Document:

Exhibit 10.25

 

 

SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT

 

 

DATED AS OF NOVEMBER 13, 2003

 

 

Among

 

 

STONE STREET FUND 1998, L.P.,

 

BRIDGE STREET FUND 1998, L.P.,

 

GREEN EQUITY INVESTORS II, L.P.,

 

GS MEZZANINE PARTNERS, L.P.,

 

GS MEZZANINE PARTNERS OFFSHORE, L.P.,

 

ARES LEVERAGED INVESTMENT FUND, L.P.,

 

ARES LEVERAGED INVESTMENT FUND II, L.P.,

 

C.L. JEFFREY,

SHEILA JEFFREY,

 

CERTAIN STOCKHOLDERS SIGNATORIES HERETO,

 

and

 

 

DFG HOLDINGS, INC.

 

 

Table of Contents

 

	
  ARTICLE 1 

  	
  Election
  of Directors.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Board of
  Directors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  Restrictions
  on Transfer; Preemptive Rights.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  General Restrictions
  on Transfer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Compliance with
  Securities Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Agreement
  to be Bound

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Tag-Along
  Rights for the Executive Parties and the Investors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
  Cooperation by the Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
  Improper
  Transfer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
  Involuntary
  Transfer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.8

  	
  First
  Option Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.9

  	
  Option to Repurchase Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.10

  	
  Preemptive
  Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.11

  	
  First
  Offer Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  Drag-Along
  Sales

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Right of Purchaser
  to Require Sale

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Drag-Along
  Notice

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  Delivery of Certificates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Consideration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Cooperation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  Registration
  Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Demand
  Registrations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
  Piggyback
  Registration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.4

  	
  Registration
  Statement

  	
   

  

 

i

 

	
   

  	
  4.5

  	
  Registration
  Procedures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.6

  	
  Holdback
  Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.7

  	
  Registration
  Expenses

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.8

  	
  Conditions to Holder’s
  Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.9

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.10

  	
  Rule 144

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  Representations and
  Warranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Representations
  and Warranties of the Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Representations
  and Warranties of the Stockholders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  Termination
  of Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  Exercise of the
  Investor Put Right

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Put Right.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Sale Rights.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Exclusive
  Remedy

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Recapitalization, Exchanges, etc.
  Affecting the Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Injunctive
  Relief

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Legend

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.5

  	
  Transferees
  Bound

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.6

  	
  Amendment;
  Waiver

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Additional
  Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.8

  	
  No
  Third-Party Benefits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.9

  	
  Successors
  and Assigns

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.10

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.11

  	
  Integration

  	
   

  

 

ii

 

	
   

  	
  8.12

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.13

  	
  Attorneys’ Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.14

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.15

  	
  Information
  for Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.16

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.17

  	
  Consent
  to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.18

  	
  No Inconsistent Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.19

  	
  Certain Distributions
  Exempt

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.20

  	
  Certain
  Limitations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.21

  	
  Information
  Regarding Beneficial Ownership

  	
   

  

 

iii

 

STOCKHOLDERS AGREEMENT

 

THIS
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (the “Agreement”), dated as of
November 13, 2003, by and among Green Equity Investors II, L.P., a
Delaware limited partnership (the “Purchaser”), Stone Street Fund 1998, L.P.,
a Delaware limited partnership (collectively with its permitted assigns, “Stone”),
Bridge Street Fund 1998, L.P., a Delaware limited partnership (collectively
with its permitted assigns, “Bridge”), GS Mezzanine Partners, L.P., a
Delaware limited partnership (collectively with its permitted assigns, “GSMP Onshore”),
GS Mezzanine Partners Offshore, L.P., an exempt Cayman Islands limited
partnership (collectively with its permitted assigns, “GSMP Offshore” and,
collectively with Stone, Bridge and GSMP Onshore, “GSMP”), Ares Leveraged
Investment Fund, L.P., a Delaware limited partnership (“Ares I”), Ares Leveraged
Investment Fund II, L.P., a Delaware limited partnership (“Ares II”, and collectively
with Ares I, “Ares”), C.L. Jeffrey, an individual (“CL”), Sheila Jeffrey, an
individual (together with CL, the “Broker”), certain stockholders signatories
hereto (individually, the “Executive”, and collectively, the “Executives”)
and DFG Holdings, Inc., a Delaware corporation (the “Company”), amends and
restates in its entirety the Stockholders Agreement, dated as of
November 13, 1998, by and among the Purchaser, the Executives and the
Company.  Each of the parties to this
Agreement (other than the Company) and any other Person (as defined in
Section 4.1) who shall become a party to or agree to be bound by the terms
of this Agreement after the date hereof is sometimes hereinafter referred to
individually as a “Stockholder” and collectively as “Stockholders”.  GSMP and Ares are sometimes herein referred
to individually as an “Investor” and collectively as “Investors”.

 

RECITALS

 

On
December 18, 2003, the parties hereto entered into the Amended and
Restated Stockholders Agreement (the “Original
Agreement”) in connection with the consummation by he Company, the
Purchaser and the Executives of the merger (the “Merger”) contemplated by
that certain Agreement and Plan of Merger dated as of November 13, 1998,
(the “Merger
Agreement”).

 

In
connection with the Merger, the Company and the Investors entered into (i) a
Subscription Agreement, dated as of December 18, 1998 (the “Subscription
Agreement”), providing for the issuance and sale of 1,957.5378 Shares (as
defined below) by the Company to the Investors and (ii) a Purchase Agreement,
dated as of December 18, 1998 (the “Original
Purchase Agreement”), providing for (A) the issuance by the
Company to the Investors of $120,625,617.30 Aggregate Principal Amount of 13%
Senior Discount Notes Due 2006 (the “Discount Notes”) and (B) the issuance and
sale of 1,040.6103 Shares by the Company to the Investors.

 

Concurrently
with the execution and delivery of this Agreement, the Company and the
Investors are entering into the exchange agreements (the “Exchange Agreement”), dated as of the date
hereof, pursuant to which the Investors are exchanging the Discount Notes for
16% Senior Notes Due 2012, 13.95% Senior Subordinated Notes Due 2012
(collectively, the “New Notes”)
and certain cash payments.  It is a
condition to the execution

 

1

 

and delivery of the
Exchange Agreement that the Stockholders amend and restate the Original
Agreement and enter into this Agreement.

 

The
Stockholders currently own the shares of Class A Common Stock, par value $0.001
per share, of the Company (the “Common Stock”), as set forth on Schedule 1
attached hereto.  Shares of Common Stock
now owned or hereafter acquired by any Stockholder are collectively referred to
as the “Shares”.  Schedule 1 also sets forth each
Stockholder’s percentage interest in the Common Stock on a fully-diluted basis.

 

The
Company and each of the Stockholders desire, for their mutual benefit and
protection, to amend and restate the Original Agreement and to enter into this
Agreement to set forth their respective rights and obligations with respect to
their Shares (whether issued or acquired hereafter, including all shares of
Common Stock or other equity interests of the Company issuable upon the
exercise, conversion or exchange of warrants, options or other securities or
rights to acquire shares of Common Stock or other equity interests of the
Company, or upon the conversion or exchange of any security (“Rights”)).

 

NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

ARTICLE 1                                Election of Directors.

 

1.1                                 Board of Directors.  Each Stockholder other than GSMP shall vote his or its Shares in
favor of the election of such nominee to the board of directors of the Company
(the “Board
of Directors”) as set forth herein. 
So long as Jeffrey Weiss is the chief executive officer of the Company,
he shall be nominated to the Board of Directors and each Stockholder agrees to
vote in favor of such nomination.  So
long as GSMP or its Affiliates own any New Notes or Shares, GSMP Onshore shall
be entitled to nominate two members of the Board of Directors and each
Stockholder agrees to vote in favor of such nominations.  So long as Purchaser owns, directly or
indirectly, twenty percent (20%) or more of the then issued and outstanding
stock of the Company, the Purchaser shall be entitled to nominate the remaining
members of the Board of Directors and each Stockholder other than GSMP agrees
to vote in favor of such nominations.

 

The
size of the Board of Directors shall not be increased from its current size of
seven without the consent of the Purchaser and, for so long as GSMP is entitled
to nominate two members of the Board of Directors, GSMP.  In the event a director is removed, with or
without cause, the vacancy created by such removal shall be filled only by the
Stockholder (or its permitted successors, or assigns) who had in the first
instance nominated such director (but only if such Stockholder otherwise
continues to be entitled to nominate such director).

 

The
Company and the Stockholders shall take all other actions necessary to ensure
that the Certificate of Incorporation and By-laws of the Company do not at any
time conflict with the provisions of this Agreement.

 

2

 

ARTICLE 2                                Restrictions on Transfer; Preemptive
Rights.

 

2.1                                 General Restrictions on Transfer.  So long as this Agreement is in effect, each
Stockholder agrees that such Stockholder will not, directly or indirectly,
sell, hypothecate, give, bequeath, transfer, assign, pledge or in any other way
whatsoever encumber or dispose of by operation of law or otherwise (any such
event, a “Transfer”)
any Shares now or hereafter at any time owned by such Stockholder to another
Person (“Transferee”),
to the extent such Transfer is prohibited by this Agreement or any employment
agreement between such Executive and the Company.  The Company shall not transfer upon its books any Shares to any
Person to the extent prohibited by this Agreement and any purported transfer in
violation hereof shall be null and void and of no effect.  Each Executive represents and warrants to
the Purchaser, the Investors and the Company that, except as permitted by
Section 2.4 and Article 3, there is not any plan or intention on the
part of such Executive to sell, exchange or otherwise dispose of the Shares
owned by such Executive on the date hereof.

 

2.2                                 Compliance with Securities Laws.  No Stockholder shall Transfer any Shares,
and the Company shall not transfer on its books any Shares, unless (a) the
Transfer is pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or any similar federal statute, and the rules
and regulations of the Commission (as defined in Section 4.1) thereunder,
all as the same shall be in effect at the time (the “Securities Act”) and is in
compliance with any applicable state securities or blue sky laws or (b) such
Stockholder shall have furnished the Company with an opinion of counsel, to the
extent reasonably required by the Company, which opinion and counsel shall be
reasonably satisfactory to the Company, to the effect that no such registration
is required because of the availability of an exemption from registration under
the Securities Act; provided that any Transfer by a Stockholder which is a
state-sponsored employee benefit plan to a successor trust or fiduciary or
pursuant to a statutory reconstitution shall be expressly permitted and no
opinions of counsel shall be required in connection therewith.  As used in this Agreement, the term “affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such Person.  For purposes of this Agreement, the term “control”
(including, with correlative meanings, the terms “controlling”, “controlled
by”, and “under common control with”), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.  Notwithstanding the foregoing, in no event
shall any Investor be deemed to be an affiliate of the Company or the
Purchaser.

 

2.3                                 Agreement to be Bound.  No Transfer of Shares, including without
limitation transfers otherwise permitted under Section 2.8 and
Section 2.11 hereof, by a Stockholder shall be effective (and the Company
shall not transfer on its books any Shares) unless (i) the certificates
representing such Shares issued to the Transferee shall bear the legend
provided in Section 8.4, if required by such Section 8.4, and (ii)
the Transferee shall have executed and delivered to the Company, as a condition
precedent to such Transfer, an instrument or instruments in form and substance
satisfactory to the Company confirming that the Transferee agrees to be bound
by the terms of this Agreement and accepts the rights and obligations set forth
hereunder, provided, however, that the conditions set forth in
this Section 2.3 shall not apply to any sale of Shares pursuant to an
effective registration

 

3

 

statement under the
Securities Act or, provided such sale is made after a Public Offering Event (as
defined in Section 2.4.5), pursuant to Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or any other similar regulation
hereafter adopted by the Commission (“Rule 144”).

 

2.4                                 Tag-Along Rights for the Executive
Parties and the Investors.

 

2.4.1                        Right
to Participate in Sale.  (a)  Purchaser and its affiliates are sometimes
referred to in this Agreement, collectively, as the “Purchaser Parties” and,
individually, as a “Purchaser Party.”  The Investors and their affiliates, collectively with the Broker
are sometimes referred to in this Agreement, collectively, as the “Investor/Broker
Parties” and, individually, as an “Investor/Broker Party.”  The Executives and their respective spouses,
descendants and ancestors and any trusts solely for the benefit of any or all
of the foregoing, in each case to the extent Shares have been transferred to
such Person as permitted under Section 2.8.3, are sometimes referred to in
this Agreement, collectively, as the “Executive Parties” and, individually, as an
“Executive
Party.”  As used in this
Section 2.4.1., (i) the “Triggering Transaction” shall mean the
transaction representing a sale or other disposition of Shares by the Purchaser
Parties which transaction when aggregated with all prior sales or other
dispositions of Shares by any Purchaser Party results in the sale or other
disposition by the Purchaser Parties of greater than twenty percent (20%) of
the Shares beneficially owned by the Purchaser Parties as of the date of this
Agreement and (ii) “Exempt Transactions” shall mean any sale or
other disposition of Shares by a Purchaser Party which occurs prior to the date
of the Triggering Transaction.  If at
any time any Purchaser Parties propose to enter into an agreement (or
substantially contemporaneous agreements, whether or not with the same or
affiliated parties) to sell or otherwise dispose of for value any Shares in one
or more related transactions other than in one or more related Exempt
Transactions (such sale or other disposition for value being referred to as a “Tag-Along
Sale”), then such Purchaser Parties shall afford the Executive
Parties and the Investor/Broker Parties (each individually a “Tag-Along
Stockholder” and, collectively, the “Tag-Along Stockholders”) the
opportunity to participate proportionately in such Tag-Along Sale in accordance
with this Section 2.4 or any employment agreement between such Executive
and the Company.  The number of Shares
that each Tag-Along Stockholder will be entitled to include in such Tag-Along
Sale (the “Tag-Along Allotment”) shall be determined by multiplying (i)
the number of Shares held by such Tag-Along Stockholder on a fully diluted
basis as of the close of business on the day immediately prior to the Tag-Along
Notice Date (as hereinafter defined) (the “Base Shares”) by (ii) a fraction, the
numerator of which shall equal the number Shares proposed by the Purchaser
Parties to be sold or otherwise disposed of by the Purchaser Parties pursuant
to the Tag-Along Sale and the denominator of which shall equal the total number
of Shares that are beneficially owned by the Purchaser Parties on a
fully-diluted basis as of the close of business on the day immediately prior to
the Tag-Along Notice Date; provided, however, that if any of the
Tag-Along Stockholders fails to elect to participate in a Tag-Along Sale,
Purchaser shall give notice of such failure to the other Tag-Along
Stockholders.  Such notice shall be made
by telephone and confirmed in writing within two (2) days.  The other Tag-Along Stockholders shall have
three (3) days from the date such written notice was given to agree to sell
their pro rata share of any unsold portion. 
For purposes of this Section 2.4.1, a Tag-Along Stockholder’s pro
rata share of any unsold portion shall be equal to the number of shares
obtained by multiplying (A) the number of Shares eligible for sale

 

4

 

by the non-electing
Tag-Along Stockholders by (B) a fraction, the numerator of which shall
equal such Tag-Along Stockholder’s Base Shares and the denominator of which
shall equal the Base Shares held by all Tag-Along Stockholders that are
participating in the Tag-Along Sale.

 

2.4.2                        Sale
Notice.  The relevant Purchaser
Parties shall provide each Tag-Along Stockholder and the Company with written
notice (the “Tag-Along Sale Notice”) not more than sixty (60) days nor less
than thirty (30) days prior to the proposed date of the Tag-Along Sale (the “Tag-Along Sale
Date”).  Each Tag-Along Sale
Notice shall be accompanied by a copy of any written agreement relating to the
Tag-Along Sale and shall set forth: 
(i) the name and address of each proposed Transferee of Shares in
the Tag-Along Sale; (ii) the number of Shares proposed to be Transferred
by such Purchaser Parties; (iii) the proposed amount and form of
consideration to be paid for such Shares and the terms and conditions of
payment offered by each proposed Transferee; (iv) the aggregate number of
Shares held of record by the Purchaser Parties as of the close of business on
the day immediately prior to the date of the Tag-Along Sale Notice (the “Tag-Along
Notice Date”); (v) the Tag-Along Stockholder’s Tag-Along
Allotment assuming the Tag-Along Stockholder elected to sell the maximum number
of Shares possible; (vi) confirmation that the proposed Transferee has been
informed of the Tag-Along Rights provided for herein and has agreed to purchase
Shares from any Tag-Along Stockholder in accordance with the terms hereof; and
(vii) the Tag-Along Sale Date.

 

2.4.3                        Tag-Along
Notice.  Any Tag-Along Stockholder
wishing to participate in the Tag-Along Sale shall provide written notice (the
“Tag-Along
Notice”) to the relevant Purchaser Parties no less than fifteen (15)
days prior to the Tag-Along Sale Date. 
The Tag-Along Notice shall set forth the number of Shares that such
Tag-Along Stockholder elects to include in the Tag-Along Sale, which shall not
exceed such Tag-Along Stockholder’s Tag-Along Allotment.  The Tag-Along Notice given by any Tag-Along
Stockholder shall constitute such Tag-Along Stockholder’s binding agreement to
sell the Shares specified in the Tag-Along Notice on the terms and conditions
applicable to the Tag-Along Sale; provided, however, that in the
event that there is any material change in the terms and conditions of such
Tag-Along Sale applicable to the Tag-Along Stockholder (including, but not
limited to, any decrease in the purchase price that occurs other than pursuant
to an adjustment mechanism set forth in the agreement relating to the Tag-Along
Sale) after such Tag-Along Stockholder gives its Tag-Along Notice, then,
notwithstanding anything herein to the contrary, the Tag-Along Stockholder
shall have the right to withdraw from participation in the Tag-Along Sale with
respect to all, but not less than all, of its Shares affected thereby.  If the proposed Transferee does not
consummate the purchase of all of the Shares requested to be included in the
Tag-Along Sale by any Tag-Along Stockholder on the same terms and conditions
applicable to the Purchaser Parties, then such Purchaser Parties shall not
consummate the Tag-Along Sale of any of its Shares to such Transferee, unless
the Shares of such Purchaser Parties and the Tag-Along Stockholders to be sold are
reduced or limited pro rata in proportion to the respective number of Shares
actually sold in any such Tag-Along Sale and all other terms and conditions of
the Tag-Along Sale are the same for such Purchaser Parties and the Tag-Along
Stockholders.

 

If a
Tag-Along Notice from any Tag-Along Stockholder is not received by such
Purchaser Parties prior to the fifteen (15) day period specified above, such
Purchaser Parties

 

5

 

shall have the right to
consummate the Tag-Along Sale without the participation of such Tag-Along
Stockholder, but only on terms and conditions which are no more favorable in
any material respect to such Purchaser Parties (and, in any event, at no
greater a purchase price, except as the purchase price may be adjusted pursuant
to the agreement relating to the relevant Tag-Along Sale) than as stated in the
Tag-Along Sale Notice and only if such Tag-Along Sale occurs on a date within
ninety (90) days of the Tag-Along Sale Date. 
If such Tag-Along Sale does not occur within such ninety (90) day
period, the Shares that were to be subject to such Tag-Along Sale thereafter
shall continue to be subject to all of the restrictions contained in this
Section 2.4.

 

2.4.4                        Delivery
of Certificates.  On the Tag-Along
Sale Date, each Tag-Along Stockholder shall deliver a certificate or
certificates for the Shares to be sold by such Tag-Along Stockholder in
connection with the Tag-Along Sale, duly endorsed for transfer with signatures
guaranteed, to the Transferee in the manner and at the address indicated in the
Tag-Along Sale Notice against delivery of the purchase price for such Shares.

 

2.4.5                        Exempt
Transfers.  The provisions of this
Section 2.4 shall not apply:

 

(i)                                     to
any sale, transfer or other disposition of Shares by and among Purchaser and
any of its respective limited partners (on a pro rata basis for no
consideration), or general partners or investment funds controlled, directly or
indirectly, by the general partner of such Purchaser Party;

 

(ii)                                  to
any sale of Shares to the public pursuant to an effective registration
statement under the Securities Act or pursuant to Rule 144;

 

(iii)                               from and after a Public
Offering Event.  For the purposes of
this Agreement, a “Public Offering Event” shall mean the first
date after which at least twenty percent (20%) of the Company’s outstanding
shares of Common Stock is publicly held and such Common Stock is listed or
admitted to trading on a national securities exchange or quoted on the NASDAQ
National Market or Small Capitalization System; or

 

(iv)                              to
any bona fide pledge of Shares to a commercial bank, savings and loan
institution or any other similar lending institution as security for any
indebtedness to such lender, provided that, upon any foreclosure such pledgee
shall comply with the terms of Section 2.3 of this Agreement.

 

2.5                                 Cooperation by the Company.  The Company will provide reasonable
assistance to any Executive Party, any Investor/Broker Party, or any Purchaser
Party seeking to sell its Shares, provided that the Company shall not be
required to provide any confidential information to any prospective purchaser
who has not executed a confidentiality agreement in form reasonably
satisfactory to the Company.  Any reasonable
out-of-pocket costs to the Company of providing such assistance shall be paid
pro rata (based on the number of Shares proposed to be sold) by each
Stockholder seeking to sell its Shares. 
The Company will also cooperate with any Executive Party, any
Investor/Broker Party or any Purchaser Party in having all stop transfer
instructions or notations and restrictive legends

 

6

 

lifted in connection with
the sale (other than to an affiliate of the Company) of Shares pursuant to Rule
144 promulgated under the Securities Act; provided that in such a case the
selling Stockholder shall be required to provide the Company with the opinion
provided for in Section 2.2(b).

 

2.6                                 Improper Transfer.  Any attempt to Transfer or otherwise encumber any Shares in violation
of this Agreement shall be null and void and neither the Company nor any
transfer agent of such Shares shall give any effect to such attempted Transfer
or encumbrance in its stock records.

 

2.7                                 Involuntary Transfer.  In the case of any Transfer of title or
beneficial ownership of Shares upon default, foreclosure, forfeit, court order,
or otherwise than by a voluntary decision on the part of a Stockholder (an “Involuntary
Transfer”), such Stockholder (or his legal representatives) shall
promptly (but in no event later than two (2) Business Days after such
Involuntary Transfer) furnish written notice to the Company indicating that an
Involuntary Transfer has occurred, specifying the name of the Person to whom
such Shares have been transferred and giving a detailed description of the
circumstances giving rise to, and stating the legal basis for, the Involuntary
Transfer.

 

2.8                                 First Option Rights.

 

2.8.1                        First
Option.  (a) No Executive Party
shall Transfer any Shares except as specifically permitted by this
Section 2.8 or under the terms of Section 2.4 or Article 3.  If at any time any Executive Party (a “Selling
Executive Party”) desires to sell for cash all or any part of the
Shares held by such Selling Executive Party, and such Selling Executive Party
shall have received an irrevocable and unconditional bona fide arm’s length
written offer (the “Bona Fide Offer”) for the purchase of such
Shares for consideration consisting solely of cash from any third party
unaffiliated with such Selling Executive Party (an “Outside Party”), the Selling
Executive Party shall provide written notice (the “Sale Notice”) to each of
(i) Purchaser or its assigns (together, the “Purchaser  Buyer”), (ii) Investors or their respective
assigns (together, the “Investor Buyers” and collectively with the
Purchaser Buyer, the “Secondary Buyers”) and (iii) the
Company (each Purchaser Buyer, each Investor Buyer and the Company, a “Potential
Buyer”) setting forth such desire to sell for cash such Shares,
which Sale Notice shall be accompanied by a photocopy of the original Bona Fide
Offer and shall set forth at least the name and address of the Outside Party
and the price and terms of such Bona Fide Offer.  Upon the giving of such Sale Notice, each Potential Buyer shall,
subject to the priorities set forth below, have the option (which option (the “Purchase
Option”), in the case of Purchaser Buyer and the Investor Buyers
only, shall be assignable at Purchaser Buyer’s or each respective Investor
Buyer’s, as the case may be, sole discretion, but only to its respective
affiliates) to purchase all, but not less than all, of such Shares specified in
the Sale Notice, on the same terms and conditions, including but not limited to
the offer price for the Shares, as the Bona Fide Offer.  Each Potential Buyer shall have thirty (30)
days from receipt of the Sale Notice to provide written notice (the “Acceptance
Notice”) to such Selling Executive Party of its desire to exercise
such Purchase Option.  If more than one
Potential Buyer shall deliver an Acceptance Notice within such thirty (30) day
period, the priority as among the Potential Buyers to match the Bona Fide Offer
and purchase such Shares shall be, to the extent such Potential Buyers have
delivered Acceptance Notices, first, the Company, and, second, if the Company
shall have

 

7

 

failed to deliver an
Acceptance Notice, the Secondary Buyers, based on the allocations set forth
below, provided, however, that the Company and the Secondary Buyers may in
their discretion, agree to a different allocation of the Shares to be purchased
as among themselves so long as each of them agrees to such allocation.  If the Company fails to deliver an
Acceptance Notice and (i) at least two Secondary Buyers deliver Acceptance
Notices, each of them shall purchase from such Selling Executive Party such
number of Shares as equals (A) the total number of Shares specified in the Sale
Notice delivered by such Selling Executive Party multiplied by (B) a fraction,
the numerator of which shall equal the number of Shares held by such Secondary
Buyer on a fully-diluted basis as of the close of business on the day
immediately prior to the date on which such Selling Executive Party delivers
the Sale Notice to the Potential Buyers and the denominator of which shall
equal the aggregate number of Shares held by all Secondary Buyers who delivered
Acceptance Notices, on a fully-diluted basis, on such date, or (ii) only one
Secondary Buyer delivers an Acceptance Notice, such Secondary Buyer shall
purchase all of the Shares specified in such Sale Notice.

 

If a
Potential Buyer or Potential Buyers, as applicable, elects to purchase, in the
aggregate, all of the Shares covered by the Bona Fide Offer on the terms and
conditions set forth in the Sale Notice, the Potential Buyer(s) entitled to
purchase such Shares (the “Chosen Buyer(s)”) shall be determined in
accordance with the priorities set forth above and such Chosen Buyer(s) shall
be obligated to purchase, and such Selling Executive Party shall be obligated
to sell, such Shares at the price and terms specified in the Sale Notice.  The closing of the purchase by the Chosen
Buyer(s) shall be held on a Business Day within sixty (60) days (or such
necessary longer period, if any, pending any necessary approval or
non-objection by, or any filing with, any governmental or regulatory authority
being sought in good faith by appropriate proceedings promptly initiated and
diligently conducted) after the giving of the relevant Acceptance Notice, at
the principal offices of the Chosen Buyer(s), or at such other time and place
as may be mutually agreed to by the Chosen Buyer(s) and the Selling Executive
Party.

 

If no
Acceptance Notice(s) is (are) delivered within the periods specified above by
one or more Potential Buyers, as applicable, with respect to all (but not less
than all) of the Shares included in the Sale Notice, the Selling Executive
Party shall, upon compliance with the provisions of Section 2.3, have the
right to consummate the sale of all (but not less than all) of the Shares
covered by the Sale Notice to the Outside Party but only at the price and upon
terms and conditions no less favorable to the Selling Executive Party than
those contained in the Sale Notice (provided that the purchase price must be
payable solely in cash) and only if such sale occurs on a date within sixty
(60) days of the date of the Sale Notice; provided, however, that
in the event the Selling Executive Party has not so transferred all (but not
less than all) of such Shares to the Outside Party within such sixty (60) day
period, then such Shares thereafter shall continue to be subject to all of the
restrictions contained in this Agreement.

 

2.8.2                        No
Waiver.  Any election in any
instance by any Potential Buyer not to exercise its option rights under this
Section 2.8 shall not constitute a waiver of such rights with respect to
any other proposed Transfer of Shares.

 

2.8.3                        Exempt
Transfers.  The provisions of this
Section 2.8 shall not apply:

 

8

 

(i)                                     to
any Transfer of Shares to the spouse of such Executive, any direct lineal
descendant or ancestor of such Executive or any trust solely for the benefit of
any or all of the foregoing, provided that each of the following conditions
shall be satisfied:

 

(A)                              after
giving effect to such Transfer, such executive shall be the sole beneficial and
record owner of a number of Shares representing not less than fifty percent
(50%) of the Shares (including Shares subject to options) held by such Executive
on the date hereof;

 

(B)                                after
giving effect to such Transfer, sole voting power with respect to such
Transferred Shares shall be held by such Executive; and

 

(C)                                if
the Transferee of such Transferred Shares shall have executed and delivered to
the Company, as a condition precedent to such Transfer, an instrument or
instruments in form and substance satisfactory to the Company confirming that
the Transferee agrees to be bound by the terms of this Agreement and accepts
the rights and obligations set forth in this Agreement; or

 

(ii)                                  to
any sale of Shares by an Executive Party in a public offering pursuant to an
effective registration statement under the Securities Act.

 

2.9                                 Option to Repurchase Shares.  In the event that an Executive is no longer
employed, which includes the death or disability of such Executive (the “Terminated
Executive”, which term includes any legal representative of the
Terminated Executive) with the Company (or any of its subsidiaries) (an “Option Event”),
then the Company, the Purchaser (or its assigns) and each Investor (or its
assigns) (together with Purchaser (or its assigns), the “Repurchase Option Buyers”),
subject to the priorities set forth below, shall have the right and option (the
“Repurchase
Option”), in each of their respective sole discretion, at any time
during the thirty (30) days following the occurrence of an Option Event, to
repurchase from such Terminated Executive all of the Shares then owned,
directly or indirectly, by such Terminated Executive, including all such Shares
acquired by a Person pursuant to an Exempt Transfer as set forth in paragraph
2.8.3 of this Agreement.  The priority
to exercise the Repurchase Option shall be, first to the Company and, second to
the Purchaser (or its assigns) and to each Investor (or its respective assigns
based on the allocations set forth below); provided, however,
that each of the Company, the Purchaser and each Investor can elect not to
exercise the Repurchase Option and that the Company, the Purchaser and the
Investors may in their discretion, agree to a different allocation of the
Shares to be repurchased as among themselves so long as each of them agrees to
such allocation.  In the event the
Company does not choose to exercise the Repurchase Option, and at least two
Repurchase Option Buyers desire to exercise the Repurchase Option, each such
Repurchase Option Buyer shall purchase such number of Shares as equals (i) the
total number of Shares that are subject to the Repurchase Option, multiplied by
(ii) a fraction, the numerator of which shall equal the number of Shares owned
by such Repurchase Option Buyer on a fully-diluted basis as of the close of
business on the day immediately prior to the date of the Option Event and the
denominator of which shall equal the aggregate number of

 

9

 

the Shares held by the
Repurchase Option Buyers who chose to exercise the Repurchase Option, on a
fully-diluted basis, on such date.  The
price to exercise the Repurchase Option shall be the fair market value of the
Shares to be purchased at the time of the Option Event, which shall be
determined in accordance with the provisions set forth in Schedule 2,
attached hereto.  In the event that the
Company consummates the Repurchase Option, any amounts payable to Terminated
Executive by the Company shall be first offset against any outstanding
principal balance of any indebtedness owed to the Company (including any of its
subsidiaries) by Terminated Executive in accordance with the terms of such indebtedness.  The exercise of the Repurchase Option shall
be by means of a written notice of exercise delivered to the Terminated
Executive and the payment of the purchase price shall be made in cash (subject
to any offset of indebtedness as set forth in the preceding sentence), which
date shall be no later than thirty (30) days (or such necessary longer period,
if any, pending any necessary approval or non-objection by, or any filing with,
any governmental or regulatory authority being sought in good faith by appropriate
proceedings promptly initiated and diligently conducted) following delivery of
such notice or such longer period as may be reasonably necessary to determine
the fair market value of the Shares at the time of the Option Event in
accordance with the provisions set forth in Schedule 2, attached
hereto and in accordance with the terms governing the repayment of any
indebtedness of such Terminated Executive to the Company.  Any Shares subject to the Repurchase Option
shall be free and clear of any and all liens, claims, charges and encumbrances.

 

2.10                           Preemptive Rights.  In the event of a proposed issuance of, or a proposed granting by
the Company of, Common Stock or other equity interests of the Company or
Rights, other than the issuance of stock options (or any exercise thereof) to
employees of the Company reflected on Schedule 1 attached hereto
(each, a “Proposed
Issuance”), each of the Purchaser, each Investor and any executive
of the Company granted such rights pursuant to the terms of his or her employment
with the Company (the “Permitted Executives”) shall have the
right, on the same terms as those of the Proposed Issuance and during a
reasonable time no less than thirty (30) days after the Company has given
notice to each of the Purchaser, the Investors and the Permitted Executives of
such Proposed Issuance, to purchase that proportion of such Common Stock or
other equity interests or Rights as is necessary to maintain such Purchaser’s,
Investor’s or Permitted Executive’s fully-diluted percentage equity interests
in the Company on a record date not more than thirty (30) days prior to the
Proposed Issuance (the “Proposed Issuance Record Date”).   The price or prices for such Common Stock,
other equity interests or Rights shall be no less favorable to each Purchaser,
Investor and Permitted Executive than the price or prices at which such Common
Stock, other equity interests or Rights are proposed to be offered for sale or
granted to others, after deduction of the expenses of and compensation for the sale,
underwriting or purchase of such Common Stock, other equity interests or Rights
by underwriters, dealers or other purchasers as may be paid by the
Company.  To the extent that any
Purchaser, Investor or Permitted Executive chooses not to participate in the
Proposed Issuance (a “Non-Participating Stockholder”), the
remaining Purchaser, Investors and Permitted Executives who choose to
participate in the Proposed Issuance (the “Participating Stockholders”) shall each
have the right to purchase that number of additional shares of Common Stock,
other equity interests or Rights, as the case may be, as equals (i) number of
shares of Common Stock, other equity interests or Rights, as the case may be,
the Non-Participating Stockholders would have been entitled to receive had such
Non-Participating Stockholder(s) participated in the Proposed Issuance,
multiplied by (ii)

 

10

 

such Participating
Stockholder’s fully-diluted percentage ownership of equity interests in the
Company (without regard to the Non-Participating Stockholder(s)) on the
Proposed Issuance Record Date.

 

2.11                           First Offer Rights.

 

2.11.1                  First Offer
Rights.  (a) No Investor shall, and
the Broker shall not, Transfer any Shares except as specifically permitted by
this Section 2.11 or under the terms of Sections 2.4 or
Article 3.  If at any time any
Investor or the Broker (a “Selling Investor/Broker”) desires to sell
for cash all or any part of the Shares held by such Selling Investor/Broker,
such Selling Investor/Broker shall first give written notice (the “First Offer
Notice”) to the Purchaser or its assigns (together, the “Offer
Purchaser”)
stating such Selling Investor/Broker’s desire to make such sale, the number
Shares proposed to be sold, the price and the terms on which such Selling
Investor/Broker proposes to make such sale. 
Upon the giving of such First Offer Notice, the Offer Purchaser shall
have the option (which option (the “First Offer Option”) shall be assignable at
the Offer Purchaser’s sole discretion) to purchase all, but not less than all,
of such Shares specified in the First Offer Notice, on the terms and conditions
set forth in such First Offer Notice. 
Offer Purchaser shall have fifteen (15) days from receipt of the First
Offer Notice to provide written notice (the “First Offer Acceptance Notice”)
to such Selling Investor/Broker of its desire to exercise such First Offer
Option.

 

If an
Offer Purchaser elects to purchase, in the aggregate, all of the Shares
proposed to be sold by such Selling Investor/Broker on the terms and conditions
set forth in the First Offer Notice, the Offer Purchaser shall be obligated to
purchase, and such Selling Investor/Broker shall be obligated to sell, such
Shares at the price and terms specified in the First Offer Notice.  The closing of the purchase by the Offer
Purchaser shall be held on a Business Day within forty-five (45) days (or such
necessary longer period, if any, pending any necessary approval or non-objection
by, or any filing with, any governmental or regulatory authority being sought
in good faith by appropriate proceedings promptly initiated and diligently
conducted) after the giving of the First Offer Acceptance Notice, at the
principal offices of the Offer Purchaser, or at such other time and place as
may be mutually agreed to by the Offer Purchaser and the Selling
Investor/Broker.

 

If no
First Offer Acceptance Notice is delivered within the period specified above by
the Offer Purchaser, the Selling Investor/Broker shall, upon compliance with the
provisions of Section 2.3, have the right to consummate the sale of all
(but not less than all) of the Shares covered by the First Offer Notice to an
unaffiliated third-party of third parties but only at a price and upon terms
and conditions no less favorable to the Selling Investor/Broker than those
contained in the First Offer Notice and only if such sale occurs on a date
within seventy-five (75) days (or such necessary longer period, if any, pending
any necessary approval or non-objection by, or any filing with, any
governmental or regulatory authority being sought in good faith by appropriate
proceedings promptly initiated and diligently conducted), from the earlier of
(i) the lapse of the fifteen (15) day period (or the ten (10) day period in the
case of an Amended First Offer Notice described below) following the receipt of
the First Offer Notice and (ii) the receipt by the Selling Investor/Broker of a
notice from the Offer Purchaser declining to exercise the First Offer Option; provided,
however, that in the event the Selling Investor/Broker has not so
transferred all (but not less

 

11

 

than all) of such Shares
to such unaffiliated third-party(ies) within such seventy-five (75) day period
(or such necessary longer period, if any, pending any necessary approval or
non-objection by, or any filing with, any governmental or regulatory authority
being sought in good faith by appropriate proceedings promptly initiated and
diligently conducted), then such Shares thereafter shall continue to be subject
to all of the restrictions contained in this Agreement.  Notwithstanding anything to the contrary
contained in this paragraph, the Selling Investor/Broker shall have the right
in such seventy-five (75) day period to provide to the Offer Purchaser an
amended First Offer Notice (the “Amended First Offer Notice”) which shall be
identical to the First Offer Notice, except that the Amended First Offer Notice
shall offer the Shares subject to the First Offer Notice at a price between 90%
and 99.9% of the price specified in the First Offer Notice.  The Amended First Offer Notice shall be
treated for all purposes of this Section 2.11 as if it were an initial
First Offer Notice, except that the Offer Purchaser shall have ten (10) days
from receipt of such Amended First Offer Notice to provide such Selling
Investor/Broker with a First Offer Acceptance Notice.

 

2.11.2                  No Waiver.  Any election in any instance by Offer
Purchaser not to exercise its first offer rights under this Section 2.11
shall not constitute a waiver of such rights with respect to any other proposed
Transfer of Shares.

 

2.11.3                  Exempt
Transfers.  The provisions of this
Section 2.11 shall not apply:

 

(i)                                     to
any sale, transfer or other disposition of Shares by and among Ares and any of
its respective limited partners (on a pro rata basis for no consideration), or
general partners or investment funds controlled, directly or indirectly, by the
general partners of Ares;

 

(ii)                                  to
any sale, transfer or other disposition of Shares by and among GSMP and any of
its respective limited partners (on a pro rata basis for no consideration), or
general partners or investment funds controlled, directly or indirectly, by the
general partners of GSMP; and

 

(iii)                               to
the sale of the Shares by any Investor in a public offering pursuant to an
effective registration statement under the Securities Act  pursuant to the provisions set forth in
Sections 4.2 and 4.3 of this Agreement.

 

ARTICLE 3                                Drag-Along Sales.

 

3.1                                 Right of Purchaser to Require Sale.  Notwithstanding any other provision of this
Agreement, if the Purchaser Parties (the “Drag-Along Sellers”) agree to sell or
otherwise dispose of (or cause to be sold or otherwise disposed of) for cash or
any other securities all of the Shares then owned by the Purchaser Parties, in
one in one or more related transactions (a “Drag-Along Sale”), to a third
Person or third Persons who are not affiliates of any of the Drag-Along Sellers
(a “Third
Party”), then, upon the demand of a majority of the Drag-Along
Sellers, the Executive Parties, the Investors and the Broker (the “Required
Sellers”) shall be required to sell to such Third Party all, but not
less than all, of the shares of Common Stock, if any, then held by them, at the
same price and on the same terms and conditions as the Drag-Along Sellers have
agreed to with such Third Party;

 

12

 

provided,
however, in the event of a drag-along transaction that includes as
consideration other securities that are not publicly traded, the Investors
shall be entitled to the rights with respect to such securities that are as
favorable to the Investors as those set forth in ARTICLE 4 hereof.

 

3.2                                 Drag-Along Notice.  Prior to making any Drag-Along Sale, the Drag-Along Sellers shall
promptly provide each Required Seller with written notice (the “Drag-Along
Notice”) not more than thirty (30) or less than fifteen (15) days
prior to the proposed date of the Drag-Along Sale (the “Drag-Along Sale Date”).  The Drag-Along Notice shall set forth:  (i) the name and address of the Third Party;
(ii) the name and address of each member of the Drag-Along Sellers; (iii) the
proposed amount and form of consideration to be paid per Share and the terms
and conditions of payment offered by the Third Party; (iv) the number of Shares
held of record as of the close of business on the date of the Drag-Along Sale
Notice (the “Drag-Along Notice Date”) by the Required Seller to whom the
notice is sent; (v) the aggregate number of Shares held of record as of the
Drag-Along Notice Date by the Drag-Along Sellers; (vi) confirmation that the
Drag-Along Sellers are selling all or substantially all of the aggregate number
of Shares then held by them to the Third Party; (vii) the Drag-Along Sale Date;
and (viii) confirmation that the proposed Third Party has agreed to purchase
the Required Sellers’ shares of Common Stock in accordance with the terms
hereof.

 

3.3                                 Delivery of Certificates.  On the Drag-Along Sale Date, each Required
Seller shall deliver a certificate or certificates for all of its shares of
Common Stock, duly endorsed for transfer with signatures guaranteed, to such
Third Party in the manner and at the address indicated in the Drag-Along Notice
against delivery of the purchase price for such Required Seller’s shares of
Common Stock.

 

3.4                                 Consideration. 
The provisions of this Section 3 shall apply regardless of the form
of consideration received in the Drag-Along Sale.  In the event that all or a portion of the consideration received
by the Required Sellers in the Drag-Along Sale is other than cash or securities
that are publicly traded and are freely tradeable (“Saleable Securities”), the
Company  agrees that any outstanding
indebtedness of a Required Seller to the Company shall remain outstanding
without modification to the extent such indebtedness exceeds the amount, if
any, of the portion of the consideration consisting of cash or Saleable
Securities, except that such non-cash consideration received by such Required
Seller shall substitute and replace the Shares sold in the Drag-Along Sale
which previously served as collateral for such indebtedness.

 

3.5                                 Cooperation. 
The Executive Parties shall cooperate in good faith with the Drag-Along
Sellers in connection with the consummation of the Drag-Along Sale.

 

ARTICLE 4                                Registration Rights.

 

4.1                                 Definitions. 
For purposes of this Article 4, the following terms are used as
defined below.

 

“Commission”
means the Securities and Exchange Commission or any other federal agency at the
time administering the Securities Act and Exchange Act.

 

13

 

“Demand”
means a written request of the Company from either a Purchaser Holder or a GSMP
Holder to consummate a Demand Registration.

 

“Demand
Registration” means the registration under the Securities Act
(including, but not limited to, a shelf registration under Rule 415 promulgated
under the Securities Act) by the Company of all or part of the Registrable
Shares of Purchaser Holders or GSMP Holders, as applicable, pursuant to a
Demand received by the Company from the Purchaser Holders or GSMP Holders, as
the case may be.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder.

 

“Executive
Holder” means a Holder of Registrable Executive Shares, including a
Transferee of Registrable Executive Shares if (i) the Transfer to such
Transferee is not prohibited by this Agreement, and (ii) the Shares Transferred
to such Transferee continue to be Registrable Shares.

 

“GSMP Holder”
means a Holder of Registrable GSMP Shares, including a Transferee of
Registrable GSMP Shares if (i) the Transfer to such Transferee was not
prohibited by this Agreement, and (ii) the Shares Transferred to such
Transferee continue to be Registrable Shares;

 

“Holder”
means a Holder of Registrable Shares.  A
Person is deemed to be a Holder of Registrable Shares whenever such Person owns
Registrable Shares; provided, however, that unless the Company is
otherwise notified by the Holder of Registrable Shares, the Holder of
Registrable Shares shall be deemed to be that Person set forth on the books and
records of the Company or the registrar for such Registrable Shares set forth.

 

“Investor
Holder” means, collectively, the GSMP Holders and the Non-GSMP
Investor Holders.

 

“Non-GSMP
Investor Holder” means a Holder of Registrable Non-GSMP Investor
Shares, including a Transferee of Registrable Non-GSMP Investor Shares if (i)
the Transfer to such Transferee is not prohibited by this Agreement, and (ii)
the Shares Transferred to such Transferee continue to be Registrable Shares;

 

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

 

“Purchaser
Holder” means a Holder of Registrable Purchaser Shares, including a
Transferee of Registrable Purchaser Shares if (i) the Transfer to such Transferee
is not prohibited by this Agreement, and (ii) the Shares Transferred to such
Transferee continue to be Registrable Shares.

 

“Registrable
Broker Shares” means the Shares owned by the Broker on the date
hereof or subsequently acquired by Broker (and any securities issued or
issuable with respect to such Common Stock by way of stock dividends or stock
splits or in connection

 

14

 

with a combination of
shares, recapitalization, merger, consolidation, or other reorganization or
otherwise).

 

“Registrable
Executive Shares” means the shares of Common Stock owned by an
Executive on the date hereof or subsequently acquired by any Executive Party
(and any securities issued or issuable with respect to such Common Stock by way
of stock dividends or stock splits or in connection with a combination of
shares, recapitalization, merger, consolidation, or other reorganization or
otherwise) (collectively, together with the Registrable Broker Shares,
Registrable Purchaser Shares, Registrable GSMP Shares and Registrable Non-GSMP
Investor Shares, the “Registrable Shares”); provided, however,
that any Registrable Shares will cease to be Registrable Shares when (i) a
registration statement covering such Registrable Shares has been declared
effective and such Registrable Shares have been disposed of pursuant to such
effective registration statement, or (ii) such Registrable Shares are
distributed to the public pursuant to Rule 144;

 

“Registrable
GSMP Shares” means the Shares issued to GSMP pursuant to the
Subscription Agreement and the Purchase Agreement or Shares subsequently
acquired by any GSMP party (and any securities issued or issuable with respect
to such Shares or Warrants by way of stock dividends or stock splits or in connection
with a combination of shares, recapitalization, merger, consolidation, or other
reorganization or otherwise);

 

“Registrable
Investor Shares” means, collectively, the Registrable GSMP Shares
and the Registrable Non-GSMP Investor Shares.

 

“Registrable
Non-GSMP Investor Shares” means the Shares issued to Ares
(collectively, the “Non-GSMP Holders”) pursuant to the
Subscription Agreement and the Purchase Agreement or Shares subsequently
acquired by any Non-GSMP Investor Holders (and any securities issued or
issuable with respect to such Shares by way of stock dividends or stock splits
or in connection with a combination of shares, recapitalization, merger,
consolidation or other organization or otherwise);

 

“Registrable
Purchaser Shares” means the shares of Common Stock issued pursuant
to the Merger Agreement to Purchaser or subsequently acquired by any Purchaser
Party (and any securities issued or issuable with respect to such Common Stock
by way of stock dividends or stock splits or in connection with a combination
of shares, recapitalization, merger, consolidation, or other reorganization or
otherwise); and

 

“Selling
Holder” means, with respect to any registration statement, any
Holder who seeks to include its Registrable Shares are included therein.

 

4.2                                 Demand Registrations.

 

4.2.1                        Number
of Registrations.

 

(a)                                  Purchaser
Holders’ Demand Rights.  Commencing
on the date of this Agreement, Purchaser Holders holding an aggregate number of
Registrable Purchaser Shares at least equal to twenty percent (20%) of the
number of Registrable Purchaser Shares on the date hereof shall be entitled to
make a Demand of the Company to consummate a Demand Registration of all or part
of their Registrable Purchaser Shares; provided, however,

 

15

 

that not more than an
aggregate of three (3) Demand Registrations with respect to the Registrable
Purchaser Shares may be made pursuant to the rights granted by this
Section 4.2.1(a); and provided, further that if one or more
of the Purchaser Parties have not registered all or part of their Registrable
Shares through the first Demand Registration, then one or more Purchaser
Holders holding an aggregate number of Registrable Purchaser Shares at least
equal to fifteen percent (15%) of the Registrable Purchaser Shares on the date
hereof shall be entitled to make a subsequent Demand; and provided, further
that the first Demand Registration must cover an aggregate number of
Registrable Purchaser Shares at least equal to twenty-five percent (25%) of the
number of Registrable Purchaser Shares on the date hereof and a subsequent
Demand Registration must cover an aggregate number of Registrable Purchaser
Shares at least equal to twenty percent (20%) of the number of Registrable
Purchaser Shares on the date hereof.

 

(b)                                 GSMP
Holders’ Demand Rights. 
Notwithstanding any Demand Registrations consummated by the Company
pursuant to Section 4.2.1(a) of this Agreement, commencing on the date of
this Agreement, the GSMP Holders holding an aggregate number of Registrable
GSMP Shares at least equal to twenty-five percent (25%) of the number of
Registrable GSMP Shares on the date hereof shall be entitled to make a Demand
of the Company to consummate a Demand Registration of all or part of the
Registrable Investor Shares on a pro rata basis among all Investor Holders who
own any Registrable Investor Shares; provided, however, that not
more than two (2) Demand Registrations with respect to the Registrable Investor
Shares may be made pursuant to the rights granted by this
Section 4.2.1(b).

 

(c)                                  Selection
of Underwriter.  Any Demand
Registration hereunder shall be on any appropriate form under the Securities
Act permitting registration of such Registrable Shares for resale by the
Purchaser Holders or the Investor Holders, as applicable, in the manner or
manners designated by them (including, without limitation, pursuant to one or
more underwritten offerings).  The
determination of whether the offering will involve an underwritten offering,
and the selection of investment bankers and managers, if any, and counsel,
shall be made by Holders of a majority of the Registrable Purchaser Shares or
the Registrable GSMP Shares, as applicable, to be included in such
registration, provided, however, that the selection of investment
bankers and managers, if any, and counsel so selected shall be reasonably
satisfactory to the Company.  If
requested, the Company shall enter into an underwriting or other such agreement
with an investment banking firm in connection with a Demand Registration,
containing representations, warranties, indemnities and agreements then
customarily included in underwriting or other such agreement by such
underwriter with respect to secondary distributions of securities.

 

4.2.2                        Registration.  The Company shall file a registration
statement with respect to each Demand Registration and use its best efforts to
cause the same to be declared effective as promptly as practicable following
such Demand, but not later than one hundred twenty (120) days thereafter.  Unless all of the Registrable Purchaser
Shares or Registrable Investor Shares, as applicable, covered by the
registration statement have earlier been sold or withdrawn from sale, the
Company shall keep any such Registration Statement effective for a period of at
least one hundred eighty (180) days after such registration statement is first
declared effective plus a period equal to (x) any period during which the
Selling Holders are prohibited from making sales because of any stop order,
injunction or other order or

 

16

 

requirement of the
Commission or any other governmental agency or court plus (y) any Demand
Suspension Period (as defined below) plus (z) any holdback period pursuant
to Section 4.6 that occurs while the registration statement is effective
(the “Demand
Period”) and a registration will not count as a Demand Registration
unless it is declared effective by the Commission and remains effective until
the earlier of such time as all of the Registrable Purchaser Shares or
Registrable Investor Shares, as applicable, included in such registration have
been sold or disposed of or withdrawn from sale by the Selling Holders or the
expiration of the Demand Period or, if the registration remains effective for a
shorter period, the Selling Holders have sold at least eighty percent (80%) of
their Registrable Purchaser Shares or Registrable Investor Shares, as
applicable, included in such Demand Registration.  In addition, a request for registration shall not be deemed to
constitute a Demand Registration if: (i) the conditions to closing specified in
the underwriting agreement or other such agreement entered into in connection
with such Demand Registration are not satisfied other than by reason of some
act or omission by the Purchaser Holders or the GSMP Holders, as applicable,
that are Selling Holders; (ii) the Company voluntarily takes any action that
would result in the Selling Holders not being able to sell such Registrable
Shares covered thereby during the Demand Period; (iii) after it has become
effective, such Demand Registration becomes subject to any stop order,
injunction or other order or requirement of the Commission or other
governmental agency or court and such order, injunction or requirement is not
promptly withdrawn or lifted, and such Demand Registration has not otherwise
remained effective for the Demand Period (including effective periods both
before and after the order, injunction or requirement is made or imposed); or
(iv) such Demand Registration does not involve an underwritten offering and the
Purchaser Holders or the Investor Holders, as applicable, that are Selling
Holders determine not to proceed following any delay imposed hereunder by the
Company; provided, however, that prior to such a delay under this
clause (iv), the Purchaser Holders or the Investor Holders, as applicable, that
are Selling Holders have not sold more than eighty percent (80%) of the
Registrable Purchaser Shares or Registrable Investor Shares, as applicable,
included in such Demand Registration. 
Notwithstanding the foregoing, the Company may, at any time, delay the
filing or delay or suspend the effectiveness of the Demand Registration or,
without suspending such effectiveness, instruct the Selling Holders not to sell
any securities included in the Demand Registration, if the Company shall have
determined in good faith (as evidenced by a Board resolution delivered to the
Selling Holders) that proceeding with the Demand Registration at such time may
have a material adverse effect on the Company or the Company shall have
determined upon the advice of counsel that it would be required to disclose any
actions taken by the Company in good faith and for valid business reasons,
including without limitation, the acquisition or divestiture of assets, which
disclosure may have a material adverse effect on the Company or on such actions
(a “Demand
Suspension Period”), by providing the Selling Holders with written
notice of such Demand Suspension Period and the reasons therefor.  The Company shall use its best efforts to
provide such notice at least ten (10) days prior to the commencement of such a
Demand Suspension Period; provided, however, that in any event
the Company shall provide such notice no later than the commencement of such
Demand Suspension Period; and provided, further, that in no event
shall the Demand Suspension Periods exceed one hundred twenty (120) days in any
three hundred sixty (360) day period.

 

The
Company further agrees to supplement or amend such registration statement with
respect to such Demand Registration, as required by the registration form
utilized by

 

17

 

the Company or by the
instructions applicable to such registration form or by the Securities Act for
the registration of securities or as reasonably requested (which request shall
result in the filing of a supplement or amendment subject to approval thereof
by the Company, which approval shall not be unreasonably withheld) by any
Selling Holder or any managing underwriter of Registrable Shares to which such
Demand Registration relates, and the Company agrees to furnish to the Selling
Holders (and any managing underwriter) copies, in substantially the form
proposed to be used and/or filed, of any such supplement or amendment prior to
its being used and/or filed with the Commission.  The Company shall amend or supplement the registration statement
with respect to such Demand Registration no less frequently than every
forty-five (45) days to update the list of Selling Holders pursuant to written
requests by such Holders.

 

4.2.3                        Inclusion
of Registrable Shares.  Any Demand
shall specify the number of Registrable Purchaser Shares or Registrable
Investor Shares, as applicable, to be registered and the intended methods of disposition
thereof.  Within ten (10) days after
receipt of such Demand, the Company shall give written notice of such
registration request to all Holders of Registrable Purchaser Shares or
Registrable Investor Shares, as applicable, which have not made the Demand, and
the Company shall include in such registration all Registrable Purchaser Shares
or Registrable Investor Shares, as applicable, with respect to which the
Company has received written requests for inclusion therein within fifteen (15)
days after the date on which such notice is given.  Each such request shall also specify the aggregate number of
Registrable Purchaser Shares or Registrable Investor Shares, as applicable, to
be registered.  Subject to the priority
provisions of Section 4.2.4 hereof, the Company may also include in such
Demand Registration shares of Common Stock for the account of the Company and
any other Persons who hold shares of Common Stock.

 

4.2.4                        Priority
on Demand Registrations.  If a
Demand Registration is an underwritten registration and the managing
underwriters of such offering determine in good faith that the aggregate number
of (i) Registrable Purchaser Shares or Registrable Investor Shares, as
applicable, of the Selling Holders exercising their rights to participate in the
Demand Registration on a demand basis, pursuant to this Section 4.2;
(ii) Shares of the Company; and (iii) Shares of any other Persons
entitled to participate in such Demand Registration, in each case proposed to
be included in such registration statement, exceeds the maximum number of
Shares that can reasonably be expected to be sold within a price range
acceptable to the Purchaser Holders or the GSMP Holders, as applicable, that
made the Demand, then the number of shares to be offered for the account of the
Company and for the account of all such other Persons, other than holders of
Registrable Purchaser Shares, if the Purchaser Holders made the Demand, or
Registrable Investor Shares, if the GSMP Holders made the Demand, participating
in such registration shall be reduced or limited pro rata (and to zero, if
necessary) in proportion to the respective number of Shares requested to be
registered to the extent necessary to reduce the total number of Shares
requested to be included in such registration statement to the maximum number
of Shares that can reasonably be expected to be included therein and still
satisfy such price requirement.  If the
foregoing market “cutback” does not reduce the aggregate number of Shares
proposed to be included in the registration statement to the maximum number of
Shares that can reasonably be expected to be sold within the price range
acceptable to the Purchaser Holders or the GSMP Holders, as applicable, that
made the Demand, the Company shall include in such registration Registrable
Purchaser Shares or Registrable Investor Shares, as applicable, of

 

18

 

such Selling Holders pro
rata among all such Selling Holders on the basis of the number of Registrable
Purchaser Shares or Registrable Investor Shares, as applicable, requested to be
included by all such Selling Holders. 
Any request for registration with respect to which such a market
“cutback” with respect to such Selling Holders occurs shall be deemed to
constitute a Demand Registration for all purposes of this Article 4; provided,
however, that if any such market “cutback” occurs with respect to a
Demand Registration and all the Selling Holders that made the Demand are not
able to sell at least eighty percent (80%) of the Registrable Shares which such
Holders proposed to sell pursuant to such Demand Registration (in the case of a
Demand made by the GSMP Holders, the Registrable Non-GSMP Investor Shares of
the Non-GSMP Investor Holders shall also be included for this purpose), then
such request for registration will not count against the number of Demands to
which the Purchaser Holders or the GSMP Holders, as applicable, that made the
Demand are entitled pursuant to Section 4.2 hereof.

 

4.2.5                        Compliance.  Notwithstanding any other provisions hereof,
the Company shall use its best efforts to ensure that (i) any registration
statement filed in connection with a Demand Registration or a Piggyback
Registration pursuant to Section 4.3 below, and any amendment thereto, and
any prospectus forming a part thereof, and any supplement thereto, complies in
all material respects with the Securities Act and the rules and regulations
thereunder, (ii) any registration statement filed in connection with a Demand
Registration, or a Piggyback Registration pursuant to Section 4.3 below,
and any amendment thereto, does not, when it becomes effective, 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 not misleading
and (iii) any prospectus forming part of any registration statement filed in
connection with a Demand Registration, or a Piggyback Registration pursuant to
Section 4.3 below, and any supplement to such prospectus, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they are made, not misleading.

 

4.3                                 Piggyback Registration.

 

4.3.1                        Right
to Include Registrable Shares.  If
the Company at any time proposes to register any of its equity securities under
the Securities Act, whether or not for sale for its own account and whether or
not on account of receipt by the Company of a Demand pursuant to
Section 4.2.1(a) or (b), on a form and in a manner which would permit
registration of Registrable Shares for a public offering under the Securities
Act (other than on a registration statement (i) on Form S-4 or Form S-8 or
any successor form thereto or (ii) filed in connection with an exchange
offer), the Company shall give written notice of the proposed registration to
each Holder at least fifteen (15) days prior to the filing thereof, and each
Holder shall have the right to request that all or any part of its Registrable
Shares be included in such registration by giving written notice to the Company
within fifteen (15) days after the giving of such notice by the Company.  If the registration statement is to cover an
underwritten offering, such Registrable Shares shall be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters. 
Notwithstanding the foregoing, an Executive Holder may not request the
registration of his or her respective Registrable Executive Shares, if such
Registrable Executive Shares may, at the time (or within thirty days
thereafter), be distributed to the

 

19

 

public pursuant to
paragraph (k), as such paragraph may be amended from time to time, or any other
similar provision hereafter adopted by the Commission, of Rule 144.

 

4.3.2                        Priority
on Piggyback Registrations.

 

(a)                                  Company
Registrations.  If the registration
is an underwritten primary registered offering on behalf of the Company and not
as the result of a Demand pursuant to Section 4.2.1, and the managing
underwriter(s) of such offering determine in their good faith judgment that the
aggregate number of securities, including Registrable Shares, of the Company
which all Selling Holders and all other security holders of the Company,
pursuant to contractual rights to participate in such registration (the “Other
Holders”), propose to include in such registration statement exceeds
the maximum number of securities, including Registrable Shares, that can reasonably
be expected to be sold in such offering without materially and adversely
affecting the marketability of the offering or the selling price to be
obtained, the Company will include in such registration, first, the shares of
Common Stock or other securities which the Company proposes to sell and,
second, the Registrable Shares of such Selling Holders and other securities to
be sold for the account of Other Holders, pro rata among all such Selling
Holders and Other Holders, taken together, on the basis of the number of
Registrable Shares or other securities of the Company requested to be included
by all Selling Holders and Other Holders who have requested that securities
owned by them be so included, it being agreed and understood, however,
that such managing underwriter(s) shall have the right, at their sole
discretion, to eliminate entirely the participation in such registration of all
Selling Holders and Other Holders (or certain selected classes, such as
directors and executive officers).

 

(b)                                 Selling
Holders’ Registration.  If the
registration is an underwritten secondary registered offering on behalf of
Selling Holders that are Purchaser Holders or Investor Holders, as the case may
be, pursuant to Section 4.2 hereof, and the managing underwriter(s)
determine in good faith that the aggregate number of securities which all
Selling Holders, the Company and all Other Holders propose to include in such
registration exceeds the maximum number of securities that can reasonably be
expected to be sold within the price range acceptable to the Purchaser Holders
or the GSMP Holders, as applicable, that made the Demand, the Company will
include in such registration, first, the Registrable Purchaser Shares of the
Purchaser Holders, if the Purchaser Holders made the Demand or the Registrable
Investor Shares of the Investor Holders, if the GSMP Holders made the Demand in
accordance with Section 4.2.4 hereof, and, second, any securities to be
sold for the account of the Company, securities to be sold for the account of
the Selling Holders (that are not Purchaser Holders, if the Purchaser Holders
made the Demand or Investor Holders, if the GSMP Holders made the Demand)
participating in such offering on a piggyback basis and any securities to be
sold for the account of the Other Holders electing to include securities in
such registration, pro rata among the Company, all such Selling Holders and all
such Other Holders, taken together, on the basis of the number of Shares or
other securities to be sold by the Company in the absence of such pro ration,
the number of Registrable Shares or other securities requested to be included
by all such Selling Holders and the number of Shares or other securities
requested to be included by all such Other Holders, it being agreed and understood,
however, that such managing underwriter(s) shall have the right, at
their sole discretion, to eliminate entirely the participation therein of the

 

20

 

Company and of all such
Selling Holders and Other Holders (or certain selected classes, such as
directors and executive officers).

 

(c)                                  Other
Holders’ Registration.  If the
registration is an underwritten secondary registered offering on behalf of any
of the Other Holders pursuant to demand registration rights arising from a
document other than this Agreement, and the managing underwriter(s) determine
in good faith that the aggregate number of securities which all Selling
Holders, the Company and all Other Holders propose to include in such
registration exceeds the maximum number of securities that can reasonably be
expected to be sold within the price range acceptable to the Other Holders, the
Company will include in such registration, first, the securities to be sold for
the account of the Other Holders demanding registration (but only to the extent
such Other Holders are entitled to demand inclusion thereof pursuant to demand
registration rights), second, any securities to be sold for the account of the
Company, and, third, the Registrable Shares of such Selling Holders and other
securities to be sold for the account of the Other Holders electing to include
(but not being entitled pursuant to demand registration rights to demand
inclusion of) securities in such registration, pro rata among all such Selling
Holders and Other Holders, taken together, on the basis of the number of
Registrable Shares or other securities of the Company requested to be included
by all Selling Holders and such Other Holders who have requested that
securities owned by them be included (it being agreed and understood, however,
that such managing underwriter(s) shall have the right to eliminate entirely
the participation therein of all such Selling Holders and Other Holders (or
certain selected classes, such as directors and executive officers) with
respect to such securities since they are not entitled to demand inclusion of
such securities pursuant to demand registration rights).

 

(d)                                 Underwriters.  Except in the case of a Demand Registration,
the Registrable Shares proposed to be registered and sold for the account of
any Selling Holder pursuant to a piggyback registration shall be sold to
prospective underwriters selected or approved by the Company, and on the terms
and subject to the conditions of one or more underwriting agreements negotiated
between the Company, the Purchaser Holders, if any, the GSMP Holders, if any,
and/or Other Holders demanding registration and such prospective
underwriters.  The Selling Holders shall
be permitted to withdraw all or a part of the Registrable Shares held by such
Selling Holders which were to be included in such piggyback registration at any
time prior to the effective date of such registration.  The Company may withdraw any registration
statement for such offering at any time before it becomes effective, or
postpone the offering of securities, without obligation or liability to any
Selling Holder participating on a piggy-back basis.

 

4.4                                 Registration Statement.  In connection with any registration of
Registrable Shares under the Securities Act pursuant to this Agreement, the
Company will furnish each Selling Holder and each underwriter, if any, with a
copy of the registration statement and all amendments thereto and will supply
each such Selling Holder with copies of any prospectus included therein
(including a preliminary prospectus and all amendments and supplements
thereto), in each case including all exhibits, and such other documents as may
be reasonably requested, in such quantities as may be reasonably necessary for
the purposes of the proposed sale or distribution covered by such registration
(the Company hereby consenting to the use in accordance with all applicable law
of each such registration statement (or

 

21

 

amendment or post-effective
amendment thereto) and each such prospectus (or preliminary prospectus or
supplement thereto) by each such Selling Holder and the underwriters, if any,
in connection with the offering and sale of the Registrable Shares covered by
such registration statement or prospectus). 
The Company shall not, however, be required to maintain the
registration statement relating to a Demand Registration and to supply copies
of a prospectus for a period beyond the Demand Period, and, at the end of such
period, the Company may deregister any Registrable Shares covered by such
registration statement and not then sold or distributed.  In connection with any such registration of
Registrable Shares, the Company will, at the request of the managing
underwriter with respect thereto (or, if not an underwritten offering, at the
request of Selling Holders holding a majority of the Registrable Shares to be
included in the registration) use its best efforts to register or qualify such
Registrable Shares for sale under the securities laws of such states as is
reasonably requested to permit the distribution of such Registrable Shares and
to use its reasonable efforts to keep each such registration or qualification
effective during the period such registration statement is required to be kept
effective and to do such other acts or things reasonably necessary to enable
the disposition in such jurisdictions of the securities covered by the
applicable registration statement in accordance with applicable “blue sky”
securities laws of such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereof to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or become subject to taxation in any
jurisdiction.

 

In
connection with any offering of Registrable Shares registered pursuant to this
Agreement, the Company shall (i) furnish each Selling Holder, at the Company’s
expense and at least three (3) business days prior to the sale of any
Registrable Shares to the underwriters, with unlegended certificates in a form
eligible for deposit with The Depository Trust Company representing ownership
of the Registrable Shares which are sold pursuant to the registration
statement, in such denominations and registered in such names as the managing
underwriter, if any, or such Selling Holder shall reasonably request, and (ii)
instruct the transfer agent and registrar of the Common Stock to release any
stop transfer orders with respect to the Registrable Shares so sold.

 

4.5                                 Registration Procedures.  In connection with the Company’s obligations
to effect a registration pursuant to Sections 4.2 and 4.3 (but subject to the
last sentence of Section 4.3.2(d) and provided that any time periods set
forth in this Section 4.5 regarding effective periods and the like shall
apply only in the event of a Demand Registration), the Company will as
expeditiously as is reasonably practicable:

 

(i)                                     prepare
and file with the Commission as soon as practicable (in the case of a Demand
Registration) a registration statement with respect to such Registrable Shares,
on a form available for the sale of the Registrable Shares by the Holders
thereof in accordance with the intended method or methods of distribution
thereof and use its commercially reasonable efforts to cause each such
registration statement to become and remain effective; provided, however,
that before filing a registration statement or prospectus or any amendments or
supplements thereto (including documents that would be incorporated or deemed
to be incorporated therein by reference) and, whether or not filed pursuant to
Section 4.2 or 4.3, the Company will furnish to the Holders of the
Registrable Shares covered by such registration statement and the underwriters,
if any, and any attorney,

 

22

 

accountant or other agent
retained by the Holders of Registrable Shares covered by such registration
statement, copies of all such documents proposed to be filed, which documents
will be subject to the review and comment of such Holders, such counsel and
underwriters, if any.  The Company will
not file any registration statement or any amendment thereto or any prospectus
or any supplement thereto in connection with a Demand Registration pursuant to
Section 4.2 (including such documents incorporated by reference and
proposed to be filed after the initial filing of the registration statement) to
which the Holders of a majority of the Registrable Shares covered by such
registration statement or the underwriters, if any, shall reasonably and timely
object;

 

(ii)                                  prepare
and file with the Commission such amendments and post-effective amendments to
such registration statement and such supplements to the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective (to the extent otherwise required by this Agreement) 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 or the expiration of the Demand Period (in the case of a Demand
Registration), whichever occurs earlier; provided, however, that
the only remedy for any failure to keep the registration statement so effective
shall be as set forth in Section 4.2.2 and provided, further,
that the Company will have no obligation to a Selling Holder participating on a
“piggyback” basis in a registration statement that has become effective to keep
such registration statement effective for a period beyond 120 days from the
effective date of such registration statement;

 

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

 

(iv)                              notify
each Selling Holder and the managing underwriter, if any, promptly (and in any
event within three (3) business days): 
(A) when the prospectus or any prospectus supplement or post-effective
amendment has been filed, and with respect to the registration statement or any
post-effective amendment, when the same has become effective; (B) of any
request by the Commission or any other federal or state governmental authority
for any amendments or supplements to the registration statement or the
prospectus or for additional information; (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose; (D) if, at any time prior
to the closing contemplated by an underwriting agreement or such other
agreement entered into in connection with such registration statement, that the
representations and warranties of the Company contained in such agreement cease
to be true and correct; (E) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; (F) of the happening of any event which makes any statement
made in the registration statement, the prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue or which requires the
making of any changes in the registration statement, the prospectus or any
document incorporated therein by reference in order to make the statements
therein not misleading; and (G) of the Company’s reasonable determination that
a post-effective amendment to a registration statement would be required;

 

23

 

(v)                                 make
commercially reasonable efforts to prevent the issuance of any order suspending
the effectiveness of the registration statement or of any order preventing or
suspending the use of a prospectus or suspending the qualification of any of
the Registrable Shares included therein for sale in any jurisdiction (subject
to the proviso at the end of the penultimate paragraph of Section 4.4),
and, in the event of the issuance of any stop order suspending the
effectiveness of the registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Shares included in such registration statement for sale in any jurisdiction
(subject to the proviso at the end of the penultimate paragraph of
Section 4.4), the Company will use its best efforts to promptly obtain the
withdrawal of any such order;

 

(vi)                              furnish
to each Selling Holder and the managing underwriters, if any, without any
additional charge, one signed copy of the registration statement and any
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits (including
those incorporated by reference);

 

(vii)                           as
promptly as reasonably practicable, if required, based on the advice of the
Company’s counsel or counsel to any Selling Holder whose securities are
included in such registration statement or upon the occurrence of any event
contemplated by Section 4.5(iv)(F), prepare and file a supplement or
post-effective amendment to the registration statement, the related prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Shares, the prospectus will not contain an untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein not
misleading;

 

(viii)                        cause all
Registrable Shares covered by the registration statement to be listed on each
securities exchange on which identical securities issued by the Company are
then listed if requested by the Selling Holders holding a majority in number of
the Registrable Shares covered by the Registration Statement or the managing
underwriters, if any;

 

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

 

(x)                                   use
its best efforts to provide a CUSIP number for the Registrable Shares, not
later than the effective date of the registration statement;

 

(xi)                                use
its best efforts to (A) obtain opinions of counsel to the Company (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and not objected to by the
Holders of a majority of the Registrable Shares being sold), and updates
thereof addressed to the Selling Holders, covering the matters customarily
covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by the underwriters, if any; and (B) obtain
“cold comfort” letters and updates thereof (which letters and updates (in form,
scope and substance) shall be reasonably satisfactory to the managing
underwriters, if

 

24

 

any, and counsel to the
Holders of a majority of the Registrable Shares being sold) from the Company’s
independent certified public accountants addressed to such Selling Holders
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the registration statement), such letters to be in customary form and covering
matters of the type customarily covered in “cold comfort” letters by
accountants in connection with underwritten offerings and such other matters as
the underwriters, if any, or the Holders of a majority of the Registrable
Shares being sold, reasonably request. 
The above shall be done at each closing under such underwriting or
similar agreement or as and to the extent required thereunder or, if not an
underwritten offering, as otherwise reasonably requested by the Holders of a
majority of the Registrable Shares being sold;

 

(xii)                             make
available for inspection by a representative of the Selling Holders and any
attorneys or accountants retained by such Holders (and, to the extent
reasonably requested, furnish copies), in connection with the preparation of a
registration statement pursuant to this Agreement, all financial and other
records and pertinent corporate documents and properties of the Company, and
cause the Company’s officers, directors and employees to supply all information
reasonably requested by any such representative(s), attorney(s) or accountant(s)
in connection with such registration; provided, however, that any
records, information or documents that are designated by the Company in writing
as confidential shall be kept confidential by such persons unless disclosure of
such records, information or documents is required by court or administrative
order or under applicable law; and provided, further, that
appropriate arrangements are made, to the extent required by applicable
antitrust law, to limit access to such information of the Company to representatives
of the Holders who are not officers or employees of the Selling Holders; and provided,
further that, without limiting the foregoing, no such information shall
be used by any such Person in connection with any market transactions in
securities of the Company or its subsidiaries in violation of law;

 

(xiii)                          enter
into such agreements reasonably requested (including, as applicable, an
underwriting agreement in form, scope and substance as is customary in
underwritten offerings and is reasonably satisfactory to the Company) and take
all such other customary and reasonable actions in connection therewith
(including those requested by the managing underwriters) in order to expedite
or facilitate the disposition of the Registrable Shares, and in such connection,
whether or not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration:

 

(a)                                  make
such representations and warranties to the Holders of such Registrable Shares
included in the registration statement and the underwriters, if any, with
respect to the business of the Company and the registration statement,
prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and
confirm the same, if and when reasonably requested; and

 

25

 

(b)                                 deliver
such documents and certificates as may be reasonably requested by the Holders
of a majority of the Registrable Shares being included in the registration
statement and managing underwriters, if any, to evidence compliance with clause
(a) above and with any provisions contained in the underwriting agreement or other
similar agreement entered into by the Company;

 

The above shall be done
at each closing under such underwriting or other such agreement or as and, if
not an underwritten offering, to the extent otherwise reasonably requested by
the Holders of a majority of the Registrable Shares being sold pursuant to the
registration statement;

 

(xiv)                         (a) if so
required by the managing underwriter in an underwritten offering of Registrable
Shares covered by a registration statement filed pursuant to Section 4.2
or 4.3 hereof, not publicly or privately sell, make any short sale of, loan,
grant any option, effect any public sale or distribution of or otherwise
dispose of its equity securities or securities convertible into or exchangeable
or exercisable for any of such securities during the ten (10) days prior to and
the ninety (90) days after any underwritten registration pursuant hereto has
become effective, except as part of such underwritten registration and except
pursuant to any exchange offer or registrations on Form S-4 or S-8 or any
successor or similar forms thereto, except that the Company may make grants of
options under its stock option plans and may issue securities issuable upon the
exercise or conversion of outstanding convertible securities, stock options and
other options, warrants and rights of the Company and (b) if requested, use
reasonable efforts to cause each holder of ten percent (10%) or more of the
securities of the same class as the securities included in any underwritten
registration pursuant to Section 4.2 hereof, or any securities convertible
into or exchangeable or exercisable for such securities, in each case purchased
from the Company at any time after the date of this Agreement (other than in a
registered public offering) to agree not to effect any public or private sale
or distribution or otherwise dispose (including sales pursuant to Rule 144
promulgated under the Act) of any such securities during the ten (10) days
prior to and the ninety (90) days after any underwritten registration pursuant
hereto has become effective (except as part of such underwritten registration,
if otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree;

 

(xv)                            if
requested, furnish each Selling Holder with a copy (or a reasonable number of
copies, as requested) of the registration statement (together with the Exhibits
thereto) and each amendment thereto prior to the filing thereof with the
Commission;

 

(xvi)                         if
requested by the managing underwriters, if any, or a Holder of Registrable
Shares being sold, promptly incorporate in a prospectus, supplement or
post-effective amendment such information as the managing underwriters, if any,
and the Holders of the Registrable Shares being sold reasonably request to be
included therein relating to the sale of the Registrable Shares, including,
without limitation, information with respect to the number of Registrable
Shares being sold to underwriters, the purchase price being paid therefor by
such underwriters and with respect to any other terms of the underwritten
offering of the Registrable Shares to be sold in such offering; and make all
required filings

 

26

 

of such prospectus,
supplement or post-effective amendment promptly following notification of the
matters to be incorporated in such supplement or post-effective amendment;

 

(xvii)                      upon the
occurrence of any event that would cause a shelf registration statement
(A) to contain a material misstatement or omission or (B) to be not
effective and usable for resale of Registrable Shares during the Demand Period,
the Company shall promptly file an amendment to such shelf registration
statement, in the case of clause (A), correcting any such misstatement or
omission and, in the case of either clause (A) or (B), use its commercially
reasonable efforts to cause such amendment to be declared effective and such
shelf registration statement to become usable as soon as reasonably practicable
thereafter;

 

(xviii)                   otherwise use
its best efforts to (A) comply with all applicable rules and regulations
of the Commission and to take all other steps reasonably necessary to effect
the registration of the Registrable Shares covered by the registration
statement contemplated hereby, and (B) make available to its
securityholders an earnings statement which satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any
similar rule promulgated under the Act) no later than forty-five (45) days
after the end of any twelve-month (12) period (or ninety (90) days after the
end of any twelve-month (12) period if such period is a fiscal year) (or in
each case within such extended period of time as may be permitted by the
Commission for filing the applicable report with the Commission) (1) commencing
at the end of any fiscal quarter in which Registrable Shares are sold to
underwriters in a firm commitment or best efforts underwritten offering and (2)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said twelve-month (12)
periods; and

 

(xix)                           in
connection with any underwritten offering, cooperate with all marketing efforts
reasonably requested by the managing underwriter(s) in connection with the sale
of the Registrable Shares, including, without limitation, participation in a
reasonable number of road-show presentations (in major U.S. financial cities)
and other marketing activity by executives and other employees of the Company
requested by such underwriter or underwriters provided that the scheduling of
the road-show presentations shall be set in consultation with the Company and
will not require the Company’s involvement at any time or place to which the
Company has a reasonable objection.

 

4.6                                 Holdback Agreements.

 

4.6.1                        Restrictions
on Public Sale by Company and Holders of Registrable Shares.  Each Holder of Registrable Shares (whether
or not such Registrable Shares are covered by a Registration Statement filed
pursuant to Section 4.2 or 4.3 hereof) and the Company (only in the event
of a Demand Registration in accordance with Section 4.2) agrees, if
requested (pursuant to a timely written notice) by the managing underwriter(s)
in an underwritten offering, not to effect any public sale or distribution of
any of the Company’s securities, including a sale pursuant to Rule 144
(except as part of such underwritten offering), during the period beginning ten
(10) days prior to, and ending ninety

 

27

 

(90) days after, the
closing date of the underwritten offering made pursuant to such Registration
Statement.

 

4.6.2                        Exceptions.  The foregoing provisions shall not apply to
any holder of Registrable Shares if such Holder is prevented by applicable
statute or regulation from entering into any such agreement; provided, however,
that any such Holder shall undertake not to effect any public sale or
distribution of the class of securities covered by such Registration Statement
(except as part of such underwritten offering) during such period unless it has
provided sixty (60) days’ prior written notice of such sale or distribution to
the managing underwriter(s).

 

4.7                                 Registration Expenses.  Except as otherwise required by state
securities laws or the rules and regulations promulgated thereunder, all
expenses, disbursements and fees incurred by the Company in connection with
carrying out its obligations under this Article 4, including but not
limited to, (i) the reasonable and documented fees and expenses of one
counsel for the Selling Holders (which counsel shall be selected by Holders of
a majority of the Registrable Shares included in the applicable registration),
(ii) all registration, filing fees and expenses (including fees with
respect to filings made with the NASD (including, if applicable, the fees and
expenses of any “qualified independent underwriter” and its counsel, as may be
required by the rules and regulations of the NASD, (iii) fees and expenses
of compliance with securities or blue sky laws (including fees and
disbursements of counsel for the underwriters or Selling Holders in connection
with blue sky qualifications of the Registrable Shares and determinations of
their eligibility for investment under the laws of such jurisdiction as the
managing underwriters or Holders of a majority of the Registrable Shares being
sold may designate, subject to the proviso to the last sentence of the
penultimate paragraph of Section 4.4), (iv) printing expenses (including
printing certificates for the Registrable Shares to be sold and the
registration statements and prospectuses), messenger and delivery expenses,
duplication, word processing, and telephone, (v) fees and disbursements of
counsel for the Company, and (vi) fees and disbursements of all
independent certified public accountants of the Company incurred in connection
with such registration (including the expenses of any special audit and “cold
comfort” letters incident to such registration) and fees and disbursements of
underwriters (excluding discounts, commissions or fees of underwriters, selling
brokers, dealer managers or similar securities industry professionals relating
to the distribution of the Registrable Shares) and other Persons retained by the
Company (all such expenses being herein called “Registration Expenses”), will
be borne by the Company regardless of whether a registration statement becomes
effective; provided, however, that the Company will, in any
event, pay its internal expenses (including, without limitation), all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expenses of any annual audit or quarterly review, the fees and
expenses of any Person, including special experts, retained by the Company, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the NASD automated
quotation system; and provided  further, that each Selling Holder
shall pay (x) all costs and expenses of counsel (other than the counsel
costs referred to in (i) above), accounting or financing professionals retained
by such Selling Holder, (y) all underwriting discounts, commissions, fees
and expenses and all transfer taxes with respect to the Shares sold by such
Selling Holder, and (z) all other

 

28

 

expenses incurred by such
Selling Holder and incidental to the sale and delivery of the Shares to be sold
by such Holder.

 

4.8                                 Conditions to Holder’s Rights.  It shall be a condition of each Selling
Holder’s rights hereunder that:

 

4.8.1                        Cooperation.  Such Selling Holder shall cooperate with the
Company by supplying information and executing documents relating to such
Selling Holder or the securities of the Company owned by such Selling Holder in
connection with such registration which are customary for selling stockholders
to make in offerings of this type offerings of this type (including agreeing to
sell such Selling Holder’s Registrable Shares on the basis provided in any
underwriting arrangements containing customary terms reasonably satisfactory to
such Selling Holder);

 

4.8.2                        Undertakings.  Such Selling Holder shall enter into any
undertakings and take such other action relating to the conduct of the proposed
offering which the Company or the underwriters may reasonably request as being
necessary to insure compliance with federal and state securities laws and the
rules or other requirements of the NASD or which the Company or the
underwriters may reasonably request to otherwise effectuate the offering; and

 

4.8.3                        Indemnification.  Such Selling Holder shall execute and
deliver an agreement to indemnify to the fullest extent permitted by law and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, any underwriter (as defined in the
Securities Act), and each person, if any, who controls the Company or such
underwriter within the meaning of the Securities Act, against such losses,
claims, damages or liabilities (including reimbursement for legal and other
expenses) to which the Company or any such director, officer, underwriter or
controlling person may become subject under the Securities Act or otherwise, in
such manner as is customary for registrations of the type then proposed, but
only with respect to written information about or pertaining to such Selling
Holder furnished by such Selling Holder specifically for inclusion in the
Registration Statement.

 

4.9                                 Indemnification.

 

4.9.1                        Indemnification
by the Company.  In the case of any
offering registered pursuant to this Agreement, the Company agrees to indemnify
to the fullest extent permitted by law and hold each Selling Holder, each
affiliate of such Selling Holder and each director, officer, agent,
representative and employee of such Selling Holder and its affiliates, each
Person who controls each Selling Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act and the directors,
officers, agents or employees of each such controlling person (collectively, “Selling
Holder Indemnified  Persons”)
harmless against any and all losses, claims, damages, liabilities, actions
(including reasonable and documented costs (including, without limitation,
costs of preparation and reasonable attorneys’ fees and disbursements) and
expenses, including reasonable expenses of investigation) (collectively “Losses”)
to which they or any of them may become subject under the Securities Act or any
other statute or common law or otherwise, insofar as any such Losses shall
arise out of, be caused by or shall be based upon

 

29

 

(i) any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement relating to the sale of the Registrable Shares covered thereby, or
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
or (ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus (as amended or supplemented if the
Company shall have filed with the Commission any amendment thereof or
supplement thereof), if used prior to the effective date of such registration
statement, or contained in the prospectus (as amended or supplemented if the
Company shall have filed with the Commission any amendment, thereof or
supplement thereof, including the information deemed part of such registration
statement pursuant to Rule 430A promulgated under the Securities Act), if used
within the period during which the Company shall be required to keep the
registration statement to which such prospectus relates current pursuant to the
terms of this Agreement, or the omission or alleged omission to state therein
(if so used) a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
will reimburse each Selling Holder Indemnified Person for any legal or other
expenses reasonably incurred by such Selling Holder Indemnified Person in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the
indemnification agreement contained in this Section 4.9.1 shall not apply
to such Losses which shall arise from the sale of Registrable Shares to any
Person if such Losses shall arise out of, shall be caused by or shall be based
upon any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission shall have been
made in reliance upon and in conformity with information furnished in writing
to the Company by such Selling Holder specifically for use in connection with
the preparation of the registration statement or any preliminary prospectus or
prospectus contained in the registration statement or any such amendment
thereof or supplement thereto.  This
indemnity shall be in addition to any other indemnification arrangements to
which the Company may otherwise be a party.

 

4.9.2                        Indemnification
by Holders of Registrable Shares. 
In the case of any offering registered pursuant to this Agreement in
which a Selling Holder participates, such Selling Holder agrees to indemnify to
the fullest extent permitted by law and hold the Company, its directors,
officers, agents, representatives and employees, each Person who controls the
Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and the directors, officers, agents or
employees of such controlling persons harmless against any and all Losses to
which they or any of them may become subject under the Securities Act or any
other statute or common law or otherwise, insofar as any such Losses shall
arise out of, be caused by or based upon 
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement, prospectus or form of prospectus, or arising
out of, caused by or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of the preliminary prospectus and the
prospectus, in each case, including amendments or supplements, in light of the
circumstances in which they were made) not misleading, to the extent, but only
to the extent, that such untrue statement or omission is contained in any
information furnished in writing by such Selling Holder to the Company,
expressly for use in such registration statement or prospectus; provided,
however, that the obligation to indemnify will be several and not joint
and in no event shall the liability of any Selling Holder hereunder be greater
in amount than the dollar

 

30

 

amount of the proceeds
(net of the payment of underwriting discounts and commissions payable by such
Selling Holder) received by any such Selling Holder upon the sale of the
Registrable Shares giving rise to such indemnification obligation.  The Company and the Selling Holders shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the distribution
to the same extent as provided above with respect to information so furnished
in writing by such Persons expressly for use in any prospectus or registration
statement.

 

4.9.3                        Conduct
of Indemnification Proceedings.  Any
Person entitled to indemnity under this Agreement (an “Indemnified Party”) shall
give prompt written notice to the party from which such indemnity is sought
(the “Indemnifying
Party”) of any claim or of the commencement of any proceeding with
respect to which such Indemnified Party seeks indemnification or contribution
pursuant hereto; provided, however, that the failure so to notify
the Indemnifying Party shall not relieve the indemnifying party from any
obligation or liability except to the extent that the Indemnifying Party has been
prejudiced materially by such failure. 
The Indemnifying Party shall have the right, exercisable by giving
written notice to an Indemnified Party promptly after the receipt of written
notice from such Indemnified Party of such claim or proceeding to assume, at
the Indemnifying Party’s expense, the defense of any such claim or proceeding,
with counsel reasonably satisfactory to such Indemnified Party; provided,
however, that under such circumstances an Indemnified Party shall have
the right to employ separate counsel in any such claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless:  (1) the Indemnifying Party agrees to pay
such fees and expenses; or (2) the Indemnifying Party fails promptly to assume
the defense of such claim or proceeding or fails to employ counsel reasonably
satisfactory to such Indemnified Party; or (3) the Indemnified Party shall have
been advised by counsel that (i) there may be one or more material defenses
available to such Indemnified Party that are different from or additional to
those available to the Indemnifying Party or its affiliates, or (ii) a conflict
of interest likely exists if such counsel represents such Indemnified Party and
such Indemnifying Party or its affiliate, in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof, it being
understood, however, that the Indemnifying Party shall not, in
connection with any one such claim or proceeding, or separate but substantially
similar or related claims or proceedings arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel which
such counsel shall be designated by the Indemnified Party and be reasonably
acceptable to the Indemnifying Party) at any time for such Indemnified Party,
or for fees and expenses that are not reasonable.  Whether or not such defense is assumed by the Indemnifying Party,
such Indemnifying Party will not be subject to any liability for any settlement
made without its consent (which consent shall not be unreasonably
withheld).  The Indemnifying Party shall
not consent to entry of any judgment or settle or compromise any pending or
threatened claim, action or proceeding, unless it contains as an unconditional
term thereof the giving by the claimant or plaintiff to the Indemnified Party
of a release, in form and substance satisfactory to such Indemnified Party,
from all liability in respect of such claim or litigation for which such
Indemnified Party would be entitled to indemnification hereunder.

 

31

 

The
Indemnifying Party’s liability to any such Indemnified Party hereunder shall
not be extinguished solely because any other Indemnified Party is not entitled
to indemnity hereunder.

 

4.9.4                        Contribution.  If the indemnification provided for in this
Section 4.9 is unavailable to an Indemnified Party for any reason in
respect of any Losses or is insufficient to hold such Indemnified Party
harmless, then, except to the extent that contribution is not permitted under
Section 11(f) of the Securities Act, each applicable Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party, on the one hand, and such Indemnified
Party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations appropriate under the circumstances.  The relative fault of such Indemnifying Party, on the one hand,
and such Indemnified Party, on the other hand, shall be determined by reference
to, among other things, whether any action in question, including any untrue
statement of a material fact or omission to state a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties’ relative intent, knowledge, access
to information concerning the matter with respect to which the claim was
asserted and opportunity to correct or prevent such action, statement or
omission.  The amount paid or payable by
a party as a result of any Losses shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.

 

The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 4.9.4 were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this
Section 4.9.4, no Indemnifying Party that is a Selling Holder shall be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Selling Holder from the sale of Registrable Shares
exceeds the amount of any damages that such Selling Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

 

The indemnity and
contribution agreements contained in this Section 4.9 are in addition to
any liability that the Indemnifying Parties may have to the Indemnified
Parties.

 

4.9.5                        Underwriting
Agreement to Govern.  At such time
as an underwriting agreement with respect to a particular underwriting is
entered into, the terms of any such underwriting agreement shall govern with
respect to the matters set forth therein to the extent inconsistent with this
Section 4.9; provided, however, that the indemnification
provisions of such underwriting agreement as they relate to Selling Holders are
customary for registrations of the type then proposed and provide for
indemnification by such Selling Holders only with respect to written information
furnished by such Selling Holders.

 

32

 

4.10                           Rule 144. 
Following a Public Offering Event, the Company shall 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 Commission thereunder and will take
such further action as any Holder of Registrable Shares may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Registrable Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144.  Upon the request of any Holder of Registrable Shares, the Company
will deliver to such Holder a written statement as to whether it has complied with
such requirements.

 

ARTICLE 5                                Representations and Warranties.

 

5.1                                 Representations and Warranties of
the Company.

 

The Company
represents and warrants to the Stockholders as follows:

 

5.1.1                        Organization.  It is a corporation duly organized and
validly listing under the laws of the State of Delaware;

 

5.1.2                        Authority.  It has full corporate power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby;

 

5.1.3                        Binding
Obligation.  The execution, delivery
and performance of this Agreement by it and the consummation by it of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on its part, and this Agreement constitutes its
binding obligation, enforceable against it in accordance with its terms, except
insofar as enforceability may be limited by bankruptcy, insolvency, moratorium
or other laws which may affect creditors’ rights and remedies generally and by
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law); and

 

5.1.4                        No
Conflict.  The execution, delivery
and performance of this Agreement by it and the consummation by it of the
transactions contemplated hereby will not, with or without the giving of notice
or the lapse of time, or both, (i) violate any provision of law, statute,
rule or regulation to which it is subject, (ii) violate any order,
judgment or decree applicable to it, or (iii) conflict with, or result in
a breach or default under, any term or condition of its certificate or
certificate of incorporation or its bylaws or any material agreement or other
material instrument to which it is a party or by which it or its property is
bound.

 

5.2                                 Representations and Warranties of
the Stockholders.  Each
of the Stockholders represents and warrants to each other and to the Company as
follows:

 

5.2.1                        Organization.  If it is an entity, it is a corporation,
limited partnership, limited liability company, or other entity duly organized
and validly existing under the laws of its respective state of organization;

 

5.2.2                        Authority.  It has full power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby;

 

33

 

5.2.3                        Binding
Obligation.  The execution, delivery
and performance of this Agreement by it and the consummation by it of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on its part, and this Agreement constitutes its binding
obligation, enforceable against it in accordance with its terms, except insofar
as enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws which may affect creditors’ rights and remedies generally and by
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law); and

 

5.2.4                        No
Conflict.  The execution, delivery
and performance of this Agreement by it and the consummation by it of the transactions
contemplated hereby will not, with or without the giving of notice or the lapse
of time, or both, (i) violate any provision of law, statute, rule or regulation
to which it is subject, (ii) violate any order, judgment or decree applicable
to it, or (iii) conflict with, or result in a breach or default under, any term
or condition of its certificate of incorporation, bylaws, partnership
agreement, operating agreement or equivalent governing document or any material
agreement or other material instrument to which it is a party or by which it or
its property is bound.

 

ARTICLE 6                                Termination of Agreement

 

Subject
to the next succeeding sentence, this Agreement shall terminate on a date that
is the earlier of ten (10) years from the date of this Agreement or such
earlier date to which the parties may agree at any time within two (2) years
prior to the termination of such ten (10) year period (the “Termination
Date”).  The provisions of
Article 1 and Article 3 of this Agreement and the provisions of
Sections 2.4, 2.8, 2.9, 2.10 and 2.11 of this Agreement shall terminate on the
date of a Public Offering Event which occurs prior to the Termination Date.

 

ARTICLE 7                                Exercise of the Investor Put Right

 

7.1                                 Put Right.

 

7.1.1                        At any
time during the period beginning on  September 30, 2008 and ending on
September 30, 2009, each of GSMP and Ares, as a group (each such group, an
“Investor Group”), shall have the
right (a “Put
Right”), which right may be exercised only once (except as provided
in Section 7.2.3), to require the Company to repurchase all or a portion
of the Shares then owned by each member of such Investor Group by giving a
written notice (a “Put Notice”) to the Company of such
Investor Group’s election to exercise such Put Right and the number of Shares
covered thereby.  Upon receipt of a Put
Notice from an Investor Group, the Company shall notify in writing the other
Investor Group that such Put Notice has been delivered to the Company and,
within 30 days after the receipt of such notice from the Company, such other
Investor Group shall either deliver its Put Notice with respect to all or a
portion of the Shares then owned by each member of such Investor Group or shall
be deemed to irrevocably waive its Put Right. 
Upon delivery of a Put Notice by any Investor Group, the Company shall
be obligated to purchase the Shares covered thereby (the “Put Shares”) for a cash
purchase price (the “Put Price”) equal to the product of (x) the
number of the Put Shares multiplied by (y) the Adjustment Factor (determined in
accordance with Section 7.1.4) and multiplied by (z) the Per Share Equity
Put Value.  The

 

34

 

closing of the purchase
of the Put Shares shall occur on the 60th day (or if such day is not a business
day, on the next succeeding business day) following either the delivery of the
Put Notice delivered by the second Investor Group or the date upon which such
Investor Group is deemed to have irrevocably waived its Put Right.

 

7.1.2                        On the
date of closing of a Put Right, the selling Investors shall deliver to the
Company the Shares to be purchased by the Company on such date, free and clear
of any and all liens and encumbrances whatsoever (other than any liens or
encumbrances created by the Company), against the delivery by the Company to
each selling Investor or its order of immediately available funds in the amount
of the Put Price therefor by wire transfer of immediately available funds for
such account, as directed in writing by such Investor.  Upon the exercise and closing of the Put
Right as provided in this Section 7.1, the Shares so purchased by the
Company shall be retired and shall cease to be outstanding.

 

7.1.3                        For
purposes of this Section 7.1, “Per Share
Equity Put Value” shall mean a fraction, (i) the numerator of which
equals (x) 6.5 times Consolidated Cash Flow (as such term is defined in the
Exchange Agreements) of the Company and its subsidiaries for the four completed
calendar quarters most recently ended prior to the delivery of the Put Notice
less (y) Funded Indebtedness outstanding on the date of the delivery of the Put
Notice first delivered to the Company, and (ii) the denominator of which equals
to the number of shares of Common Stock on a fully-diluted basis (assuming the
issuance of Common Stock upon exercise or conversion of all then outstanding
Rights) as of the date of the delivery of the Put Notice first delivered to the
Company.  “Funded Indebtedness” shall mean, as at any date of
determination, all Indebtedness (as such term is defined in the Exchange
Agreements) of the Company and its subsidiaries as at such date which by its
terms or by the terms of the instrument or agreement related thereto matures,
or which is otherwise payable or unpaid, one year or more from, or is directly
or indirectly renewable or extendible at the option of the obligor in respect
thereof to a date one year or more (including, without limitation, an option of
such obligor under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of one year or more) from, the
date of the creation thereof; provided that Funded Indebtedness shall,
as at any date of determination, include all current maturities thereof.

 

7.1.4                        The “Adjustment Factor” shall be determined as
follows:  Unless prior to the delivery
of a Put Notice the Company issues any Non-FMV Stock (as defined below), the
Adjustment Factor shall equal 1.  If the
Company shall issue any shares of Common Stock or Rights (such Common Stock and
such Rights are collectively referred to herein as “Non-FMV Stock”) on any date after the date hereof and prior to
the date of the delivery of the Put Notice (such date, the “Issue Date”) at a price per share (or
having a conversion or exercise price per share) (such price, the “Issue Price”) of less than the fair market
value (determined in accordance with Schedule 2) at the Issue Date, the
Adjustment Factor for such Issue Date shall be determined pursuant to a
formula:

 

	
  OxFMV

  	
   

  
	
  (O-NFS)xFMV +
  NFSxIP

  	
   

  
	
   

  	
   

  
	
  where:

  	
   

  

 

35

 

O = number of
shares of Common Stock on a fully-diluted basis (assuming the issuance of
Common Stock upon exercise or conversion of all then outstanding Rights) as of
the Issue Date;

 

NFS = number of
shares of Non-FMV Stock (assuming exercise or conversion of all Rights included
in such Non-FMV Stock);

 

FMV = the fair
market value (determined in accordance with Schedule 2) at the Issue Date;
and

 

IP = the Issue
Price.

 

To the extent more
than one Issue Date shall have occurred, the Adjustment Factor for each Issue
Date shall be multiplied by the Adjustment Factors determined for each prior
Issue Date.  Notwithstanding anything
herein to the contrary, in no event may the Adjustment Factor be less than 1.

 

7.2                                 Sale Rights.

 

7.2.1                        If the
Company is unable to purchase Shares required to be purchased by it upon
delivery of a Put Notice or Put Notices by one or both Investor Groups within
the time period prescribed by Section 7.1.1, the Investors holding the
majority of the Shares covered by such Put Notice or Put Notices (“Majority Investors”) shall have the right,
upon written notice to the Company, to require the Company to effect a sale of
the Company (by merger, consolidation, reorganization, sale, lease or transfer
of all or substantially all assets of the Company and its subsidiaries or any
other method chosen as provided below). 
The Majority Investors and the Company shall mutually engage a
nationally recognized investment banking firm to conduct such sale.  If the Company and the Majority Investors
are unable to agree on the selection of the nationally recognized investment
banking firm, a body agreed to by the Company and the Majority Investors or, on
the failure of such agreement, American Arbitration Association will be requested
by the Company and the Majority Investors jointly to appoint a nationally
recognized investment banking firm to conduct such sale.  The Majority Investors and the Company
shall, upon consultation with such nationally recognized investment banking firm,
mutually develop a plan for such sale. 
If the Company and the Majority Investors are unable to agree on the
plan of sale, any disputes related to a plan of sale shall be settled by a
nationally recognized investment banking firm conducting the sale (or, if the
Company and the Majority Investors so choose by mutual agreement, any other
nationally recognized investment banking firm).  Any Stockholder shall have the right to bid in the sale, and to
the extent that he so does, he will agree to abide by the terms of the sale
established as aforesaid; provided that if any of the Investors or any
of their affiliates, the Purchaser or any of its affiliates or any other
affiliate of the Company proposes to purchase all or part of the Company in
connection with any such plan of sale, such transaction shall not be completed
unless the Company obtains an opinion as to the fairness of such plan of sale
to the stockholders of the Company from a financial point of view issued by a
nationally recognized investment banking firm. 
Notwithstanding anything herein to the contrary, only the Majority
Investors in consultation with other Investors shall have the right, in their
sole and absolute discretion, to accept or reject any bids for such sale and
the Company (subject to the fiduciary duties of its Board of

 

36

 

Directors) and the
Stockholders agree to abide by such acceptance or rejection; provided
that each holder of Shares shall be entitled to receive consideration on the same
basis, and participate in such sale on the same terms, as all other holders of
Shares.

 

7.2.2                        In the
event the Investors exercise their sale rights pursuant to Section 7.2.1,
the Company shall (A) use its best efforts to ensure that its Board of Directors
(subject to their fiduciary duties) and, if necessary, the stockholders in
general meeting, agree to vote in favor of the transaction accepted by the
Majority Investors and take such other action as may be necessary or desirable
to facilitate such transaction; provided that each Stockholder, by
joining in this Agreement, grants to the Majority Investors an irrevocable
proxy, which proxy is coupled with interest, to vote in favor of any such
transaction and to take such other actions as may be necessary or desirable to
facilitate such transaction; and (B) provide, and cause its officers and
employees to provide, such cooperation in the sale process as the Majority
Investors may reasonably request. 
Notwithstanding anything herein to the contrary, any decision by the
Board of Directors of the Company not to vote in favor of the transaction
accepted by the Majority Investors or to cause the Company not to abide by the
acceptance or rejection of any bid by the Majority Investors shall be
accompanied by an opinion of counsel reasonably satisfactory to the Majority
Investors that the directors of the Company were obligated to make such
decision to comply with their fiduciary duties to the Company.

 

7.2.3                        In the
event that the Majority Investors advise the Company in writing that the sale
of the Company will not be consummated, the Put Right provided for in this
Article 7 (including, without limitation, the Investors’ right to demand
the sale of the Company if the Company is unable to consummate such Put Right)
shall be reinstated for another 12-month period beginning on the first
anniversary of the end of the immediately preceding 12-month period during
which the Put Right was in effect.

 

7.2.4                        All
expenses incurred by the Investors in connection with such sale shall be borne
by the Company.

 

7.3                                 Exclusive Remedy.  The parties to this Agreement agree that, in the event that the
Company is unable to pay the Put Price as and when required by Section 7.1
of this Agreement due to its (a) inability to (i) produce internally-generated
cash or (ii) borrow under its credit facilities or (b) determination not to
seek additional financing, in the case of (a) and (b), in the amount sufficient
to consummate the Put Right, the Investors’ sole and exclusive remedy shall be
the Investors’ right under Section 7.2 of this Agreement to require the
Company to effect a sale of the Company pursuant to Section 7.2 of this
Agreement; provided that nothing contained in this Section 7.3
shall prevent any Investor to sue for specific performance, injunction or other
equitable relief, to assure due and punctual performance by the Company or any
Stockholder of the provisions of this Article 7.

 

ARTICLE 8                                General

 

8.1                                 Recapitalization, Exchanges, etc.
Affecting the Shares. 
The provisions of this Agreement shall apply to the full extent set
forth herein with respect to (a) the Shares and any option, right or warrant to
acquire Shares, and (b) any and all shares of capital stock of the Company or
any successor or assign of the Company (whether by merger,

 

37

 

consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for, or in
substitution for any Shares, by combination, recapitalization,
reclassification, merger, consolidation or otherwise.  In the event of any change in the capitalization of the Company,
as a result of any stock split, stock dividend or stock combination, the
provisions of this Agreement shall be appropriately adjusted.

 

8.2                                 Injunctive Relief.  It is hereby agreed and acknowledged that it will be impossible
to measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that, in the
event of any such failure, an aggrieved person will be irreparably damaged and
will not have an adequate remedy of law. 
Any such person shall, therefore, be entitled to injunctive relief,
including specific performance, to enforce such obligations, without the
posting of any bond and if any action should be brought in equity to enforce
any of the provisions of this Agreement, none of the parties hereto shall raise
the defense that there is an adequate remedy at law.

 

8.3                                 Notices.  Any
and all notices, demands or other communications required or permitted
hereunder shall be in writing and shall be made by hand delivery (deemed given
upon receipt), or by certified mail return receipt requested (deemed given upon
execution of such return receipt), addressed to a Stockholder and the Company
at the address set forth below such person’s or entity’s signature.  Any party may change its address for notice
by notice given to each Stockholder and the Company in accordance with the
foregoing.  No objection may be made to
the method of delivery of any notice actually and timely received.

 

8.4                                 Legend.  In
addition to any other legend which may be required by applicable law, each
share certificate issued after the date hereof representing Shares which are
subject to this Agreement shall have endorsed, to the extent appropriate, upon
its face the following words:

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
JURISDICTION.  SUCH SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR
APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM REGISTRATION UNDER
SUCH ACT, OR APPLICABLE STATE SECURITIES LAW, RELATING TO THE DISPOSITION OF
SECURITIES, INCLUDING RULE 144, PROVIDED AN OPINION OF COUNSEL IS FURNISHED TO
THE COMPANY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO
THE EFFECT THAT AN EXEMPTION FROM THE

 

38

 

REGISTRATION
REQUIREMENTS OF THE ACT AND/OR APPLICABLE STATE SECURITIES LAW IS AVAILABLE.

 

IN
ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS SUCH TRANSFER COMPLIES WITH THE PROVISIONS OF A SECOND AMENDED AND
RESTATED STOCKHOLDERS AGREEMENT DATED AS OF NOVEMBER 13, 2003 (THE
“STOCKHOLDERS AGREEMENT”), A COPY OF WHICH IS ON FILE AND MAY BE INSPECTED
AT THE PRINCIPAL OFFICE OF THE COMPANY. 
NO TRANSFER OF THE SECURITIES WILL BE MADE ON THE BOOKS OF THE COMPANY
UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH
STOCKHOLDERS AGREEMENT.  THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO OTHER RIGHTS AND
OBLIGATIONS AS SET FORTH IN THE STOCKHOLDERS AGREEMENT.

 

8.5                                 Transferees Bound.  All Shares owned by a Transferee shall, subject to the terms of
Section 2.3 of this Agreement, for all purposes be subject to the terms of
this Agreement, whether or not such Transferee has executed a consent to be
bound by this Agreement.  The foregoing
shall not apply in the case of any Shares acquired by a Transferee pursuant to
a sale of Shares pursuant to an effective registration statement under the
Securities Act or, except for sales made prior to a Public Offering Event,
pursuant to Rule 144.

 

8.6                                 Amendment; Waiver.  This Agreement may be amended, modified, supplemented or
terminated only by a written instrument signed by each of (i) the Company, (ii)
Stockholders holding a majority of the Registrable Purchaser Shares, (iii)
Stockholders holding a majority of the Registrable Investor Shares, and (iv)
Stockholders holding a majority of the Registrable Executive Shares.  No provision of this Agreement may be waived
orally, but only by a written instrument signed by the party against whom
enforcement of such waiver is sought. 
Stockholders shall be bound from and after the date of the receipt of a
written notice from the Company setting forth such amendment or waiver by any
consent authorized by this Section, whether or not the Shares shall have been
marked to indicate such consent; no alteration, modification or impairment
shall be implied by reason of any previous waiver, extension of time, delay or
omission in exercise, or other indulgence.

 

8.7                                 Additional Documents.  Each party hereto agrees to execute any and
all further documents and writings within its powers and to perform such other
actions which may be or become necessary or expedient to effectuate and carry
out this Agreement.

 

39

 

8.8                                 No Third-Party Benefits.  None of the provisions of this Agreement
shall be for the benefit of, or enforceable by, any third-party beneficiary.

 

8.9                                 Successors and Assigns.  Subject to the terms hereof, this Agreement
shall be binding upon and shall inure to the benefit of the Stockholders, and
their respective successors and permitted assigns; provided, however,
(i) neither this Agreement nor any rights or obligations hereunder may be
transferred by the Company and (ii) no rights or obligations of any Stockholder
under this Agreement may be assigned except that any Stockholder may transfer
its rights and obligations hereunder, in whole or in part, in connection with a
Transfer of Shares made in compliance with all of the provisions of this
Agreement.  Notwithstanding the
foregoing, the parties hereto acknowledge and agree that the term “Investors”
shall include only the Investors named in the preamble to this Agreement and
their affiliates who may own Shares form time to time and shall not include any
other subsequent holders of Shares.

 

8.10                           Severability. 
In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein; provided, however, that 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 invalid, illegal
or unenforceable term, provision, covenant or restriction.

 

8.11                           Integration. 
This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof. 
There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth or referred to herein.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to its subject
matter including the Original Agreement.

 

8.12                           Governing Law. 
THE RIGHTS AND LIABILITIES OF THE PARTIES SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE CHOICE OF LAWS
PROVISIONS OF SUCH STATE OR ANY OTHER JURISDICTION.

 

8.13                           Attorneys’ Fees.  Should any litigation or arbitration be commenced (including any
proceedings in a bankruptcy court) between the parties hereto or their
representatives concerning any provision of this Agreement or the rights and
duties of any person or entity hereunder, the party or parties prevailing in
such proceeding shall be entitled, in addition to such other relief as may be
granted, to the reasonable attorneys’ fees and court costs incurred by reason
of such litigation or arbitration.

 

8.14                           Headings. 
The headings in this Agreement are inserted only as a matter of
convenience, and in no way define, limit, or extend or interpret the scope of
this Agreement or of any particular Section.

 

40

 

8.15                           Information for Notices.  No Stockholder (other than a Stockholder as
of the date of this Agreement with respect to the Shares held as of such date)
shall hold any of its Shares in nominee name unless it otherwise provides the
Company and the other Stockholders with its name and address and other
information reasonably requested by the Company in order to establish such
Stockholder’s particular status under this Agreement (e.g., Purchaser Party,
Executive Party, Investor Party, etc.).

 

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

 

8.17                           Consent to Jurisdiction.  Each Stockholder agrees that any proceeding
arising out of or relating to this Agreement or the breach or threatened breach
of this Agreement may be commenced and prosecuted in a court in the State of
Delaware.  Each Stockholder hereby
irrevocably and unconditionally consents and submits to the non-exclusive
personal jurisdiction of any court in the State of Delaware in respect of any
such proceeding.  Each Stockholder
consents to service of process upon it with respect to any such proceeding by
registered mail, return receipt requested, and by any other means permitted by
applicable laws and rules.  Each
Stockholder waives any objection that it may now or hereafter have to the
laying of venue of any such proceeding in any court in the State of Delaware
and any claim that it may now or hereafter have that any such proceeding in any
court in the State of Delaware has been brought in an inconvenient forum.

 

8.18                           No Inconsistent Agreements.  The Company will not hereafter enter into
any agreements with respect to its securities which are inconsistent with or
violate in any material respects the rights granted to the Holders of
Registrable Shares in this Agreement.

 

8.19                           Certain Distributions Exempt.  Notwithstanding anything to the contrary
contained in this Agreement, any distribution of Shares by the Purchaser or any
other Purchaser Party, or by any of the Investors or any Investor Party, to its
respective equity participants in accordance with the terms of its limited
partnership agreement, operating agreement or other governing agreement or
instrument shall be exempt from the terms and conditions of this Agreement,
other than that the Persons receiving the Shares in connection with any such
distribution shall be bound on a going-forward basis by the terms and
conditions of this Agreement.  For
example, and not by way of limitation, any such distribution shall not trigger
any of the “tag-along” rights set forth in Section 2.4.  For purposes of this Agreement, each of
Purchaser Parties, Executive Parties and Investor Parties shall designate a
representative, (each a “Representative”).  The Executive Parties designate and appoint Jeffrey Weiss (or any
successor designated in writing by a majority of the Executive Parties) as
representative (the “Executive Representative”) on behalf of the
Executive Parties; the Purchaser Parties designate and appoint Leonard Green
& Partners, L.P. (“LGP”) (or any successor designated in
writing by a majority of the Purchaser Parties) as representative (the “LGP
Representative”) on behalf of the Purchaser Parties; and Investor
Parties designate and appoint GSMP Onshore, (or any successor designated in
writing by a majority of the Investor Parties) as representative (the “Investor  Representative”) on behalf of the
Investor Parties with the authority to receive any notices, settle any claims,
agree to any amendments, and grant any consents or waivers on behalf of such
parties, respectively.  The parties
hereto shall be entitled to deal exclusively with the

 

41

 

respective Representative
with respect to matters arising out of this Agreement and the parties hereto
shall be entitled to deliver any notices to the respective Representative and
rely on any action of the respective Representative with respect to actions taken
under this Agreement on behalf of the parties hereto.

 

8.20                           Certain Limitations.  Notwithstanding anything to the contrary
contained in this Agreement, prior to the issuance or sale of any shares of the
Company’s capital stock pursuant to an effective registration statement under
the Securities Act, the Company shall not be required to register any transfer
of Shares on the Company’s books if in the reasonable, good faith judgment of
the Company, registering such transfer would cause the Company to become
subject to registration pursuant to the Exchange Act.

 

8.21                           Information Regarding
Beneficial Ownership. 
Each Stockholder agrees to promptly provide to the Company any
information or representations that the Company may request regarding such
holder’s beneficial ownership of shares of any class of the Company’s capital
stock.

 

42

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first set forth above.

 

	
   

  	
  THE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  DFG Holdings,
  Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  Weiss

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey
  Weiss

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
  1436 Lancaster
  Avenue

  Berwyn, Pennsylvania  19312

  Telephone: 610-296-3400

  
	
   

  	
  Fax:
  610-296-7844

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE PURCHASER

  
	
   

  	
   

  	
   

  
	
   

  	
  Green Equity
  Investors II, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Grand Avenue
  Capital Partners, L.P.,

  Its:  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Grand Avenue
  Capital Corporation,

  Its:  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  Seiffer

  	
   

  
	
   

  	
   

  	
  Name:       Jonathan
  Seiffer

  
	
   

  	
   

  	
  Title:       Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  c/o Leonard
  Green & Partners, L.P.

  
	
   

  	
  11111 Santa
  Monica Boulevard

  
	
   

  	
  Suite 2000

  
	
   

  	
  Los Angeles,
  California  90025

  
	
   

  	
  Telephone:  310-954-0444

  
	
   

  	
  Fax:
  310-954-0404

  
	
   

  	
  Attention:  Jonathan Seiffer

  
						

 

43

 

	
   

  	
  EXECUTIVE PARTIES

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  Weiss

  	
   

  
	
   

  	
   

  	
  Name:  Jeffrey Weiss

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald
  Gayhardt

  	
   

  
	
   

  	
   

  	
  Name:  Donald Gayhardt

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  Bernie Flaherty

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike Marcus

  	
   

  
	
   

  	
   

  	
  Name:  Mike Marcus

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter
  Sokolowski

  	
   

  
	
   

  	
   

  	
  Name:  Peter Sokolowski

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Evan
  Guengerich

  	
   

  
	
   

  	
   

  	
  Name:  Evan Guengerich

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melissa
  Holmes

  	
   

  
	
   

  	
   

  	
  Name:  Melissa Holmes

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew
  Callan

  	
   

  
	
   

  	
   

  	
  Name:  Andrew Callan

  

 

44

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  Syd Franchuk

  

 

45

 

	
   

  	
  THE INVESTORS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GS MEZZANINE
  PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS Mezzanine
  Advisors, L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Katherine B.
  Enquist

  	
   

  
	
   

  	
   

  	
  Name: Katherine
  B. Enquist

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  GS MEZZANINE
  PARTNERS OFFSHORE, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS Mezzanine
  Advisors, L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Katherine B.
  Enquist

  	
   

  
	
   

  	
   

  	
  Name: Katherine
  B. Enquist

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  STONE STREET
  FUND 1998, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Stone Street
  1998, L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Katherine B.
  Enquist

  	
   

  
	
   

  	
   

  	
  Name: Katherine
  B. Enquist

  
	
   

  	
   

  	
  Title: Vice
  President

  

 

46

 

	
   

  	
  BRIDGE STREET
  FUND 1998, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Stone Street
  1998, L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Katherine B.
  Enquist

  	
   

  
	
   

  	
   

  	
  Name: Katherine
  B. Enquist

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  ARES LEVERAGED
  INVESTMENT FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ARES Management,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ARES Operating
  Member, LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeff Serota

  	
   

  
	
   

  	
   

  	
  Name: Jeff
  Serota

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  ARES LEVERAGED
  INVESTMENT FUND II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ARES Management
  II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ARES Operating
  Member II, LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeff Serota

  	
   

  
	
   

  	
   

  	
  Name: Jeff
  Serota

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BROKER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C.L. Jeffrey

  	
   

  
	
   

  	
   

  	
  Name: C.L.
  Jeffrey

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sheila
  Jeffrey

  	
   

  
	
   

  	
   

  	
  Name: Sheila
  Jeffrey

  

 

47

 

Schedule 1

 

Pro Forma Ownership

 

	
  Stockholder

  	
   

  	
  Number of

  Shares Owned

  	
   

  	
  Number of

  Options

  Owned(1)

  	
   

  	
  Total Number of

  Fully Diluted

  Shares

  	
   

  	
  Percentage of

  Total(2)

  	
   

  
	
  Green Equity Investors II, L.P.

  	
   

  	
  13,014.9364

  	
   

  	
  —

  	
   

  	
  13,014.936

  	
   

  	
  62.78

  	
  %

  
	
  Jeffrey Weiss

  	
   

  	
  3,058.9908

  	
   

  	
  —

  	
   

  	
  3,058.991

  	
   

  	
  14.76

  	
  %

  
	
  Donald Gayhardt

  	
   

  	
  164.5601

  	
   

  	
  399.0000

  	
   

  	
  563.5601

  	
   

  	
  2.72

  	
  %

  
	
  Peter Sokolowski

  	
   

  	
  53.3536

  	
   

  	
  25.0000

  	
   

  	
  78.3536

  	
   

  	
  0.38

  	
  %

  
	
  Michael Marcus

  	
   

  	
  65.2174

  	
   

  	
  40.0000

  	
   

  	
  105.2174

  	
   

  	
  0.51

  	
  %

  
	
  Evan Guengerich

  	
   

  	
  50.3876

  	
   

  	
  5.0000

  	
   

  	
  55.3876

  	
   

  	
  0.27

  	
  %

  
	
  Drew Callan

  	
   

  	
  23.5086

  	
   

  	
  5.0000

  	
   

  	
  28.5086

  	
   

  	
  0.14

  	
  %

  
	
  Melissa Holmes

  	
   

  	
  26.4745

  	
   

  	
  5.0000

  	
   

  	
  31.4745

  	
   

  	
  0.15

  	
  %

  
	
  Stone Street Fund 1998,
  L.P.

  	
   

  	
  57.7978

  	
   

  	
  —

  	
   

  	
  57.7978

  	
   

  	
  0.28

  	
  %

  
	
  Bridge Street Fund 1998,
  L.P.

  	
   

  	
  17.4445

  	
   

  	
  —

  	
   

  	
  17.4445

  	
   

  	
  0.08

  	
  %

  
	
  GS Mezzanine Partners, L.P.

  	
   

  	
  1,350.1857

  	
   

  	
  —

  	
   

  	
  1,350.1857

  	
   

  	
  6.51

  	
  %

  
	
  GS Mezzanine Partners
  Offshore, L.P.

  	
   

  	
  725.0285

  	
   

  	
  —

  	
   

  	
  725.0285

  	
   

  	
  3.50

  	
  %

  
	
  Ares Leveraged Investment
  Fund, L.P.

  	
   

  	
  423.8458

  	
   

  	
  —

  	
   

  	
  423.8458

  	
   

  	
  2.04

  	
  %

  
	
  Ares Leveraged Investment
  Fund II, L.P.

  	
   

  	
  423.8458

  	
   

  	
  —

  	
   

  	
  423.8458

  	
   

  	
  2.04

  	
  %

  
	
  Syd Franchuk

  	
   

  	
  41.2403

  	
   

  	
  100.0000

  	
   

  	
  141.2403

  	
   

  	
  0.68

  	
  %

  
	
  Bernard Flaherty

  	
   

  	
  106.3027

  	
   

  	
  24.0000

  	
   

  	
  130.3027

  	
   

  	
  0.63

  	
  %

  
	
  C.L. and Sheila Jeffrey

  	
   

  	
  155.0388

  	
   

  	
  —

  	
   

  	
  155.0388

  	
   

  	
  0.75

  	
  %

  
	
  Total

  	
   

  	
  19,758.1589

  	
   

  	
  603.0000

  	
   

  	
  20,361.1589

  	
   

  	
  98.22

  	
  %

  

 

(1)                                  Represents
total number of option shares owned. Vested number of shares may be different
depending on vesting provisions.

(2)                                  Assumes
exercise of all options.  The total
percentage does not add to 100% because certain non-stockholder employees of
Dollar Financial Group, Inc. hold an aggregate of 379.000 options.

 

48

 

Schedule 2

 

Fair market value of the
Class A Common Stock, par value $.001 (the “Common Stock”), of DFG Holdings,
Inc. (the “Company”) shall be determined as follows:

 

(a)                                  for
the purposes of the Agreement, the “fair
market value” of each of the shares of the Common Stock of the
Company shall be determined on the basis of the fair market value of the entire
common equity of the Company as of the date of valuation, less an appropriate
discount for lack of liquidity and minority interest; provided  however,
such discount for lack of liquidity and minority interest shall not apply in
the event such stockholder owned on the closing date of the Merger at least ten
percent (10%) of the entire common equity of the Company;

 

(b)                                 (i)                                     If
the fair market value is being determined for purposes of Section 2.9,
during the sixty (60) day period following the date of termination or the date
on which an option or other repurchase event occurs or a repurchase right is
exercised (as the case may be), the Executive with respect to whom such event
occurred or such right was exercised (as the case may be), or his personal
representative, on the one hand, and the Board of Directors of the Company (the
“Board of Directors”) (following
consultations with GEI II, if GEI II other than the Company is exercising a
repurchase right), on the other hand, shall attempt, reasonably and in good
faith, to agree upon the fair market value;

 

(ii)                                  If
the fair market value is being determined for purposes of calculating the
Adjustment Factor referred to in Section, 7.1, during the 60 day period
following the date of the relevant issuance, the Investors on the one hand, and
the Board of Directors, on the other hand, shall attempt, reasonably and in good
faith, to agree upon the fair market value;

 

(c)                                  in
the event the Executive (or his personal representative, as the case may be) or
the Investors (any such party, a “Requesting
Party”), as applicable, and the Board of Directors are unable to so
agree, then within ten (10) business days after the expiration of said sixty
(60) day period, the Board of Directors and such Requesting Party shall
mutually agree upon, and retain, a nationally recognized independent appraiser
of closely held businesses (the “Appraiser”).  The Requesting Party, on the one hand, and
the Board of Directors, on the other hand, shall each submit to the Appraiser
such parties’ respective opinions as to the fair market value, together with
such supporting data as such party deems relevant.  The Appraiser shall then conduct its own evaluation of such
opinions and such data, and shall conduct such independent procedures and
investigation as the Appraiser shall deem necessary in order to form an opinion
as to the fair market value.  However,
the Appraiser shall be limited to selecting, as the fair market value, either
(x) the opinion of the Requesting Party, or (y) the opinion of the Board of
Directors.  The Appraiser shall give
written notice of its determination to the Requesting Party and the
Company.  The fair market value as
determined by the Board of Directors shall be the “Board Fair Market Value” and the fair market value as
determined by the Requesting Party shall be the “Requesting Party Fair Market Value”.  In the case of the determination of fair market value for
purposes of Section 2.9, if the Appraiser

 

49

 

shall
select the Board Fair Market Value, the fees and costs of the Appraiser shall
be paid by the Executive (or his personal representative, as the case may be),
and if the Appraiser shall select the Requesting Party Fair Market Value, the
fees and costs of the Appraiser shall be paid by the Company.  In the case of the determination of fair
market value for purposes of determining the Adjustment Factor, the fees and
costs of the Appraiser shall be paid by the Company.

 

50Exhibit
4.1

 

DATED
14 NOVEMBER 2003

 

 

J
& E DAVY

 

 

THE
PERSONS NAMED IN THE FIRST SCHEDULE

 

 

-and-

 

 

WATERFORD
WEDGWOOD PLC

 

 

 

UNDERWRITING
AGREEMENT

 

RIGHTS
ISSUE

 

 

 

McCann
FitzGerald

Solicitors

2 Harbourmaster Place

International Financial
Services Centre

Dublin 1

BHD\704709.1

 

 

TABLE
OF CONTENTS

 

	
  1.

  	
  INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  CONDITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  APPOINTMENT OF DAVY

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  REGISTRATION AND APPLICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  ALLOTMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  DAVY OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  PAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  SETTLEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  FEES, COMMISSIONS AND EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  WARRANTIES AND UNDERTAKINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  RELEASE AND INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  CONTINUING OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  ANNOUNCEMENTS AND INFORMATION

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  GENERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  FIRST SCHEDULE

  	
   

  
	
   

  	
   

  
	
  SECOND SCHEDULE

  	
   

  
	
   

  	
   

  
	
  THIRD SCHEDULE

  	
   

  
	
   

  	
   

  
	
  FOURTH SCHEDULE

  	
   

  
	
   

  	
   

  
	
  FIFTH SCHEDULE

  	
   

  

 

AGREED FORM DOCUMENTS

 

1.             Amended
Existing Notes Purchase Commitment Letter

 

2.             Amended
Revolving Credit Facility Commitment Letter

 

3.             New
Rosenthal Facility Commitment Letter

 

 

4.             Bank
of New York Escrow Agreement

 

5.             Barclays
Instruction Letter

 

6.             Listing
Particulars

 

7.             PAL

 

8.             Board
Resolutions

 

9.             Red
Herring Offering Memorandum

 

10.           Verification
Notes

 

11.           Responsibility
Statements and Powers of Attorney

 

12.           A certificate signed by
two Directors confirming that the Conditions contained in Clause 2.1 (m), (n),
(o), (p), (q) and (r) have been satisfied.

 

13.           Conditional
confirmation letter from the auditors of the Company addressed to Davy and the
Company regarding sufficiency of working capital.

 

14.           A letter from the
Company addressed to Davy confirming the accuracy of extraction of the
financial information in the underwriter’s proof of the Listing Particulars.

 

15.           A letter from the Company
to Davy confirming that there has been no significant change in the financial
or trading position of the Group since 30 September 2003.

 

16.           A letter from the
Company addressed to Davy confirming the sufficiency of working capital
available to the Group.

 

18.           A letter from the
Company addressed to Davy confirming that the Directors have had explained to
them the nature of their responsibilities and obligations as directors of a
listed company.

 

 

THIS AGREEMENT is
made on 14 November 2003

 

BETWEEN:

 

(1)           J & E DAVY, an unlimited company
registered in Ireland under number 106680, having its registered office at Davy
House, 49 Dawson Street, Dublin 2 (“Davy”);

 

(2)           THE PERSONS NAMED IN
THE FIRST SCHEDULE (the “Executive
Directors”); and

 

(3)           WATERFORD WEDGWOOD PLC,
a public limited company registered in Ireland under number 11861, having its
registered office at Kilbarry, Waterford (the “Company”).

 

WHEREAS:

 

A.            The Company is a
public limited company incorporated in Ireland under number 11861 and has at
the date of this Agreement an authorised share capital of €60,000,000 divided into 1,000,000,000
ordinary shares of €0.06 each,
of which 783,347,110 are in issue and fully paid up.

 

B.            The Company proposes
to raise €38,455,221 (before
commission and expenses) by means of the rights issue of the Rights Issue Units
at the Price and on the terms set out in the Listing Particulars.

 

C.            The persons whose
names are set out in the First Schedule are the chairman, the deputy
chairman and all of the present executive directors of the Company.

 

D.            Davy has, on the terms
and subject to the conditions of this Agreement and the Rights Issue Documents,
agreed to underwrite the Rights Issue at the Price.

 

IT IS AGREED as
follows:

 

1.             INTERPRETATION

 

1.1           Definitions

 

In this Agreement, including the Schedules,
the following words and expressions shall have the meanings ascribed to them
below:

 

“Accounts Date”,
means 31 March 2003, being the date to which the Group’s last reported
audited financial statements, being the financial statements in respect of the
12 month period ended on that date, relate;

 

“Admission”,
means the admission of all of the Rights Issue Units, nil paid, to the official
list of the Irish Stock Exchange and the official list maintained by the UK
Listing Authority and to trading on the main markets for listed securities of
the Irish Stock Exchange and the London Stock Exchange becoming effective in
accordance with the Listing Rules;

 

1

 

“Amended Existing
Notes Purchase Agreement”, means the amended existing
notes purchase agreement to be entered into by the Company and certain
Subsidiary Undertakings with the purchasers named therein providing for, inter
alia, the amendment of certain terms of the US$95,000,000 guaranteed senior
private placement notes due November 2018, which were issued in
November 1998 by Waterford Wedgwood Finance and guaranteed by the Company
and which agreement (a) shall be consistent in all material respects with the
terms and conditions specified in the Amended Existing Notes Purchase Commitment
Letter and (b) shall not contain any material terms or conditions other than
those contained in the Amended Existing Notes Purchase Commitment Letter;

 

“Amended Revolving
Credit Facility Agreement”, means the amended
revolving credit facility agreement to be entered into by the Company, certain
Subsidiary Undertakings and a syndicate of banks (including the Royal Bank of
Scotland, Bank of Ireland and others), providing for, inter alia, the amendment
of certain terms of the Original Credit Facility (as defined in the Listing
Particulars), and which agreement (a) shall be consistent in all material
respects with the terms and conditions specified in the Amended Revolving
Credit Facility Commitment Letter and (b) shall not contain any material terms
or conditions other than those contained in the Amended Revolving Credit
Facility Commitment Letter;

 

“Amended Existing
Notes Purchase Commitment Letter”, means the letter
from the Company and Waterford Wedgwood Finance Inc. to the holders of the
Existing Notes (as defined in the Listing Particulars) dated 13
November 2003 relating, inter alia, to the proposed amendment of the terms
of the Existing Notes (as defined in the Listing Particulars), including the
termsheet annexed thereto entitled “Summary Terms and Conditions for Amended US
Private Placement Notes (the “Amended Notes”)
and Intercreditor Deed” in the agreed form;

 

“Amended Revolving
Credit Facility Commitment Letter”, means the letter
from National Westminster Bank plc to the Company and certain other members of
the Group dated 13 November 2003, including the termsheet annexed thereto
entitled “Summary Terms and Conditions for Senior Debt Facility for Waterford
Wedgwood plc”, in the agreed form;

 

“Application”,
means the application for Admission to be made by Davy on behalf of the
Company;

 

“Banks”,
means the banks who are a party to the Amended Revolving Credit Facility
Agreement;

 

“Bank of New York
Escrow Agreement”, means the agreement, in the agreed
form, between the Bank of New York (in its capacity as escrow agent), Davy and
the Company in which the Bank of New York agrees that, upon receipt of the
proceeds of the Subordinated Bonds, being not less than €165,000,000, from the Bank of New York (in its capacity as common
depository in relation to the Subordinated Bonds and upon receipt of a
certificate from Davy notifying the Bank of New York that Admission has
occurred), (i) approximately €81.8 million of the net proceeds will be
unconditionally and irrevocably released by it to the Banks in accordance with
the terms of the Amended Revolving Credit Facility Agreement (ii) approximately
€24.5 million of the net proceeds will be unconditionally and irrevocably
released by it to

 

2

 

the Noteholders in accordance with the terms
of the Amended Existing Notes Purchase Agreement, (iii) approximately €5.0
million of the net proceeds will be unconditionally and irrevocably released by
it to the Lenders in accordance with the terms of the New Rosenthal Facility
Agreement and the balance of the proceeds will be irrevocably and
unconditionally released to, or at the direction of, the Company;

 

“Barclays Instruction
Letter”, means the letter from Barclays Bank plc to
the Bank of New York (in its capacity as common depository in relation to the
Subordinated Bonds), in the agreed form, in which Barclays Bank plc irrevocably
authorises and instructs the Bank of New York to pay the gross proceeds of the
Subordinated Bonds to the escrow account maintained by the Bank of New York in
its capacity as escrow agent under the Bank of New York Escrow Agreement;

 

“Board”,
means the board of directors of the Company from time to time;

 

“Board Resolutions”,
means the resolutions of the Board and of the board of directors of Waterford
Wedgwood UK, in the agreed form, which shall include (without limitation)
approval of the Rights Issue Documents, authorising (where required) their
publication and approving this Agreement and its execution;

 

“Business Day”,
means any day (other than a Saturday or Sunday) on which lending banks in
Dublin and London are open for business;

 

“Closing Date”,
means the latest date for acceptance and payment in full under the Rights
Issue;

 

“Companies Acts”,
means the Companies Acts 1963 to 2001;

 

“Company’s
Solicitors”, means William Fry, Fitzwilton House,
Wilton Place, Dublin 2;

 

“Completion”,
means completion of the subscription for the Rights Issue Units;

 

“Conditions”,
means the conditions set out in Clause 2.1;

 

“CREST”,
means the relevant system for the paperless settlement of trades and the
holding of uncertificated securities operated by CRESTCo in accordance with the
CREST Regulations;

 

“CRESTCo”,
means CRESTCo Limited (the operator of CREST);

 

“CREST member”,
means a person who has been admitted by CRESTCo as a system-member (as defined
in the CREST Regulations);

 

“CREST Regulations”,
means the Companies Act 1990 (Uncertificated Securities) Regulations 1996 (SI
No. 68/1996);

 

“CREST participant”,
means a person who is, in relation to CREST, a system-participant (as defined
in the CREST Regulations);

 

“Davy Relevant
Persons”, means Davy and (a) each undertaking which
is, on or at any time after the date of this Agreement, a subsidiary
undertaking or parent

 

3

 

undertaking of Davy or a subsidiary
undertaking of a parent undertaking of Davy (including, for the avoidance of
doubt, Davy Corporate Finance Limited); and (b) each person who is, on or at
any time after the date of this Agreement, a director, officer or employee of
Davy or an undertaking specified in sub-paragraph (a);

 

“Directors”,
means all of the directors of the Company;

 

“Engagement Letter”,
means the letter from Davy Corporate Finance Limited to the Company dated 11
November 2003 confirming the scope of the engagement of Davy Corporate
Finance Limited with the Company in relation to the Rights Issue;

 

“Environmental Laws”,
means (a) the common law and (b) all laws, by-laws, statutes, regulations,
rules, orders, instruments, decrees, directives, decisions, injunctions,
rulings and judgements of any government, local government, international,
supranational, executive, administrative, judicial or regulatory authority or
agency whether of Ireland, the European Union or elsewhere and all approved
codes of practice (whether voluntary or compulsory) relating to the protection
of the environment or of human health or safety or welfare or to the
manufacture, formulation, processing, treatment, storage, containment,
labelling, handling, transportation, distribution, recycling, re-use, release,
disposal, removal remediation, abatement or clean-up of any containment
including (without prejudice to the generality of the foregoing) the provisions
of the Public Health (Ireland) Act, 1878, the Fisheries Acts 1959 to 2001, the
Local Government (Water Pollution) Acts 1977 and 1990, the European Communities
(Waste) Regulations 1984, the Litter Pollution Acts 1997 to 2001, the Air
Pollution Act, 1987, the European Communities (Environmental Impact Assessment)
Regulations 1989 to 1999, the Planning Acts, the Environmental Protection
Agency Act 1992, the Wildlife Acts 1976 and 2000, and the Waste Management Acts
1996 to 2001 and any amendment thereto and any and all regulations, orders and
notices made or served thereunder or pursuant thereto and the United States
equivalent of all the foregoing;

 

“Escrow Closing Time”,
means the time on the Impact Day when the Company receives an original copy of
the Barclays Instruction Letter from Barclays Bank plc, as the initial
purchaser of the Subordinated Bonds;

 

“Group”,
means the Company and the Subsidiary Undertakings at the date of this Agreement
and “member of the Group” or “Group Company” shall mean any one of them;

 

“Impact Day”,
means the Business Day on which the Company receives an original copy of the
Barclays Instruction Letter;

 

“Income Shares”,
means non-voting shares of nominal value Stg 1p each in the capital of
Waterford Wedgwood UK which, when issued with and tied to an Ordinary Share,
entitle holders of Stock Units to elect to receive dividends paid from
UK-sourced profits;

 

“Irish Stock
Exchange”, means The Irish Stock Exchange Limited;

 

“Lenders”,
means the lenders under the New Rosenthal Term Facility Agreement;

 

4

 

“Listing Particulars”,
means the listing particulars for the purposes of the Rights Issue, in the
agreed form, relating to the Company and the Group, as required by the
Regulations and the Rules, subject to such amendments as the Company, with the
prior consent of Davy, may require to be made thereto prior to the Impact Day;

 

“Listing Rules”,
means the listing rules of the Irish Stock Exchange and/or, where appropriate,
the listing rules of the UK Listing Authority;

 

“London Stock
Exchange”, means the London Stock Exchange plc;

 

“Long Stop Date”,
means 5 December 2003;

 

“member account ID”,
means the identification code or number attached to any member account in
CREST;

 

“New Rosenthal
Facility Commitment Letter”, means the letter dated 6
November, 2003 from Hypovereinsbank to Rosenthal AG, Waterford Wedgwood GmbH
and the Company, in the agreed form;

 

“New Rosenthal Term
Facility Agreement”, means the new Rosenthal term
facility agreement to be entered into by Rosenthal AG, Waterford Wedgwood GmbH
(a subsidiary of the Company) and their respective subsidiaries, as the case
may be, replacing their existing credit facilities, which agreement (a) shall
be consistent in all material respects with the terms and conditions specified
in the New Rosenthal Facility Commitment Letter; and (b) shall not contain any
material terms or conditions other than those contained in the New Rosenthal
Facility Commitment Letter;

 

“Noteholders”,
means the holders of notes under the Amended Existing Notes Purchase Agreement;

 

“Official List”,
means the official list of the Irish Stock Exchange and/or, as appropriate, the
official list maintained by the UK Listing Authority;

 

“Ordinary Shares”,
means ordinary shares of nominal value  €0.06 each in the capital of the Company;

 

“O’Reilly/Goulandris Interests”, means the holders of Stock Units in which
(i) Sir Anthony O’Reilly has an interest, being currently 156,447,797 Stock
Units registered in the name of Stoneworth Investment Limited, Albany Hill
Limited, Mystic Investments (Cayman) Limited and Indexia Holdings Limited; and
(ii) Mr Peter John Goulandris has an interest, being currently 192,088,091
Stock Units registered in the name of Stoneworth Investment Limited, Albany
Hill Limited, Araquipa International Limited, Cressborough Holdings Limited,
currently being in aggregate, due to common interests, 192,758,998 Stock Units;

 

“PAL”, means the provisional allotment letter, in
the agreed form, to be despatched to certain Qualifying Stockholders pursuant
to the Rights Issue;

 

“participant ID”, means the identification code or membership
number used in CREST to identify a particular CREST member or other CREST
participant;

 

5

 

“Planning Acts”, means the Local Government (Planning and
Development) Act, 1982, the Local Government (Planning and Development) Act, 1993, the Planning and
Development Act, 2000 and the Building Control Act, 1990 and all regulations
made thereunder;

 

“Press Release”, means the press release, in such form as
Davy may reasonably request, to be released on Admission by or on behalf of the
Company giving details, inter alia, of the Rights Issue;

 

“Price”, means €0.18 per Rights Issue Unit;

 

“Qualifying Stockholders”, means holders of Ordinary Shares on the
register of members of the Company and holders of Income Shares on the register
of members of Waterford Wedgwood UK, in each case on the Record Date;

 

“Record Date”, means 6 pm on the third Business Day before
the expected Impact Day or such other date as the Company and Davy may agree;

 

“Red Herring Offering Memorandum”, means a draft document, in the agreed form,
which is subject to completion and which includes indicative information on the
Subordinated Bonds;

 

“Registrars” and/or “Receiving
Agent”, means Capita
Corporate Registrars plc, Unit 5, Manor Street Business Park, Manor Street,
Dublin 7;

 

“Regulations”, means the European Communities (Stock
Exchange) Regulations 1984 and the European Communities (Transferable
Securities and Stock Exchange) Regulations 1992;

 

“Rights Issue”, means the issue of Rights Issue Units by
way of rights in accordance with this Agreement and the Rights Issue Documents;

 

“Rights Issue Amount”, means the Price multiplied by the number of
Underwritten Stock Units;

 

“Rights Issue Documents”, means the Listing Particulars, the PAL and
the Press Release issued with the authority of the Company;

 

“Rights Issue Units”, means 213,640,119 Stock Units;

 

“Rules”, means the latest edition of “The Listing
Rules” issued by the Irish Stock Exchange and the UK Listing Authority;

 

“stock account”, means an account within a member account in
CREST to which a holding of a particular share or other security in CREST is credited;

 

“Stockholders”, means holders of Stock Units;

 

“Stock Exchanges”, means the Irish Stock Exchange and the
London Stock Exchange;

 

6

 

“Stock Unit”, means one Ordinary Share and one Income
Share which are “twinned”
together;

 

“Subordinated Bonds”, means the €165,000,000 aggregate principal
amount of subordinated bonds due September 2010, which are expected to be
issued by the Company on the Impact Day;

 

“Subsidiary Undertakings”, means all subsidiaries and subsidiary
undertakings of the Company, including the companies listed in the Second
Schedule or any one or more of them;

 

“uncertificated” or “in an
uncertificated form”, means Stock Units recorded on the registers of
members of the Company and Waterford Wedgwood UK as being held in uncertificated
form in CREST and title to which, by virtue of the CREST Regulations, may be
transferred by means of an instruction issued in accordance with the rules of
CREST;

 

“UK Listing Authority” or “UKLA”,
means the Financial Services Authority acting in its capacity as the competent
authority for the purposes of Part VI of the Financial Services and Markets Act
2000 of the United Kingdom;

 

“Underwritten Stock Units”, means all of the Rights Issue Units,
including for the avoidance of doubt, any fractional entitlements (as defined
in Clause 6.1);

 

“VAT”, means value added tax;

 

“Verification Notes”, means the questions contained in the agreed
form document prepared by the Company’s Solicitors to verify statements in the
Listing Particulars and the answers to such questions;

 

“Warranties”, means the warranties, indemnities and
representations set out in Clause 10 and the Fourth Schedule;

 

“Waterford Wedgwood UK”, means Waterford Wedgwood UK p.l.c., a
subsidiary of the Company; and

 

“Working Capital Estimates”, means the working capital estimates
prepared by the Company for the Group for the period to 31 December, 2004.

 

1.2           Interpretation

 

Where used in this Agreement, the terms “subsidiary”, “financial year” and “connected
persons” shall have the meanings respectively attributed to them by
the Companies Acts at the date of this Agreement and the terms “subsidiary undertaking” and “parent undertaking” shall have the
meanings respectively attributed to them by the European Community (Companies:
Group Accounts) Regulations 1992.

 

1.3           Legislation

 

A reference to any statutory provision in this
Agreement:

 

7

 

(a)           includes any order,
instrument, regulation, permission and direction made or issued under such
statutory provision or deriving validity from it;

 

(b)           shall be construed as a
reference to such statutory provision as in force at the date of this Agreement
(including, for the avoidance of doubt, any amendments made to such statutory
provision that are in force at the date of this Agreement); and

 

(c)           shall also be construed
as a reference to any statutory provision of which such statutory provision is
a re-enactment or consolidation.

 

1.4           Headings

 

The headings in this Agreement are for
convenience only and shall not affect its meaning.

 

1.5           Reference to Clauses

 

Reference to a Clause or sub-Clause,
Schedule or paragraph are (unless otherwise stated) to a Clause,
sub-Clause of and Schedule to this Agreement and to a paragraph of the
relevant Schedule.  The Schedules form part
of this Agreement.

 

1.6           Clauses incorporating gender

 

Words importing one gender shall (where
appropriate) include any other gender and words importing the singular shall
(where appropriate) include the plural and vice versa.

 

1.7           Agreed form

 

A document expressed to be “in agreed form”
means a document, the terms, conditions and form of which have been agreed by
the parties to this Agreement prior to the execution of this Agreement and a
copy of which has been identified as such and initialled by or on behalf of the
parties to this Agreement (subject to any further amendments as the parties to
this Agreement may subsequently agree).

 

1.8           Material

 

In this Agreement, unless the context
otherwise requires, a reference to the words “material”
and “materially” means
material in the context of the Rights Issue in the reasonable opinion of Davy
and “materially” shall be
construed accordingly.

 

1.9           Best of knowledge

 

Unless expressly stated otherwise, where any
statement is qualified by the expression “to the best of his knowledge,
information and belief” or “so far as he is aware”, or any similar expression,
unless otherwise stated, there shall be deemed to be included after such
statement the words “after due consideration and having made proper enquiries”.

 

8

 

2.             CONDITIONS

 

2.1           Conditions

 

The obligations of Davy pursuant to this
Agreement are conditional upon the fulfilment of the following conditions by
not later than the relevant time or date specified (or such later date as the
Company and Davy may agree in writing but not being later than 8.30 am on the
Long Stop Date):-

 

(a)           the Listing Particulars
being stamped and approved by the Irish Stock Exchange and a copy thereof,
together with the consents and material contracts, as required by the
Regulations, being filed with the Registrar of Companies in Ireland not later
than the Escrow Closing Time, and written confirmation of such filing being
made to Davy by the Company’s Solicitors by not later than the Escrow Closing
Time;

 

(b)           the Listing Particulars
being stamped and approved by the UK Listing Authority and a copy thereof, as
required by the Financial Services and Markets Act 2000 of the United Kingdom,
being filed with the Registrar of Companies in England and Wales not later than
the Escrow Closing Time, and written confirmation of such filing being made to
Davy by the Company’s Solicitors not later than the Escrow Closing Time;

 

(c)           the Listing Particulars
being despatched to Qualifying Stockholders by not later than 11.59 pm on the
Impact Day;

 

(d)           the PAL being
despatched by no later than 11.59 pm on the Impact Day;

 

(e)           the Application having
been made to the Irish Stock Exchange, the UK Listing Authority and the London
Stock Exchange by or on behalf of the Company prior to the Escrow Closing Time;

 

(f)            (to the extent that
the same has not already occurred) the matters referred to in this Agreement
(and in particular, the matters referred to in Clauses 3, 4 and 5 (a) below)
being duly approved at a meeting of the Board (and, where appropriate, by the
board of directors of Waterford Wedgwood UK) or a duly established and
authorised committee thereof prior to the Escrow Closing Time;

 

(g)           the submission to the
Stock Exchanges of any advertisement (including, without limitation, the Press
Release) or other requisite information relating to the Rights Issue and/or the
Application and the Stock Exchanges approving the contents thereof or
authorising the issue thereof without such approval by not later than the
proposed date for release or issue thereof;

 

(h)           there having been
delivered to Davy:

 

(a)           simultaneously with the
execution of this Agreement, the documents listed in Part I of the Third
Schedule; and

 

(b)           prior to the Escrow
Closing Time, the documents listed in Part II of the Third Schedule;

 

9

 

(i)            Admission occurring
not later than 8 am on the first Business Day after the Impact Day;

 

(j)            any supplementary
listing particulars which may be required pursuant to the Regulations or the
Financial Services and Markets Act, 2000 of the United Kingdom being approved
by the committee of the Irish Stock Exchange and by the UK Listing Authority
and published in accordance with the Listing Rules, the Regulations and the
Financial Services and Markets Act 2000 of the United Kingdom before Admission;

 

(k)           the Company having
complied in all material respects with its obligations under this Agreement
which are required to be performed prior to the Escrow Closing Time;

 

(l)            the delivery prior to
the Escrow Closing Time by the Company to Davy of a letter in the form set out
in the Fifth Schedule (or in such other form as Davy may approve) and
effective as of the Escrow Closing Time;

 

(m)          the Amended Revolving
Credit Facility Agreement having been duly entered into by all parties thereto
and not having been materially amended (without the prior written consent of
Davy) or terminated, and there being no grounds on which it could be
terminated, in each case immediately prior to the Escrow Closing Time and all
conditions for drawdown under that agreement (save for any condition in regard
to (i) Admission, (ii) the payment of approximately €26.5 million from the net proceeds of the Rights Issue to the Banks
and (iii) the payment of approximately €81.8 million from the net proceeds of
the Subordinated Bonds to the Banks) having been satisfied or having been
irrevocably waived by all of the Banks immediately prior to the Escrow Closing
Time;

 

(n)           the offering of the Subordinated Bonds having been made and having been
completed on terms substantially as described in the Red Herring Offering Memorandum or on such other terms (including
the rate of interest attaching to the notes) as the Company, with the prior
written consent of Davy (such consent not to be unreasonably withheld) may
agree, and the proceeds thereof, being not less than  € 165,000,000, having been received by the Bank of New York (in
its capacity as common depository) (such receipt to be evidenced by an oral
confirmation from the Bank of New York to Davy and the Company), and the
Company having received an original copy of the Barclays Instruction Letter
(duly executed by Barclays Bank plc) no later than the Business Day prior to
the Long Stop Date;

 

(o)           the Amended Existing Notes Purchase Agreement having been duly entered into by all the
parties thereto and not having been materially amended (without the prior
written consent of Davy) or terminated, and there being no grounds on which it
could be terminated, in each case immediately prior to the Escrow Closing Time
and all conditions to that agreement (save for any condition in regard to (i)
Admission, (ii) the payment of approximately €6.7 million from the net proceeds
of the Rights Issue to the Noteholders and (iii) the payment of approximately
€24.5 from the net proceeds of the Subordinated Bonds to the

 

10

 

Noteholders) having been satisfied or having
been irrevocably waived by all of the Noteholders prior to the Escrow Closing
Time;

 

(p)           the Company, Davy and
the Bank of New York having duly
executed the Bank of New York Escrow Agreement prior to the Escrow Closing
Time; and

 

(q)           an irrevocable letter
of instruction or other written document, in a form satisfactory to Davy,
signed by the Company authorising the Bank of New York, in its capacity as common depository, to
release the gross proceeds of the Subordinated Bonds, upon receipt of those
proceeds, to the Bank of New York (in its capacity as escrow agent);

 

(r)            the New Rosenthal
Facility Agreement having been duly entered into by all the parties thereto and
not having been materially amended (without the prior written consent of Davy)
or terminated, and there being no grounds on which it could be terminated, in
each case immediately prior to
the Escrow Closing Time and all conditions to that agreement (save for any
condition in regard to (i) Admission, and (ii) the payment of approximately €5.0 from the net proceeds of the
Subordinated Bonds to the Lenders) having been satisfied or having been
irrevocably waived by the Lenders prior to the Escrow Closing Time

 

provided that any of the above conditions may be
waived in whole or in part by Davy in its absolute discretion by notice in
writing to the Company.

 

2.2           Fulfilment of Conditions

 

The Company undertakes to Davy to use its
reasonable endeavours, at the Company’s own expense, to fulfil or procure the
fulfilment of the Conditions by the times and dates specified therein and Davy
shall provide all reasonable assistance in connection therewith.  The Company undertakes to Davy that it
shall, from the proceeds of the Rights Issue, pay or procure the payment of
approximately €26.5 million to the Banks in order to satisfy one of the
conditions to the Amended Revolving Credit Facility and approximately €6.7
million to the Noteholders in order to satisfy one of the conditions to the
Amended Existing Notes Purchase Agreement.

 

2.3           Other information

 

The Company and the Executive Directors shall
deliver to Davy all such other information and documents as Davy may reasonably
require in connection with the fulfilment and observance of this Agreement and
the implementation of the Rights Issue.

 

2.4           Press release

 

The Company hereby authorises Davy to release the
Press Release to the press and the Irish Stock Exchange and the UKLA at 7.00am
on the Business Day after the Impact Day, or such later time as Davy and the
Company may agree.

 

11

 

2.5           Non-fulfilment of Conditions

 

If any of the Conditions becomes incapable of
being satisfied (and is not waived by Davy) or if all the Conditions are not
fulfilled (or waived by Davy) on or before the time or date set for its
fulfilment (or such later time as Davy and the Company may agree pursuant to
Clause 2.1), then Davy’s obligations under this Agreement shall terminate
immediately; and

 

(a)           the Company shall
forthwith pay to Davy all costs, expenses and disbursements of the nature
referred to in Clause 9.2;

 

(b)           the Company shall
forthwith pay to Davy an abort fee of an amount equal to 1% of the Rights Issue
Amount;

 

(c)           if the date on which
Davy’s obligations terminate occurs on or after the 29th day of
Davy’s commitment under this Agreement, such commitment beginning from (and
including) the date of this Agreement, an additional commission calculated in
accordance with Clause 9.1(b) shall be payable by the Company to Davy; and

 

(d)           neither Davy, the
Executive Directors nor the Company shall have any claim whatsoever against the
other under or in respect of this Agreement except in respect of any breach of
the provisions of this Agreement which has occurred before then,

 

provided however that this Agreement shall
not be capable of termination as and from the date of the Escrow
Closing Time for any reason other than failure to satisfy the condition
relating to Admission.

 

3.             APPOINTMENT OF DAVY

 

3.1           Appointment

 

The Company irrevocably appoints Davy to act
as its agent for the purpose of procuring subscribers to subscribe for the
Rights Issue Units in accordance with the terms and conditions set out in the
Rights Issue Documents and this Agreement.

 

3.2           Powers and authorities

 

The Company hereby irrevocably and
unconditionally confirms that the foregoing authority confers on Davy all
powers, authorities and discretions which are necessary for, or reasonably
incidental to, the Rights Issue (including, without limitation, the giving of
such instructions to the Registrars as may in the reasonable opinion of Davy be
necessary or desirable in connection with the Rights Issue and/or the
Application) and hereby agrees to ratify and confirm everything which Davy
shall lawfully and properly do in the exercise of such appointment, powers,
authorities and discretions.

 

12

 

4.             REGISTRATION AND APPLICATION

 

4.1           Delivery for registration

 

Prior to publication of the Listing
Particulars the Company shall procure that a copy of the Listing Particulars is
delivered to the Registrar of Companies in Ireland and in England and Wales for
registration pursuant to the Regulations and to the Financial Services and
Markets Act 2000 of the United Kingdom.

 

4.2           Significant change

 

The Company agrees that every significant
change, significant new matter or significant inaccuracy in the Listing
Particulars which arises or becomes apparent between the date the Listing
Particulars is registered and Admission shall be dealt with in accordance with
Article 23 of Council Directive 80/390EEC (the “Directive”) and, in particular, should the need arise and in
conjunction with Davy for the purpose of their obligations under this
Agreement, a supplementary prospectus will be published as required by the
Directive.  The Company undertakes to
bring to the attention of Davy any such matters as are referred to in this
Clause of which it has knowledge before Admission.

 

4.3           Application

 

The Company undertakes to Davy that it will
promptly make the Application to the Stock Exchanges and the UK Listing
Authority through Davy and that it will comply with all reasonable requirements
which the Stock Exchanges and the UK Listing Authority shall make of it so as
to enable the Application to be granted.

 

4.4           Information

 

The Company and each of the Executive
Directors (for so long as he remains a Director) undertake to provide all such
information and assistance relating to the Group or otherwise as may reasonably
be required by Davy for the purpose of complying with any requirement of law or
any requirement of the Irish Stock Exchange, the London Stock Exchange or the
UK Listing Authority in relation to the Application or the Rights Issue or its
associated transactions and documents and will do (or procure to be done) all
such things and execute (or procure to be executed) all such documents as may
be necessary or desirable in the reasonable opinion of Davy to be done or
executed by the Company or by its officers, employees or agents in connection
with the Rights Issue or Admission.

 

4.5           Application to CRESTCo

 

Prior to Admission the Company will, unless
Davy otherwise agrees:

 

(a)           apply to CRESTCo for
the Rights Issue Units to be admitted to CREST as participating securities; and

 

(b)           take all reasonable
steps necessary for the Rights Issue Units to become participating securities
in CREST immediately after Admission.

 

13

 

5.             ALLOTMENT

 

5.1           Board meetings

 

(a)           The Company and
(insofar as it is within their power of procurement) the Executive Directors
shall procure that:

 

(i)            on or before the
execution of this Agreement the Directors (and the directors of Waterford
Wedgwood UK) shall convene and hold a meeting of the Board of Directors of the
Company (and of the board of directors of Waterford Wedgwood UK) for the
purpose of considering and passing the Board Resolutions; and

 

(ii)           no later than the
Escrow Closing Time, the Directors (and the directors of Waterford Wedgwood UK)
shall convene and hold a meeting of the Board of Directors of the Company and
of the board of directors of Waterford Wedgwood UK (or, in either case, a duly
appointed committee thereof) to approve the provisional allotment of the shares
comprised in the Rights Issue Units to Qualifying Stockholders by way of rights
nil paid at the Price, the entitlement of each Qualifying Stockholders being
rounded down to the nearest whole number.

 

(b)           The Company undertakes
to Davy not to give, or, so far as it is within its powers, permit to be given,
any direction to Davy or the Directors and not to take any action which is
inconsistent with its obligations or any of the powers or authorities conferred
by it under this Agreement and, in particular, not to create any adverse
interest over the Underwritten Stock Units to be allotted and issued by it
pursuant to this Agreement.

 

(c)           The Company undertakes
to Davy to procure that Waterford Wedgwood UK shall not give, or so far as it
is within its powers, permit to be given, any direction to Davy or the
directors of Waterford Wedgwood UK and not to take any action which is
inconsistent with its obligations or any of the powers or authorities conferred
by it under this Agreement, and, in particular, not to create any adverse
interest over the Underwritten Stock Units to be allotted and issued by it
pursuant to this Agreement.

 

5.2           Confirmation

 

The Company hereby confirms that the Rights
Issue Units will, as from the date when they are issued and are fully paid up,
rank pari passu in all respects with the Stock Units then in issue, and in
particular will rank in full for all dividends and other distributions declared
made and paid on the Stock Units after the date of their issue.

 

5.3           Overseas Stockholders

 

The following arrangements will apply to
certain entitlements under the Rights Issue of overseas Stockholders:-

 

(a)           The Rights Issue Units
have not been, and will not be, registered under the United States Securities
Act 1933 (as amended) (the “US Securities
Act”) or

 

14

 

relevant securities legislation in Canada,
Australia or Japan.  Accordingly,
Qualifying Stockholders who have registered addresses in Canada, Australia,
Japan or the United States or their respective territories or possessions or
any areas subject to their respective jurisdictions (“Excluded Holders”) will not be sent a PAL unless they have
satisfied the Company prior to the PALs being posted that they may take up
their entitlement to Rights Issue Units in accordance with an applicable
exemption from local securities law.

 

(b)           Qualifying Stockholders
(not being Excluded Holders) with registered addresses in territories other
than Ireland and the UK may be dealt with in a manner similar to the provisions
of sub-Clause 5.3(a).

 

(c)           Davy acknowledges that
the Rights Issue Units have not been and will not be registered under the US
Securities Act and may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the US Securities Act or pursuant to an exemption from the
registration requirements of the US Securities Act.  Davy agrees that it will not offer or sell the Rights Issue
Units  as part of their initial
allotment at any time or otherwise until 40 days after the commencement of the
Rights Issue within the United States or to or for the account or benefit of
U.S. persons, except in either case in accordance with Regulation S under the
US Securities Act.  Accordingly, neither
Davy nor any person acting on its behalf have engaged or will engage in any
directed selling effort in the United States with respect to the Rights Issue
Units.  Davy will send to each
broker/dealer or sub-underwriter to which it sells in reliance on Regulation S
during such 40 day period a confirmation or other notice detailing the
restrictions on offers and sales of such securities within the United States,
or to or for the account or benefit of U.S. persons.  In addition, Davy agrees that no such securities will be offered
or sold by or on behalf of it or any sub-underwriter in the United States
except by a broker/dealer registered under the Exchange Act 1934 of the United
States or pursuant to a valid exemption from such requirements under the
Exchange Act.  Terms used in this
paragraph have the meaning given to them by Regulation S.

 

(d)           Davy acknowledges that
each Qualifying Stockholder who is in the United States and who wishes to
exercise a right to purchase Rights Issue Units will be required to execute a
representation letter in the form acceptable to the Company.  Such representation letter will require the
investor to represent that, among other things, it is a “qualified
institutional buyer” (as defined in Rule 144A under the US Securities Act) and
is acquiring such securities in a transaction not involving a public offering
in the United States.

 

6.             DAVY OBLIGATIONS

 

6.1           Fractions

 

Fractions of Rights Issue Units (“fractional entitlements”) will not be
provisionally allotted to Qualifying Stockholders but will be aggregated,
provisionally allotted to Davy and sold in accordance with the provisions of
Clause 6.2.

 

15

 

6.2           Subscription for fractional entitlements

 

(a)           The Company shall
inform Davy of the number of Underwritten Stock Units provisionally allotted to
Davy, representing the aggregate of fractional entitlements.  Davy shall use its reasonable endeavours to
procure that the rights to subscribe all or as many as is reasonably
practicable of such Underwritten Stock Units are sold through the Stock
Exchanges nil paid at a premium over the expenses of sale (including any VAT
thereon) as soon as practicable but no later than by 9.30 am on the Closing
Date.  Immediately after such sale takes
place, the Company shall deliver to Davy nil paid split provisional allotment
letters in the names and denominations required by Davy.  Davy shall account to the Receiving Agent
for the net proceeds of sale (after deduction of expenses, including any VAT
thereon) of those Underwritten Stock Units that have been sold and the net
proceeds shall be paid to and retained for the benefit of the Company.

 

(b)           If the rights to
subscribe the Underwritten Stock Units referred to in Clause 6.2 have not been
sold before 9.30 am on the Closing Date, they will be dealt with in accordance
with the remaining provisions of this Clause 6.

 

6.3           Take up in full

 

If by 9.30 am on the Closing Date (or
otherwise as provided in the Listing Particulars) PALs in respect of all the
Underwritten Stock Units have been lodged for acceptance (whether by Qualifying
Stockholders or by renouncees of the right to accept an allotment of
Underwritten Stock Units) in accordance with the terms of the Rights Issue
Documents, accompanied by cheques or other remittances for the Price (provided
that such cheques or other remittances have not been dishonoured by such time),
Davy’s obligations under the following Clauses of this Section 6 shall
cease.  The Underwritten Stock Units
comprised in PALs which have been so lodged and accompanied by cheques or other
remittances for the full Price (provided that such cheques or other remittances
have not been dishonoured by such time) are for the purposes of this Clause 6
described as having been “taken up”,
provided that, if the Company so elects, Underwritten Stock Units shall be
deemed to have been taken up by 9.30 am on the Closing Date if:

 

(a)           PALs and accompanying
remittances are received late (the cover bearing a legible postmark dated not
later than 9.30 am on the Closing Date); or

 

(b)           a cheque or other remittance
(and whether or not such cheque or other remittance shall be honoured) is
received from an authorised person (being, in the case of Stockholders in
Ireland, an organisation or firm authorised or exempted pursuant to the
Investment Intermediaries Act 1995 or the Stock Exchange Act 1995 and being, in
the case of Stockholders in the United Kingdom, an adviser authorised pursuant
to the Financial Services and Markets Act 2000 of the United Kingdom) no later
than 9.30 am on the Closing Date who identifies the Underwritten Stock Units
concerned and undertakes to lodge the relevant PALs duly completed in due
course.

 

16

 

6.4           Notification to Davy

 

The Company shall from time to time at the
request of Davy keep Davy informed of the amount of Underwritten Stock Units
provisionally allotted which have been taken up. If, however, by 9.30 am on the
Closing Date, any of the Underwritten Stock Units have not been taken up, the
provisional allotment of such Underwritten Stock Units will be deemed to have
been declined. The Company will then, as soon as possible but in any event not
later than 4 pm on the next Business Day following the Closing Date, procure
that Davy are notified in writing of the number of Underwritten Stock Units not
taken up.

 

6.5           Notification to Stock Exchanges

 

Davy and the Company shall consult as to
whether the Stock Exchanges should be notified of the number of Underwritten
Stock Units not taken up before Davy begins to procure subscribers for any
Underwritten Stock Units not taken up pursuant to Clause 6.6.

 

6.6           Davy to procure subscribers

 

Davy will, as agent for the Company, subject
to the provisions of Clauses 6.4 and 6.5, use its reasonable endeavours to
procure subscribers as soon as possible and in any event by not later than 3 pm
on the fifth Business Day following the Closing Date for all or as many as is
reasonably practicable of the Underwritten Stock Units (but not the Stock Units
which are provisionally allotted to the O’Reilly/Goulandris Interests) not
taken up if a premium over the aggregate of the Price and the expenses of
procuring such subscribers (including any VAT thereon), can be obtained,
provided that Davy may at any time after 4 pm on the Business Day following the
Closing Date determine  that it shall no
longer use its reasonable endeavours to procure subscribers, if, in its
opinion, it is unlikely that any such subscribers can be procured as aforesaid,
in which case it will promptly consult with the Company in relation to the
basis for such determination.  In the
case of Stock Units provisionally allotted to the O’Reilly/Goulandris
Interests, Davy may deal with those Stock Units pursuant to this Clause 6.6,
but shall have no obligation so to do.

 

6.7           Allotment to subscribers

 

Forthwith upon Davy notifying the Company
that any subscriber has been procured pursuant to Clause 6.6, the Company will
allot the Underwritten Stock Units for which subscribers have been procured to
the persons and in the denominations required by Davy and will deliver or
procure the delivery to Davy of duly receipted fully paid allotment letters in
respect of those Underwritten Stock Units. 
Davy will, not later than 3 pm on the sixth Business Day following the
Closing Date, account to the Company for the proceeds received from subscribers
(after deduction of the expenses of procuring subscriptions, including any VAT
thereon).  The Company will distribute
the relevant part of the proceeds (after deduction of the Price and of the
expenses of procuring subscriptions, including any VAT thereon) pro rata to
Qualifying Stockholders who did not take up all the Underwritten Stock Units
provisionally allotted to them, except that individual amounts of less
than  €3.80 per holding will not
be distributed but will be retained for the benefit of the Company.

 

17

 

6.8           Notification to the Stock Exchanges

 

Davy will, with the prior agreement of the
Company, on behalf of the Company, notify the Stock Exchanges by not later than
4.30 pm on the fifth Business Day following the Closing Date of the amount of
Underwritten Stock Units taken up and either that Davy has procured subscribers
under Clause 6.6 for all the Underwritten Stock Units which have not been taken
up (in which case the announcement must include the date the subscribers were
procured and the price paid to subscribe the Stock Units) or that all such
Underwritten Stock Units will be taken up by Davy, such subscribers and the
sub-underwriters, or any of them (as the case may be).

 

6.9           Underwriting

 

Davy hereby undertakes on the terms, subject
to the conditions and on the basis of the information contained in the Rights
Issue Documents (except as regard the time for acceptance and payment) and in
reliance upon the Warranties to procure, as agent for the Company, subscribers
for the Underwritten Stock Units not taken up by Qualifying Stockholders
(including overseas Stockholders as referred to in Clause 5.3 above) or by
renouncees of the right to accept an allotment of Underwritten Stock Units and
not subscribed pursuant to the foregoing provisions of this Clause 6 and, in
default, to subscribe for such Underwritten Stock Units itself and, not later
than 3 pm on the sixth Business Day following the Closing Date, to procure
payment of, or pay to such accounts as may be specified by the Company, the
Price for such Underwritten Stock Units against delivery to Davy or its
nominees (as it may request) of duly receipted fully paid PALs in such names
and in such denominations as Davy may require.

 

6.10         Admission

 

Davy shall use its reasonable endeavours to
procure that Admission occurs on the first Business Day after the Impact Day
and in any event (but on a reasonable endeavours basis only) not later than the
Long Stop Date.

 

7.             PAYMENT

 

7.1           Payment of subscription monies

 

Subject to Clause 8.1, Davy shall procure the
payment for the Underwritten Stock Units as set out in Clauses 6.2, 6.7 and
6.9, subject to deduction of:

 

(a)           the commissions payable by the Company
pursuant to Clause 9.1;

 

(b)           the expenses of sale referred to in Clauses
6.2 and 6.7;

 

(c)           any fees payable to Davy Corporate Finance
Limited under the Engagement Letter; and

 

(d)           any expenses referred to in Clause 9.2.

 

18

 

7.2           Bank account

 

Payment for the Rights Issue Units (subject
to the deductions referred to in Clause 7.1) by telegraphic transfer to the
account notified in writing to Davy by the Company prior to the Closing Date
shall be a full discharge of Davy in respect of its obligations pursuant to
Clause 7.1.

 

8.             SETTLEMENT

 

8.1           Settlement

 

Upon Admission fully paid, the Company will
deliver to Davy, or as it may direct, the duly receipted fully paid PALs in
such names and denominations as Davy shall specify in respect of the
Underwritten Stock Units referred to in Clause 6.9 and/or, to the extent so
directed by Davy, procure that CRESTCo is instructed to credit to stock
accounts of one or more CREST members (identified by member account ID and
participant ID by Davy) entitlements to Underwritten Stock Units as directed by
Davy, and ensure that the same are enabled for settlement as soon as
practicable after Admission fully paid. 
Subject to the Company delivering such duly receipted fully paid PALs
and/or taking such other steps as aforesaid, Davy will pay or cause to be paid
to the Company in accordance with Clause 7.1 the amounts specified in that
Clause.

 

8.2           Registration

 

The Company will provide the Registrars with
all necessary authorisations and information to enable them to perform their
duties as registrars in accordance with and as contemplated by this Agreement
and the terms of the Rights Issue Documents.

 

9.             FEES, COMMISSIONS AND EXPENSES

 

9.1           Fees

 

In consideration of Davy’s covenants and
obligations under this Agreement and Davy’s services in connection with the
Rights Issue and the Application, the Company will pay to Davy a commission of:

 

(a)           2.25% of the Rights
Issue Amount (out of which Davy will discharge the sub-underwriting commission
commitments undertaken by it) for the first 28 days of Davy’s commitment under
this Agreement, beginning from (and including) the date of this Agreement; and

 

(b)           an additional
commission of 0.125% for each seven days or part of seven days (if any) after
the first 28 days of Davy’s commitment under this Agreement from and including
the 29th day of Davy’s commitment under this Agreement up to and
including the date on which the obligations of Davy under this Agreement cease
(both dates inclusive).

 

Payments under this Clause 9 are to be made
in accordance with the deductions permitted by Clause 7.1 or, to the extent
that there is no such deduction, on demand by Davy.

 

19

 

9.2           Costs

 

Provided that Davy has consulted with the
Company prior to the appointment of any professional adviser whose fees are to
be discharged by the Company and provided that the Company has received an
estimate of the fees, costs and expenses to be paid for such appointment prior
to the date hereof, the Company will bear all costs, charges and expenses of,
or incidental to, the satisfaction of the Conditions, the Rights Issue, the
issue of the Rights Issue Units and the arrangements referred to in this
Agreement or contemplated by this Agreement (together with any VAT chargeable
thereon), including, without limitation, all fees and expenses payable in
connection with Admission, the Engagement Letter, all expenses of the
Registrars, printing and advertising expenses, postage and all reasonable accountancy,
actuarial and other professional fees and expenses, including Davy’s legal
adviser’s fees.  The Company shall,
without prejudice to Clause 7.1, upon receipt from Davy of invoices and/or
vouchers in respect of the same, reimburse to Davy the amount of any such
costs, charges and expenses which Davy may have paid.

 

9.3           VAT

 

Where, pursuant to Clauses 2.5, 9.1 or 9.2 a
sum is payable to Davy the Company shall, in addition, pay to Davy in respect
of VAT, where the payment (or any part of it) constitutes the consideration (or
any part thereof) for any supply of services by Davy to the Company, such
amount as equals any VAT properly payable thereon.  Where a sum in respect of VAT is paid pursuant to this Clause
9.3, Davy shall within 10 Business Days provide the Company with an appropriate
and valid tax invoice in respect of the supply to which the payment relates,
naming the Company as the recipient of the supply.

 

10.           WARRANTIES AND UNDERTAKINGS

 

10.1         Warranties

 

The Company warrants to Davy that each statement
set out in the Fourth Schedule is true, accurate and not misleading as at
the date of this Agreement, and warrants that each such statement, if repeated
at such time, will be true, accurate and not misleading as of the time
immediately prior to the Escrow Closing Time.

 

10.2         Indemnity

 

The Company will indemnify and hold Davy
harmless against any losses, claims, damages, costs, expenses or liabilities
arising out of breach by it of any of the Warranties given by it in terms of
this Clause 10.

 

10.3         Executive Directors’ undertakings

 

Each Executive Director severally undertakes
to Davy that (except to the extent necessary to give effect to this Agreement)
he will not, and will procure (so far as lies within his power of procurement)
that no Group Company will, do, allow or procure any act or omission before the
Escrow Closing Time which would constitute a breach of any Warranty or cause
any Warranty to become untrue, inaccurate or misleading in

 

20

 

any respect by reference to the facts then
existing if the Warranties were repeated at any time before the Escrow Closing
Time.

 

10.4         Warranties not extinguished by Completion

 

Subject to the provisions of this Clause 10,
the Warranties shall not in any respect be extinguished or affected by the
completion of all matters and arrangements contemplated by this Agreement.

 

10.5         Notice of breach

 

The Company and each Executive Director
severally undertakes to Davy to notify Davy immediately if it/he becomes aware
of any matter which constitutes a breach of any Warranty or which would
constitute a breach of any Warranty or cause any Warranty to become untrue,
inaccurate or misleading by reference to the facts then existing if repeated at
any time before the Escrow Closing Time.

 

10.6         Consultation

 

If before the Escrow Closing Time Davy
receives a notice pursuant to Clause 10.5 or otherwise become aware of any
Warranty being untrue, inaccurate or misleading by reference to the facts then
existing or of any circumstance which would cause any Warranty, if repeated at
such time, to become untrue, inaccurate or misleading by reference to the facts
then existing, Davy (without prejudice to its right to terminate this Agreement
pursuant to Clause 12) shall consult with the Board and may require the Company
at its own expense to make or cause to be made an announcement and/or despatch
a communication to potential subscribers for the Rights Issue Units, such
announcement or communication to be approved by Davy after consultation with
the Board.

 

10.7         Limitations

 

Except in the case of fraud, wilful
misrepresentation, deliberate concealment or gross negligence:

 

(a)           no claim may be made
against the Company for breach of Warranty under this Agreement, or against an
Executive Director for breach of the undertakings contained in Clause 10.3
unless written notice that such claim may be made (giving reasonable details of
the circumstances giving rise to the claim) has been given to the Company or
the Executive Director (as the case may be) on or before 30 November 2005;

 

(b)           the maximum liability
of the Company in respect of claims for breach of Warranty under this Agreement
and against all of the Executive Directors for breach of the undertakings
contained in Clause 10.3 shall not exceed an amount equal to the Rights Issue
Amount; and

 

(c)           no claim may be made
against the Company for breach of Warranty under this Agreement or against an
Executive Director for breach of the undertakings contained in Clause 10.3
unless the aggregate amount of all such claims

 

21

 

exceeds €50,000, in aggregate, in which case the full amount of
all claims shall become payable.

 

10.8         Grossing-up

 

If
the Revenue Commissioners or any other taxing authority brings into charge to
tax any sum payable under the Warranties or indemnities contained in this
Agreement then the amount so payable shall be grossed up by such amount as will
ensure that, after deduction of the tax so chargeable, there shall remain a sum
equal to the amount that would otherwise be payable under such Warranty or
indemnity.

 

10.9         Acknowledgement

 

The
Company acknowledges that Davy has entered into this Agreement in reliance
upon, inter alia, the Warranties and the release and indemnity contained in
Clause 11.

 

10.10       Action materially affecting Rights Issue

 

The
Company will not, and will procure that none of the Subsidiary Undertakings
will, between the date hereof and the Closing Date, enter into any agreement,
commitment or arrangement which is material in the context of the business or
affairs of the Group (taken as a whole) or which would, or would be likely to,
materially and adversely affect the Rights Issue other than:

 

(a)           the Amended Revolving Credit Facility Agreement;

 

(b)           the Amended Existing Notes Purchase Agreement;

 

(c)           the related intercreditor agreement;

 

(d)           the underwriting agreement relating to the Subordinated Bonds;

 

(e)           the related indenture;

 

(f)            the New Rosenthal Facility Agreement; and

 

(g)           (all other agreements reasonably required to
give full effect to the agreements listed in sub-clauses (a) to (f) above.

 

11.           RELEASE AND INDEMNITY

 

11.1         Release

 

Neither the Company nor any of the Executive
Directors shall make or assert a claim against Davy or any Davy Relevant Person
to recover, and neither Davy nor any Davy Relevant Person shall have any
liability to the Company or the Directors for, any loss, liability or cost
incurred by any of them arising:

 

(a)           out of the performance
by Davy or any Davy Relevant Person of Davy’s obligations under this Agreement;
or

 

22

 

(b)           in connection with the
performance by Davy or any Davy Relevant Person of any matter incidental to or
related to the Rights Issue;

 

unless, and to the extent that, any such
loss, liability or cost arises directly from the negligence, breach of this
Agreement, bad faith, wilful default, recklessness or fraud of Davy or any Davy
Relevant Person.  The Company will
procure that no other Director or Group Company will make or assert such claim
or seek to establish such liability.

 

11.2         Indemnity

 

The Company will indemnify and hold Davy and
all Davy Relevant Persons harmless against any losses, claims, damages,
liabilities  incurred or suffered by
Davy or any Davy Relevant Person arising:

 

(a)           out of or in connection
with the performance by Davy or any Davy Relevant Person of Davy’s obligations
under this Agreement; or

 

(b)           in connection with the
Rights Issue and the preparation and publication of the Rights Issue Documents,
including, without limitation:

 

(i)            the Listing
Particulars not containing or being alleged not to contain all the information
required to be stated therein; or

 

(ii)           any statement contained
in the Listing Particulars not being or being alleged not to be complete, true,
accurate, fair or reasonable or being alleged to be misleading; or

 

(c)           out of any breach or
alleged breach of the laws or regulations of any country resulting from the
issue, offer or underwriting of the Rights Issue or the publication or
distribution of the Rights Issue Documents or the performance of the terms of
this Agreement; or

 

(d)           out of the Company
failing to comply with any of the requirements imposed upon it by the Irish
Stock Exchange, the London Stock Exchange or the UK Listing Authority in
connection with the Rights Issue,

 

including, without limitation, all losses,
claims, damages, liabilities and costs incurred as a result of investigating,
defending or settling any actual or potential claim, action or proceeding
alleging any such liability and enforcing the terms of this Clause, unless and
to the extent that any of them arises from the negligence, breach of this
Agreement, bad faith, wilful default, recklessness or fraud of Davy or any Davy
Relevant Person.

 

11.3         Acknowledgement

 

The Company and the Executive Directors
hereby acknowledge that Davy shall not be responsible to the Company or the
Directors for verifying the accuracy and fairness of any information contained
in the Rights Issue Documents or otherwise published by the Company in
connection with the transactions described in the Listing Particulars,

 

23

 

save for those
matters being verified by Davy as specifically provided in the Verification
Notes.

 

11.4         Indemnity additional

 

The Company agrees with Davy for its benefit
and as trustee for all Davy Relevant Persons that the indemnity obligations of
the Company under Clause 11.2 shall be in addition to any liability which the
Company may otherwise have to Davy and any Davy Relevant Persons (as the case
may be) and shall be binding upon and inure to the benefit of any successors,
heirs and personal representatives of the Company, Davy and all Davy Relevant
Persons.

 

11.5         Notice of claims

 

Davy shall, as soon as reasonably practicable
after it becomes aware of any claims made or threatened against it or any Davy
Relevant Persons which may occasion a liability on the Company under Clause 11,
notify the Company in writing of any such claims and Davy shall, at the request
of the Company, use all reasonable endeavours to avoid, dispute, resist
,appeal, compromise or defend any claim (unless in the reasonable opinion of
Davy after consultation with the Company, the reputation or standing of Davy
would thereby be affected adversely to a material extent, in which case Davy
shall be at liberty to settle the claim) upon being fully indemnified and
secured by the Company against all costs, damages and expenses thereby
incurred, in which event Davy shall not make, and shall procure that no Davy
Relevant Persons make any admission as to liability or any compromise in respect
of any such claim without the prior written consent of the Company, such
consent not to be unreasonably withheld or delayed.

 

11.6         Other remedies

 

The Company accepts that all remedies
available to Davy in this Agreement shall be available (to the extent so agreed
by Davy with them) to all sub-underwriters and that, in addition to any remedy
or right of action available to it under this Agreement, Davy and any
sub-underwriter shall be entitled ( as subscribers or purchasers of the Rights
Issue Units), to the extent that Davy and any sub-underwriter has subscribed
for or purchased Rights Issue Units, to the same remedies and rights of action
against the Company and to the same extent as any person may have acquiring any
Rights Issue Units on the basis of the Rights Issue Documents.

 

12.           TERMINATION

 

12.1         Termination

 

If at or at any time before the Escrow
Closing Time:

 

(a)           it shall come to the
notice of Davy that any Warranty was not, when given, true, accurate and not
misleading in any respect and as a result could be expected to have a material
adverse effect on the Rights Issue by reference to the facts existing at the
time the Warranty was given;

 

24

 

(b)           a matter has arisen
after the date of this Agreement which would have rendered any Warranty, if
repeated at that time, to be untrue, inaccurate or misleading by reference to
the facts then existing in any respect and as a result could be expected to
have a material adverse effect on the Rights Issue;

 

(c)           the Company or any of
the Executive Directors has failed to comply in any respect, which would have a
material adverse effect on the Rights Issue, with any of their respective
obligations under this Agreement or otherwise relating to the Rights Issue; or

 

(d)           circumstances arise
whereby a supplementary prospectus (in relation to matter(s) which would have a
material adverse effect on the Rights Issue) would, in the reasonable opinion
of Davy, be required to be published by the Company pursuant to the Regulations;
or

 

(e)           a material adverse change occurs with
respect to the Group;

 

then Davy may, after consultation with the
Company, in its absolute discretion by notice in writing to the Company,
terminate this Agreement.

 

12.2         Force majeure

 

If on or at any time before the Escrow
Closing Time, there shall have occurred any change in national or international
financial, monetary, military, economic or political or stock market conditions
which, in the reasonable opinion of Davy arrived at in good faith would, or
would be likely to, be materially prejudicial to the Company, any other member
of the Group or to the Application or the offering constituted by the Rights
Issue or to the acquisition of the Rights Issue Units by persons pursuant
thereto, then Davy may, in its absolute discretion, by notice in writing to the
Company, terminate this Agreement.

 

12.3         Effect of termination

 

(a)           If this Agreement is
terminated under Clauses 12.1 or 12.2, the provisions of Clause 2.5 shall apply
as if the Conditions had not been fulfilled.

 

(b)           For the avoidance of
doubt the indemnities and warranties in this Agreement (including those in
Clauses 10 and 11) shall continue to apply notwithstanding termination of this
Agreement and shall not be limited by any other provisions of this Agreement.

 

12.4         Press Announcement

 

If any notice is given by Davy to the Company
pursuant to Clause 12.1 or Clause 12.2, Davy shall, on behalf of the Company,
withdraw any application to the Irish Stock Exchange, the UK Listing Authority
and to the London Stock Exchange for Admission and, if requested in writing by
Davy, the Company shall make a press announcement in a form reasonably required
by Davy.

 

25

 

13.           CONTINUING OBLIGATIONS

 

13.1         Company undertakings

 

The Company undertakes to Davy that it will:

 

(a)           apply the sums received
by it pursuant to the Rights Issue for the purposes described in the Listing
Particulars; and

 

(b)           for the period from the
date of this Agreement to 31 July 2004, not issue securities, or re-issue
any treasury shares, without prior consultation with and the consent of Davy,
save on exercise of any options under the Company’s four share option schemes.

 

13.2         Executive Directors’ undertakings

 

(a)           The Company hereby
undertakes (so far as lawful and where relevant in the context) to Davy, and
each of the Executive Directors severally undertakes to Davy that while he
remains a Director he will use reasonable endeavours to procure, that so long
as Davy remains as the Company’s Irish sponsor and the Company remains listed
on the Irish Stock Exchange and the UK Listing Authority, the Company will at
all times comply with its continuing obligations under the Listing Rules.

 

(b)           Each Executive Director
hereby severally undertakes to Davy that he will not dispose of any Stock Units
in which he has an interest (as set out in the Listing Particulars) for the
period of three months from the Impact Day and will procure, so far as is
within his power of procurement, that the holder of such Stock Units does not
so dispose of any Stock Unit, save with the consent of Davy.

 

13.3         Change of Director

 

The Company shall immediately inform Davy if,
at any time before 31 July 2004, any person is appointed, or ceases to be,
a director of the Company or there is any proposal that this shall happen.

 

13.4         Compliance by Group Companies

 

The Company undertakes to Davy to ensure that
the Subsidiary Undertakings comply with those provisions of this Agreement
which are applicable to them.

 

14.           ANNOUNCEMENTS AND INFORMATION

 

14.1         No publication

 

Until the Closing Date each of the Company
and the Executive Directors severally undertakes to Davy not to make any public
statement (in response to enquiries or otherwise) or publish any document or
information which relates to the Rights Issue or which relates to any member of
the Group unless:

 

(a)           it is a normal trade announcement or
document, or

 

26

 

(b)           the statement, document
or information is required by law or the Irish Stock Exchange or the UK Listing
Authority to be made or published,

 

provided such party has first obtained the
prior consent of Davy as to the content, timing and manner of the making or
publication of the announcement, statement, document or information, such
consent not to be unreasonably withheld or delayed.

 

14.2         Consultation with Davy

 

The Company undertakes to Davy that, while
Davy remains as the Company’s sponsor and the Company remains listed on the
Irish Stock Exchange and the UK Listing Authority, it will as early as
practicable consult with Davy in advance (and procure that the relevant member
of the Group will consult with Davy in advance) concerning any public statement
or document or information which relates to the results, dividends or prospects
of any member of the Group or to any acquisition, disposal, reorganisation,
take-over, management development or any other significant matter (similar or
not to the foregoing) which any member of the Group proposes to make or
publish.

 

14.3         References to public statement

 

In Clauses 14.1 and 14.2 references to making
a public statement or publishing a document or information include authorising
or permitting another person to do so.

 

14.4         Release of statement

 

The parties undertake to each other to use
all their reasonable endeavours to ensure that any public statement or document
or information which any member of the Group proposes to make or publish and
which requires to be released to the Irish Stock Exchange or the London Stock
Exchange shall be released, where practicable, simultaneously on the Irish
Stock Exchange and the London Stock Exchange or, where not so practicable, on
the same day.

 

14.5         Client confidentiality

 

The parties agree that where any information,
which is required by law or by any regulatory authority to be disclosed, is
disclosed by Davy to the Stock Exchanges or the UKLA or the Irish Takeover
Panel in relation to the Group or the Rights Issue such disclosure shall not be
a breach of client confidentiality.

 

14.6         Disclosure required by law

 

Davy hereby undertake that, where it is
required by law or any regulatory body to disclose any information in relation
to the Group or the Rights Issue to any statutory or regulatory authority, it
will immediately after making the required disclosure provide the Company with
details of the information disclosed.

 

27

 

15.           GENERAL

 

15.1         Waiver

 

No waiver by any party hereto of any breach
or non-fulfilment by any other party of any provision of this Agreement shall
be deemed to be a waiver of any subsequent or other breach of that or any other
provision hereof and no failure to exercise or delay in exercising any right or
remedy under this Agreement shall constitute a waiver thereof.  No single or partial exercise of any right
or remedy under this Agreement shall preclude or restrict the further exercise
of any such right or remedy.  The rights
and remedies of the parties provided in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.

 

15.2         Agreement remains in force

 

This Agreement shall remain in full force and
effect so far as concerns any matter remaining to be performed at Completion
and notwithstanding that Completion shall have taken place.

 

15.3         Warranties continuing

 

Subject to the provisions of Clauses 10 and
11, the warranties, indemnities, undertakings, agreements and provisions
contained in this Agreement shall remain in full force and effect and
notwithstanding Completion.

 

15.4         Severance

 

The invalidity illegality or unenforceability
of any provision of this Agreement shall not affect the continuation in force
of the remainder of this Agreement.

 

15.5         Time of the Essence

 

Dates, times or periods referred to in this
Agreement shall not be of the essence except for the Escrow Closing Time in
respect of which the time and date shall be of the essence and the extent to
which the parties agree in writing to vary the Escrow Closing Time shall be of
the essence.

 

15.6         Variations

 

No variation of this Agreement or any of the
documents in the agreed form shall be valid unless it is in writing and signed
by or on behalf of each of the parties hereto.

 

15.7         Counterparts

 

This Agreement may be executed in any number
of counterparts each of which when executed by one or more of the parties
hereto shall constitute an original but all of which shall constitute one and
the same instrument.

 

28

 

15.8         Entire agreement

 

This Agreement and any documents referred to herein
in the agreed form constitute the entire agreement between the parties with
respect to the subject matter of this Agreement.

 

15.9         Notices

 

Any notice to be given pursuant to the terms
of this Agreement must be given in writing to the party due to receive such
notice at (in the case of a company) its registered office from time to time or
(in the case of an individual) his address set out in this Agreement or such
other address as may have been notified for the purpose to the other parties in
accordance with this Clause.  Notice
shall be sent by pre-paid recorded delivery or pre-paid registered post (air
mail if overseas) or by facsimile transmission and shall be deemed to be given
in the case of posting (in the absence of evidence of earlier receipt) within
forty eight hours after posting or six days if sent by air mail and in the case
of facsimile transmission on completion of the transmission if such
transmission is received prior to 5.00 pm on a Business Day, or if received at
any other time on the next Business Day provided that a confirmation copy is
sent on that date by pre-paid post as aforesaid.

 

15.10       Governing law and jurisdiction

 

(a)           This Agreement is governed by Irish law.

 

(b)           Each party irrevocably
agrees that the Irish courts shall have non-exclusive jurisdiction to hear and
determine any suit, action or proceedings, and to settle any disputes, which
may arise out of or in connection with this Agreement (respectively, “Proceedings” and “Disputes”) and, for such purposes,
irrevocably submits to the jurisdiction of the Irish courts.  Each party irrevocably waives any objection
which it might at any time have to the Irish courts being nominated as the
forum to hear and determine any Proceedings and to settle any Disputes and
agrees not to claim that the Irish courts are not a convenient or appropriate
forum.  Each party agrees that the
process by which any Proceedings are begun in Ireland or elsewhere may be
served on it by being posted in accordance with Clause 15.9, although this
shall not affect the right to serve process in any other manner permitted by
law.

 

IN WITNESS whereof
this Agreement has been entered into the day and year first herein written.

 

29

 

FIRST SCHEDULE

 

EXECUTIVE
DIRECTORS

 

	
  Name

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Sir Anthony O’Reilly

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  
	
   

  	
   

  	
   

  
	
  Peter John Goulandris

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  
	
   

  	
   

  	
   

  
	
  Richard Barnes

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  
	
   

  	
   

  	
   

  
	
  P.Redmond O’Donoghue

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  
	
   

  	
   

  	
   

  
	
  Ottmar C.Kűsel

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  
	
   

  	
   

  	
   

  
	
  Christopher J.McGillivary

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  
	
   

  	
   

  	
   

  
	
  John Foley

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  
	
   

  	
   

  	
   

  
	
  Peter B. Cameron

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2, Ireland

  
	
   

  	
   

  	
   

  
	
  Tony O’Reilly Jnr

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  
	
   

  	
   

  	
   

  
	
  Lord Wedgwood

  	
   

  	
  c/o 1-2 Upper Hatch Street, Dublin 2,
  Ireland

  

 

30

 

SECOND SCHEDULE

 

MATERIAL
SUBSIDIARY UNDERTAKINGS

 

Name

 

Waterford Crystal (Manufacturing) Ltd

 

Josiah Wedgwood & Sons Ltd

 

Rosenthal AG

 

All-clad Metalcrafters LLC

 

Waterford Crystal Ltd

 

Stuart & Sons Ltd.

 

Waterford Wedgwood Australia Ltd

 

Waterford Wedgwood Canada Inc.

 

Waterford Wedgwood USA Inc.

 

Waterford Wedgwood Japan Ltd

 

Waterford Wedgwood Retail Ltd

 

Josiah Wedgwood & Sons (Exports) Ltd

 

Josiah Wedgwood (Malaysia)

 

Waterford Wedgwood Trading Singapore Pte. Ltd

 

Waterford Wedgwood (Taiwan) Ltd

 

Wedgwood GmbH

 

W/C Imports Inc.

 

All-Clad Switzerland GmbH

 

Spring USA Corporation

 

Cashs Mail Order Limited

 

Statum Limited

 

Waterford Wedgwood U.K. plc

 

Wedgwood Ltd

 

Waterford Wedgwood Inc.

 

Waterford Glass Research and Development Ltd

 

Waterford Wedgwood Employee Share Ownership Plan (Jersey) Ltd

 

31

 

Waterford Wedgwood GmbH

 

All-clad Holdings Inc.

 

Waterford Wedgwood Linens Inc.

 

Ashling Corporation

 

32

 

THIRD SCHEDULE

 

PART
I

 

DELIVERY
OF DOCUMENTS AT EXECUTION

 

1.             Amended
Existing Notes Purchase Commitment Letter.

 

2.             Amended
Revolving Credit Facility Commitment Letter.

 

3.             New
Rosenthal Facility Commitment Letter.

 

4.             Underwriters proof of
the Listing Particulars, duly signed and dated by each of the Directors and the
directors of Waterford Wedgwood UK or by his agent duly authorised in writing.

 

5.             Draft Verification
Notes.

 

6.             Two copies of the
Board Resolutions, certified by the Secretary of the Company or the Secretary
of Waterford Wedgwood UK, as appropriate, as having been duly passed.

 

7.             The Working Capital
Estimates.

 

8.             A copy (certified as
aforesaid) of a duly executed power of attorney granted by each Director, or
director of Waterford Wedgwood UK, as appropriate, in the agreed form.

 

9.             The trading statement
for the Group for the six-month period to 30 September 2003, to be issued
by the Company on the date of this Agreement.

 

10.           The Red Herring
Offering Memorandum.

 

11.           A copy (certified by a
Director or the secretary of the Company or by a director or the secretary of
Waterford Wedgwood UK, as appropriate) of a responsibility letter from or on
behalf of each of the Directors and the directors of Waterford Wedgwood UK, in
the agreed form, confirming his acceptance of responsibility for the underwriter’s
proof of the Listing Particulars.

 

12.           Conditional
confirmation letter, in the agreed form, from the auditors of the Company
addressed to Davy and the Company regarding sufficiency of working capital for
the Group.

 

13.           A report on the Working
Capital Estimates from the auditors of the Company regarding sufficiency of
working capital.

 

14.           A letter from the
auditors of the Company addressed to Davy and the Company confirming the
accuracy of the extraction of financial information in the underwriter’s proof
of the Listing Particulars.

 

33

 

15.           A letter from the
Company addressed to Davy confirming the accuracy of extraction of financial
information in the underwriter’s proof of the Listing Particulars, in the
agreed form.

 

16.           A letter from the
Company addressed to Davy confirming the sufficiency of working capital
available to the Group, in the agreed form.

 

17.           A letter from the
Company to Davy confirming that there has been no significant change in the
financial or trading position of the Group since 30 September 2003, the
date to which the Group’s most recent consolidated financial statements were
published, in the agreed form.

 

18.           All such further
documents as may reasonably be required by Davy for the purpose of or in
connection with the Rights Issue or Admission.

 

34

 

PART
II

 

DELIVERY
OF DOCUMENTS AT/PRIOR TO THE ESCROW CLOSING TIME

 

1.             A
copy of the Amended Existing Notes Purchase Agreement, duly executed.

 

2.             A
copy of the Amended Revolving Credit Facility Agreement, duly executed.

 

3.             A
copy of the Indenture relating to the Subordinated Bonds, duly executed.

 

4.             A
copy of the New Rosenthal Facility Agreement, duly executed.

 

5.             A copy of (i) the
legal opinion addressed to the Banks from the legal counsel to the Banks, in
such form as is required by the Banks, concerning the due execution, validity
and enforceability of the Amended Revolving Credit Facility Agreement (ii) the
legal opinion addressed to the Noteholders from the legal counsel to the
Noteholders, in such form as is required by the Noteholders, concerning the due
execution, validity and enforceability of the Amended Existing Notes Purchase
Agreement.  If such an opinion is
provided to the Lenders, the Company undertakes to Davy that it will use all
reasonable endeavours to procure the delivery to Davy of the legal opinion
addressed to the Lenders from the legal counsel to the Lenders, in such form as
is required by the Lenders concerning the due execution, validity and
enforceability of the New Rosenthal Facility Agreement.

 

6.             A certificate signed
by two Directors and addressed to Davy confirming that the Conditions contained
in Clause 2.1 (m), (n), (o), (p), (q) and (r) have been satisfied, in the
agreed form.

 

7.             The Bank of New York
Escrow Agreement, duly executed by the Bank of New York, Davy and the Company.

 

8.             An original copy of
the Barclays Instruction Letter, duly executed.

 

9.             A copy of the
irrevocable instruction referred to in Clause 2.1(q), duly executed.

 

10.           The Press Release.

 

11.           Two copies of the board
minutes, certified by the Secretary of the Company or the Secretary of
Waterford Wedgwood UK, as appropriate, approving the issue of the Listing
Particulars and the provisional allotment of the shares comprised in the Rights
Issue Units to Qualifying Stockholders.

 

12.           A copy of the board
minutes, certified by the Secretary of the Company, approving, inter alia, the
entry into by the Company of the Amended Credit Facility Agreement, the Amended
Existing Notes Purchase Agreement, the Subordinated Bonds underwriting
agreement, the New Rosenthal Facility Agreement and all other documents to be
executed in connection therewith and the issue of the Subordinated Bonds.

 

35

 

13.           Two further copies of
the Listing Particulars, each duly signed and dated by each of the Directors
and the directors of Waterford Wedgwood UK or by his agent duly authorised in
writing, together with two certified copies of the authority of any such agent.

 

14.           Two originals of the
letter, specified in paragraph 5.5 of the Listing Rules, relating to the
contents of the Listing Particulars, each duly signed by each of the Directors
and the directors of Waterford Wedgwood UK or by his agent duly authorised in
writing.

 

15.           One signed original of
the Verification Notes.

 

16.           A letter from the
auditors of the Company addressed to Davy and the Company reporting on the
Working Capital Estimates and confirming that the statement as to sufficiency
of working capital available to the Group as contained in the section of
the Listing Particulars entitled “Working Capital” has been made after due and
careful enquiry by the Company and that the persons or institutions providing
finance have stated that the relevant financing facilities exist.

 

17.           A letter from the
Company addressed to Davy confirming the sufficiency of working capital
available to the Group, in the agreed form.

 

18.           A letter from the
auditors of the Company addressed to Davy and the Company confirming the
accuracy of the extraction of financial information in the Listing Particulars.

 

19.           A copy (certified by a
Director or the secretary of the Company, or a director or the secretary of
Waterford Wedgwood UK, as appropriate, as being a true copy) of a
responsibility letter from each of the Directors and the directors of Waterford
Wedgwood UK, in the agreed form, confirming his acceptance of responsibility
for the Listing Particulars.

 

20.           A letter from the
Directors to Davy confirming that there has been no significant change in the
financial or trading position of the Group since 30 September 2003, the
date to which the Group’s most recent consolidated financial statements were
published, in the agreed form.

 

21.           A letter from the
Company addressed to Davy confirming that the Directors have had explained to
them the nature of their responsibilities and obligations as directors of a
listed company under the Listing Rules, in the agreed form and confirming
certain matters in relation to paragraph 2.13 of the Listing Rules.

 

22.           Schedule 3A,
application for admission of securities to the official list, duly executed for
and on behalf of the Company.

 

23.           All such further
documents as may reasonably be required by Davy for the purpose of or in
connection with the Rights Issue or Admission.

 

36

 

FOURTH SCHEDULE

 

WARRANTIES
AND REPRESENTATIONS

 

PART
I

 

1.             The implementation of
the Rights Issue, and the publication and despatch of the Rights Issue
Documents, will comply in all respects with the relevant provisions of the
Companies Acts, the Regulations, the Rules and all other relevant laws and
regulations and will comply in all material respects with, and will not
infringe, any agreements and obligations to which the Company or any of the
Subsidiary Undertakings is a party or by which the Company or any of the
Subsidiary Undertakings is bound.

 

2.             All statements of
fact contained in the Rights Issue Documents are and will, when the Rights
Issue Documents are despatched, be true and accurate and not misleading.  All statements of opinion, intention or
expectation contained in the Rights Issue Documents were, at the relevant time,
made on reasonable grounds after due and proper consideration, are fair and
honest, and there are no facts known or which could on reasonable enquiry have
been known to the Company which are not disclosed in the Listing Particulars
the omission of which would make misleading in any material respect any statement
therein, whether of fact or opinion, and in particular:

 

(a)           the information
contained in Part 3 of the Listing Particulars is true and accurate in all
material respects and is not misleading in any material respect and gives a
true and fair view of the profits and source of funds and cash flows for the
financial period covered by the report and of the state of affairs of the Group
as at the end of such financial period;

 

(a)           the reasons for the
Rights Issue are fairly and accurately described in the Listing Particulars;

 

(b)           the Pro Forma
Consolidated Balance Sheet included in Part 4 of the Listing Particulars has
been properly compiled on the basis of the Group’s audited consolidated
financial statements for the year ended 31 March, 2003, as adjusted for the net
proceeds of the Rights Issue and the Subordinated Bonds;

 

(c)           the interests (if any)
of the Directors in the share capital of the Company and in contracts and
arrangements with the Company are fairly and accurately described in the
Listing Particulars; and

 

(d)           the Company has no
material subsidiaries other than those identified in the Listing Particulars
and the Company is not itself the subsidiary of any other company.

 

3.                                                 (a)           Upon satisfaction of
the Conditions and subject to Davy complying with its underwriting obligations
contained in Clause 6 of this Agreement, the Company will have sufficient
working capital for at least the period of 12 months following the Impact Day.

 

37

 

(b)           The Working Capital
Estimates have been approved by the Company and have been prepared after due
and careful enquiry and on the basis and assumptions stated in the Working
Capital Estimates, which the Company believes to be reasonable.

 

4.             The Listing
Particulars contains all such information as investors and their professional
advisers would reasonably require and reasonably expect to find in the Listing
Particulars for the purpose of making an informed assessment of the assets and
liabilities, financial position, profits, and losses and prospects of the Group
and of the rights attaching to the Stock Units.

 

5.             All statements made
by or with the express authority of the Company in connection with the
Application for certain information to be omitted from the Listing Particulars
as being inapplicable or of minor importance only and not such as would
influence assessment of the assets and liabilities, financial position, profits
and losses and prospects of the Group or any other reason permitted by the
applicable Rules were, when made, and continue to be true and accurate in all
material respects.

 

6.             The answers to the
Verification Notes have been prepared or approved by persons having appropriate
knowledge and responsibility to enable them properly to provide such replies
and are believed by the Company to be true, complete and accurate in all
material respects.

 

7.             All sums due in
respect of the issued capital of each member of the Group have been paid to and
received by relevant member of the Group and, except as stated in the Listing
Particulars, there are no authorised but unissued shares or outstanding option
or other rights to subscribe for or call for the allotment of any share or loan
capital of any member of the Group.

 

8.             The Company and the
Directors have all necessary power under the Memorandum and Articles of
Association of the Company, and all authorisations, approvals, consents and
licences required by the Company have been unconditionally obtained and are in
full force and effect, to permit the Company and Waterford Wedgwood UK to allot
and issue the Rights Issue Units, to enter into this Agreement and to perform
its obligations under this Agreement.

 

9.             The creation,
allotment and issue of the Rights Issue Units will not infringe or exceed any
limits, powers or restrictions or the terms of any contract, obligation or
commitment whatsoever of the Company or Waterford Wedgwood UK.

 

10.           None of the owners or
holders of shares in the Company or Waterford Wedgwood UK will, following
Admission, have any rights, in their capacity as such, in relation to the
Company or Waterford Wedgwood UK, as the case may be, other than as set out in
the relevant Articles of Association of the Company or Waterford Wedgwood UK.

 

38

 

PART
II

 

In this Part II references to the Company shall, except where the
context otherwise requires, be deemed to include additional and separate
references also to each Subsidiary Undertaking, whether or not it was a
subsidiary of the Company at the relevant time.

 

1.             So far as is material
to the Group taken as a whole, all returns of the Company for taxation purposes
have been made by the due date and all such returns are correct in all material
respects and are not the subject of any dispute with or claim by the Revenue
Commissioners or other taxing authority which would be material for disclosure
in the Listing Particulars.

 

2.             Proper provision or
reserve has been made in the financial statements for the year ended 31
March 2003 in accordance with all legal requirements and Irish GAAP for
all taxation liable to be assessed on each Group Company or for which it is or
may become accountable in respect of:

 

(a)           profits, gains or
income (as computed for taxation purposes) accruing or arising or deemed to
accrue or arise on or before the Accounts Date;

 

(b)           any transactions
effected or deemed to be effected on or before the Accounts Date or provided
for in the financial statements; and

 

(c)           distributions made or
deemed to be made on or before the Accounts Date or provided for in the
financial statements.

 

3.             Since
the Accounts Date save as disclosed in the Listing Particulars:

 

(a)           the Company has carried
on its business in the ordinary and usual course;

 

(b)           there has been no
significant material adverse change in the financial or trading position of the
Group taken as a whole;

 

(c)           the Company has not
disposed of any of its assets other than in the ordinary course of trading and
has not entered into any material contract or commitment of an unusual and/or
unusually onerous nature or assumed any material liabilities (including
contingent liabilities);

 

(d)           the Company has not
paid or made any payment or transfer to shareholders of any dividend, bonus,
loan or distribution, other than the payment by the Company of a final dividend
to shareholders for the year ended 31 March 2003; and

 

(e)           the Company has not
incurred any tax liability which could reasonably be considered material in
respect of carrying on its business in the ordinary course.

 

4.             Neither the Company nor
any of the Subsidiary Undertakings is engaged in any litigation, arbitration or
similar proceedings of material importance in the context of the Group nor are
any such litigation, arbitration or similar proceedings threatened or pending
and there are no circumstances known to the Company, after due and careful

 

39

 

enquiry, which are likely to give rise to any
such litigation, arbitration or similar proceedings.

 

5.             The Company has not
taken any action, nor have legal proceedings started or been threatened against
the Company for its winding-up or dissolution or for it to enter into any
arrangement with or composition for the benefit of creditors, or for the
appointment of a receiver, administrator, administrative receiver, trustee or
similar officer of the Company or any of its properties, revenues or other
assets.

 

6.             No
event has occurred or, to the best of the knowledge, information and belief of
the Company, is subsisting which constitutes or would constitute a material
default under, or result in the acceleration by reason of default of, any
material obligations under any agreement, undertaking, instrument or
arrangement to which the Company is a party or by which it or any of its
properties, revenues or assets are bound and which would in any such case have
a material adverse effect on the business, assets, prospects or condition of
the Group taken as a whole.

 

7.             No
Director has given notice to, or received notice from, the Company terminating
his employment and no such person has threatened or, so far as the Company is
aware, is expected to give such notice. 
Save as disclosed in the Listing Particulars there are no contracts of
service between any Group Company and any Director which cannot be terminated
on twelve months’ notice or less without payment of compensation.

 

8.             The
Company maintains appropriate insurance cover against fire and other risks upon
all its assets and such public and employer’s liability, taking into account
the nature and scale of its activities and the provisions of agreements binding
upon it and such insurance is now in force and the Company is not aware of any
fact or matter which would lead to any such insurance being vitiated or
repudiated and there is no material claim pending or outstanding and all
premiums in respect of such insurances are duly paid.

 

9.             The
amounts borrowed by the Company do not exceed any limitation on its borrowing
contained in its Articles of Association, any debenture or other deed or
document binding upon it and the Company has not outstanding any loan capital,
nor has it factored any of its debts, or engaged in financing of a type which
would not require to be shown or reflected in audited accounts or borrowed any
money which it has not repaid, save for borrowings specified in Part I of the
Listing Particulars.

 

10.           There
is not outstanding:

 

(a)           any
loan made by any member of the Group to, or debt owing to any member of the
Group by, any of the Directors or any person connected with any of them (within
the meaning of Section 26 of the Companies Act 1990);

 

(b)           any
agreement or arrangement to which any member of the Group is a party and in
which any of the Directors or any
such connected person is interested;

 

(c)           any
agreement or arrangement to which any member of the Group is a party and which
has been entered into otherwise than on arm’s length basis;

 

40

 

in the case of (b) and (c) above where such
agreement or arrangement exceeds €20,000 in value

 

11.           The statement of
Directors’ interests notified to the Company and required to be entered in the
register of directors’ interests in accordance with the Companies Act, 1990,
which is set out in the Listing Particulars is true and complete and not
misleading, and so far as the Company is aware no person whose interest would
be treated as a Directors’ interest under Part IV of the Companies Act, 1990
has any interest in the Company’s securities which has not been so notified.

 

12.           No event has occurred
and no circumstances exist in relation to any material government, regional,
state or local authority investment grants, loan subsidies or financial
assistance received by or pledged to the Company in consequence of which the
Company is or may be held liable to forfeit or repay in whole or in part any
such grant or loan.

 

13.           All written information
supplied to Davy or its agents or advisors by the Company or, to the extent
authorised by the Company, by its agents or advisors for the purposes of the
Rights Issue and the arrangements contemplated by this Agreement is true and
accurate in all material respects and all forecasts and estimates given or
implied have been made after due and proper consideration.

 

14            So far as the Company
is aware, the execution of this Agreement and the consummation of the
transactions contemplated by it will not, nor is likely to, cause the Company
or any of the Subsidiary Undertakings to lose the benefit of any right or
privilege which it presently enjoys or any person who normally does business
with the Company or the relevant Subsidiary Undertakings not to continue to do
so on the same basis.

 

15.           The Company is not
aware of any material breach of Environmental Law and/or of any requirement
pursuant to Environmental Law which has not been fully complied with by the
Group.

 

16.           The Group has no
existing or contingent material liabilities in respect of any properties
previously occupied by it or in which it has owned or held an interest
including (without limitation) leasehold premises assigned or otherwise
disposed of.

 

17.           Each asset used by each
Group Company which is material to its business is:

 

(a)           legally and
beneficially owned by the Group Company, free from any encumbrances except for
rights securing indebtedness under the Amended Revolving Credit Facility and
under the Amended Existing Notes Purchase Agreement and not the subject of any
assignment, royalty, factoring arrangement (other than in respect of debtors),
leasing or hiring agreement, hire purchase agreement, agreement for payment on
deferred terms, or any similar agreement or arrangement; or

 

(b)           if an asset is used but
not owned by the Group Company, unconditionally available for use under the
terms of a lease or hire agreement, hire purchase agreement, credit sale or
conditional sale agreement or any similar agreement or arrangement,

 

41

 

and each of those assets is in the possession
(where capable of being possessed) or under the control of the Group Company.

 

18.           The statutory books,
books of account and other records or whatsoever kind of each Group Company are
up-to-date in all material respects and contain complete and accurate records
required by law to be dealt with in such books in all material respects and no
notice or allegation that any is incorrect or should be rectified has been
received.  All accounts, documents and
returns required by law to be delivered or made to the Registrar of Companies
in Ireland or any other authority have been duly and correctly delivered or
made.

 

19.           Save as disclosed in
the Listing Particulars there are no amounts owing or promised to any present
or former directors or employees of any Group Company other than remuneration
accrued due or for reimbursement of business expenses, no directors or senior
management employees of any Group Company have given or indicated an intention
to give or been given notice terminating their contracts of employment and no
Group Company is liable to pay any industrial training levy nor is there
outstanding any undischarged liability of a material amount to pay to any
governmental or regulatory authority in any jurisdiction any taxation,
contribution or other impost arising in connection with the employment or
engagement of employees or directors or consultants by it.

 

20.           Save to the extent to
which provision or allowance has been made in the financial statements, no
liability material to the Group as a whole has been incurred by any Group
Company for breach of any contract of service, contract for services or
consultancy agreement, for redundancy payments (including protective awards) or
for compensation for wrongful dismissal or unfair dismissal or for failure to
comply with any order for the reinstatement or re-engagement of any employee or
for the actual or proposed termination or suspension of employment or variation
of any terms of employment of any present or former employee of any Group
Company.

 

21.           No event has occurred
or, to the best of the knowledge, information and belief of the Company, is
about to occur by reason of the happening of which any secured or unsecured
borrowings of the Company have become or would with the giving of notice or the
lapse of time become repayable prior to maturity, and there are no
circumstances known to the Company, having made all reasonable enquiries, which
might lead to the occurrence of any such event.

 

22.           Except pursuant to
those pension arrangements disclosed in the Listing Particulars or in the
audited accounts made up to the Accounts Date, the Company is not under any
liability or obligation (whether or not legally enforceable ) to pay, provide
or contribute towards any retirement, death or disability benefit for or in
respect of any past officer or employee (or any spouse, child or dependant of
any of them) of the Company.

 

23.           The Company has not
done or omitted to do any act, matter or thing in respect of any agreement
relating to intellectual property material to the Group taken as a whole which
would impinge upon the validity or enforceability of the same or upon the right
of the Company to use the same nor are there any outstanding obligations of the
Company whether as to payment or otherwise which if left outstanding would so
impinge and which have not been provided for in the audited accounts of the
Company for the year ended 31 March 2003. 
Save as disclosed in the Listing Particulars, the Company owns

 

42

 

or licences all intellectual property
material to the Group taken as a whole relating to the business of the Company
free from all liens, charges and encumbrances and none of such intellectual
property is the subject of any claim, opposition, assertion, infringement,
attack, right, action or other restriction or arrangement of whatsoever nature
which does or may impinge upon the validity, enforceability or ownership of the
same or the utilisation thereof by the Company to an extent which is material
in the context of the Group.  To the
best of the knowledge, information and belief of the Company, having made due
and careful enquiry, none of the activities of the Company infringes any right
of any other person relating to intellectual property.

 

24.           Each member of the
Group has been duly incorporated and has full corporate power and authority to
carry on its business as at the date hereof and has in all material respects
carried on such business in compliance with all legal requirements applicable
to such business and as far as the Company is aware, having made due and
careful enquiry, each member of the Group holds all licences, permissions,
authorisations and consents necessary to enable it to carry on the same
business as hitherto carried on (including, without limitation, all necessary
planning and other consents or permissions in relation to the properties owned
or occupied by it and all consents, authorisations and licences required under
environmental and health and safety legislation) and so far as the Company is
aware such licences, permissions, authorisations and consents are in full force
and effect and so far as the Company is aware there are no circumstances which
indicate that any of them is reasonably likely to be revoked, rescinded,
avoided or repudiated or not renewed in whole, or in part, in the ordinary
course of events.

 

25.           Save for grants of
options under the Share Option Schemes and the Employee Participation Schemes
(each as defined in the Listing Particulars and to the extent disclosed
therein), or pursuant to the Company’s scrip divided plan there are in force no
options or other agreements or arrangements which call for the issue to any
person or accord to any person the right to call for the issue of any shares in
the capital of the Group or any other securities of any member of the Group.

 

43

 

FIFTH SCHEDULE

 

LETTER
OF CONFIRMATION FROM THE COMPANY

 

	
   

  	
  [Impact
  Date]

  
	
  J & E Davy

  	
   

  
	
  Davy House

  	
   

  
	
  49 Dawson Street

  	
   

  
	
  Dublin 2

  	
   

  

 

 

Dear Sirs

 

 

Proposed Rights Issue of 213,640,110 Units by
Waterford Wedgwood plc at a price of €• per New Stock Unit (the “Rights Issue”).

 

We refer to the Rights Issue and to the Underwriting Agreement relating
thereto dated • November 2003 (the
“Underwriting Agreement”).  Words and
expressions defined in the Underwriting Agreement have the same meaning herein.

 

The Company hereby confirms that the Company has complied with its
obligations under Clauses 2, 3, 4 and 5 of the Underwriting Agreement.

 

Subject to the limitations contained in clause 10.7 of the Underwriting
Agreement, the Company hereby confirms that none of the representations and
warranties given by it in Clause 10 of the Underwriting Agreement was breached
or untrue or inaccurate or misleading in any respect when made, none of such
representations and warranties would be breached or untrue or inaccurate or
misleading in any respect were it to be repeated by reference to the facts and
circumstances subsisting at the date hereof and none of the undertakings
contained in Clause 10 of the Underwriting Agreement has been breached by the
Company.

 

	
  Yours faithfully

  
	
   

  
	
   

  	
   

  
	
  Director

  
	
  For and on behalf of Waterford Wedgwood plc

  

 

44

 

	
  SIGNED by

  	
   

  
	
  duly authorised

  	
   

  
	
  for and on behalf of

  	
   

  
	
  J & E DAVY

  	
  /s/ Hugh McCutcheon

  	
   

  
	
  in the presence of:-

  	
   

  
	
  Hugh McCutcheon

  	
   

  
	
  DAVY HOUSE

  D2

  	
   

  
	
   

  	
   

  
	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by Sir Anthony O’Reilly

  	
   

  
	
  in the presence of:

  	
  /s/ Sir Anthony O’ Reilly

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  	
   

  	
   

  
	
   

  

 
 	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by Peter John Goulandris

  	
   

  
	
  in the presence of:

  	
  /s/ Peter John Goulandris

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  
	
   

  
	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by Richard Barnes

  	
   

  
	
  in the presence of:

  	
  /s/ Richard Barnes

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  	
   

  
	
   

  	
   

  
	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by P. Redmond O’Donoghue

  	
   

  
	
  in the presence of:

  	
  /s/ P. Redmond O’ Donoghue

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  	
   

  
	
   

  	
   

  
	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by Christopher McGillivary

  	
   

  
	
  in the presence of:

  	
  /s/ Christopher McGillivary

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  	
   

  
	
   

  	
   

  
	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by John Foley

  	
   

  
	
  in the presence of:

  	
  /s/ John Foley

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
									

 

45

 

	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by Peter B. Cameron

  	
   

  
	
  in the presence of:

  	
  /s/ Peter B. Cameron

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  	
   

  
	
   

  	
   

  
	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by Tony O’Reilly Jnr

  	
   

  
	
  in the presence of:

  	
  /s/ Tony O’ Reilly Jnr

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  
	
   

  	
   

  
	
  SIGNED SEALED AND DELIVERED

  	
   

  
	
  by Ottmar Claus Heindrich Küsel

  	
   

  
	
  in the presence of :

  	
  /s/ Ottmar Claus Heindrich Küsel

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  
	
   

  
	
  SIGNED SEALED AND DELIVERED

  
	
  by Lord Wedgwood

  	
   

  
	
  in the presence of:

  	
  /s/ Lord Wedgwood

  	
   

  
	
  Brendan Cahill

  	
  by his
  attorney

  	
   

  
	
  William Fry

  	
  Patrick
  Dowling

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  
	
   

  
	
  SIGNED by

  
	
  duly authorised for

  	
   

  
	
  and on behalf of

  	
   

  
	
  WATERFORD WEDGWOOD plc

  	
   

  
	
  in the presence of:

  	
  /s/ Patrick Dowling

  	
   

  
	
  Brendan Cahill

  	
   

  
	
  William Fry

  	
   

  
	
  Fitzwilton House

  Wilton Place

  Dublin 2

  	
   

  
	
   

  	
   

  
							

 

46

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]