Document:

2003 EQUITY INCENTIVE PLAN

 

EXHIBIT 10.1

ITT Industries, Inc. 2003 Equity

Incentive Plan, effective May 13, 2003

2003 Equity Incentive Plan

Contents

	 	 	 	 	 
	
    
    Article 1. Establishment, Purpose, and
    Duration
    

    	 	 	1	 
	
    
    Article 2. Definitions
    

    	 	 	1	 
	
    
    Article 3. Administration
    

    	 	 	5	 
	
    
    Article 4. Shares Subject to the Plan and
    Maximum Awards
    

    	 	 	6	 
	
    
    Article 5. Eligibility and Participation
    

    	 	 	7	 
	
    
    Article 6. Stock Options
    

    	 	 	8	 
	
    
    Article 7. Stock Appreciation Rights
    

    	 	 	10	 
	
    
    Article 8. Restricted Stock and Restricted
    Stock Units
    

    	 	 	12	 
	
    
    Article 9. Performance Measures
    

    	 	 	13	 
	
    
    Article 10. Beneficiary Designation
    

    	 	 	15	 
	
    
    Article 11. Rights of Participants
    

    	 	 	15	 
	
    
    Article 12. Acceleration Event
    

    	 	 	16	 
	
    
    Article 13. Amendment, Modification,
    Suspension, and Termination
    

    	 	 	16	 
	
    
    Article 14. Withholding
    

    	 	 	16	 
	
    
    Article 15. Successors
    

    	 	 	17	 
	
    
    Article 16. General Provisions
    

    	 	 	17	 

 

ITT Industries, Inc.

2003 Equity Incentive Plan

Article 1.      Establishment,
Purpose, and Duration

1.1      Establishment. ITT
Industries, Inc., an Indiana corporation (hereinafter referred
to as the “Company”), establishes an incentive
compensation plan to be known as the 2003 Equity Incentive Plan
(hereinafter referred to as the “Plan”), as set forth
in this document.

The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights (SARs),
Restricted Stock, and Restricted Stock Units.

The Plan shall become effective as of May 13, 2003 (the
“Effective Date”) and shall remain in effect as
provided in Section 1.3 hereof.

1.2      Purpose of the
Plan. The purpose of the Plan is to promote the long-term
interests of the Company and its shareholders by strengthening
the Company’s ability to attract and retain Employees of
the Company and its Affiliates and members of the Board of
Directors upon whose judgment, initiative, and efforts the
financial success and growth of the business of the Company
largely depend, and to provide an additional incentive for such
individuals through share ownership and other rights that
promote and recognize the financial success and growth of the
Company and create value for shareholders.

1.3      Duration of the
Plan. The Plan shall commence as of the Effective Date, as
described in Section 1.1 hereof, and shall remain in
effect, subject to the right of the Committee to amend or
terminate the Plan at any time pursuant to Article 13
hereof, until all Shares subject to it shall have been purchased
or acquired according to the Plan’s provisions.

Article 2.      Definitions

Whenever used in the Plan, the following terms shall have the
meanings set forth below, and when the meaning is intended, the
initial letter of the word shall be capitalized.

		
	2.1	
    “Acceleration Event” shall be deemed to have
    occurred as of the first day that any one or more of the
    following conditions have been satisfied:

		
	(a) 	
    A report on Schedule 13D shall be filed with the Securities
    and Exchange Commission pursuant to Section 13(d) of the
    Exchange Act disclosing that any person (within the meaning of
    Section 13(d) of the Exchange Act), other than the Company
    or a Subsidiary or any employee benefit plan sponsored by the
    Company or a Subsidiary, is the Beneficial Owner directly or
    indirectly of twenty

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    percent (20%) or more of the outstanding common stock of the
    Company;

		
	      (b) 	
    Any person (within the meaning of Section 13(d) of the
    Exchange Act), other than the Company or a Subsidiary or any
    employee benefit plan sponsored by the Company or a Subsidiary,
    shall purchase shares pursuant to a tender offer or exchange
    offer to acquire any common stock of the Company (or securities
    convertible into common stock of the Company) for cash,
    securities, or any other consideration, provided that after
    consummation of the offer, the person in question is the
    Beneficial Owner directly or indirectly, of fifteen percent
    (15%) or more of the outstanding common stock of the Company
    (calculated as provided in paragraph (d) of Rule 13d-3
    under the Exchange Act in the case of rights to acquire common
    stock);

      (c) The shareholders of
the Company approve:

		
	            (i)  	
    Any consolidation or merger of the Company in which the Company
    is not the continuing or surviving corporation or pursuant to
    which shares of common stock of the Company would be converted
    into cash, securities, or other property, other than a
    consolidation or merger of the Company in which holders of
    common stock of the Company immediately prior to the
    consolidation or merger have the same proportionate ownership of
    common stock of the surviving corporation immediately after the
    consolidation or merger as immediately before; or
	 
	            (ii) 	
    Any sale, lease, exchange, or other transfer (in one transaction
    or a series of related transactions) of all or substantially all
    the assets of the Company

		
	      (d) 	
    There shall have been a change in a majority of the members of
    the Board within a twelve (12) month period unless the election
    or nomination for election by the Company’s shareholders of
    each new Director during such twelve (12) month period was
    approved by the vote of two-thirds (2/3) of the Directors at the
    beginning of such twelve (12) month period.

		
	2.2 	
    “Affiliate” shall mean any Subsidiary and any
    other Person that directly, or indirectly through one or more
    intermediaries, controls, or is controlled by, or is under
    common control with, the Person specified.
	 
	2.3 	
    “Award” means, individually or collectively, a
    grant under this Plan of Nonqualified Stock Options, Incentive
    Stock Options, SARs, Restricted Stock, and Restricted Stock
    Units.

		
	2.4	
    “Award Agreement” means either (i) an
    agreement entered into by the Company and a Participant setting
    forth the terms and provisions

2

 

		
		
    applicable to Awards granted under this Plan, or (ii) a
    statement issued by the Company to a Participant describing the
    terms and conditions of such Award.

		
	2.5	
    “Beneficial Owner” or “Beneficial
    Ownership” shall have the meaning ascribed to such term
    in Rule 13d-3 of the General Rules and Regulations under
    the Exchange Act.
	 
	2.6	
    “Board” or “Board of Directors”
    means the Board of Directors of the Company.
	 
	2.7	
    “Code” means the U.S. Internal Revenue Code of
    1986, as amended from time to time.
	 
	2.8	
    “Committee” means the Compensation and
    Personnel Committee of the Board.
	 
	2.9	
    “Company” means ITT Industries, Inc., an
    Indiana corporation, and any successor thereto as provided in
    Article 15 herein.

		
	2.10	
    “Covered Employee” means a Participant who is a
    “Covered Employee,” as defined in Code
    Section 162(m) and the regulations promulgated under Code
    Section 162(m), or any successor statute.
	 
	2.11	
    “Director” means any individual who is a member
    of the Board of Directors.
	 
	2.12	
    “Employee” means any employee of the Company or
    its Affiliates.
	 
	2.13	
    “Exchange Act” means the Securities Exchange
    Act of 1934, as amended from time to time, or any successor act
    thereto.
	 
	2.14	
    “Fair Market Value” means a price that is based
    on the opening, closing, actual, high, low, or average selling
    prices of a Share on the New York Stock Exchange
    (“NYSE”) or other established stock exchange (or
    exchanges) on the applicable date, the preceding trading day,
    the next succeeding trading day, or an average of trading days,
    as determined by the Committee in its discretion.

Such definition of Fair Market Value shall be specified in the
Award Agreement and may differ depending on whether Fair Market
Value is in reference to the grant, exercise, vesting, or
settlement or payout of an Award. If, however, the accounting
standards used to account for equity awards granted to
Participants are substantially modified subsequent to the
Effective Date of the Plan, the Committee shall have the ability
to determine an Award’s Fair Market Value based on the
relevant facts and circumstances. If Shares are not traded on an
established stock exchange, Fair Market Value shall be
determined by the Committee based on objective criteria.

		
	2.15	
    “Freestanding SAR” means a SAR that is granted
    independently of any Options, as described in Article 7
    herein.

3

 

		
	2.16	
    “Grant Price” means the amount to which the
    Fair Market Value of a Share is compared pursuant to
    Section 7.6 to determine the amount of payment that should
    be made upon exercise of a SAR
	 
	2.17	
    “Incentive Stock Option” or “ISO”
    means an Option that meets the requirements of Code
    Section 422, or any successor provision, and that is not
    designated as a Nonqualified Stock Option.
	 
	2.18	
    “Insider” shall mean an individual who is, on
    the relevant date, an officer, Director, or more than ten
    percent (10%) Beneficial Owner of any class of the
    Company’s equity securities that is registered pursuant to
    Section 12 of the Exchange Act, as determined by the Board
    or the Committee in accordance with Section 16 of the
    Exchange Act.
	 
	2.19	
    “Nonqualified Stock Option” or
    “NQSO” means an Option that is not intended to
    meet the requirements of Code Section 422, or that
    otherwise does not meet such requirements.
	 
	2.20	
    “Option” means an Incentive Stock Option or a
    Nonqualified Stock Option to purchase Shares, as described in
    Article 6 herein.
	 
	2.21	
    “Option Price” means the price at which a Share
    may be purchased by a Participant pursuant to an Option.
	 
	2.22	
    “Participant” means an Employee or Director who
    has been selected to receive an Award or who has an outstanding
    Award granted under the Plan.
	 
	2.23	
    “Performance-Based Compensation” means an Award
    that is qualified as Performance-Based Compensation under Code
    Section 162(m).
	 
	2.24	
    “Performance Measures” means measures as
    described in Article 9, the attainment of which may
    determine the amount of payout and/or vesting with respect to
    Awards.
	 
	2.25	
    “Performance Period” means the period of time
    during which the performance goals must be met in order to
    determine the amount of payout and/or vesting with respect to an
    Award.
	 
	2.26	
    “Period of Restriction” means the period when
    Restricted Stock or Restricted Stock Units are subject to a
    substantial risk of forfeiture (based on the passage of time,
    the achievement of performance goals, or upon the occurrence of
    other events as determined by the Committee, at its discretion)
    and transfer restrictions, as provided in Article 8 herein.
	 
	2.27	
    “Person” shall have the meaning given in
    Section 3(a)(9) of the Exchange Act, as modified and used
    in Sections 13(d) and 14(d) thereof.
	 
	2.28	
    “Plan Year” means the fiscal year.

4

 

		
	2.29	
    “Restricted Stock” means an Award granted to a
    Participant pursuant to Article 8 herein.
	 
	2.30	
    “Restricted Stock Unit” means an Award granted
    to a Participant pursuant to Article 8 herein.
	 
	2.31	
    “Share” means a share of common stock of the
    Company, $1.00 par value per share.
	 
	2.32	
    “Stock Appreciation Right” or
    “SAR” means an Award granted to a Participant
    pursuant to Article 7 herein.
	 
	2.33	
    “Subsidiary” means any corporation,
    partnership, joint venture, limited liability company, or other
    entity (other than the Company) in an unbroken chain of entities
    beginning with the Company if each of the entities other than
    the last entity in the unbroken chain owns at least fifty
    percent (50%) of the total combined voting power in one of the
    other entities in such chain.
	 
	2.34	
    “Tandem SAR” means a SAR that is granted in
    connection with a related Option pursuant to Article 7.

Article
3.      Administration

3.1      General. The
Committee shall be responsible for administering the Plan. The
Committee may employ attorneys, consultants, accountants, and
other persons, and the Committee, the Company, and its officers
and Directors shall be entitled to rely upon the advice,
opinions, or valuations of any such persons. All actions taken
and all interpretations and determinations made by the Committee
shall be final and binding upon the Participants, the Company,
and all other interested persons.

3.2      Authority of the
Committee. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of the
Plan and to determine eligibility for Awards and to adopt such
rules, regulations, and guidelines for administering the Plan as
the Committee may deem necessary or proper. Such authority shall
include, but not be limited to, selecting Award recipients,
establishing all Award terms and conditions and, subject to
Article 13, adopting modifications and amendments to the
Plan or any Award Agreement, including without limitation, any
that are necessary to comply with the laws of the countries in
which the Company and its Affiliates operate.

3.3      Delegation. The
Committee may delegate to one or more of its members or to one
or more agents or advisors such administrative duties as it may
deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee
or such person may have under the Plan. The Committee may, by
resolution, authorize one or more officers of the Company to do
one or both of the following: (a) designate

5

 

Employees and Directors to be recipients of Awards; and
(b) determine the size of the Award; provided, however, the
Committee shall not delegate such responsibilities to any such
officer for Awards granted to an Employee that is considered an
elected officer of the Company, or to the extent it would
unintentionally cause Performance-Based Compensation to lose its
status as such.

Article 4.      Shares
Subject to the Plan and Maximum Awards

4.1      Number of Shares
Available for Awards. Subject to adjustment as provided in
Section 4.2 herein, the number of Shares hereby reserved
for issuance to Participants under the Plan shall be
six million one hundred thousand (6,100,000).

The number of Shares that may be issued under the Plan for
Awards other than Options granted with an Option Price equal to
at least Fair Market Value on the date of grant or SARs with a
Grant Price equal to at least Fair Market Value on the date of
grant shall not exceed one million (1,000,000).

All of the reserved Shares may be used as ISOs.

Any Shares related to Awards which terminate by expiration,
forfeiture, cancellation, or otherwise without the issuance of
such Shares, are settled in cash in lieu of Shares, or are
exchanged with the Committee’s permission for Awards not
involving Shares, shall be available again for grant under the
Plan. Moreover, if the Option Price of an NQSO under the Plan or
the tax withholding requirements with respect to any Award
(other than an ISO) granted under the Plan are satisfied by
tendering Shares to the Company (by either actual delivery or by
attestation), or if a SAR is exercised, only the number of
Shares issued, net of the Shares tendered, if any, will be
deemed delivered for purposes of determining the maximum number
of Shares available for delivery under the Plan. The maximum
number of Shares available for issuance under the Plan shall not
be reduced to reflect any dividends or dividend equivalents that
are reinvested into additional Shares or credited as additional
Restricted Stock, or Restricted Stock Units. In addition, the
Committee, in its discretion, may establish any other
appropriate methodology for calculating the number of Shares
issued pursuant to the Plan. The Shares available for issuance
under the Plan may be authorized and unissued Shares or treasury
Shares.

The following limits (“Award Limits”) shall apply to
Awards:

			
	 	(a)  	
    Options: The maximum aggregate number of Shares that may
    be granted in the form of Options, pursuant to any Award granted
    in any one Plan Year to any one Participant shall be three
    hundred thousand (300,000).
	 
	 	(b)  	
    SARs: The maximum number of Shares that may be granted in
    the form of Stock Appreciation Rights, pursuant to any Award
    granted in

6

 

			
	 		
    any one Fiscal Year to any one Participant shall be three
    hundred thousand (300,000).
	 
	 	(c)  	
    Restricted Stock or Restricted Stock Units: The maximum
    aggregate grant with respect to Awards of Restricted Stock or
    Restricted Stock Units granted in any one Plan Year to any one
    Participant shall be one hundred fifty thousand (150,000).

4.2      Adjustments in
Authorized Shares. In the event of any corporate event or
transaction (including, but not limited to, a change in the
shares of the Company or the capitalization of the Company) such
as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split,
split up, spin-off, or other distribution of stock or property
of the Company, combination of shares, exchange of shares,
dividend in kind, or other like change in capital structure or
distribution (other than normal cash dividends) to shareholders
of the Company, or any similar corporate event or transaction,
the Committee, in its sole discretion, in order to prevent
dilution or enlargement of Participants’ rights under the
Plan, shall substitute or adjust, in an equitable manner, as
applicable, the number and nature of Shares that may be issued
under the Plan, the number and nature of Shares subject to
outstanding Awards, the Option Price and the Grant Price
applicable to outstanding Awards, the Award Limits, and other
value determinations applicable to outstanding Awards.

Except to the extent it would unintentionally cause Performance
Based Compensation to fail to qualify for the performance based
exception to Code Section 162(m), appropriate adjustments
may also be made by the Committee in the terms of any Awards
under the Plan to reflect such changes or distributions and to
modify any other terms of outstanding Awards on an equitable
basis, including modifications of performance goals and changes
in the length of Performance Periods. The determination of the
Committee as to the foregoing adjustments, if any, shall be
conclusive and binding on Participants under the Plan.

Subject to the provisions of Article 12, without affecting
the number of Shares reserved or available hereunder, the
Committee may authorize the issuance or assumption of benefits
under this Plan in connection with any merger, consolidation,
acquisition of property or stock, share exchange, amalgamation,
reorganization or similar transaction upon such terms and
conditions as it may deem appropriate; provided, however, that
no such issuance or assumption shall be made without affecting
the number of Shares reserved or available hereunder if it would
prevent the granting of ISOs under the Plan.

Article 5.      Eligibility
and Participation

5.1      Eligibility.
Individuals eligible to participate in this Plan include all
Employees and Directors.

7

 

5.2      Actual
Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible
individuals, those to whom Awards shall be granted and shall
determine the form and amount of each Award.

Article 6.      Stock
Options

6.1      Grant of Options.
Subject to the terms and provisions of the Plan, Options may be
granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the
Committee.

ISOs may not be granted following the ten-year
(10) anniversary of the Effective Date. ISOs may be granted
only to Employees.

6.2      Award Agreement.
Each Option grant shall be evidenced by an Award Agreement that
shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, the conditions
upon which an Option shall become vested and exercisable, and
such other provisions as the Committee shall determine which are
not inconsistent with the terms of the Plan. The Award Agreement
also shall specify whether the Option is intended to be an ISO
or an NQSO.

6.3      Option Price.
Subject to the following sentence, the Option Price for each
grant of an Option under this Plan shall be as determined by the
Committee; provided, however, the Option Price shall not be less
than one hundred percent (100%) of the Fair Market Value of a
Share on the date the Option is granted. For Options granted to
Participants outside the United States, the Committee, in order
to comply with local tax laws and regulations, has the authority
to grant Options at a price that is less than the Fair Market
Value of a Share on the date of grant.

6.4      Duration of
Options. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of
grant; provided, however, no Option shall be exercisable later
than the tenth (10th) anniversary of its grant.

6.5      Exercise of
Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such terms and
conditions as the Committee shall in each instance approve,
which need not be the same for each grant or for each
Participant.

6.6      Payment. Options
granted under this Article 6 shall be exercised by the
delivery of notice of exercise to an agent designated by the
Company or by complying with any alternative procedures which
may be authorized by the Committee, setting forth the number of
Shares with respect to which the Option is to be exercised.

8

 

A condition of the issuance of the Shares as to which an Option
shall be exercised shall be the payment of the Option Price. The
Option Price of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent, (b) by
tendering (either by actual delivery or attestation) previously
acquired Shares having an aggregate Fair Market Value at the
time of exercise equal to the Option Price (provided the Shares
tendered must have been held by the Participant for at least six
(6) months prior to their tender to satisfy the Option
Price or have been purchased on the open market), (c) by a
combination of (a) and (b), or (d) any other method
approved by the Committee in its sole discretion. The Committee
shall determine acceptable methods for tendering Shares as
payment upon exercise of an Option and may impose such
limitations and prohibitions on the use of Shares to exercise an
Option as it deems appropriate.

Subject to any governing rules or regulations, as soon as
practicable after receipt of written notification of exercise
and full payment (including satisfaction of any applicable tax
withholding), the Company shall deliver to the Participant
evidence of book entry Shares, or upon the Participant’s
request, Share certificates in an appropriate amount based upon
the number of Shares purchased under the Option(s).

Unless otherwise determined by the Committee, all payments under
all of the methods indicated above shall be paid in United
States dollars.

6.7      Restrictions on Share
Transferability. The Committee may impose such restrictions
on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable,
including, without limitation, restrictions under applicable
federal securities laws, under the requirements of any stock
exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws
applicable to such Shares.

6.8      Termination of
Employment. The impact of a termination of a
Participant’s employment or service as a Director on an
Option’s vesting and exercise period shall be determined by
the Committee, in its sole discretion, in the Participant’s
Award Agreement, and need not be uniform among Option grants or
Participants.

6.9      Transferability of
Options. During his or her lifetime, only the Participant
shall have the right to exercise the Options. After the
Participant’s death, the Participant’s estate or
beneficiary shall have the right to exercise such Options.

			
	 	(a)  	
    Incentive Stock Options. No ISO granted under the Plan
    may be sold, transferred, pledged, assigned, or otherwise
    alienated or hypothecated, other than by will or by the laws of
    descent and distribution.
	 
	 	(b)  	
    Nonqualified Stock Options. Except as otherwise provided
    in a Participant’s Award Agreement, no NQSO granted under
    this

9

 

			
	 		
    Article 6 may be sold, transferred, pledged, assigned, or
    otherwise alienated or hypothecated, other than by will or by
    the laws of descent and distribution.

6.10      Notification of
Disqualifying Disposition. If any Participant shall make any
disposition of Shares issued pursuant to the exercise of an ISO
under the circumstances described in Section 421(b) of the
Code (relating to certain disqualifying dispositions), such
Participant shall notify the Company of such disposition within
ten (10) days thereof.

Article 7.      Stock
Appreciation Rights

7.1      Grant of SARs.
Subject to the terms and conditions of the Plan, SARs may be
granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee may grant
Freestanding SARs, Tandem SARs, or any combination of these
forms of SARs.

Subject to the terms and conditions of the Plan, the Committee
shall have complete discretion in determining the number of SARs
granted to each Participant and, consistent with the provisions
of the Plan, in determining the terms and conditions pertaining
to such SARs.

The SAR Grant Price for each grant of a Freestanding SAR shall
be determined by the Committee and shall be specified in the
Award Agreement. The SAR Grant Price may include (but shall not
be limited to) a Grant Price based on one hundred percent (100%)
of the Fair Market Value of the Shares on the date of grant, a
Grant Price that is either set at a discount or premium to the
Fair Market Value of the Shares on the date of grant, or is
indexed to the Fair Market Value of the Shares, with the index
determined by the Committee, in its discretion. The Grant Price
of Tandem SARs shall be equal to the Option Price of the related
Option.

7.2      SAR Agreement.
Each SAR Award shall be evidenced by an Award Agreement that
shall specify the Grant Price, the term of the SAR, and such
other provisions as the Committee shall determine.

7.3      Term of SAR.
Subject to the following sentence, the term of a SAR granted
under the Plan shall be determined by the Committee, in its sole
discretion, provided that, except as determined otherwise by the
Committee and specified in the SAR Award Agreement, no SAR shall
be exercisable later than the tenth (10th) anniversary of its
grant. For SARs granted to Participants outside the United
States, the Committee has the authority to grant SARs that have
a term greater than ten (10) years.

7.4      Exercise of
Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole
discretion, imposes upon them.

10

 

7.5.      Exercise of Tandem
SARs. Tandem SARs may be exercised for all or part of the
Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option.
A Tandem SAR may be exercised only with respect to the Shares
for which its related Option is then exercisable.

Notwithstanding any other provision of this Plan to the
contrary, with respect to a Tandem SAR granted in connection
with an ISO: (a) the Tandem SAR will expire no later than
the expiration of the underlying ISO; (b) the value of the
payout with respect to the Tandem SAR may be for no more than
one hundred percent (100%) of the difference between the Option
Price of the underlying ISO and the Fair Market Value of the
Shares subject to the underlying ISO at the time the Tandem SAR
is exercised; and (c) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO
exceeds the Option Price of the ISO.

7.6      Payment of SAR
Amount. Upon the exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount
determined by multiplying:

			
	 	(a) 	
    The difference between the Fair Market Value of a Share on the
    date of exercise over the Grant Price; by

      
(b) The number of Shares with respect to which the SAR is
exercised.

At the discretion of the Committee, the payment upon SAR
exercise may be in cash, in Shares of equivalent value, in some
combination thereof, or in any other manner approved by the
Committee at its sole discretion. The Committee’s
determination regarding the form of SAR payout shall be set
forth in the Award Agreement pertaining to the grant of the SAR.

7.7      Termination of
Employment. The impact of a termination of a
Participant’s employment or service as a Director on a
SAR’s vesting and exercise period shall be determined by
the Committee, in its sole discretion, in the Participant’s
Award Agreement, and need not be uniform among SAR grants or
Participants.

7.8      Nontransferability of
SARs. Except as otherwise provided in a Participant’s
Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a
Participant’s Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or
her lifetime only by such Participant.

7.9      Other
Restrictions. The Committee shall impose such other
conditions and/or restrictions on any Shares received upon
exercise of a SAR granted pursuant to the Plan as it may deem
advisable. This includes, but is not limited to, requiring the
Participant to hold the Shares received upon exercise of a SAR
for a specified period of time.

11

 

Article 8.      Restricted
Stock and Restricted Stock Units

8.1      Grant of Restricted
Stock or Restricted Stock Units. Subject to the terms and
conditions of the Plan, the Committee, at any time and from time
to time, may grant Shares of Restricted Stock and/or Restricted
Stock Units to Participants in such amounts as the Committee
shall determine. Restricted Stock Units shall be similar to
Restricted Stock except that no Shares are actually awarded to
the Participant on the date of grant.

8.2      Restricted Stock or
Restricted Stock Unit Agreement. Each Restricted Stock
and/or Restricted Stock Unit grant shall be evidenced by an
Award Agreement that shall specify the Period(s) of Restriction,
the number of Shares of Restricted Stock or the number of
Restricted Stock Units granted, and such other provisions as the
Committee shall determine.

8.3      Transferability.
Except as provided in this Article 8, the Shares of
Restricted Stock and/or Restricted Stock Units granted herein
may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period
of Restriction established by the Committee and specified in the
Award Agreement (and in the case of Restricted Stock Units until
the date of delivery or other payment), or upon earlier
satisfaction of any other conditions, as specified by the
Committee, in its sole discretion, and set forth in the Award
Agreement.

8.4      Other
Restrictions. The Committee shall impose such other
conditions and/or restrictions on any Shares of Restricted Stock
or Restricted Stock Units granted pursuant to the Plan as it may
deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of
Restricted Stock or each Restricted Stock Unit, restrictions
based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of
the performance goals, time-based restrictions, and/or
restrictions under applicable federal or state securities laws.

To the extent deemed appropriate by the Committee, the Company
may retain the certificates representing Shares of Restricted
Stock in the Company’s possession until such time as all
conditions and/or restrictions applicable to such Shares have
been satisfied or lapse.

Except as otherwise provided in this Article 8, Shares of
Restricted Stock covered by each Restricted Stock Award shall
become freely transferable by the Participant after all
conditions and restrictions applicable to such Shares have been
satisfied or lapse (including satisfaction of any applicable tax
withholding obligations), and Restricted Stock Units shall be
paid in cash, Shares, or a combination of cash and Shares as the
Committee, in its sole discretion shall determine.

8.5      Voting Rights. To
the extent permitted or required by law, as determined by the
Committee, Participants holding Shares of Restricted Stock

12

 

granted hereunder may be granted the right to exercise full
voting rights with respect to those Shares during the Period of
Restriction. A Participant shall have no voting rights with
respect to any Restricted Stock Units granted hereunder.

8.6      Dividends and Other
Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock or Restricted
Stock Units granted hereunder may, if the Committee so
determines, be credited with dividends paid with respect to the
underlying Shares or dividend equivalents while they are so held
in a manner determined by the Committee in its sole discretion.
The Committee may apply any restrictions to the dividends or
dividend equivalents that the Committee deems appropriate. The
Committee, in its sole discretion, may determine the form of
payment of dividends or dividend equivalents, including cash,
Shares, Restricted Stock, or Restricted Stock Units.

8.7      Termination of
Employment. The impact of a termination of a
Participant’s employment or service as a Director on
Restricted Stock or Restricted Stock Unit vesting and payment
shall be determined by the Committee, in its sole discretion, in
the Participant’s Award Agreement, and need not be uniform
among Award grants or Participants.

8.8      Section 83(b)
Election. The Committee may provide in an Award Agreement
that the Award of Restricted Stock is conditioned upon the
Participant making or refraining from making an election with
respect to the Award under Section 83(b) of the Code. If a
Participant makes an election pursuant to Section 83(b) of
the Code concerning a Restricted Stock Award, the Participant
shall be required to file promptly a copy of such election with
the Company.

Article 9.      Performance
Measures

Unless and until the Committee proposes for shareholder vote and
the shareholders approve a change in the general Performance
Measures set forth in this Article 9, the performance goals
upon which the payment or vesting of an Award to a Covered
Employee that is intended to qualify as Performance-Based
Compensation shall be limited to the following Performance
Measures:

			
	 	(a)  	
    Net earnings;
	 
	 	(b)  	
    Earnings per share;
	 
	 	(c)  	
    Net sales growth;
	 
	 	(d)  	
    Net income (before or after taxes);
	 
	 	(e)  	
    Net operating profit;
	 
	 	(f)  	
    Return measures (including, but not limited to, return on
    assets, capital, equity, or sales);

13

 

			
	 	(g)  	
    Cash flow (including, but not limited to, operating cash flow
    and free cash flow);
	 
	 	(h)  	
    Cash flow return on capital;
	 
	 	(i)  	
    Earnings before or after taxes, interest, depreciation, and/or
    amortization;
	 
	 	(j)  	
    Gross or operating margins;
	 
	 	(k)  	
    Productivity ratios;
	 
	 	(l)  	
    Share price (including, but not limited to, growth measures and
    total shareholder return);
	 
	 	(m) 	
    Expense targets;
	 
	 	(n)  	
    Margins;
	 
	 	(o)  	
    Operating efficiency;
	 
	 	(p)  	
    Customer satisfaction;
	 
	 	(q)  	
    Employee satisfaction metrics;
	 
	 	(r)  	
    Human resources metrics;
	 
	 	(s)  	
    Working capital targets; and
	 
	 	(t)  	
    EVA®.

Any Performance Measure(s) may be used to measure the
performance of the Company or an Affiliate as a whole or any
business unit of the Company or an Affiliate or any combination
thereof, as the Committee may deem appropriate, or any of the
above Performance Measures as compared to the performance of a
group of comparator companies, or published or special index
that the Committee, in its sole discretion, deems appropriate,
or the Company may select Performance Measure (l) above as
compared to various stock market indices. The Committee also has
the authority to provide for accelerated vesting of any Award
based on the achievement of performance goals pursuant to the
Performance Measures specified in this Article 9.

The Committee may provide in any such Award that any evaluation
of performance may include or exclude any of the following
events that occurs during a Performance Period: (a) asset
write-downs, (b) litigation or claim judgments or
settlements, (c) the effect of changes in tax laws,
accounting principles, or other laws or provisions affecting
reported results, (d) any reorganization and restructuring
programs, (e) extraordinary nonrecurring items as described
in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition
and results of operations appearing in the Company’s annual
report to shareholders for the applicable year,
(f) acquisitions or divestitures, and (g) foreign
exchange gains and losses. To the extent such inclusions or
exclusions affect Awards to

14

 

Covered Employees, they shall be prescribed in a form that meets
the requirements of Code Section 162(m) for deductibility.

Awards that are designed to qualify as Performance-Based
Compensation, and that are held by Covered Employees, may not be
adjusted upward. The Committee shall retain the discretion to
adjust such Awards downward.

In the event that applicable tax and/or securities laws change
to permit Committee discretion to alter the governing
Performance Measures without obtaining shareholder approval of
such changes, the Committee shall have sole discretion to make
such changes without obtaining shareholder approval.

Article 10.      Beneficiary
Designation

Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all
of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when
filed by the Participant in writing with the Company during the
Participant’s lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant’s
death shall be paid to the Participant’s estate.

Article 11.      Rights of
Participants

11.1      Employment.
Nothing in the Plan or an Award Agreement shall interfere with
or limit in any way the right of the Company and/or its
Affiliates to terminate any Participant’s employment or
service on the Board at any time or for any reason not
prohibited by law, nor confer upon any Participant any right to
continue his or her employment or service as a director for any
specified period of time.

Neither an Award nor any benefits arising under this Plan shall
constitute an employment contract with the Company and,
accordingly, subject to Article 3 and Section 13.1,
this Plan and the benefits hereunder may be terminated at any
time in the sole and exclusive discretion of the Committee
without giving rise to any liability on the part of the Company,
its Affiliates, and/or its Subsidiaries.

11.2      Participation. No
individual shall have the right to be selected to receive an
Award under this Plan, or, having been so selected, to be
selected to receive a future Award.

11.3      Rights as a
Shareholder. Except as otherwise provided in Section 8
of the Plan or in an Award Agreement, a Participant shall have
none of the rights of a shareholder with respect to Shares
covered by any Award until the Participant becomes the record
holder of such Shares.

15

 

Article 12.      Acceleration
Event

The Compensation Committee shall specify in each
Participant’s Award Agreement the treatment of outstanding
Awards upon an Acceleration Event.

Article 13.      Amendment,
Modification, Suspension, and Termination

13.1      Amendment,
Modification, Suspension, and Termination. Subject to
Section 13.3, the Committee may, at any time and from time
to time, alter, amend, modify, suspend, or terminate the Plan
and any Award Agreement in whole or in part; provided, however,
that, without the prior approval of the Company’s
shareholders, Options issued under the Plan will not be
repriced, replaced, or regranted through cancellation, or by
lowering the Option Price of a previously granted Option, and no
amendment of the Plan shall be made without shareholder approval
if shareholder approval is required by law, regulation, or stock
exchange rule.

13.2      Adjustment of Awards
Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4.2
hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent unintended
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. The determination
of the Committee as to the foregoing adjustments, if any, shall
be conclusive and binding on Participants under the Plan.

13.3      Awards Previously
Granted. Notwithstanding any other provision of the Plan to
the contrary, no termination, amendment, suspension, or
modification of the Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under
the Plan, without the written consent of the Participant holding
such Award.

Article 14.      Withholding

14.1      Tax Withholding.
The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, the
minimum statutory amount to satisfy federal, state, and local
taxes, domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result
of this Plan.

14.2      Share
Withholding. With respect to withholding required upon the
exercise of Options, or SARs, upon the lapse of restrictions on
Restricted Stock and Restricted Stock Units, or any other
taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or
in part, by

16

 

having the Company withhold Shares having a Fair Market Value on
the date the tax is to be determined equal to the minimum
statutory total tax that could be imposed on the transaction.
All such elections shall be irrevocable, made in writing, and
signed by the Participant, and shall be subject to any
restrictions or limitations that the Committee, in its sole
discretion, deems appropriate.

Article 15.      Successors

All obligations of the Company under the Plan with respect to
Awards granted hereunder shall be binding on any successor to
the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business and/or
assets of the Company.

Article 16.      General
Provisions

16.1      Forfeiture
Events. The Committee may specify in an Award Agreement that
the Participant’s rights, payments, and benefits with
respect to an Award shall be subject to reduction, cancellation,
forfeiture, or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events shall
include, but shall not be limited to, termination of employment
for cause, violation of material Company and/or Affiliate
policies, breach of noncompetition, confidentiality, or other
restrictive covenants that may apply to the Participant, or
other conduct by the Participant that is detrimental to the
business or reputation of the Company and/or its Affiliates.

16.2      Legend. The
certificates for Shares may include any legend which the
Committee deems appropriate to reflect any restrictions on
transfer of such Shares.

16.3      Gender and
Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall
include the plural.

16.4      Severability. In
the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision
had not been included.

16.5      Requirements of
Law. The granting of Awards and the issuance of Shares under
the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required.

16.6      Securities Law
Compliance. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions
of Rule 16b-3 or its successor under the Exchange Act. To
the extent any provision of the Plan or action by the Committee
fails to so comply, it shall be

17

 

deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.

16.7      Registration and
Listing. The Company may use reasonable endeavors to
register Shares allotted pursuant to the exercise of an Award
with the United States Securities and Exchange Commission or to
effect compliance with the registration, qualification, and
listing requirements of any national securities laws, stock
exchange, or automated quotation system.

16.8      Delivery of
Title. The Company shall have no obligation to issue or
deliver evidence of title for Shares issued under the Plan prior
to:

			
	 	(a) 	
    Obtaining any approvals from governmental agencies that the
    Company determines are necessary or advisable; and
	 
	 	(b)  	
    Completion of any registration or other qualification of the
    Shares under any applicable national or foreign law or ruling of
    any governmental body that the Company determines to be
    necessary or advisable.

16.9      Inability to Obtain
Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the
lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue
or sell such Shares as to which such requisite authority shall
not have been obtained.

16.10      Employees Based
Outside of the United States. Notwithstanding any provision
of the Plan to the contrary, in order to comply with the laws in
other countries in which the Company and its Affiliates operate
or have Employees or Directors, the Committee, in its sole
discretion, shall have the power and authority to:

			
	 	(a) 	
    Determine which Affiliates shall be covered by the Plan;
	 
	 	(b)  	
    Determine which Employees and/or Directors outside the United
    States are eligible to participate in the Plan;
	 
	 	(c)  	
    Modify the administrative terms and conditions of any Award
    granted to Employees and/or Directors outside the United States
    to comply with applicable foreign laws;
	 
	 	(d)  	
    Establish subplans and modify exercise procedures and other
    terms and procedures, to the extent such actions may be
    necessary or advisable. Any subplans and modifications to Plan
    terms and procedures established under this Section 16.10
    by the Committee shall be attached to this Plan document as
    appendices; and
	 
	 	(e)  	
    Take any action, before or after an Award is made, that it deems
    advisable to obtain approval or comply with any necessary local
    government regulatory exemptions or approvals.

18

 

Notwithstanding the above, the Committee may not take any
actions hereunder, and no Awards shall be granted, that would
violate the Exchange Act, the Code, any securities law, or
governing statute or any other applicable law.

16.11      Uncertificated
Shares. To the extent that the Plan provides for issuance of
certificates to reflect the transfer of Shares, the transfer of
such Shares may be effected on a noncertificated basis, to the
extent not prohibited by applicable law or the rules of any
stock exchange.

16.12      Unfunded Plan.
Participants shall have no right, title, or interest whatsoever
in or to any investments that the Company may make to aid it in
meeting its obligations under the Plan. Nothing contained in the
Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant,
beneficiary, legal representative, or any other person. To the
extent that any person acquires a right to receive payments from
the Company under the Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company. All
payments to be made hereunder shall be paid from the general
funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure
payment of such amounts except as expressly set forth in the
Plan. The Plan is not subject to ERISA.

16.13      No Fractional
Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine
whether cash, Awards, or other property shall be issued or paid
in lieu of fractional Shares or whether such fractional Shares
or any rights thereto shall be forfeited or otherwise eliminated.

16.14      Retirement and
Welfare Plans. The value of compensation paid under this
Plan will not be included as “compensation” for
purposes of computing the benefits payable to any participant
under the Company’s retirement plans (both qualified and
non-qualified) or welfare benefit plans unless such other plan
expressly provides that such compensation shall be taken into
account in computing a participant’s benefit.

16.15      Governing Law.
The Plan and each Award Agreement shall be governed by the laws
of the State of New York, excluding any conflicts or choice of
law rule or principle that might otherwise refer construction or
interpretation of the Plan to the substantive law of another
jurisdiction. Unless otherwise provided in the Award Agreement,
recipients of an Award under the Plan are deemed to submit to
the exclusive jurisdiction and venue of the federal or state
courts of New York, to resolve any and all issues that may arise
out of or relate to the Plan or any related Award Agreement.

16.16      Plan Approval.
This Plan shall become effective upon adoption of the Plan by
the Board or shareholder approval of such Plan, whichever occurs
first.

19<PAGE>
1
                                                                    EXHIBIT 4.5

                          SECOND AMENDED AND RESTATED
                         REGISTRATION RIGHTS AGREEMENT

     This SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is made and entered into as of October 2, 2000, by and among
INFOGRAMS, INC. (formerly GT Interactive Software Corp.), a Delaware corporation
(the "Company"), and CALIFORNIA U.S. HOLDINGS, INC., a Delaware corporation (the
"Securityholder").

     WHEREAS, pursuant to the terms and conditions of a Securities Purchase
Agreement, dated as of November 15, 1999 (the "Company Purchase Agreement"), by
and among the Company, Infogrames Entertainment SA., a French societe anonyme
("Parent") and the Securityholder, the Company, among other things, issued to
the Securityholder an aggregate of 5,714,286 shares of common stock of the
Company, par value of $0.01 per share ("Common Stock"), and a 5% Subordinated
Convertible Note in the aggregate principal amount of approximately $60,600,000
(the "Note"), with a conversion price of $9.25 per share;

     WHEREAS, concurrent with the execution and delivery of the Company Purchase
Agreement, the Company issued to the Securityholder warrants to purchase 10,000
shares of Common Stock, having an exercise price of $0.05 per share (the
"Short-Term Note Warrants");

     WHEREAS, concurrently therewith, the Securityholder acquired from certain
principal stockholders of the Company an aggregate of 6,711,701 shares of Common
Stock (the "Cayre Shares") and warrants to acquire an aggregate of 900,000
shares of Common Stock at an exercise price of $0.05 per share (the "GAP
Warrants");

     WHEREAS, concurrently therewith, the Company and the Securityholder entered
into a Registration Right Agreement dated as of November 15, 1999 (the
"Registration Right Agreement"), pursuant to which the Securityholder received
certain registration rights in respect of the shares of Common Stock acquired by
the Securityholder pursuant to the Company Purchase Agreement, the Cayre Shares,
and any shares of Common Stock issuable upon conversion of the Original Note or
upon exercise of the Short-Term Note Warrants and the GAP Warrants.

     WHEREAS, pursuant to the terms of the Master Assignment and Acceptance
dated as of February 15, 2000 (the "Assignment and Acceptance"), by and among
(i) the Company, as borrower, (ii) First Union National Bank, Bank of America,
N.A., European American Bank, Fleet Bank, N.A., National Bank of Canada, The
Bank of Nova Scotia (collectively the "Previous Lenders"), and (iii) Parent, as
assignee, the Previous Lenders assigned to Parent all other rights and
obligations of the Previous Lenders under the Credit Agreement dated as of
September 11, 1998 (as amended, restated, supplemented or otherwise modified,
the "Credit Agreement"), by and among the Company and the Previous Lenders;

<PAGE>
2

     WHEREAS, in connection with the Assignment and Acceptance, the Company
entered into a warrant agreement dated as of February 15, 2000 with Parent and
the Securityholder and issued to the Securityholder warrants to purchase 45,000
shares of Common Stock (the "Credit Warrants");

     WHEREAS, in connection with the issuance of the Credit Warrants to the
Securityholder, the Company and the Securityholder amended the Registration
Right Agreement, as of February 15, 2000 (the "Amended and Restated Registration
Rights Agreement") to include the shares of Common Stock issuable upon exercise
of the Credit Warrants;

     WHEREAS, in connection with the issuance of shares of Common Stock to the
Securityholder pursuant to the Agreement and Plan of Merger, dated as of
September 6, 2000, by and among the Company, INA Merger Sub, Inc., Parent, the
Securityholder and Infogrames North America, Inc. (the "Merger Agreement"), the
Company has agreed to further amend the Amended and Restated Registration
Rights Agreement to include the shares of Common Stock issuable pursuant to the
Merger Agreement and the transactions contemplated thereby;

     WHEREAS, the Company and the Securityholder deem it to be in their
respective best interests to amend and restate in its entirety the Amended and
Restated Registration Rights Agreement to set forth the rights of the
Securityholder in connection with public offerings and sales of the Registrable
Securities (as defined below).

     NOW, THEREFORE, in consideration of the premises and mutual covenants and
obligations hereinafter set forth, and for other good and valuable
consideration, the sufficiency and adequacy of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto agree to amend and
restate in its entirety the Amended and Restated Registration Rights Agreement
as set forth herein and to agree as follows:

     SECTION 1.  DEFINITIONS.

     (a)  As used in this Agreement, the following terms shall have the
following meanings:

     "Business Day" shall mean any Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which banking institutions in New York City are
authorized by law, regulation or executive order to close.

     "Common Stock" shall mean the common stock, par value $0.01 per share, of
the Company.

     "Delay Notice" shall have the meaning set forth in Section (b) hereof.

     "Demand Participation Notice" shall have the meaning set forth in Section
3(a) hereof.

     "Demand Registration" shall have the meaning set forth in Section 3(a)
hereof.

<PAGE>
   3

          "Demand Registration Notice" shall have the meaning set forth in
Section 3(a) hereof.

          "Holder" shall mean the Securityholder and any of its transferees
that owns Registrable Securities. For purposes of this Agreement, the Company
may deem the registered holder of a Registrable Security as the Holder thereof.

          "Material Development Condition" shall have the meaning set forth in
Section 6(b) hereof.

          "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.

          "Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by a prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
materials incorporated by reference in such prospectus.

          "Registrable Securities" shall mean (i) the shares of Common Stock
acquired by the Securityholder pursuant to the Company Purchase Agreement and
the Cayre Shares, (ii) any shares of Common Stock issuable upon conversion of
the Note, (iii) any shares of Common Stock issuable upon exercise of the
Short-Term Note Warrants and the GAP Warrants, (iv) any shares of Common Stock
issuable pursuant to the Merger Agreement, including the 20,089,224 shares of
Common Stock issued in connection with the conversion of the then outstanding
debt under the Credit Agreement and certain intercompany payables, and (vi) any
other securities issued or issuable as a result of or in connection with any
stock dividend, stock split or reverse stock split, combination,
recapitalization, reclassification, merger or consolidation, exchange or
distribution in respect of such Common Stock.

          "Registration Expenses" shall have the definition set forth in
Section 7 hereof.

          "Registration Period" shall have the definition set forth in Section
3(b) hereof.

          "Registration Statement" shall mean any registration statement which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus included therein, all amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits and all materials incorporated by reference in such
registration statement.

          "Requesting Securityholder" shall have the meaning set forth in
Section 4 hereof.

          "Restricted Securities" shall have the meaning set forth in Section 2
hereof.

<PAGE>
      "Rule 144" shall mean Rule 144 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

      "Rule 415" shall mean Rule 145 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

      "Rule 903" shall mean Rule 903 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

      "Rule 904" shall mean Rule 904 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

      "SEC" shall mean the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Securities Act.

      "Securities Act" shall mean the Securities Act of 1933, as amended (or any
similar successor federal statute), and the rules and regulations thereunder, as
the same are in effect from time to time.

      "Underwritten Offering" shall mean a registered offering in which
securities of the Company are sold to an underwriter for reoffering to the
public.

      (b) All references to the number of shares of Common Stock shall reflect
the one-for-five reverse stock split of the issued and outstanding shares of
Common Stock, effected by the Company as of the close of business on June 26,
2000.

      SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT.

      The securities entitled to the benefits of this Agreement are the
Registrable Securities but, with respect to any particular Registrable Security,
only so long as such security continues to be a Restricted Security. A
Registrable Security that has ceased to be a Registrable Security cannot
thereafter become a Registrable Security. As used herein, a "Restricted
Security" is a Registrable Security which has not been effectively registered
under the Securities Act and distributed in accordance with an effective
Registration Statement and which has not been sold by a Holder pursuant to Rule
144 (except pursuant to a transfer to any affiliate of such Holder), Rule 903 or
Rule 904, unless, in the case of a Registrable Security distributed pursuant to
Rule 903 or 904, any applicable restricted period has not expired or the SEC or
its staff has taken the position in a published release, ruling or no-action
letter that securities distributed under Rule 903 or 904 are ineligible for
resale in the United States under Section 4(1) of the Securities Act
notwithstanding expiration of the applicable restricted period.

<PAGE>
5

                         SECTION 3. DEMAND REGISTRATION.

                         (a) Demand.  At any time during the term of this
Agreement, a Holder or Holders may request the Company, in writing (a "Demand
Registration Notice"), to effect the registration of all or such portion of the
Registrable Securities as such Holder or Holders shall specify; provided, that
only one demand may be made pursuant to this Section 3(a) during any six month
period; provided, further, that an aggregate of only three demands may be made
pursuant to this Section 3(a), unless the Company is eligible to use Form S-3
(or any successor form) in which case the foregoing limitation shall not apply.
Upon receipt of any such Demand Registration Notice,  the Company shall promptly
give written notice of such proposed registration to all other Holders. Such
Holders shall have the right, by giving written notice (the "Demand
Participation Notice") to the Company within fifteen (15) days after the Company
provides its notice, to elect to have included in such registration such number
of their Registrable Securities as such Holders may request in such Demand
Participation Notice. A Holder or Holders may, at any time up to five (5)
Business Days before the filing date of the applicable Registration Statement
relating to the Demand Registration, request that his or its Registrable
Securities not be included therein by providing a written notice to that effect
to the Company.

                         Upon receipt of a Demand Registration Notice, the
Company shall use its commercially reasonable efforts to file, as expeditiously
as possible, but in any event no later than forty-five (45) days after such
Demand Registration Notice, a Registration Statement on Form S-3 (or any
successor form), or any other form available to the Company under the Securities
Act, covering all Registrable Securities which the Company has been so requested
to register (the "Demand Registration").

                         (b) Effectiveness of Registration Statement. Subject to
the provisions of Sections 6(b) and (c) hereof, the Company agrees to use its
commercially reasonable efforts to (i) cause the Registration Statement(s)
relating to the Demand Registration described in Section 3(a) to become
effective as promptly as practicable (such date of effectiveness, the
"Effective Time"), and (ii) thereafter keep each such Registration Statement
effective continuously for the period (the "Registration Period") ending,
subject to the second sentence of Section 5(b) hereof and clause (3) of the last
sentence of Section 6(b) hereof, on the earlier of (A) one year following the
Effective Time, and (B) the date on which all Registrable Securities covered by
each such Registration Statement have been sold and the distribution
contemplated thereby has been completed.

                         (c) Inclusion of Other Securities. Any other holder of
the Company's securities who has registration rights may include its securities
in the Demand Registration effected pursuant to this Section 3.

                         SECTION 4.  PIGGYBANK REGISTRATION.

                         If, during the term of this Agreement, the Company at
any time proposes to file a registration statement with respect to any class of
equity securities, whether (i) for its own account (other than in connection
with the Registration Statement contemplated by Section 3 or a registration
statement on Form S-4 or S-8 (or any successor or substantially similar form),
and other than in connection with (A) an employee stock option, stock purchase
or compensation.
<PAGE>
6

plan or of securities issued or issuable pursuant to any such plan, or (B) a
dividend reinvestment plan) or (ii) for the account of a holder of securities of
the Company pursuant to demand registration rights granted by the Company (a
"Requesting Securityholder"), then the Company shall in each case give written
notice of such proposed filing to all Holders of Registrable Securities at least
fifteen (15) days before the anticipated filing date of any such registration
statement by the Company, and such notice shall offer to all Holders the
opportunity to have any or all of the Registrable Securities held by such
Holders included in such registration statement. Each Holder of Registrable
Securities desiring to have its Registrable Securities registered under this
Section 4 shall so advise the Company in writing within ten (10) days after the
date of receipt of such notice (which request shall set forth the amount of
Registrable Securities for which registration is requested), and the Company
shall use its commercially reasonable efforts to include in such registration
statement all such Registrable Securities so requested to be included therein.
Notwithstanding the foregoing, if the managing underwriter or underwriters of
any such proposed public offering advises the Company that the total amount of
securities which the Holders of Registrable Securities, the Company and any
other Persons intended to be included in such proposed public offering is
sufficiently large to adversely affect the success of such proposed public
offering, then the amount of securities to be offered for the accounts of
Holders of Registrable Securities shall be reduced pro rata, based upon the
aggregate number of securities to be offered for the accounts of all of the
Holders of Registrable Securities and all other holders (except the Company and
the Requesting Securityholder) of securities intended to be included in such
offering and the number of securities to be offered for the account of each such
Holder, to the extent necessary to reduce the total amount of securities to be
included in such proposed public offering to the amount recommended by such
managing underwriter or underwriters before the securities offered by the
Company or any Requesting Securityholder are so reduced. Anything to the
contrary in this Agreement notwithstanding, the Company may withdraw or postpone
a registration statement referred to in this Section 4 at any time before it
becomes effective or withdraw, postpone or terminate the offering after it
becomes effective without obligation to the Holder or Holders of the Registrable
Securities; provided that the Company's obligations pursuant to Section
5(a)(ii), 7 and 8 shall remain effective.

                      SECTION 5.  REGISTRATION PROCEDURES.

          (a)  General. In connection with the Company's registration
obligations pursuant to Section 3 and, to the extent applicable, Section 4
hereof, the Company will:

          (i)  prepare and file with the SEC a new Registration Statement or
     such amendments and post-effective amendments to an existing Registration
     Statement as may be necessary to keep such Registration Statement effective
     for the time periods set forth in Section 3(b), provided that no
     Registration Statement shall be required to remain in effect after all
     Registrable Securities covered by such Registration Statement have been
     sold and distributed as contemplated by such Registration Statement, and,
     provided, further, that as soon as practicable, but in no event later than
     five (5) Business Days before filing such Registration Statement, any
     related Prospectus or any amendment or supplement thereto, other than any
     amendment or supplement made solely as a result of incorporation by
     reference of documents filed with the SEC subsequent to the filing of such
     Registration Statement, the Company shall furnish to the Holders of the
     Registrable Securities covered by such Registration Statement and the
     underwriters, if any, copies of

<PAGE>
7

all such documents proposed to be filed, which documents shall be subject to
the review of such Holders and underwriters;

     (ii)  notify the selling Holders of Registrable Securities and the
managing underwriters, if any, promptly (1) when a new Registration Statement,
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any new Registration Statement or post-effective
amendment, when it has become effective, (2) of any request by the SEC for
amendments or supplements to any Registration Statement or Prospectus or for
additional information, (3) of the issuance by the SEC of any comments with
respect to any filing, (4) of any stop order suspending the effectiveness of
any Registration Statement or the initiation of any proceedings for that
purpose, (5) of any suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (6) if there is a misstatement or omission of a
material fact in any Registration Statement, Prospectus or any document
incorporated therein by reference or if any event occurs which requires the
making of any changes in any Registration Statement, Prospectus or any document
incorporated therein by reference in order to make the statements therein (in
the case of any Prospectus, in the light of the circumstances under which they
were made) not misleading;

     (iii) if reasonably requested by the managing underwriter or underwriters
or a Holder of Registrable Securities being sold in connection with an
Underwritten Offering, promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters and the
Holders of a majority of the Registrable Securities being sold in such
Underwritten Offering agree should be included therein relating to the sale of
the Registrable Securities, including, without limitation, information with
respect to the aggregate number of shares of Registrable Securities being sold
to such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the Underwritten Offering
of the Registrable Securities to be sold in such offering; and promptly make
all required filings of such Prospectus supplement or post-effective amendment;

     (iv)  furnish to each selling Holder of Registrable Securities and each
managing underwriter, if any, without charge, as many conformed copies as may
reasonably be requested of the then effective Registration Statement and any
post-effective amendments thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);

     (v)   deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the then effective
Prospectus (including each prospectus subject to completion) and any amendments
or supplements thereto as such Persons may reasonably request;

     (vi)  use commercially reasonable efforts to register or qualify or
cooperate with the selling Holders of Registrable Securities, the underwriters,
if any, and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or "blue sky" laws of such jurisdiction as any
<PAGE>
8

     selling Holder of Registrable Securities or underwriter reasonably
     requests in writing; provided, however, that the Company will not be
     required to (1) qualify to do business in any jurisdiction where it
     would not otherwise be required to qualify, but for this paragraph
     (vi), (2) subject itself to general taxation in any such jurisdiction
     or (3) file a general consent to service of process in any such
     jurisdiction;

          (vii) cooperate with the selling Holders of Registrable
     Securities and the managing underwriters, if any, to facilitate the
     timely preparation and delivery of certificates representing
     Registrable Securities to be sold and not bearing any restrictive
     legends; and enable such Registrable Securities to be in such
     denominations and registered in such names as the managing
     underwriters may request at least two (2) Business Days prior to any
     sale of Registrable Securities to the underwriters;

          (viii) cause all Registrable Securities covered by the
     Registration Statement to be listed on each securities exchange (or
     quotation system operated by a national securities association) on
     which identical securities issued by the Company are then listed if
     requested by the Holders of a majority of the Registrable Securities
     covered by such Registration Statement or the managing underwriters,
     if any, and enter into customary agreements including, if necessary, a
     listing application and indemnification agreement in customary form,
     and provide a transfer agent for such Registrable Securities no later
     than the effective date of such Registration Statement;

          (ix) otherwise use its commercially reasonable efforts to
     comply in all material respects with all applicable rules and
     regulations of the SEC relating to such registration and the
     distribution of the securities being offered and make generally
     available to its securities holders earnings statements satisfying the
     provisions of Section 11(a) of the Securities Act;

          (x) cooperate and assist in any filings required to be made
     with the National Association of Securities Dealers, Inc.; and

          (xi) subject to the proviso in paragraph (vi) above, cause the
     Registrable Securities covered by the Registration Statement to be
     registered with or approved by such other governmental agencies or
     authorities as may be necessary to enable the seller or sellers
     thereof or the underwriters, if any, to consummate the disposition of
     such Registrable Securities (other than as may be required by the
     governmental agencies or authorities of any foreign jurisdiction and
     by reason of its own activities or business other than the sale of
     Registrable Securities).

          As a condition precedent to the participation in any registration
hereunder, the Company may require each seller of Registrable Securities as to
which any such registration is being effected to furnish to the Company such
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request to comply with the applicable
provisions of the Securities Act.
<PAGE>
9

     (b) Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the company of the
happening of any event of the kind described in Section 5(a)(ii)(4), (5) or (6)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the then current Prospectus until (1) such Holder is
advised in writing by the Company that a new Registration Statement covering
the offer of Registrable Securities has become effective under the Securities
Act or (2) such Holder receives copies of any required supplemented or amended
Prospectus, or until such Holder is advised in writing by the Company that the
use of the Prospectus may be resumed. If the Company shall have given any such
notice during a period when a Demand Registration is in effect, the Company
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days during
which any such disposition of Registrable Securities is discontinued pursuant
to this Section 5(b). If so directed by the Company, 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 in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice.

     SECTION 6.  HOLDBACK AGREEMENTS

     (a) Hold-Back Election. In the case of the registration of any
underwritten primary offering initiated by the Company (other than any
registration by the Company on Form S-4 or Form S-8 (or any successor or
substantially similar form), and other than in connection with (A) an employee
stock option, stock purchase or compensation plan or of securities issued or
issuable pursuant to any such plan, or (B) a dividend reinvestment plan) or any
underwritten secondary offering initiated at the request of a holder of
securities of the Company pursuant to registration rights granted by the
Company, each Holder agrees that if he or it is (x) than a 5% or greater
stockholder, a director or an officer of the Company and (y) reasonably
requested to do so by the managing underwriter or the underwriters, then such
Holder shall not effect any public sale or distribution of securities of the
Company except as part of such underwritten registration, during the period
beginning twenty-five (25) days prior to the closing date of such underwritten
offering and ending ninety (90) days after such closing date (or such longer
period as may be reasonable requested by the managing underwriter or
underwriters).

     (b) Material Development Condition. With respect to any Registration
Statement filed or to be filed pursuant to Section 3, if the Company determines
that, in its good faith judgment, (i) it would (because of the existence of, or
in reasonable anticipation of, any acquisition or corporate reorganization or
other transaction, financing activity, stock repurchase or other development
involving the Company or any subsidiary, or the unavailability for reasons
substantially beyond the Company's control of any required financial statements,
or any other event or condition of similar significance to the Company or any
subsidiary for purposes of disclosure to the stockholders or potential investors
of the Company) be materially disadvantageous (a "Material Development
Condition") to the Company or any subsidiary or its stockholders for such
Material Development Condition to be publicly disclosed, and (ii) the Company
reasonably believes it would be required under the Securities Act to disclose
such Material Development Condition in such Registration Statement, then the
Company shall, notwithstanding any other provisions of this Agreement, be
entitled, upon the giving of a written notice that a Material Development
Condition has occurred (a "Delay Notice") from an officer of
<PAGE>
10

the Company to any Holder of Registrable Securities included or to be included
in such Registration Statement, (i) to cause sales of Registrable Securities by
such Holder pursuant to such Registration Statement to cease, (ii) to cause
such Registration Statement to be withdrawn and the effectiveness of such
Registration Statement terminated, or (iii) in the event no such Registration
Statement has yet been filed or declared effective, to delay filing or
effectiveness of any such Registration Statement until, in the good faith
judgment of the Company, such Material Development Condition shall be disclosed
or no longer exists (notice of which the Company shall promptly deliver to any
Holder of Registrable Securities with respect to which any such Registration
Statement has been filed). Notwithstanding the foregoing provisions of this
Section 6(b): (1) in no event may such cessation or delay (i) be, for each such
Registration Statement, for a period of more than ninety (90) consecutive days
from the giving of its Delay Notice to a Holder or Holders with respect to such
Material Development Condition, as above provided, or (ii) for each such
Registration Statement, exceed in the aggregate one hundred twenty (120) days in
any consecutive three hundred sixty-five (365) day period; (2) in the event a
Registration Statement is filed and subsequently withdrawn by reason of any
existing or anticipated Material Development Condition as hereinbefore provided,
the Company shall cause a new Registration Statement covering the Registrable
Securities to be filed with the SEC as soon as practicable after such Material
Development Condition expires or, if sooner, as soon as practicable after the
expiration of the earlier of such ninety (90) day or one hundred twenty (120)
day period, and the Registration Period for such new Registration Statement
shall be the greater of thirty (30) days or the number of days that remained in
such Registration Period with respect to the withdrawn Registration Statement at
the time it was withdrawn; and (3) in the event the Company elects not to
withdraw or terminate the effectiveness of any such Registration Statement but
to cause a Holder or Holders to refrain from selling Registrable Securities for
any period during the Registration Period, the Registration Period with respect
to such Holders shall be extended by the number of days during the Registration
Period that such Holders are required to refrain from selling Registrable
Securities.

     (c) Limitation on Demand and Piggyback Registration Rights. Anything to the
contrary contained in this Agreement notwithstanding, when (i) in the opinion of
counsel for the Company (which counsel shall be experienced in securities law
matters), registration of the Registrable Securities is not required by the
Securities Act and other applicable securities laws in connection with a
proposed sale of such Registrable Securities and (ii) the amount of Registrable
Securities held by such Holders does not exceed five percent of the outstanding
shares of Common Stock, on a fully diluted basis, the Holders shall have no
rights pursuant to Sections 3 and 4 hereof to request a Demand Registration or a
piggyback registration in connection with such proposed sale and the Company
shall promptly provide to the transfer agent and the Holders' broker in
connection with any sale transaction an opinion to the effect set forth above,
reasonably sufficient in form and substance to permit the transfer agent to
issue stock certificates for such Registrable Securities without any legend
restricting transfer thereof.

     SECTION 7.  REGISTRATION EXPENSES.

     All expenses incident to the Company's performance of or compliance with
this Agreement, including without limitation all registration and filing fees
(including, without limitation, any fees payable to the NASD or the relevant
securities exchange if the Company's shares are listed on such exchange), fees
and expenses of compliance with securities or "blue

<PAGE>
11

sky" laws (including reasonable fees and disbursements of counsel in connection
with "blue sky" qualifications or registrations (or the obtaining of exemptions
therefrom) of the Registrable Securities), printing expenses (including
expenses of printing Prospectuses), messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), fees and
disbursements of its counsel and its independent certified public accountants,
securities acts liability insurance (if the Company elects to obtain such
insurance), fees and expenses of any special experts retained by the Company in
connection with any registration hereunder and fees and expenses of other
Persons retained by the Company (all such expenses being referred to as
"Registration Expenses"), shall be borne by the Company; provided, that
Registration Expenses shall now include any fees and expenses of counsel for
the Holders, out-of-pocket expenses incurred by the Holders and underwriting
discounts, commissions or fees attributable to the sale of the Registrable
Securities.

     SECTION 8. INDEMNIFICATION.

     (a)  Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the full extent permitted by law, but without duplication,
each Holder of Registrable Securities, and each Person who controls such Holder
(within the meaning of the Securities Act), against all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation
and reasonable legal fees and expenses) resulting from any untrue statement of
a material fact in, or any omission of a material fact required to be stated
in, any Registration Statement or Prospectus or necessary to make the
statements therein (in the case of a Prospectus in light of the circumstances
under which they were made) not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the Company
by any Holder or any underwriters expressly for use therein. The Company will
also indemnify underwriters participating in the distribution, their officers,
directors, employees, partners and agents, and each Person who controls such
underwriters (within the meaning of the Securities Act), to the same extent as
provided above with respect to the indemnification of the Holders of
Registrable Securities, if so requested.

     (b)  Indemnification by Holders of Registrable Securities. In connection
with any Registration Statement in which a Holder of Registrable Securities is
participating, each such Holder will furnish to the Company in writing such
information and affidavits relating to such Holder as the Company reasonably
requests for use in connection with any such Registration Statement or
Prospectus and agrees to indemnify and hold harmless, to the full extent
permitted by law, but without duplication, the Company, its officers,
directors, stockholders, employees, advisors and agents, and each Person who
controls the Company (within the meaning of the Securities Act), against all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation and reasonable legal fees and expenses) resulting from any
untrue statement of material fact in, or any omission of a material fact
required to be stated in, the Registration Statement or Prospectus or necessary
to make the statements therein (in the case of a Prospectus in light of the
circumstances under which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission is contained in any
information or affidavit relating to such Holder so furnished in writing by
such Holder to the Company specifically for inclusion therein. The Company and
the other Persons described above shall be entitled to receive indemnities from
underwriters participating in the distribution,
<PAGE>
12

to the same extent as provided above with respect to information so furnished
in writing by such Persons specifically for inclusion in any Prospectus or
Registration Statement. In no event shall any participating Holder have an
obligation to indemnify any Person pursuant to this Section 8(b) for any amount
in excess of the net proceeds received by such Holder from the Registrable
Securities offered and sold by such Holder pursuant to such Registration
Statement.

          (c)  Conduct of Indemnification Proceedings.  Any Person entitled to
indemnification hereunder will (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel of such
indemnifying party's choice and reasonably satisfactory to the indemnified
party; provided, however, that the failure to notify the indemnifying party
shall not relieve the indemnifying party of any liability that it may have to
the indemnified party hereunder, except to the extent that the indemnifying
party forfeits substantive rights or defenses by reason of such failure;
provided, further, that any Person entitled to indemnification hereunder shall
have the right to employ separate counsel and to participate in (but not
control) the defense of such claim, but the fees and expenses of such counsel
shall be at the expense of such indemnified Person unless (A) the indemnifying
party shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to the indemnified party in a timely manner or (B) in
the reasonable judgment of any such Person, based upon a written opinion of its
counsel, a conflict of interest may exist between such Person and the
indemnifying party with respect to such claims (in either of which case, if the
Person notifies the indemnifying party in writing that such Person elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such Person). The indemnifying party will not be subject to any
liability for any settlement made without its consent. No indemnified party will
be required to consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of such claim or litigation. An indemnifying party who is not
entitled to, or elects not to, assume the defense of the claim will not be
obligated to pay the fees and expenses of more than one counsel (except one (1)
local counsel if required in a specific instance) for all parties indemnified by
such indemnifying party with respect to such claim.

          (d)  Contribution.  If for any reason the indemnification provided
for in Section 8(a) or Section 8(b) is unavailable to an indemnified party or
insufficient to hold it harmless as contemplated by Section 8(a) and Section
8(b), then the indemnifying party shall contribute to the amount 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 not only the relative
benefits received by the indemnifying party and the indemnified party, but also
the relative fault of the indemnifying party and the indemnified party, as well
as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement or the omission or alleged omission relates to information
supplied by the indemnifying party or parties on the one hand, or the
indemnified party or parties on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. 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 misrepresentations. In no event shall any

<PAGE>
13

participating Holder be required to contribute any amount in excess of the net
proceeds received by such Holder from the Registrable Securities offered and
sold by such Holder pursuant to such Registration Statement.

     SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.

     No Person may participate in any Underwritten Offering hereunder unless
such Person (i) agrees to sell such Person's Registrable Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
Nothing in this Section 9 shall be construed to create any additional rights
regarding the registration of Registrable Securities in any Person otherwise
than as set forth herein.

     SECTION 10. AMENDMENTS AND WAIVERS.

     The provisions of this Agreement, including the provisions of this Section
10, may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the Company has
obtained the written consent of Holders of a majority of the Registrable
Securities then outstanding. Whenever the consent or approval of Holders of a
specified number of Registrable Securities is required hereunder, Registrable
Securities held by the Company or any of its controlled affiliates (other than
Holders of Registrable Securities if such Holders are deemed to be affiliates
solely by reason of their holdings of such Registrable Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required number.

     SECTION 11. TERM OF AGREEMENT.

     This Agreement may be terminated at any time by a written instrument signed
by Holders of all of the Registrable Securities then outstanding. Unless sooner
terminated in accordance with the preceding sentence, this Agreement shall
terminate in its entirety on such date as there shall be no Registrable
Securities outstanding; provided that any shares of Common Stock previously
subject to this Agreement shall not be Registrable Securities following the sale
of such shares in an offering registered pursuant to this Agreement.
<PAGE>
14

          SECTION 12. NOTICES.

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

          (a)  If to a Holder of Registrable Securities, at the most current
     address given by such Holder to the Company, in accordance with the
     provisions of this Section 12, which address initially is, with respect to
     each Holder, listed on Schedule 1 attached hereto.

          (b)  If to the Company, initially at

                    417 Fifth Avenue
                    New York, New York 10016
                    Attention: Director of Legal Services
                    Telecopier no. (212) 679-3424
                    Confirm no. (212) 726-6500

     with a copy to

                    Gibson, Dunn & Crutcher LLP
                    200 Park Avenue
                    New York, NY 10166
                    Attention: Dennis J. Friedman, Esq.
                    Telecopier no. (212) 351-4035
                    Confirm no. (212) 351-4000

     and thereafter at such other address as may be designated from time to time
     by notice given in accordance with the provisions of this Section 12.

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

          SECTION 13.    COUNTERPARTS.

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

          SECTION 14.    HEADINGS.

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

<PAGE>
   15

               SECTION 15. GOVERNING LAW.

               THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE PRINCIPLES OF THE CONFLICT OF LAWS THEREOF.

               SECTION 16. JURISDICTION; FORUM; SERVICE OF PROCESS.

               Any action or proceeding arising under or relating to this letter
or any of the transactions contemplated hereby may only be brought in the United
States District Court for the Southern District of New York or the courts of the
State of New York located in the County of New York. Each party hereto submits
to personal jurisdiction of each such court with respect to any action or
proceeding arising under or relating to this Agreement or any of the
transactions contemplated hereby and waives any objection to the laying of venue
in such courts and any claim that any such action or proceeding has been brought
in an inconvenient forum. To the extent permitted by law, any judgment in
respect of a dispute arising under or relating to this Agreement may be enforced
in any other jurisdiction within or outside the United States by suit on the
judgment, a certified copy of such judgment being conclusive evidence of the
fact and amount of such judgment. The Securityholder hereby irrevocably appoints
the person listed on the signature page hereof as its agent for service of
process in connection with any action or proceeding arising under or relating to
this Agreement and any of the transactions contemplated hereby. Each party
hereto agrees that personal service of process may be effected by any of the
means specified in Section 12 hereof, addressed to such party. The foregoing
shall not limit the rights of any party to serve process in any other manner
permitted by law.

               SECTION 17. 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
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.

               SECTION 18. SUCCESSORS AND ASSIGNS.

               This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto, including without
limitation and without the need for an express assignment to, any subsequent
Holder of the Registrable Securities.

               SECTION 19. ENTIRE AGREEMENT.

               This Agreement is intended by the parties as a final expression
of their agreement and is intended to be a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
<PAGE>
16

      IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Registration Rights Agreement as of the date first written above.

                                    INFOGRAMES, INC.

                                    By:
                                       -------------------------------------
                                       Name:
                                       Title:

                                    CALIFORNIA U.S. HOLDINGS, INC.

                                    By:
                                       -------------------------------------
                                       Name:
                                       Title:

<PAGE>
17

                                   SCHEDULE 1

California U.S. Holdings, Inc.
c/o Infogrames Entertainment S.A.
84, rue du ler Mars 1943
Villeurbanne, 69100
France
Attention: Thomas Schmider
Telecopy: (011 33) 472 655116
Conform: (011 33) 472 655000

and

Attention:  Frederic Monnereau
Telecopy:  (011 33) 472 655062
Confirm:  (011 33) 472 655000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]