Exhibit 10.24


 


SECOND
AMENDED AND RESTATED


 


 


SECURITYHOLDERS
AGREEMENT


 


AMONG


 


DOUGLAS
DYNAMICS HOLDINGS, INC.


 


AND


 


CERTAIN
OF ITS STOCKHOLDERS,


 


OPTIONHOLDERS


 


AND


 


WARRANTHOLDERS


 


 


June 30,
2004


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
  1.1

  	
  Certain Defined Terms

  	
  1

  
	
   

  	
   

  	
  1.2

  	
  Index of Other Defined
  Terms

  	
  9

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Compliance with
  Securities Laws

  	
  11

  
	
   

  	
   

  	
  2.1

  	
  Restrictions on
  Transfer

  	
  11

  
	
   

  	
   

  	
  2.2

  	
  Cooperation of Company

  	
  11

  
	
   

  	
   

  	
  2.3

  	
  Rule 144
  Acknowledgment

  	
  11

  
	
   

  	
   

  	
  2.4

  	
  Restrictions on
  Transfer for Benefit of Securityholders

  	
  12

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Further Restrictions

  	
  12

  
	
   

  	
   

  	
  3.1

  	
  Prohibition on Transfer
  Prior to Qualified IPO Date

  	
  12

  
	
   

  	
   

  	
  3.2

  	
  Certain Releases
  Required

  	
  12

  
	
   

  	
   

  	
  3.3

  	
  Certain Restrictions on
  Releases of Securities of Managing Directors

  	
  12

  
	
   

  	
   

  	
  3.4

  	
  Restriction on Transfer
  Subsequent to Qualified IPO Date

  	
  13

  
	
   

  	
   

  	
   

  
	
  4.

  	
  First Refusal Rights

  	
  13

  
	
   

  	
   

  	
  4.1

  	
  Restrictions Cumulative

  	
  13

  
	
   

  	
   

  	
  4.2

  	
  Bona Fide Offers

  	
  13

  
	
   

  	
   

  	
  4.3

  	
  Involuntary Transfers

  	
  16

  
	
   

  	
   

  	
  4.4

  	
  Application of First
  Refusal Rights

  	
  17

  
	
   

  	
   

  	
  4.5

  	
  Termination of First
  Refusal Rights

  	
  17

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Third-Party Offer for
  All Outstanding Securities

  	
  17

  
	
   

  	
   

  	
  5.1

  	
  “Drag-Along”
  Obligations

  	
  17

  
	
   

  	
   

  	
  5.2

  	
  Termination of
  Drag-Along Obligations

  	
  18

  
	
   

  	
   

  	
  5.3

  	
  Restrictions Cumulative

  	
  18

  
	
   

  	
   

  	
   

  
	
  6.

  	
  “Tag-Along” Rights

  	
  18

  
	
   

  	
   

  	
  6.1

  	
  “Tag-Along” Sales

  	
  18

  
	
   

  	
   

  	
  6.2

  	
  Notice of Tag-Along
  Opportunity

  	
  19

  
	
   

  	
   

  	
  6.3

  	
  Notice and Terms of
  Acceptance of Tag-Along Opportunity

  	
  20

  
	
   

  	
   

  	
  6.4

  	
  Application of
  Tag-Along Provisions

  	
  21

  
	
   

  	
   

  	
  6.5

  	
  Termination of
  Tag-Along Rights

  	
  21

  
	
   

  	
   

  	
  6.6

  	
  Restrictions Cumulative

  	
  21

  



 


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TABLE OF CONTENTS 
(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Certain Voting
  Agreements

  	
  21

  
	
   

  	
   

  	
  7.1

  	
  Grant of Irrevocable
  Proxy

  	
  21

  
	
   

  	
   

  	
  7.2

  	
  Agreement of GEPT

  	
  22

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Call Upon the
  Occurrence of Certain Events

  	
  23

  
	
   

  	
   

  	
  8.1

  	
  Joint Call by Holdings
  and Ares

  	
  23

  
	
   

  	
   

  	
  8.2

  	
  Closing of Joint Call
  by Holdings and Ares

  	
  23

  
	
   

  	
   

  	
  8.3

  	
  Call by the Company

  	
  23

  
	
   

  	
   

  	
  8.4

  	
  Non-Exercise of Call

  	
  24

  
	
   

  	
   

  	
  8.5

  	
  Closing Mechanics

  	
  24

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Registration Rights

  	
  24

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Right of First Offer

  	
  24

  
	
   

  	
   

  	
  10.1

  	
  Right of First Offer

  	
  24

  
	
   

  	
   

  	
  10.2

  	
  Definition of New Securities

  	
  24

  
	
   

  	
   

  	
  10.3

  	
  Notice of Right

  	
  25

  
	
   

  	
   

  	
  10.4

  	
  Exercise of Right

  	
  25

  
	
   

  	
   

  	
  10.5

  	
  Lapse and Reinstatement
  of Right

  	
  25

  
	
   

  	
   

  	
  10.6

  	
  Termination of Right

  	
  26

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Information Rights;
  Board Observer Rights and Consultation

  	
  26

  
	
   

  	
   

  	
  11.1

  	
  Information Rights;
  Board Observer Rights and Consultation

  	
  26

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Termination

  	
  28

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Miscellaneous

  	
  28

  
	
   

  	
   

  	
  13.1

  	
  Governing Law

  	
  28

  
	
   

  	
   

  	
  13.2

  	
  Entire Agreement;
  Amendments

  	
  28

  
	
   

  	
   

  	
  13.3

  	
  Legend on Stock
  Certificates

  	
  29

  
	
   

  	
   

  	
  13.4

  	
  Specific Performance

  	
  30

  
	
   

  	
   

  	
  13.5

  	
  Waiver

  	
  30

  
	
   

  	
   

  	
  13.6

  	
  Successors and Assigns

  	
  30

  
	
   

  	
   

  	
  13.7

  	
  Severability

  	
  30

  
	
   

  	
   

  	
  13.8

  	
  Headings

  	
  30

  
	
   

  	
   

  	
  13.9

  	
  Further Assurances

  	
  31

  
	
   

  	
   

  	
  13.10

  	
  Gender

  	
  31

  
	
   

  	
   

  	
  13.11

  	
  Notices

  	
  31

  
	
   

  	
   

  	
  13.12

  	
  Counterparts

  	
  31

  
	
   

  	
   

  	
  13.13

  	
  Arbitration

  	
  31

  
	
   

  	
   

  	
  13.14

  	
  Effective Date

  	
  32

  
	
   

  	
   

  	
  13.15

  	
  GEPT Liability

  	
  32

  



 


ii

















 


TABLE OF CONTENTS 
(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Class A
  Securityholders

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
  Class B
  Securityholders

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
  Class C
  Securityholders

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT D

  	
  Registration Rights

  	
   

  



 


iii

















 


SECOND
AMENDED AND RESTATED


SECURITYHOLDERS
AGREEMENT


 


This Second Amended and
Restated Securityholders Agreement (the “Agreement”) is made and entered
into as of June 30, 2004, by and among (a) Douglas Dynamics Holdings, Inc.,
a Delaware corporation (together with its permitted successors, the “Company”),
(b) each of the stockholders, optionholders and warrantholders of the
Company whose names and addresses are listed on Exhibit A hereto,
as the same may be supplemented or amended from time to time (collectively, the
“Class A Securityholders,” which term shall include any Permitted
Transferees thereof), (c) each of the stockholders of the Company whose
names and addresses are listed on Exhibit B hereto, as the same may
be supplemented or amended from time to time (collectively, the “Class B
Securityholders,” which term shall include any Permitted Transferees
thereof) and (d) each of the stockholders of the Company whose names and
addresses are listed on Exhibit C hereto, as the same may be supplemented
or amended from time to time (collectively, the “Class C
Securityholders,” which term shall include any Permitted Transferees
thereof).  The Class A
Securityholders, the Class B Securityholders and Class C
Securityholders are referred to herein collectively as the “Securityholders.”


 


RECITALS


 


WHEREAS, the Company is
authorized to issue an aggregate of 1,100,000 shares of capital stock,
including 1,000,000 shares of common stock, par value $0.01 per share, and
100,000 shares of preferred stock, par value $0.01 per share, 65,000 shares of
which have been designated as Series A Redeemable Exchangeable Cumulative
Preferred Stock, par value $0.01 per share (“Series A Preferred”), one (1) share
of which has been designated as Series B Special Voting Preferred Stock,
par value $0.01 per share (“Series B Preferred”), and one (1) share
of which has been designated as Series C Special Voting Preferred Stock,
par value $0.01 per share (“Series C Preferred”); and


 


WHEREAS, the
Securityholders desire to enter into an agreement with each other and the
Company concerning, inter alia,
the transfer or other disposition of securities of the Company;


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:


 


1.                                      Definitions.


 


1.1                               Certain Defined Terms. 
The following terms, as used herein or in the Exhibits hereto, have the following
meanings:


 


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


 


1

















 


“AEP II” means
Aurora Equity Partners II L.P., a Delaware limited partnership.


 


“Affiliate,” when
used with reference to any Person, means any other Person directly or
indirectly, through one or more intermediaries, Controlling, Controlled by or
under common Control with such first Person and, when used with reference to
any natural person, shall also include such person’s spouse, parents and
descendants (whether by blood or adoption, and including stepchildren) and the
spouses of such persons.  “Affiliated
with” shall have a correlative meaning to the term “Affiliate.”


 


“Ares” means Ares
Corporate Opportunities Fund, L.P., a Delaware limited partnership.


 


“Associate” means,
when used to indicate a relationship with any Person, (a) any other Person
of which such Person is an officer, director or partner or is, directly or
indirectly, the beneficial owner of ten percent (10%) or more of any class of
equity securities issued by such other Person, (b) any trust or estate in
which such Person has a substantial beneficial interest or as to which such
Person serves as a trustee or in a similar fiduciary capacity, and (c) any
spouse of such Person, or any relative of such Person who has the same home as
such Person.


 


“Beneficial Owner”
has the meaning attributed to it in Rules 13d-3 and 13d-5 under the
Exchange Act (as in effect on the Initial Date), whether or not applicable,
except that a “person” shall not be deemed to have “beneficial ownership” of
any shares that any such person has the right to acquire, whether or not such
right is exercisable immediately or within sixty (60) days after the date as of
which such determination is being made.  “Beneficially
Owned” shall have a correlative meaning to the term “Beneficial Owner.”


 


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


 


“Business Day”
means Monday through Friday of each week, except that no legal holiday
recognized as such by the government of the United States or the State of
California shall be regarded as a Business Day.


 


“Call Period” means,
with respect to a particular Securityholder, the period beginning on the date
of the commencement of such Securityholder’s employment or consultancy for the
Company or any of its direct or indirect Subsidiaries, provided that if such Securityholder is an
employee or consultant for any direct or indirect Subsidiary of the Company,
such period shall not begin prior to the date such Subsidiary is acquired by
the Company, and ending on the earlier of (i) the second anniversary of
the date of such commencement and/or acquisition, as the case may be, and (ii) the
Qualified IPO Date.


 


“Capital Stock”
means, with respect to any corporation, any and all shares, interests, rights
to purchase (other than convertible or exchangeable indebtedness), warrants,
options, participations or other equivalents of or interests (however
designated) in stock issued by that corporation.


 


“Cause” means,
with respect to any Class A Securityholder under an employment or
consulting relationship with the Company or any of its direct or indirect
Subsidiaries, (i) if such relationship is pursuant to a written agreement
between such Class A Securityholder and the Company or any of its direct
or indirect Subsidiaries containing a definition for cause, such


 


2

















 


definition, or (ii) if
such relationship is not pursuant to such a written agreement containing a
definition for cause, the occurrence or existence of any of the following with
respect to such Class A Securityholder, as determined by a majority of the
disinterested directors of the Board: (a) a material breach by such Class A
Securityholder of any of his or her obligations as an employee or consultant of
the Company or any of its direct or indirect Subsidiaries, provided, however, that Cause shall not be
deemed to exist until the Company or the applicable Subsidiary shall have given
written notice specifying the claimed material breach and such Class A
Securityholder fails to correct the claimed breach within thirty (30) days
after the receipt of the applicable notice; (b) a material breach by such Class A
Securityholder of his duty not to engage in any transaction that represents,
directly or indirectly, self-dealing with the Company or any of its direct or
indirect Subsidiaries which has not been approved by a majority of the
disinterested directors of the Board, provided,
however, that Cause shall not be deemed to exist until the Company
shall have given written notice specifying the claimed material breach and such
Class A Securityholder fails to correct the claimed breach within thirty
(30) days after the receipt of the applicable notice; (c) the repeated
material breach by such Class A Securityholder of any material duty
referred to in clause (a) or (b) above as to which at least
two (2) written notices have been given pursuant to such clause (a) or (b);
(d) any misappropriation, embezzlement, intentional fraud or similar
conduct involving the Company or any of its direct or indirect Subsidiaries; (e) the
conviction or the plea of nolo contendere or the equivalent in respect of a
felony or a crime involving moral turpitude; (f) intentional infliction of
any damage of a material nature to any property of the Company or any of its
direct or indirect Subsidiaries; or (g) the repeated non-prescription use
of any controlled substance or the repeated use of alcohol or any other
non-controlled substance which, in any case described in this clause (g),
the Board reasonably determines renders such Class A Securityholder unfit
to serve in his or her capacity as an officer, employee or consultant of the
Company or any of its direct or indirect Subsidiaries.


 


“Certificate of
Designations” means, (a) with respect to any series of Preferred Stock
of the Company outstanding on the date hereof the designations of the
preferences and relative and optional and other special rights of such
Preferred Stock and the qualifications, limitations and restrictions applicable
thereto contained in the Company’s Amended and Restated Certificate of
Incorporation, as in effect on the date hereof or as amended from time to time
after the date hereof in accordance with its terms, and (b) with respect
to any series of Preferred Stock issued after the date hereof, the Certificate
of Designations, Preferences, and Relative, Optional and Other Special Rights
of Preferred Stock and Qualifications, Limitations and Restrictions Thereof of
such series of Preferred Stock of the Company, as in effect on the date of
issuance thereof or as amended from time to time after such date of issuance in
accordance with its terms.


 


“Co-Investor”
means any Class A Securityholder identified in Exhibit A
hereto as a designated Co-Investor.


 


“Commission” means
the Securities and Exchange Commission.


 


“Common Stock”
means the Company’s common stock, par value $0.01 per share, any stock into
which such common stock shall have been changed or any stock resulting from any
reclassification of such common stock, and all other stock of any class or
classes (however designated) of the Company the holders of which have the
right, without limitation as to amount,


 


3

















 


either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.


 


“Control” means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.


 


“Eligible Holders”
means all Securityholders.


 


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


 


“Fair Market Value”
of any Securities as of a particular date means the average value of the
Securities of such class for the ten (10) Business Day period immediately
preceding such date.  Such average value
shall be the average of the last reported sales price of the Securities of such
class on the New York Stock Exchange for each of such ten (10) Business
Days, or, if not reported on such Exchange, on the Composite Tape, or, in case
no such reported sales take place for each of such ten (10) Business Days,
the average of the reported closing bid and asked quotations on the New York
Stock Exchange for each of such ten (10) Business Days, or if no such
quotations are available, the last reported sale prices for such ten (10) Business
Days on the principal national securities exchange on which such class of
Securities is listed, or if not listed on any national securities exchange, the
last reported sales prices for such ten (10) Business Days in the
over-the-counter market as reported by the National Quotation Bureau,
Incorporated or similar organization, or if none of such sale prices are
available for each Business Day in such ten (10) Business Day period, the
average of the high bid and low asked quotations in the over-the-counter market
as so reported for such ten (10) Business Days, or if no such quotations
are available, the fair market value per share as determined in good faith by
the Board, whose determination shall be conclusive.


 


“GEPT” means
General Electric Pension Trust, a New York common law trust.


 


“Holdings” means
Douglas Dynamics Holdings, LLC, a Delaware limited liability company.


 


“HSR Act” means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.


 


“Initial Date”
means June     , 2004.


 


“Involuntary Transfer”
means any transfer, proceeding or action (other than to a Permitted Transferee)
by or in which a Securityholder shall be deprived or divested of any right,
title or interest in or to any Securities, including, without limitation, (i) any
seizure under levy of attachment or execution, (ii) any foreclosure upon a
pledge of such Securities, (iii) any transfer in connection with
bankruptcy (whether pursuant to the filing of a voluntary or an involuntary
petition under the Federal Bankruptcy Code of 1978, or any modifications or revisions
thereto or any similar state laws) or other court proceeding to a debtor in
possession, trustee in bankruptcy or receiver or other officer or agency, (iv) any
transfer to a state or to a public officer or agency


 


4

















 


pursuant to any statute
pertaining to escheat or abandoned property, (v) any transfer to such
Securityholder, with respect to the disposition of the community property
interest of such Securityholder’s spouse in all or any part of the Securities
upon the death of such spouse, and any transfer occasioned by the incompetence
of such Securityholder, or (vi) any transfer to a Securityholder’s spouse
as a result of the termination of the marital relationship of the
Securityholder and the Securityholder’s spouse. 
“Involuntary Transferee” shall have a correlative meaning to “Involuntary
Transfer.”


 


“Liens” means any
and all liens, claims, options, charges, encumbrances, voting trusts,
irrevocable proxies or other rights of any kind or nature.


 


“Managing Director”
means, as of any date, any individual who is then designated as a Managing
Director of the general partner of AEP II or a Managing Director of Ares, as
the case may be.


 


“Net Common Book Value”
means, with respect to any Call Event, the remainder that results when (i) the
consolidated net book value of the liabilities of the Company and its
Subsidiaries and (ii) the Net Preferred Book Value are subtracted from the consolidated net
book value of the assets of the Company and its Subsidiaries, in each case as
of the last day of the month in which the Call Event related to such Securities
occurs, such calculation to be performed, on an unaudited basis, in accordance
with the accounting principles and procedures used by the Company in the preparation
of its regularly prepared financial statements.


 


“Net Preferred Book
Value” means, with respect to any Call Event, the amount that would be
distributed to the holders of Preferred Stock upon a liquidation of the
Company, as of the last day of the month in which the Call Event related to
such Securities occurs, such calculation to be performed, on an unaudited
basis, in accordance with the accounting principles and procedures used by the
Company in the preparation of its regularly prepared financial statements.


 


“Options” means
any stock option now or hereafter granted or issued by the Company entitling
the holder thereof to purchase shares of Common Stock.


 


“Per Share Book Value”
means, with respect to:


 


(a)                                 any share of Common Stock subject to Section 8
hereof, the quotient that results when (i) the Net Common Book Value is divided by (ii) the number of
shares of Common Stock outstanding on the last day of the month in which the
Call Event relating to such calculation occurs; and


 


(b)                                 any share of Preferred Stock subject to Section 8
hereof, the quotient that results when (i) the Net Preferred Book Value is divided by (ii) the number of
shares of preferred stock outstanding on the last day of the month in which the
Call Event relating to such calculation occurs.


 


“Per Share Call Price”
means, with respect to:


 


5














 


(a)                                 any shares of Common Stock subject to Section 8
hereof, the lesser of (i) the Per Share Book Value of such Securities and (ii) the purchase price paid by
such Class A Securityholder for such Securities, without the payment to
such Class A Securityholder of interest, appreciation or return thereon;
and


 


(b)                                 any shares of Preferred Stock subject to Section 8
hereof, the lesser of (i) the Per Share Book Value of such Securities and (ii) the original stated value of
such shares of preferred stock, without the payment to such Class A
Securityholder of interest, appreciation, return or dividends thereon.


 


“Permitted
Transferee” means:


 


(a)                                 as to any Securityholder who is a natural
person, (i) the successors in interest to such Securityholder, in the case
of a Transfer upon the death of such Securityholder, provided that such successors in interest would be a
Permitted Transferee under clauses (a)(ii) or (a)(iv) of this
definition, (ii) such Securityholder’s spouse, parents and descendants
(whether by blood or adoption, and including stepchildren) and the spouses of
such persons, (iii) such Securityholder, with respect to the disposition
of the community property interest of such Securityholder’s spouse in all or
any part of the Securities upon the death of such spouse, and any Transfer
occasioned by the incompetence of such Securityholder and (iv) in the case
of a Transfer during such Securityholder’s lifetime, any Person in which no
Person has any interest (directly or indirectly) except for any of such Securityholder,
such Securityholder’s spouse, parents and descendants (whether by blood or
adoption, and including stepchildren) and the spouses of such persons; provided, however,
that in respect of any Transfer by any Securityholder during such
Securityholder’s lifetime pursuant to clause (ii) or (iv), such
Securityholder shall retain voting power over all of the outstanding Securities
being Transferred; and provided, further, that, in the case of a Transfer
to a Person (such as a partnership or a trust) as to which a governing
instrument exists, (x) such Securityholder shall furnish a copy of such
governing instrument to the Company in advance, (y) the terms of such
governing instrument shall not be inconsistent with the terms of this Agreement
and (z) during the period that such Securities are held by such Person,
the relevant Securityholder and all other relevant parties shall agree in
writing that the terms of such governing instrument shall not be amended in any
manner that results in such governing instrument being inconsistent with the
terms of this Agreement without the prior written consent of the Company;


 


(b)                                 as to any Securityholder that is a trust,
all the beneficiaries of which are natural persons, such beneficiaries or the
grantor of the trust; provided, however, that if such trust is a Permitted
Transferee under clause (a)(i) or (a)(iv) of this definition,
each such beneficiary or grantor of such trust is a Person who would be
permitted to have an interest in such trust under such clause (a)(i) or
(a)(iv);


 


(c)                                  as to any Securityholder that is a
limited partnership or limited liability company, (i) any limited or
general partner, member, officer, employee or Affiliate of such Securityholder
or (ii) any Affiliate of any limited or general partner or member of such
Securityholder; provided, however, that if such limited partnership
or limited liability company is a Permitted Transferee under clause (a)(i) or
(a)(iv) of this definition, each such limited or general partner,


 


6

















 


member, officer, employer
or Affiliate is a Person who would be permitted to have an interest in such
partnership or limited liability company under such clause (a)(i) or
(a)(iv);


 


(d)                                 as to any Securityholder, a bank or other
financial institution to which Securities are Transferred by way of pledge or
to which Securities are Transferred upon the foreclosure thereof; provided, however,
that as to any Securityholder, any such pledge must be approved in advance in
writing by of a majority of the disinterested directors of the Board;


 


(e)                                  as to any Securityholder that is a
corporation, all Affiliates of such Securityholder; provided, however,
that if such corporation is a Permitted Transferee under clause (a)(i) or
(a)(iv) of this definition, each such Affiliate is a Person who would be
permitted to have an interest in such corporation under such clause (a)(i) or
(a)(iv); and


 


(f)                                   as to GEPT, any successor plan;


 


provided, in each such case, that prior written
notice of any such Transfer is given to the Company by such Securityholder and
that the Permitted Transferee shall agree in advance of such Transfer to be
designated as a Securityholder and to be bound by the terms of this Agreement
pursuant to a written agreement reasonably satisfactory to the Company and
Holdings.


 


“Person” means a
company, a corporation, an association, a partnership, a limited liability
company, an organization, a joint venture, a trust or other legal entity, an
individual, a government or political subdivision thereof or a governmental
agency.


 


“Preferred Stock”
means the Company’s Series A Preferred, Series B Preferred, Series C
Preferred, and any other preferred stock of the Company issued after the date
hereof howsoever designated that is entitled to any preference over the Common
Stock in the payment of dividends or in the distribution of assets upon
liquidation of the Company.


 


“Pro Rata” means,
with respect to any Securityholder in reference to any class or group of
Securityholders, the ratio of the number of shares of Common Stock held by such
Securityholder or issuable to such Securityholder to the aggregate number of
shares of Common Stock at the time outstanding held by or issuable to all
Securityholders of such class or group, in each case calculated on a fully
diluted basis.


 


“Qualified IPO”
means an underwritten public offering of Common Stock pursuant to a
registration statement filed with the Commission; provided that there are sales pursuant to such registration
statement of shares of Common Stock for an aggregate offering price of not less
than $50,000,000.


 


“Qualified IPO Date”
means the closing date of the registration statement for the Qualified IPO.


 


“Reference Rate”
means the per annum rate of interest publicly announced from time to time by
Bank of America as its prime rate (or reference rate).  Any change in the Reference Rate shall take
effect at the opening of business on the day specified in the public
announcement of such change. 
Notwithstanding the foregoing, in no event shall the rate of interest
payable by any


 


7

















 


party hereto under this
Agreement exceed the maximum rate permitted by applicable law with respect to
such payments under this Agreement.


 


“Registrable
Securities” means:


 


(a)                                 any shares of Common Stock issued and
outstanding on the date hereof or issuable upon exercise of options or warrants
issued and outstanding on the date hereof sold to the Securityholders (or any
options or warrants issued after the date hereof upon transfer or exchange of
such options or warrants pursuant to the terms thereof);


 


(b)                                 any shares of Common Stock issued after
the date hereof or issuable upon exercise of options or warrants issued after
the date hereof that, in any such case, are designated by the Company as
Registrable Securities for purposes of this Agreement to Persons who are or
become Securityholders;


 


(c)                                  any shares of Common Stock purchased
pursuant to this Agreement; and


 


(d)                                 any securities issued or issuable with
respect to any Common Stock referred to in clauses (a), (b) or (c) of
this definition by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise.


 


As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when:


 


(x)                                 a registration statement with respect to
the sale of such securities shall have become effective under the Act and such
securities shall have been disposed of in accordance with such registration
statement;


 


(y)                                 all of such securities held by any Person
and his, her or its Affiliates may be distributed to the public pursuant to Rule 144
(or any successor provision) under the Act in any three (3) month period
unless the aggregate Fair Market Value of such securities at the start of such
three (3) month period is greater than the lesser of (i) Twenty
Million Dollars ($20,000,000) or (ii) ten percent (10%) of the Fair Market
Value of all shares of Common Stock outstanding at the start of such three (3) month
period; or


 


(z)                                  such securities shall have ceased to be
outstanding.


 


Except as set forth in
the preceding sentence, no Transfer of Registrable Securities shall cause such
Registrable Securities to lose such status.


 


“Registration Expenses”
means all expenses incident to the Company’s performance of or compliance with Section 9
and Exhibit D hereto, including, without limitation, all
registration, filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and expenses of counsel for
the Company and of its independent public accountants, including the expenses
of any special audits or “cold comfort” letters required by or incident to such
performance and compliance, the reasonable fees and expenses of a single
counsel retained by


 


8

















 


the holders of a majority
of the Registrable Securities being registered and any fees and disbursements
of underwriters customarily paid by issuers or sellers of securities, but
excluding underwriting discounts and commissions and transfer taxes, if any.


 


“Securities” means
the shares of Common Stock and Preferred Stock, the Options and the Warrants
now or hereafter issued to or otherwise acquired by the Securityholders
(including acquisitions of such securities concurrent with the execution of
this Agreement and acquisitions of any such securities of the Company after the
date hereof whether or not pursuant to the terms hereof and including issuances
of any such securities pursuant to any Option or Warrant existing on the date
hereof or issued subsequent to the date hereof) and all shares of Capital Stock
or other securities (including convertible securities and the securities into
which such convertible securities convert) of the Company or any successor of
the Company issued or issuable in respect thereof as a result of any stock
dividend on, or stock split or reclassification or conversion of, or in
exchange for, any such Common Stock and Preferred Stock or issued or issuable
with respect to such Common Stock, Preferred Stock, Options or Warrants in
connection with any merger or reorganization or similar transaction involving
the Company.


 


“Shelf Registration”
means a “shelf” registration statement on an appropriate form pursuant to Rule 415
under the Act and/or any similar rule that may be adopted by the
Commission.


 


“Subsidiary” with
respect to any Person means (i) a corporation a majority of whose Capital
Stock with voting power, under ordinary circumstances, to elect directors is at
the time, directly or indirectly, owned by such Person, by such Person and one
or more direct or indirect Subsidiaries of such Person or by one or more direct
or indirect Subsidiaries of such Person, or (ii) any other Person (other
than a corporation) in which such Person, one or more direct or indirect
Subsidiaries of such Person, or such Person and one or more direct or indirect
Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof has at least majority ownership interest.


 


“Transfer” means
any direct or indirect disposition of an interest whether by sale, exchange,
merger, consolidation, transfer, assignment, conveyance, distribution, pledge,
inheritance, gift, mortgage, the creation of any security interest in, or lien
or encumbrance upon, any other disposition of any kind and in any manner, by
operation of law or otherwise, or any other transfer or agreement which would
result in a change in the percentage of the Company’s Capital Stock
Beneficially Owned by a Securityholder or a Beneficial Owner.


 


“Warrants” means
any warrants now or hereafter issued by the Company entitling the holder
thereof to purchase shares of Common Stock.


 


1.2                               Index of Other Defined Terms. 
In addition to those terms defined in Section 1.1, the following
terms shall have the respective meanings given thereto in the sections or
paragraphs indicated below:


 


	
  Defined Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Acquisition Notice

  	
   

  	
  5.1

  
	
  Acquisition Proposal

  	
   

  	
  5.1

  



 


9

















 


	
  Agreement

  	
   

  	
  Preamble

  
	
  Bona Fide Offer

  	
   

  	
  4.2

  
	
  Call Event

  	
   

  	
  8.1

  
	
  Call Notice

  	
   

  	
  8.1

  
	
  Call Option

  	
   

  	
  8.1

  
	
  Call Securities

  	
   

  	
  8.1

  
	
  Claims

  	
   

  	
  Exh. C,
  ¶ 7(a)

  
	
  Class A
  Securityholder

  	
   

  	
  Preamble

  
	
  Class B
  Securityholder

  	
   

  	
  Preamble

  
	
  Company

  	
   

  	
  Preamble

  
	
  Company Call Notice

  	
   

  	
  8.3

  
	
  Consultation

  	
   

  	
  11.1(c)

  
	
  Counter-Notice

  	
   

  	
  4.2

  
	
  Demand Holder

  	
   

  	
  Exh. C.,
  ¶ 2(a)

  
	
  Demand Registration

  	
   

  	
  Exh. C.,
  ¶ 2(a)

  
	
  Drag-Along
  Securityholder

  	
   

  	
  5.1

  
	
  Election Notice

  	
   

  	
  10.3

  
	
  Financing Notice

  	
   

  	
  10.3

  
	
  Involuntary Transfer
  Notice

  	
   

  	
  4.3

  
	
  Maximum Number

  	
   

  	
  Exh. C,
  ¶ 2(c)

  
	
  New Securities

  	
   

  	
  10.2

  
	
  Notice Date

  	
   

  	
  6.2

  
	
  Observer

  	
   

  	
  11.1(b)

  
	
  Option Notice

  	
   

  	
  4.2

  
	
  Other Securityholder

  	
   

  	
  6.1

  
	
  Other Sellers

  	
   

  	
  Exh. C,
  ¶ 2(c)

  
	
  Outside Party

  	
   

  	
  4.2

  
	
  Proposed Transferor

  	
   

  	
  6.1

  
	
  Proposed Transferor
  Notice

  	
   

  	
  6.2

  
	
  Pro-Rata Portion

  	
   

  	
  10.1

  
	
  Proxy Holder

  	
   

  	
  7

  
	
  Registration Demand
  Securities

  	
   

  	
  Exh. C.,
  ¶ 2(a)

  
	
  Registration Documents

  	
   

  	
  Exh. C,
  ¶ 7(a)

  
	
  Right of First Offer

  	
   

  	
  10.1

  
	
  Rule 144

  	
   

  	
  2.3

  
	
  Securityholder

  	
   

  	
  Preamble

  
	
  Selling Securityholder

  	
   

  	
  4.2

  
	
  Series A Preferred

  	
   

  	
  Preamble

  
	
  Series B Preferred

  	
   

  	
  Preamble

  
	
  Series C Preferred

  	
   

  	
  Preamble

  
	
  Subscribing Parties

  	
   

  	
  4.2

  
	
  Tag-Along Notice

  	
   

  	
  6.3

  
	
  Tag-Along Sale

  	
   

  	
  6.1

  
	
  Third-Party Offeror

  	
   

  	
  5.1

  
	
  Transferred Securities

  	
   

  	
  4.3

  



 


10

















 


2.                                      Compliance
with Securities Laws.


 


2.1                               Restrictions on Transfer. 
Notwithstanding anything herein to the contrary and in addition to, and
not in lieu of, the terms of Sections 3, 4, 5, 6, 7 and 8 of this
Agreement, each Securityholder agrees that, prior to making any Transfer of any
Securities (other than a Transfer to the Company or to another Securityholder
as required or permitted by this Agreement), such Securityholder will give
written notice to the Company describing the manner and terms of such proposed
Transfer, the identity of such proposed transferee and such other information
as the Company may reasonably request. 
Each such Securityholder further agrees that such proposed Transfer will
not be effected until:


 


(a)                                 the Company has notified such
Securityholder that either:


 


(i)                                     in the opinion of Company counsel, no
registration of such Securities under the Act is required in connection with
such proposed Transfer; or


 


(ii)                                  a registration statement under the Act
covering such proposed disposition has been filed by the Company with the
Commission and has become effective under the Act; and


 


(b)                                 the Company has notified such
Securityholder that either:


 


(i)                                     in the opinion of Company counsel, no registration
or qualification under the securities or “blue sky” laws of any state is
required in connection with such proposed disposition; or


 


(ii)                                  compliance with applicable state
securities or “blue sky” laws has been effected.


 


The Company will use its
best efforts to respond to any such notice from a Securityholder within ten (10) days
of its receipt of such notice.


 


2.2                               Cooperation of Company. 
In the case of any proposed Transfer under this Section 2, the
Company will use reasonable efforts to comply with any such applicable state
securities or “blue sky” laws, but shall in no event be required, in connection
therewith, to qualify to do business in any state where it is not then
qualified or to take any action that would subject it to tax or to the general
service of process in any state where it is not then subject, unless the
Company was otherwise required to do so prior to the proposed Transfer.  The restrictions on Transfer contained in Section 2.1
shall be in addition to, and not by way of limitation of, any other
restrictions on Transfer contained in any other Section of this Agreement.


 


2.3                               Rule 144 Acknowledgment. 
Each Securityholder acknowledges that such Person is familiar with Rule 144
of the Rules and Regulations of the Commission, as amended, promulgated
pursuant to the Act (“Rule 144”), and that such Person has been
advised that Rule 144 permits, only under certain circumstances, the
resale of restricted securities such as the Securities being purchased on the
date hereof or that may become subject hereto after the date hereof, but that Rule 144
is not currently, and may not in the future become, available to permit resales
by such Person of any Securities.  Each
Securityholder understands that, to the extent that


 


11

















 


Rule 144 is not
available, such Person will be unable to sell any Securities without either
registration under the Act or the existence of another exemption from such
registration requirement, and that the Company has no obligation whatsoever
(except as set forth herein) to any Securityholder to register any Securities.


 


2.4                               Restrictions on Transfer for Benefit of
Securityholders.  Each Securityholder agrees that such
Securityholder will not Transfer any Securities (or any direct or indirect
interest therein) or any stock certificate representing the same, now or
hereafter at any time owned by such Securityholder, except (i) to the
Company, (ii) to a Permitted Transferee, or (iii) as required or
permitted by the provisions of Sections 2, 3, 4, 5, 6, 7 and 8 of this
Agreement.


 


3.                                      Further
Restrictions.


 


3.1                               Prohibition on Transfer Prior to
Qualified IPO Date.  Each Securityholder agrees that, prior to the
occurrence of the Qualified IPO Date such Securityholder will not Transfer any Securities
now or hereafter owned by such Securityholder except with the consent of (i) Holdings
(which may be given or withheld in its sole and absolute discretion with or
without any reason or liability therefor except as hereinafter provided in this
Section 3; provided, however, that such consent shall not be
required with respect to any Transfer of Securities to such Permitted
Transferees described in clauses (c) and (e) of the definition of a
Permitted Transferee) and (ii) Ares (which may be given or withheld in its
sole and absolute discretion with or without any reason or liability therefor
except as hereinafter provided in this Section 3; provided, however,
that such consent shall not be required with respect to any Transfer of
Securities to such Permitted Transferees described in clauses (c) and (e) of
the definition of a Permitted Transferee). 
The foregoing restriction shall be in addition to, and not in lieu of,
the terms of Sections 2, 4, 5, 6, 7 and 8 of this Agreement.


 


3.2                               Certain Releases Required. 
Notwithstanding the provisions of the first sentence of Section 3.1,
if (i) Holdings shall make a distribution of Common Stock or Preferred
Stock in kind to its members in compliance with Section 3.1 or (ii) Ares
shall make a distribution of Common Stock or Preferred Stock in kind to its
partners in compliance with Section 3.1, then promptly after Holdings’ or
Ares’, as the case may be, receipt of a written request to do so from any Class A
Securityholder identified in Exhibit A hereto as a Designated Class A
Securityholder, given at any time or from time to time, Holdings and Ares shall
consent to the release from the terms of this Section 3 of the same
proportion of such class of Securities which are then held subject to the terms
of this Section 3 by such Designated Class A Securityholder as the
number of shares of such class being distributed by Holdings or Ares, as the
case may be, to its members or partners, as applicable, bears to the total
number of shares of such class which would be distributed to such members or
partners, as applicable, if Holdings or Ares, as the case may be, then
distributed in kind all Securities of such class to its members or partners, as
applicable.


 


3.3                               Certain Restrictions on Releases of
Securities of Managing Directors.  Holdings and
Ares may not release any Securities of a Managing Director from the
restrictions imposed by this Section 3 or consent to the Transfer of any
such Securities by a Managing Director unless, in either such case, concurrent
therewith Holdings and Ares shall consent to the


 


12

















 


release from the terms of
this Section 3 of the same proportion of such class of Securities subject
to the terms of this Section 3 by each Class A Securityholder as the
number of Securities of such class held by such Managing Director being
released from such restrictions or being Transferred bears to the total number
of Securities of such class held by such Managing Director; provided, however,
that this sentence shall not apply (a) to any Securities released from
such restrictions pursuant to Section 3.2 or (b) to Securities held
by a Managing Director which are Transferred (i) to Holdings or Ares or
any Affiliate of Holdings or Ares or any Associate of any of the foregoing or (ii) to
any other Person acceptable to Holdings or Ares if, in any such case, the
manager of Holdings or the general partner of Ares, as the case may be, shall
have determined that such Transfer is reasonably necessary to avoid financial
or other hardship to such Affiliate or Associate.


 


3.4                               Restriction on Transfer Subsequent to
Qualified IPO Date.  Each Securityholder agrees that, without the
consent of Holdings and Ares (which consent shall not be unreasonably withheld
with respect to any Transfer of Securities to a Permitted Transferee), after
the occurrence of the Qualified IPO Date, such Securityholder will not
effectuate any Transfer, or submit to any broker any sell order with respect to
a proposed Transfer, of Securities that would exceed the lesser of two (2) times
the volume limitations set forth in clauses (i), (ii) or (iii) of Rule 144(e)(1),
regardless of whether such Transfer or such Securities are otherwise subject to
Rule 144.


 


4.                                      First
Refusal Rights.


 


4.1                               Restrictions Cumulative. 
Each Securityholder agrees that such Securityholder will not Transfer
any Securities (or any direct or indirect interest therein) or any stock
certificate representing the same, now or hereafter at any time owned by him,
except to a Permitted Transferee or as required or permitted by the provisions
of Sections 2, 3, 4, 5 and 6 of this Agreement.  The restrictions on transfer imposed by this Section 4
on any Securityholder shall be in addition to, and not in lieu of, the
restrictions on transfer imposed by Sections 2, 3, 5, 6, 7 and 8 of this
Agreement to the extent the same are otherwise applicable to such
Securityholder.


 


4.2                               Bona Fide Offers.  (a) 
If any Securityholder desires to Transfer any Securities (the “Selling
Securityholder”) and such Selling Securityholder shall have received a bona
fide arms’-length written offer (a “Bona Fide Offer”) from a Person
other than an Affiliate or Associate of such Selling Securityholder (the “Outside
Party”) for the Transfer of such Securities, such Selling Securityholder shall
give written notice (the “Option Notice”) to Holdings, Ares, GEPT and
the Company setting forth such desire; provided,
however, that to the extent
Holdings is such Selling Securityholder, the Option Notice shall be sent by
Holdings to Ares, GEPT and the Company; provided,
further, that to the extent Ares
is such Selling Securityholder, the Option Notice shall be sent by Ares to
Holdings, GEPT and the Company; and provided,
further, that to the extent GEPT
is such Selling Securityholder, the Option Notice shall be sent by GEPT to
Holdings, Ares and the Company.  The
Option Notice shall set forth at least the name and address of the Outside
Party and the price and terms of the Bona Fide Offer and shall be accompanied
by a copy of the Bona Fide Offer and reasonable evidence demonstrating the
Outside Party’s ability to consummate such offer.  Upon the giving of such Option Notice,
Holdings, Ares and GEPT shall have the option to purchase, on a Pro Rata basis,


 


13

















 


at the price offered by
the Outside Party in the Bona Fide Offer, all or any portion of the Securities
specified in the Option Notice; provided,
however, that notwithstanding
anything to contrary set forth herein, (i) in the event such Option Notice
is given by Holdings, then only Ares and GEPT shall have such option to
purchase all or any portion of the Securities specified in the Option Notice
delivered by Holdings, (ii) in the event such Option Notice is given by
Ares, then only Holdings and GEPT shall have such option to purchase all or any
portion of the Securities specified in the Option Notice delivered by Ares and (iii) in
the event such Option Notice is given by GEPT, then only Holdings and Ares
shall have such option to purchase all or any portion of the Securities
specified in the Option Notice delivered by GEPT; provided, further,
however, that in the event either
Holdings, Ares or GEPT, as the case may be, does not elect to purchase all of
its Pro Rata share of the Securities specified in the Option Notice and the
other parties elect to purchase all of their Pro Rata share (the “Subscribing
Parties”), then the Selling Securityholder shall provide notice (the “Second
Notice”) to such Subscribing Parties and such Subscribing Parties shall
have the option to purchase such unsubscribed shares.  Said option to purchase shall be exercised
within ten (10) Business Days following the giving of such Option Notice
or within five (5) Business Days following the giving of such Second
Notice, as the case may be, by giving a counter-notice (a “Counter-Notice”)
to the Selling Securityholder (with a copy of such Counter-Notice to the
Company).  In the event that a
determination must be made (as described below) as to the fair market value of
non-cash consideration, the ten (10) Business Day period referred to in
the immediately preceding sentence shall be extended to such greater period of
time, not to exceed twenty (20) Business Days after said Option Notice,
specified in good faith by a disinterested majority of the Board.  In the event that the Bona Fide Offer
provides, in whole or in part, for non-cash consideration, (i) the “price”
offered by the Outside Party shall be deemed to be the amount of cash, if any,
provided in the Bona Fide Offer plus the fair market value of the non-cash
consideration as determined in good faith by a disinterested majority of the
Board, and (ii) Holdings, Ares and GEPT shall be entitled to pay such “price”
in the same ratio of cash and non-cash consideration provided in such Bona Fide
Offer, with the fair market value of the non-cash consideration provided by
Ares, Holdings and/or GEPT determined in good faith by a disinterested majority
of the Board.


 


Notwithstanding the
foregoing, Holdings and/or Ares shall not be permitted to purchase any
Securities from GEPT pursuant to this Section 4 if such purchase would
constitute a non-exempt prohibited transaction under the Employee Retirement
Income Security Act of 1974, as amended from time to time (“ERISA”).


 


(b)                                 Subject to paragraph (d) of this Section 4.2,
if Holdings, Ares and/or GEPT elect to purchase such Securities, each such
electing entity shall be obligated to purchase, at the price offered by the
Outside Party in the Bona Fide Offer, and such Selling Securityholder shall be
obligated to sell, such Securities at a closing to be held on the fifteenth
(15th) Business Day after the giving of the Counter-Notice at the principal
executive offices of the Company, or at such other time and place as may be
mutually acceptable to each purchasing entity, and such Selling
Securityholder.  The closing of any such
purchase may be delayed, at the election of the purchasing entity, up to thirty
(30) Business Days in order to permit such acquisition of such Securities to be
made in conformity with applicable laws, including the HSR Act.


 


14

















 


(c)                                  Subject to paragraph (d) of
this Section 4.2, if Holdings, Ares and/or GEPT do not elect to purchase
all of such Securities proposed to be sold by such Selling Securityholder
within the time limits specified in paragraph (a) of this Section 4.2,
then the Company shall have the option, exercisable by the delivery of a
counter-notice to such Selling Securityholder no later than fifteen (15)
Business Days following the date of the Option Notice, to purchase, at the
price offered by the Outside Party in the Bona Fide Offer, all or any portion
of the Securities specified in the Option Notice and not purchased by Holdings,
Ares and/or GEPT.  In the event that the
Company elects to purchase Securities pursuant to this Section 4.2(c), the
Company will be obligated to purchase, and such Selling Securityholder shall be
obligated to sell, such Securities at a closing to be held on the fifteenth
(15th) Business Day after the delivery of the Company’s counter-notice to such
Selling Securityholder at the principal executive offices of the Company, or at
such other time and place as may be mutually acceptable to Holdings, Ares,
GEPT, the Company and such Selling Securityholder.  The closing of any such purchase by the
Company may, at the election of the Company, be delayed up to thirty (30)
Business Days in order to permit such acquisition of such Securities to be made
in conformity with applicable laws, including the HSR Act.  Notwithstanding the foregoing, the Company
shall not be permitted to purchase any Securities from GEPT pursuant to this Section 4
if such purchase would constitute a non-exempt prohibited transaction under
ERISA.


 


(d)                                 If Holdings, Ares, GEPT and the Company
elect not to purchase all of the Securities subject to the Bona Fide Offer
within the time limits specified above, then the offer to sell any of the
Securities to Holdings, Ares, GEPT and the Company shall be deemed revoked and
the Selling Securityholder, at any time within a period of three months from
the giving of said Option Notice, may Transfer all (but not less than all) of
the remainder of such Securities to the Outside Party at a price and on terms
not less favorable than those contained in the Bona Fide Offer; provided, however,
that in the event such Selling Securityholder has not so Transferred said
Securities to the Outside Party within said three month period, then said
Securities thereafter shall continue to be subject to all of the restrictions
contained in this Agreement as though no Option Notice had ever been given.


 


(e)                                  At the closing of any purchase of
Securities pursuant to this Section 4.2, the Selling Securityholder shall
deliver certificates representing such Securities duly endorsed for transfer
and accompanied by all requisite stock transfer taxes.  Any Securities purchased pursuant to this Section 4.2
shall be free and clear of any and all Liens (other than those arising under
this Agreement) and at the Closing of the purchase the Selling Securityholder
shall represent and warrant to such effect and to the effect that such Selling
Securityholder is the beneficial owner of such Securities.  The Person making such purchase shall deliver
at such closing, by certified or bank check, payment in full for the Securities
being purchased by such Person.  At such
closing, all of the parties to the transaction shall execute such additional
documents as are otherwise reasonably necessary or appropriate, consistent with
the terms hereof.


 


(f)                                   If, in any instance, Holdings, Ares, GEPT
or the Company elects not to exercise its rights hereunder or elects to waive
such rights, such election shall not constitute a waiver of such Person’s
rights to receive an Option Notice in the case of any Transfer subsequently
proposed by such or any other Securityholder.


 


15














 


4.3                               Involuntary Transfers.  (a) Each
Securityholder shall notify the Company, Holdings, Ares and GEPT promptly upon
the occurrence of an Involuntary Transfer of any Securities (including
Involuntary Transfers of any beneficial interest by a Beneficial Owner); provided, however,
that to the extent Holdings is such Securityholder, such notice shall be sent
by Holdings to Ares, GEPT and the Company; provided,
further, that to the extent Ares
is such Securityholder, such notice shall be sent by Ares to Holdings, GEPT and
the Company and provided, further, that to the extent GEPT is such
Securityholder, such notice shall be sent by GEPT to Holdings, Ares and the
Company.  If an Involuntary Transfer of
any of the Securities owned by any Securityholder shall occur, Holdings, Ares,
GEPT and the Company shall have the same rights of first refusal under Section 4.2
above with respect thereto (the “Transferred Securities”) as if the
Involuntary Transfer had been a proposed voluntary Transfer by such
Securityholder, except that:


 


(i)                                     the periods within which such rights must
be exercised shall run from the date notice of the Involuntary Transfer is
received from the Securityholder or its legal representatives with respect to
which such Involuntary Transfer has occurred; and


 


(ii)                                  such rights shall be exercised by notice
(an “Involuntary Transfer Notice”) to the Involuntary Transferee rather
than to the Securityholder with respect to which such Involuntary Transfer has
occurred.


 


If such Transferred
Securities were shares of Common Stock or Preferred Stock, the purchase price
thereof shall be the lesser of the Fair Market Value of such Transferred
Securities on the date of such Involuntary Transfer or on the date of the
relevant Involuntary Transfer Notice from the Securityholder from whom such
Involuntary Transfer took place (or from such Involuntary Transferee).  If such Transferred Securities are Options or
Warrants that are then exercisable, the purchase price thereof shall be equal
to (i) the lesser of (y) the aggregate Fair Market Value on the date
of such Involuntary Transfer of the number of shares of Common Stock which the
holder of such Options or Warrants is entitled to receive upon exercise of such
Transferred Securities or (z) the aggregate Fair Market Value of such
number of shares on the date of the relevant Involuntary Transfer Notice from
the Securityholder from whom such Involuntary Transfer took place (or from such
Involuntary Transferee), less (ii) the aggregate exercise price of such
Transferred Securities, but not less than zero. 
If such Transferred Securities are Options or Warrants that are not then
exercisable, the purchase price thereof shall be as set forth in the
immediately preceding sentence after such appropriate discount for the fact
that such Transferred Securities are not then exercisable as may be determined
by the Board, in good faith and in the exercise of business judgment.


 


(b)                                 At the closing of any purchase of
Transferred Securities, the Involuntary Transferee shall deliver certificates representing
the Transferred Securities being purchased by Holdings, Ares, GEPT or the
Company, as the case may be, duly endorsed for transfer and accompanied by all
requisite stock transfer taxes.  Such
Transferred Securities shall be transferred free and clear of any and all Liens
arising through the action or inaction of the Involuntary Transferee (other
than those arising under this Agreement) and the Involuntary Transferee shall
represent and warrant to such effect and to the effect that such Involuntary
Transferee is the beneficial owner of such Transferred Securities.  At the closing of any such


 


16

















 


purchase, the
Securityholder that was the transferor in respect of the Involuntary Transfer
shall represent and warrant to the purchaser or purchasers that such
Securityholder had conveyed to the Involuntary Transferee good and valid title
to the Transferred Securities.  The
Person making such purchase shall deliver at closing, by a certified or bank
check, payment in full of the purchase price for the Transferred Securities
being purchased by such Person.  At such
closing, all of the parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.


 


(c)                                  In the event that the provisions of this Section 4.3
shall be held to be unenforceable with respect to any particular Involuntary
Transfer of Securities, Holdings, Ares, GEPT and the Company shall have a right
of first refusal as set forth in Section 4.2 hereof if the Involuntary
Transferee subsequently obtains a Bona Fide Offer for and desires to Transfer
such Transferred Securities.


 


4.4                               Application of First Refusal Rights. 
The first refusal rights provided in Sections 4.2 and 4.3 shall not
apply to any Transfer of Securities:


 


(a)                                 to the Company, or to a Permitted
Transferee of the relevant Securityholder;


 


(b)                                 to Holdings by any Associate or Affiliate
of Holdings, or to Ares by any Associate or Affiliate of Ares, or to GEPT by
any Associate or Affiliate of GEPT;


 


(c)                                  pursuant to an effective registration
statement under the Act or pursuant to Rule 144;


 


(d)                                 to an Other Securityholder (as defined in
Section 6.1) pursuant to Section 6 below; or


 


(e)                                  by a Drag-Along Securityholder (as
defined in Section 5.1) pursuant to Section 5 below.


 


4.5                               Termination of First Refusal Rights. 
Notwithstanding anything herein to the contrary, the rights of first
refusal provided in this Section 4 shall terminate, with respect to all
Securities held by each Securityholder, upon the occurrence of the
Qualified IPO Date.


 


5.                                      Third-Party
Offer for All Outstanding Securities.


 


5.1                               “Drag-Along” Obligations.  If Holdings and/or Ares shall receive an
offer in writing from a third party which is not an Affiliate of Holdings or
Ares (a “Third-Party Offeror”) to purchase all of the issued and
outstanding Securities held by Holdings and Ares for purposes of effecting a
business combination of the Company with such Person or an Affiliate thereof or
to purchase all or substantially all the assets of the Company (each an “Acquisition
Proposal”), and both Holdings and Ares desire to accept or cause the
Company to accept such Acquisition Proposal, Holdings and Ares shall deliver a
joint notice (an “Acquisition Notice”) to the Company (which shall deliver
a copy of such Acquisition Notice to each of the other Securityholders within
three (3) Business Days of its receipt thereof).  Such Acquisition Notice shall contain a copy
of such Acquisition Proposal, including the name and address of the Third-


 


17

















 


Party Offeror and the
terms of the Acquisition Proposal.  If
any other Securityholder receives any Acquisition Proposal (which, for this
purpose, includes an offer to purchase all of the issued and outstanding Common
Stock and any other securities exercisable for or convertible into Common Stock
but not an offer to purchase only such other Securityholder’s Common Stock and
any other securities exercisable for or convertible into Common Stock), such
Securityholder shall promptly transmit such Acquisition Proposal to the
Company, Holdings and Ares (which Holdings and/or Ares may elect not to pursue
without any liability or obligation to any Securityholder or the Company).  The other Securityholders (other than Holdings
and Ares) (the “Drag-Along Securityholders”) severally agree that, upon
receipt of such Acquisition Notice, they shall be obligated to sell, at the
same time Holdings and Ares sell, all of their Securities to the Third-Party
Offeror upon the terms and conditions set forth in the Acquisition Proposal,
or, as the case may be, to vote their Securities in favor of the merger or sale
of all or substantially all of the assets of the Company as described in the
Acquisition Proposal, and otherwise to take all actions reasonably necessary or
appropriate to cause the Company to consummate the proposed transaction.  In any such transaction, all of such shares
of Common Stock shall be purchased at, or be converted into the right to
receive, the same price per share of Common Stock as received by Holdings and
all of such shares of Preferred Stock shall be purchased at, or be converted
into the right to receive, the same price per share of Preferred Stock as
received by Holdings.  Notwithstanding
the foregoing, GEPT shall not be obligated to sell any Securities to any
Third-Party Offeror pursuant to this Section 5 if such sale would
constitute a non-exempt prohibited transaction under ERISA.  In that regard, Holdings and/or Ares may, in
their sole discretion and at their own expense, seek an administrative
exemption from the U.S. Department of Labor (or other appropriate governmental
agency) to allow such sale.


 


5.2                               Termination of Drag-Along Obligations. 
Notwithstanding anything herein to the contrary, the rights and
obligations provided for in this Section 5 shall terminate, with respect
to all Securities held by any Securityholder, upon the occurrence of the
Qualified IPO Date.


 


5.3                               Restrictions Cumulative. 
The restrictions on transfer imposed by this Section 5 on any
Securityholder shall be in addition to, and not in lieu of, the restrictions on
transfer imposed by Sections 2, 3, 4, 6, 7 and 8 of this Agreement to the
extent the same are otherwise applicable to such Securityholder.


 


6.                                      “Tag-Along”
Rights.


 


6.1                               “Tag-Along” Sales. 
If Holdings or Ares (for purposes of this Section 6, respectively
the “Proposed Transferor”) at any time or from time to time, in one
transaction or in a series of related transactions, desires to enter into an
agreement (whether oral or written) to Transfer (for purposes of this Section 6,
a “Tag-Along Sale”) shares of Common Stock and/or Preferred Stock to any
Person, then each of the other Securityholders (other than Holdings only if
such Proposed Transferor is Holdings or other than Ares only if such Proposed
Transferor is Ares) (for purposes of this Section 6, collectively, the “Other
Securityholders”) shall have the right, but not the obligation, to elect
that the Proposed Transferor be obligated to require, as a condition to such
Tag-Along Sale, that the proposed purchaser purchase from each such electing
Other Securityholder:


 


18

















 


(a)                                 up to the number of shares of Common
Stock derived by multiplying the total number of shares of Common Stock owned
by or issuable to such electing Other Securityholder by a fraction, the
numerator of which is equal to the number of shares of Common Stock then owned
by or issuable to the Proposed Transferor that are to be purchased by the
proposed purchaser (without giving effect to any reduction in such number of
shares by reason of any Other Securityholder’s election to exercise the “tag-along”
rights provided in this Section 6 in connection with such transaction) and
the denominator of which is the total number of shares of Common Stock owned by
or issuable to the Proposed Transferor prior to such sale; and


 


(b)                                 up to the number of shares of Preferred
Stock having an aggregate redemption value equal to the amount derived by
multiplying the aggregate redemption value of all the shares of Preferred Stock
owned by or issuable to such electing Other Securityholder times a fraction,
the numerator of which is equal to the aggregate redemption value of all the
shares of Preferred Stock then owned by or issuable to the Proposed Transferor
that are to be purchased by the proposed purchaser (without giving effect to
any reduction in such number of shares by reason of any Other Securityholder’s
election to exercise the “tag-along” rights provided in this Section 6 in
connection with such transaction) and the denominator of which is the aggregate
redemption value of all the shares of Preferred Stock owned by or issuable to
the Proposed Transferor prior to such sale;


 


provided,  however, that if any Other Securityholder
chooses not to sell any or all Securities which such Other Securityholder may
be entitled to sell under this Section 6.1, the Proposed Transferor may
sell, in the same transaction, (x) additional shares of Common Stock equal
to the difference between the number of shares of Common Stock which such Other
Securityholder is entitled to sell and the number of shares of Common Stock
such Other Securityholder chooses to sell, if any, and (y) additional
shares of Preferred Stock equal to the difference between the number of shares
of Preferred Stock which such Other Securityholder is entitled to sell and the
number of shares of Preferred Stock such Other Securityholder chooses to
sell.  Any such sales by any Other
Securityholder shall be on the same terms and conditions as the proposed
Tag-Along Sale by the Proposed Transferor. 
Each Other Securityholder whose Securities are sold in a Tag-Along Sale
shall be required to bear a proportionate share of the expenses of the
transaction, including, without limitation, legal, accounting and investment
banking fees and expenses.


 


6.2                               Notice of Tag-Along Opportunity. 
The Proposed Transferor participating in a Tag-Along Sale shall promptly
(and in no event less than twenty (20) Business Days prior to the consummation
thereof) provide the Company with notice (for purposes of this Section 6,
the “Proposed Transferor Notice”) of the proposed Tag-Along Sale (which
the Company shall transmit to each Other Securityholder within three (3) Business
Days after its receipt thereof) containing the following:


 


(a)                                 the name and address of the proposed
transferee of the Securities in the Tag-Along Sale;


 


19

















 


(b)                                 the number of shares of Common Stock and
each series of Preferred Stock proposed to be Transferred by the Proposed
Transferor in the event none of the Other Securityholders elects to
participate;


 


(c)                                  the proposed amount and form of
consideration to be paid for such Securities and the terms and conditions of
payment offered by the proposed transferee;


 


(d)                                 the aggregate number of shares of Common
Stock and each series of Preferred Stock held of record by such Proposed
Transferor as of the date of the notice (for purposes of this Section 6, “Notice
Date”) from the Proposed Transferor to the Company;


 


(e)                                  the aggregate number of shares of Common
Stock and each series of Preferred Stock held of record as of the Notice Date
by all Other Securityholders as a group;


 


(f)                                   the maximum number of shares of Common
Stock and each series of Preferred Stock each such Other Securityholder is
entitled to include in the Tag-Along Sale (as computed in accordance with the
equations set forth in Section 6.1); and


 


(g)                                  that the proposed transferee has been
informed of the “tag-along” rights provided for in Section 6.1.


 


6.3                               Notice and Terms of Acceptance of
Tag-Along Opportunity.


 


(a)                                 If an Other Securityholder desires to
participate in such Tag-Along Sale, such Other Securityholder shall provide
written notice (the “Tag-Along Notice”) to such Proposed Transferor not later
than ten (10) Business Days after the Notice Date setting forth the number
of shares of Common Stock and each series of Preferred Stock, if any, such
Other Securityholder elects to include in the Tag-Along Sale.


 


(b)                                 Any Other Securityholder who at the time
of a Proposed Transferor Notice then owns Preferred Stock of any series as well
as Common Stock and/or Preferred Stock of any other series may elect to include
Preferred Stock of such series in a Tag-Along Sale (if shares of Preferred
Stock of such series are to be transferred by the Proposed Transferor in such
Tag-Along Sales) only if the Preferred Stock of such series to be transferred
by such Other Securityholder represents a percentage of the Preferred Stock of
such series then owned by such Other Securityholder at least equal to the
greatest percentage of the Common Stock or any series of Preferred Stock having
a liquidation preference or preference as to dividends that is junior to such
series of Preferred Stock that is to be transferred by such Other
Securityholder in such Tag-Along Sale.


 


(c)                                  The Tag-Along Notice given by any Other
Securityholder shall constitute such Other Securityholder’s binding agreement
to sell such Securities as are included therein on the terms and conditions
applicable to such sale (including the requirements of this Section 6), in
which case the number of shares of Common Stock and/or Preferred Stock to be
Transferred by the Proposed Transferor shall be


 


20

















 


correspondingly
reduced.  In the event that the proposed
transferee does not purchase the Securities of the Proposed Transferor, then
the proposed Tag-Along Sale by the Other Securityholders to such proposed
transferee shall not take place.  If the
Tag-Along Notice from any Other Securityholder is not received by the Proposed
Transferor within the ten (10) Business Day period specified above in this
Section 6.3, the Proposed Transferor shall have the right to transfer the
Securities of Common Stock and Preferred Stock to the proposed transferee
without any participation by such Other Securityholder, but only on the terms
and conditions stated in the notice to such Other Securityholders or on terms
and conditions no more favorable to the Proposed Transferor and only if a
definitive and binding agreement to sell or otherwise transfer such Securities
is entered into not later than thirty (30) days after the end of such ten (10) Business
Day period specified above in this Section 6.3.


 


6.4                               Application of Tag-Along Provisions. 
The provisions of this Section 6 shall not apply to:


 


(a)                                 any transaction in which shares of Common
Stock or Preferred Stock are proposed to be sold publicly pursuant to a
registration statement filed under the Act or pursuant to Rule 144;


 


(b)                                 any Transfer to a Permitted Transferee;


 


(c)                                  any one transaction or series of related
transactions involving the Transfer (other than to a Permitted Transferee) by
the Proposed Transferor of less than 1% of the issued and outstanding shares of
Common Stock or less than 1% of the issued and outstanding shares of Preferred
Stock of any series;


 


(d)                                 any shares of Common Stock or Preferred
Stock proposed to be Transferred by the Proposed Transferor which are purchased
by the Company or any Other Securityholder pursuant to Section 4; or


 


(e)                                  any Transfer of shares of Common Stock in
connection with an Acquisition Proposal subject to the provisions of Section 5
hereof.


 


6.5                               Termination of Tag-Along Rights. 
Notwithstanding anything herein to the contrary, the rights and obligations
provided for in this Section 6 shall terminate, with respect to all
Securities held by each Other Securityholder, upon the occurrence of the
Qualified IPO Date.


 


6.6                               Restrictions Cumulative. 
The restrictions on transfer imposed by this Section 6 on any
Securityholder shall be in addition to, and not in lieu of, the restrictions on
transfer imposed by Sections 2, 3, 4, 5, 7 and 8 of this Agreement to the
extent the same are otherwise applicable to such Securityholder.


 


7.                                      Certain
Voting Agreements.


 


7.1                               Grant of Irrevocable Proxy. 
Each Class A Securityholder (other than GEPT)  hereby
irrevocably appoints Holdings, and each of them (with full power of
substitution), as such Class A Securityholder’s proxy and attorney in fact
(each, in such capacity, a “Proxy


 


21

















 


Holder”) to vote and to give or withhold
consent with respect to all shares of Common Stock and Preferred Stock (if any
such rights exists) held by such Class A Securityholder from time to time
in such manner as such Proxy Holder or Proxy Holders shall determine in their
respective sole and absolute discretion, at any meeting (whether annual or
special and whether or not an adjourned meeting) of the Company or by written
consent or otherwise, giving and granting to the Proxy Holders all powers such Class A
Securityholder would possess if personally present and hereby ratifying and
confirming all that said Proxy Holders or either shall lawfully do or cause to
be done by virtue hereof, provided, however,
that the foregoing proxy shall not apply to any action to be taken or consent
to be given by any such Class A Securityholder, in its capacity as such,
under the terms of Sections 11 and 12.2 of this Agreement and provided, further, that Holdings shall be
prohibited from using any of such proxies to amend the terms and conditions set
forth in Sections 11 and 12 hereof. 
Neither of the Proxy Holders shall have any liability to any
Securityholder as a result of any action taken or failure to take action
pursuant to the foregoing proxy except for any action or failure to take action
not taken or omitted in good faith or which involves intentional misconduct or
a knowing violation of applicable law. 
Each such Class A Securityholder represents that any proxies
heretofore given by such Class A Securityholder in respect of its
Securities are not irrevocable; any such prior proxies are hereby revoked.  Each such Class A Securityholder hereby
affirms that this irrevocable proxy is given in consideration for the mutual
agreements contained in this Agreement and in connection with such Class A
Securityholder’s subscription for its Securities and constitutes a material
inducement to the Company and Holdings to approve such subscription, and that
this irrevocable proxy is coupled with an interest and may, under no
circumstances, be revoked.  The Company
hereby acknowledges receipt of and the validity of the foregoing irrevocable
proxy, and agrees to recognize the Proxy Holders as the sole attorneys and
proxies for each such Class A Securityholder at all times prior to the
termination date of such irrevocable proxy as hereinafter provided in this Section 7.  Each such Class A Securityholder intends
that this irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212 of the Delaware General
Corporation Law to the extent that the same is or may be applicable.  The proxy granted by this Section 7
shall terminate with respect to any share of Common Stock or Preferred Stock
held by any such Class A Securityholder only at such time as such share is
no longer owned beneficially or of record by such Class A Securityholder
or any of his, her or its  Permitted
Transferees.


 


7.2                               Agreement of GEPT. 
GEPT hereby irrevocably agrees, with respect to any matter, to vote and
to give or withhold consent with respect to all shares of Common Stock and
Preferred Stock held by GEPT as a Class A Securityholder from time to time
in such manner as Holdings shall vote or give or withhold consent with respect
to such matter; provided, however,
that GEPT shall not be so obligated to the extent that it reasonably believes,
based on advice of counsel, that its fiduciary duties under ERISA shall require
otherwise; and provided, further,
that the foregoing shall not apply to any action to be taken or consent to be
given by GEPT, in its capacity as a Class A Securityholder, under the
terms of Sections 11 and 12.2 of this Agreement.  GEPT represents that it has not heretofore
given any proxies in respect of its Securities, and agrees that so long as such
Securities are subject to this Section 7.2, it will not grant any proxy to
any Person in conflict with the provisions of this Section 7.2.  GEPT hereby affirms that its agreement to
vote its Securities set forth in this Section 7.2 is given in
consideration for the mutual agreements contained in this Agreement and in
connection with its subscription for its Securities and constitutes a material
inducement to the Company and


 


22

















 


Holdings to approve such
subscription, and that this agreement to vote is coupled with an interest and
may, under no circumstances, be revoked. 
The agreement set forth in this Section 7.2 shall terminate with
respect to each Security only at such time as such Security is no longer owned
beneficially or of record by GEPT or any of its Permitted Transferees.


 


8.                                      Call
Upon the Occurrence of Certain Events.


 


8.1                               Joint Call by Holdings and Ares. 
If (i) any Class A Securityholder is employed by the Company
or any of its direct or indirect Subsidiaries or (ii) any Class A
Securityholder is a consultant to the Company or any of its direct or indirect
Subsidiaries, and such employment or consulting relationship shall, during the
Call Period, be terminated by the Company for Cause or be voluntarily
terminated by such Class A Securityholder (in either case, a “Call
Event”), then Holdings and Ares shall have the option to purchase (the “Call
Option”) on a Pro Rata basis, at the Per Share Call Price, and such Class A
Securityholder shall be required to sell, all or any portion of the Securities
held by such Class A Securityholder (collectively, the “Call Securities”),
such option to be exercised within sixty (60) days after the Call Event by
the giving of an exercise notice (the “Call Notice”) to such Class A
Securityholder (with a copy of such Call Notice to the Company).


 


8.2                               Closing of Joint Call by Holdings and
Ares.  Subject to Section 8.4, if Holdings
and/or Ares elect to purchase such Call Securities, each such purchasing entity
shall be obligated to purchase, and such Class A Securityholder shall be
obligated to sell, such Call Securities at a closing to be held on the
fifteenth (15th) Business Day after the giving of the Call Notice at the principal
executive offices of the Company, or at such other time and place as may be
mutually acceptable to each such purchasing entity and such selling Class A
Securityholder.  The closing of any such
purchase by Holdings and/or Ares, as the case may be, may, at the election of
the purchasers, be delayed up to thirty (30) Business Days in order to permit
such acquisition of such Call Securities to be made in conformity with
applicable laws, including the HSR Act.


 


8.3                               Call by the Company. 
Subject to Section 8.4, if Holdings and/or Ares do not elect to
purchase all of such Call Securities within the time limits specified in Section 8.1,
then the Company shall have the option, exercisable by the delivery of an
exercise notice (the “Company Call Notice”) to such Class A
Securityholder no later than fifteen (15) Business Days following the date of
expiration of the sixty (60) day period specified in Section 8.1, to
purchase, at the Per Share Call Price, all or any portion of the Call
Securities specified in the Call Option and not purchased by Holdings and/or
Ares.  In the event that the Company
elects to purchase the Call Securities pursuant to this Section 8.3, the
Company will be obligated to purchase, and such Class A Securityholder
shall be obligated to sell, such Call Securities at a closing to be held on the
fifteenth (15th) Business Day after the delivery of the Company Call Notice to
such Class A Securityholder at the principal executive offices of the
Company, or at such other time and place as may be mutually acceptable to the
Company and such selling Class A Securityholder.  The closing of any such purchase by the
Company may, at the election of the Company, be delayed up to thirty (30)
Business Days in order to permit such acquisition of such Call Securities to be
made in conformity with applicable laws, including the HSR Act.


 


23

















 


8.4                               Non-Exercise of Call. 
If Holdings, Ares and the Company elect not to purchase all of the Call
Securities subject to the Call Event within the time limits specified above,
then the sale of the Call Securities to Holdings, Ares and/or the Company shall
be deemed revoked.


 


8.5                               Closing Mechanics. 
At the closing of any purchase of Call Securities pursuant to this Section 8,
the selling Class A Securityholder shall deliver certificates representing
such Call Securities duly endorsed for transfer and accompanied by all
requisite stock transfer taxes.  Any Call
Securities purchased pursuant to this Section 8 shall be transferred free
and clear of any and all Liens (other than those arising under this Agreement)
and at the Closing of the purchase the selling Class A Securityholder
shall represent and warrant to such effect and to the effect that such selling Class A
Securityholder is the beneficial owner of such Call Securities.  The Person making such purchase shall deliver
at such closing, by certified or bank check, payment in full for the Call
Securities being purchased by such Person. 
At such closing, all of the parties to the transaction shall execute
such additional documents as are otherwise reasonably necessary or appropriate,
consistent with the terms hereof.


 


9.                                      Registration
Rights.


 


The Company agrees to
afford to each Eligible Holder the registration rights set forth in Exhibit D
hereto and each party hereby agrees to be bound by the terms and conditions
included in Exhibit D hereto as if such terms and conditions were
included in the body of this Agreement.


 


10.                               Right
of First Offer.


 


10.1                        Right of First Offer. 
Subject to the terms and conditions contained in this Section 10,
the Company grants to GEPT, each Class B Securityholder and Class C
Securityholder the right of first offer to purchase such Securityholder’s
Pro-Rata Portion (as defined below) of any New Securities (as defined below),
that the Company may, from time to time, propose to sell and issue (the “Right
of First Offer”).  GEPT’s, a Class B
Securityholder’s or Class C Securityholder’s “Pro Rata Portion” in
respect of any New Securities consisting of Common Stock or Preferred Stock or
any rights, options or warrants to purchase the same shall be the ratio that (x) the
sum of the number of shares of Common Stock then held by such Securityholder or
issuable to such Securityholder bears to (y) the sum of the aggregate
number of shares of Common Stock then outstanding, in each case calculated on a
fully-diluted basis.  Subject to the
terms and conditions contained in this Section 10, any portion of the New
Securities not purchased pursuant to the Right of First Offer may be sold to
any other Person.


 


10.2                        Definition of New Securities. 
Except as set forth below, “New Securities” shall mean any shares
of capital stock of the Company, including Common Stock or Preferred Stock,
whether authorized or not, and rights, options or warrants to purchase shares
of Common Stock or Preferred Stock, and securities of any type whatsoever that
are, or may become, convertible into said shares of Common Stock or Preferred
Stock, issued after the date hereof. 
Notwithstanding the foregoing, “New Securities” does not include (i) the
shares of Series A Preferred which have been issued prior to the date
hereof and shares of Series A Preferred, Series B Preferred or Series C
Preferred to be issued by the Company concurrently with the execution of this
Agreement; (ii) securities offered to the public generally pursuant to a
registration


 


24

















 


statement under the
Securities Act; (iii) securities issued in connection with the acquisition
of another corporation by the Company by merger, purchase of all or
substantially all of the assets or shares or other reorganization whereby the
Company or its stockholders own not less than a majority of the voting power of
the surviving or successor corporation, provided
such transaction is approved by the Board in accordance with the Certificate of
Incorporation of the Company as then in effect; (iv) any shares of Common
Stock or related options convertible into or exercisable for such Common Stock
issued to employees, officers and directors of, and consultants to, the
Company, pursuant to any of the Company’s option plan or plans, provided that such shares of Common Stock
shall not exceed the number of shares allocated or reserved for issuance under
the Company’s option plan or plans (subject to appropriate adjustment for stock
splits, stock dividends, combinations, recapitalizations and the like); (v) stock
issued in connection with any stock split, stock dividend or recapitalization
by the Company or (vi) shares of capital stock including Common Stock or
Preferred Stock, issued or to be issued by the Company after April 12,
2004 to any Affiliate of AEP II or Holdings or any Co-Investor with an
aggregate purchase price not to exceed $10,300,000.


 


10.3                        Notice of Right. 
In the event the Company proposes to undertake an issuance of New
Securities, it shall give to GEPT, each Class B Securityholder and Class C
Securityholder written notice of its intention, describing the type of New
Securities and the price and terms upon which the Company proposes to issue the
same and, if available, the definitive documents for such a financing (a “Financing
Notice”).  GEPT and each Class B
Securityholder and Class C Securityholder shall have ten (10) Business
Days from the date of receipt of any such Financing Notice to agree to
purchase, on a Pro Rata basis, such New Securities, for the price and upon the
terms specified in the notice, by giving written notice to the Company and
stating therein the quantity of New Securities to be purchased (the “Election
Notice”).


 


10.4                        Exercise of Right. 
If GEPT, any Class B Securityholder or Class C Securityholder
exercises its Right of First Offer hereunder, the closing of the purchase of
the New Securities with respect to which such right has been exercised shall
take place within fifteen (15) Business Days after GEPT, such Class B
Securityholder and/or Class C Securityholder gives notice of such
exercise, which period of time may be delayed up to thirty (30) Business
Days in order to permit such acquisition of such New Securities to be made in
conformity with applicable laws, including the HSR Act.  Upon exercise of such Right of First Offer,
the Company and GEPT and/or such Class B Securityholder and/or Class C
Securityholder shall be legally obligated to consummate the purchase
contemplated thereby and shall use their best efforts to secure any approvals
required in connection therewith.


 


10.5                        Lapse and Reinstatement of Right. 
In the event GEPT, any Class B Securityholder and/or Class C
Securityholder fails to exercise the Right of First Offer provided in this Section 10
within said ten (10) Business Day period, then GEPT or any other Class B
Securityholder or Class C Securityholder, as the case may be, that elects
to purchase all of its Pro Rata Portion of the New Securities in said ten (10) Business
Day period shall have the option to purchase such unsubscribed shares of New
Securities within fifteen (15) Business Days after GEPT, such Class B
Securityholder and/or Class C Securityholder, as the case may be, receives
notice from the Company of such unsubscribed shares, which period of time may
be delayed up to thirty (30) Business Days in order to permit such
acquisition of such New Securities to be made in conformity with applicable
laws, including the HSR Act.  In the
event GEPT, any


 


25














 


Class B
Securityholder and/or Class C Securityholder fails to exercise the Right
of First Offer provided in this Section 10 to purchase all of the New
Securities set forth in the Financing Notice within said ten (10) Business
Day period, the Company shall have a period of three (3) months thereafter
to sell or enter into an agreement (pursuant to which the sale of New
Securities covered thereby shall be closed, if at all, within thirty (30)
Business Days from the date of said agreement) to sell the New Securities not
elected to be purchased by GEPT, such Class B Securityholder and/or Class C
Securityholder at the price and upon terms no less favorable to the Company
than those contained in the Financing Notice. 
In the event the Company has not sold the New Securities or entered into
an agreement to sell the New Securities within said three (3) month period
(or sold and issued New Securities in accordance with the foregoing within
thirty (30) Business Days from the date of said agreement), the Company shall not
thereafter issue or sell any New Securities without first offering such
securities to GEPT, each Class B Securityholder and Class C
Securityholder as provided in Section 10.1 above.


 


10.6        Termination of
Right.  Notwithstanding anything
herein to the contrary, the rights and obligations provided in this Section 10
shall terminate upon the occurrence of a Qualified IPO.


 


11.          Information Rights; Board Observer
Rights and Consultation


 


11.1        Information Rights;
Board Observer Rights and Consultation. 
In the event that the number of shares of Common Stock beneficially
owned by Ares is less than 30% of the shares of Common Stock beneficially owned
by Ares as of the Initial Date but not less than 10% of the shares of Common
Stock beneficially owned by Ares as of the Initial Date, and the number of
shares of Preferred Stock beneficially owned by Ares is less than 30% of the
shares of Preferred Stock beneficially owned by Ares as of the Initial Date
(other than by reason of the redemption of the Preferred Stock), but not less
than 10% of the shares of Preferred Stock beneficially owned by Ares as of the
Initial Date (other than by reason of the redemption of the Preferred Stock),
and in the event that the number of shares of Common Stock beneficially owned
by GEPT is not less than 10% of the shares of Common Stock beneficially owned
by GEPT as of the Initial Date, and the number of shares of Preferred Stock
beneficially owned by GEPT is not less than 10% of the shares of Preferred
Stock beneficially owned by GEPT as of the Initial Date (other than by reason
of the redemption of the Preferred Stock), then


 


(a)           the Company shall deliver to Ares and
GEPT, as applicable:


 


(i)            as soon as available, but in any
event within forty-five (45) days after the end of each quarter, copies of: (1) consolidated
balance sheets of the Company and its Subsidiaries as at the end of such
quarter, and (2) consolidated statements of income, stockholders’ equity
and cash flows of the Company and its subsidiaries, for such quarter and for
the portion of the fiscal year ending with such quarter, in each case prepared
in accordance with GAAP applicable to periodic financial statements generally,
fairly presenting, in all material respects, the financial position of the
Persons being reported on and their results of operations and cash flows,
subject to changes resulting from normal year-end adjustments;


 


26

















 


(ii)           as soon as available, but in any
event within ninety (90) days after the end of each fiscal year of the Company,
copies of: (1) consolidated balance sheets of the Company and its
Subsidiaries as at the end of such year, and (2) consolidated statements
of income, stockholders’ equity and cash flows of the Company and its subsidiaries
for such year, in each case prepared in accordance with GAAP, fairly
presenting, in all material respects, the financial position of the Persons
being reported on and their results of operations and cash flows, and
accompanied by an opinion thereon of independent certified public accountants
of recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the Persons being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP; and


 


(iii)          such other information concerning the
condition or operations, financial or otherwise, of the Company and its
Subsidiaries as Ares or GEPT may, from time to time, reasonably request.


 


(b)           Ares and GEPT, as applicable, will
have the right to send one representative on its behalf (the “Observer”)
to attend all meetings of the Board, including all committees thereof, solely
in a non-voting observer capacity.  The
Company will furnish to the Observer copies of all notices, minutes, consents
and other materials that it generally makes available to its directors.  The Observer may participate in discussions
of matters under consideration by the Board and any matters brought before any
committee thereof but will not be entitled to vote on any matter presented to
the Board; provided, however, that a majority of the Board
shall have the right, after deliberation in a closed session in which they can
exclude the Observer, to exclude the Observer from portions of meetings of the
Board or any committee thereof or omit to provide the Observer with certain
information  if access to
such information or attendance at such meeting could adversely affect the
attorney-client privilege between the Company and its counsel; provided, further,
however, that the Observer shall
agree, prior to attending any such meetings, to hold in confidence and trust
and not use or disclose any confidential information provided to or learned by
him in connection with his rights under this Agreement during the time the
Observer has observation rights and for a period of three (3) year
thereafter.  Ares and GEPT will each have the right to
remove and replace its respective Observer in its sole discretion and to
designate a substitute representative if such Observer is unable or unwilling
to attend any of the Board’s meetings, including any committees thereof.


 


(c)           the Company agrees to consult (a “Consultation”)
with the representatives of Ares with respect (x) to any issues, events or
transactions pertaining to the Company which in the good faith judgment of the
Board are material to the consolidated business, operations and financial condition
of the Company and (y) to the preparation of the annual business plan of
the Company.  In connection with any Consultation,
the Company will provide such representatives with all material information
regarding any action under consideration and reasonable notice so that the
Consultation period shall constitute sufficient time for Ares to participate
meaningfully in any decision-making process regarding the action to be taken.


 


27

















 


12.          Termination.


 


Except for the provisions
of Sections 9 and 13, which shall survive the expiration or other termination
of this Agreement, this Agreement shall terminate on the earlier to occur of (a) June     ,
2014 and (b) upon the written approval of (i) the Company, (ii) Holdings
so long as the number of shares of Common Stock beneficially owned collectively
by Holdings, its Affiliates and Co-Investors is not less than 30% of the shares
of Common Stock beneficially owned collectively by Holdings, its Affiliates and
Co-Investors on the Initial Date and the number of shares of Preferred Stock
beneficially owned collectively by Holdings, its Affiliates and Co-Investors is
not less than 30% of the shares of Preferred Stock beneficially owned
collectively by Holdings, its Affiliates and Co-Investors on the Initial Date
(other than by reason of the redemption of the Preferred Stock), (iii) Ares
so long as the number of shares of Common Stock beneficially owned collectively
by Ares and its Affiliates is not less than 30% of the shares of Common Stock
beneficially owned collectively by Ares and its Affiliates on the Initial Date
and the number of shares of Preferred Stock beneficially owned collectively by
Ares and its Affiliates is not less than 30% of the shares of Preferred Stock
beneficially owned collectively by Ares and its Affiliates on the Initial Date
(other than by reason of the redemption of the Preferred Stock), and (iv) the
holders of a majority in voting interest of the issued and outstanding shares
of Common Stock and Preferred Stock, voting together as a single class and each
such share being entitled to one vote per share, held by all the
Securityholders (including Holdings and Ares); provided
that any termination that would adversely affect the rights of any
Securityholder (other than any termination that would adversely affect the
rights of all Securityholders in the same manner) under this Agreement must be
consented to by such Securityholder before such termination may be deemed
effective against such Securityholder.  A
Securityholder shall cease to be deemed a Securityholder hereunder, and shall
no longer be a party to this Agreement, at such time as such Securityholder
ceases to own any Securities.


 


13.          Miscellaneous.


 


13.1        Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware without regard to principles of conflicts of law.


 


13.2        Entire Agreement;
Amendments.  This Agreement
(including the exhibits hereto) 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 (a) the Company, (b) Holdings
so long as the number of shares of Common Stock beneficially owned collectively
by Holdings, its Affiliates and Co-Investors is not less than 30% of the shares
of Common Stock beneficially owned collectively by Holdings, its Affiliates and
Co-Investors on the Initial Date and the number of shares of Preferred Stock
beneficially owned collectively by Holdings, its Affiliates and Co-Investors is
not less than 30% of the shares of Preferred Stock beneficially owned
collectively by Holdings, its Affiliates and Co-Investors on the Initial Date
(other than by reason of the redemption of the Preferred Stock), (c) Ares
so long as the number of shares of Common Stock beneficially owned collectively
by Ares and its Affiliates is not less than 30% of the shares of Common Stock
beneficially owned collectively by Ares and its Affiliates on the Initial Date
and the number of shares of Preferred Stock beneficially owned collectively by
Ares and its Affiliates is not less than 30% of the shares of Preferred Stock
beneficially owned


 


28

















 


collectively by Ares and
its Affiliates on the Initial Date (other than by reason of the redemption of
the Preferred Stock), and (d) the holders of a majority in interest of the
issued and outstanding shares of Common Stock and Preferred Stock, voting
together as a single class and each such share being entitled to one vote per
share, held by the Securityholders; provided
that no amendment shall be made to Sections 7.2, 11 (solely with respect
to the rights of GEPT as set forth therein) and 13.15 hereof without the
consent of GEPT and provided  further that any amendment that would
adversely affect the rights of any Securityholder (other than any amendment
that would adversely affect the rights of all Securityholders in the same
manner) under this Agreement must be consented to by such Securityholder before
such amendment may be deemed effective against such Securityholder.  Notwithstanding the foregoing, subject to the
subscription rights set forth in Section 10 and subject to any limitations
set forth in its Amended and Restated Certificate of Incorporation or Bylaws,
the Company shall have the right, from and after the date hereof, in the sole
discretion of the Board, to issue shares of Common Stock or Preferred Stock, or
Options or Warrants to purchase or securities convertible into such shares, to
any Person (whether or not such Person is already party to this Agreement) and
to cause such securities and such Persons (to the extent not already subject to
this Agreement) to become subject to this Agreement (including, at the option
of the Company, the designation of any of such securities as Registrable
Securities) and as a Securityholder of whatever class as the Company may
determine, respectively.


 


13.3        Legend on Stock
Certificates.  Each certificate
representing Securities which are subject to this Agreement shall be endorsed
with a legend substantially to the following effect (in addition to any legend
required by applicable state securities or “blue sky” laws):


 


THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THAT ACT
AND UNDER APPLICABLE STATE SECURITIES LAWS OR DOUGLAS DYNAMICS HOLDINGS, INC.
(THE “COMPANY”) SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION
OF SUCH SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.  THE
SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS ALSO SUBJECT TO
COMPLIANCE WITH THE TERMS AND CONDITIONS OF THAT CERTAIN SECOND AMENDED AND
RESTATED SECURITYHOLDERS AGREEMENT, DATED AS OF JUNE 30, 2004, AS SUPPLEMENTED,
MODIFIED AND AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND THE STOCKHOLDERS,
OPTIONHOLDERS AND WARRANTHOLDERS SIGNATORY THERETO, A COPY OF WHICH AGREEMENT
IS AVAILABLE FOR INSPECTION DURING REGULAR BUSINESS HOURS AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY.


 


29

















 


Any stock certificate
issued at any time in exchange or substitution for any certificate bearing such
legend (except a new certificate issued upon the completion of a public
distribution of securities of the Company represented thereby) shall also bear
such legend, unless the restrictions contained in Sections 3, 4, 5, 6, 7,
8 and 9 of this Agreement are no longer in effect and, in the opinion of
counsel for the Company, the Securities represented thereby need no longer be
subject to the restrictions contained in Section 2 of this Agreement.  The provisions of this Agreement shall be
binding upon, and shall inure to the benefit of, the Securityholders and all
subsequent holders of Securities who acquired the same directly or indirectly
from a Securityholder in a transaction or series of transactions not involving
any public offering.  The Company agrees
that it will not transfer on its books any certificate representing Securities
in violation of the provisions of this Agreement.


 


13.4        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.


 


13.5        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, a Securityholder shall
be valid and binding upon any and all persons or entities (other than the
Company) who may, at any time, have or claim any rights under or pursuant to
this Agreement in respect of the Securities originally acquired by such
Securityholder.


 


13.6        Successors and
Assigns.  Except as otherwise
expressly provided herein, this Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns, and the Securityholders
and their respective heirs, personal representatives, successors and permitted
assigns.


 


13.7        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.


 


13.8        Headings.  The section headings contained herein are for
the purposes of convenience of reference only and are not intended to define or
limit the contents of said sections.


 


30

















 


13.9        Further Assurances.  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.


 


13.10      Gender.  Whenever the pronouns “he” or “his” are used
herein they shall also be deemed to mean “she” or “hers” or “it” or “its”
whenever applicable.  Words in the
singular shall be read and construed as though in the plural and words in the
plural shall be construed as though in the singular in all cases where they
would so apply.


 


13.11      Notices.  Any notice or other communication to be given
hereunder by any party to any other party shall be in writing and delivered in
person or by courier or by facsimile transmission or by mail, postage prepaid,
as follows:


 


(a)           if to the Company, to Douglas
Dynamics Holdings, Inc., 7777 North 73rd Street, P.O. Box 245038,
Milwaukee, Wisconsin, Attention:  Chief
Executive Officer, Telecopier No. (414) 354-8448 (with a copy to Gibson,
Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles,
California 90071, Attention: 
Bruce D. Meyer, Esq., Telecopier No.:  (213) 229-7520)), or at such other place
as the Company shall have designated by notice as herein provided to each of
the Securityholders; and


 


(b)           if to a Securityholder, to the
address of such Securityholder as it appears on Exhibit  A, Exhibit B
or Exhibit C hereto, or at such other place as such Securityholder
shall have designated by notice as herein provided to the Company.


 


13.12      Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original for all purposes,
but all of which shall constitute but one and the same instrument.


 


13.13      Arbitration.


 


(a)           Any disputes or differences between
the parties arising out of this Agreement which the parties are unable to
resolve themselves shall be submitted to and resolved by arbitration as herein
provided.  Within ten (10) Business
Days after commencement of arbitration in accordance with the rules then
obtaining of the American Arbitration Association, any of the parties hereto in
dispute may request the American Arbitration Association to designate one
arbitrator, who shall be a retired or former judge of any appellate court of
the State of California, any United States appellate court or the United States
District Court for any California District who is, in any such case, not
affiliated with any party in interest to such arbitration and who has
substantial professional experience with regard to corporate legal matters.


 


(b)           The arbitrator shall consider the
dispute at issue at Los Angeles, California at a mutually agreed upon time
within thirty (30) days (or such longer period as may be acceptable to the
parties hereto in dispute) of the designation of the arbitrator.  The arbitration proceeding shall be held in
accordance with the rules for commercial arbitration of the American
Arbitration Association in effect on the date of commencement of such
arbitration and shall include an opportunity for the parties to conduct
discovery in advance of the proceeding. 
Notwithstanding the foregoing, the parties hereto agree that they will
attempt, and they intend that they and the arbitrator should use their best
efforts in that attempt, to conclude the arbitration


 


31

















 


proceeding and have a
final decision from the arbitrator within ninety (90) days from the date of
selection of the arbitrator; provided,
however, that the arbitrator shall be entitled to extend such ninety
(90) day period one or more times to the extent necessary for such arbitrator
to place a dollar value on any claim that may be unliquidated.  The arbitrator shall promptly deliver a
decision with respect to the dispute to each of the parties, who shall promptly
act in accordance therewith.  Each party
to such arbitration agrees that any decision of the arbitrator shall be final,
conclusive and binding and that they will not contest any action by any other
party thereto in accordance with a decision of the arbitrator.  It is specifically understood and agreed that
any party may enforce any award rendered pursuant to the arbitration provisions
of this Section 13.13 by bringing suit in any court of competent
jurisdiction.  The parties hereto agree
that the arbitrator shall have authority to grant injunctive or other forms of
equitable relief to any party that prevails in any such arbitration.


 


(c)           All costs and expenses attributable
to the arbitrator shall be allocated among the parties to the arbitration in
such manner as the arbitrator shall determine to be appropriate under the circumstances.


 


13.14      Effective Date.  The effective date of this Agreement shall be
the Initial Date, and each reference herein to the date of this Agreement shall
be deemed to be a reference to the Initial Date.


 


13.15      GEPT Liability.  Any monetary obligation or liability of GEPT
under this Agreement shall be enforced solely against the assets of GEPT and
not against the Trustees of GEPT or General Electric Company or any affiliate
thereof.  In addition, all references to
and provisions of this Agreement relating to GEPT shall apply and be effective
only upon GEPT becoming a party to and subject to this Agreement as a
Securityholder.


 


32

















 


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


 


	
   

  	
  THE COMPANY:

  
	
   

  	
  DOUGLAS DYNAMICS
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
  /s/ James L. Janik

  
	
   

  	
   

  	
  Name: 

  	
  James L. Janik

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  



 


33

















 


	
   

  	
  THE CLASS A
  SECURITYHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOUGLAS DYNAMICS EQUITY
  PARTNERS L.P.

  
	
   

  	
  By: 

  	
  Aurora Advisors II LLC,
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Richard K. Roeder

  
	
   

  	
  Richard K. Roeder, Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  PENSION TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GE ASSET MANAGEMENT INCORPORATED,

  its investment manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David W. Widerecht

  
	
   

  	
  Name: 

  	
  David W. Wiederecht

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AURORA CAPITAL GROUP
  401(k) PLAN 

  fbo Gerald L. Parsky

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Richard K. Roeder

  
	
   

  	
   

  	
  Richard K. Roeder,
  Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AURORA CAPITAL GROUP
  401(k) PLAN 

  fbo Richard K. Roeder

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Richard K. Roeder

  
	
   

  	
   

  	
  Richard K. Roeder, Trustee

  
							



 


34

















 


	
   

  	
  AURORA CAPITAL GROUP
  401(k) PLAN 

  fbo John T. Mapes

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Richard K. Roeder

  
	
   

  	
   

  	
  Richard K. Roeder, Trustee

  



 


 


	
   

  	
  JAMES D. AND MARIA D. HODGSON INTERVIVOS PERSONAL
  TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/James. D. Hodgson

  
	
   

  	
   

  	
  James Hodgson, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DALE FREY FAMILY LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dale Frey

  
	
   

  	
   

  	
  Dale Frey, General Partner

  
					



 


35

















 


	
   

  	
   

  	
  /s/ Richard K. Roeder

  
	
   

  	
  Richard K. Roeder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Richard R. Crowell

  
	
   

  	
  Richard R. Crowell

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Lawrence A. Bossidy

  
	
   

  	
  Lawrence Bossidy

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Robert Anderson

  
	
   

  	
  Robert Anderson

  



 


36

















 


	
   

  	
  THE CLASS B
  SECURITYHOLDERS:

  
	
   

  	
  DOUGLAS DYNAMICS
  HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Richard K. Roeder

  
	
   

  	
   

  	
  Name: 

  	
  Richard K. Roeder

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Secretary

  
					



 


37














 


	
   

  	
  THE CLASS C
  SECURITYHOLDERS:

  
	
   

  	
   

  
	
   

  	
  ARES CORPORATE
  OPPORTUNITIES FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  ACOF Management, L.P.,
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ACOF Operating Manager,
  L.P., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  Ares
  Management, Inc., its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Jeff Serota

  
	
   

  	
   

  	
  Name:

  	
  Jeff Serota

  
	
   

  	
   

  	
  Title:
  

  	
  Partner

  
									



 


38

















 


EXHIBIT A


 


Douglas Dynamics Holdings, Inc.

Class A Securityholders


 


as of February 12, 2010


 


	
  Name
  and Address of 

  Class A Securityholder

  	
   

  	
  Shares
  of

  Common

  Stock

  	
   

  	
  Options
  to

  Purchase

  Common Stock

  	
   

  	
  Shares
  of

  Series A

  Preferred Stock

  	
   

  	
  Shares
  of

  Series B

  Preferred Stock

  	
   

  	
  Shares
  of 

  Series C 

  Preferred Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Douglas Dynamics Equity Partners L.P.

  c/o Aurora
  Capital Group

  10877 Wilshire Boulevard, Suite 2100

  Los Angeles, CA 90024

  Attn:  Timothy J. Hart

  	
   

  	
  1,460

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Designated
  Co-Investor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No.: (310) 551-0101

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy
  No.:   (310) 277-5591

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With copies of
  any notice to:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gibson, Dunn &
  Crutcher LLP

  333 S. Grand Avenue

  Los Angeles, CA 90071

  Attn:  Bruce D. Meyer, Esq.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:    (213) 229-7979

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy No.:       (213)
  229-7520

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General Electric Pension Trust

  Attn: David W. Wiederecht, Vice President

  3003 Summer Street

  Stamford, CT 06905

  	
   

  	
  92,500

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Designated
  Co Investor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No.:  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy
  No.:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  City National Bank Trustee for the
  Aurora Capital Group 401(k) Plan 

  FBO Gerald L. Parsky

  P.O. Box 86344

  San Diego, CA  92138-6344

  Attn:  Monica Murphy

  Investment Operations Specialist Lead

  	
   

  	
  1,250

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Designated
  Co-Investor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No.:  (619) 645-3464

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy
  No.:    (619) 645-3478; or 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (619)
  545-3463 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-1

















 


	
  Name
  and Address of 

  Class A Securityholder

  	
   

  	
  Shares
  of

  Common

  Stock

  	
   

  	
  Options
  to

  Purchase

  Common Stock

  	
   

  	
  Shares
  of

  Series A

  Preferred Stock

  	
   

  	
  Shares
  of

  Series B

  Preferred Stock

  	
   

  	
  Shares
  of 

  Series C 

  Preferred Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  City National Bank Trustee for the
  Aurora Capital Group 401(k) Plan 

  FBO Richard K. Roeder

  P.O. Box 86344

  San Diego, CA  92138-6344

  Attn:  Monica Murphy

  Investment Operations Specialist Lead

  	
   

  	
  190

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Designated Co-Investor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No.:  (619) 645-3464

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy
  No.:    (619) 645-3478; or 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (619)
  545-3463

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  City National Bank Trustee for the
  Aurora Capital Group 401(k) Plan 

  FBO John T. Mapes

  P.O. Box 86344

  San Diego, CA  92138-6344

  Attn:  Monica Murphy

  Investment Operations Specialist Lead

  	
   

  	
  500

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Designated
  Co-Investor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No.:  (619) 645-3464

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy
  No.:    (619) 645-3478; or 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (619)
  545-3463

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Richard K. Roeder

  	
   

  	
  310

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Richard R. Crowell

  	
   

  	
  750

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Diane Anderson Revocable Trust dated 8/7/07,
  Diane Anderson, Trustee

  c/o Bessemer
  Trust Company

  601 S. Figueroa St., #4450

  Los Angeles, CA 90017

  Attn: Peter Zarifes, MD

  	
   

  	
  125

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone:
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-2

















 


	
  Name
  and Address of 

  Class A Securityholder

  	
   

  	
  Shares
  of

  Common

  Stock

  	
   

  	
  Options
  to

  Purchase

  Common Stock

  	
   

  	
  Shares
  of

  Series A

  Preferred Stock

  	
   

  	
  Shares
  of

  Series B

  Preferred Stock

  	
   

  	
  Shares
  of 

  Series C 

  Preferred Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Robert Anderson, Jr. Revocable Trust dated
  2/10/97, Robert Anderson, Jr., Trustee

  c/o JP Morgan
  Trust Co., N.A.

  1999 Avenue of the Stars,  26th Floor

  Los Angeles, CA 90067

  Attn: Fiduciary Dept.

  	
   

  	
  62.50

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No.: 310-860-7055

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Robert Anderson Living Trust restated 2/21/06,
  f/b/o Kathleen Thomas

  Trust FBO
  Kathleen Thomas

  c/o JP Morgan Trust Co., N.A.

  1999 Avenue of the Stars, 26th Floor

  Los Angeles, CA 90067

  Attn: Fiduciary Dept.

  	
   

  	
  62.50

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No.: 310-860-7055

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James D. and Maria D. Hodgson Intervivos Personal
  Trust

  	
   

  	
  50

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dale Frey Family Limited Partnership

  	
   

  	
  500

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lawrence Bossidy

  	
   

  	
  750

  	
   

  	
  250

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James
  R. Roethle

  	
   

  	
  3,016

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Flemming
  H. Smitsdorff

  	
   

  	
  2,445

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Raymond
  S. Littlefield

  	
   

  	
   1,630

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ralph
  R. Gould

  	
   

  	
  1,630

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James
  L. Janik

  	
   

  	
  None

  	
   

  	
  18,103

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bob
  McCormick

  	
   

  	
  None

  	
   

  	
  4,908

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mark
  Adamson  

  	
   

  	
  None

  	
   

  	
  5,000

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jack
  Peiffer

  	
   

  	
  None

  	
   

  	
  2,062

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  



 


A-3

















 


	
  Name
  and Address of 

  Class A Securityholder

  	
   

  	
  Shares
  of

  Common

  Stock

  	
   

  	
  Options
  to

  Purchase

  Common Stock

  	
   

  	
  Shares
  of

  Series A

  Preferred Stock

  	
   

  	
  Shares
  of

  Series B

  Preferred Stock

  	
   

  	
  Shares
  of 

  Series C 

  Preferred Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael
  Wickham

  	
   

  	
  None

  	
   

  	
  2,062

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John
  Anderson

  	
   

  	
  None

  	
   

  	
  250

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Robert
  Anderson

  	
   

  	
  None

  	
   

  	
  250

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Simon
  Ramo

  	
   

  	
  None

  	
   

  	
  250

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James
  Hodgson

  	
   

  	
  None

  	
   

  	
  250

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dale
  Frey 

  	
   

  	
  None

  	
   

  	
  250

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  



 


A-4

















 


EXHIBIT B


 


Douglas Dynamics Holdings, Inc.

Class B Securityholders




as of February 12, 2010


 


	
  Name
  and Address of 

  Class B Securityholder

  	
   

  	
  Shares
  of

  Common Stock

  	
   

  	
  Shares
  of

  Series A

  Preferred Stock

  	
   

  	
  Shares
  of

  Series B

  Preferred Stock

  	
   

  	
  Shares
  of

  Series C

  Preferred Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aurora
  Equity Partners II L.P.

  (Successor
  in Interest from dissolution of Aurora Industrial Holdings LLC, formerly
  Douglas Dynamics Holdings, LLC) 

  c/o Aurora Capital Group

  10877 Wilshire Boulevard, Suite 2100

  Los Angeles, CA 90024

  Attn:  Timothy J. Hart

  	
   

  	
  296,070

  	
   

  	
  None

  	
   

  	
  1

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:    (310) 551-0101

  Telecopy No.:       (310) 277-5591

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With copies of
  any notice to:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gibson, Dunn & Crutcher LLP

  333 S. Grand Avenue

  Los Angeles, CA 90071

  Attn:  Bruce D. Meyer, Esq.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:    (213) 229-7979

  Telecopy No.:       (213) 229-7520

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aurora
  Overseas Equity Partners II, L.P.

  (Successor in Interest from dissolution of Aurora Industrial Holdings LLC,
  formerly Douglas Dynamics Holdings, LLC) 

  c/o Aurora Capital Group

  10877 Wilshire Boulevard, Suite 2100

  Los Angeles, CA 90024

  Attn:  Timothy J. Hart

  	
   

  	
  3,930

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:    (310) 551-0101

  Telecopy No.:       (310) 277-5591

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With copies of
  any notice to:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gibson, Dunn & Crutcher LLP

  333 S. Grand Avenue

  Los Angeles, CA 90071

  Attn:  Bruce D. Meyer, Esq.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:    (213) 229-7979

  Telecopy No.:       (213) 229-7520

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-1

















 


EXHIBIT
C


 


Douglas Dynamics Holdings, Inc.

Class C Securityholders


 


as of February 12, 2010


 


	
  Name
  and Address of 

  Class C Securityholder

  	
   

  	
  Shares of

  Common

  Stock

  	
   

  	
  Options to

  Purchase

  Common Stock

  	
   

  	
  Shares of

  Series A

  Preferred Stock

  	
   

  	
  Shares of

  Series B

  Preferred Stock

  	
   

  	
  Shares of

  Series C

  Preferred Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ares
  Corporate Opportunities Fund, L.P. 

  1999 Avenue of the Stars, 19th Floor

  Los Angeles, California 90067

  Attn:  Jeffrey Serota

  	
   

  	
  200,000

  	
   

  	
  857

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:    (310) 201-4100

  Telecopy No.:       (310) 201-4157

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With copies of
  any notice to:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cahill Gordon & Reindel LLP

  80 Pine Street

  New York, New York 1005

  Attn:  Jonathan Schaffzin, Esq.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:    (212) 751-3000

  Telecopy No.:       (212) 269-5420

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


C-1














 


EXHIBIT D


 


Registration Rights


 


1.             “Piggy-Back” Registration.


 


(a)           Right to Include Registrable
Securities.  If the Company at any
time following a Qualified IPO, proposes to register any of its equity
securities under the Act (other than by a registration on Form S-4 or Form S-8
or any successor or similar forms), whether or not for sale for its own
account, in a manner which would permit registration of Registrable Securities
for sale to the public under the Act, then the Company will each such time give
prompt written notice (which shall be at least thirty (30) days prior to
filing) to all Eligible Holders of Registrable Securities of its intention to
do so, of such Eligible Holders’ rights under this Paragraph 1 and, to the
extent such information is available, of the type and number of equity
securities to be registered, the distribution arrangements and if the offering
is underwritten the proposed price and identity of the lead
underwriter(s).  Upon the written request
of any such Eligible Holder made within twenty (20) days after the receipt of
any such notice (which request shall specify the Registrable Securities
intended to be disposed of by such Eligible Holder and the intended method of
disposition thereof), the Company will use its best efforts to effect the
registration under the Act of all Registrable Securities which the Company has
been so requested to register by the holders thereof, to the extent requisite
to permit the disposition (in accordance with the intended methods thereof as
aforesaid) of the Registrable Securities so to be registered, by inclusion of
such Registrable Securities in the registration statement which covers the
securities which the Company proposes to register or in a separate registration
statement concurrently filed and on terms substantially the same as those being
offered to the Company; provided, however, that 
if, at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each
Eligible Holder of Registrable Securities and, thereupon:


 


(i)            in the case of a determination not
to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), and


 


(ii)           in the case of a delay in
registering, shall be permitted to delay registering any Registrable Securities
for the same period as the delay in registering such other securities.


 


(b)           Priority in “Piggy-Back”
Registrations.  If a registration
pursuant to this Paragraph 1 involves an underwritten offering and the
managing underwriter advises the Company in writing that, in its opinion, the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
offering, the Company will include in such registration to the extent of the
number which the


 


D-1

















 


Company is so advised can
be sold in such offering without adversely affecting the offering, securities
determined as follows:


 


(i)            first, the securities proposed by
the Company to be sold for its own account,


 


(ii)           second, any Registrable Securities
requested to be included in such registration pro rata among
the holders thereof requesting such registration on the basis of the number of
shares of such securities requested to be included by such holders, and


 


(iii)          third, any other securities of the
Company proposed to be included in such registration statement in accordance
with the priorities, if any, then existing among the holders of such
securities.


 


2.             Demand Registration Right of Certain Securityholders.


 


(a)           Right to Require Registration.  Subject to the provisions of this
Paragraph 2, at any time after the date 6 months following a Qualified
IPO, any Holder of 10% or more of the outstanding Common Stock (a “Demand
Holder”) shall have the right to require the Company to file a registration
statement under the Securities Act for a public offering of all or any portion
of the Registrable Securities held by such Holder when such right is exercised
(the shares subject to the demand, the “Registration Demand Securities”),
provided that any request for a
Demand Registration (as defined below) shall not be otherwise deemed to be
effective unless such request is with respect to Registrable Securities
constituting at least five percent (5%) of the outstanding shares of the class
of Registrable Securities.  The demand
registration rights granted to the Demand Holders in this
Paragraph 2 are subject to the following limitations:  (i) each Demand Holder may make a demand
under this Paragraph 2 only two (2) times (a “Demand Registration”);
(ii) the Company shall not be obligated to cause any registration statement
filed under this Paragraph 2 to be declared effective less than six months
after the effective date of the most recent registration statement filed by the
Company on its own behalf; (iii) the managing underwriter of any such
offering shall be a nationally recognized investment banking firm selected by
the Company and approved by the Demand Holder making the Demand Registration
(which approval shall not be unreasonably withheld); (iv) notwithstanding
the giving of notice by a Demand Holder of the exercise of its right to require
registration under this Paragraph 2, the Company may elect to convert such
registration into a registration of shares for sale by the Company pursuant to
Paragraph 1 hereof by providing notice to the Securityholders in accordance
with Paragraph 1, and in such event the provisions of Paragraph 1
shall apply to such registration rather than the provisions of this
Paragraph 2 and such registration shall not count as a Demand
Registration; (v) during any two-year period, the Company may make a
one-time election to postpone the filing or the effectiveness of a registration
statement for a Demand Registration for up to six months if the Board
determines, in its good faith judgment, that (x) such Demand Registration
would reasonably be expected to have an adverse effect on, interfere with or
delay any proposal or plan by the Company or any of its subsidiaries to engage
in any acquisition of assets (other than in the ordinary course of business) or
any merger, consolidation, tender offer or similar transaction, (y) the
filing of a registration statement or a sale of Registrable Securities pursuant
thereto would require disclosure of material information


 


D-2

















 


that the Company has a
bona fide business purpose for preserving as confidential or (z) the
Company is unable to comply with the registration requirements of the
Commission; provided, that, in
such event, the holders of Registrable Securities initially requesting such
Demand Registration will be entitled to withdraw such request and, if such
request is withdrawn, such request for Demand Registration will not count as a
request for Demand Registration hereunder and the Company will pay all
Registration Expenses in connection with such withdrawn registration request;
and (vi) any demand under this Paragraph 2 shall be for a firm
commitment underwritten offering, with respect to which the Company shall be
required to maintain an effective registration statement for a maximum of 90
days.


 


(b)           Notice of Exercise of Demand
Registration Right; Participation Rights. 
Any Demand Holder shall provide written notice to the Company of the
Demand Registration (which notice shall state the number of shares of
Registrable Securities the Demand Holder desires the Company to register and
the intended method of disposition of such securities), and the Company
promptly shall provide written notice of such Demand Registration to all of the
other Securityholders and all of the Securityholders then will have the opportunity
to include in the offering shares of Registrable Securities then owned by such
Securityholders, but in each case only to the extent permitted by
Paragraph 2(c) below.  In
addition, subject to Paragraph 2(c) below, the Company may elect to
include in any registration statement and offering pursuant to this
Paragraph 2 newly issued shares of Registrable Securities.  Solely for purposes of Paragraphs 3
through 9 below, any securities registered pursuant to this Paragraph 2
shall be deemed to be Registrable Securities.


 


(c)           Priority.  Notwithstanding the foregoing, if the
registration pursuant to this Paragraph 2 involves an underwritten
offering and the managing underwriter advises the Company in writing that the
number of shares of Registrable Securities desired to be offered by the Company
or Securityholders other than the Demand Holder (the “Other Sellers”)
together with the Registration Demand Securities of the Demand Holder exceeds
the maximum number of such shares which the managing underwriter considers, in
good faith, to be appropriate based on market conditions and other relevant
factors (including, without limitation, pricing) (the “Maximum Number”),
then the securities proposed to be included by the Company shall be excluded
from such registration before any such securities of the Demand Holder or the
Other Sellers.  If, and to the extent
that, after exclusion of the securities proposed to be included by the Company,
the Registration Demand Securities proposed to be included by the Demand Holder
and the securities proposed to be included by the Other Sellers exceeds the
Maximum Number, then the Registration Demand Securities proposed to be included
by the Demand Holder and the securities proposed to be included by the Other
Sellers that may be included in the underwriting shall be allocated among all
Securityholders thereof, including the Demand Holder, in proportion (as nearly
as practicable) to the amount of Registrable Securities owned by each
Securityholder; provided, however, that the number of Registration
Demand Securities to be included in such underwriting is not reduced below
thirty-five percent (35%) percent of the aggregate number of Registration
Demand Securities for which inclusion has been requested by the Demand Holder.  Each of the Demand Holder, the Other Sellers and the
Company (in the event that any securities are to be offered by the Company) may
withdraw from any demand registration pursuant to this Paragraph 2 by
giving written notice to the Company prior to the effective date of such
registration statement and, in the event of a withdrawal by the Demand Holder,
such withdrawn Demand Registration shall not be deemed to be a Demand
Registration counting against the


 


D-3

















 


maximum of two Demand
Registrations set forth in Paragraph 2(a) if the Demand Holder pays
or promptly reimburses the Company for all Registration Expenses incurred by
the Company in connection with such withdrawn Demand Registration.


 


3.             Registration Procedures.  If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Act as provided in Paragraph 1 or 2, the Company will, subject
to the terms and conditions of Paragraph 1 or 2:


 


(a)           prepare and file with the Commission
as expeditiously as possible (and, in any event, within ninety (90) days), the
requisite registration statement to effect such registration and use its best
efforts to cause such registration statement to become effective; provided, however, that as provided in
Paragraph 1 and 2 hereof, the Company may discontinue any registration of
its securities at any time prior to the effective date of the registration
statement relating thereto;


 


(b)           prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with respect
to the disposition of all securities covered by such registration statement
until the earlier of such time as all of such securities have been disposed of
in accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement or the expiration of ninety
(90) days after such registration statement becomes effective; provided, however,
that if less than all the Registrable Securities are withdrawn from
registration after the expiration of such period, the shares so withdrawn shall
be allocated pro rata among the holders thereof on the basis
of the respective numbers of Registrable Securities held by them included in
such registration;


 


(c)           promptly furnish to each seller of
Registrable Securities covered by such registration statement 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 contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Act, in conformity with the requirements of
the Act, and such other documents as such seller may reasonably request;


 


(d)           use its best efforts to register or
qualify, prior to the effective date of such registration, all Registrable
Securities and other securities covered by such registration statement under
such securities or blue sky laws of such jurisdictions as each seller thereof
shall reasonably request, to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and take any
other action which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the securities
owned by such seller, except that the Company shall not for any such purpose be
required to:


 


(i)            qualify generally to do business as
a foreign corporation in any jurisdiction wherein it would not but for the
requirements of this Paragraph 2(d) be obligated to be so qualified,


 


D-4

















 


(ii)           subject itself to taxation in any
such jurisdiction, or


 


(iii)          consent to general service of process
in any such jurisdiction;


 


(e)           use its best efforts to cause, prior
to the effective date of such registration statement, all Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities;


 


(f)            furnish to each seller of
Registrable Securities covered by such registration statement a signed
counterpart, addressed to such seller (and the underwriters, if any), of:


 


(i)            an opinion of counsel for the
Company, dated the effective date of such registration statement (or, if such
registration includes an underwritten public offering, an opinion of counsel
for the Company dated the date of the closing under the underwriting
agreement), reasonably satisfactory in form and substance to such seller, and


 


(ii)           a “comfort” letter, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, a “comfort” letter dated the date of
the closing under the underwriting agreement), signed by the independent public
accountants who have certified the Company’s financial statements included in
such registration statement,


 


covering substantially
the same matters with respect to such registration statement (and the
prospectus included therein) and, in the case of the accountants’ letter, with
respect to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer’s counsel and in accountants’ letters
delivered to the underwriters in underwritten public offerings of securities
and, in the case of the accountants’ letter, such other financial matters as
such seller or such holder (or the underwriters, if any) may reasonably
request;


 


(g)           immediately notify each holder of
Registrable Securities covered by such registration statement, at any time when
a prospectus relating thereto is required to be delivered under the Act, of the
happening of any event or the existence of any condition as a result of which
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made, or
if in the opinion of counsel for the Company it is necessary to supplement or
amend such prospectus to comply with law and, at the request of any such holder
promptly prepare and furnish to such holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made
or such prospectus, as supplemented or amended, shall comply with law;


 


(h)           otherwise use its best efforts to
comply with all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably


 


D-5

















 


practicable, an earnings
statement covering the period of at least twelve (12) months, but not more than
eighteen (18) months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act and the rules and
regulations of the Commission thereunder, and not file any amendment or
supplement to such registration statement or prospectus to which any such
seller of Registrable Securities covered by such registration statement shall
have reasonably objected on the grounds that such amendment or supplement does
not comply in all material respects with the requirements of the Act or of the rules or
regulations thereunder, having been furnished with a copy thereof at least five
(5) business days prior to the filing thereof;


 


(i)            provide a transfer agent and
registrar for all Registrable Securities covered by such registration statement
not later than the effective date of such registration statement;


 


(j)            use its best efforts to list, not
later than the effective date of such registration statement, all Registrable
Securities covered by such registration statement on any securities exchange on
which any of the Registrable Securities are then listed or any other trading
market on which any of the Registrable Securities are then admitted for
trading; and


 


(k)           pay all Registration Expenses
relating to any such registration.


 


The Company may require
each seller of Registrable Securities as to which any registration is being
effected to furnish the Company with such information and undertakings as it
may reasonably request regarding such seller and the distribution of such
securities as the Company may from time to time reasonably request in writing.


 


Each holder of
Registrable Securities agrees by acquisition of such Registrable Securities as
follows:


 


(A)          that upon receipt of any notice from
the Company of the happening of any event of the kind described in
Paragraph 3(g), such holder will forthwith discontinue such holder’s
disposition of Registrable Securities pursuant to the registration statement
relating to such Registrable Securities until such holder’s receipt of the
copies of the supplemented or amended prospectus contemplated by
Paragraph 3(g) and, if so directed by the Company, will deliver to
the Company (at the Company’s expense) all copies, other than permanent file
copies, then in such holder’s possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice, and


 


(B)          that it will immediately notify the
Company, at any time when a prospectus relating to the registration of such
Registrable Securities is required to be delivered under the Act, of the
happening of any event as a result of which information previously furnished by
such holder to the Company in writing for inclusion in such prospectus contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made.


 


In the event the Company
or any such holder shall give any such notice, the period referred to in
Paragraph 3(h) shall be extended by a number of days equal to the
number of days during the period from and including the giving of notice
pursuant to Paragraph 3(g) to and including the


 


D-6

















 


date when each seller of
any Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Paragraph 3(h).


 


4.             Underwritten
Offerings.


 


(a)           Underwriting Agreement.  If the Company at any time proposes to
register any of its securities under the Act as contemplated by
Paragraph 1 or 2 and such securities are to be distributed by or through
one or more underwriters, the Company will, subject to the provisions of
Paragraph 1(b) or 2(c), use its best efforts to arrange for such
underwriters to include the Registrable Securities to be offered and sold by a
holder who elects to exercise his rights pursuant to Paragraph 1(a) or
2(a) or (b) among the securities to be distributed by such
underwriters for and on the same price, terms, and conditions offered to the Company,
and each holder of Registrable Securities agrees, by acquisition of such
Registrable Securities, that all Registrable Securities of such holder to be
included in such registration shall be distributed and sold through such
underwriters.  The holders of Registrable
Securities to be distributed by such underwriters shall be parties to the
underwriting agreement between the Company and such underwriters and may, at
their option, require that any or all of 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 holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters shall also be made to and for the benefit of
such holders of Registrable Securities. 
The Company will use its best efforts to ensure that no underwriter
shall require any holder of Registrable Securities to make any representations
or warranties to or agreements, including indemnification obligations, with the
Company or the underwriters other than representations, warranties or
agreements, including indemnification obligations, regarding such holder and
such holder’s intended method of distribution and any other representation
required by law, and, despite the Company’s best efforts, if an underwriter
requires any holder of Registrable Securities to make additional representation
or warranties to or agreements, including indemnification obligations, with
such underwriter, such holder may elect not to participate in such underwritten
offering (but shall not have any claims against the Company as a result of such
election).


 


(b)           Selection of Underwriters.  The selection of the underwriter or
underwriters for the public offering to be made pursuant to a registration
statement filed under Paragraph 1 above shall be made by the Company, in
its sole discretion, from amongst underwriting firms of national
reputation.  Notwithstanding anything
else in this Exhibit D to the contrary, if General Electric Pension
Trust (“GEPT”) is eligible to participate in an underwriting pursuant to the
terms hereof and the General Electric Company is directly or indirectly the
beneficial owner of five percent (5%) or more of the outstanding equity
interests of an underwriter or underwriters acting in such underwriting, GEPT
shall have the absolute right to disapprove such underwriter or underwriters so
owned by General Electric Company.


 


(c)           Holdback Agreements.


 


(i)            Whether or not a holder of
Registrable Securities participates in a registration pursuant to
Paragraph 1, such holder agrees by acquisition of its Registrable
Securities, if so requested by the Company or required by the


 


D-7

















 


managing
underwriter, not to effect any public sale or distribution of such securities
or sales of such securities pursuant to Rule 144 under the Act or
otherwise, (I) during the later to occur of (A) thirty (30) days
prior to any firm commitment underwritten registration pursuant to
Paragraph 1 has become effective or (B) such period of time after
which a written notice has been provided by the Company to such holder of an
intention to undertake a firm commitment underwritten registration pursuant to
Paragraph 1, and (II) the ninety (90) days after any firm commitment
underwritten registration pursuant to Paragraph 1 has become effective; provided, however,
that either the Company or such managing underwriter shall be entitled, in its
discretion, to extend the period during which the sale or distribution of
Registrable Securities is restricted pursuant to this paragraph by up to an
additional one hundred and twenty (120) days following the effective date of
any such registration; provided, further,
that this paragraph (i) shall not apply (x) to any holder unless all
executive officers and directors and greater than five percent (5%)
stockholders of the Company enter into similar agreements or (y) for a
period in excess of 120 days in the aggregate without first obtaining the
consent of each holder affected thereby.


 


(ii)           The Company agrees:


 


(A)      not to effect any public sale or
distribution of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during the seven (7) days
prior to and the ninety (90) days after any firm commitment underwritten
registration pursuant to Paragraph 1 or 2 has become effective, except as
part of such underwritten registration and except pursuant to registrations on Form S-4
or Form S-8 or any successor or similar forms thereto, and


 


(B)      to use its best efforts to cause each
holder of its equity securities or any securities convertible into or
exchangeable or exercisable for any of such securities, in each case purchased
from the Company at any time after the date hereof (other than in a public
offering) to agree not to effect any such public sale or distribution of such
securities, during such period or, in either case, if the managing underwriter
advises the Company in writing that in its opinion, no such public sale or
distribution should be effected for a specified period longer than ninety (90)
days after such underwritten registration in order to complete the sale and
distribution of securities included in such registration, during a reasonably
longer period after such underwritten registration, except as part of such
underwritten registration.


 


5.             Preparation; Reasonable Investigation.  In connection with the preparation and filing
of each registration statement under the Act, the Company will give the holders
of Registrable Securities registered under such registration statement, their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them such access
to its books and records and such opportunities to discuss the business,
finances and accounts of the


 


D-8

















 


Company and its
subsidiaries with its officers, directors and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such holders’ and such underwriters’ respective counsel, to
conduct a reasonable investigation within the meaning of the Act.


 


6.             Certain Rights of Holders.  The Company will not file any registration
statement under the Act which refers to any holder of Registrable Securities by
name or otherwise without the prior written approval of such holder, which may
not be unreasonably withheld.


 


7.             Indemnification.


 


(a)           Indemnification by the Company.  In the event of any registration of any
securities of the Company under the Act, the Company will, and hereby does,
indemnify and hold harmless the seller of any Registrable Securities covered by
any registration statement filed pursuant to Paragraph 1 or 2, its
directors, officers, partners, employees, agents and investment advisors, each
other Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such seller or any such
underwriter within the meaning of either Section 15 of the Act or Section 20
of the Exchange Act, from and against any losses, claims, damages or
liabilities, joint or several (or actions or proceedings, whether commenced or
threatened, in respect thereof) (collectively, “Claims”), to which such
seller or any such director or officer or employee or agent or investment
advisor or underwriter or controlling person may become subject under either Section 15
of the Act or Section 20 of the Exchange Act or otherwise, insofar as such
Claims arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such securities were registered under the Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto (if used during the period the Company is
required to keep the registration statement current) (collectively, “Registration
Documents”), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances in which made, or any
violation by the Company of the Act or any state securities law, or any rule or
regulation promulgated under the Act or any state securities law, or any other
law applicable to the Company relating to any such registration or
qualification, and the Company will reimburse such seller and each such
director, officer, employee, agent, investment advisor, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such Claim; provided, however,
that the Company shall not be liable in any such case to the extent that any
such Claim or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any such
Registration Document in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by
such seller stating that it is for use in the preparation thereof; provided,  further, that the Company shall not be
liable to any Person who participates as an underwriter in the offering or sale
of Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of either Section 15 of the Act or Section 20
of the Exchange Act (or the selling holder of Registrable Securities, if the
sale is not made through an underwriter) in any such case to the extent that
any such Claim or expense arises out of such Person’s failure to send or give a
copy of the final prospectus to the Person claiming an untrue statement or
alleged untrue statement or omission or alleged omission at or


 


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prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such seller or
any such director, officer, employee, agent, investment advisor, partner,
underwriter or controlling person and shall survive the transfer of such
securities by such seller.


 


(b)           Indemnification by the Sellers.  The Company may require, as a condition to
including any Registrable Securities in any registration statement filed
pursuant to Paragraph 1 or 2, that the Company shall have received an
undertaking satisfactory to it from the prospective seller of such securities,
to indemnify and hold harmless (in the same manner and to the same extent as
set forth in this Paragraph 7(b)) the Company, each director of the
Company, each officer of the Company and each other person, if any, who
controls the Company within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act and each underwriter participating in any
distribution being made pursuant to such registration statement, with respect
to any statement or alleged statement or omission or alleged omission from such
Registration Document, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by
such seller specifically stating that it is for use in the preparation of such
Registration Document.  Notwithstanding
the foregoing, in no event shall any selling stockholder or any director,
officer, employee, agent, investment advisor or controlling person thereof be
liable to indemnify the Company pursuant to this Paragraph 7(b) in an
amount in excess of the amount of the net proceeds of the Registrable
Securities sold by him, her or it in any such offering.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company of
any such director, officer or controlling person and shall survive the transfer
of such securities by such seller.  The
Company shall use its best efforts to ensure that no underwriter shall require
any holder of Registrable Securities to provide any indemnification other than
that provided hereinabove in this Paragraph 7(b), and, if, despite the
Company’s best efforts, an underwriter requires any holder of Registrable
Securities to provide additional indemnification, such holder may elect not to
participate in such underwritten offering (but shall not have any claim against
the Company as a result of such election).


 


(c)           Notices of Claims, etc.  Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
Claim referred to in the preceding subdivisions of this Paragraph 7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of this
Paragraph 7, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. 
In case any such action is brought against an indemnified party, unless
in such indemnified party’s reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist in respect of such claim,
the indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently


 


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incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation.  No indemnifying party
shall consent to entry of any judgment or enter into any settlement of any
pending or threatened proceeding in respect of which an indemnified party is or
could have been a party and indemnity could have been sought under
Paragraph 7(a) without the consent of the indemnified party which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.


 


(d)           Other Indemnification.  Indemnification similar to that specified in
the preceding subdivisions of this Paragraph 7 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any Federal or state law or regulation of any governmental
authority, other than the Act.  If the
indemnification provided for in Paragraphs 7(a), (b) or (c) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other hand from the offering of the securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations; provided, however,
that in no event shall any contribution by the selling stockholder or any director,
officer, employee, agent, investment advisor or controlling person thereof
pursuant to this Paragraph 7(d) exceed the amount of the net proceeds
of the Registrable Securities sold by him, her or it in any such offering.


 


(e)           Indemnification Payments.  The indemnification required by this
Paragraph 7 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.


 


8.             Adjustment Affecting Registrable Securities.  The Company will not effect or permit to
occur any combination or subdivision of shares which would adversely affect the
ability of the holders of Registrable Securities to effect the registration of
such securities in the manner contemplated by these registration rights
provisions.


 


9.             Covenants Relating to Rule 144.  At all times after the effective date of the
registration statement under the Act of the initial underwritten public
offering of Common Stock, and until such time as all of the Registrable
Securities cease to be Registrable Securities, the Company will file reports in
compliance with the Exchange Act and will, at its expense, forthwith upon the
request of any holder of Restricted Securities (as defined in Rule 144 (or
any successor provision under the Act)), deliver to such holder a certificate,
signed by the Company’s principal financial officer, stating:


 


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(a)           the Company’s name, address and
telephone number (including area code);


 


(b)           the Company’s Internal Revenue
Service identification number;


 


(c)           the Company’s Commission file number;


 


(d)           the number of shares of Common Stock
of the Company outstanding as shown by the most recent report or statement published
by the Company; and


 


(e)           whether the Company has filed the
reports required to be filed under the Exchange Act for a period of at least
ninety (90) days prior to the date of such certificate and in addition has
filed the most recent annual report required to be filed thereunder.


 


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