of Covered Securities in connection with (1) any
arms-length merger, consolidation, share exchange or similar transaction of the
Company or any of its Subsidiaries with any other Person or (2) the arms-length
strategic acquisition by the Company or any of its Subsidiaries of the capital stock
(or other equity interests) or assets of any other Person.




          (iii) “Covered Security” means any equity security of the Company and any
Derivative Security.




          (iv) “Derivative Security” means any security of the Company or any of its
Subsidiaries exercisable for, or convertible or exchangeable into, an equity
security of the Company, including options, warrants and convertible debt
securities.



            (c) Such Preemptive Right will be offered to each Preemptive Rights Holder (such offer, the
“Preemptive Rights Offer”) pursuant to a written notice from the Company, delivered no less than 30
days and no more than 60 days prior to the proposed Company Preemptive Rights Transaction, offering
such Preemptive Rights Holders the Covered Securities on the same terms and conditions as offered
to the other proposed purchaser(s) in the Company Preemptive Rights Transaction (such written
notice, the “Preemptive Rights Notice”). The Preemptive Rights Notice will specify the material
terms and conditions of the offering, including (i) the aggregate offering amount and offering
price per share, (ii) the identity of each proposed purchaser, (iii) the number of Covered
Securities proposed to be acquired by each proposed purchaser, and (iv) all written financial
information and other disclosures provided by the Company to any other proposed purchaser in such
offering.



            (d) Each Preemptive Rights Holder will have 20 days from the date of the Preemptive Rights
Notice to notify the Company and other Preemptive Rights Holders in writing of its binding
acceptance of such Preemptive Rights Offer (a “Subscription Notice”), on the same terms and
conditions as set forth in such Preemptive Rights Offer, with respect to all or any portion of the
Covered Securities which is offered to such Preemptive Rights Holder pursuant to the Preemptive
Rights Offer; provided, that, if at the time of the delivery of the Preemptive Rights
Notice, the Company is unable to specify the price or other consideration for which the Covered
Securities are to be sold, then (i) the Company shall (A) use commercially reasonable



18









 







efforts to include in the Preemptive Rights Notice as much information as possible regarding
the contemplated pricing of the transaction and (B) notify the Preemptive Rights Holders as
promptly as practicable after delivery of the Preemptive Rights Notice of the final pricing and
(ii) each Preemptive Rights Holder shall have at least 5 business days following the receipt of
final pricing information to deliver a Subscription Notice.



            (e) If the Company Preemptive Rights Transaction is consummated, each Preemptive Rights Holder
delivering a Subscription Notice shall have the right to purchase from the Company, and the Company
shall be required to sell to each such Preemptive Rights Holder, at the proposed issuance price,
the number of Covered Securities specified in such Preemptive Rights Holder’s Subscription Notice,
but not to exceed an amount of Covered Securities (rounded up to avoid fractional Covered
Securities) equal to (i) if the Covered Securities consist of shares of Common Stock, such number
of additional shares of Common Stock, as shall enable such Preemptive Rights Holder to maintain its
then current Aggregate Percentage and (ii) in the case of any other Covered Securities, the product
of (A) the total number of Covered Securities proposed to be issued multiplied by (B) a fraction,
the numerator of which shall be equal to the number of shares of Common Stock then owned by such
Preemptive Rights Holder and the denominator of which shall be equal to the total number of shares
of Common Stock then outstanding (other than treasury shares).



            (f) In the event that any Preemptive Rights Holder elects to purchase Covered Securities
pursuant to this Section 4.7, the closing of the applicable Preemptive Rights Offer shall be
consummated concurrently with the respective issuance of Covered Securities to the other purchasers
in such offering; provided, that at the election of the Company, the closing of the sale to
the Preemptive Rights Holders may be delayed to the extent necessary to comply with the provisions
of Section 4.7(d).



            (g) Any Covered Security proposed to be issued and not purchased by any Preemptive Rights
Holder pursuant to Section 4.7(e) may be sold by the Company to any other Person on terms and
conditions that are no more favorable to such Person in any material respect than those specified
in the Preemptive Rights Notice or any supplement thereto delivered to the Preemptive Rights
Holders in accordance with the proviso to Section 4.7(d).



            (h) In the event of a Company Preemptive Rights Transaction involving the sale of Covered
Securities for consideration other than cash, then the consideration to be paid by the Preemptive
Rights Holders exercising Preemptive Rights shall be determined (i) in accordance with Section 3.5
in the case of consideration consisting of Marketable Securities or (ii) in the case of
consideration other than Marketable Securities, the value of such consideration shall be determined
by mutual agreement of the relevant Preemptive Rights Holders and the Company; provided,
that if the Preemptive Rights Holders and the Company cannot agree to such valuation within 10
business days of the date of the Preemptive Rights Notice (or, if the Preemptive Rights Notice did
not specify the consideration to be paid in the Company Preemptive Rights Transaction, 10 business
days from the date that notice of such consideration was actually given to the Preemptive Rights
Holders), then (x) the Company and the Preemptive Rights Holders holding a majority of the Common
Stock held by all Preemptive Rights Holders party to this Agreement shall engage a mutually
acceptable investment banking firm or independent appraiser to determine the fair market value of
the consideration. The determination



19









 







of such firm or appraiser shall be final and binding upon the Preemptive Rights Holders and
the Company. The costs and expenses incurred in connection with the determination made by the
investment banking firm or independent appraiser shall be borne by the Company.



            (i) At any closing held pursuant to this Section 4.7, the purchase price for the purchase for
the relevant securities shall be paid in cash (by wire transfer of immediately available funds to
an account specified in writing by the Company at least three (3) business days prior to the date
of such closing) or by certified or official bank check.



            Section 4.8 Termination of Tag-Along and Preemptive Rights. The provisions of this
Article IV shall expire upon the occurrence of a Public Offering Event.



ARTICLE V.




REGISTRATION RIGHTS




            Section 5.1 Definitions. For purposes of this Agreement:



            (a) “Company Securities” means Other Securities sought to be included in a registration for
the Company’s account.



            (b) “Other Securities” means securities of the Company sought to be included in a registration
other than Registrable Securities.



            (c) “Public Offering Event” means the first date after which the Company has completed one or
more public offerings of Common Stock in an aggregate offering amount of at least $35,000,000 as a
result of which at least fifteen percent (15%) of the outstanding Common Stock, other than treasury
shares (after giving effect to such offerings), is publicly traded.



            (d) “Registrable Securities” means shares of Common Stock owned by the Stockholders, other
than any shares of Common Stock the sale of which has been registered pursuant to the Securities
Act and which shares have been sold pursuant to such registration.



            (e) “Registration Expenses” means any and all expenses incident to performance of or
compliance with any registration of securities pursuant to this Article V, including, without
limitation, (i) the fees, disbursements and expenses of the Company’s counsel and accountants,
including for special audits and comfort letters; (ii) all expenses, including filing fees, in
connection with the preparation, printing and filing of the registration statement, any preliminary
prospectus or final prospectus, any other offering document and amendments and supplements thereto
and the mailing and delivering of copies thereof to any underwriters and dealers; (iii) the cost of
printing or producing any underwriting agreements and blue sky or legal investment memoranda and
any other documents in connection with the offering, sale or delivery of the securities to be
disposed of; (iv) all expenses in connection with the qualification of the securities to be
disposed of for offering and sale under state securities laws, including the reasonable fees and
disbursements of counsel in connection with such qualification and in connection with any blue sky
and legal investment surveys; (v) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. (“NASD”)



20









 







of the terms of the sale of the securities to be disposed of; (vi) transfer agents’ and
registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in
connection with such offering; (vii) all security engraving and security printing expenses; (viii)
all fees and expenses payable in connection with the listing of the securities on any securities
exchange or automated interdealer quotation system or the rating of such securities; (ix) all
expenses with respect to road shows that the Company is obligated to pay pursuant to Section
5.7(p); (x) the reasonable fees and expenses of one counsel for all Selling Holders participating
in the registration incurred in connection with any such registration, such counsel to be selected
by the Selling Holder who requested the largest number of shares of Common Stock to be included in
the registration; and (xi) any other fees and disbursements of underwriters customarily paid by the
sellers of securities, but excluding underwriting discounts and commissions and transfer taxes, if
any (which underwriting discounts and commissions and transfer taxes shall be borne by each
participant in a particular offering and, if selling securities in such offering, the Company, pro
rata in accordance with the total amount of securities sold in such offering by each such Person in
accordance with Section 5.6). Unless otherwise required, the Company shall not be required to pay
the fees and expenses of counsel to the underwriters.



            (f) “Registration Party” means any Executive Stockholder or any GEI Party.



            (g) “Selling Holders” means, with respect to any registration statement, any Stockholder whose
Registrable Securities are included therein.



            (h) “Shelf Underwritten Offering” means an underwritten offering of Registrable Securities by
a Selling Holder pursuant to a take-down from a Shelf Registration Statement in accordance with
Section 5.4(e).



            Section 5.2 Stockholder Demand Rights.



            (a) Subject to the terms and conditions of this Agreement, and at any time after the
consummation of a Public Offering Event, upon written notice delivered by a Registration Party (a
“Demand”) at any time requesting that the Company effect the registration (a “Demand Registration”)
under the Securities Act of any or all of the Registrable Securities held by the Registration
Parties, which Demand shall specify the number and type of such Registrable Securities to be
registered and the intended method or methods of disposition of such Registrable Securities, the
Company shall promptly give written notice of such Demand to all other Stockholders and other
Persons who may have piggyback registration rights with respect to such Demand Registration and
shall use its best efforts to file the Demand Registration within 60 days of the Demand in order to
effect the registration under the Securities Act and applicable state securities laws of (i) the
Registrable Securities which the Company has been so requested to register by such Registration
Parties in the Demand, and (ii) all other Registrable Securities which the Company has been
requested to register by the holders thereof by written request given to the Company within twenty
(20) days after the giving of such written notice by the Company (which request shall specify the
intended method of disposition of such Registrable Securities), and to cause the same to be
declared effective by the SEC as promptly as practicable thereafter, all to the extent requisite to
permit the disposition (in accordance with such intended methods of disposition) of the Registrable
Securities to be so registered. There shall be no limit to the number of occasions on which any
Executive Stockholder or any GEI Party may make



21









 







Demands. No Registration Party shall be entitled to make a Demand pursuant to this Section
5.2 unless such Registration Party, together with all other Registration Parties delivering the
Demand, are requesting the registration of Common Stock with an aggregate estimated market value of
at least $15,000,000. In connection with the Transfer of Registrable Securities to any GEI
Transferee or Executive Transferee, a Registration Party may assign (i) the right to exercise a
Demand Registration pursuant to this Section 5.2(a) and/or (ii) the right to participate in any
registration pursuant to the terms of Section 5.3. In the event of any such assignment, references
to the Registration Parties in this Section 5.2(a) and in Section 5.4(a) shall be deemed to refer
to the relevant transferee, as appropriate. The relevant Registration Party shall give prompt
written notice of any such assignment to the Company and the other Stockholders.



            (b) RESERVED.



            (c) Company Blackout Rights. With respect to any registration statement filed, or to
be filed, pursuant to this Section 5.2, if (i)(A) the Company determines in good faith that such
registration would cause the Company to disclose material non-public information which disclosure
(x) would be required to be made in any registration statement so that such registration statement
would not be materially misleading, (y) would not be required to be made at such time but for the
filing or effectiveness of such registration statement and (z) would be materially detrimental to
the Company or would materially interfere with any material financing, acquisition, corporate
reorganization or merger or other material transaction involving the Company or any of its
Subsidiaries and that, as a result of such potential disclosure or interference, it is in the best
interests of the Company to defer the filing or effectiveness of such registration statement at
such time, and (B) the Company promptly furnishes to the Selling Holders a certificate signed by
the chief executive officer of the Company to that effect, or (ii) prior to receiving the Demand,
the Board of Directors had determined to effect a registered underwritten offering of the Company’s
securities for the Company’s account and the Company had taken substantial steps (including but not
limited to selecting a managing underwriter for such offering) and is proceeding with reasonable
diligence to effect such offering, then the Company shall have the right to defer such filing or
effectiveness for the period necessary, as determined by the Board of Directors of the Company in
good faith, in the case of a deferral pursuant to clause (i) above, or until the proposed
registration for the Company’s account is completed or abandoned, in the case of a deferral
pursuant to clause (ii) above, provided, that such deferral, together with any other
deferral or suspension of the Company’s obligations under Section 5.2 or Section 5.4, shall not be
effected for a period of more than one hundred twenty (120) days, in the aggregate, for all such
deferrals or suspensions over any twelve-month period. The Company shall promptly notify the
Selling Holders of the expiration of any period during which it exercised its rights under this
Section 5.2(c). The Company agrees that, in the event it exercises its rights under this Section
5.2(c), it shall, as promptly as practicable following the expiration of the applicable deferral
period, file or update and use its best efforts to cause the effectiveness of, as applicable, the
applicable deferred registration statement.



            (d) Fulfillment of Registration Obligations. Notwithstanding any other provision of
this Agreement, a registration requested pursuant to this Section 5.2 shall not be deemed to have
been effected (i) unless it has become effective, (ii) if after it has become effective such
registration is interfered with by any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason other than



22









 







a misrepresentation or an omission by a Registration Party and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely distributed in accordance
with the plan of distribution set forth in the related registration statement; provided,
that if such registration is a shelf registration pursuant to Section 5.4, such registration shall
be deemed to have been effected if such registration statement remains effective for the period
specified in Section 5.4, (iii) if not a shelf registration and the registration does not
contemplate an underwritten offering, if it does not remain effective for at least one hundred
eighty (180) days (or such shorter period as will terminate when all securities covered by such
registration statement have been sold or withdrawn); or if not a shelf registration and such
registration statement contemplates an underwritten offering, if it does not remain effective for
at least one hundred eighty (180) days, or if sooner, the completion of such distribution, plus
such longer period as, in the opinion of counsel for the underwriter or underwriters, a prospectus
is required by law to be delivered in connection with the sale of Registrable Securities by an
underwriter or dealer or (iv) in the event of an underwritten offering, if the conditions to
closing specified in the purchase agreement or underwriting agreement entered into in connection
with such registration are not satisfied or waived other than by reason of some wrongful act or
omission by a Registration Party.



            Section 5.3 Piggyback Registration Rights.



            (a) In the event that the Company at any time proposes or is required to register any of its
Common Stock under the Securities Act (including pursuant to Section 5.2 hereof), whether or not
for sale for its own account, in a manner that would permit registration of Registrable Securities
for sale for cash to the public under the Securities Act, subject to the last sentence of this
Section 5.3(a), it shall at each such time give prompt written notice (the “Piggyback Notice”) to
each Stockholder of its intention to do so, which Piggyback Notice shall specify the number and
class or classes (or type or types) of Registrable Securities to be registered. Upon the written
request of any Stockholder made within fifteen (15) business days after receipt of the Piggyback
Notice by such Person (which request shall specify the number of Registrable Securities intended to
be disposed of), subject to the other provisions of this Article V, the Company shall effect, in
connection with the registration of such Common Stock, the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register. Notwithstanding
anything to the contrary contained in this Section 5.3, the Company shall not be required to effect
any registration of Registrable Securities under this Section 5.3 incidental to the registration of
any of its securities on Forms S-4 or S-8 (or any similar or successor form providing for the
registration of securities in connection with mergers, acquisitions, exchange offers, subscription
offers, dividend reinvestment plans or stock option or other executive or employee benefit or
compensation plans) or any other form that would not be available for registration of Registrable
Securities.



            (b) Determination Not to Effect Registration. If at any time after giving such
Piggyback Notice and prior to the effective date of the registration statement filed in connection
with such registration the Company shall determine for any reason (including the withdrawal by any
Registration Party exercising a Demand) not to register the securities originally intended to be
included in such registration, the Company may, at its election, give written notice of such
determination to the Selling Holders and thereupon the Company shall be relieved of its obligation
to register such Registrable Securities in connection with the registration of securities



23









 







originally intended to be included in such registration, without prejudice, however, to the
right of a Registration Party immediately to request that such registration be effected as a
registration under Section 5.2 (including a shelf registration under Section 5.4) to the extent
permitted thereunder.



            (c) Cutbacks in Company Offering. If the registration referred to in the first
sentence of Section 5.3(a) is to be an underwritten registration on behalf of the Company, and the
lead underwriter or managing underwriter advises the Company in writing (with a copy to each
Selling Holder) that, in such firm’s good faith view, the number of Other Securities and
Registrable Securities requested to be included in such registration exceeds the number which can
be sold in such offering without being likely to have a significant adverse effect upon the price,
timing or distribution of the offering and sale of the Other Securities and Registrable Securities
then contemplated, the Company shall include in such registration:




          (i) first, all Company Securities; and




          (ii) second, Registrable Securities, pro rata on the basis of the
relative number of such Registrable Securities owned by the Persons seeking such
registration.



            (d) Cutbacks in Other Offerings. If the registration referred to in the first
sentence of Section 5.3(a) is to be an underwritten registration other than on behalf of the
Company, and the lead underwriter or managing underwriter advises the Selling Holders in writing
(with a copy to the Company) that, in such firm’s good faith view, the number of Registrable
Securities and Other Securities requested to be included in such registration exceeds the number
which can be sold in such offering without being likely to have a significant adverse effect upon
the price, timing or distribution of the offering and sale of the Registrable Securities and Other
Securities then contemplated, the Company shall include in such registration. Registrable
Securities and Other Securities (other than Company Securities) that are requested to be included
in such registration pursuant to Section 5.2, this Section 5.3 and the terms of any other
registration rights agreement to which the Company is a party that can be sold without having the
adverse effect referred to above, pro rata on the basis of the relative number of such Registrable
Securities and Other Securities owned by the Persons seeking such registration.



            (e) Expiration. Notwithstanding any other provision of this Agreement, the right of
any Stockholder to include securities of a particular class in a registration pursuant to this
Section 5.3 shall expire at such time as all Registrable Securities of such class held by such
Stockholder are eligible to be sold to the public pursuant to Rule 144 without limitation as a
result of the volume restrictions set forth therein.



            Section 5.4 Shelf Registration.



            (a) General; Duration. Any Registration Party shall have the right pursuant
to Section 5.2 at any time, upon the Company’s eligibility to use Form S-3 (or any successor form
to Form S-3, or any similar short-form registration statements), and from time to time, to request,
in connection with delivery of a Demand, that the Company prepare and file with the Commission a
“shelf” registration statement (the “Shelf Registration Statement”) on the



24









 







appropriate form for an offering to be made, covering the Registrable Securities requested to
be included therein, on a continuous or delayed basis pursuant to Rule 415 under the Securities Act
(or any successor rule or similar provision then in effect) in the manner or manners designated by
such Registration Party (including, without limitation, one or more underwritten offerings).
Subject to Section 5.7(b), the Company shall use its best efforts to have the Shelf Registration
Statement declared effective by the Commission as soon as practicable and to keep such Shelf
Registration Statement continuously effective and free of material misstatements or omissions
(including the preparation and filing of any amendments and supplements necessary for that purpose)
until the earlier of (i) the date on which the Registration Party and all other Selling Holders
have consummated the sale of all Registrable Securities registered under the Shelf Registration
Statement or (ii) twelve months from the date the Shelf Registration Statement first became
effective, subject to extension (A) pursuant to Section 5.4(b)(ii) or (B) for any period of time
during which the offering of Registrable Securities pursuant to such Shelf Registration Statement
is interfered with by a stop order, injunction or other order or requirement of the Commission or
any other governmental agency or court.



            (b) Company Blackout Rights.




          (i) Prior to Effectiveness. With respect to any Shelf Registration
Statement filed, or to be filed, pursuant to this Section 5.4, if (A) (x) the
Company determines in good faith that such registration would cause the Company to
disclose material non-public information which disclosure (i) would be required to
be made in any registration statement so that such registration statement would not
be materially misleading, (ii) would not be required to be made at such time but for
the filing or effectiveness of such registration statement and (iii) would be
materially detrimental to the Company or would materially interfere with any
material financing, acquisition, corporate reorganization or merger or other
material transaction involving the Company and any of its Subsidiaries and that, as
a result of such potential disclosure or interference, it is in the best interests
of the Company to defer the filing or effectiveness of such Shelf Registration
Statement at such time, and (y) the Company promptly furnishes to the Registration
Party and any other Persons participating in such registration a certificate signed
by the chief executive officer of the Company to that effect, or (B) prior to
receiving the request to file the Shelf Registration Statement, the Board of
Directors had determined to effect a registered underwritten offering of the
Company’s securities for the Company’s account and the Company had taken substantial
steps (including but not limited to selecting a managing underwriter for such
offering) and is proceeding with reasonable diligence to effect such offering, then
the Company shall have the right to defer such filing or effectiveness for the
period necessary, as determined by the Board of Directors of the Company in good
faith, in the case of a deferral pursuant to clause (A) above, or until the proposed
registration for the Company’s account is completed or abandoned, in the case of a
deferral pursuant to clause (B) above, provided, that such deferral,
together with any other deferral or suspension of its obligations under Section 5.2
or Section 5.4, shall not be effected for a period of more than one hundred twenty
(120) days, in the aggregate, for all such deferrals or suspensions over any
twelve-month period. The Company shall promptly notify



25









 







the Selling Holders of the expiration of any period during which it exercised
its rights under this Section 5.4(b)(i). The Company agrees that, in the event it
exercises its rights under this Section 5.4(b)(i), it shall, as promptly as
practicable following expiration of the applicable deferral period, file or update
and use its best efforts to cause the effectiveness of, as applicable, the
applicable deferred Shelf Registration Statement.




          (ii) Following Effectiveness. Following effectiveness of any Shelf
Registration Statement pursuant to this Section 5.4, (A) if the Company determines
in good faith that the availability of the Shelf Registration Statement for use
would cause the Company to disclose material non-public information which disclosure
(x) would be required to be made in any registration statement so that such
registration statement would not be materially misleading, (y) would not be required
to be made at such time but for the continued use of such registration statement and
(z) would be materially detrimental to the Company or would materially interfere
with any material financing, acquisition, corporate reorganization or merger or
other material transaction involving the Company or any of its Subsidiaries and
that, as a result of such potential disclosure or interference, it is in the best
interests of the Company to suspend the use of such Shelf Registration Statement at
such time, and (B) the Company promptly furnishes to the Registration Party and each
other Person participating in such Shelf Registration Statement a certificate signed
by the chief executive officer of the Company to that effect, then the Company shall
have the right to suspend the use of such Shelf Registration Statement,
provided, that such suspension, together with any other suspension or
deferral of its obligations under Section 5.2 or Section 5.4, shall not be effected
for a period of more than one hundred twenty (120) days, in the aggregate, for all
such suspensions or deferrals over any twelve-month period. The Company agrees
that, in the event it exercises its rights under this Section 5.4(b)(ii), it shall,
as promptly as practicable following expiration of the applicable suspension period,
update the suspended Shelf Registration Statement as may be necessary to permit the
Selling Holders to resume use thereof in connection with the offer and sale of their
Registrable Securities in accordance with applicable law. The minimum period of
time during which the applicable Shelf Registration Statement must remain effective
pursuant to Section 5.4(a) shall be extended by the number of days during the period
from and including the date of delivery to the Selling Holders of the certificate
contemplated by the first sentence of this Section 5.4(b)(ii) and ending on the date
that the Company gives notice as provided herein that such suspension has ended.



            (c) Supplements and Amendments. The Company agrees, if necessary, to supplement or
amend the Shelf Registration Statement, 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 as otherwise required by this Agreement, and shall use its reasonable best
efforts to have such supplements and amendments declared effective, if required, as soon as
practicable after filing.



26









 





            (d) Fulfillment of Registration Obligations. A registration will not be deemed to
have been effected pursuant to a Shelf Registration Statement unless (i) the provisions of Section
5.2(d) and 5.4(a) are fulfilled with respect to such Shelf Registration Statement and (ii) the
Shelf Registration Statement with respect thereto has remained effective for the minimum period of
time required by Section 5.4(a), as extended as provided in Section 5.4(a).



            (e) Shelf Underwritten Offerings. At any time that a Shelf Registration Statement is
effective, if a Registration Party delivers a notice to the Company (a “Shelf Underwriting Notice”)
stating that it intends to effect a Shelf Underwritten Offering of all or part of its Registrable
Securities included by it on the Shelf Registration Statement and stating the aggregate offering
price and/or number of the Registrable Securities to be included in the Shelf Underwritten
Offering, then the Company shall amend or supplement the Shelf Registration Statement as may be
necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf
Underwritten Offering (taking into account the inclusion of Registrable Securities and Other
Securities by any Stockholders or holders of Other Securities pursuant to this Section 5.4(e) or
the terms of any other registration rights agreement to which the Company may be a party). In
connection with any Shelf Underwritten Offering:




          (i) the Company shall deliver a copy of the Shelf Underwriting Notice to all
Stockholders and permit each such Stockholder to include its Registrable Securities
included by it on the Shelf Registration Statement in the Shelf Underwritten
Offering if such Stockholder seeking to so include Registrable Securities notifies
the Registration Party and the Company of such request, specifying the aggregate
amount of Registrable Securities to be included, within five business days (or such
lesser period as is reasonably practicable under the circumstances in the judgment
of the underwriter) after receipt of the Shelf Underwriting Notice thereby;
provided, that in no event shall the Company be required to include pursuant
to this Section 5.4(e) any securities of a class or type other than the classes or
types described in the Shelf Underwriting Notice; and




          (ii) if the lead or managing underwriter of a proposed Shelf Underwritten
Offering informs the Selling Holders in writing (with a copy to the Company) that,
in its good faith view, the number of securities of such class requested to be
included in such offering exceeds the number which can be sold in such offering
without being likely to have a significant adverse effect on the price, timing or
distribution of the offering and sale of the Registrable Securities and Other
Securities to be sold in such offering, then (A) the number of Registrable
Securities and Other Securities which will be included in the Shelf Underwritten
Offering shall only be that number which, in the good faith opinion of such lead or
managing underwriter, can be included without being likely to have a significant
adverse effect on the price, timing or distribution of the offering and the sale of
the Registrable Securities and Other Securities then contemplated, and (2) each
Holder shall be entitled to include Registrable Securities or Other Securities in
the Shelf Underwritten Offering in the manner set forth in Section 5.3(d) with
respect to allocations in a requested registration.



27









 





            Section 5.5 Selection of Underwriters. In the event that any registration pursuant to
Section 5.2 shall involve, in whole or in part, an underwritten offering, the two Stockholders who
have requested the largest number of shares of Common Stock to be included in the registration
shall have the right to designate the underwriter or underwriters; provided, that selection
of such underwriters shall be reasonably satisfactory to the Company.



            Section 5.6 Withdrawal Rights; Expenses.



            (a) Except as provided herein, the Company shall pay all Registration Expenses with respect to
a particular offering (or proposed offering). Except as provided herein each Selling Holder and
the Company shall be responsible for its own fees and expenses of counsel and financial advisors
and their internal administrative and similar costs, as well as their respective pro rata shares of
underwriters’ commissions and discounts, which shall not constitute Registration Expenses.



            Section 5.7 Registration and Qualification. If and whenever the Company is required
to effect the registration of any Registrable Securities under the Securities Act as provided in
this Article V, the Company shall as promptly as practicable:



            (a) Registration Statement. Prepare and (as soon thereafter as practicable and in any
event, no later than sixty (60) days after the end of the applicable period specified in Section
5.2(a)(ii) within which requests for registration may be given to the Company) file a registration
statement under the Securities Act relating to the Registrable Securities to be offered and use its
best efforts to cause such registration statement to become effective as promptly as practicable
thereafter; furnish to the lead underwriter or underwriters, if any, and to the Selling Holders who
have requested that Registrable Securities be covered by such registration statement, prior to the
filing thereof with the Commission, a copy of the registration statement, and each amendment
thereof, and a copy of any prospectus, and each amendment or supplement thereto (excluding
amendments caused by the filing of a report under the Exchange Act), and shall use its reasonable
best efforts to reflect in each such document, when so filed with the Commission, such comments as
such Persons reasonably may on a timely basis propose;



            (b) Amendments; Supplements. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection therewith as may
be (i) reasonably requested by any Selling Holder (to the extent such request relates to
information relating to such Selling Holder), or (ii) necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities until the earlier of (A) such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of disposition set forth
in such registration statement and (B) if a shelf registration, the expiration of the applicable
period specified in Section 5.4(a) and, if not a shelf registration, the applicable period
specified in Section 5.2(d)(iii); provided, that any such required period provided for in
Section 5.4(a) or this 5.7(b) shall be extended for such number of days (x) during any period from
and including the date any written notice contemplated by paragraph (f) below is given by the
Company until the date on which the Company delivers to the Selling Holders the supplement or
amendment contemplated by paragraph (f) below or written notice that the use of the prospectus may
be resumed, as the case may be, and (y) during which the offering of



28









 







Registrable Securities pursuant to such registration statement is interfered with by any stop
order, injunction or other order or requirement of the Commission or any other governmental agency
or court or by actions taken by the Company pursuant to Section 5.2(c), Section 5.4(b)(i) or
Section 5.4(b)(ii); provided, further, that the Company will have no obligation to
a Selling Holder participating on a “piggyback” basis in a registration statement that has become
effective to keep such registration statement effective for a period beyond one hundred twenty
(120) days from the effective date of such registration statement.



            (c) Copies. Furnish to the Selling Holders and to any underwriter of such Registrable
Securities such number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such number of copies of
the prospectus included in such registration statement (including each preliminary prospectus and
any summary prospectus), in conformity with the requirements of the Securities Act, such documents
incorporated by reference in such registration statement or prospectus, and such other documents,
as such Selling Holders or such underwriter may reasonably request, and upon request a copy of any
and all transmittal letters or other correspondence to or received from, the Commission or any
other governmental agency or self-regulatory body or other body having jurisdiction (including any
domestic or foreign securities exchange) relating to such offering;



            (d) Blue Sky. Use its reasonable best efforts to register or qualify all Registrable
Securities covered by such registration statement under the securities or blue sky laws of such
U.S. jurisdictions as any Selling Holder or any underwriter of such Registrable Securities shall
request, and use its reasonable best efforts to obtain all appropriate registrations, permits and
consents in connection therewith, and do any and all other acts and things which may be necessary
or advisable to enable the Selling Holders or any such underwriter to consummate the disposition in
such jurisdictions of its Registrable Securities covered by such registration statement;
provided that the Company shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any such jurisdiction wherein it is not so qualified or
to consent to general service of process in any such jurisdiction;



            (e) Delivery of Certain Documents. (i) Furnish to each Selling Holder and to any
underwriter of such Registrable Securities an opinion of counsel for the Company (which opinion (in
form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any,
or, in the case of a non-underwritten offering, to the Selling Holders) addressed to each Selling
Holder and any underwriter of such Registrable Securities and dated the date of the closing under
the underwriting agreement (if any) (or if such offering is not underwritten, dated the effective
date of the applicable registration statement) covering the matters customarily covered in opinions
requested in sales of securities or underwritten offerings and such other matters as any Selling
Holder may reasonably request, (ii) furnish (to the extent not inconsistent with applicable
accounting policies) to each Selling Holder and any underwriter of such Registrable Securities a
“cold comfort” and “bring-down” letter addressed to each Selling Holder and any underwriter of such
Registrable Securities and signed by the independent public accountants who have audited the
financial statements of the Company included in such registration statement, covering the matters
customarily covered in accountants’ letters delivered to underwriters in underwritten public
offerings of securities and (iii) cause such authorized



29









 







officers of the Company to execute customary certificates as may be requested by any Selling
Holder or any underwriter of such Registrable Securities;



            (f) Notification of Certain Events; Corrections. Promptly notify the Selling Holders
and any underwriter of such Registrable Securities in writing (i) of the occurrence of any event as
a result of which the registration statement or the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, (ii) of any request by the
Commission or any other regulatory body or other body having jurisdiction for any amendment of or
supplement to any registration statement or other document relating to such offering, and (iii) if
for any other reason it shall be necessary to amend or supplement such registration statement or
prospectus in order to comply with the Securities Act and, in any such case as promptly as
reasonably practicable thereafter, prepare and file with the Commission an amendment or supplement
to such registration statement or prospectus which will correct such statement or omission or
effect such compliance;



            (g) Notice of Effectiveness. Notify the Selling Holders and the lead underwriter or
underwriters, if any, and (if requested) confirm such advice in writing, as promptly as reasonably
practicable after notice thereof is received by the Company (i) when the applicable registration
statement or any amendment thereto has been filed or becomes effective and when the applicable
prospectus or any amendment or supplement thereto has been filed, (ii) of any written comments by
the Commission, (iii) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or any order preventing or suspending the use of any
preliminary or final prospectus or the initiation or threat of any proceedings for such purposes
and (iv) of the receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for offering or sale in any jurisdiction or the
initiation or threat of any proceeding for such purpose;



            (h) Stop Orders. Use its reasonable best efforts to prevent the entry of, and use its
best efforts to obtain as promptly as reasonably practicable the withdrawal of, any stop order with
respect to the applicable registration statement or other order suspending the use of any
preliminary or final prospectus;



            (i) Plan of Distribution. Promptly incorporate in a prospectus supplement or
post-effective amendment to the applicable registration statement such information as the lead
underwriter or underwriters, if any, and the Selling Holders holding a majority of each class of
Registrable Securities being sold agree (with respect to the relevant class) should be included
therein relating to the plan of distribution with respect to such class of Registrable Securities;
and make all required filings of such prospectus supplement or post-effective amendment as promptly
as reasonably practicable after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment;



            (j) Other Filings. Use its reasonable best efforts to cause the Registrable
Securities covered by the applicable registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable the seller or



30









 







sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of
such Registrable Securities;



            (k) NASD Compliance. Cooperate with each Selling Holder and each underwriter or
agent, if any, participating in the disposition of such Registrable Securities and their respective
counsel in connection with any filings required to be made with the NASD;



            (l) Shelf Amendments. Upon the request of any Selling Holder, promptly amend any
Shelf Registration Statement or take such other action as may be necessary to de-register, remove
or withdraw all or a portion of the Selling Holder’s Registrable Securities from a Shelf
Registration Statement, as requested by such Selling Holder;



            (m) Listing. Use its reasonable best efforts to cause all such Registrable Securities
registered pursuant to such registration to be listed and remain on each securities exchange and
automated interdealer quotation system on which identical securities issued by the Company are then
listed;



            (n) Transfer Agent; Registrar; CUSIP Number. Provide a transfer agent and registrar
for all Registrable Securities registered pursuant to such registration and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of the applicable
registration statement;



            (o) Compliance; Earnings Statement. Otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and make available to each
Selling Holder, as soon as reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the first month after the
effective date of the applicable registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;



            (p) Road Shows. To the extent reasonably requested by the lead or managing
underwriters in connection with an underwritten offering pursuant to Section 5.2 (including a Shelf
Underwritten Offering pursuant to Section 5.4), send appropriate officers of the Company to attend
any “road shows” scheduled in connection with any such underwritten offering, with all
out-of-pocket costs and expenses incurred by the Company or such officers in connection with such
attendance to be paid by the Company;



            (q) Certificates. Unless the relevant securities are issued in book-entry form,
furnish for delivery in connection with the closing of any offering of Registrable Securities
pursuant to a registration effected pursuant to this Article V unlegended certificates representing
ownership of the Registrable Securities being sold in such denominations as shall be requested by
any Selling Holder or the underwriters of such Registrable Securities (it being understood that the
Selling Holders will use their reasonable best efforts to arrange for delivery to The Depository
Trust Company); and



            (r) Best Efforts. Use its reasonable best efforts to take all other steps necessary
to effect the registration of the Registrable Securities contemplated hereby.



31









 





            Section 5.8 Underwriting; Due Diligence. (a) If requested by the underwriters for
any underwritten offering of Registrable Securities pursuant to a registration requested under this
Article V, the Company shall enter into an underwriting agreement with such underwriters for such
offering, which agreement will contain such representations and warranties by the Company and such
other terms and provisions as are customarily contained in underwriting agreements generally with
respect to secondary distributions to the extent relevant, including, without limitation,
indemnification and contribution provisions substantially to the effect and to the extent provided
in Section 5.9, and agreements as to the provision of opinions of counsel and accountants’ letters
to the effect and to the extent provided in Section 5.7(e). The Selling Holders on whose behalf
the Registrable Securities are to be distributed by such underwriters shall be parties to any such
underwriting agreement, and the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters, shall also be made to and for the
benefit of such Selling Holders and the conditions precedent to the obligations of such
underwriters under such underwriting agreement shall also be conditions precedent to the
obligations of such Selling Holders to the extent applicable. Subject to the following sentence,
such underwriting agreement shall also contain such representations and warranties by such Selling
Holders and such other terms and provisions as are customarily contained in underwriting agreements
with respect to secondary distributions, when relevant. No Selling Holder shall be required in any
such underwriting agreement or related documents to make any representations or warranties to or
agreements with the Company or the underwriters other than customary representations, warranties or
agreements regarding such Selling Holder’s title to Registrable Securities, power and authority to
effect the transfer, any written information provided by the Selling Holder to the Company
expressly for inclusion in the related registration statement and such other matters pertaining to
compliance with securities laws as may be reasonably requested.



            (a) In connection with the preparation and filing of each registration statement registering
Registrable Securities under the Securities Act pursuant to this Article V, the Company shall make
available upon reasonable notice at reasonable times and for reasonable periods for inspection by
each Selling Holder, by any managing underwriter or underwriters participating in any disposition
to be effected pursuant to such registration statement, and by any attorney, accountant or other
agent retained by any Selling Holder or any managing underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of the Company, and cause all of the
Company’s officers, directors and employees and the independent public accountants who have
certified the Company’s financial statements to make themselves available to discuss the business
of the Company and to supply all information reasonably requested by any such Selling Holders,
managing underwriters, attorneys, accountants or agents in connection with such registration
statement as shall be necessary to enable them to exercise their due diligence responsibility
(subject to entry by each party referred to in this clause (b) into customary confidentiality
agreements in a form reasonably acceptable to the Company).



            (b) In the case of an underwritten offering requested by the Registration Parties pursuant to
Section 5.2 or Section 5.4, the price, underwriting discount and other financial terms for the
Registrable Securities of the related underwriting agreement shall be determined by the Selling
Holders. In the case of any underwritten offering of securities by the Company pursuant to Section
5.3, such price, discount and other terms shall be determined by



32









 







the Company, subject to the right of Selling Holders to withdraw their Registrable Securities
from the registration pursuant to 5.3(b).



            (c) Subject to Section 5.8(a), no Person may participate in an underwritten offering unless
such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting
arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and
executes all customary questionnaires, powers of attorney, indemnities, underwriting agreement and
other documents reasonably required under the terms of such underwriting arrangements.



            Section 5.9 Indemnification and Contribution.



            (a) Indemnification by the Company. In the case of each offering of Registrable
Securities made pursuant to this Article V, the Company agrees to indemnify and hold harmless, to
the extent permitted by law, each Selling Holder, each underwriter of Registrable Securities so
offered and each Person, if any, who controls or is alleged to control (within the meaning set
forth in the Securities Act) any of the foregoing Persons, the Affiliates of each of the foregoing,
and the officers, directors, partners, employees and agents of each of the foregoing, against any
and all losses, liabilities, costs (including reasonable attorney’s fees and disbursements), claims
and damages, joint or several, to which they or any of them may become subject, under the
Securities Act or otherwise, including any amount paid in settlement of any litigation commenced or
threatened, insofar as such losses, liabilities, costs, claims and damages (or actions or
proceedings in respect thereof, whether or not such indemnified Person is a party thereto) arise
out of or are based upon any untrue statement by the Company or alleged untrue statement by the
Company of a material fact contained in the registration statement (or in any preliminary, final or
summary prospectus included therein) or in any offering memorandum or other offering document
relating to the offering and sale of such Registrable Securities prepared by the Company or at its
direction, or any amendment thereof or supplement thereto, or in any document incorporated by
reference therein, or any omission by the Company or alleged omission by the Company to state
therein a material fact required to be stated therein or necessary to make the statements therein
(in the case of a prospectus or preliminary prospectus, in light of the circumstances under which
they were made) not misleading; provided, however, that the Company shall not be
liable to any Person in any such case to the extent that any such loss, liability, cost, claim or
damage arises out of or relates to any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon and in conformity
with information relating to such Person furnished in writing to the Company by or on behalf of
such Person expressly for inclusion in the registration statement (or in any preliminary, final or
summary prospectus included therein), offering memorandum or other offering document, or any
amendment thereof or supplement thereto. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any such Person and shall survive the
transfer of such securities.



            (b) Indemnification by Selling Holders. In the case of each offering made pursuant to
this Agreement, each Selling Holder, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless, to the extent permitted by law, the Company, each other Selling Holder
and each Person, if any, who controls or is alleged to control (within the meaning set forth in the
Securities Act) any of the foregoing, any Affiliate of any of the foregoing, and the



33









 







officers, directors, partners, employees and agents of each of the foregoing, against any and
all losses, liabilities, costs (including reasonable attorney’s fees and disbursements), claims and
damages to which they or any of them may become subject, under the Securities Act or otherwise,
including any amount paid in settlement of any litigation commenced or threatened, insofar as such
losses, liabilities, costs, claims and damages (or actions or proceedings in respect thereof,
whether or not such indemnified Person is a party thereto) arise out of or are based upon any
untrue statement made by such Selling Holder of a material fact contained in the registration
statement (or in any preliminary, final or summary prospectus included therein) relating to the
offering and sale of such Registrable Securities prepared by the Company or at its direction, or
any amendment thereof or supplement thereto, or any omission by such Selling Holder of a material
fact required to be stated therein or necessary to make the statements therein (in the case of a
prospectus or preliminary prospectus, in light of the circumstances under which they were made) not
misleading, but in each case only to the extent that such untrue statement of a material fact is
contained in, or such material fact is omitted from, information relating to such Selling Holder
furnished in writing to the Company by or on behalf of such Selling Holder expressly for inclusion
in such registration statement (or in any preliminary, final or summary prospectus included
therein), or any amendment thereof or supplement thereto; provided, however, that
such Selling Holder shall not be liable in any case to the extent that prior to the filing of any
such registration statement or prospectus or amendment thereof or supplement thereto, such Selling
Holder has furnished in writing to the Company information expressly for use in such registration
statement or prospectus or any amendment thereof or supplement thereto which corrected or made not
misleading information previously furnished to the Company. The liability of any Selling Holder
hereunder shall be several and not joint and in no event shall the liability of any Selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds received by such Selling
Holder under the sale of the Registrable Securities giving rise to such indemnification obligation.



            (c) Indemnification Procedures. Each party entitled to indemnification under this
Section 5.9 shall give notice to the party required to provide indemnification promptly after such
indemnified party has actual knowledge that a claim is to be made against the indemnified party as
to which indemnity may be sought, and shall permit the indemnifying party to assume the defense of
such claim or litigation resulting therefrom and any related settlement and settlement
negotiations, subject to the limitations on settlement set forth below; provided, that
counsel for the indemnifying party, who shall conduct the defense of such claim or any litigation
resulting therefrom, shall be approved by the indemnified party (whose approval shall not
unreasonably be withheld), and the indemnified party may participate in such defense at such
party’s expense; and provided, further, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of its obligations under
this Section 5.9, except to the extent the indemnifying party is actually prejudiced by such
failure to give notice. Notwithstanding the foregoing, an indemnified party shall have the right
to retain separate counsel, with the reasonable fees and expenses of such counsel being paid by the
indemnifying party, if representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel or if the indemnifying party
has failed to assume the defense of such action. No indemnified party shall enter into any
settlement of any litigation commenced or threatened with respect to which indemnification is or
may be sought without the prior written consent of the indemnifying party (such consent not to



34









 







be unreasonably withheld). No indemnifying party, in the defense of any such claim or
litigation, shall, except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release, reasonably satisfactory
to the indemnified party, from all liability in respect to such claim or litigation. Each
indemnified party shall furnish such information regarding itself or the claim in question as an
indemnifying party may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.



            (d) Contribution. If the indemnification provided for in this Section 5.9 shall for
any reason be unavailable (other than in accordance with its terms) to an indemnified party in
respect of any loss, liability, cost, claim or damage referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability, cost, claim or damage in
such proportion as shall be appropriate to reflect the relative fault of the indemnifying party on
the one hand and the indemnified party on the other with respect to the statements or omissions
which resulted in such loss, liability, cost, claim or damage as well as any other relevant
equitable considerations. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission. The amount paid or
payable by an indemnified party as a result of the loss, cost, claim, damage or liability, or
action in respect thereof, referred to above in this paragraph (d) shall be deemed to include, for
purposes of this paragraph (d), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. 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.
Notwithstanding anything in this Section 5.9(d) to the contrary, no indemnifying party (other than
the Company) shall be required pursuant to this Section 5.9(d) to contribute any amount in excess
of the amount by which the net proceeds received by such indemnifying party from the sale of
Registrable Securities in the offering to which the losses of the indemnified parties relate
exceeds the amount of any damages which such indemnifying party has otherwise been required to pay
by reason of such untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5.9(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account the equitable
considerations referred to in this Section.



            (e) Indemnification/Contribution under State Law. Indemnification and contribution
similar to that specified in the preceding paragraphs of this Section 5.9 (with appropriate
modifications) shall be given by the Company and the Selling Holders and underwriters with respect
to any required registration or other qualification of securities under any state law or regulation
or governmental authority.



            (f) Obligations Not Exclusive. The obligations of the parties under this Section 5.9
shall be in addition to any liability which any party may otherwise have to any other Person.



35









 





            (g) Survival. For the avoidance of doubt, the provisions of this Section 5.9 shall
survive any termination of this Agreement or transfer of securities.



            Section 5.10 Cooperation; Information by Selling Holder.



            (a) It shall be a condition of each Selling Holder’s rights under this Article V that such
Selling Holder cooperate with the Company by entering into any undertakings and taking such other
action relating to the conduct of the proposed offering which the Company or the underwriters may
reasonably request as being necessary to insure compliance with federal and state securities laws
and the rules or other requirements of the NASD or which are otherwise customary and which the
Company or the underwriters may reasonably request to effectuate the offering.



            (b) Each Selling Holder shall furnish to the Company such information regarding such Selling
Holder and the distribution proposed by such Selling Holder as the Company may reasonably request
in writing and as shall be reasonably required in connection with any registration, qualification
or compliance referred to in this Article V. The Company shall have the right to exclude from the
registration any Selling Holder that does not comply with this Section 5.10.



            (c) At such time as an underwriting agreement with respect to a particular underwriting is
entered into, the terms of any such underwriting agreement shall govern with respect to the matters
set forth therein to the extent inconsistent with this Article V; provided,
however, that the indemnification provisions of such underwriting agreement as they relate
to the Selling Holders are customary for registrations of the type then proposed and provide for
indemnification by such Selling Holders only with respect to written information furnished by such
Selling Holders.



            Section 5.11 Rule 144 and Rule 145. Following the consummation of a Public Offering
Event, the Company shall use its best efforts to ensure that the conditions to the availability of
Rule 144 and Rule 145 set forth in paragraph (c) of Rule 144 shall be satisfied. The Company
agrees to use its best efforts to file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act, at any time after
it has become subject to such reporting requirements. Upon the request of any Stockholder for so
long as such information is a necessary element of such Person’s ability to avail itself of Rule
144 or Rule 145, the Company will deliver to such Person (i) a written statement as to whether it
has complied with such requirements and (ii) a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed as such Person may reasonably request
in availing itself of any rule or regulation of the Commission allowing such Person to sell any
such securities without registration.



            Section 5.12 Holdback Agreement. Each of the Company and each holder of Registrable
Securities (whether or not such Registrable Securities are covered by a registration statement
filed pursuant to Section 1.7, Section 5.2, 5.3 or 5.4 hereof), agrees, if requested (pursuant to a
timely written notice) by the managing underwriter or underwriters in an underwritten offering, not
to effect any public sale or distribution of any of the Registrable Securities, including a sale
pursuant to Rule 144 (except as part of such underwritten offering),



36









 







or exercise any registration right during the period beginning ten (10) days prior to, and
ending ninety (90) days after, the closing date of the underwritten offering made pursuant to such
registration statement. The foregoing provisions shall not apply to the Company or any other
Person if such Person is prevented by applicable statute or regulation from entering into any such
agreement; provided, however, that any such Person shall undertake not to effect
any public sale or distribution of the class of securities covered by such registration statement
(except as part of the underwritten offering) during such period unless it has provided sixty (60)
days’ prior written notice of such sale or distribution to the managing underwriter.



            Section 5.13 Suspension of Sales. Each Selling Holder participating in a registration
agrees that, upon receipt of notice from the Company pursuant to Section 5.7(f), such Selling
Holder will discontinue disposition of its Registrable Securities pursuant to such registration
statement until receipt of the copies of the supplemented or amended prospectus contemplated by
Section 5.7(f), or until advised in writing by the Company that the use of the prospectus may be
resumed, as the case may be, and, if so directed by the Company, such Selling Holder will deliver
to the Company (at the Company’s expense) all copies, other than permanent file copies then in such
Selling Holder’s possession, of the prospectus covering such Registrable Securities which are
current at the time of the receipt of the notice of the event described in Section 5.7(f).



ARTICLE VI.




REPRESENTATIONS AND WARRANTIES




            Section 6.1 Representations and Warranties. Each party hereto represents and warrants
to each other party hereto as follows:



            (a) If such party is not a natural Person, it is duly organized and validly existing and in
good standing under the laws of the state or jurisdiction of its organization or formation.



            (b) Such party has full power and authority to execute, deliver and perform this Agreement and
the documents contemplated hereby. If such party is not a natural Person, the execution, delivery
and performance of this Agreement and the documents contemplated hereby and the consummation of the
transactions contemplated hereby and thereby have been duly and validly authorized by it and no
other action on its part is necessary. This Agreement and the documents contemplated hereby to
which such party is a party have been duly executed and delivered by such party and constitute the
valid and binding obligation of such party enforceable against such party in accordance with their
respective terms.



            (c) The execution, delivery and performance of this Agreement by such party and the
consummation of the transactions contemplated hereby will not (with or without giving of notice,
the lapse of time, or both): (i) with respect to any party which is not a natural Person, violate
or conflict with any of the provisions of its governing documents; (ii) conflict with, result in a
breach of, or constitute a default under any applicable law, judgment, order, ordinance, decree,
rule, regulation, or ruling of any court or governmental instrumentality applicable to such party;
and (iii) conflict with, constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance required



37









 







by the terms of any material agreement, instrument, license, or permit to which such party is
a party or by which such party or any of its assets or properties may be bound.



ARTICLE VII.




NOTICES




            All notices or other communications under this Agreement shall be given in writing and shall
be deemed duly given and received on the third full business day following the day of the mailing
thereof by registered or certified mail, on the first business day following delivery by recognized
overnight courier services or when delivered personally or sent by facsimile transmission (with
receipt confirmed) as follows:




          (i) if to the Company, at its principal executive offices at the time of the
giving of such notice, or at such other place as the Company shall have designated
by notice as herein provided to the Stockholders, Attention: Chief Executive
Officer;




          (ii) if to the Executive, to:




Kenneth Levine

405 Whitetail Road

Dalton, PA 18414

Facsimile No.: (507) 586-7733




or at such other place as the Executive shall have designated by notice as
herein provided to the Company and the other Stockholders;




          (iii) if to any Stockholder other than a GEI Party, at the address of such
Stockholder as set forth in the stock records of the Company or at such other place
as such Stockholder shall have designated by notice as herein provided to the
Company and the other Stockholders; and




          (iv) if to any GEI Party, to:




Green Equity Investors II, L.P.

11111 Santa Monica Boulevard, Suite 2000

Los Angeles, CA 90025

Attention: Jonathan Seiffer

Facsimile No.: 310-954-0404




with a copy to:




Latham & Watkins LLP

885 Third Avenue, Suite 1000

New York, New York 10022

Attention: Howard A. Sobel, Esq.

Facsimile No.: 212-751-4864



38









 






or at such other place as GEI shall have designated by notice as herein
provided to the Company and the other Stockholders.



ARTICLE VIII.




SPECIFIC PERFORMANCE




            Due to the fact that the securities of the Company cannot be readily purchased or sold in the
open market and for other reasons, the parties will be irreparably damaged in the event that this
Agreement is not specifically enforced. In the event of a breach or threatened breach of the
terms, covenants and/or conditions of this Agreement by any of the parties hereto, the other
parties shall, in addition to all other remedies, be entitled (without any bond or other security
being required) to a temporary and/or permanent injunction, without showing any actual damage or
that monetary damages would not provide an adequate remedy, and/or a decree for specific
performance, in accordance with the provisions hereof.



ARTICLE IX.




PUT OPTION AND CALL OPTION




            Section 9.1 Put Option. Subject to the provisions of this Article IX, commencing with
the fiscal year ending December 31, 2006, the Executive grants to GEI the option (the “Put Option”)
to require the Executive to purchase from GEI up to 238,571 shares of Common Stock (the “Put
Shares”), in respect of such fiscal year and each fiscal year thereafter (a “Fiscal Year”), until
such time as GEI no longer owns any shares of Common Stock, at a price of $21.50 per share (the
“Put Price”). The Put Option may be exercised by GEI at any time during the ninety (90) day period
following the completion of the Company’s audited financial statements in respect of the Fiscal
Year in respect of which the Put Option is exercised (the “Put Period”). Notwithstanding anything
to the contrary contained in the first sentence of this Section 9.1, the number of Put Shares in
respect of the fiscal year ending December 31, 2007 shall equal (i) 142,142 plus (ii) the
difference between (a) 477,142 and (b) the sum of the actual aggregate number of Call Shares (as
hereinafter defined) subject to the exercise of one or more Call Options (as hereinafter defined)
prior to December 15, 2007 and the actual number of Put Shares subject to the exercise of the Put
Option in respect of the fiscal year ending December 31, 2006; provided, however, in no event shall
such number of Put Shares exceed 238,571.



            Section 9.2 Call Option. Subject to the provisions of this Article IX commencing with
the Fiscal Year ending December 31, 2006, GEI grants to the Executive the option (the “Call
Option”) to require GEI to sell to the Executive up to 477,142 shares of Common Stock (the “Call
Shares”), in respect of such Fiscal Year (to the extent that GEI owns such number of shares as of
the time of the giving of the Call Notice, as defined in Section 9.6) and each Fiscal Year
thereafter, until such time as GEI no longer owns any shares of Common Stock, at a price of $21.50
per share (the “Call Price”). The Call Option may be exercised by the Executive (i) at any time
and from time to time during the three hundred and sixty (360) day



39









 







period following the completion of the Company’s audited financial statements in respect of
the Fiscal Year ending December 31, 2006, (ii) at any time and from time to time during the three
hundred (300) day period following the completion of the Company’s audited financial statements in
respect of the fiscal year ending December 31, 2007 and (iii) at any time during the ninety (90)
day period following the completion of the Company’s audited financial statements in respect of
each Fiscal Year thereafter in respect of which the Call Option is exercised (each such period
during which the Call Option may be exercised is referred to herein as the “Call Period”). The
Executive may assign thereafter his rights and obligations under the Put Option and the Call Option
to the Company (an “Assignment”) provided that the Company is and will be permitted to exercise the
rights, and perform the obligations of, the Executive under this Article IX pursuant to the terms
of any indenture or loan agreement or other instrument or agreement to which the Company is a
party, and applicable law. Any determination to be made by the Company with respect to an
Assignment shall be made by a majority of the Board of Directors of the Company.



            Section 9.3 Equity Value. Notwithstanding anything to the contrary contained in
Section 9.1 and Section 9.2, in no event shall (i) GEI be required to sell any shares in respect of
any Fiscal Year if the Equity Value is greater than $26.87 per share and (ii) the Executive be
required to purchase any shares in respect of any Fiscal Year if the Equity Value is less than
$16.12 per share. The term Equity Value shall mean, in respect of each Fiscal Year, (a) the
product of the Company’s EBITDA in respect of such Fiscal Year multiplied by 8, (b) minus the
Company’s Net Debt as of the end of such Fiscal Year (c) divided by the number of shares of the
Company’s Common Stock outstanding (other than treasury shares) as of the end of such Fiscal Year.



            Section 9.4 Adjusted Put Price. For the Fiscal Year ending December 31, 2009 and each
Fiscal Year thereafter, notwithstanding the maximum and minimum Equity Values set forth in Section
9.3, in the event that, for each of such Fiscal Year and the immediately prior Fiscal Year (which,
in the case of the fiscal year ending December 31, 2009, shall be the Fiscal Year ending December
31, 2008), the Equity Value is greater than $26.87 per share and the Company’s ratio of Net
Debt/EBITDA is less than 3.0x, (i) the Put Price shall be adjusted as of the end of and in respect
of such Fiscal Year to equal the Equity Value as of the end of such Fiscal Year and (ii) the number
of Put Shares which GEI shall have the right to require the Executive to purchase in respect of
such Fiscal Year shall be adjusted to equal the number (the “Adjusted Put Shares”) determined by
dividing (i) the lower of (x) the maximum amount of Debt that the Company could incur such that the
ratio of Net Debt/EBITDA as of the end of such Fiscal Year would not exceed 3.0x, and (y) the
maximum amount of Debt that the Company could incur such that Net Debt as of the end of such Fiscal
Year would not exceed $50 million, by (ii) the Equity Value as of the end of such Fiscal Year;
provided, however, that in no event shall the number of Adjusted Put Shares exceed a number of
shares equal to the difference between (a) the product of (x) the number of completed Fiscal Years
since the end of the Fiscal Year ending December 31, 2005, multiplied by (y) 238,571, minus (b) the
aggregate number of shares of Common Stock previously purchased by the Executive or the Company
from GEI since the end of the Fiscal Year ending December 31, 2005 pursuant to Section 9.1 and 9.2.



40









 





            Section 9.5 Exercise of Put Option; Closing. The Put Option may be exercised during
each Put Period by GEI giving a written notice of such exercise (the “Put Notice”) to the Executive
at any time during such Put Period, and shall be consummated after the giving of such Put Notice
(the “Put Closing”). The Put Closing shall be held at 10 a.m. on the thirtieth day following the
giving of the Put Notice at the principal offices of the Company or at such other time and location
as to which the parties hereto shall mutually agree. At the Put Closing, (i) GEI shall deliver
certificates evidencing the Put Shares to the Executive, duly endorsed in blank or with stock
powers duly executed in blank or with such other instruments of transfer as may be necessary (in
the reasonable opinion of counsel to the Executive) to transfer title to the Put Shares free and
clear of all liens and encumbrances and (ii) the Executive shall wire transfer to GEI funds in the
amount of the purchase price thereof, as determined pursuant to this Article IX.



            Section 9.6 Exercise of Call Option; Closing. The Call Option may be exercised during
each Call Period (and from time to time during the Call Period in respect of the fiscal years
ending December 31, 2006 and December 31, 2007) by the Executive giving a written notice of such
exercise (the “Call Notice”) to GEI at any time during such Call Period, and shall be consummated
after the giving of such Call Notice (the “Call Closing”). The Call Closing shall be held at 10
a.m. on the thirtieth day following the giving of the Call Notice at the principal offices of the
Company, or at such other time and location as to which the parties hereto shall mutually agree.
At the Call Closing, (i) GEI shall deliver certificates evidencing the Call Shares to the
Executive, duly endorsed in blank or with stock powers duly executed in blank or with such other
instruments of transfer as may be necessary (in the reasonable opinion of counsel to the Executive)
to transfer title to the Call Shares free and clear of all liens and encumbrances, and (ii) the
Executive shall wire transfer to GEI funds in the amount of the purchase price thereof, as
determined pursuant to this Article IX.



            Section 9.7 Certain Definitions. For purposes of this Article IX:



            (a) “Debt” means, all liabilities, contingent or otherwise, which are any of the following:
(i) obligations in respect of borrowed money or for the deferred purchase price of property,
services or assets, other than inventory, or (ii) lease obligations which, in accordance with GAAP,
have been, or which should be, capitalized.



            (b) “EBITDA” means, in any period, all earnings before all (i) interest and tax obligations,
(ii) depreciation and (iii) amortization for said period, all determined in accordance with GAAP on
a basis consistent with the latest audited financial statements of the Company, and calculated
based upon the most recent financial statements.



            (c) “Net Debt” means, at any time, the outstanding amount of the Company’s Debt, minus the
aggregate amount of the Company’s cash and cash equivalents, at such time.



            Section 9.8 Regulatory Consents. The Company, GEI and the Executive shall cooperate
with one another in obtaining any consent, approval, waiver authorization, order, or approval of or
any exemption by any governmental entity or other public or private third party (individually and
collectively, a “Consent”) required to be obtained or made in connection with the transactions
contemplated by this Article IX (the “Put and Call Transactions”). If required,



41









 







the Company and the Executive shall take all reasonable action necessary to file notification
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and any
other applicable law governing antitrust or competition matters (a “HSR Filing”) and to respond as
promptly as practicable to all inquiries and requests received from any governmental entity in
connection with antitrust matters related to the Put and Call Transactions. To the extent any
Consent or HSR Filing is required to be made in connection with the Put and Call Transactions, the
Put Closing or Call Closing (or such applicable portion of such Put Closing or Call Closing), as
applicable, shall be delayed until the earliest time as such Consent is obtained or any applicable
waiting period or required approval under the HSR Act or other applicable laws required in
connection with the Put and Call Transactions shall have expired or been earlier terminated or
received.



ARTICLE X.




MISCELLANEOUS.




            Section 10.1 Entire Agreement; Amendments. This Agreement amends and restates in its
entirety the Stockholders Agreement dated as of March 31, 1998 among the Company, GEI, the
Executive and Richard Rutta, as in effect on the date hereof, constitutes the entire agreement of
the parties with respect to the subject matter hereof and may not be modified or amended except by
a written agreement signed by the Company and each of the Stockholders from time to time party
hereto; provided, however, that any of the provisions of this Agreement may be
modified, amended or eliminated by agreement of (i) the Company and (ii) holders of a majority of
the Common Stock held by all Stockholders, which majority must include (x) the Executive
Stockholders (so long as the Executive is entitled to nominate at least one member of the Board of
Directors pursuant to Section 1.1(b)) and (y) GEI (so long as it is entitled to nominate at least
one member of the Board of Directors pursuant to Section 1.1(c)), which agreement shall bind each
Stockholder whether or not such Stockholder has agreed thereto. Anything in this Agreement to the
contrary notwithstanding, any modification or amendment of this Agreement by a written agreement
signed by, or binding upon, any Stockholder shall be valid and binding upon any and all persons or
entities who may, at any time, have or claim any rights under or pursuant to this Agreement in
respect of Common Stock acquired from such Stockholder. Nothing in this Section 10.1 shall be
deemed to limit the ability of any party to assign its rights hereunder in the manner contemplated
hereby.



            Section 10.2 No Waiver. No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver of any subsequent
breach or default of the same or similar nature. Anything in this Agreement to the contrary
notwithstanding, any waiver, consent or other instrument under or pursuant to this Agreement signed
by, or binding upon, any party shall be valid and binding upon any and all Persons who may, at any
time, have or claim any rights under or pursuant to this Agreement in respect of Common Stock
acquired from such party.



            Section 10.3 Successors and Assigns. Except as otherwise expressly provided herein,
this Agreement shall be binding upon and inure to the benefit of the Company, the Stockholders and
their respective successors and assigns; provided, however, that nothing



42









 







contained herein shall be construed as granting to any party the right to transfer any Common
Stock except in accordance with this Agreement.



            Section 10.4 Recapitalization, Exchanges, etc. Affecting Common Stock. The provisions
of this Agreement shall apply to the full extent set forth herein with respect to (a) the Common
Stock and any option, right or warrant to acquire Common Stock and (b) any and all shares of
capital stock of the Company or any successor or assign of the Company (whether by stock split,
stock dividend, merger, consolidation, sale of assets or otherwise) which may be issued in respect
of, in exchange for, upon conversion of or in substitution for such Common Stock by combination,
recapitalization, reclassification, merger, consolidation or otherwise. In the event of any change
in the capitalization of the Company as a result of any stock split, stock dividend or stock
combination, the provisions of this Agreement shall be appropriately adjusted.



            Section 10.5 Severability. If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall attach only to such provision and shall
not in any manner affect or render invalid or unenforceable any other severable provision of this
Agreement, and this Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.



            Section 10.6 Arbitration. Except as set forth in Article VIII, arbitration shall be
the exclusive remedy for resolving any dispute or controversy between or among the Company, any of
its Subsidiaries and/or the Stockholders. Such arbitration shall be conducted in accordance with
the then most applicable rules of the American Arbitration Association. The arbitrator shall be
empowered to grant only such relief as would be available in a court of law. In the event of any
conflict between this Agreement and the rules of the American Arbitration Association, the
provisions of this Agreement shall be determinative. If the parties are unable to agree upon an
arbitrator, they shall select a single arbitrator from a list including a number of arbitrators
determined by multiplying the number of parties to the arbitration by two and adding one. The
arbitrators shall be designated by the office of the American Arbitration Association having
responsibility for the city in which the Company has its executive office, all of whom shall be
retired judges who are actively involved in hearing private cases or members of the National
Academy of Arbitrators. If the parties are unable to agree upon an arbitrator from such list, they
shall each strike names alternatively from the list, with the first to strike being determined by
lot. After each party has used two strikes, the remaining name on the list shall be the
arbitrator. The fees and expenses of the arbitrator shall initially be borne equally by the
parties; provided, however, that each party shall initially be responsible for the
fees and expenses of its own representatives and witnesses. If the parties cannot agree upon a
location for the arbitration, the arbitrator shall determine the location. Judgment may be entered
on the award of the arbitrator in any court having jurisdiction. The prevailing party in the
arbitration proceeding, as determined by the arbitrator, and in any enforcement or other court
proceedings, shall be entitled to the extent provided by law to reimbursement from the other party
for all of the prevailing party’s costs (including, but not limited to, the arbitrator’s
compensation), expenses and reasonable attorneys’ fees.



            Section 10.7 Litigation Expenses. Should any party to this Agreement be required to
commence any litigation concerning any provision of this Agreement or the rights and duties of the
parties hereunder, the prevailing party in such proceeding shall be entitled, in



43









 







addition to such other relief as may be granted, to the reasonable attorneys’ fees and court
costs incurred by reason of such litigation.



            Section 10.8 Headings; Interpretation. The Article and Section headings contained
herein are for the purposes of convenience only and are not intended to define or limit the
contents of said sections. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be read and construed as though in the singular in all cases
where they would so apply.



            Section 10.9 Business Day. For purposes of this Agreement, “business day” means any
day other than Saturday, Sunday or a day on which banks in are authorized by law to be closed in
New York, NY. In the event any deadline for the taking of any action or delivery of any notice
hereunder falls on a day which is not a business day, then such deadline shall be deemed to be
extended until 5:00 p.m. New York City time on the next business day.



            Section 10.10 Further Actions. Each party hereto shall cooperate and shall take such
further action and shall execute and deliver such further documents as may be reasonably requested
by any other party in order to carry out the provisions and purposes of this Agreement.



            Section 10.11 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.



            Section 10.12 Jurisdiction. The Company and the Stockholders hereby irrevocably and
unconditionally consent to the jurisdiction of any Delaware court or federal court of the United
States sitting in the State of Delaware in any action or proceeding relating to this Agreement and
consents to service of process in connection therewith by the delivery of notice to such Person’s
address at the address for notices to such Person pursuant to this Agreement.



            Section 10.13 Governing Law. This Agreement will be governed by and construed under
the internal laws of the State of Delaware (without regard to principles of conflicts of laws that
would result in the application of any law other than the law of the State of Delaware).



            Section 10.14 Spouse. Each Stockholder who is an individual represents, severally and
not jointly, that, if such Stockholder is married and resides in a community property state, his or
her spouse has signed this Agreement as a party hereto, or if not, has signed the Acknowledgment
and Agreement of Spouse at the end of this Agreement.



ARTICLE XI.




CERTAIN DISTRIBUTIONS EXEMPT




            Section 11.1 It is expressly understood and agreed that GEI may, in connection with the
expiration, dissolution or winding down of GEI, effect any mandatory distribution to its partners,
members or other equity participants, in accordance with the terms of its limited partnership
agreement, limited liability company agreement or other constituent documents, of all or any part
of the shares of the Company’s capital stock or other Company securities held by it (any such
distribution, a “GEI Distribution”), provided that such distribution shall in no event



44









 







occur prior to the Release Date. Notwithstanding anything to the contrary contained in this
Agreement, any GEI Distribution shall not constitute a “Transfer” for any purpose under this
Agreement and shall be exempt in all respects from the terms and conditions of this Agreement. As
an example, and without limiting the generality of the foregoing, it is expressly understood and
agreed that a GEI Distribution shall not constitute a Tag-Along Sale. Further, it is also
expressly understood and agreed that, following a GEI Distribution, (i) the shares of the Company’s
capital stock or other Company securities distributed to the partners or equity participants of GEI
shall in no way be subject to, or entitled to the benefits provided in, this Agreement and (ii) any
partner or equity participant of GEI which receives shares of the Company’s capital stock or other
Company securities pursuant to a GEI Distribution shall not be required or deemed to become a party
to this Agreement or otherwise be subject to this Agreement.



[Signature Page Follows]





45









 








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



	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	DIAMOND TRIUMPH AUTO GLASS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Name:

Title:
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	GREEN EQUITY INVESTORS II, L.P.
	 
	 	 	 	 	 	 
	 	 	By:	 	Grand Avenue Capital Partners, L.P.,

its general partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:

Title:
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	KENNETH LEVINE
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 	By:      Kenneth Levine







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