exv10w23






Exhibit 10.23




EXECUTION COPY




GLOBAL MONITORING SYSTEMS, INC.

STOCKHOLDERS AGREEMENT



          THIS STOCKHOLDERS AGREEMENT (this “Agreement”) is entered into as of December 22,
2005, by and among GLOBAL MONITORING SYSTEMS, INC., a Delaware corporation (the
“Corporation”), AMERICAN CAPITAL STRATEGIES, LTD., a Delaware corporation (together with
its transferees, “ACAS” and together with each of the persons who execute this Agreement as
a stockholder, warrant holder or option holder of the Corporation, each a “Stockholder” and
collectively, the “Stockholders”).



WITNESSETH:



          WHEREAS, the Corporation is presently authorized to issue 3,200,000 shares of Common Stock,
par value $0.001 per share, consisting of Class A Voting Common Stock and Class B Non-Voting Common
Stock (“Common Stock”), and 1,500,000 shares of Series A Redeemable Paid-in-Kind Preferred
Stock, par value $0.001 per share, consisting of Series A-1 Convertible Participating Preferred
Stock and Series A-2 Convertible Participating Preferred Stock (“Preferred Stock”);


          WHEREAS, the Stockholders have received shares of Common Stock, Preferred Stock and warrants
to purchase shares of Common Stock (“Warrants”) pursuant to the Master Restructuring
Agreement and Plan of Merger (as hereinafter defined) and the capitalization of the Corporation is
set forth on Schedule A hereto; and


          WHEREAS, the Stockholders and the Corporation desire to enter into this Agreement for the
purposes, among others, of (i) assuring continuity in the management and ownership of the
Corporation and (ii) limiting the manner and terms by which the Corporation Securities (as
hereinafter defined) may be transferred.


          NOW THEREFORE, in consideration of the mutual covenants and agreements of the parties hereto,
and of the mutual benefits to be gained by the performance thereof, and for other good and valuable
consideration, the receipt whereof each to the other is hereby acknowledged, the parties for
themselves, their heirs, executors, administrators, successors and assigns, do hereby covenant and
agree as follows:



 









 








ARTICLE 1

CERTAIN DEFINED TERMS



          As used in this Agreement, the following additional terms, not defined elsewhere, have the
meanings herein specified:


          “ACAS” shall have the meaning ascribed thereto in the Recitals.


          “ACAS Limited Sale Notice” shall have the meaning set forth in Section 3.5(a).


          “ACAS Sale Notice” shall have the meaning set forth in Section 3.5(b).


          “ACFS” shall have the meaning set forth in Section 10.1.


          “Affiliate” shall mean a Person that is controlled by, that controls or that is under
common control with a particular Person and shall specifically include any present or former
officer, director or employee of a particular Person.


          “Board of Directors” shall mean the board of directors of the Corporation.


          “Bona Fide Offer” shall mean a bona fide, firmly committed offer for the Transfer. of
Corporation Securities owned by a Selling Stockholder to a transferee which



               (i) is not a competitor of or an investor in a competitor of the Corporation or
any of its Subsidiaries; and



               (ii) has the financial resources to complete the purchase and meet other
capital requirements that might be sought of stockholders.



          “Bona Fide Offeror” shall mean any Person or other entity who has made a Bona Fide
Offer to a Selling Stockholder in accordance with Article 3.



          “Business Day” shall mean any day of the year on which national banking institutions
in Bethesda, Maryland are open to the public for conducting business and are not required or
authorized to close.



          “Cause” shall mean, with respect to any Employee Stockholder, the definition of
“Cause” provided in any employment agreement between the Employee Stockholder and the
Corporation or any Subsidiary or, if there is no such provision, that an Employee Stockholder:



               (i) has committed or engaged in an act of fraud, embezzlement, sexual harassment, dishonesty
or theft in connection with his or her duties for the Corporation or any Subsidiary;



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               (ii) has breached or defaulted under his or her agreements or obligations under his or her
employment agreement or his or her confidentiality, non-competition and intellectual property
agreement or any similar agreements with the Corporation or any Subsidiary;



               (iii) is convicted of, or enters a plea of nolo contendre with respect to, an act of criminal
misconduct; or



               (iv) has engaged in an act of incompetence, gross negligence or willful failure to perform his
or her duties or responsibilities (such determination is to be made in writing by a majority of the
Board of Directors of the Corporation or any Subsidiary).



Notwithstanding the foregoing, in the event that the Corporation or any Subsidiary provides notice
of termination for Cause in reliance upon the circumstances contained in (iv) above, Employee
Stockholder shall have the opportunity to cure such circumstances within two (2) Business Days. of
receipt of such notice.



          “Commission” shall mean the Securities and Exchange Commission or any successor agency
of the federal government serving a similar function.


          “Common Stock” shall have the meaning ascribed to such term in the Recitals hereto.


          “Competitive Acts” shall mean, with respect to any Employee Stockholder, any of the
actions described in Exhibit A hereto; provided, that to the extent an Employee
Stockholder is subject to an effective employment, non-compete, confidentiality or similar
agreement with the Corporation or any Subsidiary containing confidentiality, non-compete or
non-solicitation provisions which are less restrictive than the provisions described in Exhibit
A hereto, the less restrictive provisions of such other agreement shall be deemed to apply in
lieu of the provisions set forth on Exhibit A hereto; provided, further,
that all other provisions of Exhibit A shall continue to apply to each Employee
Stockholder.


          “Corporation Securities” shall mean, collectively, Common Stock, Preferred Stock,
Warrants, including any securities issuable upon exercise of Warrants, or other options, warrants
or other securities issued from time to time by the Corporation.


          “Debt Instrument” shall mean any loan agreement, credit agreement, promissory note,
note purchase agreement, capital lease, guarantee or other agreement or instrument of indebtedness
of the Corporation or any Subsidiary or the terms and conditions of any preferred stock or other
securities issued by the Corporation or any Subsidiary that are senior in priority to the Common
Stock; but shall not include any trade indebtedness or accounts payable incurred by the Corporation
or any Subsidiary in the ordinary course of business or any agreements regarding payment of the
same; shall not include any indebtedness to Stockholders or
former Stockholders of the Corporation
or any Subsidiary with respect to purchase options or redemption rights set forth in this Agreement
or otherwise; and shall not include any indebtedness to Stockholders or

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former Stockholders of the
Corporation or any Subsidiary under any stock appreciation rights plan or similar plan.


          “Demand Registration” shall have the meaning set forth in Section 8.2.


          “Demanding Holder” shall have the meaning set forth in Section 8.2.


          “Disability” shall mean a physical or mental incapacity or disability which renders
the Employee Stockholder substantially unable to render services to the Corporation or any
Subsidiary for one hundred twenty (120) days in any twelve (12) month period.


          “Discounted Value” shall mean, with respect to any particular Corporation Securities,
fifty percent (50%) of the lower of the then Fair Market Value or Original Cost of such Corporation
Securities.


          “Dosimetry” shall mean Dosimetry Acquisitions (U.S.), Inc., a Delaware corporation.


          “Employee Stockholders” shall mean the employee stockholders set forth in Schedule
A hereto, any employees of the Corporation or any Subsidiary who become a party to this
Agreement, and their respective successors and permitted assigns.


          “Estate” shall mean and include the executors or administrators of a deceased
Stockholder, and any and all Persons who may claim any interest in his property under such deceased
Stockholder’s will or by virtue of any laws of descent and distribution.


          “Exempt Transfer” shall have the meaning ascribed to such term in Section 3.1 hereto.


          “Fair Market Value” shall mean the fair market value of a particular type of
Corporation Securities, as determined in accordance with this definition. The Fair Market Value of
a share of Common Stock or Preferred Stock will be equal to its value determined in connection with
a Sale Transaction, and if not available, its Market Price, and if not available, its value as
determined in good faith by the Board of Directors. The Fair Market Value of the Warrants shall be
equal to the aggregate Fair Market Value of the shares of Common Stock for which such Warrants may
then be exercised minus the exercise price to be paid in connection with such exercise. In the
event there is a dispute between the Corporation and a Stockholder as to the Fair Market Value of a
particular type of Corporation Securities and the amount in dispute is greater than $100,000, Fair
Market Value shall be determined by an expert (the “Expert”) designated by the
Corporation’s outside auditor from among investment banks or accounting firms of international
standing, having an office in the City of New York, and not affiliated with ACAS or the Other
Stockholders. The Expert shall be requested to use best efforts to furnish a report to the parties
within thirty (30) calendar days of appointment. If the Expert determines that the Fair Market
Value is at least 10% greater than the Fair Market Value determined in accordance with the second
sentence of this definition, the costs of the Expert shall be borne by

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the Corporation. If the
Expert determines that the Fair Market Value is not at least 10% greater than the Fair Market Value
determined in accordance with the second sentence of this definition, the costs of the Expert shall
be shared equally between the Corporation and the Stockholder or Stockholders disputing the
calculation (and the Corporation is hereby authorized by any Stockholder to deduct from any payment
due such holder by the Corporation such Stockholder’s share of such costs).


          “Financing Conveyance” shall mean a pledge or collateral assignment of a security to a
third party lender to or financing source for (including any agents therefor) ACAS or any of its
Affiliates, and any subsequent foreclosure, deed in lieu of foreclosure or similar event or
transaction whereby such security is further sold, assigned or conveyed and any subsequent sale,
assignment or conveyance of such security by or to any Person thereafter.


          “Fully Diluted Basis” shall mean the determination of the percentage ownership of a
particular type of Corporation Securities based on the number of all outstanding securities of such
type as if all securities eligible for conversion into or that are exercisable or exchangeable for
such class of Corporation Securities had been converted or exercised (including Warrants, which
shall be considered exercised for their maximum number of shares of the type of Corporation
Securities for which they are exercisable, but excluding any shares of Common Stock that may be
issued upon the exercise of options under the Option Plan or any similar plan if such options have
not vested).


          “GDS” shall mean. Global Dosimetry Solutions, Inc. a Delaware corporation.


          “Good Reason” shall mean, with respect to any Employee Stockholder, the definition of
“Good Reason” provided in any employment agreement between the Employee Stockholder and the
Corporation or any Subsidiary or, if there is no such provision and in the absence of the written
consent of Employee Stockholder:



               (i) a reduction in such Employee Stockholder’s base salary, a material reduction or
discontinuance of any material incentive compensation plan or the taking of any action with the
purpose of materially adversely affecting such Employee Stockholder’s participation in benefits
under any fringe benefit provided to such Employee Stockholder (other than as part of an across the
board reduction in salary applicable to all executives at the Corporation or any Subsidiary);



               (ii) a diminution in such Employee Stockholder’s title or position or a significant diminution
in such Employee Stockholder’s authorities, duties or responsibilities set forth in such Employee
Stockholder’s employment agreement with Corporation or any of its Subsidiaries (other than isolated
actions not taken in bad faith and remedied by the applicable entity within thirty (30) days after
written notice thereof is given by such Employee Stockholder), if applicable and provided therein;



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               (iii) the requirement that such Employee Stockholder relocate in violation of such Employee
Stockholder’s employment agreement with the Corporation or any of its Subsidiaries, if applicable
and provided therein; or



               (iv) any failure by the Corporation or any Subsidiary to comply with any material provision of
such Employee Stockholder’s employment agreement with the Corporation or any of its Subsidiaries,
any stock option agreement or other material agreement between such Employee Stockholder and the
Corporation or any Subsidiary (which such failure is not cured within thirty (30) after written
notice thereof to the Corporation or Subsidiary).


          Notwithstanding the foregoing, in the event that such Employee Stockholder provides notice of
termination of employment with the Corporation or any of its Subsidiaries for Good Reason in
reliance upon any of the circumstances contained in this definition, the Corporation or such
Subsidiary shall have the opportunity to cure such circumstances within sixty (60) days of receipt
of such notice. If such Employee Stockholder does not deliver to the Corporation or Subsidiary a
notice of termination within the sixty (60) day period after such
Employee Stockholder has knowledge that an event constituting Good Reason has occurred, such
event will no longer constitute Good Reason.


          “Incentive Stock” shall mean any shares of Common Stock acquired by Employee
Stockholders pursuant to the Option Plan or under any other present or future incentive plan or
program for employees or consultants to the Corporation or any of its Affiliates, whether through
the exercise of stock options or warrants or as a result of the grant of restricted stock,
including any shares of Common Stock issued as a result of such securities, whether by way of stock
split, dividend or otherwise. Corporation Securities shall continue to be “Incentive Stock” while
owned by an Employee Stockholder’s successors and permitted assigns. Shares of restricted stock
shall become “Incentive Stock” when owned outright by an Employee Stockholder (i.e., when
all vesting and other similar restrictions have lapsed).


          “IST” shall mean IST Acquisitions, Inc., a Delaware corporation.


          “Market Price” of any security shall mean the average of the closing prices of such
security’s sales on all securities exchanges on which such security may at the time be listed or,
if there have been no sales on any such exchange on any day, the average of the highest bid and
lowest asked prices on all such exchanges at the end of each day or, if on any day such security is
not so listed, the average of the representative bid and asked prices quoted on the Nasdaq Stock
Market System as of 4:00 P.M., New York time or, if on any day such security is not quoted on the
Nasdaq Stock Market System, the average of the highest bid and lowest asked prices on such day in
the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or
any similar successor organization, in each such case averaged over a period of thirty (30) days
consisting of the day immediately preceding the day as of which “Market Price” is being determined
and the twenty-nine (29) consecutive days prior to such day.



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          “Master Restructuring Agreement and Plan of Merger” shall mean the Master
Restructuring Agreement and Plan of Merger, dated as of the date hereof; among the Corporation,
GDS, Dosimetry, IST and the other parties thereto.


          “Maximum Redemption Amount” shall have the meaning ascribed thereto in Section 5.4.


          “Nasdaq Stock Market” shall mean The Nasdaq Stock Market, Inc.


          “Non-Compete Period” shall mean with respect to any Employee Stockholder, the
non-competition period provided in any agreement between the Corporation or any Subsidiary and such
Employee Stockholder or if there is no such agreement, three (3) years.


          “Offered Securities” shall mean the shares of Corporation Securities that a Selling
Stockholder proposes to sell pursuant to a Sale Notice in accordance with Article 3.


          “Original Cost” shall mean, initially, $100.00 per share, in the case of Common Stock,
$115.11 per share, in the case of Series A-1 Convertible Participating Preferred Stock, $103.60 per
share, in the case of Series A-2 Convertible Participating Preferred Stock, and the
applicable option or warrant exercise price, in the case of Corporation Securities which are
options or warrants. Original Cost of any Corporation Securities issued or sold after the date
hereof shall be the original purchase price thereof or, in the case of options or warrants, the
exercise price.


          “Other Stockholders” shall mean, (a) in connection with any Transfer governed by
Section 3.2, 3.3 and 3.4, the Stockholders who are parties hereto other than ACAS and the Selling
Stockholder in respect of such Transfer and, (b) in all other cases, the Stockholders (including
Employee Stockholders) who are parties hereto other than ACAS.


          “Option Plan” shall mean the Corporation’s 2006 Stock Plan, as the same may be amended
from time to time.


          “Partial Termination” shall have the meaning set forth in Section 3.1.


          “Permitted. Transferee” shall mean (i) a Stockholder’s Estate and heirs, (ii) such
other persons who may be so designated by the Board of Directors, (iii) any estate planning trust
of a Stockholder provided that the grantor Stockholder is trustee of such trust or (iv) such other
personal estate or tax planning vehicle or device of which the grantor Stockholder is a controlling
Person with respect to the voting and the disposition of the Corporation Securities held thereby.


          “Person” shall mean any individual, partnership, limited partnership, corporation,
limited liability company, association, joint stock corporation, trust, joint venture,
unincorporated organization or governmental entity or department, agency or political subdivision
thereof.



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          “Pro Rata Share” shall have the meaning set forth in Section 3.3.


          “Promissory Note” shall mean a promissory note issued by the Corporation in favor of a
Stockholder pursuant to Articles 5 or 6 (i) payable quarterly in level principal payments over a
period not in excess of the lesser of (A) thirty (30) days after the latest maturity date of any
outstanding Debt Instrument of the Corporation or any Subsidiary or (B) five (5) years; (ii) that
bears interest at the greater of (A) a floating rate of two hundred (200) basis points over the
“prime rate” in effect from time to time as reported under current practice under the heading
“Money Rates” in The Wall Street Journal and if a range of rates is listed, the lowest such
rate (and if The Wall Street Journal should discontinue such practice, such other indication of the
“prime rate” as the Board of Directors shall reasonably determine) and (B) subject to any
prohibition contained in any Debt Instrument, the highest rate of interest of any outstanding Debt
Instrument; (iii) secured at least by the Corporation Securities that were the subject of the
purchase for which the Promissory Note is given; and (iv) that is subordinated to any and all
indebtedness for borrowed money of the Corporation or any Subsidiary (whether to ACAS, any
Affiliate of ACAS or any other Person).


          “Public Sale” shall mean any sale pursuant to an underwritten registered public
offering under the Securities Act or any sale pursuant to Rule 144 promulgated under the Securities
Act.


          “Purchaser” shall mean any Stockholder who has elected to purchase Offered Securities
in accordance with Section 3.3.


          “Put Notice” shall mean a written notice given to the Corporation pursuant to Section
5.1 by a holder of Incentive Stock of his or her election to have the Corporation redeem all or
less than all of such holders’ Incentive Stock. The Put Notice shall set forth the number and type
of Incentive Stock to be redeemed.


          “Registrable Securities” shall mean all shares of Common Stock owned by the
Stockholders, including any Common Stock received or issuable as a result of the exercise of the
Warrants or options to purchase Common Stock or as a result of splits, stock dividends or similar
events. Any Registrable Securities will cease to be such when (i) a registration statement covering
such Registrable Securities has been declared effective by the Commission and such Registrable
Securities have been disposed of pursuant to such effective registration statement, (ii) such
Registrable Securities are distributed to the public pursuant to Rule 144 (or any similar provision
then in effect) under the Securities Act or (iii) such Registrable Securities may be resold to the
public without restriction under the Securities Act in accordance with Rule 144(k).


          “Registration Expenses” shall have the meaning ascribed to such term in Section 8.5
hereof.


          “Sale Notice” shall have the meaning set forth in Section 3.2.



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          “Sale Transaction” shall mean a transaction or a series of related transactions
involving (a) the sale of eighty percent (80%) or more of the assets (based on their fair market
value) of the Corporation; (b) any consolidation, merger or recapitalization of the Corporation (i)
in which the Corporation is not the continuing or surviving corporation or (ii) pursuant to which
the Corporation’s voting stock would be converted into cash, securities and/or other property, in
each case other than any such transaction in which holders of the Corporation’s voting stock
immediately before the transaction, in the aggregate, have (or upon conversion, exercise or similar
action would have) more than fifty percent (50%) of the voting power of all issued and outstanding
securities of the surviving corporation after the transaction; (c) the liquidation or dissolution
of the Corporation; or (d) any sale to a Person not Affiliated with a then current stockholder of
voting stock representing more than fifty percent (50%) of the votes eligible to be cast by
stockholders of the Corporation in the election of members of the Board of Directors.


          “Securities Act” shall mean the Securities Act of 1933, as amended.


          “Selling Stockholder” shall have the meaning set forth in Section 3.2.


          “Stockholders” shall have the meaning ascribed to such term in the Recitals hereto and
any future stockholder of the Corporation who agrees to bind itself as a Stockholder hereto in
accordance with this Agreement;


          “Subsidiary” shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, if each of the corporations other than the
last corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Subsidiary on a date after
the execution of this Agreement shall be considered a Subsidiary commencing as of such date.


          “Transfer” shall mean, with respect to any Corporation Securities, any sale,
assignment, transfer, alienation, conveyance, gift, bequest by will or under intestacy laws,
pledge, lien, encumbrance or other disposition, with or without consideration and whether
voluntarily or involuntarily by operation of law, of all or part of such Corporation Securities, or
of any beneficial interest therein, now or hereafter owned by a Stockholder. Transfer shall not
include the transfer, direct or indirect, of any interest in any Corporation Securities by ACAS or
any successor or assignee of ACAS. “Transferred” shall have the correlative meaning.


          “Warrants” shall have the meaning ascribed to such term in the Recitals hereto.



ARTICLE 2




STOCKHOLDERS’ COVENANTS,

REPRESENTATIONS AND WARRANTIES


          Each of the Stockholders represents and warrants severally, to each of the other Stockholders
and to the Corporation, that this Agreement constitutes the legal, valid and binding

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obligation of
such Stockholder, enforceable against such Stockholder in accordance with its terms, and the
execution, delivery and performance of this Agreement by such Stockholder does not and will not
conflict with, violate or cause a breach of any agreement, contract or instrument to which such
Stockholder is a party or any judgment, order or decree to which such Stockholder is subject.



ARTICLE 3




GENERAL RESTRICTIONS ON DISPOSITION OF SHARES


          3.1 Transfer of Securities. No Other Stockholder shall undertake a Transfer of
Corporation Securities except pursuant to (i) a Public Sale, (ii) a Transfer to a Permitted
Transferee that agrees to be bound by the terms hereof and that complies with the terms of this
Agreement (each of (i) and (ii), an “Exempt Transfer”), (iii) in connection with a Bona
Fide Offer in accordance with Sections 3.2, 3.3 and 3.4 or (iv) Articles 5 or 6 of this Agreement.
In addition, no Stockholder other than ACAS may undertake a Transfer of any Corporation Securities
(except to ACAS or the Other Stockholders pursuant to Section 3.3 or pursuant to an effective
registration statement under the Securities Act) without first delivering to the Corporation an
opinion of counsel (reasonably acceptable in form and substance to the Corporation) that no
registration under the Securities Act is required in connection with such Transfer. The
restrictions on the Transfer of Corporation Securities set forth in this Article 3 shall continue
with respect to each share of Corporation Securities governed hereunder until the date on which the
Corporation completes an initial public offering of the Corporation Securities under the Securities
Act or completes a Sale Transaction in which the surviving corporation or its parent has a class of
securities registered under the Securities Exchange Act of 1934, as amended (each, a “Partial
Termination”).


          3.2 Notice of Proposed Sale of Corporation Securities. In advance of any proposed
Transfer other than an Exempt Transfer, an Other Stockholder (the “Selling Stockholder”)
will give written notice (the “Sale Notice”) to the Corporation, ACAS and the Other
Stockholders that the Selling Stockholder believes it has a Bona Fide Offer that it desires to
accept. The Sale Notice will disclose the number and type of shares of Corporation Securities to be
sold, the identity of the Bona Fide Offeror and the terms and conditions of the proposed Transfer
and that the Bona Fide Offeror to such Transfer has indicated in writing that it will execute and
deliver a counterpart to this Agreement binding itself as a Stockholder to the terms hereof upon
the consummation of such proposed Transfer.


          3.3 Right of First Refusal. If the Selling Stockholder delivers a Sale Notice pursuant
to Section 3.2, such notice shall be deemed to constitute an offer by the Selling Stockholder to
Transfer (in accordance with and subject to the provisions of this Section 3.3) all, but not less
than all, of the Corporation Securities identified in the Sale Notice (the “Offered
Securities”), at the price and upon the other terms and conditions described in the Sale Notice
to ACAS and the Other Stockholders on at least a pro rata basis in accordance with the number of
shares of Common Stock or Preferred Stock, as the case may be, owned
by each of them in relation to
the number of shares of Common Stock or Preferred Stock, as the case may be, owned

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by the
Stockholders, other than the Selling Stockholder, on a Fully Diluted Basis (as to each of ACAS and
the Other Stockholders, its “Pro Rata Share”).


          (a) Upon issuance of a Sale Notice, ACAS and each Other Stockholder may exercise its purchase
rights under this Section 3.3 by delivering written notice to the Selling Stockholder and the
Corporation stating the number of Offered Securities ACAS or such Other Stockholder desires to
purchase within twenty (20) days after receipt of the Sale Notice. If either ACAS or any Other
Stockholder fails to deliver a notice setting forth its election to purchase all or any portion of
the Offered Securities within such twenty (20) day period, each such Stockholder shall be deemed
irrevocably to have elected not to purchase the Offered Securities. If ACAS and the Other
Stockholders elect to purchase an aggregate number of Offered Securities greater than the total
number of Offered Securities, each of ACAS and such Other Stockholders shall be entitled to
purchase (i) its Pro Rata Share of the type of Offered Securities (i.e. Common Stock and
its equivalents or Preferred Stock) plus, (ii) as to those Other Stockholders and, if applicable,
ACAS, that have elected to purchase a number of Offered Securities greater than their respective
Pro Rata Shares (determined as aforesaid), the amount so elected for purchase allocated among such
Stockholders based on their respective Pro Rata Shares (determined as aforesaid) up to the number
of Offered Securities elected to be purchased by each such Stockholder.


          (b) If ACAS and the Other Stockholders (as applicable, the “Purchaser”) have together
elected to purchase all of the Offered Securities, then the Selling Stockholder shall sell such
Offered Securities to the Purchaser, and the Purchaser shall acquire such Offered Securities from
the Selling Stockholder, at the price and on the other terms described in the Sale Notice. The
consummation of the Transfer shall take place at 10:00 a.m. local time at the offices of the
Corporation, on the earlier of (i) the date specified for the proposed Transfer in the notice from
the applicable Purchaser accepting the offer set forth in the Sale Notice, or (ii) the closing date
specified by the Selling Stockholder in the Sale Notice, at which time the Purchaser shall deliver
the appropriate consideration, and the Selling Stockholder shall deliver certificates representing
the Offered Securities to be sold, free and clear of any and all liens, claims and
encumbrances whatsoever (except those imposed by this Agreement and federal and any applicable
state securities laws generally), together with such other instruments and documents of transfer as
the Purchaser shall reasonably request.


          (c) If ACAS and the Other Stockholders do not purchase all of the Offered Securities, then the
Selling Stockholder may Transfer the Offered Securities in accordance with the Bona Fide Offer to
the Bona Fide Offeror within fifteen (15) Business Days of the expiration of the twenty (20) day
period specified in Section 3.3(a) above, provided, however, that such Transfer may be made at any
earlier date selected by the Selling Stockholder, after the Selling Stockholder shall have received
written notice from ACAS and all of the Other Stockholders that ACAS and such Other Stockholders
have elected not to purchase all of the Offered Securities. Upon a Transfer by the Selling
Stockholder of the Offered Securities to the Bona Fide Offeror, the Bona Fide Offeror shall execute
and deliver a counterpart to this Agreement binding itself as a Stockholder to the terms hereof.



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          (d) Promptly after any Transfer of Offered Securities pursuant to this Section 3.3, the
Selling Stockholder shall notify the Corporation of the consummation thereof and shall promptly
furnish such evidence of the completion (including date of completion) of such Transfer and such
other information regarding such Transfer as the Corporation may reasonably request.


          3.4 Co-Sale Right of ACAS. ACAS may elect to participate in the contemplated Transfer
by a Selling Stockholder as may be specified in a Sale Notice pursuant to Section 3.2 above by
delivering written notice to the Selling Stockholder and the Corporation within twenty (20) days
after ACAS has been given the Sale Notice. If ACAS has elected to participate in such Transfer,
ACAS will be entitled to sell in the contemplated Transfer, at the same price and on the same terms
as the Selling Stockholder is Transferring Corporation Securities, a number and type of shares of
Corporation Securities equal to the product of (i) the quotient determined by dividing the
percentage of the Corporation Securities of such type held by ACAS (on a Fully Diluted Basis) by
the aggregate percentage of the Corporation Securities of such type owned by the Selling
Stockholder and ACAS (on a Fully Diluted Basis) and (ii) the number of shares of Common Stock to be
Transferred in the contemplated transaction.



For example, if the Sale Notice contemplated a Transfer of 100 shares of Common Stock, and
if the Selling Stockholder was at such time the owner of 30% of the Common Stock (on a Fully
Diluted Basis) and if ACAS elected to participate and ACAS owned 20% of the Common Stock (on
a Fully Diluted Basis), the Selling Stockholder would be entitled to sell 60 shares (30% ÷
50% x 100 shares) and ACAS would be entitled to sell 40 shares (20% ÷ 50% x 100 shares).



The Selling Stockholder will use reasonable commercial efforts to obtain the agreement of the
prospective transferee(s) to the participation of ACAS in the contemplated Transfer and will not
Transfer any Corporation Securities to the prospective transferee(s) if such transferee(s) refuses
to allow the participation of ACAS. In connection with any such sale of Common Stock, ACAS may
elect to exercise the Warrants and participate in such sale as a holder of Common Stock or, in lieu
of such exercise, to receive in exchange for such Warrants, the excess of the consideration
per share of Common Stock receivable in such sale over the exercise price per share under the
Warrants.



          3.5 Tag-Along Rights.


          (a) In the event that ACAS elects to sell or have redeemed less than fifty percent (50%) of
its holdings of any Corporation Securities (determined on a Fully Diluted Basis) in one transaction
or a series of related transactions, it shall provide written notice (an “ACAS Limited Sale
Notice”) to all Other Stockholders and such Other Stockholders have the right to participate in
the contemplated sale or redemption by delivering written notice to ACAS and the Corporation within
twenty (20) days after the date of delivery of the ACAS Limited Sale Notice. If an Other
Stockholder elects to participate in such sale or redemption, such Stockholder will be entitled to
sell in the contemplated sale or redemption, at the same price and on the same terms as ACAS is
selling Corporation Securities, a number of Corporation Securities of the same type

12









 






 as those being
sold by ACAS equal to the product of (i) the quotient determined by dividing the percentage of the
type of Corporation Securities being sold (on a Fully Diluted Basis) held by such Other Stockholder
by the aggregate percentage of the type of Corporation Securities being sold (on a Fully Diluted
Basis) owned by ACAS and such Other Stockholder and (ii) the number of shares of Corporation
Securities to be sold in the contemplated sale.



For example, if the ACAS Limited Sale Notice contemplated a sale of 100 shares of Common
Stock, and if ACAS was at such time the owner of 30% of the Common Stock (on a Fully Diluted
Basis) and if such Other Stockholder who elected to participate owned 20% of the Common
Stock (on a Fully Diluted Basis), then ACAS would be entitled to sell 60 shares (30% ÷ 50% x
100 shares) and such Other Stockholder would be entitled to sell 40 shares (20% ÷ 50% x 100
shares).


          (b) In the event that ACAS elects to sell or have redeemed fifty percent (50%) or more of its
holdings of any Corporation. Securities (determined on a Fully Diluted Basis) in one transaction or
a series of related transactions, it shall provide written notice (an “ACAS Sale Notice”)
to all Other Stockholders and such Other Stockholders have the right to participate in the
contemplated sale or redemption by delivering written notice to ACAS and the Corporation within
twenty (20) days after the date of delivery of the ACAS Sale Notice. If an Other Stockholder elects
to participate in such sale or redemption, such Stockholder will be entitled to sell in the
contemplated sale or redemption, at the same price and on the same terms as ACAS is selling
Corporation Securities up to all of the Corporation Securities owned by such Other Stockholder, as
it may elect.


          (c) ACAS will use reasonable commercial efforts to obtain the agreement of the prospective
transferee(s) to the participation of each other participating Other Stockholder in the
contemplated sale and will not Transfer any Corporation Securities to the prospective transferee(s)
if such transferee(s) refuses to allow the participation of each Other Stockholder electing to
participate in such transaction. In the event of the sale of multiple types of Corporation
Securities (including Preferred Stock), the value to be paid thereunder with regard to any
particular class of securities will be assigned in the following manner:




     (i) all outstanding notes will be valued at their full outstanding principal
amount plus all accrued and unpaid interest, prepayment premiums and other fees and
costs;




     (ii) all shares of Preferred Stock will be valued at their liquidation value
plus, without duplication, accrued and unpaid dividends;




     (iii) the remaining value will be allocated next to any Warrants included in
such sale, pro rata at their respective Fair Market Value; and




     (iv) any remaining value will then be allocated pro rata among shares of Common
Stock (on a Fully Diluted Basis, excluding any Warrants).



13









 




          (d) The rights granted under this Section 3.5 shall not apply in the case of any Transfer by
ACAS to an Affiliate of ACAS, or in connection with any Financing Conveyance.


          (e) If ACAS elects to sell the Warrants, the tag-along rights described in this Section 3.5
will apply as though ACAS had elected to sell the Common Stock underlying such Warrants.


          3.6 Drag-Along Rights. For so long as ACAS shall continue to own Corporation
Securities, ACAS shall have the right to require the Other Stockholders (i) to agree to and to sell
all of their Corporation Securities and any rights to acquire Corporation Securities that they may
own on the same terms and conditions as ACAS proposes to sell all of its Corporation Securities as
reflected in a written notice provided to such Other Stockholders by ACAS and (ii) as stockholders
of the Corporation, to vote for a Sale Transaction proposed or endorsed by ACAS in writing and
approved by the Board of Directors. The obligations of the Other Stockholders with respect to such
sale of Corporation Securities or Sale Transaction are subject to the conditions that, (i) upon the
consummation of such sale or Sale Transaction, all of the holders of each class of Corporation
Securities will receive (subject to the sentence below) the same form and amount of consideration
per share in respect of such class of Corporation Securities and (ii) no holder of Corporation
Securities shall be required to incur indemnification obligations in connection with such sale or
Sale Transaction other than (x) pro rata obligations with respect to representations, warranties
and agreements of or regarding the Corporation (which in no event shall exceed the sales proceeds
received by such holder) or (y) obligations in connection with representations, warranties and
indemnification in respect of title of such Stockholder to its Corporation Securities and other
matters related to the legality of such transfer by such Stockholder. In connection with any such
sale or Sale Transaction, each holder of vested options or Warrants may elect to exercise such
options or Warrants and participate in such sale or Sale Transaction as a holder of Common Stock.


          3.7 No Transfer in Contravention of this Agreement. Any attempted Transfer of shares
of Corporation Securities other than in accordance with this Agreement shall be null and void and
the Corporation shall refuse to recognize any such Transfer and shall not reflect on its records
any change in record ownership of shares of Corporation Securities pursuant to any such Transfer.



ARTICLE 4




LEGENDS ON CERTIFICATES


          4.1 During the term of this Agreement, each certificate or instrument representing Corporation
Securities subject to this Agreement shall bear the following legends on its face, or upon the
reverse side thereof, appropriately completed, which legends shall likewise be endorsed upon all
stock certificates representing shares of the Corporation’s capital stock that shall hereafter be
issued and which are subject to this Agreement:



14









 








“THE SECURITIES REPRESENTED BY THIS [CERTIFICATE] [WARRANT AND ANY SECURITIES
ACQUIRED UPON EXERCISE OF THIS WARRANT] HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS AND NEITHER [THESE
SECURITIES] [THIS WARRANT, SUCH SECURITIES] NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS.”



“THE SECURITIES REPRESENTED BY THIS [CERTIFICATE] [WARRANT] ARE SUBJECT TO THE
CONDITIONS ON TRANSFER SPECIFIED IN THE STOCKHOLDERS AGREEMENT DATED AS OF DECEMBER
[  ], 2005, BY AND AMONG THE CORPORATION AND THE STOCKHOLDERS OF THE CORPORATION.
UPON WRITTEN REQUEST, A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY THE CORPORATION
TO THE HOLDER HEREOF WITHOUT CHARGE.”



ARTICLE 5




CERTAIN PUT RIGHTS OF EMPLOYEE STOCKHOLDERS


          5.1 Put Rights. Subject to the limitations provided herein, including the
Corporation’s prior rights pursuant to Article 6, any Employee Stockholder may elect to have the
Corporation redeem all or less than all of such holder’s Incentive Stock by tendering a Put Notice
within ninety (90) days after (a) the Employee Stockholder’s death (in which case the Put Notice
may be delivered by the Employee Stockholder’s Estate) or Disability, (b) the termination of the
Employee Stockholder other than for Cause or (c) resignation by the Employee Stockholder for Good
Reason. The Corporation shall honor the Put Notice pursuant to this Section 5.1 within thirty (30)
days of delivery by payment in cash of the Fair Market Value of the Incentive Stock, unless
performance by the Corporation is suspended by Section 5.3 or limited by Section 5.4 herein. If
performance by payment in cash does become so suspended, then the Corporation shall, unless
prohibited by Section 5.3, deliver a Promissory Note for the suspended amount and shall make
payment thereunder to the extent consistent with Sections 5.3 and 5.4 until payment is made in
full, and shall accelerate payment thereunder to the extent permitted under Sections 5.3 and 5.4.
For purposes of this Article 5, Fair Market Value of the Incentive Stock shall be
determined as of the date an Employee Stockholder or his/her Estate delivers a Put Notice to
the Corporation.


          5.2 Retained Shares; Successor to Employee Stockholder. Any of the Incentive Stock not
purchased by the Corporation pursuant to Article 5 or Article 6 shall remain subject to Article 3
hereof.



15









 







          5.3 Put Limitations. The rights of redemption available to the holders of Incentive
Stock pursuant to this Article 5 shall at all times be subject to limitations under the Delaware
General Corporation Law and any requirement under any outstanding Debt Instrument of the
Corporation or any Subsidiary (without regard to whether the holder of or lender under such Debt
Instrument is a Stockholder or an Affiliate thereof) limiting the Corporation’s right to make
payment under this Article 5 during a default or an event of default thereunder (or its
Subsidiaries’ ability to make distributions to the Corporation for such purpose). Nothing herein
shall require the Corporation to honor a Put Notice if such would result in a violation of law or
any such Debt Instrument, as determined in the good faith judgment of the Board of Directors. At
such time as redemption is permitted (a) under the Debt Instruments described in this Section 5.3,
and (b) without violation of law, the Corporation shall make payment of any suspended payment
obligation in Section 5.1 (whether in cash or by issuance of Promissory Notes, as required by
Section 5.1).


          5.4 Maximum Redemption Amount. The Corporation shall be obligated to redeem in cash no
more than $250,000 (the “Maximum Redemption Amount”) of Incentive Stock annually, whether
pursuant to this Article 5 or pursuant to Article 6; provided, that, only the applicable annual
principal payment obligations under any Promissory Note issued or proposed to be issued for any
amount of the purchase price of Incentive Stock shall be included in calculating the Maximum
Redemption Amount.


          5.5 Status of Redeemed Shares. Incentive Stock redeemed pursuant to this Article 5
shall no longer be deemed to be outstanding (except when such Incentive Stock is pledged as
security for a Promissory Note), and all rights of the holders thereof as stockholders of the
Corporation with respect to those shares redeemed (except the right to receive the redemption price
from the Corporation) shall cease. Upon surrender of the certificates for Incentive Stock so
redeemed, the Corporation shall pay to the holder thereof the applicable redemption price as
aforesaid. All redemption rights applicable to Incentive Stock shall cease upon the redemption of
such stock. Such Incentive Stock shall, if reissued by the Corporation, be without a legend
designating it as Incentive Stock.


          5.6 Lapse of Rights. An Employee Stockholder’s rights pursuant to this Article 5 shall
lapse with respect to any Incentive Stock Transferred in connection with or after a Partial
Termination.



ARTICLE 6




CERTAIN CALL RIGHTS OF THE

CORPORATION FROM EMPLOYEE STOCKHOLDERS


          6.1 Call Rights Generally. Each Employee Stockholder agrees that, in the event that
his or her employment with the Corporation or any Subsidiary shall terminate, any or all
Corporation Securities owned by him or her, his or her Estate or any of his or her Permitted
Transferees, whether now owned or subsequently acquired, may be purchased by the Corporation on the
terms and conditions set forth in this Agreement as follows:



16









 









     (i) in the case of an Employee Stockholder who (a) is terminated for Cause or
(b) voluntarily terminates his or her employment before the date that is three (3)
years (or any other date set forth in any employment or similar agreement between
the Corporation or any Subsidiary and an Employee Stockholder) from the date hereof
without Good Reason, for an aggregate purchase price equal to the Discounted Value;
or




     (ii) in the case of an Employee Stockholder whose employment terminates for any
reason other than as set forth in (i) above, for an aggregate purchase price equal
to the then Fair Market Value.



To exercise its option set forth in Section 6.1, the Corporation shall deliver a written notice to
the applicable Employee Stockholder setting forth the number of Corporation Securities to be
purchased and the applicable purchase price thereof, and the date on which such purchase is to be
consummated, which date shall be not less than fifteen (15) days or more than thirty (30) days
after the date of such notice. Such right may be exercised by the Corporation with respect to an
Employee Stockholder at any time prior to 180 days after the termination of such Employee
Stockholder’s employment.



          6.2 Call as a Result of a Competitive Act. Each Employee Stockholder agrees that, in
the event that (a) the Corporation does not elect to exercise its right to purchase the Corporation
Securities owned by him or her, his or her Estate or any of his or her Permitted Transferees upon
termination of his or her employment pursuant to Section 6.1 and (b) such Employee Stockholder
engages in a Competitive Act at any time prior to the expiration of the applicable Non-Compete
Period, any or all of such Employee’s Corporation Securities, whether now owned or subsequently
acquired, may be purchased by the Corporation for an aggregate purchase price equal to the
Discounted Value. To exercise its option set forth in this Section 6.2, the Corporation shall
deliver a written notice to the applicable Employee Stockholder setting forth the amount of
Corporation Securities to be purchased, that the purchase is pursuant to Section 6.2, and the date
on which such purchase is to be consummated. Such rights may be exercised by the Corporation at any
time prior to 180 days after the Non-Compete Period of such Employee Stockholder.


          6.3 Call Limitation. The purchase of Corporation Securities by the Corporation
referred to in Section 6.1 and Section 6.2 shall be suspended at any time when purchase by the
Corporation is prohibited pursuant to (a) the Delaware General Corporation Law
or (b) any requirement under any outstanding Debt Instrument of the Corporation or any
Subsidiary (without regard to whether the holder of or lender under such Debt Instrument is a
Stockholder or an Affiliate thereof) limiting the Corporation’s right to make payment under this
Article 6 during a default or an event of default thereunder (or its Subsidiaries’ ability to make
distributions to the Corporation for such purpose). Such purchase will be reinstated at such time
as it may occur in accordance with (a) and (b) hereof.


          6.4 Payment. (a) Upon consummation of a sale made in accordance with Section 6.1 or
6.2 hereof, the Corporation shall deliver payment to the Stockholder in cash,

17









 






unless performance by
the Corporation is suspended under Section 6.3. If performance by payment in cash does become so
suspended under Section 6.3, then the Corporation shall deliver, unless prohibited by Section 6.3,
a Promissory Note for the suspended amount and shall make payment thereunder to the extent
consistent with Section 6.3 until payment is made in full, and shall accelerate payment to the
extent permitted under Section 6.3. At such time as redemption is permitted (i) under the Debt
Instruments described in Section 6.3 and (ii) without violation of law, the Corporation shall make
payment of any suspended payment obligation in Section 6.1 or 6.2 (whether in cash or by issuance
of Promissory Notes as required hereby).


          (b) When payment is made in full in cash or by the delivery of a Promissory Note upon any sale
to the Corporation hereunder, the Stockholder shall deliver the certificate evidencing the
Corporation Securities being sold, duly endorsed for transfer, free and clear of any lien or
encumbrance, with all required federal and state documentary stamps and transfer taxes prepaid or
provided for. Upon full payment therefor, any Corporation Securities purchased by the Corporation
pursuant to this Article 6 shall be retired and shall have the status of authorized but unissued
capital stock.


          6.5 Key Man Life Insurance.


          (a) The Corporation may (but need not) apply for, obtain and maintain, at its sole cost and
expense, a life insurance policy on the life of any individual Stockholder, and a policy of
disability insurance as to any Employee Stockholder, which policy or policies shall name the
Corporation and/or any applicable third-party lender to the Corporation or any Subsidiary as
beneficiaries in an amount not to exceed the purchase price of such Stockholder’s Corporation
Securities. The amount of such insurance may be increased or decreased by the Corporation to
reflect fluctuations in the Fair Market Value of such Corporation Securities. Each individual
Stockholder agrees to submit himself or herself for physical examinations, execute and complete all
necessary questionnaires and consents, and cooperate with the Corporation to obtain the insurance
described herein.


          6.6 Fair Market Value Determinations. For purposes of this Article 6, Fair Market
Value of an Employee Stockholder’s Corporation Securities shall be determined as of the date the
Corporation delivers notice to an Employee Stockholder that it intends to exercise its rights under
this Article 6 with respect to such Employee Stockholder’s Corporation Securities.


          6.7 Lapse of Rights. An Employee Stockholder’s Corporation Securities Transferred in
connection with or after a Partial Termination in a bona fide arm’s length transaction shall
thereupon cease to be subject to this Article 6.



ARTICLE 7




RIGHTS OF FIRST OFFER


          7.1 Sale of Securities. If the Corporation, after the date of this Agreement,
authorizes the issuance and sale of any shares of capital stock or any securities containing

18









 






options or rights to acquire any shares of capital stock (other than (a) shares or other securities
issued in connection with an underwritten public offering, (b) shares or other securities issued in
exchange for the securities or assets of another person as a party to an acquisition of a business
as a going concern, (c) shares or other securities issued or sold to parties that are (i) strategic
partners in connection with a commercial relationship with the Corporation or (ii) providing the
Corporation with equipment leases, real property leases, loans, credit lines, guarantees of
indebtedness, cash price reductions or similar transactions under arrangements approved by the
Board of Directors, (d) shares or other securities issued (i) upon the conversion of securities
outstanding on the date hereof or (ii) upon the conversion of convertible securities, the exchange
of exchangeable securities or the exercise of any options, warrants or other rights if either the
issuance of such convertible or exchangeable securities or such options, warrants or rights was
subject to the rights of first offer granted pursuant to this Section 7.1 or was exempted from the
application of this Section 7.1, (e) options or other securities issued under any equity
compensation plan maintained by the Corporation for the benefit of employees of the Corporation, or
(f) securities issued as dividends payable-in-kind on preferred stock), the Corporation will offer
to sell to each Other Stockholder a portion of such securities equal to the percentage determined
by dividing (i) the number of shares of Corporation Securities (on a Fully Diluted Basis) (without
duplication) then held by each Other Stockholder by (ii) the number of shares of Common Stock
outstanding (on a Fully Diluted Basis). Other Stockholders will be entitled to purchase such stock
or securities at the same price and on the same terms as such stock or securities are to be offered
to any other Person, and shall agree to observe and comply with the same representations,
warranties, covenants and other terms and provisions to which such other Persons are subject, all
as described in the written notice provided by the Corporation pursuant to this Section 7.1 (it
being understood that the Other Stockholders shall execute and deliver such documents as the
Corporation may reasonably require to evidence such agreement). Each Other Stockholder must
exercise its purchase rights within twenty (20) days after receipt of written notice from the
Corporation describing in reasonable detail the stock or securities being so offered, the purchase
price thereof, the payment terms and such Other Stockholder’s percentage allotment (or, if shorter,
the period during which other Persons to whom the shares or other securities will be issued are
permitted to elect whether or not to acquire such shares or other securities). Upon the expiration
of such period, the Corporation will be free to sell such stock or securities that such Other
Stockholders have not elected to purchase during the ninety (90) days following such expiration on
terms and conditions no more favorable to purchasers thereof than those offered to the Other
Stockholders. Any stock or securities offered or sold by the Corporation after such 90 day period
(or the portion thereof specified above) must be reoffered to each Other Stockholder pursuant to
the terms of this Section 7.1.


          7.2 Convenience Sale. For convenience of administration, the Corporation may offer and
sell to third parties the shares of capital stock or other securities subject to the purchase
rights under. Section 7.1 without first offering such shares or other securities to the Other
Stockholders, so long as the Other Stockholders are given the opportunity to purchase their
proportionate percentages of such shares or other securities within forty-five (45) days after
the close of such sale.



19









 







          7.3 Termination. The provisions of Section 7.1 shall terminate upon the consummation
of a Partial Termination.



ARTICLE 8




REGISTRATION RIGHTS


          8.1 Piggyback Registration. (a) Whenever the Corporation proposes to register any of
its securities for an underwritten offering under the Securities Act, if the registration statement
proposed to be used by the Corporation is not a registration statement on Form S-4 or S-8 (or any
substitute form for comparable purposes that may be adopted by the Commission) or a registration
statement filed in connection with an exchange offer or an offering of securities solely to the
Corporation’s existing security holders and the registration form to be used may be used for the
registration of Registrable Securities (a “Piggyback Registration”), the Corporation will
give prompt written notice to all Stockholders holding Registrable Securities with respect of the
proposed offering at least thirty (30) days before the initial filing with the Commission of such
registration statement, and offer to include in such filing such Registrable Securities as any such
holder may request. Each such holder of Registrable Securities desiring to have Registrable
Securities registered under this 8.1 shall advise the Corporation in writing within fifteen (15)
days after the date of receipt of such notice from the Corporation, setting forth the amount of
such Registrable Securities for which registration, is requested. Subject to 8.1(c), the
Corporation shall thereupon include in such filing the number of Registrable Securities for which
registration is so requested, and shall use its reasonable best efforts to effect registration
under the Securities Act of such Registrable Securities.


          (b) The Registration Expenses of the holders of Registrable Securities will be paid by the
Corporation in all Piggyback Registrations to the extent provided in 8.5.


          (c) (i) If a Piggyback Registration is an underwritten primary registration on behalf of the
Corporation and the managing underwriters advise the Corporation in writing that in their opinion
the number of securities requested to be included in such registration exceeds the number that can
be sold in an orderly manner in such offering within a price range acceptable to the Corporation,
the Corporation will include in such registration: (A) first, the securities the Corporation
proposes to sell and (B) second, the Registrable Securities and any other securities requested to
be included in such registration, pro rata among the holders of such Registrable Securities and
ACAS on the basis of the number of shares owned by each such holder.




     (ii) If a Piggyback Registration is an underwritten secondary registration on
behalf of holders of the Corporation’s securities, and the managing underwriters
advise the Corporation in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number that can be sold in
an orderly manner in such offering within a price range acceptable to the holders
initially requesting such registration, the Corporation will include in such
registration (A) first, any securities requested to be included in such
registration by ACAS or its successors and assigns, whether requested hereunder



20









 







or under any other agreement providing ACAS with registration rights, (B) second,
the Registrable Securities requested to be included in such registration and not
described in clause (A), pro rata among the holders of such securities on the basis
of the number of shares owned by each such holder, and (C) third, other securities
requested to be included in such registration.


          (d) If the managing underwriters in either an underwritten primary or secondary registration
advise the Corporation in writing that in their opinion the relationship to the Corporation
(i.e., as officers, directors or stockholders) of the selling stockholders holding
Registrable Securities requested to be included in the registration statement will adversely effect
an orderly sale of Corporation Securities within a price range acceptable to the Corporation or the
holders initially requesting such registration, the Corporation may exclude from such registration
such amount up to all of such Registrable Securities of such selling stockholders as the managing
underwriters determine are desirable to complete such an orderly sale.


          8.2 Demand Registration. (a) If, at any time after the Corporation has filed any
registration statement under the Securities Act or the Securities Exchange Act, except with respect
to registration statements filed on Form S-8 or any successor form, the Corporation receives a
written request by ACAS, its successors or assigns (each, a “Demanding Holder”) to effect
the registration under the Securities Act of shares of Registrable Securities of the Corporation (a
“Demand Registration”), the Corporation shall follow the procedures described in this
Section. Thereupon, the Corporation shall, as expeditiously as possible, use its best reasonable
efforts to effect the registration on a form of general use under the Securities Act of the shares
it has been requested to register in such initial request and in any response to such notice given
to the Corporation within twenty (20) days after the Corporation’s giving of such notice;
provided, however, that the Corporation shall not be required to effect a Demand
Registration if more than two Demand Registrations have been undertaken. The Corporation may not be
required to effect a registration pursuant to this Section during the first 180 days after the
effective date of any registration statement filed by the Corporation under Section 8.1 if the
Demand Holders have been afforded the opportunity to register in such registration all or a
majority of their Registrable Securities. The Corporation may include in any registration under
this Section any other shares of Registrable Securities (including issued and outstanding shares of
stock as to which the holders thereof have contracted with the Corporation for “piggyback”
registration rights) so long as the inclusion in such registration of such shares will not, in the
opinion of the managing underwriter of the shares of the stockholder or stockholders first
demanding registration (if the offering is underwritten), interfere with the successful marketing
in accordance with the intended method of sale or other disposition of all the stock sought to be
registered by such demanding stockholder or stockholders pursuant to this Section.


          (b) In addition to the registration rights provided in Section 8.1 and 8.2(a) above, if at any
time the Corporation is eligible to use Commission Form S-3 (or any successor form) for
registration of secondary sales of Registrable Securities, any single Stockholder of Registrable
Securities holding two percent (2%) or more of the Common Stock, on a Fully Diluted Basis, may
request in writing that the Corporation register shares of Registrable Securities on such form or
any successor form. Upon receipt of such request, the Corporation

21









 






will promptly notify all such
holders of Registrable Securities in writing of the receipt of such
request and each such holder may elect (by written notice sent to the Corporation within
thirty (30) days of receipt of the Corporation’s notice) to have its Registrable Securities
included in such registration pursuant to this Section 8.2. Thereupon, the Corporation will, as
soon as practicable, use its best efforts to effect the registration on Form S-3 of all Registrable
Securities that the Corporation has so been requested to register by such holders for sale. The
Corporation will use its best efforts to maintain the effectiveness of any such registration
statement and to qualify and maintain its qualification for eligibility to use Form S-3 for such
purposes. The Corporation shall not be required to effect more than two (2) registrations pursuant
to this Section 8.2.


          8.3 Lock-Up. (a) Each holder of Registrable Securities agrees not to effect any Public
Sale or distribution (including sales pursuant to Rule 144) of equity securities of the
Corporation, or any securities convertible into or exchangeable or exercisable for such securities,
during the thirty (30) days prior to and the 90 day period (or such longer period, not to exceed 90
additional days, as the managing underwriter shall require) beginning on the effective date of the
registration statement relating to any underwritten Piggyback Registration or Demand Registration
in which Registrable Securities are included (except as part of such underwritten registration),
unless the underwriters managing the registered public offering otherwise agree.


          (b) The Corporation agrees (i) not to effect any Public Sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable for such securities,
during the seven (7) days prior to and during the sixty (60) day period beginning on the effective
date of any underwritten Piggyback Registration or Demand Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-8 or any successor form), unless
the underwriters managing the registered public offering otherwise agree, and (ii) to use its
commercially reasonable efforts to cause each holder of at least ten percent (10%) (on a Fully
Diluted Basis) of its equity securities, or any securities convertible into or exchangeable or
exercisable for its equity securities, purchased from the Corporation at any time after the date of
this Agreement (other than in a registered public offering) to agree not to effect any Public Sale
or distribution (including sales pursuant to Rule 144) of any such securities during such period
(except as part of such underwritten registration, if otherwise permitted), unless the underwriters
managing the registered public offering otherwise agree.


          8.4 Registration Procedures. Whenever the holders of Registrable Securities have
requested that any Registrable Securities be registered as permitted by and pursuant to this
Agreement, the Corporation will use reasonable efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Corporation will use its reasonable best efforts to:


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



22









 







          (b) furnish to each seller of Registrable Securities such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus included in such
registration statement (including each prospectus subject to completion) and such other
documents as such seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;


          (c) use reasonable efforts to register or qualify such Registrable Securities under such other
securities or blue sky laws of such jurisdictions as any seller of Registrable Securities
reasonably requests and do any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller (provided that the Corporation will not be required to
(i) qualify generally to do business in any jurisdiction where it would not otherwise be required
to qualify but for this subparagraph, (ii) subject itself to taxation in any such jurisdictions,
(iii) consent to general service of process in each such jurisdiction or (iv) undertake such
actions in any jurisdiction other than the states of the United States of America and the District
of Columbia);


          (d) notify each seller of such Registrable Securities, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, the Corporation will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading; provided, however, that each seller shall,
immediately upon receipt of any notice from the Corporation of the happening of any event of the
kind described in this paragraph (d), forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities until the seller has
received copies of the supplement or amendment prepared in accordance with this paragraph (d) and,
if so directed by the Corporation, each seller shall deliver to the Corporation all copies, other
than permanent file copies then in the seller’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice;


          (e) use its reasonable best efforts to cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Corporation are then listed and,
if not so listed, to be quoted on the Nasdaq Stock Market and, if quoted on the Nasdaq Stock
Market, use its best efforts to secure designation of all such Registrable Securities covered by
such registration statements as a Nasdaq Stock Market “national market system security” within the
meaning of Rule 11Aa2-1 of the Commission;


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



23









 







          (g) enter into such customary agreements (including underwriting agreements in customary form)
and take all such other actions as the holders of a majority of the Registrable Securities being
sold or the underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);


          (h) make available for inspection by any seller of Registrable Securities, any underwriter
participating in any disposition pursuant to such registration statement and any attorney,
accountant or other agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Corporation, and cause the
Corporation’s officers, directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement;


          (i) otherwise use its reasonable best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve months beginning with the
first day of the Corporation’s first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act (which may be achieved by, among other things, compliance with the conditions of
Rule 158 thereunder);


          (j) permit any holder of Registrable Securities which holder, in its judgment, might be deemed
to be an underwriter or a controlling person of the Corporation, to participate in the preparation
of such registration or comparable statement and to require the insertion therein of material,
furnished to the Corporation in writing, which in the reasonable judgment of such holder and its
counsel should be included; and


          (k) in the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any related prospectus
or suspending the qualification of any Common Stock included in such registration statement for
sale in any jurisdiction, the Corporation will use its reasonable best efforts promptly to obtain
the withdrawal of such order. If any such registration or comparable statement refers to any holder
by name or otherwise as the holder of any securities of the Corporation and if in its sole and
exclusive judgment such holder is or might be deemed to be a controlling person of the Corporation,
such holder shall have the right to require (i) to the extent permitted by law, the insertion
therein of language, in form and substance satisfactory to such holder and presented to the
Corporation in writing, to the effect that the holding by such holder of such securities is not to
be construed as a recommendation by such holder of the investment quality of the Corporation’s
securities covered thereby and that such holding does not imply that such holder will assist in
meeting any future financial requirements of the Corporation, (ii) in the event that such reference
to such holder by name or otherwise is not required by the Securities Act or any similar federal
statute then in force, the deletion of the reference to such holder;provided that such
holder shall furnish to the Corporation an opinion of counsel to such effect, which opinion and
counsel shall be reasonably satisfactory to the Corporation.



24









 







          8.5 Expenses. All expenses incident to the Corporation’s performance of or compliance
with this Article 8, including without limitation all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for the Corporation and all independent certified
public accountants and other Persons retained by the Corporation (all such expenses, excluding
underwriting discounts and commissions, being herein called “Registration Expenses”), will
be borne by the Corporation. All fees for separate counsel and for seller
underwriting discounts and commissions will be borne by the sellers of the securities sold
pursuant to the registration.


          8.6 Indemnification. (a) The Corporation agrees to indemnify, to the extent permitted
by law, each holder of Registrable Securities, its officers and directors and each Person who
controls such holder (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or prospectus subject to completion or any
amendment thereof or supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not misleading or other
violation by the Corporation of the Securities Act of 1933 or other laws relating to such
registration, except insofar as the same are caused by or contained in any information furnished in
writing to the Corporation by such holder expressly for use therein or by such holder’s failure to
deliver a copy of the registration statement or prospectus or any amendments or supplements thereto
after the Corporation has furnished such holder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Corporation will indemnify such underwriters, their
officers and directors and each Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to the indemnification of the
holders of Registrable Securities.


          (b) In connection with any registration statement in which a holder of Registrable Securities
is participating pursuant to the provisions of this Agreement, each such holder will furnish to the
Corporation in writing such information and affidavits as the Corporation reasonably requests for
use in connection with any such registration statement or prospectus and will indemnify the
Corporation, its directors and officers and each Person who controls the Corporation (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or prospectus subject to completion or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading but only to the extent that such
untrue statement or omission is contained in any information or affidavit so furnished in writing
by such holder, provided that in no event will the indemnity provided for in this Section 8.6(b)
exceed the gross proceeds from the offering received by the indemnifying holder.


          (c) Any Person entitled to indemnification hereunder will (i) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless
in such indemnified party’s reasonable judgment a conflict of

25









 






interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such
defense is assumed, the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a
claim will not be obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such indemnified parties
with respect to such claim.


          (d) The indemnification provided for under this Agreement will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and will survive the transfer of
securities. The Corporation also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Corporation’s indemnification is
unavailable for any reason.


          8.7 Requirements for Underwritten Offerings. No Person may participate in any
registration hereunder that is underwritten unless such Person (a) agrees to sell such Person’s
securities on the basis provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements; provided that no holder of Registrable Securities
included in any underwritten registration shall be required to make any representations or
warranties to the Corporation or the underwriters other than representations and warranties
regarding such holder and such holder’s intended method of distribution.



ARTICLE 9




EQUITABLE REMEDIES


          9.1 The Corporation Securities are agreed to be unique, and recognizing that the remedy at law
for any breach or threatened breach by a party hereto of the covenants and conditions set forth
herein would be inadequate, and further recognizing that any such breach or threatened breach would
cause immediate, irreparable and permanent damage to the parties, the extent of which would be
impossible or difficult to ascertain, the parties hereto agree that in the event of any such breach
or threatened breach, and in addition to any and all remedies at law or otherwise provided herein,
any party hereto may specifically enforce the terms of this Agreement and may obtain temporary
and/or permanent injunctive relief (including a mandatory injunction) without the necessity of
proving actual damage or the lack of an adequate remedy at law, and, to the extent permissible
under applicable rules of provision and statutes, a temporary injunction may be granted immediately
upon the commencement of any suit hereunder regardless of whether the breaching party or parties
have actually received notice thereof. Such remedy shall

26









 






be cumulative and not exclusive, and shall
be in addition to any other remedy or remedies available to the parties.



ARTICLE 10




BOARD OF DIRECTORS


          10.1 Board of Directors Composition. The Board shall initially consist of three (3)
directors. ACAS shall have the right to nominate one director who shall initially be Robert Klein.
The Chief Executive Officer of the Corporation, who is Thomas Logan on the date hereof, also shall
be a director. The Board shall have the right to nominate an additional director, who
shall initially be Donald Hartman. Pursuant to Article II, Section 2(a) of the Bylaws of the
Corporation, the Corporation must at all times maintain a Board of five (5) directors with two (2)
vacancies, subject to filling such vacancies as further provided in this Section. If at any time
there is an “Event of Default” under any Debt Instrument of the Corporation or any subsidiary as to
which American Financial Services, Inc. (“ACFS”) serves as agent for the lender or note
purchaser thereunder, ACFS shall have the right to nominate two (2) directors to fill the vacancies
on the Board. In addition, if at any time ACAS exercises its right to convert its Preferred Stock
into Common Stock in sufficient shares such that it thereafter owns a majority of the Class A
Voting Common Stock, ACAS shall have the right to nominate two (2) directors to fill the vacancies
on the Board.


          10.2 Agreement to Vote. All of the Stockholders agree to vote their shares of Common
Stock (and the Corporation agrees to vote, and to cause each Subsidiary to vote, shares of voting
stock in its direct subsidiaries) in any election of directors for such nominees designated
pursuant to this Article 10 or for removal of any director designated to be removed (i) by ACAS
with respect to any director who was designated for appointment by ACAS pursuant to this Article
10, (ii) without further action, in the case of the resignation or termination of employment of the
Chief Executive Officer or (iii) by the Board with respect to the director designated for
appointment by the Board pursuant to this Article 10.


          10.3 Confidentiality Duties. Notwithstanding the fiduciary duties of directors
regarding the Corporation’s confidential information under the Delaware General Corporation Law,
any director designated by ACAS shall be and is hereby authorized to disclose to ACAS confidential
information of the Corporation to the extent such disclosure is in furtherance of ACAS’s
administration of its investment in the Corporation in the ordinary course of its business.



ARTICLE 11




ENABLING PROVISION


          11.1 The provisions of this Agreement shall be binding upon all holders of Corporation
Securities issued subsequent hereto and shall be binding upon all subsequent holders of Corporation
Securities whether now or hereafter issued and outstanding. The Corporation shall, upon further
issuance or Transfer of any Corporation Securities (including as a result of the

27









 






           exercise of any
option agreements), require the holder(s) of such newly issued or Transferred Corporation
Securities to enter into a counterpart copy of this Agreement, and shall include the restrictive
legends set forth in Article 4 upon any such newly issued or Transferred Corporation Securities,
and such new holder(s) shall be deemed “Stockholders” (and, as appropriate, “Other Stockholders”
and “Employee Stockholders”) for all purposes of this Agreement. For such purposes, any transferee
from ACAS of Corporation Securities shall be considered to have the same rights and obligations
hereunder as did ACAS with regard to such Corporation Securities;provided;
however, that any transferee from ACAS shall not have any right to appoint a director or
directors.



ARTICLE 12




TERMINATION OF AGREEMENT


          12.1 Events of Termination. This Agreement shall automatically terminate upon the
happening of any of the following events: (a) the affirmative vote of ACAS plus the affirmative
vote of the holders of not less than fifty-one percent (51%) of the Common Stock subject to this
Agreement, other than Common Stock owned by ACAS or (b) the registration under the Securities Act
of shares of Common Stock, provided that Article 8 and Article 10 shall survive any termination
pursuant to clause (b) hereof where less than 50% of the shares of Common Stock then outstanding
are registered.


          12.2 Transfer of All Securities. Upon the permitted Transfer by any Stockholder,
executor or other entity of all Corporation Securities owned or held by him, her or it and, upon
payment of any consideration to which such Stockholder is entitled, such Stockholder shall have no
further rights or privileges under this Agreement or otherwise be entitled to the benefits hereof.
However, such Transfer shall not relieve a Stockholder, his or her executor or his, her or its
successors or assigns from liability hereunder in the event of a breach by any such Stockholder of
his, her or its duties hereunder prior to such Transfer.



ARTICLE 13




MISCELLANEOUS PROVISIONS


          13.1 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall serve as an original of the party executing the same, but all of which shall constitute
but one and the same Agreement.


          13.2 Binding Agreement. This Agreement shall be binding upon the parties hereto, their
heirs, administrators, executors, successors and assigns, and the parties hereto do covenant and
agree that they themselves and their heirs, executors, administrators, successors and assigns will
execute any and all instruments, releases assignments, and consents that may be required of them in
accordance with the provisions of this Agreement.



28









 







          13.3 Headings. All headings set forth in this Agreement are intended for convenience
only and shall not control or affect the meaning, construction or effect of this Agreement or of
any of the provisions hereof.


          13.4 Singular and Plural. As used herein, the singular shall include the plural, the
plural refer to the singular and any use of the male or female gender shall include the other
gender, all wherever the same shall be applicable and when the context shall admit or require.


          13.5 Enforceability. The invalidity or enforceability of any particular provision of
this Agreement shall not affect the enforceability of or invalidate the other provisions hereof,
and this Agreement shall be construed in all respects as if such invalid or unenforceable
provisions had never been part hereof and were omitted herefrom.


          13.6 Waivers. Any waiver, permission, consent or approval of any kind or nature by any
party hereto, of any breach or default under this Agreement, or any waiver of any provision of this
Agreement by any party hereto, must be in writing and shall be effective only in the specific
instance and for the specific purpose given, and shall be effective only to the extent in such
writing specifically set forth, and the same shall not operate or be construed as a waiver of any
subsequent breach, default, provision or condition of this Agreement by any party hereto, including
the party to whom originally given.


          13.7 Amendments. Other than as provided in Section 12.1, this Agreement may only be
amended, modified or revoked in whole or in part by a writing signed by (a) ACAS, (b) the holders
of not less than fifty-one percent (51%) of the Common Stock subject to this Agreement, other than
Common Stock owned by ACAS and (c) the Corporation. Notwithstanding the foregoing, no amendment or
modification of this Agreement which adversely affects the rights of any Stockholder in a manner
which is disproportionate to the manner in which all other Stockholders (other than ACAS) are
treated shall be adopted without the prior written consent of such Stockholder. This Agreement
contains the entire understanding of the parties hereto with respect to the subject matter hereof
and supersedes any and all other agreements, whether oral or written, relating to such subject
matter, by and between the parties hereto.


          13.8 Notices. Any notice required or permitted hereunder shall be given in writing,
addressed to the notice recipient at the address shown in the stock records of the Corporation. If
the Corporation is the notice recipient, the notice shall be sent to the Corporation’s Secretary at
the Corporation’s headquarters address, with a copy to (a) American Capital Strategies, Ltd., Two
Bethesda Metro Center, 14th Floor, Bethesda, MD 20814, Attention: Compliance Officer, (b) American
Capital Strategies, Ltd., 461 Fifth Avenue, 25th Floor, New York, NY, 10153, Attention: Robert
Klein, Managing Director and Principal and Brian Graff, Principal and (c) Weil, Gotshal and Manges
LLP, 767 Fifth Avenue, New York, NY 10153, Attention: Christopher K. Aidun, Esq. The notice shall
be sent by United States Certified Mail, postage prepaid, return receipt requested, by Federal
Express or other nationally or internationally recognized overnight parcel delivery service for
next day delivery; or by hand delivery with a receipt confirmation requested. Notice given in
accordance with this paragraph

29









 






shall be presumed to have been delivered and received three (3) days
after mailing if sent by United States Mail, one day after delivery to FedEx or equivalent if sent
for next day delivery; and on the day of delivery if hand delivered or given by telecopy, but such
notice will not be effective unless the notice provider obtains a machine generated confirmation of
receipt.


          13.9 Renewals. Reference to this Agreement herein shall include any amendment or
renewal hereof.


          13.10 Governing Law. This Agreement shall be deemed to be a contract governed by the
laws of the State of Delaware and shall for all purposes be construed in accordance with the laws
of such state, without reference to the conflicts of laws provisions thereof.


          13.11 Effectiveness. This Agreement shall be and become effective in general as of the
date of execution hereof by the Corporation and ACAS. It shall be effective as to each subsequent
signatory upon its signature hereto.



* * *





30









 







          IN WITNESS WHEREOF, the parties have caused this Stockholders Agreement to be executed, by
their duly authorized officers or agents where applicable, as of the same day and year first above
written.



	 	 	 	 	 	 	 
	 	 	GLOBAL MONITORING SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas D. Logan
 

Name: Thomas D. Logan
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	AMERICAN CAPITAL STRATEGIES, LTD.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	  

Name:
Todd Wilson
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Thomas D. Logan	 	 
	 	 	 	 	 
	 	 	Thomas D. Logan	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Philippe Destenbert	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Michael S. Wilson	 	 






SIGNATURE PAGE TO GMS STOCKHOLDER AGREEMENT




 









 







          IN WITNESS WHEREOF, the parties have caused this Stockholders Agreement to be executed, by
their duly authorized officers or agents where applicable, as of the same day and year first above
written.



	 	 	 	 	 	 	 
	 	 	GLOBAL MONITORING SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 

Name: Thomas D. Logan
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	AMERICAN CAPITAL STRATEGIES, LTD.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Todd Wilson	 	 
	 

	 	 	 	Name: Todd Wilson	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Thomas D. Logan	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Philippe Destenbert	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Michael S. Wilson	 	 






SIGNATURE PAGE TO GMS STOCKHOLDER AGREEMENT




 









 







          IN WITNESS WHEREOF, the parties have caused this Stockholders Agreement to be executed, by
their duly authorized officers or agents where applicable, as of the same day and year first above
written.



	 	 	 	 	 	 	 
	 	 	GLOBAL MONITORING SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	 	 	Name: Thomas D. Logan	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	AMERICAN CAPITAL STRATEGIES, LTD.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	 	 	Name: Todd Wilson	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Thomas D. Logan	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Philippe Destenbert	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Michael S. Wilson	 	 
	 	 	 	 	 
	 	 	Michael S. Wilson	 	 






SIGNATURE PAGE TO GMS STOCKHOLDER AGREEMENT





 









 








EXECUTION COPY




EXHIBIT A




COMPETITIVE ACTS


          1. Confidentiality. Employee Stockholder shall not, during the term of Employee
Stockholder’s employment with the Corporation or at any time thereafter, directly or indirectly,
divulge, use, furnish, disclose, exploit or make available to any person or entity, whether or not
a competitor of the Corporation, any Unauthorized disclosure of Confidential Information. All
references herein to “the Corporation” shall be deemed to include its Subsidiaries.


          As used herein, the term:


          (a) “Confidential Information” shall mean trade secrets, confidential or proprietary
information, and all other information, documents or materials, relating to, owned, developed or
possessed by the Corporation, whether in tangible or intangible form. Confidential Information
includes, but is not limited to, (i) financial information, (ii) products, (iii) product and
service costs, prices, profits and sales, (iv) new business, technical or other ideas, proposals,
plans and designs, (v) business strategies, (vi) product and service plans, (vii) marketing plans
and studies, (viii) forecasts, (ix) budgets, (x) projections, (xi) computer programs, (xii) data
bases and the documentation (and information contained therein), (xiii) computer access codes and
similar information, (xiv) source code, (xv) know-how, technologies, concepts and designs,
including, without limitation, patent applications, (xvi) research projects and all information
connected with research and development efforts, (xvii) records, (xviii) business relationships,
methods and recommendations, (xix) existing or prospective client, customer, vendor and supplier
information (including, but not limited to, identities, needs, transaction histories, volumes,
characteristics, agreements, prices, identities of individual contacts, and spending, preferences
or habits), (xx) training manuals and similar materials used by the Corporation in conducting its
business operations, (xxi) skills, responsibilities, compensation and personnel files of
Corporation employees, directors and independent contractors, (xxii) competitive analysis, (xxiii)
contracts with other parties, and (xxiv) other confidential or proprietary information that has not
been made available to the general public by the senior management of the Corporation. Confidential
Information shall not include information that (I) is or becomes generally available to the public
through no act or omission on the part of Employee Stockholder, (II) is hereafter received on a
non-confidential basis by Employee Stockholder from a third party who has the lawful right to
disclose such information, or (III) Employee Stockholder is required to disclose pursuant to court
order or law.


          (b) “Unauthorized” shall mean: (i) in contravention of the policies or procedures of
the Corporation; (ii) otherwise inconsistent with any measures taken by the Corporation to protect
its interests in the Confidential Information; (iii) in contravention of any lawful instruction or
directive, either written or oral, of a director, officer or employee of the



 









 








Corporation empowered to issue such instruction or directive; (iv) in contravention of any
duty existing under law or contract; or (v) to the detriment of the Corporation.



          Employee Stockholder further agrees to take all reasonable measures to prevent unauthorized
persons or entities from obtaining or using Confidential Information. Promptly upon termination,
for any reason, of Employee Stockholder’s employment with the Corporation, Employee Stockholder
agrees to deliver to the Corporation all property and materials within Employee Stockholder’s
possession or control which belong to the Corporation or which contain Confidential Information.


          2. Non-Competition; Non-Solicitation.


          (a) During the term of Employee Stockholder’s employment with the Corporation and during the
Non-Compete Period, whenever the same shall occur and for whatever reason, Employee Stockholder
will not, directly or indirectly:




     (i) engage, anywhere in the Restricted Area, whether such engagement be as an
individual, officer, director, proprietor, employee, partner, member, investor (other than
solely as a holder of less than two percent (2%) of the outstanding capital stock of a
corporation whose shares are publicly traded on a national securities exchange or through a
national market system), creditor, consultant, advisor, sales representative, agent or other
participant, in a Restricted Business; or




     (ii) make any statements or perform any acts intended to advance the interest of any
person engaged in or proposing to engage in a Restricted Business in any way that could
injure the interests of the Corporation.


          (b) During the Non-Compete Period, Employee Stockholder shall not:




     (i) directly or indirectly hire, offer to hire, divert, entice away, solicit or in any
other manner persuade, or attempt to do any of the foregoing (each, a
“Solicitation”), any person or entity who is an officer, employee, agent or
consultant of the Corporation to accept employment with a third party or engage in a
Solicitation with respect to any person or entity who is, or was, at any time within six
months prior to the Solicitation, an officer, employee, agent or consultant of the
Corporation to work for a third party engaged in a Restricted Business or to engage in any
of the activities hereby prohibited with respect to Employee Stockholder under Sections
2(a)(i) or (ii) above, or subparagraph (ii) below, or




     (ii) directly or indirectly solicit, divert, entice away or in any other manner
persuade, or attempt to do any of the foregoing, (A) any actual or prospective customer of
the Corporation to become a customer of any third party engaged in a Restricted Business or
(B) any customer or supplier to cease doing business with the Corporation with respect to
the Restricted Business.



2









 




          (c) Because it is impossible to know which business or operations Employee Stockholder will
participate in during Employee Stockholder’s employment by the Corporation,
Employee Stockholder agrees that a reasonable definition of “Restricted Business”
shall mean any business or operations engaged in or planned to be engaged in by the Corporation
during Employee Stockholder’s employment with the Corporation. Employee Stockholder also
acknowledges that the Restricted Business is international in scope. Accordingly, Employee
Stockholder agrees that the “Restricted Area” shall be the entire world.








3









 








SCHEDULE A




Stockholders



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Shares of Class A	 	Shares of Class B	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Common Stock Upon	 	Common Stock Upon	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Exercise of	 	Exercise of	 	 
	 	 	Shares of Class A	 	Shares of Class B	 	Shares of Series	 	Shares of Series	 	Warrants and	 	Warrants and	 	Employee
	Name	 	Common Stock	 	Common Stock	 	A-1 Preferred Stock	 	A-2 Preferred Stock	 	Options	 	Options	 	Stockholder Yes/No
	ACAS
	 	 	0	 	 	 	42,032	 	 	 	677,426	 	 	 	70,000	 	 	 	0	 	 	 	421,294	 	 	No
	Thomas D. Logan
	 	 	987	 	 	 	0	 	 	 	920	 	 	 	0	 	 	 	15,551	 	 	 	4,063	 	 	Yes
	Philippe Destenbert
	 	 	0	 	 	 	695	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	20,924	 	 	No
	Antony
Besso*
	 	 	0	 	 	 	2,500	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	Yes
	Michael S. Wilson
	 	 	0	 	 	 	33	 	 	 	458	 	 	 	0	 	 	 	4,046	 	 	 	1,124	 	 	Yes








 




			
	*	 	Antony Besso’s Class B Common Stock represent
securities that will be purchased upon consummation of the transactions
contemplated by the Master Restructuring Agreement and Plan of Merger.