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EXHIBIT 4.1    
    

Certification  

        I, Aaron Regent, Chief Executive Officer of Falconbridge Limited, certify that: 

	1.
	I
have reviewed this annual report on Form 40-F of Falconbridge Limited;

	2.
	Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.
	Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the issuer as of, and for, the periods presented in this report;

	4.
	The
issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure control and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the issuer and have:

	a)
	Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)
	Evaluated
the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and

	c)
	Disclosed
in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected,
or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and

	5.
	The
issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the
audit committee of the issuer's board of directors (or persons performing the equivalent functions):

	a)
	All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
issuer's ability to record, process, summarize and report financial information; and 

	b)
	Any
fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting. 

	Date: March 29, 2005	 	 
	

/s/  AARON REGENT      
 Aaron Regent

Chief Executive Officer	
 	

 

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EXHIBIT 4.2    
    

Certification  

        I, Michael Doolan, Chief Financial Officer of Falconbridge Limited, certify that: 

	1.
	I
have reviewed this annual report on Form 40-F of Falconbridge Limited;

	2.
	Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.
	Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the issuer as of, and for, the periods presented in this report;

	4.
	The
issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the issuer and have:

	a)
	Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b)
	Evaluated
the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and

	c)
	Disclosed
in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected,
or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and

	5.
	The
issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the
audit committee of the issuer's board of directors (or persons performing the equivalent functions):

	a)
	All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
issuer's ability to record, process, summarize and report financial information; and 

	b)
	Any
fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting. 

	Date: March 29, 2005	 	 
	

/s/  MICHAEL DOOLAN      
 Michael Doolan

Chief Financial Officer	
 	

 

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EXHIBIT 4.2Exhibit
4.2

 

 

 

STOCKHOLDERS’
AGREEMENT

 

among

 

LINCOLN TECHNICAL
INSTITUTE, INC.,

 

BACK TO SCHOOL
ACQUISITION, L.L.C.,

 

and

 

FIVE MILE RIVER
CAPITAL PARTNERS LLC

 

 

Dated as of
September 15, 1999

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
  Page

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01.  Certain Defined Terms

  	
  1

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  CERTAIN
  AGREEMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01.  Voting

  	
  5

  
	
  SECTION 2.02.  Company Financial Statements

  	
  6

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  RESTRICTIONS
  ON TRANSFER

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01.  General Restriction

  	
  6

  
	
  SECTION 3.02.  Legends

  	
  6

  
	
  SECTION 3.03.  Certain Restrictions on Transfer

  	
  7

  
	
  SECTION 3.04.  Rights to Participate in Certain Sales.

  	
  8

  
	
  SECTION 3.05.  “Drag-Along” Rights

  	
  11

  
	
  SECTION 3.06.  Certain Persons to Execute Agreement

  	
  12

  
	
  SECTION 3.07.  Improper Sale or Encumbrance

  	
  13

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  REGISTRATION
  RIGHTS

  	
   

  
	
  SECTION 4.01.  Incidental Registration

  	
  13

  
	
  SECTION 4.02.  Furnish Information

  	
  14

  
	
  SECTION 4.03.  Expenses of Registration

  	
  14

  
	
  SECTION 4.04.  Underwriting Requirements

  	
  14

  
	
  SECTION 4.05.  Registration Procedures

  	
  15

  
	
  SECTION 4.06.  Rule 144 Information

  	
  16

  
	
  SECTION 4.07.  Indemnification

  	
  16

  

 

 

	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01.  Termination

  	
  19

  
	
  SECTION 5.02.  Conflict with Certificate of Incorporation
  or By-Laws

  	
  19

  
	
  SECTION 5.03.  Expenses

  	
  19

  
	
  SECTION 5.04.  Notices

  	
  19

  
	
  SECTION 5.05.  Public Announcements

  	
  21

  
	
  SECTION 5.06.  Headings

  	
  21

  
	
  SECTION 5.07.  Severability

  	
  21

  
	
  SECTION 5.08.  Entire Agreement

  	
  21

  
	
  SECTION 5.09.  Assignment

  	
  22

  
	
  SECTION 5.10.  No Third Party Beneficiaries

  	
  22

  
	
  SECTION 5.11.  Amendment

  	
  22

  
	
  SECTION 5.12.  Governing Law

  	
  22

  
	
  SECTION 5.13.  Counterparts

  	
  22

  
	
  SECTION 5.14.  Specific Performance

  	
  22

  
	
  SECTION 5.15.  Waiver of Jury Trial

  	
  22

  

 

ii

 

STOCKHOLDERS’ AGREEMENT,
dated as of September  15, 1999 among LINCOLN TECHNICAL INSTITUTE, INC., a
New Jersey corporation (the “Company”); BACK TO SCHOOL ACQUISITION,
L.L.C., a Delaware limited liability company (“Stonington”); and FIVE
MILE RIVER CAPITAL PARTNERS LLC, a Delaware limited liability company, formerly
known as Hart/LTI, LLC (“FMRCP”).

 

WHEREAS, by a Stock
Option Agreement, dated June 21, 1999, between Stonington and FMRCP,
Stonington granted an option to FMRCP to acquire 6,459 shares of common stock,
no par value per share, of the Company (“Common Stock”) held by
Stonington (the “FMRCP Option”); and

 

WHEREAS, as a condition
to the exercise of the FMRCP Option and in order to make certain agreements
with respect to their respective rights and obligations as holders of Common
Stock, the parties hereto have determined that it is in their best interests to
enter into this Agreement;

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements and covenants
hereinafter set forth, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01.  Certain Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings:

 

“Affiliate”
means, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, such specified Person.

 

“Agreement”
or “this Agreement” means this Stockholders’ Agreement, dated as of
September 15, 1999, among the Company and each of the other parties
signatory hereto, and all amendments hereto made in accordance with the
provisions of Section 5.11.

 

“beneficial
owner” or “beneficially own” has the meaning given such term in Rule
13d-3 under the Exchange Act.

 

“Board”
means the Board of Directors of the Company.

 

“Business Day”
means any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by law to be closed in the City of New York.

 

 

“By-Laws” means
the Company’s by-laws, as in effect from time to time.

 

“Cash
Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having the highest rating obtainable from either Standard &
Poor’s Ratings Services, a Division of The McGraw-Hill Companies, Inc. (“S&P”)
or Moody’s Investors Service, Inc.; or (c) commercial paper maturing not more
than one year from the date of issuance thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or
Moody’s Investors Service, Inc.

 

“Certificate of
Incorporation” means the Company’s Certificate of Incorporation as in
effect from time to time.

 

“Commission”
means the Securities and Exchange Commission, and any successor commission or
agency having similar powers.

 

“Common Stock”
has the meaning specified in the recitals to this Agreement.

 

“Company”
has the meaning specified in the preamble to this Agreement.

 

“Control” (including
the terms “controlled by” and “under common control with”), with
respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, as trustee or executor, by contract
or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.

 

“Encumbrance”
means any security interest, pledge, mortgage, lien (including, without
limitation, environmental and tax liens), charge, encumbrance, adverse claim,
preferential arrangement or restriction of any kind, including, without
limitation, any restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.

 

2

 

“Fair Value”
means (a) as to publicly traded securities, the average of the daily closing
prices or last reported sales price, as applicable, or if closing prices or
last reported sales prices are not available, the average of the highest
reported bid and the lowest reported asked price, for the ten (10) consecutive
trading days ending on the most recent trading day prior to the date of
determination, and (b) as to other assets, the fair market value of such assets
determined in good faith by an independent nationally recognized investment
banking firm selected by the Company and approved (which approval shall not be
unreasonably withheld) by (i) FMRCP and its Permitted Transferees and (ii)
Stonington and its Affiliates, by action of the majority in number of Fully
Diluted Shares held by each such group, and which investment banking firm shall
have provided no material services to the Company or any Stockholder within the
preceding year.

 

“Fully Diluted
Shares” means the aggregate of (a) the number of Shares issued and
outstanding (other than Shares held in the treasury of the Company or held by
any Subsidiary) and (b) the number of Shares issuable upon (i) the exercise of
any then outstanding options, warrants or similar instruments (other than such
instruments held by the Company or any Subsidiary) and (ii) the exercise of any
conversion or exchange rights with respect to any outstanding securities or
instruments (other than such securities or instruments held by the Company or
any Subsidiary).

 

“FMRCP” has
the meaning specified in the preamble to this Agreement.

 

“FMRCP Option”
has the meaning specified in the preamble to this Agreement.

 

“Marketable
Securities” means securities that are (a) (i) securities of or other
interests in any Person that are traded on a national securities exchange,
reported on the Nasdaq Stock Market System or otherwise actively traded
over-the-counter or (ii) debt securities of an issuer that has debt or
equity securities that are so traded or so reported on and which a nationally
recognized securities firm has agreed to make a market in, and (b) not
subject to restrictions on transfer as a result of any applicable contractual
provisions or the provisions of the Securities Act or, if subject to such
restrictions under the Securities Act, are also subject to registration rights
reasonably acceptable to Stonington.

 

“Other
Stockholder” means any of FMRCP and any of its Permitted Transferees.

 

“Permitted
Transferee” means, in the case of FMRCP, (a) any of their Affiliates and
(b) any Person with respect to which the Stockholders agree that they have
no objection if a Sale of Shares is made to such Person.

 

3

 

“Person”
means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization or other entity, as
well as any syndicate or group that would be deemed to be a person under
Section 13(d)(3) of the Exchange Act.

 

“Public Company”
means that, as of the date of determination, the shares of Common Stock that
have been sold in Public Offerings shall equal not less than 10% of the Fully
Diluted Shares.

 

“Public
Offering” means an underwritten public offering of equity securities of the
Company pursuant to an effective registration statement under the Securities
Act.

 

“Registrable
Shares” means the Shares, including the Shares issued or issuable pursuant
to the FMRCP Option and any securities issued or issuable with respect to any
Shares by way of conversion, exchange, replacement, stock dividend, stock split
or other distribution or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or
otherwise.  For purposes of this
Agreement, any Registrable Shares shall cease to be Registrable Shares when
(a) 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, (b) such Registrable Shares are
sold by a Person in a transaction in which the rights under the provisions of
this Agreement are not assigned or (c) such Registrable Shares are sold
pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the Securities Act without registration under the
Securities Act.

 

“Restricted
Shares” means all Shares other than (a) Shares that have been
registered under a registration statement pursuant to the Securities Act; (b)
Shares with respect to which a Sale has been made in reliance upon, and in
accordance with, Rule 144; or (c) Shares with respect to which the holder
thereof shall have delivered to the Company either (i) a written opinion, in
form and substance reasonably satisfactory to the Company, of counsel, who
shall be reasonably satisfactory to the Company, or (ii) a “no action” letter
from the Commission, to the effect that subsequent transfers of such Shares may
be effected without registration under the Securities Act.

 

“Rule 144”
means Rule 144 (or any successor provision) under the Securities Act.

 

“Rule 144
Transaction” means any Sale of Shares made in reliance upon, and in
accordance with, Rule 144.

 

“Sale”
means any sale, assignment, transfer, distribution or other disposition of
Shares or of a participation or other right therein, whether voluntarily or by
operation of law.

 

4

 

“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations
thereunder.

 

“Share”
means any share of Common Stock.

 

“Stockholder”
means each Person (other than the Company) who or which shall be a party to
this Agreement, whether in connection with the execution and delivery hereof as
of the date hereof, pursuant to Section 3.06 or otherwise, so long as such
Person shall own, beneficially or of record, any Shares.

 

“Subsidiary”
or “Subsidiaries” of any Person means any corporation, partnership,
joint venture, association or other entity, all of the capital stock or other
similar equity interests of which, are owned beneficially and of record by such
Person directly or indirectly through one or more intermediaries.

 

“Stonington”
has the meaning specified in the preamble to this Agreement.

 

“Third Party”
means, with respect to any Stockholder, any Person, other than (i) the
Company, (ii) any Subsidiary of the Company or (iii) any Affiliate of
such Stockholder or, in the case of FMRCP, any Person described in clause (a)
of the definition of Permitted Transferee.

 

ARTICLE II

 

CERTAIN AGREEMENTS

 

SECTION 2.01.  Voting.  FMRCP hereby agrees to vote all Shares owned or held of record by
it as directed by Stonington at any annual or special stockholders’ meeting, or
to take all actions by written consent in lieu of any such meeting as directed
by Stonington.  In particular:

 

(i)                                   Board.  FMRCP hereby agrees to vote all Shares owned
or held of record by it in favor of P.J. Santangelo (or his designee) whenever
nominated to be a director of the Company, so long as Stonington shall confirm
to FMRCP that, at the time of the proposed election, P.J. Santangelo and James
Santangelo collectively own Shares constituting at least 5% of the outstanding
Shares.

 

(ii)                                Certificate
of Incorporation and By-Laws.  For
such time as P.J. Santangelo and James Santangelo and their Permitted
Transferees hold any Shares, FMRCP agrees for the benefit of P.J. Santangelo
and James Santangelo, not to vote in favor of any amendments to the

 

5

 

Certificate of
Incorporation or the By-Laws that in any way would affect P.J. Santangelo or
James Santangelo adversely in a manner different from the other holders of
Common Stock.

 

FMRCP hereby agrees that
P.J. Santangelo and James Santangelo shall be expected beneficiaries of this
Section 2.01.

 

SECTION 2.02.  Company Financial Statements.  For such time as FMRCP and its Permitted
Transferees (other than the Persons described in clause (b) of the definition
of Permitted Transferee) hold any Shares, the Company agrees to provide each of
them with (i) unaudited quarterly financial statements of the Company
within 45 days of the end of each fiscal quarter of the Company and
(ii) audited financial statements of the Company within 90 days of the end
of each fiscal year of the Company.

 

ARTICLE III

 

RESTRICTIONS ON TRANSFER

 

SECTION 3.01.  General Restriction.  The Other Stockholders, agree that they will
not, directly or indirectly, make or solicit any Sale of, or create, incur,
solicit or assume any Encumbrance with respect to, any Share, except in
compliance with the Securities Act and this Agreement.  Notwithstanding the foregoing, FMRCP and its
Permitted Transferees may make or solicit sales to Permitted Transferees,
subject to compliance with this Article III.

 

SECTION 3.02.  Legends.  (a)  The Company shall
affix to each certificate evidencing Shares of the Other Stockholders a legend
in substantially the following form:

 

THE SECURITIES EVIDENCED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.  NO REGISTRATION OF TRANSFER
OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER
IS MADE IN CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR
SUCH ACT DOES NOT APPLY.

 

THE SECURITIES EVIDENCED
BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET
FORTH IN A

 

6

 

STOCKHOLDERS’ AGREEMENT,
DATED AS OF SEPTEMBER 15, 1999, AS IT MAY THEREAFTER BE AMENDED, A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.  NO REGISTRATION OF TRANSFER OF SUCH SECURITIES
WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS
SHALL HAVE BEEN COMPLIED WITH.

 

(b)                              The
Company shall affix to each certificate evidencing Shares of any Stockholder a
legend in substantially the following form:

 

THE HOLDER OF THE
SECURITIES EVIDENCED BY THIS CERTIFICATE IS ENTITLED TO CERTAIN RIGHTS AND
SUBJECT TO CERTAIN OBLIGATIONS AS SET FORTH IN A STOCKHOLDERS’ AGREEMENT, DATED
AS OF SEPTEMBER 15, 1999, AS IT MAY THEREAFTER BE AMENDED, A COPY OF WHICH
IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.

 

(c)                               In
the event that any Shares shall cease to be Restricted Shares, the Company
shall, upon the written request of the holder thereof, issue to such holder a
new certificate evidencing such Shares without the first paragraph of the
legend required by Section 3.02(a) endorsed thereon; provided, however,
that such holder shall furnish the Company or its transfer agent such
certificates, legal opinions or other information as the Company or its
transfer agent may reasonably require to confirm that the legend is not
required on such certificate.  In the
event that any Shares shall cease to be subject to the restrictions on transfer
set forth in this Agreement, the Company shall, upon the written request of the
holder thereof, issue to such holder a new certificate evidencing such Shares
without the second paragraph of the legend required by
Section 3.02(a).  In the event that
any Shares shall cease to be entitled to any rights and subject to any
obligations set forth in this Agreement, the Company shall, upon the written
request of the holder thereof, issue to such holder a new certificate
evidencing such Shares without the legend required by Section 3.02(b).

 

SECTION 3.03.  Certain Restrictions on Transfer.  (a) So long as Stonington and/or its
Affiliates own at least twenty percent (20%) of the then outstanding Shares,
each Other Stockholder agrees that such Other Stockholder will not, directly or
indirectly, make any Sale of, or create, incur, or assume any Encumbrance with
respect to, any Shares held by such Other Stockholder other than any Sale or
Encumbrance to a Permitted Transferee (other than the Persons described in
clause (b) of the definition of Permitted Transferee), without first granting
Stonington and/or its Affiliates, the option to acquire those Shares in
accordance with this Section 3.03.

 

(b)                              If
an Other Stockholder receives a bona fide offer that such Other Stockholder
desires to accept from a Third Party with respect to the Sale of such Other
Stockholder’s Shares, such

 

7

 

Other Stockholder shall
give to Stonington written notice (the “Transfer Notice”) of such
proposed Sale, specifying the proposed transferee, the number of Shares
proposed to be disposed of, the proposed purchase price to be received in
exchange therefor, and the other material terms of the proposed Sale.  Delivery of the Transfer Notice to
Stonington shall constitute an irrevocable offer to sell such Shares to
Stonington on the terms and conditions set forth therein; provided, however,
that if the proposed purchase price set out in the Transfer Notice is other
than all cash, such Other Stockholder shall accept an amount of cash equivalent
to the Fair Value of such non-cash consideration, such Fair Value to be
determined at the cost of the Company.

 

(c)                               Stonington
shall have the right, exercisable by written notice given to such Other
Stockholder within ten (10) Business Days after receipt of such Transfer
Notice, to purchase (or to cause an Affiliate of Stonington to purchase) all,
but not less than all, of the Shares specified in such Transfer Notice at the
purchase price and on the other terms set forth therein.

 

(d)                              If
Stonington exercises its right of first refusal pursuant to this
Section 3.03, the closing of the purchase of the Shares with respect to
which such right has been exercised shall take place within five Business Days
after Stonington gives notice of such exercise.  If Stonington does not exercise its right of first refusal pursuant
to this Section 3.03 within the time specified for such exercise, the
Other Stockholder shall be free during the 90-day period following the
expiration of such time to sell the Shares specified in such Transfer Notice to
the Person specified therein for the consideration (or at any price in excess
thereof) and on substantially the same terms (or on other terms more favorable
to the Other Stockholder) specified therein.

 

SECTION 3.04.  Rights to Participate in Certain Sales.  (a) 
(i) Neither Stonington nor any of its Affiliates shall, in one or more
transactions, directly or indirectly, make any Sale of Shares held by them
constituting more than forty-five percent (45%) of the then outstanding Shares
to any Third Party or Third Parties, unless the terms and conditions of such
Sale shall include an offer to include, at the option of the Other
Stockholders, in such Sale to the Third Party or Third Parties, the number of
Shares then owned by such Other Stockholders, as determined by
Section 3.04(a)(iii).

 

(ii)                                If
Stonington and/or any of its Affiliates receives from a Third Party or Third
Parties a bona fide offer or offers to purchase or otherwise acquire (for
purposes of this Section an “Offer”) any Shares held by Stonington
or such Affiliates (for purposes of this Section 3.04, the “Offered
Shares”) that, together with Shares previously disposed of by Stonington or
any of such Affiliates to Third Parties aggregate more than forty-five percent
(45%) of the then outstanding Shares (such Shares, together with the Offered
Shares, for purposes of this Section 3.04, the “Tag-Along Shares”),
and Stonington and/or such Affiliates intends to sell such Offered Shares to
such Third Party or Third Parties, then Stonington and such Affiliate (for
purposes of this Section 3.04, the “Prospective Sellers”) shall jointly
provide written notice (for purposes of this Section 3.04, the “Offer
Notice”) of such Offer to each of the Other Stockholders not later than
thirty (30) days prior to the consummation

 

8

 

of the Sale contemplated
by the Offer.  The Offer Notice shall
identify the Offered Shares, the price offered for such Offered Shares (for
purposes of this Section 3.04, the “Offer Price”), all other
material terms and conditions of the Offer and, in the case of an Offer in
which the consideration payable for Offered Shares consists in whole or in part
of consideration other than cash, such information relating to such other
consideration as may be reasonably necessary to ascertain the value of such
other consideration.

 

(iii)                             Each
of the Other Stockholders shall have the right and option, for the period of
ten (10) days after the date the Offer Notice is given (for purposes of this
Section 3.04, the “Notice Period”), to notify the Prospective
Sellers of such Other Stockholder’s interest in selling or otherwise disposing
of up to the Pro Rata Portion of such Other Stockholder’s Shares pursuant to
the Offer.  For purposes of this
subsection 3.04, “Pro Rata Portion” means, with respect to each
Other Stockholder, a number of Fully Diluted Shares equal to the product of
(x) the total number of Fully Diluted Shares then owned by such Other
Stockholder, multiplied  by (y) a fraction, the numerator of
which shall be the total number of Tag-Along Shares, and the denominator of which
shall be the total number of Shares owned by the Prospective Sellers on the
date of the first sale of Tag-Along Shares.

 

(iv)                            Each
Other Stockholder desiring to sell such Other Stockholder’s Pro Rata Portion of
Shares pursuant to this Section 3.04 shall, prior to the expiration of the
Notice Period, provide the Prospective Sellers with a written notice specifying
the number of Shares as to which such Other Stockholder has an interest in
selling or otherwise disposing of pursuant to the Offer (for purposes of this
Section 3.04, a “Notice of Interest”), and shall deliver to the
Prospective Sellers, to be held in trust, (A) the certificate or
certificates evidencing the Shares to be sold or otherwise disposed of by such
Other Stockholder duly endorsed in blank or accompanied by written instruments
of transfer in form reasonably satisfactory to the Prospective Sellers executed
by such Other Stockholder; (B) an instrument of assignment reasonably
satisfactory to the Prospective Sellers assigning, as of the consummation of
the Sale to the Third Party or Third Parties, all of such Stockholder’s rights
under this Agreement with respect to the Shares to be sold or otherwise
disposed of (to the extent assignable); (C) a special irrevocable
power-of-attorney authorizing the Prospective Sellers, on behalf of such Other
Stockholder, to sell or otherwise dispose of such Shares pursuant to the terms
of the Offer (at a price equal to the Offer Price) and to take all such actions
as shall be necessary or appropriate in order to consummate such Sale; provided,
however, that the Prospective Sellers shall not have the authority to
incur or create liabilities or to give representations or warranties on behalf
of such Other Stockholder; and (D) wire transfer instruction for payment
of the purchase price (if cash) for the purchase of the Other Stockholder’s
Shares.  Delivery of such certificate or
certificates evidencing the Shares to be sold, the instrument of assignment,
the special irrevocable power of attorney authorizing the Prospective Sellers
and wire transfer instructions, on behalf of such Other Stockholder, to sell or
otherwise dispose of such Shares shall constitute an irrevocable election by
such Other Stockholder to authorize and permit the Prospective Sellers to sell such
Shares, on behalf of such Other Stockholder, pursuant to the Offer.  The Prospective Sellers shall cause the
Third Party to whom or which the Shares

 

9

 

of the Other Stockholders
are being sold or otherwise disposed of to deliver the appropriate purchase
price for the purchase of such Shares to the Other Stockholders, against
delivery of the Shares being sold or otherwise disposed of.

 

(v)                               Each
Stockholder shall bear such Stockholder’s own expenses in connection with any
such Sale pursuant to this Section 3.04.

 

(vi)                            If at
the end of the Notice Period any Other Stockholder shall not have given a
Notice of Interest (and delivered all other required documents) with respect to
some or all of such Other Stockholder’s Shares, such Other Stockholder will be
deemed to have waived all of such Other Stockholder’s rights under this
Section 3.04 with respect to the portion of such Other Stockholder’s
Shares for which a Notice of Interest shall not have been given.  If, at the end of the 180-day period
following the giving of the Offer Notice, the Prospective Sellers shall not
have completed the Sale of all the Offered Shares and the Shares with respect
to which any Other Stockholders shall have given Notices of Interest pursuant
to this Section 3.04, the Prospective Sellers shall return to such Other
Stockholders all certificates evidencing the unsold Shares that such Other
Stockholders delivered for Sale pursuant to this Section 3.04 and such
Other Stockholders’ related instruments of assignment and powers-of-attorney
and the Prospective Sellers shall not consummate the Sale with such Third Party
or Third Parties without again complying with the terms and procedures set
forth in this Section 3.04, including providing to the Other Stockholders
another Offer Notice.

 

(vii)                         Except as
expressly provided in this Section 3.04, no Prospective Seller shall have
any obligation to any Other Stockholder with respect to the Sale of any Shares
owned by any Other Stockholder in connection with this Section 3.04.  Anything herein to the contrary
notwithstanding and irrespective of whether any Notice of Interest shall have
been given, no Prospective Seller shall have any obligation to any Other
Stockholder to sell or otherwise dispose of any Offered Shares pursuant to this
Section 3.04 as a result of any decision by such Prospective Seller not to
accept or consummate any Offer or Sale with respect to the Offered Shares (it
being understood that any and all such decisions shall be made by such
Prospective Seller in its sole discretion). 
Except as otherwise permitted herein, no Other Stockholder shall be
entitled to sell or otherwise dispose of Shares directly to any Third Party or
Third Parties pursuant to an Offer (it being understood that all such Sales
shall be made only on the terms and pursuant to the procedures set forth in
this Section 3.04).

 

(b)                              Anything
in this Section 3.04 to the contrary notwithstanding, in the event that
Stonington and/or its Affiliates shall exercise their rights under
Section 3.05, the Other Stockholders shall thereafter have no right
pursuant to this Section 3.04 to participate in any Sale pursuant to this
Section 3.04 with respect to the Sale the subject of Section 3.05.  Nothing in this Section 3.04 shall affect
any of the obligations of any of the Stockholders under any other provision of
this Agreement.

 

10

 

SECTION 3.05.  “Drag-Along” Rights.  (a) If Stonington and/or any of its
Affiliates shall, in any transaction or series of related transactions,
directly or indirectly, propose to make a Sale of Shares constituting more than
50% of the Fully Diluted Shares (for purposes of this Section 3.05, the “Controlling
Shares”) to a Third Party or Third Parties (for purposes of this
Section 3.05, an “Offer”), Stonington and/or such Affiliates may,
at their option, require each of the Other Stockholders to sell the Pro Rata
Portion of such Stockholder’s Shares to such Third Party or Third Parties for
the same consideration per Share and otherwise upon the same terms and
conditions upon which Stonington and/or such Affiliates sell their Shares.  For purposes of this Section 3.05, “Pro
Rata Portion” means, with respect to each Other Stockholder, a number of
Shares equal to the product of (x) the total number of Fully Diluted
Shares then owned by such Other Stockholder, multiplied  by
(y) a fraction, the numerator of which shall be the total number of Shares
proposed to be sold by Stonington and/or such Affiliates, and the denominator
of which shall be the total number of Shares then owned by Stonington and/or
its Affiliates.

 

(b)                              (i)  Stonington and/or such Affiliates shall
provide a written notice (for purposes of this Section 3.05, the “Offer
Notice”) of such Offer to each of the Other Stockholders not later than the
fifteenth Business Day prior to the consummation of the Sale contemplated by
the Offer.  The Offer Notice shall
contain written notice of the exercise of the “drag-along” rights of Stonington
and/or its Affiliates pursuant to Section 3.05(a), setting forth the
consideration per Share to be paid by the Third Party or Third Parties and the
other material terms and conditions of the Offer.  Within ten (10) Business Days following the date the Offer
Notice is given, each of the Other Stockholders shall deliver to Stonington
and/or such Affiliates, to be held in trust, (A) the certificate or
certificates evidencing the Pro Rata Portion of Shares owned or held by such
Other Stockholder duly endorsed in blank or accompanied by written instruments
of transfer in form reasonably satisfactory to Stonington and/or such Affiliate
executed by such Other Stockholder, (B) a special irrevocable
power-of-attorney authorizing Stonington and/or such Affiliate, on behalf of such
Other Stockholder, to sell or otherwise dispose of such Shares pursuant to the
terms of the Offer and to take all such actions as shall be necessary or
appropriate in order to consummate such Sale; provided, however,
that Stonington and/or such Affiliate shall not have the authority to incur or
create liabilities or to give representations and warranties on behalf of such
Other Stockholder, and (C) wire transfer instructions for payment of the
purchase price of the Other Stockholder’s Shares; provided that no Other
Stockholder shall have any liability to any purchaser of the Shares pursuant to
the Offer in excess of the aggregate proceeds received by such Other
Stockholder in exchange for such Stockholder’s Shares or in a manner that is
disproportionate or different from Stonington and its Affiliates.  Stonington and/or such Affiliate shall cause
the Third Party to whom or which the Shares of the Stockholders are being sold
or otherwise disposed to deliver the appropriate amount of immediately
available funds for the purchase of such Shares to the Other Stockholders
pursuant to the wire transfer instructions described in clause (C) above.  If in connection with such Sale, Stonington
and/or such Affiliate are to receive consideration other than cash, Cash
Equivalents or Marketable Securities, each Other Stockholder shall have the
right to elect to receive in lieu thereof cash or Cash Equivalents equal to the
Fair Value of the

 

11

 

consideration otherwise
payable to such Other Stockholder.  Such
Other Stockholder shall make such election in a written notice to Stonington
and/or such Affiliate within ten (10) Business Days following the date the
Offer Notice is provided to such Other Stockholder.

 

(ii)                                Each
Stockholder shall bear such Stockholder’s own expenses incurred in connection
with a Sale pursuant to this Section 3.05.

 

(iii)                             If,
at the end of the 180-day period following the giving of the Offer Notice,
Stonington and/or its Affiliates shall not have completed the Sale of all the
Controlling Shares and the Other Stockholders’ Shares delivered pursuant to
Section 3.05(b)(i), Stonington and/or its Affiliates shall return to each
of the Other Stockholders all certificates evidencing unsold Shares and related
powers-of-attorney that such Other Stockholder delivered pursuant to this
Section 3.05.

 

(iv)                            Except
as expressly provided in this Section 3.05, Stonington and its Affiliates
shall have no obligation to any Other Stockholder with respect to the Sale of
any Shares owned by any Other Stockholder in connection with this
Section 3.05.  Anything herein to
the contrary notwithstanding, Stonington and/or its Affiliates shall have no
obligation to any Other Stockholder to sell or otherwise dispose of any
Controlling Shares pursuant to this Section 3.05 as a result of any
decision by Stonington and/or its Affiliates not to accept or consummate any
Offer or Sale with respect to the Controlling Shares (it being understood that
any and all such decisions shall be made by Stonington and/or its Affiliates in
their sole discretion).  No Other
Stockholder shall  be entitled to make
any Sale of Shares directly to any Third Party pursuant to an Offer (it being
understood that all such Sales shall be made only on the terms and pursuant to
the procedures set forth in this Section 3.05).  Nothing in this Section 3.05 shall affect any of the
obligations of any of the Stockholders under any other provision of this
Agreement.

 

SECTION 3.06.  Certain Persons to Execute Agreement.  (a)  Each Stockholder agrees that
it will not directly or indirectly make any Sale of, or create, incur or assume
any Encumbrance with respect to, any Shares held by such Stockholder, unless,
prior to the consummation of any such Sale or the creation, incurrence or assumption
of any such Encumbrance, the Person to whom or which such Sale is proposed to
be made or the Person in whose favor such Encumbrance is proposed to be
created, incurred or assumed (for purposes of this Section 3.06, a ”Prospective
Transferee”) (i) executes and delivers to the Company an agreement, in
form and substance reasonably satisfactory to the Company, whereby such
Prospective Transferee confirms that, with respect to the Shares that are the
subject of such Sale or Encumbrance, it shall be deemed to be a “Stockholder”
for the purposes of this Agreement and agrees to be bound by all the terms of
this Agreement and (ii) delivers to the Company a written opinion of
counsel, satisfactory in form and substance to the Company, to the effect that
the agreement referred to above that is delivered by such Prospective

 

12

 

Transferee is a legal,
valid and binding obligation of such Prospective Transferee enforceable against
such Prospective Transferee in accordance with its terms.  Upon the execution and delivery by such
Prospective Transferee of the agreement referred to in clause (i) of the next
preceding sentence and, the delivery of the opinion of counsel referred to in
clause (ii) of the next preceding sentence, such Prospective Transferee shall
be deemed a “Stockholder” for the purposes of this Agreement, and shall have
the rights and be subject to the obligations of a Stockholder hereunder with
respect to the Shares held by such Prospective Transferee or in respect of
which such Encumbrance shall have been created, incurred or assumed.

 

(b)                              Anything
in this Section 3.06 to the contrary notwithstanding, the provisions of
this Section 3.06 will not be applicable to (i) any Sale of Shares
pursuant to a Public Offering or (ii) any Sale of Shares in a Rule 144
Transaction so long as immediately prior to, and immediately after the
consummation of, such Rule 144 Transaction the Company is a Public Company.

 

SECTION 3.07.  Improper Sale or Encumbrance.  Any attempt by any Stockholder to make any
Sale of, or create, incur or assume any Encumbrance with respect to, any Shares
not in compliance with this Agreement shall be null and void and the Company
shall not give any effect in the Company’s stock records to such attempted Sale
or Encumbrance.

 

ARTICLE IV

 

REGISTRATION RIGHTS

 

SECTION 4.01.  Incidental Registration.  If at any time the Company determines that
it shall file a registration statement under the Securities Act (other than a
registration statement on a Form S-4 or S-8 or filed in connection with an
exchange offer or an offering of securities solely to the Company’s employee
benefit plans) on any form that would also permit the registration of the
Registrable Shares and such filing is to be on behalf of the Company and/or on
behalf of selling holders of its securities for the general registration of its
Common Stock to be sold for cash, the Company shall each such time promptly
give each Other Stockholder written notice of such determination setting forth
the date on which the Company proposes to file such registration statement,
which date shall be no earlier than thirty (30) days from the date of such
notice, and advising each Other Stockholder of its right to have such Other
Stockholder’s Registrable Shares included in such registration; provided
that the Other Stockholders shall not have any right to have their Registrable
Shares included in the initial public offering of the Company if no other
Stockholder has its Registrable Shares so included.  Upon the written request of any Other Stockholder received by the
Company no later than fifteen (15) days after the date of the Company’s notice,
the Company shall use all reasonable efforts to cause to be registered under
the Securities Act all of the Registrable Shares that each Other Stockholder
has so

 

13

 

requested to be
registered.  If, in the written opinion
of the managing underwriter (or, in the case of a non-underwritten offering, as
reasonably determined by the Board and communicated in writing to the
Stockholders), the total amount of such securities to be so registered,
including such Registrable Shares, will exceed the maximum amount of the
Company’s securities which can be marketed (i) at a price reasonably related to
the then current market value of such securities, or (ii) without otherwise
materially and adversely affecting the entire offering, then the Company shall
be entitled to reduce the number of Registrable Shares to be sold in the
offering by the Other Stockholders, and any other stockholders of the Company
exercising incidental registrations rights similar to those set forth herein,
to that number which in the written opinion of the managing underwriter (or, in
the case of a non-underwritten offering, as reasonably determined by the Board
and communicated in writing to the Other Stockholders) would permit all such
securities (including Shares held by any other stockholder of the Company who
proposes to exercise such incidental registration rights) to be so
marketed.  Such reduction shall be
allocated among the Other Stockholders in proportion (as nearly as practicable)
to the amount of Registrable Shares owned by each such Other Stockholder and
the number of Shares owned by any other stockholders of the Company which are
sought to be included in the registration statement by such other stockholders
of the Company, all measured at the time of filing the registration statement.

 

SECTION 4.02.  Furnish Information.  It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 4.01
that the Other Stockholders shall furnish to the Company such information
regarding themselves, the Registrable Shares held by them, and the intended
method of disposition of such securities as the Company shall reasonably
request and as shall be required in connection with the action to be taken by
the Company.

 

SECTION 4.03.  Expenses of Registration.  All expenses incurred in connection with
each registration pursuant to Section 4.01, excluding underwriters’
discounts and commissions, but including without limitation all registration,
filing and qualification fees, word processing, duplicating, printers’ and
accounting fees (including the expenses of any special audits or “cold comfort”
letters required by or incident to such performance and compliance), fees of
the National Association of Securities Dealers, Inc. or listing fees, messenger
and delivery expenses, all fees and expenses of complying with state securities
or blue sky laws, fees and disbursements of counsel for the Company, and the
fees and disbursements of one counsel for the selling Other Stockholders (which
counsel shall be selected by the Other Stockholders holding a majority in
interest of the Registrable Shares being registered), shall be paid by the
Company.  The Other Stockholders shall
bear and pay the underwriting commissions and discounts applicable to
securities offered for their account in connection with any registrations,
filings and qualifications made pursuant to this Agreement.

 

SECTION 4.04.  Underwriting Requirements.  In connection with any underwritten
offering, the Company shall not be required under Section 4.01 to include
Registrable Shares in such

 

14

 

underwritten offering
unless the Other Stockholders holding such Registrable Shares accept the terms
of the underwriting of such offering that have been reasonably agreed upon
between the Company and the underwriters selected by the Company and which are
customary with respect to such an offering and not inconsistent with this
Article IV.  No such Other
Stockholder shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Other Stockholder, such Other
Stockholders’ Registrable Shares and such Stockholders’ intended method of
distribution customarily given to underwriters and any other representation
required by law.

 

SECTION 4.05.  Registration Procedures.  If and whenever the Company is required by
the provisions of Section 4.01 to effect the registration of any
Registrable Shares under the Securities Act, the Company shall, as
expeditiously as possible:

 

(a)                               furnish
to each Other Stockholder of Registrable Shares covered by such registration
statement and each underwriter thereof, if any, such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement filed under Rule 424 under
the Securities Act, and such other documents, as such Other Stockholder and
underwriter may reasonably request in order to facilitate the public sale or
other disposition of such Registrable Shares;

 

(b)                              use
all reasonable efforts to register or qualify all Registrable Shares covered by
such registration statement under such other securities laws or blue sky laws
of such jurisdictions as any Other Stockholder thereof and any underwriter
thereof shall reasonably request; and

 

(c)                               notify
each Other Stockholder of Registrable Shares covered by such registration
statement and each underwriter thereof, if any, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, upon the
Company’s discovery that, or upon the happening of any event of which the
Company has knowledge as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and at the request of any such Other Stockholder
or such underwriter promptly prepare and furnish to such Other Stockholder or
such underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to the purchasers of
such Registrable Shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing.

 

15

 

SECTION 4.06.  Rule 144 Information.  With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Shares to the public without registration, at all
times after ninety (90) days after any registration statement covering a public
offering of securities of the Company under the Securities Act shall have
become effective, the Company agrees to:

 

(i)                                   make
and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act;

 

(ii)                                use
its reasonable efforts to file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act
and the Exchange Act; and

 

(iii)                             furnish
to each Other Stockholder holding Registrable Shares forthwith upon request a
written statement by the Company as to its compliance with the reporting
requirements of such Rule 144 and of the Securities Act and the Exchange
Act, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed by the Company as such Other
Stockholder may reasonably request in availing itself of any rule or regulation
of the Commission allowing such Other Stockholder to sell any Registrable
Shares without registration.

 

SECTION 4.07.  Indemnification.  In the event any Registrable Shares are
included in a registration statement under Section 4.01:

 

(a)                               The
Company shall indemnify and hold harmless each Other Stockholder, such Other
Stockholder’s managers, directors and officers, each Person who participates in
the offering of such Registrable Shares, including underwriters (as defined in
the Securities Act), and each Person, if any, who controls such Stockholder or
participating Person within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or proceedings in respect thereof) arise out of
or are based on any untrue or alleged untrue statement of any material fact
contained in such registration statement on the effective date thereof (including
any prospectus filed under Rule 424 under the Securities Act or any
amendments or supplements thereto) or arise out of or are based upon 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
any violation by the Company of the Securities Act or any rule or regulation
thereunder, and shall reimburse each such Other Stockholder, such Other
Stockholder’s managers, directors and officers, such participating person or
controlling person for any legal or other expenses reasonably incurred by them
(but not in excess of expenses incurred in respect of one counsel for all of
them unless there is an actual

 

16

 

conflict of interest
between any indemnified parties, which indemnified parties may be represented
by separate counsel) in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that
the indemnity agreement contained in this Section 4.07(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld); provided  further
that the Company shall not be liable to any Other  Stockholder, such Other Stockholder’s managers, directors and
officers, participating person or controlling person in any such case for any
such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements thereto,
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Other Stockholder,
such Other Stockholder’s directors and officers, participating person or
controlling person.  Such indemnity
shall remain in full force regardless of any investigation made by or on behalf
of any such Other Stockholder, such Other Stockholder’s directors and officers,
participating person or controlling person, and shall survive the transfer of
such securities by such Other Stockholder.

 

(b)                              Each
Other Stockholder joining in a registration severally and not jointly shall
indemnify and hold harmless the Company, each of its directors and officers,
each person, if any, who controls the Company within the meaning of the
Securities Act, and each agent and any underwriter for the Company (within the
meaning of the Securities Act) against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director,
officer, controlling person, agent or underwriter may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or proceedings in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in such registration statement on the effective date thereof (including any
prospectus filed under Rule 424 under the Securities Act or any amendments
or supplements thereto) or arise out of or are based upon 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, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by or on behalf of such Other Stockholder expressly for use in connection with
such registration; and each such Other Stockholder shall reimburse any legal or
other expenses reasonably incurred by the Company or any such director,
officer, controlling person, agent or underwriter  (but not in excess of expenses incurred in respect of one counsel
for all of them unless there is an actual conflict of interest between any
indemnified parties, which indemnified parties may be represented by separate
counsel) in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 4.07(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability 

 

17

 

or action if such
settlement is effected without the consent of such Other Stockholder (which
consent shall not be unreasonably withheld), and provided  further
that the liability of each Other Stockholder hereunder shall be limited to the
proportion of any such loss, claim, damage, liability or expense which is equal
to the proportion that the net proceeds from the sale of the Shares sold by
such Other Stockholder under such registration statement bears to the total net
proceeds from the sale of all securities sold thereunder, but not in any event
to exceed the net proceeds received by such Other Stockholder from the sale of
Registrable Securities covered by such registration statement.

 

(c)                               Promptly
after receipt by an indemnified party under this Section 4.06 of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against any indemnifying party under this
Section 4.06, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in and
assume the defense thereof with counsel selected by the indemnifying party and
reasonably satisfactory to the indemnified party; provided, however,
that an indemnified party shall have the right to retain its own counsel, with
all reasonable fees and expenses thereof to be paid by such indemnified party,
and to be apprised of all progress in any proceeding the defense of which has
been assumed by the indemnifying party. 
The failure to notify an indemnifying party promptly of the commencement
of any such action, if and to the extent prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 4.07, but the omission so to notify
the indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 4.07.

 

(d)                              To
the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified party in connection with the actions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.  The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action.  The
amount paid or payable by a party as a result of the losses, claims, damages or
liabilities referred to above 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 4.07(d) were determined by pro rata allocation or by any other
method of allocation

 

18

 

which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph.  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.

 

ARTICLE V

 

MISCELLANEOUS

 

SECTION 5.01.  Termination.  Unless otherwise expressly provided herein,
the obligations of the parties hereto shall terminate on the date upon which
the Other Stockholders or their Permitted Transferees cease to own any Shares.

 

SECTION 5.02.  Conflict with Certificate of
Incorporation or By-Laws.  In the
event any provision of this Agreement conflicts with any provision of the
Certificate of Incorporation or the By-Laws, the terms of this Agreement shall
control, and each Stockholder shall vote all Shares which such Stockholder
holds of record, and shall take all actions necessary, to ensure that at all
times the Certificate of Incorporation and the By-Laws do not conflict with any
provision of this Agreement.

 

SECTION 5.03.  Expenses.  Except as expressly set forth herein, costs and expenses,
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Person incurring such
costs and expenses.

 

SECTION 5.04.  Notices.  All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made (and shall be deemed
to have been duly given or made upon receipt) by delivery in person, by courier
service, by telecopy or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given
in accordance with this Section 5.04):

 

19

 

	
  (a)

  	
  if to FMRCP:

  
	
   

  	
   

  
	
   

  	
  Five Mile River Capital
  Partners LLC

  
	
   

  	
  131 Rowayton Avenue

  
	
   

  	
  Rowayton, CT  06851

  
	
   

  	
  Telecopy: (203)
  857-6051

  
	
   

  	
  Attention:  Steven W. Hart

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Finn Dixon &
  Herling LLP

  
	
   

  	
  One Landmark Square

  
	
   

  	
  Stamford, CT 06901

  
	
   

  	
  Telecopy: (203)
  348-5777

  
	
   

  	
  Attention:  Charles J. Downey III, Esq.

  
	
   

  	
   

  
	
  (b)

  	
  if to the Company:

  
	
   

  	
   

  
	
   

  	
  Lincoln Technical
  Institute, Inc.

  
	
   

  	
  200 Executive Drive

  
	
   

  	
  West Orange, NJ  07052

  
	
   

  	
  Telecopy:  (973) 243-0841

  
	
   

  	
  Attention:  President

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Stonington Partners,
  Inc.

  
	
   

  	
  767 Fifth Avenue, 48th
  Floor

  
	
   

  	
  New York, NY  10153

  
	
   

  	
  Telecopy:  (212) 339-8585

  
	
   

  	
  Attention:  James J. Burke, Jr.

  

 

20

 

	
  (c)

  	
  if to Stonington:

  
	
   

  	
   

  
	
   

  	
  c/o Stonington
  Partners, Inc.

  
	
   

  	
  767 Fifth Avenue, 48
  Floor

  
	
   

  	
  New York, NY 10153

  
	
   

  	
  Telecopy:  (212) 339-8585

  
	
   

  	
  Attention:  James J. Burke, Jr.

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Shearman & Sterling

  
	
   

  	
  599 Lexington Avenue

  
	
   

  	
  New York, NY  10022

  
	
   

  	
  Telecopy:  (212) 848-7179

  
	
   

  	
  Attention:  Clare O’Brien, Esq.

  

 

SECTION 5.05.  Public Announcements.  Unless otherwise required by applicable  law, no party to this Agreement shall make,
or cause to be made, any press release or public announcement in respect of
this Agreement or the transactions contemplated hereby or otherwise communicate
with any news media without the prior written consent of the other party, and
the parties shall cooperate as to the timing and contents of any such press
release or public announcement.

 

SECTION 5.06.  Headings.  The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

SECTION 5.07.  Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law,
governmental regulation or public policy, all other terms and provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.

 

SECTION 5.08.  Entire Agreement.  This Agreement and the agreements referred
to herein constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and

 

21

 

supersedes all prior
agreements and undertakings, both written and oral, between the Company,
Stonington and FMRCP with respect to the subject matter hereof and thereof.

 

SECTION 5.09.  Assignment.  Except as expressly provided herein, this Agreement shall not be
assigned without the express written consent of each of the Company, Stonington
and FMRCP (which consent may be granted or withheld in the sole discretion of
each of the Company, Stonington and FMRCP).

 

SECTION 5.10.  No Third Party Beneficiaries.  Except as set forth in Sections 2.01
and 4.07, this Agreement shall be binding upon and inure solely to the benefit
of the parties hereto, their successors and their permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other
Person, any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

 

SECTION 5.11.  Amendment.  This Agreement may not be amended or modified except by an
instrument in writing signed by, or on behalf of, each of the parties.

 

SECTION 5.12.  Governing Law.  This Agreement shall be governed by the laws
of the State of New York.  All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined in any New York state or federal court sitting in The City
of New York, and the parties hereto hereby consent to the jurisdiction of such
courts in any such action or proceeding.

 

SECTION 5.13.  Counterparts.  This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.

 

SECTION 5.14.  Specific Performance.  The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.

 

SECTION 5.15.  Waiver of Jury Trial.  Each of the parties hereto irrevocably and
unconditionally waives trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to
this Agreement or the actions of the Company, Stonington or FMRCP in the
negotiation, administration, performance and enforcement thereof.

 

22

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed, as of the day
and year first above written, by their respective authorized signatories
thereunto duly authorized.

 

 

	
   

  	
  LINCOLN TECHNICAL
  INSTITUTE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BACK TO SCHOOL
  ACQUISITION, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIVE MILE RIVER CAPITAL
  PARTNERS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Hart Capital LLC,
  its manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Steven W. Hart

  
	
   

  	
   

  	
  Title: Authorized
  Person

  

 

23

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