Document:

EX-10.2

 

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

          This REGISTRATION RIGHTS AGREEMENT is dated as of March 16, 2007 (the “Agreement”), by and
among Belden CDT, Inc., a Corporation (the “Company”) and the guarantors listed on the signature
pages hereof (the “Guarantors” and, together with the Company, the “Issuers”), on the one hand, and
the several purchasers named in Schedule I hereto (the “Initial Purchasers”), for whom Wachovia
Capital Markets, LLC is acting as Representative (in such capacity, the “Representative”),
on the other hand.

          The Company, the Guarantors and the Initial Purchasers are parties to the Purchase Agreement
dated March 13, 2007 (the “Purchase Agreement”), which provides for the sale by the Company to the
Initial Purchasers of $350,000,000 aggregate principal amount of the Company’s 7% Senior
Subordinated Notes due 2017 (the “Notes”) guaranteed on a senior subordinated basis by the
Guarantors (the “Guarantees”). References herein to the “Securities” refer to the Notes and the
Guarantees collectively. In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Issuers have agreed to provide the registration rights set forth in this Agreement
for the benefit of the Initial Purchasers and any subsequent holder or holders of the Securities.
The execution and delivery of this Agreement is a condition to the Initial Purchasers’ obligations
under the Purchase Agreement.

          In consideration of the foregoing, the parties hereto agree as follows:

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

          “Business Day” shall mean any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed.

          “Closing Date” shall mean the Closing Date as defined in the Purchase Agreement.

          “Company” shall have the meaning set forth in the preamble and shall also include the
Company’s successors.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

          “Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

          “Exchange Offer” shall mean the exchange offer by the Company and the Guarantors of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.

          “Exchange Offer Registration” shall mean a registration under the Securities Act effected
pursuant to Section 2(a) hereof.

 

 

          “Exchange Offer Registration Statement” shall mean an exchange offer registration statement on
Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to
such registration statement, in each case including the Prospectus contained therein, all exhibits
thereto and any document incorporated by reference therein.

          “Exchange Securities” shall mean senior subordinated notes issued by the Company and the
guarantees thereof by the Guarantors under the Indenture containing terms identical to the
Securities (except that the Exchange Securities will not be subject to restrictions on transfer or
to any increase in annual interest rate for failure to comply with this Agreement) and to be
offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer.

          “Guarantors” shall have the meaning set forth in the preamble and shall also include any
Guarantor’s successors and each other party that guarantees or is required to guarantee the Notes
pursuant to the Indenture.

          “Holders” shall mean the Initial Purchasers, for so long as they own any Registrable
Securities, and each of their successors, assigns and direct and indirect transferees who become
owners of Registrable Securities under the Indenture; provided that for purposes of
Sections 4 and 5 of this Agreement, the term “Holders” shall include Participating Broker-Dealers.

          “Initial Purchasers” shall have the meaning set forth in the preamble.

          “Indenture” shall mean the Indenture relating to the Securities dated as of 16, 2007 among the
Issuers and U.S. Bank National Association, as trustee, and as the same may be amended from time to
time in accordance with the terms thereof.

          “Inspector” shall have the meaning set forth in Section 3(m).

          “Issuers” shall have the meaning set forth in the preamble.

          “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of
outstanding Registrable Securities; provided that whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required hereunder, Registrable
Securities owned directly or indirectly by the Company or any of its affiliates shall not be
counted in determining whether such consent or approval was given by the Holders of such required
percentage or amount.

          “Participating Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

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          “Person” shall mean an individual, partnership, limited liability company, corporation, trust
or unincorporated organization, or a government or agency or political subdivision thereof.

          “Prospectus” shall mean the prospectus included in a Registration Statement, including any
preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other
amendments and supplements to such prospectus, and in each case including any document incorporated
by reference therein.

          “Purchase Agreement” shall have the meaning set forth in the preamble.

          “Registrable Securities” shall mean the Securities; provided that the Securities shall
cease to be Registrable Securities (i) when a Registration Statement with respect to such
Securities has been declared effective under the Securities Act and such Securities have been
exchanged or disposed of pursuant to such Registration Statement, (ii) when such Securities are
eligible to be sold pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A) under the Securities Act or (iii) when such Securities cease to be outstanding.

          “Registration Default” shall have the meaning set forth in Section 2(d) hereof.

          “Registration Expenses” shall mean any and all expenses incident to performance of or
compliance by the Issuers with this Agreement, including, without limitation, (i) all SEC, stock
exchange or National Association of Securities Dealers, Inc. registration and filing fees, (ii) all
fees and expenses incurred in connection with compliance with state securities or blue sky laws
(including reasonable fees and disbursements of one counsel for any Underwriters or Holders in
connection with blue sky qualification of any Exchange Securities or Registrable Securities), (iii)
all expenses of any Persons in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus and any amendments or supplements thereto,
any underwriting agreements, securities sales agreements or other similar agreements and any other
documents relating to the performance of and compliance with this Agreement, (iv) all rating agency
fees, (v) all fees and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii)
the fees and disbursements of counsel for the Issuers and, in the case of a Shelf Registration
Statement, the fees and disbursements of one counsel for the Holders (which counsel shall be
selected by the Majority Holders and which counsel may also be counsel for the Initial Purchasers)
and (viii) the fees and disbursements of the independent public accountants of the Issuers,
including the expenses of any special audits or “comfort” letters required by or incident to the
performance of and compliance with this Agreement, but excluding fees and expenses of counsel to
the Underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and
underwriting

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discounts and commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.

          “Registration Statement” shall mean any registration statement of the Issuers that covers any
of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement
and all amendments and supplements to any such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all exhibits thereto and any
document incorporated by reference therein.

          “SEC” shall mean the Securities and Exchange Commission.

          “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

          “Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

          “Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

          “Shelf Registration Statement” shall mean a “shelf” registration statement of the Issuers that
covers all the Registrable Securities (but no other securities unless approved by the Holders whose
Registrable Securities are to be covered by such Shelf Registration Statement) on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all exhibits thereto and any
document incorporated by reference therein.

          “Staff” shall mean the staff of the SEC.

          “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended from time to
time.

          “Trustee” shall mean the trustee with respect to the Securities under the Indenture.

          “Underwriter” shall have the meaning set forth in Section 3 hereof.

          “Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an
Underwriter for reoffering to the public.

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          2. Registration Under the Securities Act. (a) To the extent not prohibited by any
applicable law or applicable interpretations of the Staff the Issuers shall (i) cause to be filed
an Exchange Offer Registration Statement covering an offer to the Holders to exchange all the
Registrable Securities for Exchange Securities not later than 180 days after the Closing Date, (ii)
use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to be
declared effective under the Securities Act within 240 days after the Closing Date, and (iii) use
their commercially reasonable efforts to cause the exchange offer to be completed within 285 days
after the Closing Date.

          The Issuers shall commence the Exchange Offer by mailing the related Prospectus, appropriate
letters of transmittal and other accompanying documents to each Holder stating, in addition to such
other disclosures as are required by applicable law,

(i) that the Exchange Offer is being made pursuant to this Agreement and that all
Registrable Securities validly tendered and not properly withdrawn will be accepted for
exchange;

(ii) the dates of acceptance for exchange (which shall be a period of at least 20 Business
Days from the date such notice is mailed) (the “Exchange Dates”);

(iii) that any Registrable Security not tendered will remain outstanding and continue to
accrue interest but will not retain any rights under this Agreement;

(iv) that any Holder electing to have a Registrable Security exchanged pursuant to the
Exchange Offer will be required to surrender such Registrable Security, together with the
appropriate letters of transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) and in the manner specified in the notice, prior
to the close of business on the last Exchange Date; and

(v) that any Holder will be entitled to withdraw its election, not later than the close of
business on the last Exchange Date, by sending to the institution and at the address
(located in the Borough of Manhattan, The City of New York) specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the
principal amount of Registrable Securities delivered for exchange and a statement that such
Holder is withdrawing its election to have such Securities exchanged.

          As a condition to participating in the Exchange Offer, a Holder will be required to represent
to the Issuers that (i) any Exchange Securities to be received by it will be acquired in the
ordinary course of its business, (ii) at the time of the commencement of the Exchange Offer it is
not engaged in, does not intend to engage in, and has no arrangement or understanding with any
Person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Securities in violation of the provisions of the Securities
Act, (iii) it is not an “affiliate” (within the meaning of Rule 405 under Securities Act) of the
Company

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or any Guarantor and (iv) if such Holder is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Registrable Securities that were acquired as a
result of market-making or other trading activities, then such Holder will deliver a Prospectus in
connection with any resale or other transfer of such Exchange Securities.

          As soon as practicable after the last Exchange Date, the Issuers shall:

(i) accept for exchange Registrable Securities or portions thereof validly tendered and not
properly withdrawn pursuant to the Exchange Offer; and

(ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable
Securities or portions thereof so accepted for exchange by the Issuers and issue, and cause
the Trustee to promptly authenticate and deliver to each Holder, Exchange Securities equal
in principal amount to the principal amount of the Registrable Securities surrendered by
such Holder.

          The Issuers shall use their commercially reasonable efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the Securities Act, the
Exchange Act and other applicable laws and regulations in connection with the Exchange Offer. The
Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not
violate any applicable law or applicable interpretations of the Staff.

          (b) In the event that (i) the Issuers determine that the Exchange Offer Registration provided
for in Section 2(a) above is not available or may not be completed as soon as reasonably
practicable after the last Exchange Date because it would violate any applicable law or applicable
interpretations of the Staff, (ii) the Exchange Offer is not for any other reason completed by the
285th day following the Closing Date or (iii) any Holder notifies the Issuers on or prior to the
20th day following the consummation of the Exchange Offer that (A) it is not permitted under law or
SEC policy to participate in the Exchange Offer, (B) it cannot publicly resell new Exchange
Securities that it acquires in the Exchange Offer without delivering a Prospectus, and the
Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available
for resales by the Holder or (C) it is a broker-dealer and holds Registrable Securities that it has
not exchanged and that it acquired directly from the Issuers or one of their affiliates, then in
addition to or in lieu of conducting the Exchange Offer, the Issuers shall be required to file a
Shelf Registration Statement with the SEC to cover resales of the Registrable Securities or the
Exchange Securities, as the case may be. In that case, the Issuers will use their commercially
reasonable efforts to (a) file the Shelf Registration Statement by the 30th day after they become
obligated to make the filing, (b) cause the Shelf Registration Statement to become effective by the
90th day after they become obligated to make the filing and (c) maintain the effectiveness of the
Shelf Registration Statement for
two years or such lesser period after which all of the Notes registered therein have been sold
or can be resold without limitation under the Securities Act (the “Shelf Effectiveness Period”).

          
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In the event that the Issuers are required to file a Shelf Registration Statement solely as a
result of the matters referred to in clause (ii) of this paragraph, but the Exchange Offer is
subsequently completed, upon consummation of the Exchange Offer, the Issuers will no longer be
required to file, have declared effective or continue the effectiveness of the Shelf Registration
Statement pursuant to such clause (ii) (without prejudice to its obligations under clause (i) or
(iii) of this paragraph). In the event that the Issuers are required to file a Shelf Registration
Statement solely as a result of the matters referred to in clause (iii) of this paragraph, the
Issuers shall use their commercially reasonable efforts to file and have declared effective by the
SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all
Registrable Securities and a Shelf Registration Statement (which may be a combined Registration
Statement with the Exchange Offer Registration Statement) with respect to offers and sales of
Registrable Securities held by any such Holder that has notified the Issuers pursuant to such
clause (iii) after completion of the Exchange Offer.

          The Issuers agree to use their commercially reasonable efforts to keep the Shelf Registration
Statement continuously effective until the earliest of (i) two years from the date the Shelf
Registration Statement is declared effective by the SEC, (ii) the expiration of the period referred
to in Rule 144(k) under the Securities Act with respect to the Registrable Securities or (iii) the
last day of the Shelf Effectiveness Period. The Issuers further agree to supplement or amend the
Shelf Registration Statement and the related Prospectus if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or by any other rules and regulations thereunder for shelf
registration or if reasonably requested by a Holder of Registrable Securities with respect to
information relating to such Holder, and to use their commercially reasonable efforts to cause any
such amendment to become effective and such Shelf Registration Statement and Prospectus to become
usable as soon as thereafter practicable. The Company and the Guarantors agree to furnish to the
Holders of Registrable Securities copies of any such supplement or amendment promptly after its
being used or filed with the SEC.

          (c) The Issuers shall pay all Registration Expenses in connection with the registration
pursuant to Section 2(a) and Section 2(b) hereof. Each Holder shall pay all underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s
Registrable Securities pursuant to the Shelf Registration Statement.

          (d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC.

          In
the event that (i) both the Exchange Offer is not completed and
the Shelf Registration Statement has not been declared effective by the 285th day following the
Closing Date, (ii) the Shelf Registration Statement, if required hereby, is not declared effective by the date specified in Section 2(b), (iii) the Exchange Offer Registration
Statement is not filed by the 180th day after the Closing Date,
(iv) both the Exchange Offer
Registration

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Statement
is not effective and the Shelf Registration Statement has not been
declared effective by the 240th day following the Closing Date, (v) the Shelf
Registration Statement, if required hereby is not filed by the date specified in Section 2(b) or
(vi) the Exchange Offer Registration Statement or the Shelf Registration Statement is declared
effective, but thereafter, subject to certain exceptions, ceases to be effective or usable in
connection with the Exchange Offer or resales of any Registrable Securities registered under the
Shelf Registration Statement (each such event referred to in clauses (i) through (vi) a
“Registration Default”), the interest rate on the Registrable Securities will be increased by 0.25%
per annum for the first 90-day period immediately following one or
more Registration Defaults and an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum
of 1.00% per annum of additional interest (all such amounts, “Additional Interest”), until
all Registration Defaults are cured, at which time the interest rate on the Registrable Securities
will revert to the original interest rate on the Notes.

          Notwithstanding the foregoing, a Registration Default referred to in clause (vi) of the
foregoing paragraph shall be deemed not to have occurred and be continuing in relation to the
Exchange Offer Registration Statement or the related prospectus if (i) such Registration Default
has occurred solely as a result of (x) the filing of a post effective amendment to the Exchange
Offer Registration Statement to incorporate annual audited financial information with respect to
the Company where such post effective amendment is not yet effective and needs to be declared
effective to permit Holders to use the related prospectus or (y) other material events with respect
to the Company that would need to be described in such Exchange Offer Registration Statement or the
related prospectus and (ii) in the case of clause (y), the Company is proceeding promptly and in
good faith to amend or supplement the Exchange Offer Registration Statement and related
prospectuses to describe such events; provided, however, if such Registration Default occurs for
more than 30 days in any twelve month period, the interest rate on the Notes shall be increased in
accordance with the preceding sentence and shall be payable in accordance with the above from the
day such Registration Default actually occurs (without giving effect to the text preceding this
paragraph) until such Registration Default is actually cured.

          (e) Without limiting the remedies available to the Initial Purchasers and the Holders, the
Issuers acknowledge that any failure by the Issuers to comply with their obligations under Section
2(a) and Section 2(b) hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to specifically enforce the
Issuers’ obligations under Section 2(a) and Section 2(b) hereof.

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          3. Registration Procedures. In connection with their obligations pursuant to Section
2(a) and Section 2(b) hereof, the Issuers shall as expeditiously as reasonably possible:

          (a) prepare and file with the SEC a Registration Statement on the appropriate form under the
Securities Act, which form (x) shall be selected by the Issuers, (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities by the selling Holders
thereof and (z) shall comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to be filed therewith; and
use their commercially reasonable efforts to cause such Registration Statement to become effective
and remain effective for the applicable period in accordance with Section 2 hereof;

          (b) prepare and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement effective for the
applicable period in accordance with Section 2 hereof and cause each Prospectus to be supplemented
by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act; and keep each Prospectus current during the period described in Section
4(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Securities or Exchange Securities;

          (c) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, to
counsel for the Initial Purchasers, to counsel for such Holders and to each Underwriter of an
Underwritten Offering of Registrable Securities, if any, without charge, as many copies as such
Person may reasonably request in writing of each Prospectus, including each preliminary Prospectus,
and any amendment or supplement thereto, in order to facilitate the sale or other disposition of
the Registrable Securities thereunder; and the Issuers consent to the use of such Prospectus and
any amendment or supplement thereto in accordance with applicable law by each of the selling
Holders of Registrable Securities and any such Underwriters in connection with the offering and
sale of the Registrable Securities covered by and in the manner described in such Prospectus or any
amendment or supplement thereto in accordance with applicable law;

          (d) use their commercially reasonable efforts to register or qualify the Registrable
Securities under all applicable state securities or blue sky laws of such jurisdictions as any
Holder of Registrable Securities covered by a Registration Statement shall reasonably request in
writing by the time the applicable Registration Statement is declared effective by the SEC;
cooperate with the Holders in connection with any filings required to be made with the National
Association of Securities Dealers, Inc.; and do any and all other acts and things that may be
necessary or advisable to enable such Holder to complete the disposition in each such jurisdiction
of the Registrable Securities owned by such Holder; provided that the Issuers shall not be
required to (i) qualify as a foreign corporation or other entity or as a dealer in

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securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii)
file any general consent to service of process in any such jurisdiction or (iii) subject itself to
taxation in any such jurisdiction if it is not so subject;

          (e) in the case of a Shelf Registration, notify each Holder of Registrable Securities, one
counsel for such Holders (which shall be selected by the holders of a majority in principal amount
of Registrable Securities, notice of which shall be provided to the Company) and counsel for the
Initial Purchasers promptly and, if requested by any such Holder or counsel, confirm such advice in
writing (i) when a Registration Statement has become effective and when any post-effective
amendment thereto has been filed and becomes effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to a Registration Statement and Prospectus or
for additional information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings for that purpose,
(iv) if, between the effective date of a Shelf Registration Statement and the closing of any sale
of Registrable Securities covered thereby, the representations and warranties of any Issuer
contained in any underwriting agreement, securities sales agreement or other similar agreement, if
any, relating to an offering of such Registrable Securities cease to be true and correct in all
material respects or if any Issuer receives any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (v) of the happening of any event during the period a Shelf
Registration Statement is effective that makes any statement made in such Shelf Registration
Statement or the related Prospectus untrue in any material respect or that requires the making of
any changes in such Registration Statement or Prospectus in order to make the statements therein
not misleading and (vi) of any determination by any Issuer that a post-effective amendment to a
Registration Statement would be appropriate;

          (f) use their commercially reasonable efforts to obtain the withdrawal of any order suspending
the effectiveness of a Registration Statement at the earliest possible moment and provide immediate
notice to each Holder of the withdrawal of any such order;

          (g) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities,
without charge, at least one conformed copy of each Shelf Registration Statement and any
post-effective amendment thereto (without any documents incorporated therein by reference or
exhibits thereto, unless requested);

          (h) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends and enable such
Registrable Securities to be issued in such denominations and registered in such names (consistent
with the provisions of the Indenture) as the selling Holders may reasonably request at least one
Business Day prior to the closing of any sale of Registrable Securities;

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          (i) in the case of a Shelf Registration, upon the occurrence of any event contemplated by
Section 3(e)(v) hereof, use their commercially reasonable efforts to prepare and file with the SEC
a supplement or post-effective amendment to such Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other required document so
that, as thereafter delivered to purchasers of the Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; and the Issuers shall notify the Holders of Registrable Securities to suspend use of
the Prospectus as promptly as practicable after the occurrence of such an event, and such Holders
hereby agree to suspend use of the Prospectus until the Issuers have amended or supplemented the
Prospectus to correct such misstatement or omission;

          (j) a reasonable time prior to the filing of any Registration Statement, any Prospectus, any
amendment to a Registration Statement or amendment or supplement to a Prospectus or of any document
that is to be incorporated by reference into a Registration Statement or a Prospectus after initial
filing of a Registration Statement, provide copies of such document to the Initial Purchasers and
their counsel (and, in the case of a Shelf Registration Statement, to the Holders of Registrable
Securities and their counsel) and make such of the representatives of the Issuers as shall be
reasonably requested by the Initial Purchasers or their counsel (and, in the case of a Shelf
Registration Statement, the Holders of Registrable Securities or their counsel) available for
discussion of such document; and the Issuers shall not, at any time after the initial filing of a
Registration Statement, file any Prospectus or free-writing prospectus (as defined in Rule 405
under the Securities Act), any amendment of or supplement to a Registration Statement or a
Prospectus, or any document that is to be incorporated by reference into a Registration Statement
or a Prospectus, of which the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, the Holders of Registrable Securities and their counsel) shall not have
previously been advised and furnished a copy or to which the Initial Purchasers or their counsel
(and, in the case of a Shelf Registration Statement, the Holders or their counsel) shall have
reasonably objected;

          (k) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case
may be, not later than the effective date of a Registration Statement;

          (l) cause the Indenture to be qualified under the Trust Indenture Act in connection with the
registration of the Exchange Securities or Registrable Securities, as the case may be; cooperate
with the Trustee and the Holders to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and execute,
and use their commercially reasonable efforts to cause the Trustee to execute, all documents as may
be required to effect such changes and all other forms and documents required to be filed with the
SEC to enable the Indenture to be so qualified in a timely manner;

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          (m) in the case of a Shelf Registration, make reasonably available for inspection by a
representative of the Holders of the Registrable Securities (an “Inspector”), any Underwriter
participating in any disposition pursuant to such Shelf Registration Statement, and attorneys and
accountants designated by the Holders, at reasonable times and in a reasonable manner, all
pertinent financial and other records, documents and properties of the Issuers, and cause the
respective officers, directors and employees of the Issuers to supply all information reasonably
requested by any such Inspector, Underwriter, attorney or accountant in connection with a Shelf
Registration Statement; provided that if any such information is identified by the Issuers
as being confidential or proprietary, each Person receiving such information shall take such
actions as are reasonably necessary to protect the confidentiality of such information (and shall,
if requested by the Company, sign a customary confidentiality agreement in form and substance
reasonably acceptable to such Person and the Company);

          (n) [reserved];

          (o) if reasonably requested by any Holder of Registrable Securities covered by a Registration
Statement, promptly incorporate in a Prospectus supplement or post-effective amendment such
information with respect to such Holder as such Holder reasonably requests to be included therein
and make all required filings of such Prospectus supplement or such post-effective amendment as
soon as the Company has received notification of the matters to be incorporated in such filing; and

          (p) in the case of a Shelf Registration, enter into such customary agreements and take all
such other actions in connection therewith (including those requested by the Holders of a majority
in principal amount of the Registrable Securities being sold) in order to expedite or facilitate
the disposition of such Registrable Securities including, but not limited to, an Underwritten
Offering and in such connection, (i) to the extent possible, make such representations and
warranties to the Holders and any Underwriters of such Registrable Securities with respect to the
business of the Company and its subsidiaries, the Registration Statement, Prospectus and documents
incorporated by reference or deemed incorporated by reference, if any, 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 requested, (ii) obtain opinions of counsel to the Issuers (which
counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Holders
and such Underwriters and their respective counsel) addressed to each selling Holder and
Underwriter of Registrable Securities, covering the matters customarily covered in opinions
requested in underwritten offerings, (iii) obtain “comfort” letters from the independent certified
public accountants of the Issuers (and, if necessary, any other certified public accountant of any
subsidiary of the Company or any Guarantor, or of any business acquired by the Company or any
Guarantor for which financial statements and financial data are or are required to be included in
the Registration Statement) addressed to each selling Holder and Underwriter of Registrable
Securities, such letters to be in customary form and covering matters of the type customarily
covered in “comfort” letters in connection with underwritten offerings and (iv) deliver such
documents and certificates as

12

 

may be reasonably requested by the Holders of a majority in principal amount of the
Registrable Securities being sold or the Underwriters, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the representations and warranties of
the Issuers made pursuant to clause (i) above and to evidence compliance with any customary
conditions contained in an underwriting agreement.

          In the case of a Shelf Registration Statement, the Company may require each Holder of
Registrable Securities to furnish to the Company such information regarding such Holder and the
proposed disposition by such Holder of such Registrable Securities as the Issuers may from time to
time reasonably request in writing. No Holder of Registrable Securities may include any of its
Registrable Securities in any Shelf Registration Statement pursuant to this Agreement if such
Holder fails to furnish such information in writing to the Company within 20 days after receipt of
the request therefore.

          In the case of a Shelf Registration Statement, each Holder of Registrable Securities agrees
that, upon receipt of any notice (a “Blackout Notice”) from the Issuers of (i) the
happening of any event of the kind described in Section 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof or
(ii) the Company’s determination to suspend use of the Prospectus to avoid premature public
disclosure of a pending corporate transaction, including pending acquisitions or divestitures of
assets, mergers and combinations or similar events, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement until such Holder’s
receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof
(and, if applicable, the earlier of (x) the effectiveness of the post-effective amendment described
in Section 3(e)(vi) hereof and (y) the end of the Blackout Period in accordance with the
limitations set forth in the next paragraph) and, if so directed by the Issuers, such Holder will
deliver to the Issuers all copies in its possession, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Registrable Securities that is current at the
time of receipt of such notice.

          If the Issuers shall give any Blackout Notice, the Issuers shall extend the period during
which the Registration Statement shall be maintained effective pursuant to this Agreement by the
number of days during the period from and including the date of the giving of such Blackout Notice
to and including the date when the Holders shall have received copies of the supplemented or
amended Prospectus necessary to resume such dispositions (the “Blackout Period”). The
Issuers may give any such notice only twice during any 365-day period and any such suspensions
shall not exceed 30 days for each suspension and there shall not be more than two suspensions in
effect during any 365-day period. The interest rate on the Notes shall not be increased in
accordance with Section 2(d) hereof during the Blackout Period (subject to the limitations in the
preceding sentence) (it being understood that if Additional Interest is already accruing at the
beginning of the Blackout Period in respect of a Registration Default, such Additional Interest
shall continue to accrue unless and until such Registration Default has been cured).

13

 

          The Holders of Registrable Securities covered by a Shelf Registration Statement who desire to
do so may sell such Registrable Securities in an Underwritten Offering. In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers (the “Underwriters”)
that will administer the offering will be selected by the Majority Holders of the Registrable
Securities included in such offering.

          4.
Participation of Broker-Dealers in Exchange Offer. (a) (a) The Staff has taken the
position that any broker-dealer that receives Exchange Securities for its own account in the
Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of
market-making or other trading activities (a “Participating Broker-Dealer”) may be deemed to be an
“underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such Exchange Securities.

          The Issuers understand that it is the Staff’s position that if the Prospectus contained in the
Exchange Offer Registration Statement includes a plan of distribution containing a statement to the
above effect and the means by which Participating Broker-Dealers may resell the Exchange
Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers to
satisfy their prospectus delivery obligation under the Securities Act in connection with resales of
Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the
requirements of the Securities Act.

          (b) In light of the above, and notwithstanding the other provisions of this Agreement, the
Issuers agree to amend or supplement the Prospectus contained in the Exchange Offer Registration
Statement, as would otherwise be contemplated by Section 3(i), for a period of up to 180 days after
the last Exchange Date (as such period may be extended pursuant to the penultimate paragraph of
Section 3 of this Agreement), if requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in order to expedite or facilitate the disposition of any Exchange
Securities by Participating Broker-Dealers consistent with the positions of the Staff recited in
Section 4(a) above. The Issuers further agree that Participating Broker-Dealers shall be
authorized to deliver such Prospectus during such period in connection with the resales
contemplated by this Section 4. Notwithstanding the foregoing, the Issuers shall not be obligated
to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement if the
Company determines, in its reasonable judgment, that there is a material event as described in
Section 2(d) hereof, provided that the failure to keep the Exchange Offer Registration Statement
effective and usable for such business reason shall last no longer than 30 days in any twelve month
period.

          (c) The Initial Purchasers shall have no liability to the Company, any Guarantor or any Holder
with respect to any request that they may make pursuant to Section 4(b) above.

14

 

          5. Indemnification and Contribution.6. (a) The Issuers, jointly and severally, agree
to indemnify and hold harmless each Initial Purchaser and each Holder, their respective affiliates,
directors and officers and each Person, if any, who controls the Initial Purchaser or any Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without limitation, legal
fees and other expenses reasonably incurred in connection with any suit, action or proceeding or
any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of,
or are based upon, any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or any Prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, and will reimburse,
as incurred, the Initial Purchasers and each Holder for any legal or other expenses reasonably
incurred by the Initial Purchasers or such Holder in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss, claim, damage,
liability or action (subject, if applicable, to the limitations set forth in Section 5(c));
provided, however, that the Issuers will not be liable in any such case except
insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to any Initial Purchaser or any Holder furnished to the
Company in writing through the Representative or any selling Holder expressly for use therein. In
connection with any Underwritten Offering permitted by Section 3, the Issuers, jointly and
severally, will also indemnify the Underwriters, if any, selling brokers, dealers and similar
securities industry professionals participating in the distribution, their respective affiliates
and each Person who controls such Persons (within the meaning of the Securities Act and the
Exchange Act) to the same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement.

          (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company,
the Guarantors, the Initial Purchasers and the other selling Holders, their respective affiliates,
the directors of the Issuers, each officer of the Issuers who signed the Registration Statement and
each Person, if any, who controls the Company, the Guarantors, any Initial Purchaser and any other
selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to
any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to such Holder furnished to the Company in writing by such
Holder expressly for use in any Registration Statement and any Prospectus.

          (c) If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any Person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such

15

 

Person (the “Indemnified Person”)
shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing; provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under this Section 5 except to the extent that it
has been materially prejudiced by such failure. If any such proceeding shall be brought or
asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others entitled to indemnification pursuant to this
Section 5 that the Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding, as incurred. In any such
proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory
to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to those available to
the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed (A) that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding, be liable for the fees and expenses of more
than one firm (in addition to one local counsel in each applicable jurisdiction) for the Initial
Purchasers and one firm (in addition to one local counsel in each applicable jurisdiction) for all
other Indemnified Persons and (B) that all such reasonable fees and expenses shall be reimbursed as
they are incurred. Any such separate firm (x) for any Initial Purchaser, its affiliates, directors
and officers and any control Persons of such Initial Purchaser shall be designated in writing by
the Representative, (y) for any Holder, its affiliates, directors and officers and any control
Persons of such Holder shall be designated in writing by the Majority Holders and (z) in all other
cases shall be designated in writing by the Company. The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable
for any settlement of any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii)
the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnification could have been
sought
 hereunder by such Indemnified Person, unless such settlement (A) includes an

16

 

unconditional
release of such Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of such proceeding and
(B) does not include any statement as to or any admission of fault, culpability or a failure to act
by or on behalf of any Indemnified Person.

          (d) If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Issuers from the
offering of the Securities and the Exchange Securities, on the one hand, and by the Holders from
receiving Securities or Exchange Securities registered under the Securities Act, on the other hand,
or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Issuers on the one hand and the Holders on the other in
connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative fault of the
Issuers on the one hand and the Holders on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Issuers or by the
Holders and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

          (e) The Issuers and the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 5 were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding the provisions of this Section 5, in no event shall a Holder be
required to contribute any amount in excess of the amount by which the total price at which the
Securities or Exchange Securities sold by such Holder exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged 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.

          (f) The remedies provided for in this Section 5 are not exclusive and shall not limit any
rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

17

 

          (g) The indemnity and contribution provisions contained in this Section 5 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Initial Purchasers or any Holder, their respective
affiliates or any Person controlling any Initial Purchaser or any Holder, or by or on behalf of the
Issuers, their respective affiliates or the officers or directors of or any Person controlling the
Issuers, (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable
Securities pursuant to a Shelf Registration Statement.

          7. General.

          (a) No Inconsistent Agreements. The Issuers represent, warrant and agree that (i) the rights
granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of any other outstanding securities issued or guaranteed by the
Company or any Guarantor under any other agreement and (ii) neither the Company nor any Guarantor
has entered into, or on or after the date of this Agreement will enter into, any agreement that is
inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof.

          (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Issuers have obtained the written consent of
Holders of at least a majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or consent;
provided that no amendment, modification, supplement, waiver or consent to any departure
from the provisions of Section 5 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder. Any amendments, modifications,
supplements, waivers or consents pursuant to this Section 6(b) shall be by a writing executed by
each of the parties hereto.

          (c) Notices. All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such
Holder to the Company by means of a notice given in accordance with the provisions of this Section
6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in
the Purchase Agreement; (ii) if to the Issuers, initially at the address of the Company set forth
in the Purchase Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 6(c); and (iii) to such other persons at their
respective addresses as provided in the Purchase Agreement and thereafter at such other address,
notice of which is given in accordance with the provisions of this Section 6(c). All such notices
and communications shall be deemed to have been
duly given at the time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and on the next Business Day if timely delivered to an

18

 

air courier
guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee, at the address specified in
the Indenture.

          (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors, assigns and transferees of each of the parties, including, without limitation and
without the need for an express assignment, subsequent Holders; provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee
of any Holder shall acquire Registrable Securities in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all the terms of this Agreement,
and by taking and holding such Registrable Securities such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of this Agreement and
such Person shall be entitled to receive the benefits hereof. The Initial Purchasers (in their
capacity as Initial Purchasers) shall have no liability or obligation to the Company or the
Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of,
any of the obligations of such Holder under this Agreement.

          (e) Purchases and Sales of Securities. The Issuers shall not, and shall use their reasonable
best efforts to cause their affiliates (as defined in Rule 405 under the Securities Act) not to,
purchase and then resell or otherwise transfer any Registrable Securities.

          (f) Third Party Beneficiaries. Each Holder shall be a third party beneficiary to the
agreements made hereunder between the Issuers, on the one hand, and the Initial Purchasers, on the
other hand, and shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of other Holders
hereunder.

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

          (h) Headings. The headings in this Agreement are for convenience of reference only, are not a
part of this Agreement and shall not limit or otherwise affect the meaning hereof.

          (i) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

          (j) Miscellaneous. This Agreement contains the entire agreement between the parties relating
to the subject matter hereof and supersedes all oral statements and prior writings with respect
thereto. If any term, provision, covenant or restriction contained in this

19

 

Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the
remainder of the terms, provisions, covenants and restrictions contained herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated. The Issuers and
the Initial Purchasers shall endeavor in good faith negotiations to replace the invalid, void or
unenforceable provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, void or unenforceable provisions.

20

 

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

	 	 	 	 	 
	 	 	BELDEN CDT, INC.
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ Stephen H. Johnson
	 

	 	 	 	 
	 

	 	 	 	Name: Stephen H. Johnson 

Title: Treasurer
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ Kevin L. Bloomfield
	 

	 	 	 	 
	 

	 	 	 	Name: Kevin L. Bloomfield
	 

	 	 	 	Title: Vice President, Secretary and General Counsel
	 
	 	 	 	 
	 	 	BELDEN WIRE & CABLE COMPANY
	 	 	BELDEN CDT NETWORKING, INC.
	 	 	NORDX/CDT CORP.
	 	 	THERMAX/CDT, INC.
	 	 	BELDEN HOLDINGS, INC.
	 	 	BELDEN TECHNOLOGIES, INC.
	 	 	BELDEN INC.
	 	 	CDT INTERNATIONAL HOLDINGS INC.
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ Stephen H. Johnson
	 

	 	 	 	 
	 

	 	 	 	Name: Stephen H. Johnson
	 

	 	 	 	Title: Treasurer
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ Kevin L. Bloomfield
	 

	 	 	 	 
	 

	 	 	 	Name: Kevin L. Bloomfield
	 

	 	Title:
	 	Vice President, Secretary and General Counsel

21

 

Confirmed and accepted as of the date first

above written:

WACHOVIA CAPITAL MARKETS, LLC

For itself and on behalf of the several

Initial Purchasers listed on Schedule I

By:  /s/ Peter DiLullo                 

Name: Peter DiLullo

Title: Managing Director

22

 

SCHEDULE I

INITIAL PURCHASERS

Wachovia Capital Markets, LLC

UBS Securities LLC

23<PAGE>

                                                                    EXHIBIT 10.1

                          EMPLOYMENT AGREEMENT BETWEEN
                         CATUITY INC. AND GRAHAM MCSTAY

     This Employment Agreement is made and entered into as of March 15, 2007
between Catuity Inc. (the "Company"), a Delaware corporation, and Graham McStay
(the "Executive").

     1. EMPLOYMENT. Company hereby employs Executive, and Executive hereby
accepts employment with Company, on the terms and conditions hereinafter set
forth.

     2. TERM. The term of this Agreement will commence on March 15, 2007 (the
"Commencement Date") and end on March 14, 2010, unless further extended or
earlier terminated as hereinafter set forth. Commencing on March 15, 2010 and on
March 14 of each year thereafter, the term of Executive's employment shall be
extended for consecutive additional one-year terms unless either party notifies
the other at least six months before termination of the then-current term that
the notifying party does not wish the Agreement to be extended.

     3. DUTIES AND RESPONSIBILITIES. Executive shall serve with the duties of
Chief Executive Officer and President of Loyalty Magic (or in such other
position as may be mutually agreed upon by Executive and the Board) and shall
have such responsibilities, duties and authority as may be assigned to him by
the Board. Executive shall devote substantially all of his working time and
effort to the business and affairs of Company, except that he may as hereinafter
provided serve as a member of the board of directors of other companies,
charities, civic organizations and professional organizations.

     4. SERVICE ON BOARD OF DIRECTORS. The parties do not presently contemplate
that Executive shall serve on the Board of the Company. However, if the Board
determines otherwise during the term of this Agreement, Executive shall serve,
if and when elected, and re-elected, as a member of the Board of Company or of
any of its subsidiaries, affiliates or divisions, and as an officer of any
subsidiary, affiliate or division, if elected. When this Agreement terminates,
Executive will, if requested by the Board of Company, tender his resignation
from any and all such Board positions.

     5. OUTSIDE ACTIVITIES. During the term of this Agreement, Executive may
devote reasonable periods of time to serve as a member of the board of directors
or of a committee of any organization involving no conflict of interest with
Company, and he may engage in charitable, civic and community activities and
manage his personal investments; provided that such activities do not materially
interfere with the regular performance of his duties and responsibilities under
this Agreement.

     6. PLACE OF EMPLOYMENT. Executive shall have his office, and perform his
duties, within 50 Kilometers of the center of Melbourne, Victoria Australia and
he shall not be required to move from the metropolitan Melbourne, Victoria
Australia area; provided that, he shall from

<PAGE>

time to time be required to travel when necessary in carrying out Company's
business. Executive acknowledges that Company maintains offices and employees in
locations in the US and Australia, and that accordingly significant and regular
travel will be required to dispatch his normal duties.

     7. REIMBURSEMENT OF EXPENSES AND FURNISHING OF SERVICES TO EXECUTIVE.
During the term of this Agreement, Executive shall be entitled to, including but
without limitation, an office at the company's Melbourne, Victoria Australia
facility as well as reimbursement, upon proper accounting, of reasonable
expenses and disbursements incurred by him in the course of his duties
(including professional dues). All expense reimbursements will be subject to
compliance with Australian Tax authorities so as to be deductible as ordinary
and necessary business expenses, and in compliance with Company's normal
policies and practices.

     8. BASE SALARY COMPENSATION. During the term of Executive's employment, he
shall be paid a minimum base salary of One Hundred Eighty Thousand dollars AUD
($180,000) per year (inclusive of 9% Superannuation). The CEO and the Board
shall review Executive's salary at least annually, and may increase Executive's
salary from time to time in their discretion, and if so increased, such salary
shall not be decreased thereafter during the term of this Agreement. Annual
leave will be accrued at the rate of 4 weeks per annum. Sick leave entitlements
will be based upon accrual of 8 days per annum. All existing accrued leave
(annual, sick and long service leave) will be rolled over. Standard long service
leave and other legislated entitlements will stand.

     9. OTHER BENEFITS. Executive shall be entitled to participate in all bonus
or incentive plans and stock purchase plans in such manner as such plans apply
to officers and senior executives of the Company generally, and in all employee
benefits, including disability insurance coverage, medical and fringe benefit
plans currently maintained, or hereafter adopted, by the Company for Loyalty
Magic, as such plans may be amended or terminated from time to time in
accordance with their terms, in the same manner as such plans apply to officers
and senior executives of Company of comparable or lesser position generally.

     10. INCENTIVE COMPENSATION.

     (a) Company shall compute the volume weighted average trading price of
Company's common stock on the Nasdaq Small Cap Market during the thirty calendar
days preceding (and ending on) March 15, 2007. This price is referred to
hereafter as the "Initial Market Price".

     (b) Company hereby grants to Executive non-qualified options to acquire
10,000 shares of Company stock, expiring ten years after the Commencement Date
at a strike price equal to the Initial Market Price. The 10,000 options will
vest on the following schedule: 25% on March 15, 2007; 25% on March 15, 2008;
25% on March 15, 2009 and the remaining 25% on March 15, 2010. These options are
to be taken up at the discretion of the Executive.

     (c) The Company will award 15,000 shares of restricted stock to Executive
on March 15, 2007. One-half of these restricted shares will vest based on
achieving the Board approved 2007 budgeted Earnings Before Interest and Taxes
(EBIT) for Loyalty Magic, subject to audit. The other half will vest based on
achieving the Board approved 2008 budgeted Earnings Before Interest and Taxes
(EBIT) for Loyalty Magic, subject to audit.

                                       -2-

<PAGE>

     (d) The Executive will be eligible for an annual bonus plan for each full
year of this Agreement where Loyalty Magic achieves EBIT levels compared to a
Board-approved annual business plan (including the effect of bonuses subject to
audit), he will receive a bonus payable in shares of Company common stock
("Bonus Shares") valued at the 30-day VWAP for December 1 through 31 of the year
for which the bonus is computed. The base bonus will be equal to 25 percent of
"eligible salary", according to "eligible salary" and bonus parameters to be
designated by the Board prior to the beginning of the bonus year. The base bonus
will be adjusted up or down in accordance with the base bonus multiplier below.
There will be no bonus paid for achievement of less than 90% of EBIT. Company
shall compute and pay the bonus on or before April 15 of each year for the prior
year. For 2007, this is based on an EBIT target of $83,000 AUD.

<TABLE>
<CAPTION>
% of EBIT target achieved   Base Bonus Multiplier
-------------------------   ---------------------
<S>                         <C>
<90%                                  -0-
90% but < 100%                         .75
100% but <120%                        1.0
120% but <140%                        1.25
140% and over                         1.50
</TABLE>

     (e) If the Company has at least nine months operating positive cash flow at
the time of the award, Executive may elect to receive 50% of the bonus amount in
cash and reduce the Bonus Shares proportionally.

     (f) All equity grants or options will carry customary provisions to adjust
the share amounts and/or exercise or trigger prices to appropriately and
equitably respond to capital changes such as stock splits, dividends,
recapitalizations and the like.

     (g) Company shall reasonably cooperate with Executive in handling
withholding tax obligations in respect of the foregoing incentive/equity
compensation items, so as to minimize the adverse effects on Executive of any
requisite withholding tax obligations. These means and methods may include
cooperation in ensuring legal resale capabilities for shares, use of shares to
satisfy withholding obligations (if share sales by Executive are impermissible,
and if such a device is then permitted, and with due regard given to Company's
liquidity position).

     11. NON DISPARAGEMENT OF EXECUTIVE. Company shall not disparage Executive's
reputation or good name during or after the term of this Agreement.

     12. TERMINATION.

     (a) Executive may voluntarily terminate his employment hereunder at any
time, on 90 days' notice without cause or "Good Reason" (as defined below), or
with Good Reason as provided in Section 13(b) below.

                                       -3-

<PAGE>

     (b) Company may terminate this Agreement and the employment of Executive at
any time, with or without "Cause" (as defined below), on 90 days' notice.

     (c) Either Company or Executive may terminate this Agreement after the
"Disability" (as defined below) of Executive, on 90 days' notice.

     (d) This Agreement will terminate on Executive's death.

     13. TERMINATION DEFINITIONS.

     (a) "Cause" means (i) the Executive's commission of acts or omissions
constituting active and deliberate dishonesty as determined by the Board of
Directors, (ii) Executive's actual receipt of an improper benefit or profit in
money, property or services, or (iii) if the Executive continuously fails to
perform his duties under this Agreement in any material manner after receipt of
notice of such failure from the Company specifying how he has so failed to
perform. The Company may at its option terminate this Agreement for Cause by
giving written notice of termination to the Executive without prejudice to any
other remedy to which the Company may be entitled at law, in equity, or under
this Agreement. The notice of termination required by this Section shall specify
the grounds for the termination and shall be supported by a statement of all
relevant facts. In the event of termination of this Agreement for Cause, the
Executive shall be entitled to no further compensation or other benefits under
this Agreement, except as to that portion of any unpaid salary and other
benefits accrued and earned by him hereunder up to and including the effective
date of such termination.

     (b) "Good Reason" will exist if after written notice setting forth the
alleged Good Reason by Executive to the Company, and the expiration of a 90-day
cure period, there continues to be: (i) a reduction in the Executive's Base
Salary and/or in the aggregate benefits provided for hereunder; (ii) the
relocation of the Executive's office to a location outside of a 50 Kilometer-
radius from the Company's present Melbourne CBD, Victoria Australia location;
(iii) a material breach by the Company of the terms of this Agreement; or (iv)
the failure by the Company to obtain an agreement from any successor to the
Company to assure that such successor guarantees the Company's performance of
this Agreement or assumes and undertakes to perform the Company's obligations
hereunder; provided, however, in the event of a "Change in Control" as defined
in paragraph 13(c) hereof, then the Company shall cease to have a 90-day period
within which to cure the alleged good reason.

     (c) For purposes of this Agreement, a "Change in Control" shall be deemed
to have occurred:

          (i) if any person or group of persons acting together (other than (a)
     the Company or any person (I) who as of the date hereof was a director or
     officer of the Company, or (II) whose shares of Common Stock of the Company
     are treated as "beneficially owned" by any such director or officer, or (b)
     any institutional investor (filing reports under Section 13(g) rather than
     13(d) of the Securities Exchange Act of 1934, as amended, including any
     employee benefit plan or employee benefit trust sponsored by the Company)),
     becomes a beneficial owner, directly or indirectly, of

                                       -4-

<PAGE>

     securities of the Company representing fifty percent (50%) or more of
     either the then-outstanding Common Stock of the Company or the combined
     voting power of the Company's then-outstanding voting securities (other
     than as a result of an acquisition of securities directly from the
     Company);

          (ii) if the Company sells all or substantially all of the Company's
     assets to any person (other than a wholly-owned subsidiary of the Company
     formed for the purpose of changing the Company's corporate domicile);

          (iii) if the Company merges or consolidates with another person as a
     result of which the shareholders of the Company immediately prior to such
     merger or consolidation would beneficially own (directly or indirectly),
     immediately after such merger or consolidation, securities of the surviving
     entity representing less than fifty percent (50%) of the then outstanding
     voting securities of the surviving entity; or

          (iv) if the new directors appointed to the Board during any
     twelve-month period constitute a majority of the members of the Board,
     unless (I) the directors who were in office for at least twelve (12) months
     prior to such twelve-month period (the "Incumbent Directors") plus (II) the
     new directors who were recommended or appointed by a majority of the
     Incumbent Directors constitutes a majority of the members of the Board.

          (v) For purposes of this paragraph a "person" includes an individual,
     a partnership, a corporation, an association, an unincorporated
     organization, a trust or any other entity.

     (d) "Disability" means the inability of Executive due to accident or
illness to perform the essential functions of his job despite reasonable
accommodations by Company, where such inability is reasonably expected to last
longer than 90 days. If Executive is covered by a Company provided long-term
disability insurance policy, then "Disability" shall mean the long term
disability of Executive (or comparable term) as defined in the applicable
long-term disability insurance policy.

     14. COMPENSATION AFTER TERMINATION.

     (a) If (I) either Company terminates this Agreement without Cause or the
Executive resigns for Good Reason, and (II) there has not been a Change in
Control prior to the termination date where the consideration to Company's
shareholders is greater than $10 per share (adjusted appropriately for stock
dividends, splits and the like occurring after the Commencement Date),
Executive's compensation shall be as follows:

          (i) Company shall pay Executive an amount equal to 12 months' salary
     at his then-current salary rate inclusive of accrued annual leave.

                                       -5-

<PAGE>

          (ii) Vesting of Executive's stock options and restricted shares will
     be frozen as of the termination date. Options vested as of the termination
     date shall be exerciseable for a six-month period following the date of
     termination.

          (iii) The bonus and Bonus Shares under Section 10(d) for the year
     prior to the year of termination, if unpaid as of the termination date,
     shall be computed and paid as provided under Section 10(d). The bonus and
     Bonus Shares under Section 10(d) for the year in which termination occurs
     shall be zero.

     (b) If (I) either Company terminates this Agreement without Cause or the
Executive resigns for Good Reason, and (II) there has been a Change in Control
prior to the termination date where the consideration to Company's shareholders
is greater than $10 per share (adjusted appropriately for stock dividends,
splits and the like occurring after the Commencement Date), Executive's
compensation shall be as follows:

          (i) Company shall pay Executive an amount equal to salary at his
     then-current rate for the greater of 12 months or the balance of the term
     of this Agreement inclusive of accrued annual leave.

          (ii) Executive's stock options and restricted shares will immediately
     vest in full. Options as so vested shall be exerciseable for a six-month
     period following the date of termination.

          (iii) The bonus and Bonus Shares under Section 10(d) for the year
     prior to the year of termination, if unpaid as of the termination date,
     shall be computed and paid as provided under Section 10(d). The bonus and
     Bonus Shares under Section 10(d) for the year in which termination occurs
     shall be computed after the end of the year of termination, and pro rated
     and paid for the portion of the termination year prior to the termination
     date.

     (c) If this Agreement is terminated due to Executive's death or Disability,
Executive's compensation shall be as follows:

          (i) Company shall pay Executive an amount equal to 12 months' salary
     at his then-current salary rate.

          (ii) Executive's stock options and restricted shares will immediately
     vest in full, and options shall be exercisable for a one-year period
     following the date of termination.

          (iii) The bonus and Bonus Shares under Section 10(d) for the year
     prior to the year of termination, if unpaid as of the termination date,
     shall be computed and paid as provided under Section 10(d). The bonus and
     Bonus Shares under Section 10(d) for the year in which termination occurs
     shall be computed after the end of the year of termination, and pro rated
     and paid for the portion of the termination year prior to the termination
     date.

                                       -6-

<PAGE>

     (d) If Company terminates this Agreement with Cause, Executive's
compensation shall be as follows:

          (i) Company shall pay Executive only for cash compensation earned up
     to the date of termination.

          (ii) All options that were not exercised prior to the date of
     termination will be terminated, and unvested restricted shares shall be
     forfeited.

          (iii) The bonus and Bonus Shares under Section 10(d) for the year
     prior to the year of termination, if unpaid as of the termination date,
     shall be computed and paid as provided under Section 10(d). The bonus and
     Bonus Shares under Section 10(d) for the year in which termination occurs
     shall be zero.

     (e) If Executive resigns without Good Reason, Executive's compensation
shall be as follows:

          (i) Company shall pay Executive only for cash compensation earned up
     to the date of termination.

          (ii) All options and restricted shares that are unvested as of the
     termination date shall be forfeited. Options that are vested as of the
     termination date shall be exercisable for a six-month period following the
     date of termination

          (iii) The bonus and Bonus Shares under Section 10(d) for the year
     prior to the year of termination, if unpaid as of the termination date,
     shall be computed and paid as provided under Section 10(d). The bonus and
     Bonus Shares under Section 10(d) for the year in which termination occurs
     shall be zero.

     (f) If this Agreement ends at the normal expiration of a term, then:

          (i) Company shall pay Executive only for cash compensation earned up
     to the date of termination.

          (ii) Vesting of options and restricted shares will be frozen as of the
     termination date. Options vested as of the termination date shall be
     exercisable for a six-month period following the date of termination.

          (iii) The bonus and Bonus Shares under Section 10(d) for the year of
     termination, shall be computed and paid after termination as provided under
     Section 10(d).

     (g) Notwithstanding anything to the contrary contained herein, in the event
it shall be determined that any compensation payment or distribution by the
Company to or for the benefit of the Executive would be subject to the excise
tax imposed by Section 4999 of the Internal

                                       -7-

<PAGE>

Revenue Code of 1986, as amended (the "Code"), the Change in Control severance
payment will be reduced to the extent necessary so that no excise tax will be
imposed, but only if to do so would result in the Executive retaining a larger
amount, on an after-tax basis, taking into account the excise and income taxes
imposed on all payments made to the Executive hereunder.

     15. INDEMNIFICATION. In addition to any indemnification provided by the
By-Laws of Company or otherwise, Company shall indemnify and provide reasonable
advances for expenses to Executive, to the fullest extent permitted by the laws
of the State of Delaware, if Executive is made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that Executive is or was
an officer, director or employee of Company or any subsidiary or affiliate
thereof, in which capacity Executive is or was serving at Company's request,
against expenses, judgments, fines and amounts paid in settlement incurred by
him in connection with such action, suit or proceeding. Company shall exercise
its reasonable commercial efforts to maintain directors' and officers' insurance
coverage as well as all other appropriate malpractice and professional liability
coverage on behalf of Executive during the term of this Agreement at Company's
expense, in a manner and coverage substantially similar to the D&O insurance
currently in effect. Subject to requirements of any applicable insurance
coverage, Executive shall have the absolute right to engage counsel reasonably
acceptable to Company and at legal rates deemed reasonably acceptable to
Company, for the above-referenced actions. Executive shall give prompt notice to
Company of any claims made against him for which he will seek indemnification.

     16. AMENDMENT OR MODIFICATION WAIVER. No provision of this Agreement may be
amended, modified or waived, unless such amendment, modification or waiver shall
be authorized by the Board or any authorized committee of the Board, and shall
be agreed to in writing, signed by Executive and by an officer of Company
thereunto duly authorized. Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of a subsequent breach of such condition or
provision or a waiver of a similar or dissimilar provision or condition at the
same or any prior or subsequent time.

     17. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions and portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent provided by law.

     18. SUCCESSORS. This Agreement shall be binding upon any successor of
Company and such successor shall be deemed substituted for Company under the
terms of this Agreement; but any such substitution shall not relieve Company of
any of its obligations hereunder. As used in this Agreement, the term
"successor" shall include any person, firm, corporation or like business entity
which at any time, whether by merger, purchase or otherwise, acquires all or
substantially all of the assets or business of Company. This Agreement may not
be otherwise assigned by Company without Executive's written consent.

                                       -8-

<PAGE>

     19. CONFIDENTIAL INFORMATION. Executive agrees not to disclose, either
while in Company's employ or at any time thereafter, to any person not employed
by Company or not engaged to render services to Company any confidential
agreement obtained by him while in the employ of Company, including, without
limitation, any of Company's inventions, processes, methods of distribution,
customers or trade secrets; provided, however, that this provision shall not
preclude Executive from use or disclosure of information known generally to the
public or of information not considered confidential by persons engaged in the
business conducted by Company or from disclosure required by law or court order.

     20. WITHHOLDING. Anything to the contrary notwithstanding, all payments
required to be made by Company hereunder to Executive or his estate or
beneficiary shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as Company may reasonably determine
it should withhold pursuant to any applicable law or regulation. In lieu of
withholding such amounts, Company may accept other provisions to the end that it
has sufficient funds to pay all taxes required by law to be withheld in respect
to any of such payments.

     21. NOTICES. For the purpose of this Agreement, notices, demands or other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or (unless other specified) mailed by United
States Certified Mail, return receipt requested, postage prepaid, addressed as
follows:

               to Executive: Graham Mcstay
                             503/700 Chapel St
                             South Yarra Vic 3141

               to Company:   Catuity Inc.
                             300 Preston Ave Ste 302
                             Charlottesville, VA 22902

or to such other address as any party may have furnished to the other in writing
in accordance therewith, except that notices of change of address shall be
effective only upon receipt.

     22. CONSTRUCTION WITH DELAWARE LAW. The validity, interpretation,
construction and performance of this agreement shall be governed by the laws of
the state of Delaware.

     23. ENTIRE AGREEMENT OF PARTIES. This Agreement contains the entire
agreement of the parties and no party shall be liable and bound except as
provided herein, but this instrument does not replace, rescind or abrogate any
other agreement or plan between the parties which may now be or may hereinafter
become effective.

                                       -9-

<PAGE>

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

                                     CATUITY INC.

                                     By: /s/ Alfred (John) Racine
                                         ---------------------------------------
                                         Alfred (John) Racine, President and CEO

                                     "Company"

                                        /s/ Graham McStay
                                     -------------------------------------------
                                     Graham McStay

                                     "Executive"

                                      -10-

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