Document:

Exhibit 4.3

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

Dated as of February 4, 2004

 

Among

 

ADVANCED ACCESSORY HOLDINGS
CORPORATION

 

and

 

BEAR, STEARNS & CO. INC.,

as Initial Purchaser

 

 

13 1/4% Senior Discount Notes
due 2011

 

 

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Exchange
  Offer

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Shelf Registration

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Additional Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registration Procedures

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registration Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Indemnification and Contribution

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Rules 144 and 144A

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Underwritten Registrations

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Miscellaneous

  	
   

  

 

i

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is dated
as of February 4, 2004, between ADVANCED ACCESSORY HOLDINGS CORPORATION, a
Delaware corporation (the “Issuer”) and BEAR, STEARNS & CO. INC.,  as initial purchaser (the “Initial Purchaser”).

 

This Agreement is entered into in connection with the Purchase
Agreement by and between the Issuer and the Initial Purchaser, dated as of
January 28, 2004 (the “Purchase Agreement”), which provides for, among
other things, the sale by the Issuer to the Initial Purchaser of $88,000,000
principal amount at maturity of its 13 1/4% Senior Discount Notes due 2011
(the “Securities”).  In order to
induce the Initial Purchaser to enter into the Purchase Agreement, the Issuer
has agreed to provide the registration rights set forth in this Agreement for
the benefit of the Initial Purchaser and any subsequent holder or holders of
the Securities.  The execution and
delivery of this Agreement is a condition to the Initial Purchaser’s obligation
to purchase the Securities under the Purchase Agreement.

 

The parties hereby agree as follows:

 

1.                                       Definitions

 

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

 

Accreted Value:  Shall have the meaning assigned thereto in the Indenture.

 

Additional Interest:  See Section 4(a) hereto.

 

Advice: 
See the last paragraph of Section 5 hereto.

 

Agreement: 
See the introductory paragraphs hereto.

 

Applicable Period:  See Section 2(b) hereto.

 

Blackout Period: See Section 3(d) hereto.

 

Business Day: 
Any day that is not a Saturday, Sunday or a day on which banking
institutions in New York are authorized or required by law to be closed.

 

Effectiveness Date:  With respect to (i) the Exchange Offer Registration
Statement, the 150th day after the Issue Date and (ii) any Shelf
Registration Statement, the 150th day after the Filing Date with respect thereto;
provided, however, that if the Effectiveness

 

 

Date would otherwise fall on a
day that is not a Business Day, then the Effectiveness Date shall be the next
succeeding Business Day.

 

Effectiveness Period:  See Section 3(a) hereto.

 

Event Date: 
See Section 4 hereto.

 

Exchange Act: 
The Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

Exchange Notes:  See Section 2(a) hereto.

 

Exchange Offer:  See Section 2(a) hereto.

 

Exchange Offer Registration Statement:  See Section 2(a) hereto.

 

Filing Date: 
(A) With respect to the Exchange Offer Registration Statement, the
90th day after the Issue Date; and (B) in any other case (which may be
applicable notwithstanding the consummation of the Exchange Offer), the 90th
day after the delivery of a Shelf Notice as required pursuant to Section 2(c)
hereto; provided, however, that if the Filing Date would
otherwise fall on a day that is not a Business Day, then the Filing Date shall
be the next succeeding Business Day.

 

Full Accretion Date:  Shall have the meaning assigned thereto in the Indenture.

 

Holder: 
Any holder of a Registrable Note or Registrable Notes.

 

Indenture: 
The Indenture, dated as of February 4, 2004, by and between the Issuer
and BNY Trust Midwest Company, as Trustee, pursuant to which the Securities are
being issued, as amended or supplemented from time to time in accordance with
the terms thereto.

 

Information: 
See Section 5(n) hereto.

 

Initial Purchaser:  See the introductory paragraphs hereto.

 

Initial Shelf Registration:  See Section 3(a) hereto.

 

Inspectors: 
See Section 5(n) hereto.

 

Issue Date: 
February 4, 2004, the date of original issuance of the Securities.

 

Issuer: 
See the introductory paragraphs hereto.

 

2

 

NASD: 
See Section 5(r) hereto.

 

Participant: 
See Section 7(a) hereto.

 

Participating Broker-Dealer:  See Section 2(b) hereto.

 

Person: 
An individual, trustee, corporation, partnership, limited liability
company, joint stock company, trust, unincorporated association, union,
business association, firm or other legal entity.

 

Private Exchange:  See Section 2(b) hereto.

 

Private Exchange Notes:  See Section 2(b) hereto.

 

Prospectus: 
The prospectus included in any Registration Statement (including,
without limitation, any prospectus subject to completion and a prospectus that
includes any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A under the Securities
Act and any term sheet filed pursuant to Rule 434 under the Securities
Act), as amended or supplemented by any prospectus supplement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

 

Purchase Agreement:  See the introductory paragraphs hereto.

 

Records: 
See Section 5(n) hereto.

 

Registrable Notes:  Each Security upon its original issuance and at all times
subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereto
is applicable upon original issuance and at all times subsequent thereto and
each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until, in each case, the earliest to occur of (i) a
Registration Statement (other than, with respect to any Exchange Note as to
which Section 2(c)(iv) hereto is applicable, the Exchange Offer
Registration Statement) covering such Security, Exchange Note or Private
Exchange Note has been declared effective by the SEC and such Security,
Exchange Note or such Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Registration Statement,
(ii) such Security has been exchanged pursuant to the Exchange Offer for
an Exchange Note or Exchange Notes that may be resold without restriction under
state and federal securities laws, (iii) such Security, Exchange Note or
Private Exchange Note, as the case may be, ceases to be outstanding for
purposes of the Indenture or (iv) such Security, Exchange Note or Private
Exchange Note, as the case may be, may be resold without restriction pursuant
to Rule 144(k) (as amended or replaced) under the Securities Act.

 

3

 

Registration Statement:  Any registration statement of the Issuer
that covers any of the Securities, the Exchange Notes or the Private Exchange
Notes filed with the SEC under the Securities Act, including the Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.

 

Rule 144: 
Rule 144 under the Securities Act.

 

Rule 144A: 
Rule 144A under the Securities Act.

 

Rule 405: 
Rule 405 under the Securities Act.

 

Rule 415: 
Rule 415 under the Securities Act.

 

Rule 424: 
Rule 424 under the Securities Act.

 

SEC: 
The United States Securities and Exchange Commission or any successor
agency thereto.

 

Securities: 
See the introductory paragraphs hereto.

 

Securities Act:  The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

Shelf Notice: 
See Section 2(c) hereto.

 

Shelf Registration:  See Section 3(b) hereto.

 

Shelf Registration Statement:  Any Registration Statement relating to a
Shelf Registration.

 

Subsequent Shelf Registration:  See Section 3(b) hereto.

 

TIA: 
The Trust Indenture Act of 1939, as amended.

 

Trustee: 
The trustee under the Indenture and the trustee (if any) under any
indenture governing the Exchange Notes and Private Exchange Notes.

 

Underwritten registration or underwritten offering:  A registration in which securities of the
Issuer are sold to an underwriter for reoffering to the public.

 

Except as
otherwise specifically provided, all references in this Agreement to acts,
laws, statutes, rules, regulations, releases, forms, no-action letters and
other regulatory

 

4

 

requirements (collectively, “Regulatory
Requirements”) shall be deemed to refer also to any amendments thereto and
all subsequent Regulatory Requirements adopted as a replacement thereto having
substantially the same effect therewith; provided that Rule 144
shall not be deemed to amend or replace Rule 144A.

 

2.                                       Exchange Offer

 

(a)                                  Unless
the Exchange Offer would violate applicable law or any applicable
interpretation of the staff of the SEC, the Issuer shall file with the SEC, no
later than the Filing Date, a Registration Statement (the “Exchange Offer
Registration Statement”) on an appropriate registration form with respect to a
registered offer (the “Exchange Offer”) to exchange any and all of the
Registrable Notes for a like aggregate principal amount at maturity of debt
securities of the Issuer (the “Exchange Notes”), that are identical in all
material respects to the Securities, except that (i) the Exchange Notes
shall contain no restrictive legend thereon and (ii) interest thereon shall
accrue from the last date on which interest was paid or accreted on the
Securities or, if no such interest has been paid or accreted, from the Issue
Date, and which are entitled to the benefits of the Indenture or a trust
indenture which is identical in all material respects to the Indenture (other
than such changes to the Indenture or any such other trust indenture as are
necessary to comply with the TIA) and which, in either case, has been qualified
under the TIA.  The Exchange Offer shall
comply with all applicable tender offer rules and regulations under the Exchange
Act and other applicable laws.  The
Issuer shall use its reasonable best efforts to (x) cause the Exchange
Offer Registration Statement to be declared effective under the Securities Act
on or before the Effectiveness Date; (y) keep the Exchange Offer open for
at least 30 days (or longer if required by applicable law) after the date that
notice of the Exchange Offer is mailed to Holders; and (z) consummate the
Exchange Offer on or prior to the 180th day following the Issue Date.

 

Each Holder
(including, without limitation, each Participating Broker-Dealer) who
participates in the Exchange Offer will be required to represent to the Issuer
in writing (which may be contained in the applicable letter of transmittal)
that:  (i) any Exchange Notes
acquired in exchange for Registrable Notes tendered are being acquired in the
ordinary course of business of the Person receiving such Exchange Notes,
whether or not such recipient is such Holder itself; (ii) at the time of
the commencement or consummation of the Exchange Offer neither such Holder nor,
to the actual knowledge of such Holder, any other Person receiving Exchange
Notes from such Holder has an arrangement or understanding with any Person to
participate in the distribution of the Exchange Notes in violation of the
provisions of the Securities Act; (iii) neither the Holder nor, to the
actual knowledge of such Holder, any other Person receiving Exchange Notes from
such Holder is an “affiliate” (as defined in Rule 405) of the Issuer or,
if it is an affiliate of the Issuer, it will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable
and will provide information to be included in the Shelf Registration Statement
in accordance with

 

5

 

Section 5 hereto in order to
have their Securities included in the Shelf Registration Statement and benefit
from the provisions regarding Additional Interest in Section 4 hereto;
(iv) neither such Holder nor, to the actual knowledge of such Holder, any
other Person receiving Exchange Notes from such Holder is engaging in or
intends to engage in a distribution of the Exchange Notes; and (v) if such
Holder is a Participating Broker-Dealer, such Holder has acquired the
Registrable Notes as a result of market-making activities or other trading
activities and that it will comply with the applicable provisions of the
Securities Act (including, but not limited to, the prospectus delivery
requirements thereunder).

 

Upon
consummation of the Exchange Offer in accordance with this Section 2, the
provisions of this Agreement shall continue to apply solely with respect to
Registrable Notes that are Private Exchange Notes, Exchange Notes as to which
Section 2(c)(iv) is applicable and Exchange Notes held by Participating
Broker-Dealers, and the Issuer shall have no further obligation to register
Registrable Notes (other than Private Exchange Notes and Exchange Notes as to
which clause 2(c)(iv) hereto applies) pursuant to Section 3 hereto.

 

No securities
other than the Exchange Notes shall be included in the Exchange Offer
Registration Statement.

 

(b)                                 The
Issuer shall include within the Prospectus contained in the Exchange Offer
Registration Statement a section entitled “Plan of Distribution,” reasonably acceptable
to the Initial Purchaser, which shall contain a summary statement of the
positions taken or policies made by the staff of the SEC with respect to the
potential “underwriter” status of any broker-dealer that is the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes
received by such broker-dealer in the Exchange Offer (a “Participating
Broker-Dealer”), whether such positions or policies have been publicly
disseminated by the staff of the SEC or such positions or policies represent
the prevailing views of the staff of the SEC. 
Such “Plan of Distribution” section shall also expressly permit, to the
extent permitted by applicable policies and regulations of the SEC, the use of
the Prospectus by all Persons subject to the prospectus delivery requirements
of the Securities Act, including, to the extent permitted by applicable
policies and regulations of the SEC, all Participating Broker-Dealers, and
include a statement describing the means by which Participating Broker-Dealers
may resell the Exchange Notes in compliance with the Securities Act.

 

The Issuer
shall use its reasonable best efforts to keep the Exchange Offer Registration
Statement effective and to amend and supplement the Prospectus contained
therein in order to permit such Prospectus to be lawfully delivered by all
Persons subject to the prospectus delivery requirements of the Securities Act
for such period of time as is necessary to comply with applicable law in
connection with any resale of the Exchange Notes; provided, however,
that such period shall not be required to exceed 90 days or such longer period
if extended pursuant to the last paragraph of Section 5 hereto (the “Applicable
Period”).

 

6

 

If, prior to
consummation of the Exchange Offer, the Initial Purchaser holds any Securities
acquired by it that have the status of an unsold allotment in the initial
distribution, the Issuer upon the request of the Initial Purchaser shall
simultaneously with the delivery of the Exchange Notes issue and deliver to the
Initial Purchaser, in exchange (the “Private Exchange”) for such
Securities held by any such Holder, a like principal amount at maturity of
notes (the “Private Exchange Notes”) of the Issuer that are identical in
all material respects to the Exchange Notes except for the placement of a
restrictive legend on such Private Exchange Notes.  The Private Exchange Notes shall be issued pursuant to the same
indenture as the Exchange Notes and bear the same CUSIP number as the Exchange
Notes.

 

In connection
with the Exchange Offer, the Issuer shall:

 

(1)                                  mail,
or cause to be mailed, to each Holder of record entitled to participate in the
Exchange Offer a copy of the Prospectus forming part of the Exchange Offer
Registration Statement, together with an appropriate letter of transmittal and
related documents;

 

(2)                                  use
its reasonable best efforts to keep the Exchange Offer open for not less than
30 days after the date that notice of the Exchange Offer is mailed to Holders
(or longer if required by applicable law);

 

(3)                                  utilize
the services of a depositary for the Exchange Offer with an address in the Borough
of Manhattan, The City of New York;

 

(4)                                  permit
Holders to withdraw tendered Securities at any time prior to the close of business,
New York time, on the last Business Day on which the Exchange Offer remains
open; and

 

(5)                                  otherwise
comply in all material respects with all applicable laws, rules and
regulations.

 

As soon as practicable after the close of the Exchange Offer and the
Private Exchange, if any, the Issuer shall:

 

(1)                                  accept
for exchange all Registrable Notes validly tendered and not validly withdrawn
pursuant to the Exchange Offer and the Private Exchange, if any;

 

(2)                                  deliver
to the Trustee for cancellation all Registrable Notes so accepted for exchange;
and

 

(3)                                  cause
the Trustee to authenticate and deliver promptly to each Holder of Securities,
Exchange Notes or Private Exchange Notes, as the case may be, equal in

 

7

 

principal
amount at maturity to the Securities of such Holder so accepted for exchange; provided
that, in the case of any Securities held in global form by a depositary, authentication
and delivery to such depositary of one or more replacement Securities in global
form in an equivalent principal amount at maturity thereto for the account of
such Holders in accordance with the Indenture shall satisfy such authentication
and delivery requirement.

 

The Exchange
Offer and the Private Exchange shall not be subject to any conditions, other
than that (i) the Exchange Offer or Private Exchange, as the case may be,
does not violate applicable law or any applicable interpretation of the staff
of the SEC; (ii) no action or proceeding shall have been instituted or
threatened in any court or by any governmental agency which might materially
impair the ability of the Issuer to proceed with the Exchange Offer or the
Private Exchange, and no material adverse development shall have occurred in
any existing action or proceeding with respect to the Issuer; and
(iii) all governmental approvals shall have been obtained, which approvals
the Issuer deems necessary for the consummation of the Exchange Offer or
Private Exchange.

 

The Exchange
Notes and the Private Exchange Notes shall be issued under (i) the
Indenture or (ii) an indenture identical in all material respects to the
Indenture and which, in either case, has been qualified under the TIA or is
exempt from such qualification and shall provide that the Exchange Notes shall
not be subject to the transfer restrictions set forth in the Indenture.  The Indenture or such indenture shall
provide that the Exchange Notes, the Private Exchange Notes and the Securities
shall vote and consent together on all matters as one class and that none of
the Exchange Notes, the Private Exchange Notes or the Securities will have the
right to vote or consent as a separate class on any matter.

 

(c)                                  If,
(i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuer is not permitted to effect
the Exchange Offer, (ii) the Exchange Offer is not consummated within 180
days of the Issue Date, (iii) the Initial Purchaser or any holder of
Private Exchange Notes so requests in writing to the Issuer at any time after
the consummation of the Exchange Offer, or (iv) in the case of any Holder
that participates in the Exchange Offer, such Holder does not receive Exchange
Notes on the date of the exchange that may be sold without restriction under
state and federal securities laws (other than due solely to the status of such
Holder as an affiliate of the Issuer within the meaning of the Securities Act)
and so notifies the Issuer within 30 days after such Holder first becomes aware
of such restrictions, in the case of each of clauses (i) to and including (iv)
of this sentence, then the Issuer shall promptly deliver to the Holders and the
Trustee written notice thereto (the “Shelf Notice”) and shall file a Shelf
Registration pursuant to Section 3 hereto.

 

8

 

3.                                       Shelf Registration

 

If at any time
a Shelf Notice is delivered as contemplated by Section 2(c) hereto, then:

 

(a)                                  Shelf
Registration.  The Issuer shall as
promptly as practicable file with the SEC a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all of
the Registrable Notes (the “Initial Shelf Registration”).  The Issuer shall use its reasonable best
efforts to file with the SEC the Initial Shelf Registration on or prior to the
applicable Filing Date.  The Initial
Shelf Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, one or more underwritten
offerings).  The Issuer shall not permit
any securities other than the Registrable Notes to be included in the Initial
Shelf Registration or any Subsequent Shelf Registration (as defined below).

 

The Issuer shall use its reasonable best efforts to cause the Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date and, subject to Section 3(d), to keep the Initial Shelf
Registration continuously effective under the Securities Act until the date
that is two years from the Issue Date or such shorter period ending when all
Registrable Notes cease to be Registrable Notes, or all Registrable Notes covered
by the Initial Shelf Registration have been sold in the manner set forth and as
contemplated in the Initial Shelf Registration or, if applicable, a Subsequent
Shelf Registration (as may be extended pursuant to the last paragraph of
Section 5 hereto, the “Effectiveness Period”); provided, however,
that the Effectiveness Period in respect of the Initial Shelf Registration
shall be extended to the extent required to permit dealers to comply with the
applicable prospectus delivery requirements of Rule 174 under the Securities
Act and as otherwise provided herein and shall be subject to reduction to the
extent that the applicable provisions of Rule 144(k) are amended or revised to
reduce the two year holding period set forth therein.

 

(b)                                 Withdrawal
of Stop Orders; Subsequent Shelf Registrations.  If the Initial Shelf Registration or any Subsequent Shelf
Registration ceases to be effective for any reason at any time during the
Effectiveness Period (other than because of the sale of all of the Securities
registered thereunder), the Issuer shall use its reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereto,
and in any event shall within 30 days of such cessation of effectiveness
amend such Shelf Registration Statement in a manner to obtain the withdrawal of
the order suspending the effectiveness thereto, or file an additional Shelf
Registration Statement pursuant to Rule 415 covering all of the Registrable
Notes covered by and not sold under the Initial Shelf Registration or an
earlier Subsequent Shelf Registration (each, a

 

9

 

“Subsequent
Shelf Registration”).  If a Subsequent
Shelf Registration is filed, the Issuer shall use its reasonable best efforts
to cause the Subsequent Shelf Registration to be declared effective under the
Securities Act as soon as practicable after such filing and to keep such
subsequent Shelf Registration continuously effective for a period equal to the
number of days in the Effectiveness Period less the aggregate number of days
during which the Initial Shelf Registration or any Subsequent Shelf
Registration was previously continuously effective.  As used herein the term “Shelf Registration” means the Initial
Shelf Registration and any Subsequent Shelf Registration.

 

(c)                                  Supplements
and Amendments.  The Issuer shall
promptly supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount at
maturity of the Registrable Notes (or their counsel) covered by such
Registration Statement with respect to the information included therein with
respect to one or more of such Holders, or by any underwriter of such
Registrable Notes with respect to the information included therein with respect
to such underwriter.

 

(d)                                 Blackout
Period.  Notwithstanding anything to
the contrary in this Agreement, the Issuer, upon notice to the Holders of
Registrable Notes, may suspend the use of the Prospectus included in any Shelf
Registration Statement in the event that and for a period of time (a “Blackout
Period”) not to exceed an aggregate of 60 days in any twelve month period
if (1) the Board of Directors of CHAAS Holdings, LLC, the direct parent of the
Issuer (the “Parent”), or the Board of Directors of the Issuer determines that
the disclosure of an event, occurrence or other item at such time could
reasonably be expected to have a material adverse effect on the business,
operations or prospects of the Issuer and its subsidiaries or (2) the
disclosure otherwise relates to a material business transaction which has not
been publicly disclosed and such Board of Directors of the Parent or the Issuer
determines, in good faith, that any such disclosure would jeopardize the
success of such transaction or that disclosure of the transaction is prohibited
pursuant to the terms thereto; provided, that, upon the termination of
such Blackout Period, the Issuer promptly shall notify the Holders of
Registrable Notes that such Blackout Period has been terminated.

 

4.                                       Additional Interest

 

(a)                                  The
Issuer and the Initial Purchaser agree that the Holders will suffer damages if
the Issuer fails to fulfill its obligations under Section 2 or
Section 3 hereto and that it would not be feasible to ascertain the extent
of such damages with precision.  Accordingly,
the Issuer agrees to pay, as liquidated damages, in accordance with Section
4(b) below, additional

 

10

 

interest on the Securities
(“Additional Interest”) under the circumstances and to the extent set forth
below (each of which shall be given independent effect):

 

(i)                                     if
(A) neither the Exchange Offer Registration Statement nor the Initial Shelf
Registration has been filed on or prior to the Filing Date applicable thereto
or (B) notwithstanding that the Issuer has consummated or will consummate the
Exchange Offer, the Issuer is required to file a Shelf Registration and such
Shelf Registration is not filed on or prior to the Filing Date applicable
thereto, then, commencing on the day after any such Filing Date, Additional
Interest shall accrue on the Accreted Value of the Securities at a rate of
0.50% per annum for the first 90 days immediately following such applicable
Filing Date, and such Additional Interest rate shall increase by an additional
0.50% per annum at the beginning of each subsequent 90-day period; or

 

(ii)                                  if
(A) neither the Exchange Offer Registration Statement nor the Initial Shelf
Registration is declared effective by the SEC on or prior to the Effectiveness
Date applicable thereto or (B) notwithstanding that the Issuer has
consummated or will consummate the Exchange Offer, the Issuer is required to
file a Shelf Registration and such Shelf Registration is not declared effective
by the SEC on or prior to the Effectiveness Date applicable to such Shelf
Registration, then, commencing on the day after such Effectiveness Date,
Additional Interest shall accrue on the Accreted Value of the Securities at a
rate of 0.50% per annum for the first 90 days immediately following the day
after such Effectiveness Date, and such Additional Interest rate shall increase
by an additional 0.50% per annum at the beginning of each subsequent 90-day
period; or

 

(iii)                               if
(A) the Issuer has not exchanged Exchange Notes for all Securities validly
tendered in accordance with the terms of the Exchange Offer on or prior to the
180th day after the Issue Date or (B) if applicable, a Shelf Registration
has been declared effective and such Shelf Registration ceases to be effective
at any time during the Effectiveness Period (other than during any Blackout
Period relating to such Shelf Registration), then Additional Interest shall
accrue on the Accreted Value of the Securities at a rate of 0.50% per annum for
the first 90 days commencing on the (x) 181st day after the Issue Date, in
the case of (A) above, or (y) the day such Shelf Registration ceases to be
effective in the case of (B) above, and such Additional Interest rate shall increase
by an additional 0.50% per annum at the beginning of each such subsequent
90-day period;

 

provided, however, that (1) the
Additional Interest rate on the Securities may not accrue under more than one
of the foregoing clauses (i) - (iii) at any one time and at no time shall the
aggregate amount of additional interest accruing exceed in the aggregate 1.5%
per annum and (2) Additional Interest shall not accrue under clause (iii)(B)
above during the continuation of

 

11

 

a Blackout Period; provided, further, however,
that (1) upon the filing of the applicable Exchange Offer Registration
Statement or the applicable Shelf Registration as required hereunder (in the
case of clause (i) above of this Section 4), (2) upon the
effectiveness of the Exchange Offer Registration Statement or the applicable
Shelf Registration Statement as required hereunder (in the case of clause (ii)
of this Section 4), or (3) upon the exchange of the Exchange Notes
for all Securities tendered (in the case of clause (iii)(A) of this
Section 4), or upon the effectiveness of the applicable Shelf Registration
Statement which had ceased to remain effective (in the case of (iii)(B) of this
Section 4), Additional Interest on the Securities in respect of which such
events relate as a result of such clause (or the relevant subclause thereto),
as the case may be, shall cease to accrue.

 

(b)                                 The
Issuer shall notify the Trustee within two Business Days after each and every
date on which an event occurs in respect of which Additional Interest is
required to be paid (an “Event Date”). 
Any amounts of Additional Interest due pursuant to (a)(i), (a)(ii) or
(a)(iii) of this Section 4 will be (i) if on or prior to the Full
Accretion Date, added to the Accreted Value of each Note and (ii) if after the
Full Accretion Date, payable in cash, in each case, semiannually on each June
15 and December 15 (to the holders of record on the June 1 and December 1
immediately preceding such dates), commencing with the first such date
occurring after any such Additional Interest commences to accrue.  The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest rate by the Accreted
Value of the Registrable Notes, multiplied by a fraction, the numerator of
which is the number of days such Additional Interest rate was applicable during
such period (determined on the basis of a 360 day year comprised of twelve
30 day months and, in the case of a partial month, the actual number of
days elapsed), and the denominator of which is 360.  No Additional Interest shall accrue with respect to Securities
that are not Registrable Notes.

 

(c)                                  The
parties hereto agree that the Additional Interest provided for in this Section
4 constitutes the sole damages that will be suffered by Holders of Registrable
Notes by reason of the occurrence of any of the events described in Section
4(a)(i)-(iii) hereto.

 

5.                                       Registration Procedures

 

In connection
with the filing of any Registration Statement pursuant to Section 2 or 3
hereto, the Issuer shall effect such registrations to permit the sale of the
securities covered thereby in accordance with the intended method or methods of
disposition thereto, and pursuant thereto and in connection with any
Registration Statement filed by the Issuer hereunder the Issuer shall:

 

(a)                                  Prepare
and file with the SEC prior to the applicable Filing Date a Registration
Statement or Registration Statements as prescribed by Section 2 or 3
hereto, and use its reasonable best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein;
provided, however, that if

 

12

 

(1) such
filing is pursuant to Section 3 hereto or (2) a Prospectus contained
in the Exchange Offer Registration Statement filed pursuant to Section 2
hereto is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto from whom the Issuer has received written
notice that it will be a Participating Broker-Dealer in the Exchange Offer,
before filing any Registration Statement or Prospectus or any amendments or supplements
thereto, the Issuer shall furnish to and afford the Holders of the Registrable
Notes covered by such Registration Statement (with respect to a Registration
Statement filed pursuant to Section 3 hereto) or each such Participating
Broker-Dealer (with respect to any such Registration Statement), as the case
may be, their counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed (in each case at least five business days prior to such
filing).  The Issuer shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto
if the Holders of a majority in aggregate principal amount at maturity of the
Registrable Notes covered by such Registration Statement, their counsel, or the
managing underwriters, if any, shall reasonably object on a timely basis.

 

(b)                                 Prepare
and file with the SEC such amendments and post-effective amendments to each
Shelf Registration Statement or Exchange Offer Registration Statement, as the
case may be, as may be necessary to keep such Registration Statement continuously
effective for the Effectiveness Period, the Applicable Period or until
consummation of the Exchange Offer, as the case may be; cause the related Prospectus
to be supplemented by any Prospectus supplement required by applicable law, and
as so supplemented to be filed pursuant to Rule 424; and comply with the
provisions of the Securities Act and the Exchange Act applicable to it with
respect to the disposition of all securities covered by such Registration Statement
as so amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus; provided that, to the extent relating to a
Shelf Registration Statement, none of the foregoing shall be required during a
Blackout Period.  Other than during any
Blackout Period with respect to a Shelf Registration Statement, the Issuer
shall be deemed not to have used its reasonable best efforts to keep a
Registration Statement effective if the Issuer voluntarily takes any action
that would result in selling Holders of the Registrable Notes covered thereby
or Participating Broker-Dealers seeking to sell Exchange Notes not being able
to sell such Registrable Notes or such Exchange Notes during that period unless
such action is required by applicable law or permitted by this Agreement.

 

13

 

(c)                                  If
(1) a Shelf Registration is filed pursuant to Section 3 hereto, or
(2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereto is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period relating thereto from whom the Issuer has
received written notice that it will be a Participating Broker-Dealer in the
Exchange Offer, notify the selling Holders of Registrable Notes (with respect
to a Registration Statement filed pursuant to Section 3 hereto), or each
such Participating Broker-Dealer (with respect to any such Registration
Statement), as the case may be, their counsel and the managing underwriters, if
any, promptly (but in any event within one business day), and confirm such
notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective
under the Securities Act (including in such notice a written statement that any
Holder may, upon request, obtain, at the sole expense of the Issuer, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules, documents incorporated or deemed
to be incorporated by reference and exhibits), (ii) of the issuance by the
SEC of any stop order suspending the effectiveness of a Registration Statement
or of any order preventing or suspending the use of any preliminary prospectus
or the initiation of any proceedings for that purpose, (iii) if at any
time when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange Notes by
Participating Broker-Dealers the representations and warranties of the Issuer
contained in any agreement (including any underwriting agreement) contemplated
by Section 5(m) hereto cease to be true and correct, (iv) of the
receipt by the Issuer of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or
any of the Registrable Notes or the Exchange Notes to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event, the existence of any condition or any information
becoming known that makes any statement made in such Registration Statement or
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in or amendments or supplements to such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and (vi) of the Issuer’s determination

 

14

 

that a
post-effective amendment to a Registration Statement would be appropriate.

 

(d)                                 Use
its reasonable best efforts to prevent the issuance of any order suspending the
effectiveness of a Registration Statement or of any order preventing or suspending
the use of a Prospectus or suspending the qualification (or exemption from
qualification) of any of the Registrable Notes or the Exchange Notes to be sold
by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any
such order is issued, to use its reasonable best efforts to obtain the withdrawal
of any such order at the earliest practicable moment.

 

(e)                                  Subject
to Section 3(d), if a Shelf Registration is filed pursuant to Section 3
and if requested during the Effectiveness Period by the managing underwriter or
underwriters (if any), the Holders of a majority in aggregate principal amount
at maturity of the Registrable Notes being sold in connection with an
underwritten offering or any Participating Broker-Dealer, (i) as promptly
as practicable incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriter or underwriters (if
any), such Holders, any Participating Broker-Dealer or counsel for any of them
reasonably request to be included therein, (ii) make all required filings
of such prospectus supplement or such post-effective amendment as soon as practicable
after the Issuer has received notification of the matters to be incorporated in
such prospectus supplement or post-effective amendment, and
(iii) supplement or make amendments to such Registration Statement.

 

(f)                                    If
(1) a Shelf Registration is filed pursuant to Section 3 hereto, or
(2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereto is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, furnish to each selling Holder of
Registrable Notes (with respect to a Registration Statement filed pursuant to
Section 3 hereto) and to each such Participating Broker-Dealer who so
requests (with respect to any such Registration Statement) and to their
respective counsel and each managing underwriter, if any, at the sole expense
of the Issuer, one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment thereto, including financial
statements and schedules, and, if requested, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits.

 

(g)                                 If
(1) a Shelf Registration is filed pursuant to Section 3 hereto, or
(2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereto is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, deliver

 

15

 

to each
selling Holder of Registrable Notes (with respect to a Registration Statement
filed pursuant to Section 3 hereto), or each such Participating
Broker-Dealer (with respect to any such Registration Statement), as the case
may be, their respective counsel, and the underwriters, if any, at the sole
expense of the Issuer, as many copies of the Prospectus or Prospectuses
(including each form of preliminary prospectus) and each amendment or
supplement thereto and any documents incorporated by reference therein as such
Persons may reasonably request; and, subject to the last paragraph of this
Section 5, the Issuer hereby consents to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be,
and the underwriters or agents, if any, and dealers, if any, in connection with
the offering and sale of the Registrable Notes covered by, or the sale by
Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus
and any amendment or supplement thereto.

 

(h)                                 Prior
to any public offering of Registrable Notes or any delivery of a Prospectus contained
in the Exchange Offer Registration Statement by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, use its
reasonable best efforts to register or qualify, and to cooperate with the
selling Holders of Registrable Notes or each such Participating Broker-Dealer,
as the case may be, the managing underwriter or underwriters, if any, and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable Notes
for offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any selling Holder, Participating Broker-Dealer, or
the managing underwriter or underwriters reasonably request in writing; provided,
however, that where Exchange Notes held by Participating Broker-Dealers
or Registrable Notes are offered other than through an underwritten offering,
the Issuer agrees to cause its counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to this Section 5(h),
keep each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Notes held by Participating
Broker-Dealers or the Registrable Notes covered by the applicable Registration
Statement; provided, however, that the Issuer shall not be required to
(A) qualify generally to do business in any jurisdiction where it is not
then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
(C) subject itself to taxation in excess of $1,000 in any such
jurisdiction where it is not then so subject.

 

(i)                                     If a Shelf
Registration is filed pursuant to Section 3 hereto, cooperate with the
selling Holders of Registrable Notes and the managing underwriter or
underwriters,

 

16

 

if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Notes to be sold, which certificates
shall not bear any restrictive legends and shall be in a form eligible for
deposit with The Depository Trust Company; and enable such Registrable Notes to
be in such denominations (subject to applicable requirements contained in the
Indenture) and registered in such names as the managing underwriter or
underwriters, if any, or Holders may request.

 

(j)                                     If (1) a
Shelf Registration is filed pursuant to Section 3 hereto, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereto is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereto, as promptly as
practicable (except, in the case of a Shelf Registration, during a Blackout
Period) prepare and (subject to Section 5(a) hereto) file with the SEC, at
the sole expense of the Issuer, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes being sold thereunder (with respect to a
Registration Statement filed pursuant to Section 3 hereto) or to the
purchasers of the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer (with respect to any such Registration Statement),
any such Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

 

(k)                                  Use its reasonable
best efforts to cause the Registrable Notes covered by a Registration Statement
or the Exchange Notes, as the case may be, to be rated with the appropriate
rating agencies (unless such Securities are already so rated), if so requested
by the Holders of a majority in aggregate principal amount at maturity of
Registrable Notes covered by such Registration Statement or the Exchange Notes,
as the case may be, or the managing underwriter or underwriters, if any.

 

(l)                                     Prior to the
effective date of the first Registration Statement relating to the Registrable
Notes, (i) provide the Trustee with certificates for the Registrable Notes
in a form eligible for deposit with The Depository Trust Company and
(ii) provide a CUSIP number for the Registrable Notes.

 

(m)                               In connection with any
underwritten offering of Registrable Notes pursuant to a Shelf Registration,
enter into an underwriting agreement as is customary in underwritten offerings
of debt securities similar to the Securities, and take all such other actions
as are reasonably requested by the managing underwriter or underwriters

 

17

 

in order to expedite or facilitate the registration or the disposition
of such Registrable Notes and, in such connection, (i) make such representations
and warranties to, and covenants with, the underwriters with respect to the
business of the Issuer (including any acquired business, properties or entity,
if applicable), and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, as are customarily made by issuers to underwriters in underwritten
offerings of debt securities similar to the Securities, and confirm the same in
writing if and when requested; (ii) obtain the written opinions of counsel
to the Issuer, and written updates thereto in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters, addressed
to the underwriters covering the matters customarily covered in opinions reasonably
requested in underwritten offerings; (iii) obtain “cold comfort” letters
and updates thereto in form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters from the independent certified public
accountants of the Issuer  (and, if
necessary, any other independent certified public accountants of the Issuer, or
of any business acquired by the Issuer, for which financial statements and
financial data are, or are required to be, included or incorporated by reference
in the Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type customarily
covered in “cold comfort” letters in connection with underwritten offerings of
debt securities similar to the Securities; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions
and procedures no less favorable to the sellers and underwriters, if any, than
those set forth in Section 7 hereto (or such other provisions and
procedures reasonably acceptable to Holders of a majority in aggregate
principal amount at maturity of Registrable Notes covered by such Registration
Statement and the managing underwriter or underwriters or agents, if any).  The above shall be done at each closing
under such underwriting agreement, or as and to the extent required thereunder.

 

(n)                                 If (1) a Shelf
Registration is filed pursuant to Section 3 hereto, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereto is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, make available for inspection by the
Initial Purchaser, any selling Holder of such Registrable Notes being sold
(with respect to a Registration Statement filed pursuant to Section 3
hereto), or each such Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Notes, if any, and any
attorney, accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer (with respect to any such Registration
Statement), as the case may be, or underwriter (any such Initial Purchaser,
Holders, Participating Broker-Dealers, underwriters, attorneys, accountants or
agents, collectively, the “Inspectors”), upon written request, at the
offices where normally kept, during reasonable business

 

18

 

hours, all pertinent financial and other records, pertinent corporate
documents and instruments of the Issuer and subsidiaries of the Issuer
(collectively, the “Records”), as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and
cause the officers, directors and employees of the Issuer and any of its
subsidiaries to supply all information (“Information”) reasonably requested
by any such Inspector in connection with such due diligence
responsibilities.  Each Inspector shall
agree in writing that it will keep the Records and Information confidential and
that it will not disclose any of the Records or Information that the Issuer determines,
in good faith, to be confidential and notifies the Inspectors in writing are confidential
unless (i) the release of such Records or Information is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction,
(ii) disclosure of such Records or Information is necessary or advisable,
in the opinion of counsel for any Inspector, in connection with any action,
claim, suit or proceeding, directly or indirectly, involving or potentially
involving such Inspector and arising out of, based upon, relating to, or
involving this Agreement or the Purchase Agreement, or any transactions
contemplated hereby or thereby or arising hereunder or thereunder, or
(iii) the information in such Records or Information has been made generally
available to the public other than by an Inspector or an “affiliate” (as
defined in Rule 405) thereto; provided, however, that prior
notice shall be provided as soon as practicable to the Issuer of the potential
disclosure of any information by such Inspector pursuant to clause (i) of
this sentence and such Inspector shall allow the Issuer to undertake
appropriate action to prevent disclosure of such Records or Information at the
Issuer’s expense.

 

(o)                                 Provide an indenture
trustee for the Registrable Notes or the Exchange Notes, as the case may be,
and cause the Indenture or the trust indenture provided for in
Section 2(a) hereto, as the case may be, to be qualified under the TIA not
later than the effective date of the first Registration Statement relating to
the Registrable Notes; and in connection therewith, cooperate with the trustee
under any such indenture and the Holders of the Registrable Notes, to effect
such changes (if any) to such indenture as may be required for such indenture
to be so qualified in accordance with the terms of the TIA; and execute, and
use its reasonable best efforts to cause such trustee to execute, all documents
as may be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such indenture to be so qualified
in a timely manner.

 

(p)                                 Comply with all
applicable rules and regulations of the SEC and make generally available to its
securityholders with regard to any applicable Registration Statement, a
consolidated earnings statement satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end
of any fiscal quarter (or 90 days

 

19

 

after the end of any 12-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable Notes
are sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Parent, after
the effective date of a Registration Statement, which statements shall cover
said 12-month periods.

 

(q)                                 Upon consummation of
the Exchange Offer or a Private Exchange, if so requested by the Trustee,
obtain an opinion of counsel to the Issuer, in a form customary for
underwritten transactions, addressed to the Trustee for the benefit of all Holders
of Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or Private Exchange
Notes, as the case may be, and the related indenture constitute legal, valid
and binding obligations of the Issuer, enforceable against the Issuer in
accordance with their respective terms, subject to customary exceptions and
qualifications.  If the Exchange Offer
or a Private Exchange is to be consummated, upon delivery of the Registrable
Notes by Holders to the Issuer (or to such other Person as directed by the
Issuer), in exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be, the Issuer shall mark, or cause to be marked, on such Registrable
Notes that such Registrable Notes are being cancelled in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be; in no event
shall such Registrable Notes be marked as paid or otherwise satisfied.

 

(r)                                    Cooperate with each
seller of Registrable Notes covered by any Registration Statement and each
underwriter, if any, participating in the disposition of such Registrable Notes
and their respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the “NASD”).

 

(s)                                  Use its reasonable
best efforts to take all other steps necessary to effect the registration of
the Exchange Notes and/or Registrable Notes covered by a Registration Statement
contemplated hereby.

 

The Issuer may require each seller of Registrable Notes as to which any
registration is being effected to furnish to the Issuer such information
regarding such seller and the distribution of such Registrable Notes as the
Issuer may, from time to time, reasonably request.  The Issuer may exclude from such registration the Registrable
Notes of any seller so long as such seller fails to furnish such information
within a reasonable time after receiving such request.  Each seller as to which any Shelf
Registration is being effected agrees to furnish promptly to the Issuer all
information required to be disclosed in order to make the information
previously furnished to the Issuer by such seller not materially misleading.

 

20

 

If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder
shall have the right to require (i) the insertion therein of language, in
form and substance reasonably satisfactory to such Holder, to the effect that
the holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the securities
covered thereby and that such holding does not imply that such Holder will
assist in meeting any future financial requirements of the Issuer, or
(ii) in the event that such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal statute then in
force, the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.

 

Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by its acquisition of such Registrable Notes or Exchange Notes to be
sold by such Participating Broker-Dealer, as the case may be, that, upon actual
receipt of any notice from the Issuer (i) of the happening of any event of the
kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereto
or (ii) of the commencement of a Blackout Period, such Holder will forthwith
discontinue disposition of such Registrable Notes covered by such Registration
Statement (other than any Exchange Offer Registration Statement in the case of
a Blackout Period) or Prospectus or Exchange Notes to be sold by such Holder or
Participating Broker-Dealer, as the case may be, until (x) in the case of the
immediately preceding clause (i), such Holder’s or Participating
Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(j) hereto, or until it is advised in writing
(the “Advice”) by the Issuer that the use of the applicable Prospectus
may be resumed, and has received copies of any amendments or supplements
thereto or (y) in the case of the immediately preceding clause (ii) the earlier
of (A) 60 days of after the commencement of such Blackout Period and (B)
receipt of notice from the Issuer that such Blackout Period has ended.  In the event that the Issuer shall give any
such notice, each of the Applicable Period and the Effectiveness Period shall
be extended by the number of days during such periods from and including the
date of the giving of such notice to and including the date when the
requirements of the immediately preceding clause (x) or (y), as the case may
be, shall have been met.

 

6.                                       Registration Expenses

 

All fees and expenses incident to the performance of or compliance with
this Agreement by the Issuer (other than any underwriting discounts or
commissions) shall be borne by the Issuer, whether or not the Exchange Offer
Registration Statement or any Shelf Registration Statement is filed or becomes
effective or the Exchange Offer is consummated, including, without limitation,
(i) all registration and filing fees (including, without limitation,
(A) fees with respect to filings required to be made with the NASD in
connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky

 

21

 

laws (including, without limitation, fees and disbursements of counsel
in connection with Blue Sky qualifications of the Registrable Notes or Exchange
Notes and determination of the eligibility of the Registrable Notes or Exchange
Notes for investment under the laws of such jurisdictions (x) where the
holders of Registrable Notes are located, in the case of the Exchange Notes, or
(y) as provided in Section 5(h) hereto, in the case of Registrable
Notes or Exchange Notes to be sold by a Participating Broker-Dealer during the
Applicable Period)), (ii) printing expenses, including, without
limitation, expenses of printing certificates for Registrable Notes or Exchange
Notes in a form eligible for deposit with The Depository Trust Company and of
printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, by the Holders of a majority in
aggregate principal amount at maturity of the Registrable Notes included in any
Registration Statement or in respect of Registrable Notes or Exchange Notes to
be sold by any Participating Broker-Dealer during the Applicable Period, as the
case may be, (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Issuer and, in the case of
a Shelf Registration, reasonable fees and disbursements of one special counsel
for all of the sellers of Registrable Notes (exclusive of any counsel retained
pursuant to Section 7 hereto), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(m)(iii)
hereto (including, without limitation, the expenses of any “cold comfort”
letters required by or incident to such performance), (vi) Securities Act
liability insurance, if the Issuer desires such insurance, (vii) fees and
expenses of all other Persons retained by the Issuer, (viii) internal
expenses of the Issuer (including, without limitation, all salaries and
expenses of officers and employees of the Issuer performing legal or accounting
duties), (ix) the expense of any annual audit, (x) any fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange, and the obtaining of a rating of the
securities, in each case, if applicable, and (xi) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, indentures and any other documents necessary in order
to comply with this Agreement.

 

7.                                       Indemnification and Contribution

 

(a)                                  The
Issuer agrees to indemnify and hold harmless each Holder of Registrable Notes
and each Participating Broker-Dealer selling Exchange Notes during the
Applicable Period, and each Person, if any, who controls such Person or its
affiliates within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act (each, a “Participant”) against any losses, claims, damages
or liabilities to which any Participant may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon:

 

(i)                                     any
untrue statement or alleged untrue statement made by the Issuer contained in
any application or any other document or any amendment or supplement thereto
executed by the Issuer based upon written information furnished by or on behalf

 

22

 

of the Issuer filed
in any jurisdiction in order to qualify the Securities under the securities or
“Blue Sky” laws thereto or filed with the SEC or any securities association or
securities exchange (each, an “Application”);

 

(ii)                                  
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement (or any amendment thereto) or Prospectus (as
amended or supplemented if the Issuer shall have furnished any amendments or
supplements thereto) or any preliminary prospectus; or

 

(iii)                               the
omission or alleged omission to state, in any Registration Statement (or any
amendment thereto) or Prospectus (as amended or supplemented if the Issuer
shall have furnished any amendments or supplements thereto) or any preliminary
prospectus or any Application or any other document or any amendment or
supplement thereto, a material fact required to be stated therein or necessary
to make the statements therein not misleading;

 

and will reimburse, as incurred, the Participant for any reasonable
legal or other expenses incurred by the Participant in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however,
(i) the Issuer will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Registration Statement (or any amendment thereto) or Prospectus (as amended
or supplemented if the Issuer shall have furnished any amendments or
supplements thereto) or any preliminary prospectus or Application or any
amendment or supplement thereto in reliance upon and in conformity with information
relating to any Participant furnished to the Issuer by such Participant
specifically for use therein, and (ii) the Issuer shall not be liable to any
Participant under the indemnity agreement in this subsection (a) with respect
to a preliminary prospectus (or Prospectus before amendment or supplement) to
the extent that any such loss, claim, damage or liability of such Participant
results from the fact that such Participant sold Securities to a Person as to
whom it shall be established that there was not sent or given, at or prior to
the written confirmation of such sale, a copy of the Prospectus (or the
Prospectus as then amended or supplemented if the Issuer shall have furnished
such Participant with copies of such amendment or supplement thereto sufficient
to allow for a timely distribution prior to the confirmation of the sale to
such Participant), in any case where such delivery is required by applicable
law and the loss, claim, damage or liability of such Participant results from
an untrue statement or omission of a material fact contained in the preliminary
prospectus which was corrected in the Prospectus (or in the Prospectus as then
amended or supplemented if the Issuer shall have furnished such Participant
with copies of such amendment or supplement thereto sufficient to allow for a
timely distribution prior to the confirmation of the sale to such
Participant).  The indemnity provided
for in this Section 7 will be in addition to any liability that the Issuer
may otherwise have to

 

23

 

the indemnified parties.  The
Issuer shall not be liable under this Section 7 for any settlement of any
claim or action effected without its prior written consent, which shall not be
unreasonably withheld.

 

(b)                                 Each
Participant, severally and not jointly, agrees to indemnify and hold harmless
the Issuer, its directors and managers, as applicable, its officers and each
Person, if any, who controls the Issuer within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any losses, claims, damages
or liabilities to which the Issuer or any such director, manager, officer or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
Application, Registration Statement or Prospectus, any amendment or supplement
thereto, or any preliminary prospectus, or (ii) the omission or the
alleged omission to state therein a material fact necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Participant, furnished to the Issuer by the
Participant, specifically for use therein; and subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses incurred by the Issuer or any such director, manager, officer
or controlling person in connection with investigating or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action in respect thereto.  The indemnity provided for in this Section 7 will be in
addition to any liability that the Participants may otherwise have to the
indemnified parties.  The Participants
shall not be liable under this Section 7 for any settlement of any claim
or action effected without their consent, which shall not be unreasonably
withheld.  The Issuer shall not, without
the prior written consent of such Participant, effect any settlement or compromise
of any pending or threatened proceeding in respect of which any Participant is
or could have been a party, or indemnity could have been sought hereunder by
any Participant, unless such settlement (A) includes an unconditional
written release of the Participants from all liability on claims that are the
subject matter of such proceeding and (B) does not include any statement as to
an admission of fault, culpability or failure to act by or on behalf of any
Participant.

 

(c)                                  Promptly
after receipt by an indemnified party under this Section 7 of notice of
the commencement of any action for which such indemnified party is entitled to
indemnification under this Section 7, such indemnified party will, if a claim
in respect thereto is to be made against the indemnifying party under this
Section 7, notify the indemnifying party of the commencement thereof in
writing; but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to
the extent such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to

 

24

 

any indemnified party other
than the indemnification obligation provided in paragraphs (a) and (b)
above.  In case any such action is
brought against any indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after receipt
by the indemnifying party of notice of the institution of such action, then, in
each such case, the indemnifying party shall not have the right to direct the
defense of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties.  After notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof and
approval by such indemnified party of counsel appointed to defend such action,
the indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the immediately
preceding sentence (it being understood, however, that in connection with such
action the indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to one local counsel in any jurisdiction) in
any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by Participants who sold a majority in aggregate principal amount at
maturity of the Registrable Notes and Exchange Notes sold by all such
Participants in the case of paragraph (a) of this Section 7 or the Issuer in
the case of paragraph (b) of this Section 7, representing the indemnified
parties under such paragraph (a) or paragraph (b), as the case may
be, who are parties to such action or actions) or (ii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party
at the expense of the indemnifying party. 
All fees and expenses reimbursed pursuant to this paragraph (c) shall be
reimbursed as they are incurred following receipt of supporting
documentation.  After such notice from
the indemnifying party to such indemnified party, the indemnifying party will
not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld), unless
such indemnified party waived in writing its rights under this Section 7,
in which case the indemnified party may effect such a settlement without such
consent.

 

25

 

(d)                                 In
circumstances in which the indemnity agreement provided for in the preceding
paragraphs of this Section 7 is unavailable to, or insufficient to hold
harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from
the offering of the Securities or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party or parties on
the one hand and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect
thereof).  The relative benefits
received by the Issuer on the one hand and such Participant on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) of the Securities received by the Issuer bear to
the total gain (if any) excluding expenses received by such Participant in
connection with the sale of the Securities. 
The relative fault of the parties shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer on the one hand, or the Participants
on the other, the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in
the circumstances.  The parties agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d).  Notwithstanding any other provision of this paragraph (d), no
Participant shall be obligated to make contributions hereunder that in the
aggregate exceed the total gain (if any) received by such Participant in
connection with the sale of the Securities, less the aggregate amount of any
damages that such Participant has otherwise been required to pay by reason of
the untrue or alleged untrue statements or the omissions or alleged omissions
to state a material fact, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  For purposes of this
paragraph (d), each person, if any, who controls a Participant within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Participants, and each director
of the Issuer, each officer of the Issuer and each person, if any, who controls
the Issuer within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the Issuer.

 

26

 

8.                                       Rules 144 and 144A

 

The Issuer covenants and agrees that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner in accordance
with the requirements of the Securities Act and the Exchange Act and, if at any
time the Issuer is not required to file such reports, the Issuer will, upon the
request of any Holder or beneficial owner of Registrable Notes, make available
such information necessary to permit sales pursuant to Rule 144A.  The Issuer further covenants and agrees, for
so long as any Registrable Notes remain outstanding that it will take such
further action as any Holder of Registrable Notes may reasonably request, all
to the extent required from time to time to enable such holder to sell
Registrable Notes without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144(k) under the Securities
Act and Rule 144A.

 

9.                                       Underwritten Registrations

 

If any of the Registrable Notes covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount at maturity of such
Registrable Notes included in such offering and shall be reasonably acceptable
to the Issuer.

 

No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder’s
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements.

 

10.                                 Miscellaneous

 

(a)                                  No
Inconsistent Agreements.  The Issuer
has not, as of the date hereof, and the Issuer shall not, after the date of
this Agreement, enter into any agreement with respect to any of its securities
that is inconsistent with the rights granted to the Holders of Registrable
Notes in this Agreement or otherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunder
do not in any way conflict with and are not inconsistent with the rights
granted to the holders of the Issuer’s other issued and outstanding securities
under any such agreements.  The Issuer
will not enter into any agreement with respect to any of its securities which will
grant to any Person piggy-back registration rights with respect to any
Registration Statement.

 

27

 

(b)                                 Adjustments
Affecting Registrable Notes.  Except
in compliance with Section 10(c), the Issuer shall not, directly or indirectly,
take any action with respect to the Registrable Notes as a class that would
adversely affect the ability of the Holders of Registrable Notes to include
such Registrable Notes in a registration undertaken pursuant to this Agreement.

 

(c)                                  Amendments
and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, otherwise than with
the prior written consent of (I) the Issuer, and (II)(A) the Holders
of not less than a majority in aggregate principal amount at maturity of the
then outstanding Registrable Notes and (B) in circumstances that would
adversely affect the Participating Broker-Dealers, the Participating Broker-Dealers
holding not less than a majority in aggregate principal amount at maturity of
the Exchange Notes held by all Participating Broker-Dealers; provided, however,
that Section 7 and this Section 10(c) may not be amended, modified or
supplemented without the prior written consent of each Holder and each
Participating Broker-Dealer (including any person who was a Holder or
Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case
may be, disposed of pursuant to any Registration Statement) affected by any
such amendment, modification or supplement. 
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereto with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement may be given by Holders of at least a majority in
aggregate principal amount at maturity of the Registrable Notes being sold
pursuant to such Registration Statement.

 

(d)                                 Notices.  All notices and other communications
(including, without limitation, any notices or other communications to the
Trustee) provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or facsimile:

 

(i)                                     if
to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the
most current address of such Holder or Participating Broker-Dealer, as the case
may be, set forth on the records of the registrar under the Indenture, with a
copy in like manner to the Initial Purchaser as follows:

 

	
   

  	
  Bear, Stearns & Co. Inc.

  
	
   

  	
  383 Madison Avenue

  
	
   

  	
  New York, New York 10179

  
	
   

  	
  Facsimile No.:  (212) 272-3092

  
	
   

  	
  Attention:  Corporate Finance
  Department

  

 

28

 

	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Cahill Gordon & Reindel LLP

  
	
   

  	
  80 Pine Street

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Facsimile No.:  (212) 269-5420

  
	
   

  	
  Attention:  John A. Tripodoro,
  Esq.

  

 

(ii)                                  if
to the Initial Purchaser, at the address specified in Section 10(d)(i);

 

(iii)                               if
to the Issuer, at the address as follows:

 

	
   

  	
  c/o

  	
  Advanced Accessory Systems, LLC

  
	
   

  	
   

  	
  12900 Hall Road, Suite 200

  
	
   

  	
   

  	
  Sterling Heights, Michigan 48313

  
	
   

  	
   

  	
  Facsimile No.:  (586) 997-6839

  
	
   

  	
   

  	
  Attention:  Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Schulte Roth & Zabel LLP

  
	
   

  	
  919 Third Avenue

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Facsimile No.: (212) 593-5955

  
	
   

  	
  Attention:  Michael R.
  Littenberg, Esq.

  

 

All such notices and communications shall be deemed to have been duly
given:  when delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; one Business Day after being timely delivered to a
next-day air courier; and when receipt is acknowledged by the addressee, if
sent by facsimile.

 

Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.

 

(e)                                  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, the Holders and the Participating Broker-Dealers; provided,
however, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Registrable Notes in violation of the terms of
the Purchase Agreement or the Indenture.

 

29

 

(f)                                    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.

 

(g)                                 Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereto.

 

(h)                                 Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD REQUIRE THE
APPLICATION OF ANY OTHER LAW.

 

(i)                                     Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.

 

(j)                                     Securities
Held by the Issuer or Its Affiliates. 
Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the Issuer
or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

 

(k)                                  Third-Party
Beneficiaries.  Holders of
Registrable Notes and Participating Broker-Dealers are intended third-party
beneficiaries of this Agreement, and this Agreement may be enforced by such
Persons.

 

(l)                                     Entire
Agreement.  This Agreement, together
with the Purchase Agreement and the Indenture, is intended by the parties as a
final and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein and any
and all prior oral or written agreements, representations, or warranties,
contracts, understandings, correspondence, conversations and memoranda between
the Holders on the one hand and the Issuer on the other, or between or among
any

 

30

 

agents, representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect to the subject
matter hereto and thereto are merged herein and replaced hereby.

 

31

 

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

 

	
   

  	
  ADVANCED ACCESSORY HOLDINGS

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Barry Steele

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Barry Steele

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
						

 

S-1

 

The foregoing Agreement is hereby

confirmed and accepted as of the date

first above written.

 

 

	
  BEAR, STEARNS & CO. INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  /s/ James S. Wolfe

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James S. Wolfe

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

 

S-2<Page>

                                                                    Exhibit 10.2

                          MOMENTA PHARMACEUTCIALS, INC.

                            2004 STOCK INCENTIVE PLAN

1.      PURPOSE

        The purpose of this 2004 Stock Incentive Plan (the "Plan") of Momenta
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), is to advance the
interests of the Company's stockholders by enhancing the Company's ability to
attract, retain and motivate persons who are expected to make important
contributions to the Company and by providing such persons with equity ownership
opportunities and performance-based incentives that are intended to better align
their interests with those of the Company's stockholders. Except where the
context otherwise requires, the term "Company" shall include any of the
Company's present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code") and any other business venture
(including, without limitation, joint venture or limited liability company) in
which the Company has a controlling interest, as determined by the Board of
Directors of the Company (the "Board").

2.      ELIGIBILITY

        All of the Company's employees, officers, directors, consultants and
advisors are eligible to receive options, restricted stock awards, stock
appreciation rights and other stock-based awards (each, an "Award") under the
Plan. Each person who receives an Award under the Plan is deemed a
"Participant".

3.      ADMINISTRATION AND DELEGATION

        (a) ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered
by the Board. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. All decisions by the Board
shall be made in the Board's sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award. No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.

        (b) APPOINTMENT OF COMMITTEES. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). All references in
the Plan to the "Board" shall mean the Board or a Committee of the Board or the
officers referred to in Section 3(c) to the extent that the Board's powers or
authority under the Plan have been delegated to such Committee or officers.

        (c) DELEGATION TO OFFICERS. To the extent permitted by applicable law,
the Board may delegate to one or more officers of the Company the power to grant
Awards to employees or

<Page>

officers of the Company or any of its present or future subsidiary corporations
and to exercise such other powers under the Plan as the Board may determine,
provided that the Board shall fix the terms of the Awards to be granted by such
officers (including the exercise price of such Awards, which may include a
formula by which the exercise price will be determined) and the maximum number
of shares subject to Awards that the officers may grant; provided further,
however, that no officer shall be authorized to grant Awards to any "executive
officer" of the Company (as defined by Rule 3b-7 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) or to any "officer" of the Company
(as defined by Rule 16a-1 under the Exchange Act).

4.      STOCK AVAILABLE FOR AWARDS

        (a) NUMBER OF SHARES. Subject to adjustment under Section 10, Awards may
be made under the Plan for up to the number of shares of the Company's common
stock, par value $0.0001 per share (the "Common Stock"), that is equal to the
sum of:

                (1)     3,084,988 shares of Common Stock; plus

                (2)     an annual increase to be added on the first day of each
of the Company's fiscal years during the period beginning in fiscal year 2005
and ending on the second day of fiscal year 2013 equal to the lowest of (i)
1,542,494 shares of Common Stock, (ii) 5% of the outstanding shares on such date
and (iii) an amount determined by the Board.

        Notwithstanding clause (2) above, in no event shall the number of shares
available under this Plan be increased as set forth in clause (2) to the extent
such increase, in addition to any other increases proposed by the Board in the
number of shares available for issuance under all other employee or director
stock plans, including, without limitation, employee stock purchase plans, would
result in the total number of shares then available for issuance under all
employee and director stock plans exceeding 25% of the outstanding shares of the
Company on the first day of the applicable fiscal year.

        If any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part (including as
the result of shares of Common Stock subject to such Award being repurchased by
the Company at the original issuance price pursuant to a contractual repurchase
right) or results in any Common Stock not being issued, the unused Common Stock
covered by such Award shall again be available for the grant of Awards under the
Plan, subject, however, in the case of Incentive Stock Options, to any
limitations under the Code. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury shares.

        (b) PER-PARTICIPANT LIMIT. Subject to adjustment under Section 10, for
Awards granted after the Common Stock is registered under the Exchange Act, the
maximum number of shares of Common Stock with respect to which Awards may be
granted to any Participant under the Plan shall be 400,000 per calendar year.
The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code ("Section 162(m)").

                                       -2-
<Page>

5.      STOCK OPTIONS

        (a) GENERAL. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".

        (b) INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of Momenta Pharmaceuticals,
Inc., any of Momenta Pharmaceutical Inc.'s present or future parent or
subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and
any other entities the employees of which are eligible to receive Incentive
Stock Options under the Code, and shall be subject to and shall be construed
consistently with the requirements of Section 422 of the Code. The Company shall
have no liability to a Participant, or any other party, if an Option (or any
part thereof) that is intended to be an Incentive Stock Option is not an
Incentive Stock Option or for any action taken by the Board pursuant to Section
11(f), including without limitation the conversion of an Incentive Stock Option
to a Nonstatutory Stock Option.

        (c) EXERCISE PRICE. The Board shall establish the exercise price of each
Option and specify such exercise price in the applicable option agreement.

        (d) DURATION OF OPTIONS. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement; provided, however, that no Option will be granted
for a term in excess of 10 years.

        (e) EXERCISE OF OPTION. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.

        (f) PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:

(1)     in cash or by check, payable to the order of the Company;

(2)     except as the Board may otherwise provide in an option agreement, by (i)
delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price and any required tax withholding or (ii) delivery by the Participant to
the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price and any required tax withholding;

(3)     when the Common Stock is registered under the Exchange Act, by delivery
of shares of Common Stock owned by the Participant valued at their fair market
value as determined by (or in a manner approved by) the Board ("Fair Market
Value"), provided (i) such method of payment

                                       -3-
<Page>

is then permitted under applicable law, (ii) such Common Stock, if acquired
directly from the Company, was owned by the Participant at least six months
prior to such delivery and (iii) such Common Stock is not subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements;

(4)     to the extent permitted by applicable law and by the Board, by (i)
delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) payment of such other lawful consideration as
the Board may determine; or

(5)     by any combination of the above permitted forms of payment.

        (g) SUBSTITUTE OPTIONS. In connection with a merger or consolidation of
an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Board may grant Options in substitution for any options
or other stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5 or in Section 2.

6.      DIRECTOR OPTIONS.

        (a) INITIAL GRANT. Upon the commencement of service on the Board by any
individual who is not then an employee of the Company or any subsidiary of the
Company, the Company shall grant to such person a Nonstatutory Stock Option to
purchase no more than 30,000 shares of Common Stock (subject to adjustment under
Section 10).

        (b) ANNUAL GRANT. Subject to an annual evaluation, which evaluation
shall be overseen by the Corporation's Nominating and Corporate Governance
Committee, on the date of each annual meeting of stockholders of the Company,
the Company shall grant to each member of the Board of Directors of the Company
who is both serving as a director of the Company immediately prior to and
immediately following such annual meeting and who is not then an employee of the
Company or any of its subsidiaries, a Nonstatutory Stock Option to purchase no
more than 15,000 shares of Common Stock (subject to adjustment under Section
10); provided, however, that a director shall not be eligible to receive an
option grant under this Section 6(b) until such director has served on the Board
for at least six months.

        (c) TERMS OF DIRECTOR OPTIONS. Options granted under this Section 6
shall (i) have an exercise price equal to the last reported sale price of the
Common Stock on The Nasdaq Stock Market or the national securities exchange
on which the Common Stock is then traded on the trading date immediately
prior to the date of grant (and if the Common Stock is not then traded on The
Nasdaq Stock Market or a national securities exchange, the fair market value
of the Common Stock on such date as determined by the Board), (ii) expire on
the earlier of 10 years from the date of grant or three months following
termination of service on the Board and (iii) contain such other terms and
conditions as the Board shall determine.

                                       -4-
<Page>

7.      STOCK APPRECIATION RIGHTS.

        (a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right, or
SAR, is an Award entitling the holder on exercise to receive an amount in cash
or Common Stock or a combination thereof (such form to be determined by the
Board) determined in whole or in part by reference to appreciation, from and
after the date of grant, in the fair market value of a share of Common Stock.
SARs may be based solely on appreciation in the fair market value of Common
Stock or on a comparison of such appreciation with some other measure of market
growth such as (but not limited to) appreciation in a recognized market index.
The date as of which such appreciation or other measure is determined shall be
the exercise date unless another date is specified by the Board in the SAR
Award.

        (b) GRANTS. Stock Appreciation Rights may be granted in tandem with, or
independently of, Options granted under the Plan.

(1)     RULES APPLICABLE TO TANDEM AWARDS. When Stock Appreciation Rights are
expressly granted in tandem with Options, (i) the Stock Appreciation Right will
be exercisable only at such time or times, and to the extent, that the related
Option is exercisable and will be exercisable in accordance with the procedure
required for exercise of the related Option; (ii) the Stock Appreciation Right
will terminate and no longer be exercisable upon the termination or exercise of
the related Option, except that a Stock Appreciation Right granted with respect
to less than the full number of shares covered by an Option will not be reduced
until the number of shares as to which the related Option has been exercised or
has terminated exceeds the number of shares not covered by the Stock
Appreciation Right; (iii) the Option will terminate and no longer be exercisable
upon the exercise of the related Stock Appreciation Right; and (iv) the Stock
Appreciation Right will be transferable only with the related Option.

(2)     EXERCISE OF INDEPENDENT STOCK APPRECIATION RIGHTS. A Stock Appreciation
Right not expressly granted in tandem with an Option will become exercisable at
such time or times, and on such conditions, as the Board may specify in the SAR
Award.

        (c) EXERCISE. Any exercise of a Stock Appreciation Right must be in
writing, signed by the proper person and delivered or mailed to the Company,
accompanied by any other documents required by the Board.

8.      RESTRICTED STOCK.

        (a) GRANTS. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").

        (b) TERMS AND CONDITIONS. The Board shall determine the terms and
conditions of a Restricted Stock Award, including the conditions for repurchase
(or forfeiture) and the issue price, if any.

                                       -5-
<Page>

        (c) STOCK CERTIFICATES. Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the
expiration of the applicable restriction periods, the Company (or such designee)
shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a
manner determined by the Board, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant's death (the
"Designated Beneficiary"). In the absence of an effective designation by a
Participant, "Designated Beneficiary" shall mean the Participant's estate.

        (d) DEFERRED DELIVERY OF SHARES. The Board may, at the time any
Restricted Stock Award is granted, provide that, at the time Common Stock would
otherwise be delivered pursuant to the Award, the Participant shall instead
receive an instrument evidencing the right to future delivery of Common Stock at
such time or times, and on such conditions, as the Board shall specify. The
Board may at any time accelerate the time at which delivery of all or any part
of the Common Stock shall take place.

9.      OTHER STOCK-BASED AWARDS.

        Other Awards of shares of Common Stock, and other Awards that are valued
in whole or in part by reference to, or are otherwise based on, shares of Common
Stock or other property, may be granted hereunder to Participants ("Other Stock
Unit Awards"), including without limitation Awards entitling recipients to
receive shares of Common Stock to be delivered in the future. Such Other Stock
Unit Awards shall also be available as a form of payment in the settlement of
other Awards granted under the Plan or as payment in lieu of compensation to
which a Participant is otherwise entitled. Other Stock Unit Awards may be paid
in shares of Common Stock or cash, as the Board shall determine. Subject to the
provisions of the Plan, the Board shall determine the conditions of each Other
Stock Unit Awards, including any purchase price applicable thereto. At the time
any Award is granted, the Board may provide that, at the time Common Stock would
otherwise be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the Participant's right to future delivery of
the Common Stock.

10.     ADJUSTMENTS FOR CHANGES IN COMMON STOCK AND CERTAIN OTHER EVENTS.

        (a) CHANGES IN CAPITALIZATION. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than an ordinary
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share of each outstanding Option and
each Option issuable under Section 6, (iv) the repurchase price per share
subject to each outstanding Restricted Stock Award and (v) the share- and
per-share-related provisions of each outstanding Stock Appreciation Right and
Other Stock Unit Award, shall be appropriately adjusted by the Company (or
substituted Awards may be made, if applicable) to the extent determined by the
Board.

                                       -6-
<Page>

        (b) REORGANIZATION EVENTS.

(1)     DEFINITION. A "Reorganization Event" shall mean: (a) any merger or
consolidation of the Company with or into another entity as a result of which
all of the Common Stock of the Company is converted into or exchanged for the
right to receive cash, securities or other property, (b) any exchange of all of
the Common Stock of the Company for cash, securities or other property pursuant
to a share exchange transaction or (c) any liquidation or dissolution of the
Company.

(2)     CONSEQUENCES OF A REORGANIZATION EVENT ON AWARDS OTHER THAN RESTRICTED
STOCK AWARDS. In connection with a Reorganization Event, the Board shall take
any one or more of the following actions as to all or any outstanding Awards on
such terms as the Board determines: (i) provide that Awards shall be assumed, or
substantially equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), (ii) upon written notice to a
Participant, provide that the Participant's unexercised Options or other
unexercised Awards shall become exercisable in full and will terminate
immediately prior to the consummation of such Reorganization Event unless
exercised by the Participant within a specified period following the date of
such notice, (iii) provide that outstanding Awards shall become realizable or
deliverable, or restrictions applicable to an Award shall lapse, in whole or in
part prior to or upon such Reorganization Event, (iv) in the event of a
Reorganization Event under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for each share surrendered in
the Reorganization Event (the "Acquisition Price"), make or provide for a cash
payment to a Participant equal to (A) the Acquisition Price times the number of
shares of Common Stock subject to the Participant's Options or other Awards (to
the extent the exercise price does not exceed the Acquisition Price) minus (B)
the aggregate exercise price of all such outstanding Options or other Awards, in
exchange for the termination of such Options or other Awards, (v) provide that,
in connection with a liquidation or dissolution of the Company, Awards shall
convert into the right to receive liquidation proceeds (if applicable, net of
the exercise price thereof) and (vi) any combination of the foregoing.

                For purposes of clause (i) above, an Option shall be considered
assumed if, following consummation of the Reorganization Event, the Option
confers the right to purchase, for each share of Common Stock subject to the
Option immediately prior to the consummation of the Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the consideration received as a result
of the Reorganization Event is not solely common stock of the acquiring or
succeeding corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value to the per share consideration received
by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.

                To the extent all or any portion of an Option becomes
exercisable solely as a result of clause (ii) above, the Board may provide that
upon exercise of such Option the

                                       -7-
<Page>

Participant shall receive shares subject to a right of repurchase by the Company
or its successor at the Option exercise price; such repurchase right (x) shall
lapse at the same rate as the Option would have become exercisable under its
terms and (y) shall not apply to any shares subject to the Option that were
exercisable under its terms without regard to clause (ii) above.

(3)     CONSEQUENCES OF A REORGANIZATION EVENT ON RESTRICTED STOCK AWARDS. Upon
the occurrence of a Reorganization Event other than a liquidation or dissolution
of the Company, the repurchase and other rights of the Company under each
outstanding Restricted Stock Award shall inure to the benefit of the Company's
successor and shall apply to the cash, securities or other property which the
Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied to the Common
Stock subject to such Restricted Stock Award. Upon the occurrence of a
Reorganization Event involving the liquidation or dissolution of the Company,
except to the extent specifically provided to the contrary in the instrument
evidencing any Restricted Stock Award or any other agreement between a
Participant and the Company, all restrictions and conditions on all Restricted
Stock Awards then outstanding shall automatically be deemed terminated or
satisfied.

11.     GENERAL PROVISIONS APPLICABLE TO AWARDS

        (a) TRANSFERABILITY OF AWARDS. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution or, other than in the case of an Incentive Stock
Option, pursuant to a qualified domestic relations order, and, during the life
of the Participant, shall be exercisable only by the Participant. References to
a Participant, to the extent relevant in the context, shall include references
to authorized transferees.

        (b) DOCUMENTATION. Each Award shall be evidenced in such form (written,
electronic or otherwise) as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.

        (c) BOARD DISCRETION. Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.

        (d) TERMINATION OF STATUS. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, or the Participant's legal
representative, conservator, guardian or Designated Beneficiary, may exercise
rights under the Award.

        (e) WITHHOLDING. Each Participant shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by law
to be withheld in connection with an Award to such Participant. Except as the
Board may otherwise provide in an Award, for so long as the Common Stock is
registered under the Exchange Act, Participants may satisfy such tax obligations
in whole or in part by delivery of shares of Common Stock, including shares
retained from the Award creating the tax obligation, valued at their Fair Market
Value;

                                       -8-
<Page>

provided, however, that the total tax withholding where stock is being used to
satisfy such tax obligations cannot exceed the Company's minimum statutory
withholding obligations (based on minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes, that are applicable to
such supplemental taxable income). Shares surrendered to satisfy tax withholding
requirements cannot be subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements. The Company may, to the extent permitted
by law, deduct any such tax obligations from any payment of any kind otherwise
due to a Participant.

        (f) AMENDMENT OF AWARD. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

        (g) CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

        (h) ACCELERATION. The Board may at any time provide that any Award shall
become immediately exercisable in full or in part, free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

12.     MISCELLANEOUS

        (a) NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

        (b) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired

                                       -9-
<Page>

upon such Option exercise, notwithstanding the fact that such shares were not
outstanding as of the close of business on the record date for such stock
dividend.

        (c) EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on
the date on which it is adopted by the Board, but no Award may be granted unless
and until the Plan has been approved by the Company's stockholders. No Awards
shall be granted under the Plan after the completion of 10 years from the
earlier of (i) the date on which the Plan was adopted by the Board or (ii) the
date the Plan was approved by the Company's stockholders, but Awards previously
granted may extend beyond that date.

        (d) AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time; provided that, to the extent determined
by the Board, no amendment requiring stockholder approval under any applicable
legal, regulatory or listing requirement shall become effective until such
stockholder approval is obtained. No Award shall be made that is conditioned
upon stockholder approval of any amendment to the Plan.

        (e) PROVISIONS FOR FOREIGN PARTICIPANTS. The Board may modify Awards or
Options granted to Participants who are foreign nationals or employed outside
the United States or establish subplans or procedures under the Plan to
recognize differences in laws, rules, regulations or customs of such foreign
jurisdictions with respect to tax, securities, currency, employee benefit or
other matters.

        (f) GOVERNING LAW. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

                                      -10-

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