Document:

ASSIGNMENT AND AMENDMENT NO. 1 TO NOTE AGREEMENT

      This Assignment and Amendment No. 1 to Note Agreement (the  "Assignment"),
dated as of January 22, 2007, among FTS Group,  Inc., a Nevada  corporation (the
"Company" and/or "Payor"),  Richard E. Miller (the "Assignor"),  and the parties
identified on Schedule A hereto (each a "Assignee", and collectively "Assignees"
and/or "Payees").

      WHEREAS,  in connection with a Stock Purchase  Agreement  between Assignor
and the  Company  dated  January  3,  2006,  the  Company  issued to  Assignor a
self-liquidating  Promissory Note in the principal amount of $3,500,000 ("Note")
secured by 10,000 common shares of See World  Satellites  Inc.,  pursuant to the
terms of a Stock Escrow  Agreement  dated January 3, 2006 and subject to Section
2.1(D) below ("SWE Shares"); and

      WHEREAS,  the Assignor desires to assign $1,000,000 worth of his ownership
interest  in the  Note  to  Assignees,  and the  Assignees  desire  to  purchase
$1,000,000  worth of  ownership  interest  in the Note from the  Assignor on the
terms set forth in this Agreement.

      NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement,  and for  other  good and  valuable  consideration  the  receipt  and
adequacy of which are hereby acknowledged, the parties agree as follows:

                                    ARTICLE I
                                PURCHASE AND SALE

      1.1 The  Closing.  Subject to the terms and  conditions  set forth in this
Agreement, Assignor shall sell to Assignees its ownership interest in $1,000,000
principal  amount of the Note and the Assignees shall purchase from the Assignor
the $1,000,000 ownership interest in the Note for a purchase price of $1,000,000
("Purchase  Price").  Payment may be made by wire  transfer.  The closing of the
Assignment (the "Closing") shall take place at the offices of Grushko & Mittman,
P.C.,  immediately  following  the  execution  hereof or such  later date as the
parties shall agree pursuant to the terms of an Escrow  Agreement to be executed
by the  parties.  The date of the  Closing  is  hereinafter  referred  to as the
"Closing Date."

                                   ARTICLE II
            AMENDMENT OF TERMS OF ASSIGNED PORTION OF PURCHASED NOTE

      2.1 The terms of the  assigned  portion  of the Note  shall be  amended as
follows:

            (A) Article I - Payment Terms;  Term of the Loan.  Commencing on the
third (3rd) day of May, 2007 (the "First Payment  Date") and continuing  monthly
thereafter,  a total of six (6) equal  payments each in the sum of  Eighty-Three
Thousand  Dollars  ($83,000)  and  monthly  thereafter  a total of six (6) equal
payments  each in the sum of One  Hundred  and  Sixteen  Thousand  Five  Hundred
Dollars ($116,500) (the "Installments").

<PAGE>

            (B)  Article II -  Interest,  shall be amended  and  restated in its
entirety as follows:  "The Note shall bear interest at a rate of twenty  percent
(20%) or Two Hundred Thousand Dollars ($200,000) which shall be paid in the form
of an original issue discount to the Note."

            (C) Article  VII,  shall be amended and  restated in its entirety as
follows:  "This Note evidences the amount payable by Payor hereunder.  This Note
is secured by and  entitled to the  benefits of its  pro-rata  portion of 10,000
common  shares of See World  Satellites  Inc.  deposited  with the escrow  agent
pursuant to the terms of the Escrow Agreement.

            (D) Upon full  satisfaction  and payment of an aggregate of $600,000
of the Note principal,  the SWE Shares will be released from escrow and returned
to the Company.

            (E) In the event the Company  does not make a payment  within  three
business days after the payment due date, the Holder will have the option at any
time, to convert any portion or the entire missed  payment amount into shares of
common  stock at a 15% discount to market  calculated  as 85% of the closing bid
price on the day Holder  notifies  the  Company  of its  intent to  convert  the
payment in shares of the  Company's  Common  Stock  ("Shares")  pursuant to this
Section  2.1(E).  Holder will  notify the Company in writing of their  intent to
convert  pursuant to this  clause.  The Company will be obligated to deliver the
shares as directed in writing by the Holder  within  three  business  days.  The
shares issued pursuant to this clause shall not have registration rights.

      2.2 All other terms of the Note shall remain in full force and effect.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

      3.1 Representations, Covenants and Warranties of Assignor. Assignor hereby
makes the following representations and warranties to the Assignee:

            (A) Authorization; Enforcement. Assignor has the requisite power and
authority to enter into and to consummate the transactions  contemplated by this
transaction and otherwise to carry out its obligations thereunder. The execution
and delivery of each of the documents by such Assignor and the  consummation  by
them of the transactions  contemplated  thereby have been duly authorized by all
necessary action on the part of the company and no further action is required by
the company.  Each of the documents  contemplated  by this  transaction has been
duly  executed by Assignor  and,  when  delivered in  accordance  with the terms
hereof, will constitute the valid and binding obligation of Assignor enforceable
against Assignor in accordance with its terms.

            (B) Ownership. Assignor own and is conveying to Assignees all of its
rights,  title and interests to the assigned portion of the Note, free and clear
of all liens, mortgages, pledges, security interests, encumbrances or charges of
any kind or description and upon  consummation  of the transaction  contemplated
herein good title in the $1,000,000  transferred  portion of the Note shall vest
in Assignees free of all liens and other charges.

            (C) No Consents,  Approvals,  Violations  or  Breaches.  Neither the
execution and delivery of this Agreement by the Assignor,  nor the  consummation
by  Assignor  of the  transactions  contemplated  hereby,  will (i)  require any
consent,  approval,  authorization  or permit  of, or  filing,  registration  or
qualification  with or prior  notification  to, any  governmental  or regulatory
authority  under  any law of the  United  States,  any  state  or any  political
subdivision  thereof  applicable  to Assignor,  (ii)  violate any statute,  law,
ordinance,  rule or regulation of the United States,  any state or any political
subdivision  thereof,  or  any  judgment,  order,  writ,  decree  or  injunction
applicable to Assignor or any of Assignor's  properties or assets, the violation
of which would have a material  adverse effect upon Assignor,  or (iii) violate,
conflict  with,  or result in a breach of any  provisions  of, or  constitute  a
default (or any event  which,  with or without  due notice or lapse of time,  or
both,  would  constitute a default)  under,  or result in the termination of, or
accelerate  the  performance  required  by,  any of  the  terms,  conditions  or
provisions  of any note,  bond,  mortgage,  indenture,  deed of trust,  license,
lease,  agreement or other instrument or obligation to which Assignor is a party
or by which  Assignor  or any of  Assignor's  properties  or assets may be bound
which would have a material adverse effect upon Assignor.

<PAGE>

            (D) In connection with Section 2.1(E) above, Company shall provide a
legal opinion from its counsel representing that the holding period of Assignees
shall tack to the holding period of Assignor and that as of January 3, 2006, the
Shares will have fully aged for one year for purposes of Rule 144(d)(1).

      3.2 Representations and Warranties of Assignees.  Each Assignee represents
and warrants to Assignor as follows:

            (A) Due Diligence. Each Assignee acknowledges that upon execution of
this Agreement,  it has completed its own  investigation  and undertaken any and
all due diligence.

            (B) No Consents,  Approvals,  Violations  or  Breaches.  Neither the
execution  and  delivery  of this  Agreement  by each of the  Assignee,  nor the
consummation by each of the Assignee of the  transactions  contemplated  hereby,
will (i) require any consent,  approval,  authorization or permit of, or filing,
registration or qualification with or prior notification to, any governmental or
regulatory  authority  under  any law of the  United  States,  any  state or any
political  subdivision thereof applicable to each of the Assignee,  (ii) violate
any statute,  law, ordinance,  rule or regulation of the United States any state
or any political  subdivision  thereof, or any judgment,  order, writ, decree or
injunction  applicable  to  each of the  Assignee  or any of his  properties  or
assets, the violation of which would have a material adverse effect upon each of
the  Assignee,  or (iii)  violate,  conflict  with, or result in a breach of any
provisions of, or constitute a default (or any event which,  with or without due
notice or lapse of time or both would  constitute a default) under, or result in
the termination of, or accelerate the performance required by, any of the terms,
conditions or provisions of any note, bond, mortgage,  indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which each of the
Assignee is a party or by which each of the  Assignee  or any of his  respective
properties  or assets may be bound  which would have a material  adverse  effect
upon each of the Assignee.

            (D) The Assignee (i) is an  "accredited  investor,"  as that term is
defined in Regulation D under the Securities Act; (ii) has such knowledge, skill
and experience in business and financial matters, based on actual participation,
that the Assignee is capable of evaluating the merits and risks of an investment
in the Company and the suitability thereof as an investment for Assignee;  (iii)
has received such  documents and  information as it has requested and has had an
opportunity to ask questions of  representatives  of the Company  concerning the
terms and conditions of the investment  proposed herein, and such questions were
answered to the satisfaction of Assignee; and (iv) is in a financial position to
hold the Note for an  indefinite  time and is able to bear the economic risk and
withstand a complete loss of its investment in the Company.

<PAGE>

            (E) The  Assignee  is  acquiring  the  Note for  investment  for the
Assignee's own account and not with a view to, or for resale in connection with,
any distribution thereof.

            (F) The Assignee  understands  that the  Restricted  Shares have not
been  registered  under  applicable  state or federal  securities  laws,  and is
purchasing  the Note and  Restricted  Shares  pursuant to an exemption  from the
registration requirements of the Securities Act.

      3.3 Representations and Warranties of the Company.  The Company represents
and warrants to the parties as follows:

            (A) Neither the issuance of the Restricted Shares and Shares nor the
performance  of the Company's  obligations  under this  Assignment and all other
agreements  entered into by the Company relating thereto by the Company will (i)
violate,  conflict  with,  result in a breach of, or constitute a default (or an
event  which  with the  giving of  notice or the lapse of time or both  would be
reasonably likely to constitute a default) under (A) the articles or certificate
of  incorporation,  charter  or  bylaws  of the  Company,  (B) to the  Company's
knowledge,  any decree,  judgment,  order,  law,  treaty,  rule,  regulation  or
determination  applicable  to the Company of any court,  governmental  agency or
body, or arbitrator having  jurisdiction over the Company or over the properties
or assets of the  Company or any of its  Affiliates,  (C) the terms of any bond,
debenture, note or any other evidence of indebtedness,  or any agreement,  stock
option or other similar plan, indenture, lease, mortgage, deed of trust or other
instrument to which the Company or any of its  Affiliates  is a party,  by which
the Company or any of its Affiliates is bound, or to which any of the properties
of the  Company or any of its  Affiliates  is  subject,  or (D) the terms of any
"lock-up" or similar provision of any underwriting or similar agreement to which
the Company, or any of its Affiliates is a party except the violation, conflict,
breach,  or default  of which  would not have a material  adverse  effect;  (ii)
result in the creation or imposition of any lien, charge or encumbrance upon the
securities or any of the assets of the Company or any of its  Affiliates  except
as described  herein;  or (iii) result in the  activation  of any  anti-dilution
rights or a reset or repricing of any debt or security  instrument  of any other
creditor or equity holder of the Company, nor (iv) result in the acceleration of
the due date of any obligation of the Company..

            (B) The Restricted  Shares and Shares  issuable  pursuant to Section
2.1(E)  herein , upon  issuance  (i)  are,  or will  be,  free and  clear of any
security interests, liens, claims or other encumbrances, subject to restrictions
upon transfer under the 1933 Act and any applicable  state securities laws; (ii)
have been, or will be, duly and validly  authorized  and on the date of issuance
of the  Shares,  the  Shares  will be duly and  validly  issued,  fully paid and
nonassessable or if registered  pursuant to the 1933 Act, and resold pursuant to
an effective  registration  statement  will be free  trading and  unrestricted);
(iii) will not have been issued or sold in violation of any  preemptive or other
similar  rights of the holders of any  securities of the Company;  (iv) will not
subject  the  holders  thereof  to  personal  liability  by reason of being such
holders; and (v) will not result in a violation of Section 5 under the 1933 Act.

<PAGE>

                                   ARTICLE IV
                                RESTRICTED SHARES

      4.1 Restricted Shares. As further consideration, the Company shall deliver
to Assignees,  an aggregate of  15,000,000  $0.001 par value common stock of the
Company ("Restricted Shares") in the amounts identified on Schedule A hereto. In
the event the issuance of the Restricted  Shares will result in the invalidation
of any provision of Section 3.3 of this  Assignment,  then this issuance of such
Restricted  Shares is cancelled nunc pro tunc and the Company will issue in lieu
thereof a  promissory  note in an amount to be  determined  based on a per share
value of the highest  closing  price of the  Company's  common stock between the
date it becomes necessary to issue the promissory note and the actual issue date
of the  promissory  note. If, at any time prior to January 19, 2008, the Company
proposes to file a registration  statement  under the Securities Act of 1933, as
amended,  with  respect to an  offering  of any class of its equity  securities,
other than on Form S-8 or Form S-4, then the Company  shall give written  notice
of such proposed filing to the Holder, as soon as practicable, but no later than
20 business days,  before the  anticipated  filing date. Such notice shall offer
the Holder the opportunity to register such number of shares of Restricted Stock
as the Holder may request.  Should the Holder desire to have  Restricted  Shares
included  in such  registration  statement,  he shall so advise  the  Company in
writing,  setting  forth the  number of  shares  of  Restricted  Stock for which
registration  is  requested.  If the Holder elects to include less than the full
amount of Restricted Stock, then the registration  rights will continue to apply
to any remaining amounts of Restricted Stock. This grant of registration  rights
is conditioned upon Holder providing such information as is reasonably  required
in order to cause such registration statement to become effective.

                                    ARTICLE V
                                  MISCELLANEOUS

      5.1  Entire  Agreement;  Amendments.  The  Agreement  contains  the entire
understanding  of the  parties  with  respect to the subject  matter  hereof and
supersedes  all prior  agreements  and  understandings,  oral or  written,  with
respect to such  matters,  which the parties  acknowledge  have been merged into
such documents, exhibits and schedules.

      5.2 Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of  transmission,  if
such  notice or  communication  is  delivered  via  facsimile  at the  facsimile
telephone  number  specified in this Section  prior to 6:30 p.m.  (New York City
time) on a Business Day,  (ii) the Business Day after the date of  transmission,
if such notice or  communication  is delivered  via  facsimile at the  facsimile
telephone number specified in this Agreement later than 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by U.S. nationally
recognized  overnight courier service,  or (iv) upon actual receipt by the party
to whom such notice is required to be given.

      5.3 Governing Law. All questions  concerning the  construction,  validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal courts sitting in New York County,  New York for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein,  and hereby  irrevocably  waives,  and agrees not to
assert in any suit,  action or  proceeding,  any claim that it is not personally
subject  to the  jurisdiction  of any such  court,  that  such  suit,  action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process  and  consents  to  process  being  served in any such  suit,  action or
proceeding  by  mailing a copy  thereof  via  registered  or  certified  mail or
overnight  delivery (with evidence of delivery).  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.  Each party  irrevocably  waives,  to the fullest  extent  permitted  by
applicable  law,  any and all  right to trial  by jury in any  legal  proceeding
arising out of or relating to this  Agreement or the  transactions  contemplated
hereby.  If either party shall  commence an action or  proceeding to enforce any
provisions of the documents  contemplated  herein,  then the prevailing party in
such  action  or  proceeding  shall be  reimbursed  by the  other  party for its
attorney's  fees and other costs and expenses  incurred with the  investigation,
preparation and prosecution of such action or proceeding.

<PAGE>

      5.4 Survival.  The representations,  warranties,  agreements and covenants
contained herein shall survive the Closing.

      5.5 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken  together shall be considered one and the same agreement
and shall become effective when  counterparts have been signed by each party and
delivered to the other  party,  it being  understood  that both parties need not
sign the same  counterpart.  In the event that any  signature  is  delivered  by
facsimile  transmission,  such  signature  shall  create  a  valid  and  binding
obligation  of the  party  executing  (or on  whose  behalf  such  signature  is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

      5.6 No  Waiver.  The waiver by any party of the breach of any of the terms
and  conditions of, or any right under,  this  Agreement  shall not be deemed to
constitute  the  waiver  of any other  breach  of the same or any other  term or
condition or of any similar right.  No such waiver shall be binding or effective
unless expressed in writing and signed by the party giving such waiver.

      5.7  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of  which  shall  be  deemed  an  original  and all of which
together shall constitute one and the same instrument.

      5.8  Construction.  The  article and section  headings  contained  in this
agreement  are inserted  for  reference  purposes  only and shall not affect the
meaning or interpretation of this Agreement.

      5.9 Legal Fees. In connection with this transaction, legal fees of $10,000
shall be payable by the Company to Grushko & Mittman, P.C.

      5.10 Due  Diligence  Fees. A Due Diligence Fee of $25,000 shall be payable
to the parties identified on Schedule A hereto.

      5.11 Capitalized Terms.  Unless otherwise  defined,  all capitalized terms
used herein shall have the  meanings as defined in the  Promissory  Note,  Stock
Purchase Agreement and Stock Escrow Agreement.

<PAGE>

      5.12 Further Assurances.  Each party will execute and deliver such further
agreements,  documents and  instruments  and take such further  action as may be
reasonably requested by the other party to carry out the provisions and purposes
of this Agreement.

      IN WITNESS  WHEREOF,  the parties  hereto have caused this  Assignment and
Amendment  No. 1 to Note  Agreement  to be duly  executed  by  their  respective
authorized signatories as of the date first indicated above.

                                        ASSIGNOR: RICHARD E. MILLER

                                        ________________________________________

                                   ASSIGNEES:

____________________________________    ________________________________________
ALPHA CAPITAL ANSTALT                   PLATINUM LONG TERM GROWTH V

____________________________________    ________________________________________
ELLIS INTERNATIONAL LTD.                WHALEHAVEN CAPITAL FUND LIMITED

                                 ACKNOWLEDGEMENT

      FTS Group,  Inc., a Nevada  corporation  (the "Company")  acknowledges the
foregoing  Assignment and Amendment No. 1 to Note  Agreement  dated January ___,
2007 and  consents to the  assignment  and sale of the Note by Richard E. Miller
("Assignor")  to  the  parties  identified  on  Schedule  A  to  the  Assignment
(collectively,  "Assignees").  The Company hereby agrees to reasonably cooperate
with  Assignor and  Assignees to fulfill the  objective  of the  Assignment  and
further  recognizes that,  following written notice from the Escrow Agent of the
full  performance  by the parties  under the terms of that certain  Funds Escrow
Agreement  dated as of the date hereto,  Assignees shall be deemed as successors
to the Assignor as to all rights pertinent to the $1,000,000 assigned portion of
the Note and 10,000  SWE  Shares  pursuant  to the terms of that  certain  Stock
Purchase Agreement and Stock Escrow Agreement dated January 3, 2006. The Company
hereby  represents  and warrants that to its knowledge  there are no defenses to
the payment of the Note  principal or any other sum that has or may accrue or be
payable pursuant to the Note or the documents  delivered  together  therewith or
related thereto.

                                        FTS GROUP, INC.

                                        By: ____________________________________
                                            Scott Gallagher, President and CEO

<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
ASSIGNEES                             PURCHASE PRICE     PRINCIPAL AMOUNT       SHARES
                                                         OF NOTE
-----------------------------------------------------------------------------------------
<S>                                   <C>                <C>                    <C>
ALPHA CAPITAL ANSTALT                 $  325,000.00      $  390,000.00          4,875,000
Pradafant 7
9490 Furstentums
Vaduz, Lichtenstein
Fax: 011-42-32323196
-----------------------------------------------------------------------------------------
PLATINUM LONG TERM GROWTH V           $  325,000.00      $  390,000.00          4,875,000
152 West 57th Street, 54th Floor
New York, NY 10019
Fax: (212)
-----------------------------------------------------------------------------------------
ELLIS INTERNATIONAL LTD               $  150,000.00      $  180,000.00          2,250,000
53rd Street Urbanizacion Obarrio
Swiss Tower, 16th Floor, Panama
Republic of Panama
Fax: (516) 887-8990
-----------------------------------------------------------------------------------------
WHALEHAVEN CAPITAL FUND LIMITED       $  200,000.00      $  240,000.00          3,000,000
c/o FWS Capital Ltd.
3rd Floor, 14 Par-Laville Road
Hamilton, Bermuda HM08
Fax: (441) 295-5262
-----------------------------------------------------------------------------------------
TOTAL                                 $1,000,000.00      $1,200,000.00         15,000,000
-----------------------------------------------------------------------------------------
</TABLE>Exhibit 10.1

================================================================================

                  REGISTRATION RIGHTS AND SHAREHOLDER AGREEMENT

                                     BETWEEN

                                   CULP, INC.

                                       AND

                        INTERNATIONAL TEXTILE GROUP, INC.

                     --------------------------------------
                          Dated as of January 22, 2007
                     --------------------------------------

================================================================================

<PAGE>

                                TABLE OF CONTENTS

                                    ARTICLE I

                                   DEFINITIONS

                                   ARTICLE II

                        REGISTRATION UNDER SECURITIES ACT

2.1   Registration on Request..................................................3
2.2   Incidental Registration..................................................4
2.3   Registration Procedures..................................................5
2.4   Underwritten Offerings...................................................8
2.5   Preparation; Reasonable Investigation....................................8
2.6   Participation in Underwritten Registrations..............................9
2.7   Adjustments Affecting Registrable Securities.............................9

                                   ARTICLE III

                              STANDSTILL AGREEMENT

3.1   No Purchase of Additional Securities.....................................9

                                   ARTICLE IV

                                VOTING AGREEMENT

4.1   Voting Agreement and Grant of Proxy.....................................10

                                    ARTICLE V

                                  MISCELLANEOUS

5.1   Other Registration Rights...............................................10
5.2   Indemnification.........................................................10
5.3   Amendments and Waivers..................................................13
5.4   Assignment; No Third-Party Rights.......................................13
5.5   Notices.................................................................13
5.6   Binding Agreement.......................................................14
5.7   Descriptive Headings....................................................14
5.8   Specific Performance....................................................14
5.9   Governing Law...........................................................14
5.10  Counterparts............................................................14
5.11  Severability............................................................14
5.12  Entire Agreement........................................................14

<PAGE>

                  REGISTRATION RIGHTS AND SHAREHOLDER AGREEMENT

     This REGISTRATION RIGHTS AND SHAREHOLDER AGREEMENT (this "Agreement") is
made and entered into this 22nd day of January, 2007 by and among CULP, INC., a
North Carolina corporation (the "Company"), and INTERNATIONAL TEXTILE GROUP,
INC., a Delaware corporation (the "Shareholder").

                              BACKGROUND STATEMENT

     The Company and the Shareholder are parties to an Asset Purchase Agreement,
dated as of January 11, 2007 (the "Asset Purchase Agreement"), pursuant to which
the Company purchased certain assets of the Shareholder's mattress ticking
business (the "Business"). As partial consideration for the purchase of the
assets pursuant to the Asset Purchase Agreement, the Company issued ________
Common Shares (as defined below) to the Shareholder. The Company and the
Shareholder now desire to enter into this Agreement to set forth certain
agreements regarding the Company's obligation to register such Common Shares and
the Shareholder's ownership of such Common Shares.

                             STATEMENT OF AGREEMENT

     In consideration of the parties entering into the agreements and carrying
out the transactions described in this Agreement, and for other good and
valuable consideration, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     As used herein, unless the context otherwise requires, the following terms
have the following respective meanings:

     "Affiliate" means with respect to any Person, each of the Persons that
directly or indirectly, through one or more intermediaries, owns or controls, is
controlled by or is under common control with, such Person. For the purpose of
this Agreement, "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of management and policies, whether
through the ownership of voting securities, by contract or otherwise.

     "Commission" means the United States Securities and Exchange Commission or
any other United States agency at the time administering the Securities Act.

     "Common Shares" means shares of common stock, par value $.05 per share, of
the Company.

     "Exchange Act" means the Securities Exchange Act of 1934, or any successor
United States statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

<PAGE>

     "Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or other entity, a government or any department or agency thereof.

     "Public Offering" means any primary or secondary public offering of Common
Shares pursuant to an effective registration statement under the Securities Act
other than a registration statement on a form registering the types of
transactions generally eligible for registration on Form S-4 or S-8 or any
successor or similar form.

     "Public Sale" means any Public Offering or any sale of Common Shares to the
public pursuant to Rule 144 effected through a broker or dealer.

     "Registrable Securities" means (i) the Common Shares (and associated rights
to purchase series A participating preferred stock of the Company) issued or
issuable to the Shareholder and (ii) any securities issued or issuable with
respect to any such Common Shares by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been distributed pursuant to such registration statement,
(ii) such securities have been sold pursuant to Rule 144 under the Securities
Act, (iii) such securities shall have been otherwise transferred and the
subsequent disposition thereof shall not require registration or qualification
under the Securities Act or any similar state law then in force or (iv) such
securities shall have ceased to be outstanding.

     "Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Article II, including, without limitation, (i)
all registration, filing and NASD fees, (ii) all fees and expenses of complying
with securities or blue sky laws, (iii) all word processing, duplicating and
printing expenses, (iv) messenger and delivery expenses, (v) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, (vi) fees
and expenses of any Persons engaged by the Company to assist the Company in
preparing or assisting in preparing any filings, agreements, and other documents
contemplated hereby, (vii) the fees and disbursements of one counsel for the
Shareholder (but only in respect of a registration effected pursuant to Section
2.1), (viii) premiums and other costs of policies of insurance against
liabilities arising out of the public offering of the Registrable Securities
being registered (if the Company elects to obtain any such insurance) and (ix)
any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, but excluding underwriting discounts and commissions and
transfer taxes, if any.

     "Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act as such rule may be amended from time to time, or any successor
rule then in force.

     "Securities Act" means the Securities Act of 1933, or any successor United
States statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.

                                       2
<PAGE>

                                   ARTICLE II

                        REGISTRATION UNDER SECURITIES ACT

     2.1 Registration on Request.

     (a) Request. If at any time following the date of this Agreement, the
Shareholder requests in writing that the Company effect the registration under
the Securities Act of a specified number of the Registrable Securities held by
it (which may be all or a portion of such Registrable Securities), specifying
the intended method of disposition thereof, the Company, in accordance with the
provisions of Section 2.3, will use its commercially reasonable efforts to
effect the registration under the Securities Act of the Registrable Securities
which the Company has been so requested to register for disposition in
accordance with the intended method or methods of disposition stated in such
request, to the extent requisite to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of Registrable Securities so to be
registered, and shall file the registration statement necessary to effect such
registration as set forth herein. Subject to Section 2.1(f), the Company shall
be required to effect only one registration pursuant to this Section 2.1(a).

     (b) Effective Registration Statement. A registration requested pursuant to
this Section 2.1 shall not be deemed to be effected for purposes of the last
sentence of Section 2.1(a) (i) if a registration statement with respect thereto
shall not have become effective within the time period specified herein, (ii)
if, after it has become effective, such registration is terminated or withdrawn
by the Company or is interfered with for any reason (excluding any postponement
undertaken by the Company pursuant to the penultimate paragraph of Section 2.3)
or by any stop order, injunction or other order or requirement of the Commission
or any other governmental agency or any court, and the result of such
interference is to prevent the Shareholder from disposing the Registrable
Securities to be sold thereunder in accordance with the intended methods of
disposition, or (iii) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with any
underwritten registration shall not be satisfied or waived with the consent of
the Shareholder, other than as a result of any breach by the Shareholder of its
obligations thereunder or hereunder.

     (c) Registration Statement Form. Registrations under this Section 2.1 shall
be on such appropriate form of registration statement promulgated by the
Commission as shall be selected by the Company and as shall permit the
disposition of the Registrable Securities so to be registered in accordance with
the intended method or methods of disposition specified in the request of the
Shareholder for such registration. The Company agrees to include in any such
registration statement all information which the Shareholder shall reasonably
request.

     (d) Expenses. The Company and the Shareholder will each pay 50% of all
Registration Expenses in connection with any registration requested pursuant to
this Section 2.1; provided, that the Shareholder shall not be responsible for
such Registration Expenses under this Section 2.1 (together with any
Registration Expenses paid by the Shareholder under Section 2.2) in excess of
$50,000.

                                       3
<PAGE>

     (e) Selection of Underwriters. If a requested registration pursuant to this
Section 2.1 involves a request by Shareholder for an underwritten offering, the
managing underwriter or underwriters shall be selected by the Company's Board of
Directors, subject to the approval of the Shareholder (which approval shall not
be unreasonably withheld).

     (f) Priority in Requested Registrations. If a requested registration
pursuant to this Section 2.1 involves a request by Shareholder for an
underwritten offering, and the managing underwriter shall advise the Company in
writing (with a copy to the Shareholder) that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering within a price range acceptable to the
Company and the Shareholder, the Company will include in such registration to
the extent of the number which the Company is so advised can be sold in such
offering Registrable Securities requested to be included in such registration.
In the event that less than 80% of Registrable Securities requested to be
included in the registration statement are included pursuant to this Section
2.1(f), the Company shall be required to effect one, and only one, additional
registration pursuant to Section 2.1(a); provided, however, that no request for
such additional registration may be made by the Shareholder prior to the
expiration of 180 days after its initial request under Section 2.1(a).

     2.2 Incidental Registration.

     (a) Right to Include Registrable Securities. If, at any time following the
date of this Agreement, the Company proposes to register any of its securities
under the Securities Act (other than by a registration on Form S-4 or S-8 or any
successor or similar forms or filed in connection with an exchange offer, or any
offering of securities solely to the Company's existing security holders, and
other than pursuant to Section 2.1), whether or not for sale for its own
account, the Company will at each such time give prompt confidential written
notice to the Shareholder of its intention to do so and of the Shareholder's
rights under this Section 2.2. Upon the written request of the Shareholder made
within 20 days after the receipt of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by the Shareholder and the
intended method of disposition thereof), the Company will, subject to the
provisions of Section 2.2(c), use its commercially reasonable efforts to effect
the registration under the Securities Act of all Registrable Securities which
the Company has been so requested to register by the Shareholder, to the extent
requisite to permit the disposition (in accordance with the intended methods
thereof) of the Registrable Securities so to be registered; provided, that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to the Shareholder and
(i) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration and (ii) in the case of a determination to delay registering, shall
be permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities.

     (b) Expenses. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 2.2.

                                       4
<PAGE>

     (c) Priority in Incidental Registrations. If a registration pursuant to
this Section 2.2 involves an underwritten offering, and the managing underwriter
shall advise the Company in writing, that, in its opinion, the number of
securities requested and otherwise proposed to be included in such registration
exceeds the number which can be sold in such offering (and, in the case of a
Company Offering, within a price range reasonably acceptable to the Company), or
that the kind of securities requested or otherwise proposed to be included in
such registration statement would materially and adversely affect the success of
such offering, the Company will include in such registration, to the extent of
the number which the Company is so advised can be sold in such offering, (i) if
the registration includes securities to be offered by the Company, (A) first,
the securities proposed to be registered by the Company, (B) second, Registrable
Securities requested to be included in such registration by the Shareholder; and
(C) third, securities of other Persons, if any, requested to be included in such
registration pro rata in accordance with the numbers of other securities
proposed to be registered by the other Persons or otherwise allocated among such
other Persons in such proportion as such holders and the Company shall agree,
and (ii) if the registration is a secondary registration on behalf of other
Persons, the Registrable Securities and securities of other Persons included in
such registration pro rata in accordance with the numbers of Registrable
Securities requested to be included by the Shareholder and the numbers of other
securities proposed to be registered by the other Persons. Without the written
consent of the Shareholder, the Company will not grant any registration rights
inconsistent with the provisions of this Section 2.2. In the event a
contemplated distribution does not involve an underwritten public offering, the
determinations contemplated by this Section 2.2 shall be made by the Company's
Board of Directors in good faith.

     2.3 Registration Procedures. If and whenever the Company is required to use
commercially reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
Company will as expeditiously as possible:

     (a) use commercially reasonable efforts to prepare and within 45 days
thereafter file with the Commission the requisite registration statement to
effect such registration, and thereafter use its commercially reasonable efforts
to cause such registration statement to become effective within 60 days after
filing; provided, that before filing such registration statement or any
amendments thereto, the Company will furnish to the Shareholder copies of all
such documents proposed to be filed;

     (b) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement continuously effective for
a period of either (i) not more than two years (subject to extension pursuant to
the last paragraph of this Section 2.3) or, if such registration statement
relates to an underwritten offering, such longer period as in the opinion of
counsel for the underwriters a prospectus is required by law to be delivered in
connection with sales of Registrable Securities by an underwriter or dealer or
(ii) such shorter period as will terminate when all of the securities covered by
such registration statement have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement (but in any event not before the expiration of any
longer period required under the Securities Act), and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as all of such
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement;

                                       5
<PAGE>

     (c) furnish to the Shareholder such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), the prospectus contained in such registration
statement (including each preliminary prospectus and any summary prospectus) and
any other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other documents
in order to facilitate the disposition of the Registrable Securities owned by
the Shareholder, as the Shareholder may reasonably request;

     (d) use its commercially reasonable efforts to register or qualify such
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions as
the Shareholder shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement remains in
effect and to take any other action which may be reasonably necessary or
advisable to enable the Shareholder to consummate the disposition of the
securities in such jurisdictions; provided, that the Company shall not for any
such purpose be required to (i) qualify generally to do business as a foreign
corporation in any jurisdiction where it would not otherwise be required to
qualify but for the requirements of this Section 2.3(d), (ii) consent to general
service of process in any such jurisdiction or (iii) subject itself to taxation
in such jurisdiction;

     (e) use its commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable the
Shareholder to consummate the disposition of such Registrable Securities;

     (f) promptly notify the Shareholder, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon the discovery of the happening of any event as a result of which,
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made, and
at the request of the Shareholder prepare and furnish to the Shareholder a copy
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include 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 not misleading in the light of the circumstances under which
they were made;

     (g) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering a period of at least 12 months, but not more than 18 months, beginning
with the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act, and will furnish to the Shareholder at least five
business days prior to the filing thereof a copy of any amendment or supplement
to such registration statement or prospectus;

                                       6
<PAGE>

     (h) provide and cause to be maintained a transfer agent and registrar for
all Registrable Securities covered by such registration statement from and after
a date not later than the effective date of such registration statement;

     (i) obtain one or more comfort letters, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the underwriting), signed
by the Company's independent public accountants in customary form and covering
such matters customarily covered by comfort letters as the Shareholder
reasonably requests (provided that such Registrable Securities constitute at
least 10% of the securities covered by such registration statement); and

     (j) obtain a legal opinion of the Company's counsel, dated the effective
date of such registration statement (or, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement) as required by the underwriters, if any, or, if such
registration does not include an underwritten public offering, in customary form
and covering such matters customarily covered by opinion letters as the
Shareholder reasonably requests.

     The Shareholder shall furnish the Company with such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request, including, without limitation, any financial
information that the Shareholder has or has used in the Business to assist the
Company in the preparation of financial statements, if any, that are required
pursuant to the Commission's rules and regulations, within a reasonable time
prior to the Company's preparation of a registration statement with respect to
the Registrable Securities or any other filing that the Company is required to
make with the Commission.

     The Shareholder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 2.3(f), the
Shareholder will promptly discontinue the Shareholder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until the Shareholder's receipt of the supplemented or
amended prospectus contemplated by Section 2.3(f) and, if so directed by the
Company, the Shareholder will use its reasonable efforts to deliver to the
Company all copies, other than permanent file copies then in the Shareholder's
possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice. In addition, the Company may postpone the
filing or effectiveness of a registration, or suspend the use of a registration
statement, upon written notice to the Shareholder (which notice need not
disclose the reason for such postponement or suspension), for a period not to
exceed 90 days, if the Company reasonably believes that such registration might
reasonably be expected to have a material adverse effect on any proposal or plan
to engage in any material acquisition of assets or capital stock or any material
merger, consolidation, tender offer or similar transaction or would otherwise
require disclosure of material, nonpublic information which the Board of
Directors of the Company reasonably determines should not be disclosed. In the
event the Company shall give any such notice, the applicable time periods set
forth above regarding the filing and effectiveness of registration statements
required hereunder shall be extended by the number of days during the period
from and including the date of the giving of such notice to and including the
date when the Shareholder shall have received the supplemented or amended
prospectus contemplated by Section 2.3(f) or the end of the postponement or
suspension period (which, if not specified in the Company's notice of such
postponement or suspension, the Company shall promptly provide upon the
termination of the event giving rise to the postponement or suspension). The
Shareholder agrees that, during any period during which the use of a
registration statement is suspended, it shall not make any offers or sales of
Registrable Securities under such registration statement.

                                       7
<PAGE>

     In the event that a registration statement covering the Registrable
Securities is not declared effective by the Commission within eight months of
the date hereof, the provisions of Article III and Article IV shall no longer
apply. Without limiting the remedies available to the Shareholder, the Company
acknowledges that any failure to comply with its obligations hereunder may
result in material irreparable injury to the Shareholder for which there is no
adequate remedy at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of any such default, the Shareholder
may obtain such relief as may be requires to specifically enforce the Company's
obligations hereunder.

     2.4 Underwritten Offerings.

     (a) Requested Underwritten Offerings. If requested by the underwriters for
any underwritten offering of Registrable Securities pursuant to a registration
requested under Section 2.1, the Company will enter into an underwriting
agreement with such underwriters for such offering. Such agreement shall be
reasonably satisfactory in substance and form to the Shareholder and the
underwriters and shall contain such representations and warranties by the
Company and by the Shareholder and such other terms as are generally prevailing
in agreements of this type, including, without limitation, indemnities to the
effect and to the extent provided in Section 5.2.

     (b) Incidental Underwritten Offerings. If the Company at any time proposes
to register any of its securities under the Securities Act as contemplated by
Section 2.2 and such securities are to be distributed by or through one or more
underwriters, (i) the managing underwriter or underwriters shall be selected by
the Company, and (ii) the Company will, if requested by the Shareholder as
provided in Section 2.2, and subject to the provisions of Section 2.2(b), use
its commercially reasonable efforts to arrange for such underwriters to include
all the Registrable Securities to be offered and sold by the Shareholder among
the securities to be distributed by such underwriters.

     (c) Holdback. The Shareholder agrees for the benefit of the Company not to
effect any Public Sale or distribution of any equity securities of the Company,
or any securities convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144 under the Securities Act (or
any similar provision then in force), during the 10 days before and the 180 days
after any underwritten registration pursuant to Section 2.1 or 2.2 has become
effective, except as part of such underwritten registration.

     2.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Shareholder, its
underwriters, if any, and their respective counsel and accountants reasonable
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto and will give each of them such access
to its books and records and such opportunities to discuss the business of the
Company with its officers and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of the
Company, to conduct a reasonable investigation within the meaning of the
Securities Act.

                                       8
<PAGE>

     2.6 Participation in Underwritten Registrations. No Person may participate
in any underwritten registration hereunder unless such Person agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
reasonably approved by the Company.

     2.7 Adjustments Affecting Registrable Securities. The Company will not
effect or permit to occur any combination or subdivision of shares or other
actions which would adversely affect the ability of the Shareholder to include
Registrable Securities in any registration of its securities contemplated by
this Article II or the marketability of Registrable Securities under any such
registration.

                                  ARTICLE III

                              STANDSTILL AGREEMENT

     3.1 No Purchase of Additional Securities. The Shareholder agrees that,
without the consent of the Company, for so long as it owns any Common Shares,
neither it nor any of its Affiliates will (a) effect, or seek, offer or propose
(whether publicly or otherwise) to effect, or announce any intention to effect,
or cause or participate in or in any way assist, facilitate or encourage any
other Person (other than the Company) to effect or seek, offer or propose
(whether publicly or otherwise) to effect or participate in, (i) any acquisition
of any securities (or beneficial ownership thereof), or rights or options to
acquire any securities (or beneficial ownership thereof), or any assets,
indebtedness or businesses of the Company or any of its subsidiaries, (ii) any
tender or exchange offer, merger or other business combination involving the
Company, any of the subsidiaries or assets of the Company or the subsidiaries
thereof constituting a significant portion of the consolidated assets of the
Company and its subsidiaries, (iii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
Company or any of its subsidiaries, or (iv) any "solicitation" of "proxies" (as
such terms are used in the proxy rules promulgated by the Commission) or
consents to vote any voting securities of the Company or any of its subsidiaries
(each of (i)-(iv), a "Standstill Transaction"); (b) form, join or in any way
participate in a "group" (as defined under the Exchange Act) with respect to a
Standstill Transaction; (c) otherwise act, alone or in concert with others, to
seek representation on or to control or influence the management, Board of
Directors or policies of the Company or to obtain representation on the Board of
Directors of the Company; (d) take any action which would or would reasonably be
expected to force the Company to make a public announcement regarding any
Standstill Transaction; or (e) enter into any discussions or arrangements with
any third party with respect to any of the foregoing.

                                       9
<PAGE>

                                   ARTICLE IV

                                VOTING AGREEMENT

     4.1 Voting Agreement and Grant of Proxy. The Shareholder agrees with the
Company that for so long as the Shareholder owns or has the power, directly or
indirectly, to vote Common Shares, it will vote or cause to be voted on each
matter at each annual or special meeting of shareholders of the Company all such
Common Shares owned by it or over which it has the power, directly or
indirectly, to vote in accordance with the recommendation of the Board of
Directors of the Company on such matter as such recommendation is included in
the most recent proxy statement or supplement distributed by the Company in
connection with such shareholders meeting. To effect the foregoing agreement,
the Shareholder hereby appoints the Company as its proxy, with the power to
appoint a substitute, and hereby authorizes the Company to represent and to vote
in accordance with its agreement set forth in the immediately preceding sentence
all Common Shares held of record by the Shareholder on the record date for each
such meeting of shareholders of the Company or any adjournment thereof. This
appointment of proxy shall be irrevocable and is coupled with the Shareholder's
agreement set forth in the first sentence of this Section 4.1. The Shareholder
will take such further action to execute such other instruments as may be
necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by the Shareholder with respect to any Common Shares held by
it.

                                   ARTICLE V

                                  MISCELLANEOUS

     5.1 Other Registration Rights. Notwithstanding anything to the contrary in
this Agreement the Company shall be permitted to grant to any Person the right
to request the Company to register any equity securities of the Company, or any
securities convertible or exchangeable into or exercisable for such securities;
provided that to the extent the Company grants, prior to effecting a
registration pursuant to Section 2.1(a), any registration rights to any Person
that are more favorable to such Person than the rights of the Shareholder
contained herein, the Company shall concurrently grant such rights to the
Shareholder.

     5.2 Indemnification.

     (a) Indemnification by the Company. In the event of any registration of any
securities of the Company under the Securities Act pursuant to this Article II,
the Company will, and hereby does, indemnify and hold harmless, the Shareholder,
its directors, officers, agents and employees and each other Person, if any, who
controls the Shareholder within the meaning of the Securities Act and Exchange
Act, and any underwriters, against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained (x) in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein or used in connection with the offering of
securities covered thereby, or any amendment or supplement thereto or any
document included by reference therein, or (y) in any application or other
document or communication (in this Section 5.2 collectively called an
"application") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify any securities covered by such registration statement under
the "blue sky" or securities laws thereof or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such Persons for any legal or any other expenses incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged omission,
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement or in any application,
in reliance upon and in conformity with written information prepared and
furnished to the Company by the Shareholder that contains any untrue statement
of any material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The Company
shall not be obligated to pay the fees and expenses of more than one counsel or
firm of counsel for all parties indemnified in respect of a claim for each
jurisdiction in which such counsel is required, unless in the reasonable
judgment of such counsel a conflict of interest may exist between such
indemnified party and any other indemnified party in respect of such claim.

                                       10
<PAGE>

     (b) Indemnification by the Shareholder. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Article II, that the Company shall have received an
undertaking satisfactory to it from the Shareholder to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
5.2(a)) the Company, each director of the Company, each officer of the Company
and each other Person, if any, who controls the Company within the meaning of
the Securities Act and the Exchange Act, with respect to any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any application,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information prepared and
furnished to the Company by the Shareholder that contains any untrue statement
of any material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.

     (c) Notices of Claims, etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 5.2, such indemnified
party will, if a claim in respect thereof is made against an indemnifying party,
give written notice to the latter of the commencement of such action; provided,
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 5.2, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party. No indemnifying party
shall, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement which includes any admission of liability
of such indemnified party or which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation.

                                       11
<PAGE>

     (d) Indemnification Payments. The indemnification required by this Section
5.2 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred, subject to refund if the party receiving
such payments is subsequently found not to have been entitled thereto hereunder.

     (e) If the indemnification provided for in Section 5.2(a) or (b) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities, then each indemnifying party under such Section,
in lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand and of
the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Shareholder 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 Company or by the Shareholder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Shareholder
agree that it would not be just or equitable if contribution pursuant to this
Section 5.2(e) were determined by pro rata allocation or by any other method of
allocation that does not take account of the foregoing equitable considerations.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5.2(e), the Shareholder shall not be required to indemnify or contribute
any amount in excess of the net proceeds received by the Shareholder in
connection with the sale of the Registrable Securities sold by such Holder. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of fraudulent misrepresentation.

     (f) The indemnity and contribution provisions contained in this Section 5.2
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Shareholder or any Person controlling the Shareholder, or by or on behalf of
the Company, its officers or directors or any Person controlling the Company,
and (iii) any sale of Registrable Securities pursuant to a registration
statement

                                       12
<PAGE>

     5.3 Amendments and Waivers. This Agreement may be amended, modified or
supplemented only by written agreement of the Shareholder and the Company.

     5.4 Assignment; No Third-Party Rights. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
expressly permitted herein, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by the Company without the
prior written consent of the Shareholder. Neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by the Shareholder,
except that the Shareholder may collaterally assign its interest in this
Agreement to its primary lender or lenders under the Shareholder's primary
credit facility to secure its obligations under such facility. To the extent any
such purchaser acquires Registrable Securities, such purchaser shall be deemed
to be a Shareholder hereunder and all references herein to "the Shareholder"
shall be deemed to be "the Shareholders", and all actions that may be taken by
the Shareholder shall be effected by the act of holders of a majority of
Registrable Securities acquired pursuant to the Asset Purchase Agreement, and
all liabilities of the Shareholder and such purchasers shall be joint and not
several. This Agreement and its provisions are for the sole benefit of the
parties to this Agreement and their successors and permitted assigns and shall
not give any other Person any legal or equitable right, remedy or claim.

     5.5 Notices. All communications provided for hereunder shall be in writing
and shall be delivered personally or by telecopy or sent by first-class mail and
addressed to each party at the address listed below:

     If to the Shareholder:

               International Textile Group, Inc.
               804 Green Valley Road
               Suite 300
               Greensboro, North Carolina 27408
               Attn: Gary L. Smith
               Facsimile: (336) 379-6972
               Copy to: Neil Koonce, Esq.
               Facsimile: (336) 379-6972

     If to the Company:

               Culp, Inc.
               1823 Eastchester Drive
               High Point, North Carolina 27265
               Attention: Franklin N. Saxon
               Facsimile: (336) 887-7089

                                       13
<PAGE>

     with copies to:

               Robinson, Bradshaw & Hinson, P.A.
               101 North Tryon Street, Suite 1900
               Charlotte, North Carolina 28246
               Attention: Henry H. Ralston
               Facsimile: (704) 378-4000

     5.6 Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.

     5.7 Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.

     5.8 Specific Performance. The parties hereto recognize and agree that money
damages may be insufficient to compensate for breaches of the terms hereof and,
consequently, that the equitable remedy of specific performance of the terms
hereof will be available in the event of any such breach.

     5.9 Governing Law. The execution, interpretation and performance of this
Agreement shall be governed by the internal laws and judicial decisions of the
State of North Carolina, without regard to principles of conflicts of laws.

     5.10 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.

     5.11 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby.

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

                                       14
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date first above written.

                                               CULP, INC.

                                               By: /s/ Franklin N. Saxon
                                                   Name: Franklin N. Saxon
                                                   Title: President

                                               INTERNATIONAL TEXTILE GROUP, INC.

                                               By: /s/ Gary L. Smith
                                                   Name: Gary L. Smith
                                                   Title: EVP and CFO

        [Signature Page to Registration Rights and Shareholder Agreement]

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