**Exhibit 10.1**

 

**REGISTRATIONRIGHTS AGREEMENT**

 

**THIS REGISTRATION RIGHTS AGREEMENT**(this“Agreement”) is made and entered into as of February 25, 2004 by and amongCherokee International Corporation, a Delaware corporation (the “Company”),OCM/GFI and GSC (each as defined herein), and the other persons listed onSchedule I attached hereto (collectively, the “Securityholders”).

 

The Securityholders are the beneficial owners of certain RegistrableSecurities (as defined below) issued by the Company.  The Company and the Securityholders deem it to be in theirrespective best interests to set forth the rights and certain obligations ofthe Securityholders or other Holders in connection with public offerings andsales of the Registrable Securities.

 

NOW, THEREFORE, in consideration of the premises and mutual covenantsand obligations hereinafter set forth, the Company and the Securityholders,intending to be legally bound hereby, agree as follows.

 

# **Section 1.**                                          Definitions.  As used inthis Agreement, the following terms shall have the following meanings:

 

“Affiliate” of any Person shall mean any other Person who eitherdirectly or indirectly through one or more intermediaries is in control of, iscontrolled by, or is under common control with, such Person.  For purposes of this definition, “control”when used with respect to any Person means the power to direct the managementand policies of such Person, directly or indirectly, whether through theownership of voting securities, by contract or otherwise.

 

“Business Day” shall mean any Monday, Tuesday, Wednesday, Thursday orFriday that is not a day on which banking institutions in The City of New Yorkare authorized or required by law, regulation or executive order to close.

 

“Capital Stock” shall mean all shares, interests, participations,rights or other equivalents (however designated) of corporate stock.

 

“Common Stock” shall mean the common stock, par value $0.001 per share,of the Company.

 

“Company Registration” has the meaning set forth in Section 4(a)hereof.

 

“Demanding Holders” shall mean each Holder holding 10% or more of theoutstanding Common Stock at the time of determination.  As of the date hereof, OCM/GFI and GSC shallconstitute Demanding Holders.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, asamended (or any similar successor federal statute), and the rules andregulations thereunder, as the same are in effect from time to time.

 

“GSC” shall mean, collectively, GSC Recovery II, L.P., GSC RecoveryIIA, L.P., GSC Partners CDO Funds, Limited and GSC Partners CDO Fund II,Limited, which shall

 

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constitute a single Holder for purposes of determining percentageownership of Common Stock hereunder.

 

“Holder” shall mean each Securityholder, any Affiliate of aSecurityholder that holds Registrable Securities and any Person that acquiresfrom a Securityholder Registrable Securities constituting 10% or more of thethen-outstanding shares of Common Stock. For purposes of this Agreement, the Company may deem the registeredholder of a Registrable Security as the Holder thereof.

 

“IPO” shall have the meaning set forth in Section 2(a).

 

“OCM/GFI” shall mean, collectively, OCM Principal Opportunities Fund,L.P., OCM/GFI Power Opportunities Fund, L.P. and GFI Two LLC, which shallconstitute a single Holder for purposes of determining percentage ownership ofCommon Stock hereunder.

 

“Other Restricted Stockholders” shall mean holders of shares of CommonStock to which the Company has granted piggyback registration rights under theStockholders Agreement among the Company and its Securityholders party thereto,dated November 27, 2002, as amended.

 

“Person” shall mean an individual, partnership, corporation, limitedliability company, joint venture, trust or unincorporated organization,governmental or regulatory body or subdivision thereof or any other entity.

 

“Prospectus” shall mean the prospectus included in any RegistrationStatement, as amended or supplemented by a prospectus supplement, with respectto the terms of the offering of any portion of the Registrable Securitiescovered by such Registration Statement, and by all other amendments andsupplements to the prospectus, including post-effective amendments and allmaterial incorporated by reference or deemed to be incorporated by reference insuch prospectus.

 

“Registrable Securities” shall mean the shares of Common Stock held bythe Securityholders as of the date hereof, as well as shares of Common Stockunderlying the other securities of the Company held by the Securityholders asof the date hereof, and any other securities issued or issuable as a result ofor in connection with any stock dividend, stock split or reverse stock split,reclassification, merger, consolidation or similar transaction in respect ofsuch shares of Common Stock; provided, however, that any sharesof Common Stock shall cease to be Registrable Securities upon the earliest ofthe following:  (i) a RegistrationStatement registering such shares of Common Stock under the Securities Act hasbeen declared or becomes effective and such shares of Common Stock have beensold or otherwise transferred by the Holder or owner thereof pursuant to sucheffective Registration Statement; (ii) such shares of Common Stock aresold or otherwise transferred to the public pursuant to Rule 144; or (iii) allsuch shares of Common Stock held by the Holder may be sold in a singletransaction without registration in compliance with Rule 144(k) under theSecurities Act.

 

“Registration Expenses” shall have the meaning set forth inSection 7 hereof.

 

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“Registration Statement” shall mean any registration statement whichcovers any of the Registrable Securities pursuant to the provisions of thisAgreement, including the Prospectus included therein, all amendments andsupplements to such Registration Statement, including post-effectiveamendments, all exhibits and all material incorporated or deemed to beincorporated by reference in such Registration Statement.

 

“Requesting Securityholder Registration” has the meaning set forth inSection 4(a) hereof.

 

“Rule 144” shall mean Rule 144 promulgated under the Securities Act, asamended from time to time, or any similar successor rule thereto that may bepromulgated by the SEC.

 

“Rule 415” shall mean Rule 415 promulgated under the Securities Act, asamended from time to time, or any similar successor rule thereto that may bepromulgated by the SEC.

 

“SEC” shall mean the Securities and Exchange Commission, or any otherfederal agency at the time administering the Securities Act or the ExchangeAct.

 

“Securities Act” shall mean the Securities Act of 1933, as amended (orany similar successor federal statute), and the rules and regulationsthereunder, as the same are in effect from time to time.

 

“Shelf Demanding Holder” shall mean any Holder that was a DemandingHolder as of the date hereof that owns at least 5% of the outstanding shares ofCommon Stock on the date a request is made by such Person pursuant toSection 3 hereof.  As of the datehereof, OCM/GFI and GSC shall constitute Shelf Demanding Holders.

 

“Shelf Registration” has the meaning set forth in Section 3(c)hereof.

 

“Underwritten Offering” shall mean a registered offering in whichshares of Common Stock are sold to an underwriter for reoffering to the public.

 

# **Section 2.**                                          FormS-1 Registration.

 

## (a)                                  Demand.  At any time commencing on the earlier of (i)180 days following the first Underwritten Offering by the Company resulting ingross proceeds to the Company of at least $75 million (the “IPO”) and (ii) thefirst anniversary of the date of this Agreement, upon the written request of aDemanding Holder that the Company effect an Underwritten Offering ofRegistrable Securities on a long-form Registration Statement (Form S-1 or anysimilar successor form) under the Securities Act and specifying the aggregatenumber of Registrable Securities to be registered and the intended method ofdisposition thereof, the Company shall, subject to Section 6(b) hereof,use its reasonable best efforts to effect the registration under the SecuritiesAct of the Registrable Securities which the Company has been so requested toregister as soon as practicable; provided, however, that theCompany shall not be obligated to effect a registration pursuant to thisSection 2 unless the Registrable Securities requested to be includedtherein have an anticipated aggregate price to the public of at least $50million.  In addition, the Company

 

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shall not be obligated to effect, or to take any action to effect, anysuch registration pursuant to this Section 2(a):  (w) after the Company has effected one (1) such registration; (x)within 180 days following the last date on which a Registration Statement filedin respect of a registration hereunder, if any, was effective; (y) during theperiod commencing with the date thirty (30) days prior to the Company’s goodfaith estimate of the date of filing of, and ending on a date ninety (90) daysafter the effective date of, a Company Registration, provided that the Companyis actively employing in good faith all reasonable efforts to cause suchregistration statement to become effective; provided, that if the Companyabandons such Company Registration, the Company shall promptly so notify anyDemanding Holder that was unable to effect a registration under thisSection 2 as a result of this clause (y); or (z) if the Demanding Holderproposes to dispose of Registrable Securities that may be immediately registeredon Form S-3 pursuant to a request made under Section 3 hereof; and provided,further, that no more than two (2) registrations under thisSection 2(a) and Section 3 may become effective during any 12 monthperiod.

 

Upon receipt of any request for registration pursuant to thisSection 2 from a Demanding Holder, the Company shall promptly give writtennotice of such request to the other Holders. The Company shall include in the requested registration all Registrable Securitiesrequested to be included by such Holders who shall make such request by writtennotice (specifying the aggregate number of Registrable Securities to beincluded) to the Company delivered within ten (10) days after their receipt ofthe Company’s notice.  If the Companyshall receive a request for inclusion in the registration of the RegistrableSecurities of Holders other than the Demanding Holder initiating theregistration, it shall promptly so inform the Demanding Holder that made theinitial request for registration.

 

Holders of a majority of the Registrable Securities to be included insuch registration pursuant to this Section 2 may, at any time prior to theeffective date of the Registration Statement relating to such registration,revoke such request by providing a written notice to the Company revoking suchrequest and, if applicable, request withdrawal of any Registration Statementfiled with the SEC and the Company shall use its reasonable best efforts to sowithdraw such Registration Statement.  Aregistration requested pursuant to this Section 2(a) shall not be deemedto have been effected unless a Registration Statement with respect thereto hasbecome effective and the Registrable Securities registered thereunder for saleare sold thereunder or are not so sold solely by reason of an act or omissionby any Demanding Holder whose Registrable Securities are included therein; provided,however, that if such registration does not become effective after theCompany has filed it solely by reason of a Demanding Holder’s revocation of itsregistration request or refusal to proceed (other than a refusal to proceedbased upon the advice of counsel relating to a matter with respect to theCompany), then such registration shall be deemed to have been effected unlessthe requesting Demanding Holder shall have elected to pay all RegistrationExpenses and any out-of-pocket expenses of any party required to be borne bythe Company pursuant hereto.

 

## (b)                                 Effectivenessof Registration Statement.  Subjectto Section 6(b), the Company agrees to use its reasonable best efforts to(x) cause the Registration Statement relating to any demand registrationpursuant to this Section 2 to become effective as promptly as practicablefollowing a request for registration under Section 2(a), and (y) thereafterkeep such Registration Statement effective continuously for the periodspecified in the next succeeding paragraph.

 

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Except as provided in the last paragraph of Section 2(a) above, ademand registration requested pursuant to this Section 2 will not bedeemed to have been effected (w) unless the Registration Statement relatingthereto has become effective under the Securities Act and remained continuouslyeffective (except as otherwise permitted under this Agreement) for a periodending on the earlier of (i) the date which is ninety (90) days after theeffective date of such Registration Statement (subject to extension as providedin Sections 5(b) and 6(b)) and (ii) the date on which all RegistrableSecurities covered by such Registration Statement have been sold and thedistribution contemplated thereby has been completed; provided, however,that with respect to a demand registration that is a Shelf Registration, theRegistration Statement related thereto shall remain continuously effective forthe period provided in Section 3(c) below, (x) if, after it has becomeeffective, such registration is interfered with for any reason by any stoporder, injunction or other order or requirement of the SEC or any other governmentalauthority, or as a result of the initiation of any proceeding for such a stoporder by the SEC through no fault of the Demanding Holder, and the result ofsuch interference is to prevent the Demanding Holder from disposing of suchRegistrable Securities proposed to be sold in accordance with the intendedmethods of disposition, or (y) if the conditions to closing specified in thepurchase agreement or underwriting agreement entered into in connection withany Underwritten Offering shall not be satisfied or waived with the consent ofthe Demanding Holder, other than as a result of any breach by the DemandingHolder or any underwriter of its obligations thereunder or hereunder.

 

## (c)                                  Inclusionof Other Securities; Cutback.  TheCompany, and any other holder of the Company’s securities who has existingregistration rights or is granted subsequent registration rights in accordancewith Section 10 hereof, may include its securities in any demandregistration effected pursuant to this Section 2 on a basis no less favorable to the Demanding Holders thanthat of any other holder of the Common Stock of the Company; provided, however,that if the managing or lead underwriter or underwriters of a proposedUnderwritten Offering contemplated thereby advise the Demanding Holders inwriting that the total number of securities to be included in such proposedpublic offering exceeds the number that can be sold in such offering within aprice range acceptable to the selling Holders holding a majority of theRegistrable Securities included in the demand registration, then the amount orkind of securities offered for the account of the following groups of holdersshall be reduced pro rata among members of such group in accordance with suchmanaging underwriter’s recommendation in the following order of priority (withthe securities to be reduced first listed first): (i) securities other than (A)Registrable Securities and (B) securities held by the Other RestrictedStockholders; (ii) securities offered by the Company; (iii) securities held bythe Other Restricted Stockholders; and (iv) Registrable Securities; and provided,further, that no Registrable Securities shall be reduced until allsecurities other than Registrable Securities are entirely excluded from theunderwriting.

 

# **Section 3.**                                          FormS-3 and Shelf Registration.

 

## (a)                                  Afterthe Company has qualified for the use of Form S-3 under the Securities Act (orany successor or substantially similar form) for sales of RegistrableSecurities by selling stockholders, in addition to the rights contained inSection 2, the Demanding Holders shall have the right to request anunlimited number of registrations on Form S-3 (such requests shall be inwriting and shall state the number of shares of Registrable Securities to bedisposed of and the intended methods of disposition of such shares by suchDemanding Holders, including whether

 

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such offering is requested to be an Underwritten Offering), and uponsuch request, the Company shall, subject to Section 6(b) hereof, use itsreasonable best efforts to effect the registration under the Securities Act ofthe Registrable Securities which the Company has been so requested to registerby such Demanding Holders; provided, however, that the Company shallnot be obligated to effect a registration pursuant to thisSection 3(a):  (x) unless theRegistrable Securities requested to be included therein have an anticipatedaggregate price to the public of at least $20 million, (y) in the circumstancesdescribed in clause (y) of Section 2(a), or (z) within 180 days followingthe last date on which a Registration Statement filed in respect of aregistration hereunder, if any, was effective. Any registration under this Section 3(a) shall be underwritten atthe request of Holders holding a majority of the Registrable Securities to beincluded therein.

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## (b)                                 Ifa request complying with the requirements of Section 3(a) hereof isdelivered to the Company, the provisions set forth in the second and thirdparagraphs of Section 2(a) and the provisions of Sections 2(b) and (c)shall apply to such registration; provided, that if such request is foran offering other than an Underwritten Offering, the portions of Sections 2(a)through (c) applying to an Underwritten Offering shall not apply.

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## (c)                                  TheShelf Demanding Holders shall have the right to request two (2) “shelf”registrations that constitute offerings of Registrable Securities under theSecurities Act in a manner that permits sales on a continuous or delayed basispursuant to Rule 415 under the Securities Act (or any successor provision) (the“Shelf Registration”).  Each request forand initial filing of a Shelf Registration shall be made in compliance withSection 3(a); provided, that clause (x) of such section shallbe inapplicable to such request.  TheCompany shall, subject to Section 6(b), use its reasonable best efforts tocause the Registration Statement relating to the Shelf Registration to becomeeffective as promptly as practicable and maintain the effectiveness of suchRegistration Statement for a period ending on the earliest of (i) two yearsfollowing the date on which such Registration Statement first becomeseffective, and (ii) the date on which all Registrable Securities covered bysuch Registration Statement have been sold and the distribution contemplatedthereby has been completed or have become freely tradeable pursuant to Rule 144without regard to volume.  Any“takedown” under the Shelf Registration shall be underwritten at the request ofHolders holding a majority of the Registrable Securities to be includedtherein.  Any such “takedown” that isintended to be an Underwritten Offering shall be made pursuant toSection 3(a) such that the provisions relating to effecting a RegistrationStatement thereunder apply to effecting the takedown under the ShelfRegistration.  Any sales made on adelayed or continuous basis under the Shelf Registration that do not constitutean Underwritten Offering shall not be required to comply withSection 3(a).

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# **Section 4.**                                          PiggybackRegistration.

 

(a)                                  Ifthe Company at any time proposes to file a registration statement with respectto any of its equity securities, whether for its own account (other than aregistration statement on Form S-4 orS-8 (or any successor or substantially similar form), or in connection with (A)an employee stock option, stock purchase or compensation plan or securitiesissued or issuable pursuant to any such plan, or (B) a dividend reinvestmentplan) (any of the foregoing, a “Company Registration”), or for the account ofany holder of securities of the Company pursuant to demand registration rightsgranted by the Company (a “Requesting Securityholder” and, such

 

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registration, a “Requesting Securityholder Registration”), then theCompany shall in each case give written notice of such proposed filing to allHolders of Registrable Securities at least twenty (20) days before theanticipated filing date of any such registration statement by the Company.  Such notice shall offer to all Holders theopportunity to have any or all of the Registrable Securities held by suchHolders included in such registration statement and shall include the number ofshares proposed to be registered, the proposed filing date, the intended methodof distribution of such shares and the proposed managing underwriter, ifany.  Each Holder of RegistrableSecurities desiring to have its Registrable Securities registered under thisSection 4 shall so advise the Company in writing within ten (10) daysafter the date of receipt of such notice (which request shall set forth theamount of Registrable Securities for which registration is requested), and theCompany shall include in such Registration Statement all such RegistrableSecurities so requested to be included therein.  If the Registration Statement relates to an UnderwrittenOffering, such Registrable Securities shall be included in the underwriting onthe same terms and conditions as the securities otherwise being sold through theunderwriters, as provided herein.  AnyHolder shall have the right to withdraw a request to include its RegistrableSecurities in any public offering pursuant to this Section 4 by givingwritten notice to the Company of its election to withdraw such request at leastten (10) Business Days prior to the proposed effective date of suchRegistration Statement.  Notwithstandingthe foregoing, if the managing or lead underwriter or underwriters of any suchproposed Underwritten Offering advise the Company in writing that the totalnumber of securities which the Holders of Registrable Securities, the Companyand any other persons or entities intended to be included in such proposedUnderwritten Offering exceeds the number that can be sold in such offeringwithin a price range acceptable to the Company (in the case of a CompanyRegistration) or to the Requesting Securityholders holding a majority of thesecurities included in a Requesting Securityholder Registration (in the case ofa Requesting Securityholder Registration), then the amount or kind ofsecurities offered for the account of the following groups of holders shall bereduced pro rata among members of such group in accordance with such managingunderwriter’s recommendation in the following order of priority: (i) if aregistration under this Section 4 is a Company Registration, then theorder of priority shall be (with the securities to be reduced first listedfirst) (A) securities other than (1) Registrable Securities or(2) securities held by the Other Restricted Stockholders, (B) theRegistrable Securities and securities held by the Other Restricted Stockholdersand (C) securities offered by the Company; (ii) if a registration under thisSection 4 is a Requesting Securityholder Registration (and the RequestingSecurityholder is not a Demanding Holder or a Shelf Demanding Holder), then theorder of priority shall be (with the securities to be reduced first listedfirst) (A) securities offered by the Company, (B) securities other than(1) Registrable Securities or (2) securities held by the OtherRestricted Stockholders (other than securities of the RequestingSecurityholder), (C) securities held by the Other Restricted Stockholdersand (D) subject to the provisions of Section 10 hereof, the RegistrableSecurities and securities of the Requesting Securityholder on a pro rata basis;and (iii) if a registration under this Section 4 is a RequestingSecurityholder Registration made pursuant to Section 2 or 3 hereof, thenthe order of priority shall be as set forth in Section 2(c).  The Company may withdraw or postpone aregistration statement referred to in this Section 4 at any time before itbecomes effective or withdraw, postpone or terminate the offering after itbecomes effective, without obligation to any Holder of Registrable Securities,unless such registration statement was filed pursuant to Section 2 or 3hereof.  Notwithstanding anything inthis Section 4 to the contrary, the Holders shall be granted priority overany holders of shares of Common

 

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Stock (other than the Other Restricted Stockholders) in connection withexercising rights under this Section 4.

 

(b)                                 Notwithstandinganything herein to the contrary, the Holders shall be entitled to exercise theregistration rights provided in Section 4(a) with respect to anyregistration statement relating to the IPO, and such Holders and the Companyhereby waive any requirement for delivery of notice by any party as provided inSection 4(a).  In such event, all rightsand obligations set forth in this Agreement shall apply to such registration.

 

# **Section 5.**                                          RegistrationProcedures.

 

## (a)                                  General.  In connection with the Company’sregistration obligations pursuant to Sections 2, 3 and 4 hereof, at itsexpense, except as provided in Section 8, the Company will, asexpeditiously as possible:

 

### (i)                                     prepare and filewith the SEC a Registration Statement with respect to such RegistrableSecurities as described in Sections 2, 3 and 4 on a form permitted bySection 2, 3 or 4 and available for the sale of the Registrable Securitiesby the Holders thereof in accordance with the intended method or methods ofdistribution thereof or such amendments and post-effective amendments to anexisting Registration Statement as may be necessary to keep such RegistrationStatement effective for the time periods set forth in Sections 2(b) or 3(c) (ifapplicable); provided that no Registration Statement shall be requiredto remain in effect after all Registrable Securities covered by such RegistrationStatement have been sold and distributedas contemplated by such Registration Statement;

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### (ii)                                  take such reasonableaction as may be necessary so that:  (i)any Registration Statement and any amendment thereto and any Prospectus formingpart thereof and any amendment or supplement thereto (and each report or otherdocument incorporated therein by reference) complies in all material respectswith the Securities Act and the Exchange Act and the respective rules andregulations thereunder, (ii) any Registration Statement and any amendmentthereto does not, when it becomes effective, contain an untrue statement of amaterial fact or omit to state a material fact required to be stated therein ornecessary to make the statements therein not misleading, and (iii) anyProspectus forming part of any Registration Statement, and any amendment orsupplement to such Prospectus, does not, as of such date, include an untruestatement of a material fact or omit to state a material fact necessary inorder to make the statements therein, in the light of the circumstances underwhich they were made, not misleading;

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### (iii)                               notify the sellingHolders of Registrable Securities and the managing underwriters, if any,promptly and, if requested, by the Holders, confirm such notice in writing (1)when a new Registration Statement, Prospectus or any Prospectus supplement orpost-effective amendment has been filed,

 

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### and, with respect to any new Registration Statement or post-effectiveamendment, when it has become effective, (2) of any request by the SEC foramendments or supplements to any Registration Statement or Prospectus or foradditional information, (3) of the issuance by the SEC of any comments withrespect to any filing and of the Company’s responses thereto, (4) of any stoporder suspending the effectiveness of any Registration Statement or theinitiation of any proceedings for that purpose, (5) of any suspension of thequalification of the Registrable Securities for sale in any jurisdiction or theinitiation or threatening of any proceeding for such purpose and (6) of thehappening of any event which makes any statement of a material fact made in anyRegistration Statement, Prospectus or any document incorporated therein byreference untrue or which requires the making of any changes in anyRegistration Statement, Prospectus or any document incorporated therein byreference in order to make the statements therein (in the case of anyProspectus, in the light of the circumstances under which they were made) notmisleading (which notice shall be accompanied by an instruction to suspend theuse of the Prospectus relating to such Registrable Securities until therequisite changes have been made);

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### (iv)                              furnish to each selling Holderof Registrable Securities prior to the filing thereof with the SEC, a copy ofany Registration Statement, and each amendment thereof and each amendment orsupplement, if any, to the Prospectus included therein and afford such Holder,the managing underwriter and their respective counsel a reasonable opportunitywithin a reasonable period to review and comment on copies of all suchdocuments (including a reasonable opportunity to review copies of any documentsto be incorporated by reference therein and all exhibits thereto) proposed tobe filed;

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### (v)                                 furnish to eachselling Holder of Registrable Securities, without charge, as many conformedcopies as may reasonably be requested, of the then effective RegistrationStatement and any post-effective amendments thereto, including financialstatements and schedules, all documents incorporated therein by reference andall exhibits (including those incorporated by reference);

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### (vi)                              deliver to each sellingHolder of Registrable Securities, without charge, as many copies of the theneffective Prospectus (including each prospectus subject to completion) and anyamendments or supplements thereto as such Persons may reasonably request inorder to permit the offering and sale of the shares of such Registrable Securitiesto be offered and sold, but only while the Company shall be required under theprovisions hereof to cause the Registration Statement to remain effective, andthe Company consents (except during a suspension period permitted by thisAgreement) to the use of the Prospectus or any amendment or supplement theretoby the selling Holder in connection with the offering and sale of the

 

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### Registrable Securities covered by the Prospectus or any amendment orsupplement thereto in accordance with the terms hereof;

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### (vii)                           use its reasonable bestefforts to prevent the issuance, and if issued to obtain the withdrawal, of anyorder suspending the effectiveness of the Registration Statement relating tosuch Registrable Securities;

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### (viii)                        prior to any offering ofRegistrable Securities pursuant to any Registration Statement, use reasonablebest efforts to register or qualify or cooperate with the selling Holders ofRegistrable Securities and their respective counsel in connection with theregistration or qualification of such Registrable Securities for offer and saleunder the securities or blue sky laws of such jurisdictions as any sellingHolder of Registrable Securities or underwriter reasonably requests in writingand to keep such registration or qualification (or exemption therefrom)effective during the period such Registration Statement is required to be kepteffective and to do all other acts or things reasonably necessary or advisableto enable the disposition in such distributions of the securities covered bythe applicable Registration Statement; provided,however, thatthe Company will not be required to (1) qualify to do business in anyjurisdiction where it would not otherwise be required to qualify, but for thisparagraph (v), (2) subject itself to general taxation in any such jurisdictionor (3) file a general consent to service of process in any such jurisdiction;

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### (ix)                                cooperate with theselling Holders of Registrable Securities to facilitate the timely preparationof, and furnish the selling Holders or the managing underwriters, at theCompany’s expense, certificates representing Registrable Securities to be soldand not bearing any restrictive legends; and enable such Registrable Securitiesto be in such denominations and registered in such names as the selling Holdersor managing underwriters, if any, may reasonably request at least two BusinessDays prior to any sale of Registrable Securities to any underwriters andinstruct the transfer agent and registrar of the Registrable Securities torelease any stop transfer orders with respect to the Registrable Securities;

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### (x)                                   cause allRegistrable Securities covered by the Registration Statement to be listed oneach securities exchange (or quotation system operated by a national securitiesassociation) on which identical securities issued by the Company are thenlisted on or prior to the effective date of any Registration Statement filedhereunder and enter into customary agreements including, if necessary, a listingapplication and indemnification agreement in customary form;

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### (xi)                                provide the Holders,the transfer agent and registrar a CUSIP number for the Registrable Securitiesno later than the effective date of such Registration Statement;

 

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### (xii)                             use its reasonable bestefforts to comply with all applicable rules and regulations of the SEC relatingto such registration and the distribution of the securities being offered andmake generally available to its securities holders, as soon as reasonablypracticable, earnings statements satisfying the provisions ofSection 11(a) of the Securities Act;

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### (xiii)                          cooperate and assist in anyfilings required to be made with the National Association of SecuritiesDealers, Inc.;

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### (xiv)                         if requested, include orincorporate in a Prospectus supplement or post-effective amendment to aRegistration Statement, such information as the managing underwritersadministering an Underwritten Offering of the Registrable Securities registeredthereunder reasonably request to be included therein and to which the Companydoes not reasonably object and make all required filings of such Prospectussupplement or post-effective amendment as soon as reasonably practicable afterthey are notified of the matters to be included or incorporated in suchProspectus supplement or post-effective amendment;

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### (xv)                            upon the occurrence of anyevent contemplated by clauses (4) (5) or (6) of Section 5(a)(iii) above,as soon as reasonably practicable prepare a post-effective amendment to anyRegistration Statement or an amendment or supplement to the related Prospectusor file any other required document so that, as thereafter delivered topurchasers of the Registrable Securities included therein, the Prospectus willnot include an untrue statement of a material fact or omit to state anymaterial fact necessary to make the statements therein, in the light of thecircumstances under which they were made, not misleading;

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### (xvi)                         subject to the proviso inparagraph (xv) above, cause the Registrable Securities covered by theRegistration Statement to be registered with or approved by such othergovernmental agencies or authorities as may be necessary to enable the selleror sellers thereof to consummate the disposition of such Registrable Securities(other than as may be required by the governmental agencies or authorities ofany foreign jurisdiction and other than as may be required by a law applicableto a selling Holder by reason of its own activities or business other than thesale of Registrable Securities);

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### (xvii)                      if such offering is anUnderwritten Offering, enter into an underwriting agreement with an investmentbanking firm selected in accordance with Section 5(c) of this Agreementcontaining representations, warranties, indemnities and agreements thencustomarily included by an issuer in underwriting agreements with respect tosecondary underwritten distributions and take all such other actions as arereasonably requested by the managing underwriters for such underwrittenoffering in order to facilitate the registration or the disposition of suchRegistrable Securities;

 

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### (xviii)                   if such offering is an UnderwrittenOffering, (a) make reasonably available for inspection by each selling Holderof Registrable Securities and any managing or lead underwriter in suchUnderwritten Offering, and any attorney, accountant or other agent retained bysuch selling Holder or any such underwriter, all relevant financial and otherrecords, pertinent corporate documents and properties of the Company and itssubsidiaries as shall be reasonably necessary to enable them to conduct a“reasonable” investigation for purposes of Section 11(a) of the SecuritiesAct; (b) cause the Company’s officers, directors and employees to makereasonably available for inspection all relevant information reasonablyrequested by the selling Holder or any such underwriter, attorney, accountantor agent in connection with any such Registration Statement, in each case, asis customary for similar due diligence examinations; *provided* that any information that is designated by theCompany as confidential at the time of delivery of such information shall bekept confidential by the selling Holder, such underwriter, or any such,attorney, accountant or agent, unless such disclosure is required by law, orsuch information becomes available to the public generally or through a thirdparty without an accompanying obligation of confidentiality; and (c) deliversuch documents and certificates as may be reasonably requested by the sellingHolder and the managing underwriters, if any, including customary opinions ofcounsel and “cold comfort” letters as may be reasonably required pursuant tothe underwriting agreement relating thereto.

###  

### (xix)                           in connection with anUnderwritten Offering requested pursuant to Section 2 or 3, the Companywill participate, to the extent reasonably requested by the managingunderwriter for the offering or the Demanding Holder or Shelf Demanding Holderparticipating therein, in customary efforts to sell the securities under theUnderwritten Offering, including, without limitation, participating in “roadshows” or other investor meetings, and the Company shall secure the reasonableparticipation of its senior management for such purposes; and

###  

### (xx)                              use its reasonable bestefforts to take all other reasonable steps necessary to effect theregistration, offering and sale of the Registrable Securities covered by theRegistration Statement contemplated hereby.

###  

The Company may require each seller of Registrable Securities, prior toinclusion of its Registrable Securities in a Registration Statement as to whichany registration is being effected, to furnish to the Company such informationregarding such seller and the distribution of such Registrable Securities asthe Company may from time to time reasonably request and as shall be requiredin connection with any registration referred to herein.   No Holder may include RegistrableSecurities in any Registration Statement pursuant to this Agreement unless anduntil such Holder has furnished to the Company such information.  Each Holder further agrees to furnish assoon as reasonably practicable to the Company all information required to bedisclosed in order to make information previously furnished to the Company bysuch Holder not materially misleading.

 

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## (b)                                 EachHolder of Registrable Securities agrees that, upon receipt of any writtennotice from the Company of the happening of any event of the kind described inclause (4), (5) or (6) of Section 5(a)(iii) or in Section 6(b), suchHolder will forthwith discontinue disposition of Registrable Securitiespursuant to the then current Prospectus until (1) such Holder is advised inwriting by the Company that a new Registration Statement covering the offer ofRegistrable Securities has become effective under the Securities Act or (2)such Holder receives copies of a supplemented or amended Prospectus contemplatedby this Section 5(b), or until such Holder is advised in writing by theCompany that the use of the Prospectus may be resumed.  If the Company shall have given any suchnotice during a period when a demand registration is in effect, the Companyshall extend the period described in Section 2(b) or 3(c) (as applicable)by the number of days during which any such disposition of RegistrableSecurities is discontinued pursuant to this paragraph, if so directed by theCompany, on the happening of such event, the Holder will deliver to the Company(at the Company’s expense) all copies, other than permanent file copies then insuch Holder’s possession, of the Prospectus covering such RegistrableSecurities current at the time of receipt of such notice.

##  

## (c)                                  Selectionof Underwriters.  With respect toany Underwritten Offering, the Company shall be entitled to select the managingunderwriter; provided, that if the Underwritten Offering is undertakenpursuant to Section 2 or 3 hereof, such managing underwriter shall beselected by the Holders of a majority of the Registrable Securities included insuch registration, subject to approval of the Company, which approval shall notbe unreasonably withheld.

##  

# **Section 6.**                                          OtherAgreements.

 

## (a)                                  “MarketStand-Off” Election.  In the case ofany Underwritten Offering, upon the request of the managing underwriter, eachHolder agrees not to effect any public sale or distribution of RegistrableSecurities, except as part of such Underwritten Offering pursuant to the termshereof, during the period beginning fifteen (15) days prior to the closing dateof such Underwritten Offering and during the period ending ninety (90) daysafter such closing date (or such longer period, not to exceed 180 days, as maybe reasonably requested by the Company or by the managing underwriter orunderwriters).

##  

## (b)                                 MaterialDevelopment Condition.  With respectto any Registration Statement filed or to be filed pursuant to Section 2or 3, if the Company determines that, in its good faith judgment, that (i) filinga Registration Statement or maintaining effectiveness of a current RegistrationStatement would have a material adverse effect on the Company or itsstockholders in relation to any material financing, acquisition or othercorporate transaction, and the Company has determined that disclosure of anysuch transaction is not in the best interests of the Company and itsstockholders, or (ii) the filing or maintaining effectiveness of a currentRegistration Statement would require disclosure of material information thatthe Company has a valid business purpose of retaining as confidential, upon thegiving of a written notice (a “Delay Notice”) to such effect, signed by theChairman Chief Executive Officer or Chief Financial Officer of the Company, toany Holder of Registrable Securities included or to be included in suchRegistration Statement, the Company shall be entitled to postpone filing orsuspend the use by the Holders of the Registration Statement for a reasonableperiod of time, provided that the Company may not postpone the filing orsuspend any such sales for a period of more than sixty (60) consecutive days; provided,that the Company shall not be entitled to exercise any such right

 

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more than two times in any calendar year or less than 30 days from theprior suspension period; and providedfurther, that such exerciseshall not prevent the Holders from being entitled to at least 240 days ofeffective registration per calendar year.

##  

## (c)                                  Limitationon Demand, Shelfand Piggyback Registration Rights.  Anything to the contrary contained in thisAgreement notwithstanding, when upon the written opinion of counsel for theCompany (which may be in-house counsel) delivered to a Holder requestingregistration hereunder that the Registrable Securities held by such Holder arenot Registrable Securities as defined in clause (iii) of the definition thereofand the Company has agreed to remove all restrictive securities law legendswith respect to such Registrable Securities, such Holder shall have no rightspursuant to Sections 2, 3 or 4 hereof, to request a registration in connectionwith such proposed sale; provided, however, if counsel for suchHolder of Registrable Securities reasonably disagrees in a written opiniondelivered to the Company with such written opinion of counsel for the Company,the foregoing limitation on registration rights shall be of no force or effect.

##  

# **Section 7.**                                          RegistrationExpenses.

 

All expenses incident to the Company’s performance of or compliancewith this Agreement, including without limitation all registration and filingfees, listing fees, fees and expenses of compliance with securities or blue skylaws (including reasonable fees and disbursements of counsel in connection withblue sky qualifications or registrations (or the obtaining of exemptionstherefrom) of the Registrable Securities), fees of the National Association ofSecurities Dealers, Inc. transfer and registration fees of transfer agents andregistrars, printing expenses (including expenses of printing Prospectuses),messenger and delivery expenses, internal expenses (including, withoutlimitation, all salaries and expenses of its officers and employees performinglegal or accounting duties), fees and disbursements of its counsel and itsindependent certified public accountants (including expenses of any specialaudit or accounting review), securities acts liability insurance (if theCompany elects to obtain such insurance), fees and expenses of any specialexperts retained by the Company in connection with any registration hereunder,reasonable fees and expenses, not to exceed $20,000 per registration hereunder,of one counsel for the Holders (and any necessary local counsel), fees andexpenses of other Persons retained by the Company, fees and expenses of one lawfirm chosen by the holders of a majority of Registrable Securities included ina registration pursuant hereto and all out-of-pocket fees and expenses incurredby any Holder in connection with the IPO (all such expenses being referred toas “Registration Expenses”), shall be borne by the Company; provided,that Registration Expenses shall not include out-of-pocket expenses incurred bythe Holders (except out-of-pocket expenses set forth in this Section 7)and underwriting discounts,commissions or fees attributable to the sale of the Registrable Securities,which shall be paid by the Holders pro rata on the basis of the number ofshares of Common Stock registered on their behalf.

 

# **Section 8.**                                          Indemnification.

 

## (a)                                  Indemnificationby the Company.  The Company,without limitation as to time agrees to indemnify and hold harmless, to the fullest extentpermitted by law, but without duplication, each Holder of RegistrableSecurities included in a Registration Statement, its

 

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officers, directors, employees, partners, principals, equityholders,managed or advised accounts, advisors and agents, and each Person who controlssuch Holder within the meaning of Section 15 of the Securities Act, and,unless indemnification of such Persons is otherwise provided for in theapplicable underwriting agreement, each underwriter, its partners, members,directors and officers and each person, if any, who controls such Underwriterwithin the meaning of Section 15 of the Securities Act  (individually, an “Indemnified Person”),from and against all losses, claims, damages, liabilities and expenses(including reasonable costs of investigation and reasonable legal fees andexpenses and including expenses incurred and amounts paid in settlement of anylitigation, commenced or threatened) arising out of or based upon any untruestatement (or alleged untrue statement) of a material fact in, or any omission(or alleged omission) of a material fact required to be stated in, suchRegistration Statement or Prospectus or necessary to make the statementstherein (in the case of a Prospectus in light of the circumstances under whichthey were made) not misleading, as such expenses are incurred, except insofaras the same are caused by or contained in any information furnished in writingto the Company by any Indemnified Person or any underwriter expressly for usetherein.

##  

## (b)                                 Indemnificationby Holders of Registrable Securities. In connection with any Registration Statement in which a Holder ofRegistrable Securities is participating, each such Holder will furnish to theCompany in writing such information and affidavits as the Company reasonablyrequests for use in connection with any such Registration Statement orProspectus and agrees to indemnify and hold harmless, to the fullest extentpermitted by law, severally but not jointly with any other Holder, but withoutduplication, and without limitation as to time, the Company, its officers,directors, shareholders, employees, advisors and agents, and each Person whocontrols the Company (within the meaning of the Securities Act) against anylosses, claims, damages, liabilities and expenses (including reasonable costsof investigation and reasonable legal fees and expenses and including expensesincurred in settlement of any litigation, commenced or threatened) arising outof or based upon any untrue statement (or alleged untrue statement) of materialfact in, or any omission (or alleged omission) of a material fact required tobe stated in, the Registration Statement or Prospectus or necessary to make thestatements therein (in the case of a Prospectus in light of the circumstancesunder which they were made) not misleading, as such expenses are incurred, to theextent, but only to the extent, that such untrue statement or omission iscontained in any information or affidavit so furnished in writing by suchHolder to the Company specifically for inclusion therein.  In no event shall any participating Holderbe liable for any amount in excess of the proceeds (net of payment of allexpenses (excluding underwriting discounts and commissions paid or payable bysuch Holder)) received by such Holder upon the sale of the RegistrableSecurities offered and sold by such Holder pursuant to such RegistrationStatement.

##  

## (c)                                  Conductof Indemnification Proceedings.  AnyPerson entitled to indemnification hereunder will (i) give prompt notice to theindemnifying party of any claim with respect to which it seeks indemnificationand (ii) permit such indemnifying party to assume the defense of such claimwith counsel of such indemnifying party’s choice; provided,however,that any Person entitled to indemnification hereunder shall have the right toemploy separate counsel and to participate in the defense of such claim, butthe fees and expenses of such counsel shall be at the expense of suchindemnified Person unless (A) the indemnifying party shall have agreed inwriting to pay them, (B) the indemnifying party shall have failed to assume thedefense of such 

 

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claim and employ counsel reasonably satisfactory to the indemnifiedparty in a timely manner or (C) the named parties to an action, claim orproceeding (including any impleaded parties) include any indemnified party andthe indemnifying party or any of its Affiliates and in the reasonable judgmentof any such Person, based upon advice of its counsel, (1) a conflict ofinterest may exist between such person and the indemnifying party with respectto such claims (in which case, if the Person notifies the indemnifying party inwriting that such Person elects to employ separate counsel at the expense ofthe indemnifying party, the indemnifying party shall not have the right to assumethe defense of such claim on behalf of such person) or (2) there may be one ormore legal defenses available to it which are different from or in addition tothose available to the indemnifying party; provided, that such counselonly be hired to the extent necessary for such defense or defenses; and provided,further, that the indemnifying party shall be responsible to pay thefees and expenses of only one law firm plus one local counsel in each necessaryjurisdiction pursuant to these clauses (A), (B) and (C).  The indemnifying party will not be subjectto any liability for any settlement made without its written consent (whichconsent shall not be unreasonably withheld). No indemnified party will be required to consent to entry of anyjudgment or enter into any settlement which does not include as anunconditional term thereof the giving by the claimant or plaintiff to suchindemnified party of a release from all liability in respect of such claim orlitigation.  An indemnifying party whois not entitled to, or elects not to, assume the defense of the claim will notbe obligated to pay the fees and expenses of more than one counsel (plus onelocal counsel if required in a specific instance) for all parties indemnifiedby such indemnifying party with respect to such claim.  The failure by an indemnified party to givenotice as provided herein shall not relieve the indemnifying party of itsobligations under this Section 9, except to the extent the failure to givesuch notice is materially prejudicial to the indemnifying party’s ability todefend such action.

##  

## (d)                                 Contribution.  If for any reason the indemnificationprovided for in Section 8(a) or Section 8(b) is unavailable to anindemnified party or insufficient to hold it harmless as contemplated by Section 8(a)and Section 8(b), then the indemnifying party shall contribute to theamount paid or payable by the indemnified party as a result of such loss,claim, damage or liability in such proportion as is appropriate to reflect therelative fault of the indemnifying party and the indemnified party, as well asany other relevant equitable considerations. The relative fault shall be determined by reference to, among otherthings, whether the untrue or alleged untrue statement or the omission oralleged omission relates to information supplied by the indemnifying party orparties on the one hand or the indemnified party on the other and the parties,relative intent, knowledge, access to information and opportunity to correct orprevent such untrue statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning ofSection 11(f) of the Securities Act) shall be entitled to contributionfrom any Person who was not guilty of such fraudulent misrepresentations.  The amount paid or payable by a party as aresult of any losses shall be deemed to include any legal or other fees orexpenses incurred by such part in connection with any proceeding, to the extentsuch party would have been indemnified for such expenses if the indemnificationprovided for in Section 8(a) or Section 8(b) were available to suchparty.  In no event shall anyparticipating Holder be liable for any amount in excess of the proceeds (net ofpayment of all expenses (excluding underwriting discounts and commissions paidor payable by such Holder)) received by such Holder upon the sale of theRegistrable Securities offered and sold by such Holder pursuant to suchRegistration Statement.

 

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## (e)                                  RemediesCumulative.  The indemnity,contribution and expense reimbursement obligations under this Section 8shall be in addition to any liability each indemnifying person may otherwisehave and shall remain operative and in full force and effect regardless of anyinvestigation made by or on behalf of any indemnified party.

##  

# **Section 9.**                                          Participationin Underwritten Registrations.

 

No Person may participate in any Underwritten Offering hereunder unlesssuch Person (i) agrees to sell such Person’s Registrable Securities on thebasis provided in any underwriting arrangements related thereto and (ii)completes and executes all questionnaires, powers of attorney, indemnities,underwriting agreements and other documents required under the terms of suchunderwriting arrangements.  Nothing inthis Section 9 shall be construed to create any additional rightsregarding the registration of Registrable Securities in any Person otherwisethan as set forth herein.

 

# **Section 10.**                                   SubsequentRegistration Rights.

 

The Company shall not modify or amend any existing agreement providingfor registration rights in a manner that would adversely affect the rights ofthe Holders granted hereunder.  Inaddition, the Company shall not grant any Person any registration rights withrespect to shares of Common Stock other than registration rights that expresslypermit the Holders to participate in the registration pro rata with the Personbeing granted registration rights based on the number of shares requested to beincluded (and on a basis no less favorable to the Holders than that of thePerson being granted registration rights). Notwithstanding anything herein to the contrary, the Company may grantregistration rights with respect to shares of Common Stock issued in connectionwith an acquisition of stock or assets of another company so long as theregistration rights would not be in conflict with or inconsistent with therights of the Holders hereunder in any material respect.

 

# **Section 11.**                                   Rule144 Reporting.

 

With a view to making available the benefits of certain rules andregulations of the SEC that may permit the sale of the Registrable Securitiesto the public without registration, the Company agrees to use its reasonablebest efforts to:

 

## (a)                                  makeand keep public information regarding the Company available as those terms areunderstood and defined in and interpreted under Rule 144 under the SecuritiesAct, at all times from and after ninety (90) days following the effective dateof an IPO registration statement;

##  

## (b)                                 filewith the Commission in a timely manner all reports and other documents requiredof the Company under the Securities Act and the Exchange Act at any time afterit has become and remains subject to such reporting requirements; and

##  

## (c)                                  solong as a Holder owns any Restricted Securities, furnish to the Holderforthwith upon written request a written statement by the Company as to itscompliance with the reporting requirements of Rule 144 (at any time from andafter ninety (90) days following the

 

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effective date of an IPO registration statement), and of the SecuritiesAct and the Exchange Act (at any time after it has become and remains subjectto such reporting requirements), a copy of the most recent annual or quarterlyreport of the Company, and such other reports and documents so filed as aHolder may reasonably request in availing itself to any rule or regulation ofthe SEC allowing a Holder to sell any such securities without registration.

##  

# **Section 12.**                                   Amendmentsand Waivers.

 

The provisions of this Agreement, including the provisions of thisSection 12, may not be amended, modified or supplemented, and waivers orconsents to departures from the provisions hereof may not be given unless (a)with respect to a particular offering hereunder, the Company has obtained thewritten consent of Holders of a majority of the Registrable Securities includedin such offering as are then outstanding as determined by the Company or (b) inany other event, the Company has obtained the written consent of Holders of amajority of the Registrable Securities then outstanding as determined by theCompany and so long as the effect thereof will be that the consenting Holderswill not be treated more favorably than all other Holders.  Whenever the consent or approval of Holdersof a specified number of Registrable Securities is required hereunder,Registrable Securities held by the Company shall not be counted in determiningwhether such consent or approval was given by the Holders of such requirednumber.

 

# **Section 13.**                                   Notices.

 

All notices and other communications provided for or permittedhereunder shall be made in writing by hand-delivery, registered first-classmail, telecopier, or air-courier guaranteeing overnight delivery:

 

## (a)                                  Ifto a Holder of Registrable Securities, initially at the address set forth belowsuch Holder’s signature page hereto, with a copy to Stroock & Stroock &Lavan LLP, 180 Maiden Lane, New York, New York 10038, Attention:  Patty Perez, Esq., Facsimile: (212) 806-6006and thereafter at such other address as may be designated from time to time bynotice given in accordance with the provisions of this Section 13.

##  

## (b)                                 Ifto the Company, initially at 500 West Dutton Road, Aston, Pennsylvania 19014,Attention:  Chief Executive Officer andPresident; telecopier no. (610) 619-3081, with a copy to Skadden, Arps, Slate,Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles,California 90071, Attention:  Jeffrey H.Cohen, Esq., Facsimile: (213) 687-5600, and thereafter at such other address asmay be designated from time to time by notice given in accordance with theprovisions of this Section 13.

##  

## (c)                                  Allsuch notices and other communications shall be deemed to have been deliveredand received (i) in the case of personal delivery, telecopier or telegram, onthe date of such delivery, (ii) in the case of overnight air courier, on theBusiness Day after the date when sent and (iii) in the case of mailing, on thethird Business Day following such mailing.

 

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# **Section 14.**                                   Successorsand Assigns.

 

This Agreement shall inure to the benefit of and be binding upon thesuccessors and assigns of each of the parties hereto, including withoutlimitation and without the need for an express assignment to subsequent Holdersof the Registrable Securities who acquire their shares in transactions notinvolving a registration under the Securities Act or a sale of shares in thepublic markets; provided, that the transferee or assignee of such rightsassumes in writing the obligations of such transferor under this Agreement andshall be added to Schedule I attached hereto as a result and provided,further, that no successor or assign shall be deemed a Holder orentitled to the rights of a Holder unless such successor or assign (a) isan Affiliate of a Securityholder or (b) acquires from a SecurityholderRegistrable Securities constituting 10% or more of the then-outstanding sharesof Common Stock.

 

# **Section 15.**                                   Counterparts.

 

This Agreement may be executed in any number of counterparts and by theparties hereto in separate counterparts, each of which when so executed shallbe deemed to be an original and all of which taken together shall constituteone and the same agreement.

 

# **Section 16.**                                   Headings.

 

The headings in this Agreement are for convenience of reference onlyand shall not limit or otherwise affect the meaning hereof.

 

# **Section 17.**                                   GoverningLaw.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITHTHE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION,SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORKCIVIL PRACTICE LAWS AND RULES 327(b).

 

# **Section 18.**                                   Jurisdiction;Forum.

 

Each party hereto consents and submits to the jurisdiction of any statecourt sitting in the County of New York or federal court sitting in theSouthern District of the State of New York in connection with any disputearising out of or relating to this Agreement. Each party hereto waives any objection to the laying of venue in such courtsand any claim that any such action has been brought in an inconvenientforum.  To the extent permitted by law,any judgment in respect of a dispute arising out of or relating to thisAgreement may be enforced in any other jurisdiction within or outside theUnited States by suit on the judgment, a certified copy of such judgment beingconclusive evidence of the fact and amount of such judgment.  Each party hereto agrees that personalservice of process may be effected by any of the means specified in Section 13,addressed to such party.  The foregoingshall not limit the rights of any party to serve process in any other mannerpermitted by law.

 

# **Section 19.**                                   Severability.

 

In the event that any one or more of the provisions contained herein,or the application thereof in any circumstance, is held invalid, illegal orunenforceable, the validity,

 

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legality and enforceability of any such provision in every otherrespect and of the remaining provisions contained herein shall not be affectedor impaired thereby.

 

# **Section 20.**                                   TerminationOf Registration Rights.

 

All rights granted under this Agreement shall terminate with respect toany Holder at such time as such Holder ceases to own Registrable Securities.

 

# **Section 21.**                                   Remedies.

 

In the event of a breach by any party of any of its obligations underthis Agreement, the other parties, in addition to being entitled to exerciseall rights provided herein or granted by law, including recovery of damages,will be entitled to specific performance of their rights under thisAgreement.  The Company and theSecurityholders agree that monetary damages would not be adequate compensationfor any loss incurred by reason of a breach by the Company or theSecurityholders, as the case may be, of any of the provisions of this Agreementand hereby further agree that, in the event of any action for specificperformance in respect of such breach, the Company or the Securityholders, asthe case may be, shall waive the defense that a remedy at law would beadequate.  No failure or delay on thepart of the Company or the Securityholders in exercising any right, power orremedy hereunder shall operate as a waiver thereof, nor shall any single or partialexercise of any such right, power or remedy preclude any other or furtherexercise thereof or the exercise of any other right, power or remedy.

 

# **Section 22.**                                   EntireAgreement.

 

This Agreementis intended by the parties as a final expression of their agreement and isintended to be a complete and exclusive statement of the agreement andunderstanding of the parties hereto in respect of the subject matter containedherein.  This Agreement supersedes allprior agreements and understandings between the parties with respect to suchsubject matter.

 

**[Remainder ofPage Intentionally Left Blank]**

 

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IN WITNESS WHEREOF, this Agreement has been executed as of the datefirst above written.

 
|   | CHEROKEE INTERNATIONAL CORPORATION     |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | By:                                    | /s/ Van Holland, Jr. |   |
|   |                                   | Name: Van Holland, Jr. |
|   |                                   | Title: Chief Financial Officer |
|   |                                   |
|   |                                   |
|   | OCM PRINCIPAL OPPORTUNITIES FUND, L.P. |
|   |                                   |
|   | By:                                    | Oaktree Capital Management, LLC, |
|   |                                   | its General Partner |
|   |                                   |
|   | By:                                    | /s/ Christopher S. Brothers |   |
|   |                                   | Name: Christopher S. Brothers |
|   |                                   | Title: Managing Director |
|   |                                   |
|   | By:                                    | /s/ Lisa Arakaki |   |
|   |                                   | Name: Lisa Arakaki |
|   |                                   | Title: Vice President, Legal |
|   |                                   |
|   |                                   |
|   | OCM/GFI POWER OPPORTUNITIES FUND, L.P. |
|   |                                   |
|   | By:                                    | GFI Energy Ventures, LLC, |
|   |                                   | its Co-General Partner, |
|   |                                   |
|   |                                   |
|   | By:                                    | /s/ Ian Schapiro |   |
|   |                                   | Name: Ian Schapiro |
|   |                                   | Title: Principal |
|   |                                   |
|   |                                   |
|   | GFI Two LLC                            |
|   |                                   |
|   |                                   |
|   | By:                               | /s/ Ian Schapiro |   |
|   |                                   | Name: Ian Schapiro |
|   |                                   | Title: Principal |
|        |                                        |  |  |  |

 

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|   | GSC RECOVERY II, L.P.          |
|--------|--------------------------------|
|   |                           |
|   | By:                            | GSC Recovery II GP, L.P., its general partner |
|   |                           |
|   |                           | By: | GSC RII, LLC, its general partner |
|   |                           |   |   |   |
|   |                           |   | By:  GSCP (NY) Holdings, L.P.,  its sole  member |
|   |                           |   |   |
|   |                           |   |   | By: | GSCP (NJ), Inc., its general  partner |
|   |                           |
|   | By:                       | /s/ Robert Hamwee |   |
|   |                           | Name: Robert Hamwee |
|   |                           | Title: Managing Director |
|   |                           |
|   |                           |
|   | GSC RECOVERY IIA, L.P.         |
|   |                           |
|   | By:                            | GSC Recovery IIA GP, L.P., its general partner |
|   |                           |
|   |                           | By: | GSC RIIA, LLC, its general partner |
|   |                           |   |   |   |
|   |                           |   | By:   GSCP (NY) Holdings,  L.P., its sole  member |
|   |                           |   |   |   |
|   |                           |   |   | By: | GSCP (NJ), Inc., its general  partner |
|   |                           |
|   | By:                       | /s/ Robert Hamwee |   |
|   |                           | Name: Robert Hamwee |
|   |                           | Title: Managing Director |
|   |                           |
|   |                           |
|   | GSC PARTNERS CDO FUND, LIMITED |
|   |                           |
|   | By:                            | GSCP (NJ), L.P. |
|   |                           | as attorney-in-fact |
|   |                           |
|   |                           | By: | GSCP (NJ), Inc. |
|   |                           | its general partner |   |
|   |                           |
|   | By:                       | /s/ Seth Katzenstein |   |
|   |                           | Name: Seth Katzenstein |
|   |                           | Title: Vice President |
|        |                                |  |  |  |  |  |  |  |  |  |  |  |  |

 

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|   | GSC PARTNERS CDO FUND II, LIMITED |
|--------|-----------------------------------|
|   |                              |
|   | By:                               | GSCP (NJ), L.P. |
|   |                              | as attorney-in-fact |
|   |                              |   |
|   |                              | By: | GSCP (NJ), Inc. |
|   |                              | its general partner |   |
|   |                              |
|   | By:                          | /s/ Seth Katzenstein |   |
|   |                              | Name: Seth Katzenstein |
|   |                              | Title: Vice President |
|        |                                   |  |  |  |  |

 

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**SCHEDULE I**

 

OCM Principal Opportunities Fund, L.P.

OCM/GFI Power Opportunities Fund, L.P.

GFI Two LLC

GSC Recovery II, L.P.

GSC Recovery IIA, L.P.

GSC Partners CDO Fund, Limited

GSC Partners CDO Fund II, Limited

 

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