Exhibit
4.5


 


PANOLAM HOLDINGS
CO.


 


REGISTRATION
RIGHTS AGREEMENT


 


This Registration Rights
Agreement (“Agreement”) is made and entered into by and among Panolam Holdings
Co., a Delaware corporation (“Company”), and the other signatories hereto who
have committed, subject to certain conditions, to become holders of Qualified
Registrable Securities (as defined herein) on the Effective Date whose names
appear on the signature pages of this Agreement:


 


1.                          Certain
Definitions. As used in this Agreement:


 


1.1                     The term
“Affiliate” shall mean any person or entity directly or indirectly controlling,
controlled by, or under common control with the Company.  As used in this definition, the term
“control,” including the correlative terms “controlling,” “controlled by,” and
“under common control with,” shall mean possession, directly or indirectly, of
a majority of the outstanding voting securities of such person or entity.


 


1.2                     The term
“Commission” shall mean the Securities and Exchange Commission and any
successor agency.


 


1.3                     The term
“Common Equity Securities” shall mean Common Shares, any option, warrant or right
to subscribe for, acquire or purchase Common Shares (whether or not currently
exercisable), and any security convertible into or exchangeable for Common Shares
(whether or not currently convertible or exchangeable).


 


1.4                     The term
“Common Shares” shall mean any shares in the share capital of any class of the
Company that has no preference in respect of dividends or amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company and is not subject to redemption by the Company,
including shares of any voting or non-voting common stock of the Company.


 


1.5                     The term
“Effective Date” shall mean the date of the closing of the transactions
(collectively, the “Acquisition”) contemplated in the Agreement and Plan of
Merger dated as of July 16, 2005, as amended, by and among GS Holdings Co., a
Delaware corporation now known as Panolam Holdings II Co., Panolam Industries Holdings,
Inc., a Delaware corporation and TC Group, L.L.C., a Delaware limited liability
company (the “Purchase Agreement”).


 


1.6                     The term
“Holder” shall mean (1) any party who is a signatory to this Agreement and, at
the time of determination of whether such party is a “Holder,” holds Qualified
Registrable Securities of record, and (2) any party who hereafter acquires
Qualified Registrable Securities from a Holder and, at the time of
determination of whether such party is a “Holder,” holds Qualified Registrable
Securities of record and who is permitted to become, and has at such time
become, a party to this Agreement under Section 11.1 of this Agreement.


 

















 


1.7                     The term
“Initial Public Offering” shall mean the first underwritten public offering of
Common Shares pursuant to a registration statement filed under the Securities
Act after the Effective Date; provided, however, that the term “Initial Public
Offering” shall not include any registration statement (1) relating to any
capital stock of the Company or options, warrants or other rights to acquire
any such capital stock issued or granted or to be issued or granted primarily
to directors, officers or employees of the Company, (2) relating to any
employee benefit plan or interests therein, (3) filed pursuant to Rule 145
under the Securities Act or any successor or similar provision or (4) relating
solely to any shares of preferred stock or debt securities of the Company.


 


1.8                     The term
“Permitted Transferee” shall mean any person or entity to which Qualified Registrable
Securities may be transferred pursuant to Section 4.3, Section 6 (other than
Sections 6.2, 6.10 or 6.11), Section 9 or Section 10 of the Stockholders
Agreement.


 


1.9                     The term
“Qualified Registrable Securities” shall mean any Common Equity Securities of
the Company. Any Holder of Qualified Registrable Securities will be deemed to
be the Holder of any Common Shares issuable upon the exercise, conversion or
exchange of such Qualified Registrable Securities, whether or not such
exercise, conversion or exchange is then permitted by the terms of such Common
Equity Securities or by applicable statutes, regulations or agreements. Any
Qualified Registrable Securities shall cease to be Qualified Registrable
Securities whenever (1) a registration statement with respect to such
securities becomes effective under the Securities Act and such securities have
been disposed of in accordance with such registration statement; (2) such
securities have ceased to be outstanding; (3) such securities have been sold
pursuant to Rule 144 or Rule 144A under the Securities Act or any successor or
similar provisions; or (4) at the time of determination of whether such
securities are Qualified Registrable Securities, such securities may be sold by
the Holder thereof without registration under the Securities Act and free of
contractual restrictions with the Company, including the provisions of Section
9.


 


1.10               The term “Qualified
Registration” shall mean a registration statement of the Company under the
Securities Act on a form that permits the sale of Common Equity Securities in
the United States (other than a registration statement (1) on Form S-4 or S-8,
or similar forms available to foreign private issuers, or any successor or
similar forms, respectively, (2) in connection with the Initial Public Offering
(unless the Company, in its sole discretion, consents to the secondary sale of
shares in the Initial Public Offering), or before (but not in connection with)
the Initial Public Offering, (3) pursuant to Section 3 in connection with a
Demand Registration (as defined therein), (4) relating to any capital stock of
the Company or options, warrants or other rights to acquire any such capital
stock issued or granted or to be issued or granted primarily to directors,
officers or employees of the Company, (5) filed pursuant to Rule 145 under the
Securities Act or any successor or similar provision, (6) relating to any
employee benefit plan or interests therein, or (7) relating to preferred stock
or debt securities of the Company).


 


1.11               The term “Required
Voting Percentage” shall mean, at any particular time, 66 2/3% of
the Shares Subject to this Agreement determined as at such time. For so long as
the Stockholders Agreement is in effect, the Voting Representative (as defined
therein) for each Designated Holder Group (as defined therein) shall be
exclusively authorized to act on behalf of


 


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and directed by each Holder included in such
Designated Holder Group with respect to any matter requiring the consent, vote
or approval of the Required Voting Percentage.


 


1.12               The term “Requisite
Amount” shall mean (1) for the purposes of Section 3, an amount of Qualified
Registrable Securities proposed to be registered under Section 3 pursuant to a Demand
Registration (as defined herein) which are expected to have an aggregate
offering price of at least $20 million, as determined in good faith by the
Company in consultation with the Sponsor Holders making a Demand Request (as
defined herein); and (2) for the purposes of Section 8, the aggregate amount of
Qualified Registrable Securities and other securities of the Company which, in
the good faith opinion of the Company, are expected to have an aggregate
offering price of at least $20 million.


 


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


 


1.14               The term “Shares
Subject to this Agreement” shall mean the aggregate of all Qualified
Registrable Securities on a fully-diluted basis held by the Holders.


 


1.15               The term “Sponsor
Holders” shall mean Genstar Capital Partners IV, L.P., Stargen IV, L.P.,
Sterling Group Partners II, L.P., and Sterling Group Partners II (Parallel),
L.P.


 


1.16               The term
“Stockholders Agreement” shall mean that certain Panolam Holdings Co.
Stockholders Agreement dated as of the Effective Date among the Company and the
Holders and the other parties thereto, as amended from time to time in
accordance with such agreement.


 


2.                          Piggyback
Registrations.


 


2.1                     Right to
Piggyback Registration. After the Initial Public Offering (or in the
Initial Public Offering, if the Company, in its sole discretion, permits the
secondary sale of shares of Qualified Registrable Securities in the Initial
Public Offering), whenever the Company proposes to register any of its Common
Equity Securities in a Qualified Registration other than a Demand Registration
under Section 3, whether or not for sale for its own account, the Company shall
give prompt written notice (the “Piggyback Notice”) to the Holders of Qualified
Registrable Securities of its intention to effect such Qualified Registration.
Upon written request of any Holder of Qualified Registrable Securities made
within 20 days after delivery of any Piggyback Notice (which request shall
specify the Qualified Registrable Securities requested to be included in such
Qualified Registration by such Holder), the Company shall, subject to Sections
2.2 and 2.3, use its reasonable best efforts to include in such Qualified
Registration all Qualified Registrable Securities that the Holders have so
requested be included in such Qualified Registration, to permit the disposition
by such Holders of such Qualified Registrable Securities; provided, however,
that (1) if, at any time after giving the Piggyback Notice and before the
effective date of the registration statement filed in connection with such
Qualified Registration, the Company determines for any reason not to register
such Common Equity Securities (other than the Qualified Registrable Securities
requested to be included therein pursuant to this Section 2), the Company, at
its election, may give written notice of such determination to all Holders of
Qualified Registrable Securities requesting the inclusion of their Qualified
Registrable Securities


 


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therein
and, thereupon, shall be relieved of its obligation to register any Qualified
Registrable Securities in connection with such registration (without prejudice,
however, to the rights of the Holders under Section 3 or the future rights of the
Holders under this Section 2); (2) if, at any time after giving the Piggyback
Notice and before the effective date of the registration statement filed in
connection with such Qualified Registration, the Company determines for any
reason to delay such registration of the Common Equity Securities (other than
the Qualified Registrable Securities requested to be included therein pursuant
to this Section 2), the Company shall be permitted to delay the registration of
such Qualified Registrable Securities for the same period as the delay in
registering such other Common Equity Securities; and (3) the Company shall not
be required to effect any registration pursuant to this Section 2.1 unless it
shall have received reasonable assurances that the Holders of any Qualified
Registrable Securities included therein will pay any expenses required to be
paid by them as provided in Section 5. As used herein, the term “Piggyback
Registration” shall mean any registration of Qualified Registrable Securities
requested pursuant to this Section 2.1.


 


2.2                     Priority on Piggyback Registrations. If a Piggyback Registration is an
underwritten offering and the managing underwriter thereof advises the Company
in writing that, in its opinion, the number of shares of Qualified Registrable
Securities requested or proposed to be included in such Qualified Registration
exceeds the number that can be sold in such offering without materially
affecting the offering price of any such securities, the Company shall include
in such Qualified Registration (1) first, to the extent that such securities of
the Company may be included in such Qualified Registration without materially
affecting the offering price thereof, in the opinion of such managing
underwriter, if such registration is initiated by the Company proposing to
register any of its Common Equity Securities, such Common Equity Securities
proposed to be sold by the Company, (2) second, to the extent that such
Qualified Registrable Securities may be included in such Qualified Registration
without materially affecting the offering price of the securities referred to
in clause (1), in the opinion of such managing underwriter, the Qualified
Registrable Securities requested by the Holders to be included in such
Piggyback Registration pursuant to Section 2.1 pro rata among such Holders on
the basis of the total number of Qualified Registrable Securities, held by each
such Holder and eligible to be included therein, and (3) third, to the extent
that such securities may be included in such Qualified Registration without
materially affecting the offering price of the securities referred to in
clauses (1) and (2), in the opinion of such managing underwriter, any other
securities of the Company held by persons other than the Holders having rights
to participate in such Piggyback Registration, in accordance with agreements
with respect to such registration rights between the Company and such persons.


 


2.3                     Selection of Underwriters. Except as otherwise provided in any
registration rights agreement with respect to any other securities of the
Company, if any Piggyback Registration is an underwritten offering, the Company
shall have the sole right to select the managing underwriter or underwriters
thereof.


 


3.                          Demand
Registrations.


 


3.1                     Right to Demand Registration. After the Initial Public Offering, upon the
written request (“Demand Request”) of one or more Sponsor Holder(s) who at the
time owns Qualified Registrable Securities requesting the Company to effect the
registration of any


 


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Qualified
Registrable Securities of such Sponsor Holder(s) under the Securities Act
(which request shall state the intended method of disposition of such Qualified
Registrable Securities by such Sponsor Holder(s)), and such Qualified
Registrable Securities requested in the Demand Request to be included therein
have, in the good faith opinion of the Company, an aggregate fair market value
of at least $5 million, the Company shall promptly give the written notice
required under Section 3.2, and thereupon, subject to this Section 3 and
Section 4 and as expeditiously as reasonably practicable and in any event
within 60 days of the date of the Demand Request (subject to Section 3.3),
shall file a registration statement under the Securities Act relating to, and
shall use its reasonable best efforts to effect, the registration (“Demand
Registration”) under the Securities Act of (1) the Qualified Registrable
Securities that the Company has been so requested to register by the Sponsor
Holder(s), for disposition in accordance with the intended method of
disposition stated in the Demand Request, and (2) all other Qualified
Registrable Securities, the Holders of which have made a written request to the
Company for registration thereof as provided in Section 3.2, in each case to
permit the disposition by such Holders of such Qualified Registrable
Securities.


 


3.2                    Obligations of Company after Demand Request. Upon the receipt of a Demand Request, the
Company promptly shall give written notice of the proposed Demand Registration
and the intended method of disposition stated in the Demand Request to all
other Holders and all other persons having registration rights under other
agreements with respect to the Demand Registration and, subject to the terms of
this Section 3 and Section 4, shall include in such Demand Registration all
Qualified Registrable Securities of the Holders with respect to which the
Company has received written requests for inclusion therein (which requests, to
be effective, shall contain a consent to the intended method of disposition
included in the Demand Request) within 20 days after the delivery of such
notice.


 


3.3                    Conditions to Company’s Obligations under Demand Registration. Notwithstanding the foregoing, the Company
shall not be required to file a registration statement for a Demand
Registration under any of the following circumstances:


 


3.3.1            (a)
within 90 days after the effective date of a registration statement filed in
connection with the Initial Public Offering (or up to 180 days if required by
the underwriters), (b) within 45 days of after the effective date of a
registration statement filed in connection with an underwritten public offering
of securities of the Company other than the Initial Public Offering (or up to
90 days if required by the underwriters), or (c) within 45 days after the
effective date of a registration statement filed in connection with a prior
Demand Registration (or up to 90 days if required by the underwriters);


 


3.3.2            the
Company promptly delivers written notice (“Delay Notice”) to the Sponsor
Holders making the Demand Request that the Company:


 


(1)                       (a) had previously determined by resolution of
the Company’s Board of Directors to file a registration statement for an
underwritten public offering of Common Equity Securities as to which the
Company expects to receive net proceeds of at least $20 million (after
deducting all costs, discounts, commissions and other expenses of the
offering), or (b) has initiated bona fide discussions with underwriters in preparation
for a public offering of its securities as to which it expects to receive net
proceeds of at least $20 million


 


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(after
deducting all costs, discounts, commissions and other expenses of the offering)
and in each case its underwriters reasonably believe (as evidenced by a letter
to the Company) that such public offering would be materially adversely
affected by the Demand Registration so requested; provided, however, that the
Company may postpone the filing of a registration statement in connection with
a Demand Registration under this clause (l) no longer than (a) 120 days after
the effective date of the registration statement to be filed by the Company as
stated in the Delay Notice, if such registration statement is filed within 45
days after the date of delivery of the Delay Notice and becomes effective
within 90 days after the date of delivery of the Delay Notice, (b) 90 days
after the date of delivery of the Delay Notice, if such registration statement
is filed within 45 days after the date of delivery of the Delay Notice but does
not become effective within such 90-day period, or (c) 45 days after the date
of delivery of the Delay Notice, if such registration statement is not filed
within 45 days after the date of delivery of the Delay Notice; and provided
further, that the Company may exercise the rights in this clause (1) no more
than once in any 24-month period and any of such periods in (a) and (b) above
may be extended to up to 180 days after the effective date of the registration
statement to be filed by the Company as stated in the Delay Notice if so
required by the underwriters; or


 


(2)                       is in possession of material information that
it reasonably deems advisable not to disclose in a registration statement;
provided, however, that the Company may postpone the filing of a registration
statement in connection with a Demand Registration under this clause (2) only
for so long as such information continues to be material and non-public, but in
no event longer than 90 days after the Demand Request or for more than an
aggregate of 90 days during any 18-month period;


 


3.3.3            the
Company has previously effected six Demand Registrations pursuant to this
Section 3, which have been declared or ordered effective by the Commission;


 


3.3.4            the
Company determines, in good faith and after consultation with the Sponsor
Holders making the Demand Request, that the Qualified Registrable Securities
proposed to be registered in the Demand Request are not expected to have an
aggregate offering price of at least the Requisite Amount; or


 


3.3.5            the
Company promptly delivers written notice (“Prior Registration Notice”) to the
Sponsor Holders making the Demand Request and any Holder who has requested to
be included in such demand registration that it has filed and is using
reasonable best efforts to have declared effective, or at the time of receipt
of the Demand Request is required to file, or has delivered a Piggyback Notice
under Section 2.1 with respect to, a registration statement pursuant to (1)
demand registration rights granted to any person or entity (other than pursuant
to this Section 3) or (2) Section 2 (“Prior Registration Rights”); provided,
however, that the Company may postpone the filing of a registration statement
pursuant to a Demand Request for a period of no longer than (1) 120 days after
the effective date of the registration statement filed pursuant to the Prior
Registration Rights, if such registration statement was filed before the date
of delivery of the Prior Registration Notice or within 45 days thereafter and,
in either case, becomes effective within 90 days after the date of delivery of
the Prior Registration Notice; (2) 90 days after the date of delivery of the
Prior Registration Notice, if such registration statement was filed before the
date of delivery of the Prior Registration Notice or within 45 days thereafter
but, in either case, does not become effective within such 90-day period; or
(3) 45 days after the date of


 


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delivery of the Prior Registration Notice, if such
registration statement was not filed before the date of delivery of the Prior
Registration Notice and is not filed within 45 days thereafter; provided,
however, that any of such periods in (1) and (2) above may be extended to up to
180 days after the effective date of the registration statement to be filed by
the Company as stated in the Delay Notice if so required by the underwriters.


 


3.4                     Priority
on Demand Registrations. If the Demand Registration is an underwritten
offering and the managing underwriter thereof advises the Company in writing
that, in its opinion, the number of shares of Qualified Registrable Securities
and other securities of the Company requested to be included in such offering
exceeds the number that can be sold in such offering without materially
affecting the offering price of any such securities, the Company shall include
in such registration (1) first, the Qualified Registrable Securities requested
by the Holders to be included in the Demand Registration pursuant to Sections
3.1 and 3.2, pro rata among such Holders on the basis of the total number of
Qualified Registrable Securities then held by such Holders requesting to be
included in such Demand Registration; and (2) second, to the extent that such
securities of the Company may be included in such Demand Registration without
materially affecting the offering price of the Qualified Registrable Securities
in the opinion of such managing underwriter, (a) any other securities of the
Company held by persons having rights to participate in such Demand
Registration that are non-preferential to the Holders in accordance with their
agreements with respect thereto and (b) securities of the Company to be issued
or sold by the Company.


 


3.5                     Selection
of Underwriters. If any Demand Registration is an underwritten offering,
the Holders of the majority of Qualified Registrable Securities to be included
in such Demand Registration shall have the sole right to select, after consultation
with the Company, the managing underwriter or underwriters thereof, at least
one of which shall be of nationally recognized standing.


 


3.6                     Clean-Up
Demand. If, after an aggregate of six Demand Registrations in compliance
with this Section 3 have become effective, any Holder shall not have sold all
of its Qualified Registrable Securities due to proration with other
registration participants, then the Holders, acting by the Required Voting
Percentage, shall be entitled to one additional Demand Request in which the
Holders then holding Qualified Registrable Securities shall not be subject to
proration with any other holders of securities of the Company entitled to
participate in such registration; provided, however, that each such Holder
shall be subject to proration on the basis of the number of shares of Qualified
Registrable Securities then held by such Holder requesting to be included
therein compared to the total number of shares of Qualified Registrable
Securities then held by all such Holders of Qualified Registrable Securities
requesting to be included therein. In the event a Demand Request is made in
accordance with this Section 3.6, the Holders shall be deemed to be Sponsor
Holders solely for the purposes effecting such Demand Request pursuant to this
Section 3.6.


 


3.7                     Form.
A Demand Registration shall be on such appropriate registration form of the
Commission for the disposition of the Qualified Registrable Securities in an
underwritten public offering as may be used and selected by the Company. Except
as provided in Section 4.4, a Demand Registration shall not be deemed to have
been effected unless it has become effective; provided, however, that if, after
a Demand Registration has become effective,


 


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the offering of Qualified Registrable Securities
pursuant thereto is suspended, blocked by any stop order, injunction or other
order of the Commission or any other governmental agency or court, or withdrawn
(except a Demand Registration withdrawn under Section 4.4), such Demand
Registration will be deemed not to have been effected for purposes of Section
3.3.3.


 


4.                          Registration
Procedures. If and when the Company is required by this Agreement to use
its reasonable best efforts to effect the registration of any Qualified
Registrable Securities:


 


4.1                     Company’s
Actions. The Company shall, as soon as 
reasonably practicable:


 


4.1.1            prepare and file with
the Commission under the Securities Act a registration statement with respect
to such Qualified Registrable Securities which shall state that the Qualified
Registrable Securities are covered thereby, and use its reasonable best efforts
to cause such registration statement to become effective and to remain
effective as provided herein; provided, however, that the Company may
discontinue any registration of Qualified Registrable Securities being effected
pursuant to Section 2 at any time before the effective date of the registration
statement relating thereto;


 


4.1.2            prepare and file with
the Commission such amendments and supplements, if any, to such registration
statement and the prospectus used in connection therewith as may be necessary
to (1) keep such registration statement effective until the earlier of (a) 180
days after the effectiveness thereof and (b) the completion of the distribution
under such registration statement, and (2) comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;


 


4.1.3            furnish to each seller
of such Qualified Registrable Securities and each underwriter (if any) such
number of copies of such registration statement (including exhibits), each
amendment and supplement thereto, the prospectus included in such registration
statement or filed with the Commission (including each preliminary prospectus),
and each amendment and supplement thereto as such seller and underwriter may
reasonably request to facilitate the disposition of the Qualified Registrable
Securities owned by such seller and covered by such registration statement;


 


4.1.4            use its reasonable
best efforts to (1) register or qualify such Qualified Registrable Securities
under the securities or “blue sky” laws of such jurisdictions as any seller of
such Qualified Registrable Securities or the managing underwriter (if any) may
reasonably request; (2) keep such registrations or qualifications in effect for
so long as such registration statement is in effect; and (3) take any and all
other reasonable actions that may be necessary or appropriate to enable each
seller of Qualified Registrable Securities or other securities of the Company
covered by such registration statement and each underwriter (if any) to
consummate the disposition in such jurisdictions of the relevant Qualified
Registrable Securities and other securities of the Company; provided, however,
that the Company shall not be required to (a) qualify generally to transact
business as a foreign corporation in any jurisdiction where it would not
otherwise be required to qualify but for the requirements of this


 


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Section 4.1; (b) subject itself to taxation in any
such jurisdiction; (c) consent to general service of process in any such
jurisdiction; or (d) register or qualify Qualified Registrable Securities or
take any other action under the securities or blue sky laws of any jurisdiction
if, in the judgment of the Board of Directors of the Company, the consequences
of such registration, qualification or other action would be unduly burdensome
to the Company;


 


4.1.5            (1) at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, notify each seller of Qualified Registrable Securities covered by a
registration statement when the Company becomes aware of the occurrence of any
event as a result of which the prospectus (as then amended or supplemented)
contains any untrue statement of a material fact or omits any fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and (2) at the request of any such seller, as
promptly as practicable thereafter, prepare in sufficient quantities and
furnish to such seller and each underwriter (if any) a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to the offerees or purchasers of such Qualified Registrable Securities, such
prospectus will not contain any untrue statement of a material fact or omit to
state any fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading;


 


4.1.6            comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as reasonably practicable, an
earning statement covering the period of at least twelve consecutive months
beginning with the first day of the Company’s first calendar quarter after the
effective date of the registration statement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;


 


4.1.7            use its reasonable
best efforts to cause all such Qualified Registrable Securities covered by such
registration statement to be listed on any securities exchange, if any, on
which similar securities of the Company are then listed, if the listing of such
Qualified Registrable Securities is then permitted under the rules of such
exchange;


 


4.1.8            enter into customary
agreements relating to the registration, including an underwriting agreement in
customary form;


 


4.1.9            subject to the
execution of confidentiality agreements, in form and substance satisfactory to
the Company, (1) make reasonably available for inspection by any seller of such
Qualified Registrable Securities, any underwriter (if any), the Representative
Counsel (as defined herein), and any legal counsel, accountant or other agent
retained by any such underwriter or Representative Counsel, all financial and
other records, relevant corporate documents, and properties of the Company, and
(2) cause the Company’s directors, officers, employees, counsel and independent
public accountants to supply all information reasonably requested by, and to
respond to inquiries from, any such seller, underwriter, Representative
Counsel, legal counsel, attorney, accountant or agent in connection with such
registration statement, in each instance to the extent that such information is
reasonably necessary to satisfy any of its obligations under applicable law;


 


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4.1.10      use its
reasonable best efforts to obtain an appropriate opinion from counsel for the
Company and a “cold comfort” letter from the Company’s independent public accountants, each in customary form and
covering such matters of the type customarily covered by opinions of
counsel and cold comfort letters in similar registrations; provided, however, that the failure to obtain such opinion
or letter, or the provision of any such opinion or letter in a form not
satisfactory to any seller whose Qualified Registrable Securities are covered
by such registration statement, notwithstanding the Company’s reasonable best
efforts, shall not give rise to any
action, at law or in equity, for damages or injunctive or other relief, but
rather shall only entitle such seller
to withdraw his Qualified Registrable Securities from such registration statement pursuant to Section 4.4;


 


4.1.11      provide (1)
each Holder of such Qualified Registrable Securities, (2) each underwriter (which, for purposes of this Agreement, shall
include any person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if any,
of the securities being sold, (3) counsel for such underwriters, and (4)
the Representative Counsel the opportunity to participate in the preparation of
such registration statement, each amendment or supplement thereto, each prospectus included therein or filed with the
Commission, and each amendment or
supplement thereto;


 


4.1.12      promptly notify each selling Holder of Qualified
Registrable Securities and each
managing underwriter (if any) and, upon request by any such person, confirm such
advice in writing, (1) when such registration statement, the prospectus or any
prospectus supplement or post-effective
amendment has been filed, and, with respect to such registration statement or any post-effective amendment
thereto, when the same has become effective, (2) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration
statement or the initiation of any proceeding for such purpose, or (3) of the
receipt by the Company of any notification with respect to the suspension of
the registration or qualification of
such Qualified Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for
such purpose;


 


4.1.13      use its reasonable best efforts to obtain the
withdrawal of any order suspending
the effectiveness of such registration statement or any post-effective
amendment thereto; and


 


4.1.14      notify each Holder of such Qualified Registrable
Securities of any proposal by the
Company to amend or waive any provision of this Agreement pursuant to Sections
11.2 and 11.10, respectively, and any amendment or waiver effected pursuant
thereto, which notice shall contain the
text of the amendment or waiver proposed or effected.


 


                       4.2                    Certain
Agreements by Holders. Each Holder of Qualified Registrable Securities
covered by a registration statement hereunder, (l) upon receipt of a notice
from the Company of the occurrence of any event of the kind described in
Section 4.1.5, shall forthwith discontinue such Holder’s disposition of
Qualified Registrable Securities pursuant to the registration statement
covering such Holder’s Qualified Registrable Securities until such Holder
receives the copies of the supplemented or amended prospectus contemplated by
Section 4.1.5, and (2) if so directed by the Company, shall deliver to the
Company, at the Company’s expense, all copies (other than permanent file
copies) then in such Holder’s possession of the prospectus


 


10

















 


covering such Qualified Registrable Securities that was in effect at the
time of receipt of such notice. If the Company gives any such notice, the
period mentioned in Section 4.1.2 shall be extended by the number of days
during the period from and including the date of the giving of such notice to
and including the date when each Holder of any such Qualified Registrable
Securities covered has received the copies of the supplemented or amended
prospectus contemplated by Section 4.1.5.


 


4.3                     Representative
Counsel. In connection with the preparation and review pursuant to this Agreement of any registration
statement, prospectus, or amendment or supplement
thereto, the sellers (including the participating Holders, but excluding the
Company) of a majority of the
securities of the Company included in such registration shall choose legal counsel (“Representative Counsel”) who shall
participate in the registration process on behalf of all of such sellers, coordinate requests by such
sellers for information from the Company, and act as the liaison between such sellers or their
individual counsel, accountants and agents and the Company. 
The Company shall establish reasonable procedures for the selection of
the Representative Counsel.


 


4.4                     Withdrawal. If any Holder participating in a registration hereunder disapproves of the terms of any offering, the sole
remedy of such Holder shall be, in its discretion,
to withdraw such Holder’s Qualified Registrable Securities and other securities
of the Company therefrom by giving written notice to the Company and any
managing underwriter (if any). The Holder’s Qualified Registrable
Securities and other securities of the Company so withdrawn from the offering also shall be withdrawn from registration.
If the Holders participating in such
registration withdraw all Qualified Registrable Securities from the offering, the Company may withdraw the registration, and if
such registration was commenced pursuant to a Demand Request, such registration shall nevertheless be counted as a
Demand Registration effected hereunder; provided, however, that such
registration shall not be so counted if (1) a majority
of the Holders participating therein withdraw all Qualified Registrable
Securities from the offering solely as
a result of the circumstances described in Section 4.1.10, or (2) the Company
or the managing underwriter advises the participating Holders, or makes a
public announcement, that there has been a
material adverse change in the condition, business or prospects of the Company.


 


4.5                     Information.      Upon written request by the Company, each seller
of Qualified Registrable Securities
or other securities of the Company pursuant to a registration hereunder shall
furnish the Company with information regarding such seller and the intended distribution
of such seller’s Qualified Registrable Securities or other securities of the
Company included in such registration for
the purpose of preparing the registration statement, to the extent that
such information is required to comply with applicable legal requirements. If
any such registration statement refers to any Holder by name or otherwise as
the Holder of any securities of the Company, then such Holder shall have the
right to require (1) the insertion therein of language,
in form and substance satisfactory to such Holder, 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 securities covered
thereby and that such holding does not imply that such Holder will
assist in meeting any future financial requirements of the Company, or (2) the
deletion of such reference to such Holder if, in the judgment of the Company,
as advised by


 


11

















 


counsel, such reference is not required by the
Securities Act or any similar federal statute or any state securities of blue
sky law then in effect.


 


5.                            Registration Expenses.


 


5.1                     Responsibility for Payment. Regardless of whether any registration pursuant to this Agreement becomes effective, all
expenses incident to the Company’s performance
of or compliance with this Agreement, including, without limitation, all
registration statement filing fees, National Association of Securities
Dealers’ fees, fees and expenses of compliance with state securities or blue
sky laws, printing and engraving expenses and fees, and disbursements of
counsel for the Company, the Representative Counsel and the independent
certified public accountants for the Company, underwriters (if any) (excluding
the discounts, commissions and transfer
taxes with respect thereto and the amounts to be paid by such underwriters) and
other persons retained by the Company shall be paid by the Company; provided,
however, that each seller of Qualified Registrable Securities or other
securities of the Company shall pay any
underwriting discounts and selling commissions and transfer taxes applicable to the Qualified Registrable Securities
or other securities of the Company sold by such seller as aforesaid.


 


6.                            Indemnification.


 


6.1                     Indemnification
by the Company. The Company shall indemnify and hold harmless, with respect
to any registration statement filed by it, to the fullest extent permitted by
law, each Holder who is a seller of Qualified Registrable Securities covered by
such registration statement, its officers,
directors, employees, agents and general or limited partners (and the directors,
officers, employees and agents thereof), and each other person, partnership,
trust, corporation, joint venture,
unincorporated organization or government or any department or agency thereof (“Person”), if any, who controls
such Holder within the meaning of the Securities Act (collectively, “Holder Indemnified Parties”) against all losses,
claims, damages, liabilities and expenses, joint or several (including
reasonable fees of counsel and any amounts paid in settlement effected with the Company’s consent, which consent shall not
be unreasonably withheld), to which
any such Holder Indemnified Party may become subject under the Securities Act,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) are caused by (1) any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement in which such Qualified Registrable Securities were included as
contemplated hereby or the omission or alleged omission to state therein a
material fact required to be stated therein
or necessary to make the statements therein not misleading, (2) any untrue statement
or alleged untrue statement of a material fact contained in any preliminary,
final or amended or supplemented prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment
thereof or supplement thereto), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or (3) any violation by the Company of
any federal, state or common law rule or regulation applicable to the Company
and relating to action of or inaction by the Company in connection with any
such registration; and in each such case, the Company shall reimburse each such
Holder Indemnified


 


12

















 


Party for any reasonable legal or any other expenses
incurred by any of them in connection with investigating or defending any such
loss, claim, damage, liability, expense, action or proceeding; provided,
however, that the Company shall not be liable to any such Holder Indemnified
Party in any such case to the extent that any such loss, claim, damage,
liability or expense (or action or proceeding, whether commenced or threatened,
in respect thereof) arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement or amendment thereof or supplement thereto or in any such
preliminary, final or amended or supplemented prospectus in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of any such Holder Indemnified Party relating to such Holder Indemnified Party
expressly for use in the preparation thereof; and provided further, that the
Company shall not be liable to any such Holder Indemnified Party with respect
to any preliminary prospectus to the extent that any such loss, claim, damage,
liability or expense of such Holder Indemnified Party results from the fact
that such Holder Indemnified Party sold Qualified Registrable Securities to a
person to whom there was not sent or given, at or before the written
confirmation of such sale, a copy of the prospectus (excluding documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if the Company has previously
furnished copies thereof to such Holder Indemnified Party in compliance with
Section 4 and the loss, claim, damage, liability or expense of such Holder
Indemnified Party results from an untrue statement or omission of a material
fact contained in such preliminary prospectus which was corrected in the
prospectus (or the prospectus as amended or supplemented). Such indemnity and
reimbursement of expenses obligations shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder Indemnified
Parties and shall survive the transfer of such securities by such Holder.


 


6.2                     Indemnification
by Holders. Each Holder of Qualified Registrable Securities participating
in any registration hereunder shall indemnify and hold harmless, to the fullest
extent permitted by law, the Company, each other Holder of Qualified Registrable
Securities participating in such registration, and their respective directors,
officers, employees and agents, and each Person who controls the Company or
each such other Holder (within the meaning of the Securities Act)
(collectively, “Company Indemnified Parties”) against all losses, claims,
damages, liabilities and expenses, joint or several (including reasonable fees
of counsel and any amounts paid in settlement effected with such indemnifying
Holder’s consent, which consent shall not be unreasonably withheld), to which
any Company Indemnified Party may become subject under the Securities Act, at
common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions or proceedings, whether commenced or threatened, in respect
thereof) are caused by (1) any untrue statement or alleged untrue statement of
a material fact contained in any registration statement in which such Holder’s
Qualified Registrable Securities were included or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (2) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or amended or supplemented prospectus, together with the
documents incorporated by reference therein (as amended or supplemented if the
Company shall have filed with the Commission any amendment thereof or
supplement thereto), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading to the extent, but only to the extent, in the cases
described in clauses (1) and (2), that


 


13

















 


such untrue statement or omission is contained in any
information furnished in writing by such Holder relating to such Holder
expressly for use in connection with such registration and if the Company does
not know, at the time such information is included in the registration
statement, prospectus, preliminary prospectus, amendment or supplement, that
such information is false or misleading, (3) any violation by such Holder of
any federal, state or common law, rule or regulation applicable to such Holder
and relating to action of or inaction by such Holder in connection with any
such registration, and (4) with respect to any preliminary prospectus, the fact
that such Holder sold Qualified Registrable Securities to a person to whom
there was not sent or given, at or before the written confirmation of such
sale, a copy of the prospectus (excluding documents incorporated by reference)
or of the prospectus as then amended or supplemented (excluding documents incorporated
by reference) if the Company has previously furnished copies thereof to such
Holder in compliance with Section 4 and the loss, claim, damage, liability or
expense of such Company Indemnified Party results from an untrue statement or
omission of a material fact contained in such preliminary prospectus which was
corrected in the prospectus (or the prospectus as amended or supplemented). The
aggregate amount which any such Holder shall be required to pay pursuant to
this Section 6.2 shall be limited to the dollar amount of proceeds received by
such Holder upon the sale of the Qualified Registrable Securities and other
securities of the Company (after deducting any underwriting commissions,
discounts and transfer taxes applicable thereto) pursuant to the registration
statement giving rise to such claim. Such indemnity obligation shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Company Indemnified Parties (except as provided above) and shall survive
the transfer of such securities by such Holder.


 


6.3                     Conduct of
Indemnification Proceedings. Promptly after receipt by an indemnified party
under Section 6.1 or 6.2 of written notice of the commencement of any action,
suit, proceeding, investigation or threat thereof made in writing with respect
to which a claim for indemnification may be made pursuant to this Section 6,
such indemnified party shall, if a claim in respect thereto is to be made
against an indemnifying party, give written notice to the indemnifying party of
the threat or commencement thereof; provided, however, that the failure so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. If any such claim
or action referred to under Section 6.1 or 6.2 is brought against any
indemnified party and it then notifies the indemnifying party of the threat or
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other indemnifying
party similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party). After notice
from the indemnifying party to such indemnified party of its election to assume
the defense of any such claim or action, the indemnifying party shall not be liable
to such indemnified party under this Section 6 for any legal expenses of
counsel or any other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation unless the indemnifying party has failed to assume the defense of
such claim or action or to employ counsel reasonably satisfactory to such
indemnified party. The indemnifying party shall not be required to indemnify
the indemnified party with respect to any amounts paid in settlement of any
action, proceeding or investigation entered into without the written consent of
the indemnifying party, which consent shall not be unreasonably withheld. No
indemnifying party shall consent to the entry of any judgment or enter into any


 


14

















 


settlement without the consent of the indemnified
party unless (1) such judgment or settlement does not impose any obligation or
liability upon the indemnified party other than the execution, delivery or
approval thereof, and (2) such judgment or settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a full release and discharge from all liability in respect
of such claim for all persons that may be entitled to or obligated to provide
indemnification or contribution under this Section 6.


 


6.4                     Additional
Indemnification. Indemnification similar to that specified in the preceding
subsections of this Section 6 (with appropriate modifications) shall be given
by the Company and each seller of Qualified Registrable Securities with respect
to any required registration or qualification of securities under any state
securities or blue sky laws.


 


6.5                     Contribution.
If the indemnification provided for in this Section 6 is unavailable to or
insufficient to hold harmless an indemnified party under Section 6.1 or 6.2,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions or proceedings in respect thereof) referred to in
Section 6.1 or 6.2 in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and the indemnified party on the
other in connection with the statements, omissions, actions or inactions which
resulted in such losses, claims, damages, liabilities or expenses. The relative
fault of the indemnifying party and the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party or the
indemnified party, any action or inaction by any such party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement, omission, action or inaction. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) pursuant
to this Section 6.5 shall be deemed to include any reasonable legal or other
expenses incurred by such indemnified party in connection with investigating or
defending any such action or claim (which shall be limited as provided in
Section 6.3 if the indemnifying party has assumed the defense of any such
action in accordance with the provisions thereof) which is the subject of this
Section 6.5. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an indemnified party under this
Section 6.5 of written notice of the commencement of any action, suit,
proceeding, investigation or threat thereof made in writing with respect to
which a claim for contribution may be made against an indemnifying party under
this Section 6.5, such indemnified party shall, if a claim for contribution in
respect thereto is to be made against an indemnifying party, give written
notice to the indemnifying party in writing of the commencement thereof (if the
notice specified in Section 6.3 has not been given with respect to such
action); provided, however, that the failure to so notify the indemnifying
party shall not relieve it from any obligation to provide contribution which it
may have to any indemnified party under this Section 6.5 except to the extent
that the indemnifying party is actually prejudiced by the failure to give
notice. Notwithstanding anything in this Section 6.5 to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to this
Section 6.5 to contribute any amount which exceeds the amount by which the
dollar amount of the proceeds received by such indemnifying party from the sale
of Qualified Registrable Securities and other securities of the Company (after
deducting any


 


15

















 


underwriting commissions, discounts and transfer taxes
applicable thereto) in the offering to which the losses, claims, damages,
liabilities or expenses of the indemnified parties relate exceeds the amount of
any losses, claims, damages, liabilities and expenses which such indemnifying
party has otherwise been required to pay as indemnity or contribution hereunder
by reason of such losses, claims, damages, liabilities or expenses.


 


The parties hereto agree
that it would not be just and equitable if contribution pursuant to this
Section 6.5 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph.


 


If indemnification is
available under this Section 6, the indemnifying parties shall indemnify each
indemnified party to the fullest extent provided in Sections 6.1 and 6.2,
without regard to the relative fault of said indemnifying party or indemnified
party or any other equitable consideration provided for in this Section 6.5.
The provisions of this Section 6.5 shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant
to law or contract, shall remain in full force and effect regardless of any
investigation made by or on behalf of any indemnified party, and shall survive
the transfer of securities by any such party.


 


6.6                     Indemnification
and Contribution of Underwriters. In connection with any underwritten
offering contemplated by this Agreement which includes Qualified Registrable
Securities, the Company and all sellers of Qualified Registrable Securities
included in any registration statement shall agree to customary provisions for
indemnification and contribution (consistent with the other provisions of this
Section 6) in respect of losses, claims, damages, liabilities and expenses of
the underwriters of such offering.


 


7.                          Participation
in Underwritten Registrations. In the case of any registration under
Section 3, if the majority of the Sponsor Holders of the Qualified Registrable
Securities to be included therein who made the Demand Request or the Company
determine to enter into an underwriting agreement in connection therewith, or
in the case of a registration under Section 2, if the Company determines to
enter into an underwriting agreement in connection therewith, (1) all shares of
Qualified Registrable Securities or other securities of the Company to be
included in such registration shall be subject to such underwriting agreement,
which shall be in customary form and contain such terms as are customarily
contained in such agreements, and (2) no person may participate in any such
registration unless such person (a) agrees to sell such person’s securities on
the basis provided in such underwriting arrangement and (b) completes and
executes all questionnaires, powers-of-attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.


 


8.                          Rights
to Withdraw From Registration. If as a result of the proration provisions
of Sections 2.2 and 3.4, any Holder is not entitled to include all of such
Holder’s Qualified Registrable Securities in a registration that such Holder
has requested to be included, then after the delivery to such Holder of notice
thereof from the Company, such Holder may elect to withdraw his request to
include such Holder’s Qualified Registrable Securities in such registration
(“Withdrawal Election”); provided, however, that a Withdrawal Election shall be
irrevocable and, after making a Withdrawal Election, a Holder shall no longer
have any right to


 


16

















 


include such Holder’s
Qualified Registrable Securities in the registration as to which such Withdrawal
Election was made. If as a result of Withdrawal Elections (but after the
Company has included in such registration in place of such withdrawn Qualified
Registrable Securities such additional Qualified Registrable Securities or
other securities of the Company to be sold by the Company or held by other
Holders or other sellers whose Qualified Registrable Securities or other
securities of the Company were excluded as a result of the proration provisions
of Sections 2 and 3), less than the Requisite Amount of Qualified Registrable
Securities and other securities of the Company are requested to be included in
a registration, the Company, in its sole discretion, may give written notice to
all Holders who have requested that such Holders’ Qualified Registrable
Securities be included in a registration and who have not made a Withdrawal
Election that the Company has determined not to proceed with such registration
and, thereupon, shall be relieved of its obligation to register any Qualified
Registrable Securities in connection with such abandoned registration (without
prejudice, however, to the Holders’ rights to have Qualified Registrable
Securities registered pursuant to Section 2 and the Holders’ rights to have
Qualified Registrable Securities registered pursuant to Section 3 in the
future). Any such abandoned registration shall not be counted as a Demand
Registration for purposes of Section 3.


 


9.                          Limitations on Sale or Distribution of Other
Securities.  If requested in writing by (1) the
Company or (2) the managing underwriter (if any) of (a) a registration in
connection with the Initial Public Offering or (b) any underwritten
registration contemplated by Section 2 or 3 declared effective after the
completion of the Initial Public Offering (“Subsequent Registration”), each
Holder hereby agrees not to effect any public offering, sale or distribution
(including any sale pursuant to Rule 144 under the Securities Act) of any
Qualified Registrable Securities or any other Common Equity Securities or any
other security of the Company (other than as part of such underwritten public
offering) within (i) 90 days after the effective date of a registration
statement filed in connection with the Initial Public Offering (or up to 180
days if required by the underwriters), and (ii) 45 days after the effective
date of the Subsequent Registration (or up to 90 days if required by the
underwriters). The Company, in its sole discretion, may waive, as to any one or
more Holders, the restrictions contained in this Section 9 as they apply to a
Subsequent Registration.


 


10.                    Termination.
 This Agreement and all rights and
obligations of the parties hereto under this Agreement shall terminate upon the
earlier of (1) the written agreement of the Holders of at least 90% of the
Shares Subject to this Agreement; provided that for so long as the Stockholders
Agreement is in effect, the Voting Representative (as defined therein) for each
Designated Holder Group (as defined therein) shall be exclusively authorized to
act on behalf of and as directed by each Holder included in such Designated
Holder Group for such purpose and (2) when all outstanding Qualified
Registrable Securities may be sold under Rule 144 or another similar exemption
in any three month period; provided, however, that the indemnification and
contribution rights and obligations shall not terminate and shall survive
forever.


 


11.                    Miscellaneous Provisions.


 


11.1               Subsequent Holders; After-Acquired Qualified
Registrable Securities.


 


11.1.1      The Company anticipates that there will be additional issuances of
Qualified Registrable Securities. Any purchaser of Qualified Registrable
Securities from the


 


17

















 


Company may become, upon the written consent of at
least the Required Voting Percentage at the time thereof, a party to this
Agreement by executing (and causing such purchaser’s spouse, if any, to
execute) a counterpart of the signature page of this Agreement, such
signature(s) being evidence of such purchaser’s (and such spouse’s) agreement to
be bound by all of the provisions of this Agreement. Once such purchaser (and
such spouse, if any) has executed this Agreement, the term “Holder” shall
include such purchaser; the terms “Qualified Registrable Securities” and
“Common Equity Securities” shall include the Qualified Registrable Securities
and Common Equity Securities then held by such purchaser.


 


11.1.2      The terms “Qualified
Registrable Securities” and “Common Equity Securities” also shall include any
Common Equity Securities acquired by any Holder after the Effective Date so
long as such Holder (and such Holder’s spouse, if any) has executed a
counterpart of this Agreement.


 


11.1.3      Each Holder may assign its
rights hereunder in connection with any transfer of its Qualified Registrable
Securities to a Permitted Transferee. To enjoy the benefits of this Agreement,
any such Permitted Transferee must become (1) a record holder of such Qualified
Registrable Securities and (2) a party hereto within 60 days after such
transfer (unless waived in writing by the Company) by executing (and causing
such transferee’s spouse, if any, to execute) a counterpart of this Agreement
and delivering such executed counterpart to the Company. Any such Permitted
Transferee who meets such conditions shall become, for the purposes hereof, a
“Holder.”


 


11.1.4      Notwithstanding the
foregoing, no rights hereunder shall inure to the benefit of, or be exercisable
by, any transferee or assignee acquiring Qualified Registrable Securities in a
public sale or public distribution.


 


11.2               Changes in
Outstanding Securities.  The
provisions of this Agreement regarding Common Equity Securities, Qualified
Registrable Securities and Requisite Amount shall apply to securities of the
Company or any successor or assignee of the Company (whether by merger,
consolidation, sale of assets or otherwise) that may be issued in respect of,
or by reason of any share issuance, share dividend, share split, reverse share
split, combination, recapitalization, reclassification, merger, amalgamation,
consolidation or otherwise. Upon the occurrence of any of such events, the
definitions of Common Equity Securities, Qualified Registrable Securities and
Requisite Amount shall be appropriately modified by the Board of Directors of
the Company.


 


11.3               Exchange Act Registration.
 If the Company files a registration
statement pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (“Exchange Act”), or a registration statement pursuant to the
Securities Act in respect of any Common Equity Securities, the Company shall
timely file the reports required to be filed by it under the Exchange Act and
the Securities Act (including, without limitation, the reports under Sections
13 and 15(d) of the Exchange Act referred to in Rule 144(c)(l) under the
Securities Act), and shall take such further action as any Holder of Qualified
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Qualified Registrable Securities
without registration under the Securities Act within the limitations of the
exemption provided by Rule 144 under the Securities Act; provided, however,
that the Company, upon


 


18

















 


approval of the Required Voting Percentage and five
days’ prior written notice to each Holder, may withdraw any such registration
at any time that it is permitted to do so under the Exchange Act. Upon the request of any Holder of Qualified
Registrable Securities, the Company shall deliver to such Holder a written statement as to whether it has complied
with the requirements of this Section 11.3.


 


11.4               Spouse.  Each individual Holder, if any, shall cause
his or her spouse (and any subsequent spouse) to execute and deliver, upon the
request of the Company, a counterpart of this Agreement. The spouses of
individual Holders, by their execution of this Agreement, (1) evidence that
they are fully aware of, understand and fully consent and agree to the
provisions of this Agreement and its binding effect upon any community property
or similar marital property interests in the Qualified Registrable Securities
or other securities of the Company they may now or hereafter own, and (2) agree
that the termination of their marital relationship with any individual Holder
for any reason shall not have the effect of removing any Qualified Registrable
Securities or other securities of the Company otherwise subject to this
Agreement from the coverage hereof.


 


11.5               Employee Matters.
 Each Holder, if an employee of the
Company or any of its subsidiaries, acknowledges and agrees that neither the
acquisition of securities of the Company by such Holder nor the execution of
this Agreement by the Company or such Holder creates any obligation whatsoever
by the Company or any of its subsidiaries to continue such Holder’s employment
or otherwise affects the Company’s right to terminate such Holder’s employment
at will, with or without cause in the sole discretion of the Company or any of
its subsidiaries which is an employer of such Holder.


 


11.6               Inspection.  For so long as this Agreement shall be in
effect, this Agreement and a complete list of the names and addresses of all of
the Holders of Qualified Registrable Securities shall be made available for
inspection and copying on any business day by any Holder of Qualified
Registrable Securities at the offices of the Company at the address thereof set
forth in Section 11.8.


 


11.7               Conflict with
Other Agreements.  If any provision
of this Agreement conflicts with any registration rights provision of any other
agreement to which the Company is or may become a party, the registration
rights provision of this Agreement shall control to the extent of such
conflict.  At any time prior to the
termination of this Agreement pursuant to Section 10, the Company shall not
grant additional registration rights without obtaining the written consent of
at least the Required Voting Percentage at the time thereof.


 


11.8               Notices and
Other Communications.  All notices,
requests and other communications required or permitted to be given to the
Company or any Holder in connection herewith (1) must be in writing and (2) may
be served either by (a) depositing the same in the United States mail, full
postage prepaid, certified or registered with return receipt requested, (b)
delivering the same by a nationally recognized air courier service requiring
acknowledgment of delivery, full delivery cost paid, (c) delivering the same in
person, or (d) sending a telecopy of the same (confirmed by appropriate
answerback), confirmed with a copy thereof delivered either by mail or air
courier service or in person as provided herein. Any such notice, request or
other communication shall be effective only if and when it is received by the
addressee; provided that


 


19

















 


notice received by telecopier
other than during the recipient’s normal business hours will be effective at the beginning of the recipient’s
next business day. For the purposes hereof, the addresses of the parties hereto are as follows: (1) the Company —
Panolam Holdings Co., 20 Progress Drive, Shelton, Connecticut 06484, Attention:
Chief Executive Officer; and (2) the Holders
— the addresses shown on the stock transfer records of the Company. Any party
hereto may change its address for the purposes hereof by giving written
notice of such change of address to the Company in the manner provided herein.


 


11.9               Entire Agreement.
 This Agreement constitutes the full
understanding of the parties and a complete and exclusive statement of the
terms and conditions of their agreement relating to the subject matter hereof
and supersedes all prior negotiations, understandings and agreements, whether
written or oral, between the parties, their affiliates, and their respective
principals, stockholders, directors, officers, employees, consultants and
agents with respect thereto.


 


11.10         Amendments and Waivers.
 Except as otherwise provided herein, no
alteration, modification, amendment, change or waiver of any provision of this
Agreement shall be effective or binding on any party hereto unless the same is
in writing and is executed by the Company and the Holders of at least the
Required Voting Percentage at the time thereof; provided, however, that (1) any
change to Section 10 or this Section 11.10 shall require the written agreement
of the Holders of at least 90% of the Shares Subject to this Agreement;
provided that so long as the Stockholders Agreement is in effect, the Voting
Representative (as defined therein) for each Designated Holder Group (as
defined therein) shall be exclusively authorized to act on behalf of and as
directed by each Holder included in such Designated Holder Group for such
purpose; (2) the Company may amend this Agreement without the consent of any
Holder to cure any ambiguity or to cure, correct or supplement any defective
provision contained herein; and (3) in no event shall an amendment adversely,
or in a manner different from any other Holder, affect such Holder’s rights and
obligations without such Holder’s prior written consent.


 


11.11         Modification and
Severability.  If a court of
competent jurisdiction declares that any provision of this Agreement is
illegal, invalid or unenforceable, then such provision shall be modified
automatically to the extent necessary to make such provision fully legal, valid
or enforceable. If such court does not modify any such provision as
contemplated herein, but instead declares it to be wholly illegal, invalid or
unenforceable, then such provision shall be severed from this Agreement, this
Agreement and the rights and obligations of the parties hereto shall be
construed as if this Agreement did not contain such severed provision, and this
Agreement otherwise shall remain in full force and effect.


 


11.12         Enforceability.  This Agreement shall be enforceable by and
against the Company, the Holders and their respective spouses, guardians,
heirs, legatees, executors, legal representatives, administrators, and
permitted successors and assignees.


 


11.13         No Third-Party
Beneficiaries.  No person or entity
not a party to this Agreement (other than any person that may become a Holder
Indemnified Party pursuant to Section 6.1) shall have rights under this
Agreement as a third-party beneficiary or otherwise.


 


20

















 


11.14         Remedies.  Each party hereto acknowledges that in the
event of any breach of this Agreement by such party, the other parties hereto
(1) would be irreparably and immediately harmed by such breach, (2) could not
be made whole by monetary damages, and (3) shall be entitled to temporary and
permanent injunctions (or their functional equivalents) to prevent any such
breach and/or to compel specific performance with this Agreement, in addition
to all other remedies to which such parties may be entitled at law or in equity
(in each case, without posting a bond or other security).   The remedies of each party hereto under this
Agreement shall be cumulative of each other and of the remedies available at
law or in equity. Any party’s full or partial exercise of any such remedy shall
not preclude any subsequent exercise by such party of the same or any other
remedy.


 


11.15         Governing Law.  This Agreement shall be governed by, construed
under, and enforced in accordance with the laws of the State of Delaware
without reference to the conflict-of-laws provisions thereof.


 


11.16         Multiple Counterparts.
 This Agreement may be executed by the
parties hereto in multiple counterparts, each of which shall be deemed an
original for all purposes, and all of which together shall constitute one and
the same instrument.


 


11.17         Limited Liability.  Notwithstanding any provision hereof, none of
the obligations of any party hereto or any of their respective affiliates that
is an entity under this Agreement shall be an obligation of any stockholder,
officer, director, member, limited partner or general partner of any of the
foregoing entities. Any liability or obligation of any party hereto arising out
of this Agreement shall be limited to and satisfied only out of the assets of
such party.


 


11.18         Termination of
Purchase Agreement.  This Agreement
shall be effective on the Effective Date. 
If the Purchase Agreement is terminated prior to the closing of the
Acquisition, this Agreement shall terminate and be of no further force or
effect.


 


21

















 


This Agreement is
executed and delivered by the parties hereto and their respective spouses (if
any) on the dates indicated below to be effective as of the Effective Date.


 


	
   

  	
   

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  PANOLAM
  HOLDINGS CO.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Robert J. Muller,
  Jr.

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Robert J. Muller, Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date of execution:
  September 30, 2005

  



 


 


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AGREEMENT]


 

















 


HOLDERS


 


	
  Name and Signature

  	
   

  	
  Common
  Shares To Be Owned

  at the Effective Date

  	
   

  	
  Date of

  Execution

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Genstar Capital Partners IV, L.P.

  	
   

  	
                          
  Shares of

  	
   

  	
  September 30, 2005

  
	
   

  	
   

  	
  Common Stock

  	
   

  	
   

  
	
  By:  Genstar
  Capital IV, L.P., General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:  Genstar
  IV GP LLC, General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Darren J. Gold

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Darren J. Gold

  	
   

  	
   

  	
   

  	
   

  
	
  Title: Principal

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stargen IV, L.P.

  	
   

  	
                          
  Shares of

  	
   

  	
  September 30, 2005

  
	
   

  	
   

  	
  Common Stock

  	
   

  	
   

  
	
  By:  Genstar
  Capital IV, L.P., General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:  Genstar
  IV GP LLC, General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Darren J. Gold

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Darren J. Gold

  	
   

  	
   

  	
   

  	
   

  
	
  Title: Principal

  	
   

  	
   

  	
   

  	
   

  



 


 


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AGREEMENT]


 

















 


	
  Sterling Group Partners II, L.P.

  	
   

  	
                          
  Shares of

  	
   

  	
  September     , 2005

  
	
   

  	
   

  	
  Common Stock

  	
   

  	
   

  
	
  By:

  	
  Sterling Group Partners II GP, L.P.,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Sterling Group Investments, L.L.C

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John D. Hawkins

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: John D. Hawkins

  	
   

  	
   

  	
   

  	
   

  
	
  Title: Authorized Manager

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sterling Group Partners II (Parallel), L.P.

  	
   

  	
                          
  Shares of

  	
   

  	
  September     , 2005

  
	
   

  	
   

  	
  Common Stock

  	
   

  	
   

  
	
  By:

  	
  Sterling Group Partners II GP, L.P.,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Sterling Group Investments, L.L.C.,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John D. Hawkins

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: John D. Hawkins

  	
   

  	
   

  	
   

  	
   

  
	
  Title: Authorized Manager

  	
   

  	
   

  	
   

  	
   

  



 


 


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AGREEMENT]


 

















 


	
  Dwight
  Investments, LP

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  Herbert
  M. Dwight

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Herbert M. Dwight

  	
   

  	
   

  	
   

  
	
  Address:

  	
  1313 West Dry Creek Road

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Healdsburg, California 95448

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
								



 


 


	
  SPOUSE:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
							



 


 


[SIGNATURE PAGE TO PANOLAM REGISTRATION RIGHTS
AGREEMENT]


 

















 


	
  By:

  	
  /s/  John
  W. Salisbury, Jr.

  	
   

  	
   

  	
   

  	
   

  
	
  Name: John W.
  Salisbury, Jr.

  	
   

  	
   

  	
   

  
	
  Address:

  	
  128 Palo de Oro Drive

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Islamorada, FL 33036

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
								



 


 


	
  SPOUSE:

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
  



  
	
  Name: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
							



 


 


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  By:

  	
  /s/  Thomas
  C. Hunt

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Thomas C.
  Hunt

  	
   

  	
   

  	
   

  
	
  Address:

  	
  771 W. Ferry Street

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Buffalo, NY 14222

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
								



 


 


	
  SPOUSE:

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
  



  
	
  Name: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
							



 


 


[SIGNATURE PAGE TO PANOLAM REGISTRATION RIGHTS
AGREEMENT]


 

















 


	
  By:

  	
  /s/  Lee Hess

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Lee Hess

  	
   

  	
   

  	
   

  
	
  Address:

  	
    324 N. Drexel Ave.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Bexley, OH 43209

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
								



 


 


	
  SPOUSE:

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
  



  
	
  Name: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
							



 


 


[SIGNATURE PAGE TO PANOLAM REGISTRATION RIGHTS
AGREEMENT]


 

















 


	
  By:

  	
  /s/ Michael L. Hunt

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Michael L. Hunt

  	
   

  	
   

  	
   

  
	
  Address:

  	
    58 Cornertown Road

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Chambersburg, PA 17201

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


 


SPOUSE:


 


	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
						



 


 


[SIGNATURE PAGE TO PANOLAM REGISTRATION RIGHTS
AGREEMENT]


 

















 


	
  By:

  	
  /s/ Reymond Kent Wallace

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Reymond Kent Wallace

  	
   

  	
   

  	
   

  
	
  Address:

  	
    Eight Greenway Plaza, Suite 702

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Houston, TX 77046

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


 


SPOUSE:


 


	
  By:

  	
  /s/ Mollie Phelan Wallace

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Mollie Phelan Wallace

  	
   

  	
   

  	
   

  
						



 


 


[SIGNATURE PAGE TO PANOLAM REGISTRATION RIGHTS
AGREEMENT]


 

















 


	
  By:

  	
  /s/ Robert J. Muller, Jr.

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert J. Muller, Jr.

  	
   

  	
   

  	
   

  
	
  Address:

  	
    52 Crosswicks Ridge Road

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Wilton, CT 06897

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


 


SPOUSE:


 


	
  By:

  	
  /s/ Mary E. Muller

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Mary E. Muller

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 


 


[SIGNATURE PAGE TO PANOLAM REGISTRATION RIGHTS
AGREEMENT]


 

















 


	
  By:

  	
  /s/ Stephen C. Feuring

  	
   

  
	
  Name:

  	
  Stephen C. Feuring

  
	
  Address:

  	
    21 Post Falls Lane

  	
   

  
	
   

  	
    Hamden, CT 06518

  	
   

  
	
   

  	
   

  	
   

  
						



 


 


	
  SPOUSE:

  
	
   

  
	
  By:

  	
    /s/ Deborah E. Feuring

  	
   

  
	
  Name:

  	
    Deborah E. Feuring

  	
   

  
				



 


 


[SIGNATURE
PAGE TO PANOLAM REGISTRATION RIGHTS AGREEMENT]


 

















 


	
  By:

  	
  /s/ Jeffrey M. Muller

  	
   

  
	
  Name:

  	
  Jeffrey M. Muller

  
	
  Address:

  	
    16 Baldwin Hill Road

  	
   

  
	
   

  	
    Litchfield, CT 06759

  	
   

  
	
   

  	
   

  	
   

  
						



 


 


	
  SPOUSE:

  
	
   

  
	
  By:

  	
    /s/ Melissa A. Muller

  	
   

  
	
  Name:

  	
    Melissa A. Muller

  	
   

  
				



 


 


[SIGNATURE
PAGE TO PANOLAM REGISTRATION RIGHTS AGREEMENT]


 

















 


	
  By:

  	
  /s/ Richard Stoll

  	
   

  
	
  Name:

  	
  Richard Stoll

  
	
  Address:

  	
    45 Riverside Drive

  	
   

  
	
   

  	
    Milford, CT 06461-3917

  	
   

  
	
   

  	
   

  	
   

  
						



 


 


	
  SPOUSE:

  
	
   

  
	
  By:

  	
    /s/ Karen L. Stoll

  	
   

  
	
  Name:

  	
    Karen L. Stoll

  	
   

  
				



 


 


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