Document:

FORM OF AMENDED AND RESTATED STOCKHOLDERS' AGRMNT

 

Exhibit 4.1

 

 

[FORM OF]

AMENDED AND RESTATED

STOCKHOLDERS AGREEMENT

BY AND AMONG

TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.

AND

THE STOCKHOLDERS NAMED HEREIN

 

 

DATED AUGUST       , 2004

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	1.
	 	Representations and Warranties; No Inconsistent Agreements	 	 	2	 
	2.
	 	Corporate Governance	 	 	2	 
	3.
	 	Subsequent Tranferees of Stock	 	 	5	 
	4.
	 	Holdback Agreement	 	 	6	 
	5.
	 	Demand Registration	 	 	6	 
	6.
	 	Piggyback Registrations	 	 	8	 
	7.
	 	Registration Procedures	 	 	9	 
	8.
	 	Registration Expenses	 	 	12	 
	9.
	 	Indemnification	 	 	12	 
	10.
	 	Participation in Underwritten Registrations	 	 	14	 
	11.
	 	Further Assurances	 	 	15	 
	12.
	 	Term	 	 	15	 
	13.
	 	Definitions	 	 	15	 
	14.
	 	Miscellaneous	 	 	19	 

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AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT

               This Amended and Restated Stockholders’ Agreement (this “Agreement”),
dated as of August  , 2004, by and among Transportation Investment Partners,
L.L.C., a Delaware limited liability company (“TIP”), Caravelle Investment
Fund, L.L.C., a Delaware limited liability company (“Caravelle”), Albion
Alliance Mezzanine Fund, L.P., a Delaware limited partnership (“Albion I”),
Albion Alliance Mezzanine Fund II, L.P., a Delaware limited partnership
(“Albion II”), CIBC Inc., a Delaware corporation (“CIBC” and, together with
TIP, Caravelle, Albion I and Albion II and any of their respective Related
Transferees (as defined below) that may become transferees of any Common Stock
(as defined below) held by them, the “Institutional Investors”), Transportation
Technologies Industries, Inc., a Delaware corporation (the “Company”), and the
persons listed on Exhibit A hereto who now or hereafter become signatories to
this Agreement (together with any of their respective Related Transferees that
may become transferees of any Common Stock, the “Individual Investors” and,
together with the Institutional Investors, the “Stockholders”).

RECITALS

               WHEREAS, on March 9, 2000, the Company and certain holders of its
preferred stock and its common stock, par value $0.01 per share (the “Common
Stock”), entered into that certain Stockholders’ Agreement (as amended on
February 28, 2001 and December 19, 2003, the “Original Stockholders’
Agreement”) in connection with the Agreement and Plan of Merger, dated as of
January 28, 2000, by and between the Company and Transportation Acquisition I
Corp.;

               WHEREAS, the Company is conducting an initial public offering (the “IPO”)
of shares of its Common Stock;

               WHEREAS, in connection with the IPO, the Company is, among other things,
redeeming all of its existing Series E Preferred Stock and is exchanging shares
of its Common Stock for all of its Series A Preferred Stock and Series C
Preferred Stock, including those shares held by the Institutional Investors,
and canceling all of its Series D Preferred Stock, and immediately following
the IPO the Company will not have any shares of preferred stock issued and
outstanding;

               WHEREAS, in connection with the IPO, the Company and its executive
officers and directors and substantially all of the existing holders of its
Common Stock have entered into lock-up agreements with respect to shares of
Common Stock owned by them as described in the Registration Statement relating
to the IPO;

               WHEREAS, immediately prior to the IPO, the Company is effecting a
100,000-for-one reverse stock split of the Common Stock; and

               WHEREAS, in connection with the IPO, the parties to the Original
Stockholders’ Agreement believe it to be in their best interests and in the
best interests of the Company that they enter into this Agreement providing for
certain rights and restrictions with respect to the

 

 

shares of Common Stock owned by them or their transferees, and that they
amend and restate the Original Stockholders’ Agreement, all as hereinafter
provided.

AGREEMENTS

               NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, the receipt and sufficiency of which are
acknowledged by each of the parties hereto, effective as of the date on which
the IPO is consummated (the “Effective Time”), the parties hereto, intending to
be legally bound, hereby agree to amend and restate the Original Stockholders’
Agreement as follows:

               1. Representations and Warranties; No Inconsistent Agreements. Each party
hereto represents and warrants that (a) this Agreement has been duly
authorized, executed and delivered by such party and constitutes the valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, and (b) such party has not granted and is not a party to any
proxy, voting trust or other agreement which conflicts with or violates any
provision of this Agreement. No party to this Agreement shall grant any proxy
or become party to any voting trust or other agreement which conflicts with or
violates any provision of this Agreement.

               2. Corporate Governance. (a) Subject to Sections 2(b) and (c), from and
after the Effective Time, each Stockholder shall vote or cause to be voted all
shares of Common Stock owned or hereafter acquired (whether by purchase or
otherwise) by such Stockholder or over which such Stockholder has control, and
shall take all other necessary actions within its control, in order to cause:

        (i) the number of directors on the Board of Directors of the Company
(the “Board”) to be nine or such greater number as is required to give
effect to the rules of any stock exchange or market on which the Common
Stock is then listed or quoted and the rules of the Securities and
Exchange Commission (the “SEC”);

        (ii) the election to the Board of such number of directors
designated jointly by the TIP Designators (as defined below) to which
they are entitled pursuant to Section 2(b)(i);

        (iii) the election to the Board of such number of directors
designated jointly by the Individual Investors to which they are entitled
pursuant to Section 2(b)(ii);

        (iv) the designation to the audit committee of such nominee, if any,
to which the TIP Designators are entitled pursuant to Section 2(b)(iii);

        (v) in the event of any vacancy in the Board or any committee
occurring for any reason, the filling of the vacancy in such a manner
that the Board will be comprised of the number of directors determined in
accordance with clause (i) above, and the audit
committee will be comprised of directors and with a chairperson as
set forth in clauses (b) (iii) and (b) (iv)below; and

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        (vi) at the written request of the TIP Designators or the Individual
Investors, the removal or replacement of any of the directors or
committee members designated by such Stockholders.

        (b) (i) TIP and its Affiliates or Associated Entities that may
become transferees of Common Stock (the “TIP Designators”) shall be
entitled, but not required, to designate such number of nominees (the
“TIP Nominees”) for election to the Board as is set forth in the table
below under “Total Number of Nominees” opposite the number of shares of
Common Stock collectively owned by the TIP Designators (expressed as a
percentage of the number of shares collectively owned by them as of the
Effective Time). Prior to the first anniversary of the Effective Time,
the nominees designated by the TIP Designators shall include at least one
nominee who qualifies as “independent” for purposes of the rules of the
stock exchange or market on which the Common Stock is then listed or
quoted and the rules and regulations of the SEC (an “Independent
Nominee”) (unless at any such time the TIP Designators are not entitled
to designate at least one nominee). On and after the first anniversary
of the Effective Time, the nominees designated by the TIP Designators
shall include at least the number of Independent Nominees as is set forth
in the table below under “Number of Independent Nominees” opposite the
number of shares of Common Stock collectively owned by the TIP
Designators (expressed as a percentage of the number of shares
collectively owned by them as of the Effective Time).

	 	 	 	 	 	 	 	 	 
	% of	 	Total Number of	    	Number of Independent
	Common Stock Owned
	 	Nominees
	 	Nominees

	>= 40%
	 	 	5	 	 	 	3	 
	< 40% and >= 30%
	 	 	4	 	 	 	2	 
	< 30% and >= 20%
	 	 	3	 	 	 	1	 
	< 20% and >= 10%
	 	 	2	 	 	 	0	 
	< 10% and > zero
	 	 	1	 	 	 	0	 
	zero
	 	 	0	 	 	 	—	 

        (ii) The Individual Investors (including their Related Transferees)
shall be entitled, but not required, to designate such number of nominees
for election to the Board as is set forth in the table below under “Total
Number of Nominees” opposite the number of shares of Common Stock
collectively owned by the Individual Investors (expressed as a percentage
of the number of shares collectively owned by them as of the Effective
Time). Prior to the first anniversary of the Effective Time, the
nominees designated by the Individual Investors shall include at least
two Independent Nominees (unless at any such time the Individual
Investors are not entitled to designate at least two nominees). On and
after the first anniversary of the Effective Time, the nominees
designated by the Individual Investors shall include at least the number
of Independent Nominees as is set forth in the table below under “Number
of Independent Nominees” opposite the number of shares of Common Stock
collectively owned by the Individual Investors (expressed as a percentage
of the number of shares collectively owned by them as of the
Effective Time. The nominees designated by the Individual Investors
shall at all times include the Chief Executive

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Officer and one other
member of senior management of the Company (which for purposes of this
Agreement shall include Thomas M. Begel).

	 	 	 	 	 	 	 	 	 
	% of	 	Total Number of	    	Number of Independent
	Common Stock Owned
	 	Nominees
	 	Nominees

	>= 40%
	 	 	4	 	 	 	2	 
	< 40% and >= 20%
	 	 	3	 	 	 	1	 
	< 20%
	 	 	2	 	 	 	0	 
	zero
	 	 	0	 	 	 	0	 

        (iii) The TIP Designators shall, at all times they are entitled to
designate three or more nominees to the Board in accordance with clause
(i), be entitled to designate one member of the audit committee of the
Board.

        (iv) The chairperson of the audit committee of the Board (the “Audit
Committee Expert”) shall comply in all respects with the requirements of
such position prescribed by the SEC and any stock exchange or market on
which the Company’s securities are then listed or quoted.

        (v) In the event that the right of any Stockholder or group of
Stockholders to nominate one or more members of the Board is reduced or
eliminated in accordance with the terms of this Agreement, such reduction
or elimination, as the case may be, shall be given effect as of the
immediately succeeding proxy statement and stockholders’ meeting relating
to the election of members of the Board and to the extent necessary at
each such immediately succeeding meeting or meetings (and thru such
related proxy or proxies) in order to give full effect to such reduction
or elimination, as the case may be.

               (c) As soon as practicable at or after the Effective Time, each
Stockholder shall vote at a meeting or by written consent all of the shares of
Common Stock owned by them so that the nominees designated by the TIP
Designators and the Individual Investors set forth below shall be elected to
the Board to the class of directors indicated below and shall be designated as
members of the committees of the Board as indicated below, and that the nominee
identified below shall be designated chairperson of the audit committee. The
initial members of the Board and the members and chairman of the audit
committee of the Board from and after the Effective Time shall be:

TIP Nominees

Jay Bloom-Class II

Mark Dalton-Class II

Steven A. Flyer-Class I

Jay R. Levine-Class I

Steven Shulman (audit committee member)-Class III

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Individual Nominees

Thomas M. Begel-Class I

Donald C. Roof (audit committee member and chairman)-Class III

Camillo M. Santomero III (audit committee member)-Class II

Andrew M. Weller-Class III

               (d) The Company shall use its reasonable efforts to cause any nominees
selected in accordance with this Agreement to be elected to the Board and
designated for membership or chairmanship of the audit committee of the Board,
as the case may be. Each Stockholder shall vote such Stockholder’s shares of
Common Stock at any regular or special meeting of stockholders of the Company
or in any written consent executed in lieu of such a meeting of stockholders
and shall take all other actions necessary (whether in such Stockholder’s
capacity as Stockholder or otherwise, including, without limitation, causing
any directors to take all such necessary action, whether at a meeting or by an
action by written consent in lieu of a meeting): (i) to give effect to the
agreements contained in Sections 2(a) through (c) and (ii) to ensure that the
certificate of incorporation, charters of committees of the Board and by-laws
of the Company and any other governing documents or official policies of the
Company do not, at any time hereafter, conflict in any respect with the
provisions of this Agreement.

               (e) For so long as Albion I and Albion II and their Affiliates and Managed
Funds together own not less than 40% of the number of shares of Common Stock
collectively owned by them as of the Effective Time, they shall be entitled to
appoint one non-voting observer to the Board (the “Albion Observer”). The
Albion Observer shall be given access to all meetings and other proceedings of
the Board, and shall be given copies of all original materials delivered to the
members of the Board (including, without limitation, any materials relating to
the budget), but shall have no vote on any matter before the Board and shall
not be counted for purposes of establishing a quorum or otherwise. In
addition, for so long as either is an Institutional Investor, each of Albion I
and Albion II and their Affiliates and Managed Funds shall have (i) the right
to submit business proposals or suggestions to the Company’s management from
time to time with the requirement that the Company’s management agree to
discuss such proposals or suggestions with Albion Alliance within a reasonable
period after such submission, (ii) the right to call a meeting with management
in order to discuss such proposals or suggestions and (iii) the right to submit
such proposals or suggestions to the Board if not adopted or implemented by
management.

               (f) Except as otherwise required by law or the certificate of
incorporation of the Company, at all meetings of the Board, a majority of the
entire Board shall constitute a quorum for the transaction of business and the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the Board.

               (g) Except to the extent required by applicable law, the composition of
the board of directors of each Subsidiary of the Company shall be identical to
the composition of the Board, unless otherwise consented to by the Board.

               3. Subsequent Transferees of Stock. Any Related Transferee who shall acquire (either voluntarily or
involuntarily, by operation of law or otherwise) any shares of Common Stock
from any Stockholder shall be bound by all of the provisions of this Agreement
to the

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same extent as the parties hereto and, prior to registration of the
Transfer of any such securities on the books of the Company, any Related
Transferee shall execute an agreement with the parties hereto agreeing to be
bound by such provisions, and shall thereupon be deemed a Stockholder.

               4. Holdback Agreement. Each Stockholder (other than the Excluded
Stockholders) agrees that, without the consent of the managing
underwriter(s) or as otherwise provided in such stockholders’
agreement with the managing underwriter(s),
it will not, for a period of 180 days following the effective date of the
registration statement for the IPO directly or indirectly sell, offer to sell,
grant any option for the sale of, or otherwise dispose of any Common Stock or
securities convertible into Common Stock. Each Stockholder (other than the
Excluded Stockholders) additionally agrees that, for a period beginning seven
days immediately preceding the effective date of any registration statement
filed by the Company under the Securities Act and relating to a public offering
which is not the IPO and ending on the earlier of (i) 180 days after the
effective date of such registration statement and (ii) the end of the shortest
period applicable to any Affiliate of the Company who is a selling shareholder
pursuant to such registration statement or who is otherwise subject to a lockup
obligation with respect to such public offering, such Stockholder shall refrain
from directly or indirectly selling any Common Stock except pursuant to such
registration statement.

               5. Demand Registration. (a) Subject to the provisions of this Agreement,
if at any time the Company shall receive a written request from one or more
Stockholders requesting that the Company file a registration statement under
the Securities Act covering the registration for the offer and sale of
outstanding Registrable Securities (a “Demand Registration”) valued (based on
the Current Market Value on the date of such request) at not less than
$5,000,000 in the aggregate when calculated together with any shares included
by any other Stockholders in accordance with the terms of this Section 5(a)
(the “Minimum Value”), then the Company shall promptly notify in writing all
other Stockholders of such request. Within 20 days after such notice has been
given by the Company, any other Stockholder may give written notice to the
Company of its election to include its Registrable Securities in the
registration. As soon as practicable after the expiration of such 20-day
period, the Company shall use its reasonable best efforts to cause the
registration of all Registrable Securities with respect to which registration
has been so requested by Stockholders. The right to demand the registration of
Registrable Securities hereunder may be exercised no more than four times by
the Institutional Investors and two times by the Individual Investors. If any
Stockholder that has exercised its Demand Registration rights pursuant to this
Section 5(a) is not able to sell all of its Registrable Securities covered by
such Demand Registration, then such registration shall not count as a Demand
Registration for purposes of this Section 5(a).

               (b) Notwithstanding the provisions of Section 5(a), without the consent of
the Company, no registration statement filed pursuant to Section 5(a) shall be
required to be declared effective within 180 days after the effective date of
any registration statement filed by the Company under the Securities Act for
any offering of Common Stock (other than a registration statement filed on
Form S-4 or Form S-8 or any successor or similar form). In
addition, the Company may postpone for up to 90 days the filing or
effectiveness of a registration statement pursuant to a request under Section
5(a) if the Board (with the concurrence of the managing underwriters, if any)
determines in good faith that such registration would be reasonably expected to
have an ad-

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verse effect on any proposal or plan by the Company to engage in any
acquisition of assets, merger, consolidation, tender offer, financing or other
material transaction; provided that the Company may not exercise this right
more than once in any 12-month period.

               (c) In the event of any postponement described in subsection (b), the
applicable Stockholder exercising its Demand Registration right shall, upon
written notice to the Company, be entitled to withdraw such request and, if
such request is withdrawn, such request shall not count as a request for
registration pursuant to Section 5(a).

               (d) If a Demand Registration is an underwritten registration, and the
managing underwriters advise the Company and the participating Stockholders in
writing that in their opinion the number of Registrable Securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting such offering, the Company will include in
such registration the Registrable Securities that the Stockholder exercising
its Demand Registration rights proposes to sell and the Registrable Securities
requested to be included in such registration by the other Stockholders and the
holders of any other securities to be included in such registration pursuant to
Section 5, pro rata among the holders of such Registrable Securities on the
basis of the number of shares that each holder has requested to be included in
such registration; provided that, in case such managing underwriters deliver to
the Company their written opinion that the participation of the Chief Executive
Officer or the Chief Financial Officer of the Company (or any of such Person’s
Affiliates), as such, materially and adversely affects the ability of the
Company to effect such offering or the pricing or amount of the securities
included in such offering, such officer (and his Affiliates) shall only include
such number of Registrable Securities as, in the opinion of such managing
underwriters, does not cause such effect by virtue of such officer’s status as
an officer of the Company (provided that any such shares excluded pursuant to
this proviso shall have priority to be included in the underwriters’
over-allotment option in such registration, except to the extent that the
managing underwriters deliver to the Company their written opinion that the
inclusion of any such officer’s shares in the over-allotment option would
materially and adversely affect the ability of the Company to effect such
offering or the pricing or amount of the securities included in such offering,
and any remaining shares included in the over-allotment option shall be
allocated on a pro rata basis among the holders of Registrable Securities
included in the offering before giving effect to the over-allotment). If,
notwithstanding the foregoing, the managing underwriters advise the Company and
the participating Stockholders in writing that the number of shares that the
Stockholder exercising its Demand Registration rights proposes to include in
such registration statement exceeds the number which can be sold in such
offering without adversely affecting such offering, such Stockholder will be
entitled to withdraw its shares from such registration statement and such
registration statement shall not count as a Demand Registration for purposes of
Section 5(a).

               (e) If the Stockholder exercising its Demand Registration rights requests
that such Demand Registration be an underwritten offering, then the Company
shall select a nationally recognized underwriter or underwriters to manage and administer such
offering, such underwriter or underwriters, as the case may be, to be
reasonably acceptable to the holders of a majority of the Registrable
Securities to be included in such registration statement. Notwithstanding the
foregoing, (i) if any Institutional Investor or its Related Transferee
(collectively, the

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“Designated Stockholders”) has requested a Demand
Registration and collectively own a majority of the Registrable Securities held
by the Institutional Investors as of the Effective Time, the Designated
Stockholders (other than Albion I and Albion II and their Affiliates and
Associated Entities) shall select the lead underwriter in any such underwritten
offering, which shall be reasonably acceptable to the Company, and the Company
shall select the co-managers in such underwritten offering, which shall be
reasonably acceptable to the Institutional Investors, and (ii) if any
Individual Investor or its Related Transferee has requested a Demand
Registration and collectively own a majority of the Registrable Securities held
by the Individual Investors at the Effective Time, the Individual Investors
shall select the lead underwriter in any such underwritten offering, which
shall be reasonably acceptable to (i) the Company, and (ii) for so long as TIP
and its Related Transferees and Associated Entities together own not less than
20% of the number of shares of Common Stock collectively owned by them as of
the Effective Time, TIP, and the Company shall select the co-managers in such
underwritten offering, which shall be reasonably acceptable to the Individual
Investors.

               (f) The Company will not permit any person other than a Stockholder
exercising its rights under this Agreement or the Common Stock Registration
Rights and Stockholder Agreement, dated as of March 9, 2000, between the
Company, CIBC Inc., First Union Securities, Inc. and the other parties named
therein, to include any securities in a registration statement under this
Agreement without the consent of the Stockholder exercising its Demand
Registration rights hereunder (which may be withheld by such Stockholder in its
absolute discretion).

               6. Piggyback Registrations.

               (a) Right to Piggyback. Whenever the Company proposes to register any of
its securities under the Securities Act, whether or not for sale for its own
account (other than pursuant to a registration on Form S-4 or Form S-8 or any
successor or similar form), and the registration form to be used may be used
for the registration of Registrable Securities, the Company will give prompt
written notice to all holders of Registrable Securities of its intention to
effect such a registration and will include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 15 days after the receipt of the
Company’s notice. All registrations requested pursuant to this Section 6(a)
are referred to herein as “Piggyback Registrations.”

               (b) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration of Registrable Securities) that
in their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included
in such registration pursuant to the Piggyback Registration rights granted
herein, pro rata among the holders of such Registrable Securities on the basis
of the number of shares that each holder has requested to be included in such
registration, and (iii) third, other securities requested to be included in
such registration; provided that, in case such managing underwriters deliver
their written opinion to the Company that the participation the Chief Executive
Officer or the Chief

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Financial Officer of the Company (or any of such Person’s
Affiliates), as such, materially and adversely affects the ability of the
Company to effect such offering or the pricing or amount of the securities
included therein, such officer (and his Affiliates) shall only include such
number of Registrable Securities as, in the opinion of such managing
underwriters, does not cause such effect by virtue of such officer’s status as
an officer of the Company or, and such amount of securities, the inclusion of
which does not, in the opinion of such managing underwriters result in such
effect, shall nevertheless be subject to the provisions of the immediately
preceding clause (ii) (provided that any such shares excluded pursuant to this
proviso shall have priority to be included in the underwriters’ over-allotment
option in such registration, except to the extent that the managing
underwriters deliver to the Company their written opinion that the inclusion of
any such officer’s shares in the over-allotment option would materially and
adversely affect the ability of the Company to effect such offering or the
pricing or amount of the securities included in such offering, and any
remaining shares included in the over-allotment option shall be allocated on a
pro rata basis among the holders of Registrable Securities included in the
offering before giving effect to the over-allotment option).

               7. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered
pursuant to this Agreement, the Company will use its reasonable efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:

        (a) prepare and file with the Commission a registration statement
with respect to such Registrable Securities and thereafter use its
reasonable best efforts to cause such registration statement to become
effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will
furnish to the counsel selected by the holders of a majority of the
Registrable Securities covered by such registration statement copies of
all such documents proposed to be filed, which documents will be subject
to the review of such counsel);

        (b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of either (i) not less than 120 days
(subject to extension pursuant to Section 10(b)) or, if such registration
statement relates to an underwritten offering, such longer period as in
the opinion of counsel for the underwriters a prospectus is required by
law to be delivered in connection with sales of Registrable Securities by
an underwriter or dealer or (ii) such shorter period as will terminate
when all of the securities covered by such registration statement have
been disposed of in accordance with the intended methods of disposition
by the seller or
sellers thereof set forth in such registration statement (but in any
event not before the expiration of any longer period required under the
Securities Act), and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until such time as all of such securities have
been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof set forth in the registration statement;

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        (c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as such
seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;

        (d) use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests or, in the
alternative, to obtain exemptions from the registration requirements of
such securities law, and do any and all other acts and things which may
be reasonably necessary or advisable to enable such seller to consummate
the disposition in such jurisdictions of the Registrable Securities owned
by such seller; provided, however, that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph,
(ii) subject itself to taxation in any such jurisdiction or (iii) consent
to general service of process in any such jurisdiction;

        (e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the discovery of the
happening of any event as a result of which, the prospectus included in
such registration statement contains an untrue statement of a material
fact or omits any fact necessary to make the statements therein not
misleading in the light of the circumstances under which they were made,
and, at the request of any such seller, the Company will prepare and
furnish to such seller a reasonable number of copies of a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading in the light of
the circumstances under which they were made;

        (f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on a national securities
exchange or over-the-counter market such as the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its
best efforts to secure designation of all such Registrable Securities
covered by such registration statement as a NASDAQ “national market
system security” within the meaning of Rule 11Aa2-1 of the Exchange Act
or, failing that, to secure NASDAQ authorization for such Registrable
Securities and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register as such with respect
to such Registrable Securities with the NASD;

        (g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;

        (h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
holders of a majority of the Registrable Securities (except in the case
of a Demand Registration under Section 5 in which case it shall be at the
request of the Stockholder exercising its Demand Registration

-10-

 

Rights) being sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities;

        (i) subject to complying with such confidentiality requirements as
the Company may reasonably impose, and subject to the requirements of the
federal and state securities laws, the rules of the NASD and the rules of
any securities exchange or market on which the Company’s securities are
then listed or quoted, make available for inspection by any underwriter
participating in any disposition pursuant to such registration statement
and any attorney, accountant or other agent retained by any such
underwriter, all financial and other records, pertinent corporate
documents and properties of the Company and its Subsidiaries, and cause
the Company’s and each of its Subsidiaries’ officers, directors,
employees and independent accountants to supply all information
reasonably requested by any such underwriter, attorney, accountant or
agent in connection with such registration statement;

        (j) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning with
the first day of the Company’s first full calendar quarter after the
effective date of the registration statement, which earnings statement
will satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder;

        (k) permit any holder of Registrable Securities which holder, in its
reasonable judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of
such registration or comparable statement and to require the insertion
therein of material, furnished to the Company in writing, which in the
reasonable judgment of such holder and its counsel should be included;

        (l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration
statement for sale in any jurisdiction, the Company will use its
reasonable best efforts promptly to obtain the withdrawal of such order;

        (m) obtain a comfort letter, dated the effective date of such
registration statement (and, it such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the Company’s independent public
accountants in customary form and covering such matters of the type
customarily covered by comfort letters as the holders of a majority of
the Registrable Securities being sold reasonably request; and

        (n) provide a legal opinion of the Company’s outside counsel
addressed to each holder (in form or substance satisfactory to each such
holder and its counsel) of Registrable Securities included in such
registration, dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering,
dated the date of the closing under the underwriting agreement), with
respect to the registration statement, each amendment and supplement
thereto, the prospectus included therein (in-

-11-

 

cluding the preliminary
prospectus) and such other documents relating thereto in customary form
and covering such matters of the type customarily covered by legal
opinions of such nature; provided, however, that nothing contained herein
shall prohibit the Company from abandoning or discontinuing its efforts
to register its securities, unless such registration is being effected in
accordance with the provisions of Section 5(a).

               8. Registration Expenses. The Company will pay all expenses incident to
the Company’s performance of or compliance with Sections 5, 6 and 7 of this
Agreement, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, listing fees,
printing expenses, messenger and delivery expenses, and fees and disbursements
of counsel for the Company and its independent certified public accountants,
and underwriters’ fees and expenses (excluding discounts and commissions, which
shall be paid by the holders selling the Registrable Securities) and all other
Persons retained by the Company, as well as the fees and expenses of one legal
counsel retained by the holders of a majority of the Registrable Securities
included in such registration statement (which, if such registration statement
includes Registrable Securities of any Institutional Investor, shall be
selected by such Institutional Investors) (all such expenses being collectively
referred to herein as “Registration Expenses”).

               9. Indemnification. (a) The Company agrees to indemnify and hold
harmless, to the extent permitted by law, each holder of Registrable
Securities, its officers and directors and each Person who controls such holder
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities, joint or several, to which such holder or any such director or
officer or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based upon (i) any untrue or alleged untrue statement of material
fact contained (A) in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or (B) in any application or other document
or communication (in this Section 9 collectively called an “application”)
executed by or on behalf of the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify any securities covered by such registration statement under the “blue
sky” or securities laws thereof, or (ii) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will reimburse such holder and each
such director, officer and controlling person for any legal or any other
expenses incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon an untrue
statement or omission made in such registration statement, any such prospectus
or preliminary prospectus or any amendment or supplement thereto, or in any
application, in reliance upon, and in conformity with, written information
prepared and furnished to the Company by such holder expressly for use therein
or by such holder’s failure to deliver a copy of the prospectus or any
amendments or supplements thereto after the Company has furnished such holder
with a sufficient number of copies of the same. In connection with an
underwritten offering, the Company will indemnify such underwriters, their
officers and directors and each Person who controls such

-12-

 

underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities.

               (b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, will indemnify and hold
harmless the Company, its directors and officers and each other Person who
controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities, to which the Company or any such director
or officer or controlling person may become subject under the Securities Act or
otherwise, to the extent that such losses, claims, damages or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof)
result from (i) any untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or in any application, (ii) any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only in the case of clauses (i) and (ii) to the
extent that such untrue statement or omission is made in such registration
statement, any such prospectus or preliminary prospectus or any amendment or
supplement thereto, or in any application, in reliance upon and in conformity
with written information prepared and furnished to the Company by such holder
expressly for use therein, or (iii) the failure by such holder of Registrable
Securities to deliver a prospectus to the extent required under the Securities
Act but only if the Company shall have complied with its obligation under this
Agreement to provide such holder with such a prospectus. The liability of each
holder pursuant to this paragraph shall be limited to the amount equal to the
aggregate net proceeds (after deducting underwriting discounts and commissions
but before deducting any other expenses incident to the consummation of the
transactions contemplated by this paragraph) to such holder from the sale of
Registrable Securities by it in such offering.

               (c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification but the failure to provide notice as is required by this
sentence shall not relieve the indemnifying party of its obligations hereunder
except to the extent that the failure to provide such notice has prejudiced
such indemnifying party in any material respect and (ii) unless in such
indemnified party’s reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim or
unless in the indemnified party’s reasonable judgment there may be one or more
legal defenses available to it that are different from or additional to those
available to any such indemnifying party, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its consent
(but such consent will not be unreasonably withheld). An indemnifying party
who is not entitled to, or elects not to, assume the defense of a claim will
not be obligated to pay the fees and expenses of more than one counsel (in
addition to any required local counsel) for all parties indemnified by such
indemnifying party as well as one additional counsel (in addition to any
required local counsel) for all Institutional Investors and their Related
Transferees to the extent any of them may be an indemnified party hereunder
with respect to such claim, unless in the reasonable judgment of any
indemnified party

-13-

 

a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim.

               (d) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities. The Company or
the holders of Registrable Securities also agrees to make such provisions, as
are reasonably requested by any indemnified party, for contribution to such
party in the event the Company’s or the holders of Registrable Securities
indemnification is unavailable for any reason.

               10. Participation in Underwritten Registrations. (a) No Person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person’s securities on the basis provided in any
underwriting arrangements approved by the Company (including, without
limitation, pursuant to the terms of any over-allotment or “green shoe” option
requested by the managing underwriter(s), except that no holder of Registrable
Securities will be required to sell more than the number of Registrable
Securities that such holder has requested the Company to include in any
registration), (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements; provided, however,
that no holder of Registrable Securities included in any underwritten
registration will be required to make any representations or warranties to the
Company or the underwriters other than representations and warranties regarding
such holder and such holder’s intended method of distribution, due and valid
execution of any agreements relating to such offering, and good title to, and
the absence of liens or encumbrances on, any Registrable Securities to be sold
by such Stockholders in such registration, and to the extent that any
underwriter or underwriters may require any Stockholder to make additional
representations and warranties which all of the other participants in such
underwritten offering have agreed to make (unless any such representation or
warranty is not applicable to such Stockholder’s ownership), then such
Stockholder will not be permitted to participate in such registration unless
such Stockholder agrees to make the same representations and warranties, (iii)
timely furnishes to the Company and/or the underwriters managing such
registration, all information regarding such holder, the Registrable Securities
held by such holder and its intended method of distribution of such Registrable
Securities as the Company or such underwriters reasonably request, and (iv)
agrees (and such holder hereby agrees) to notify the Company and/or any
underwriter managing such registration of any untrue statement of material fact
contained in the prospectus in connection with such registration or any
omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is made in such prospectus in
reliance upon and in conformity with written information prepared and furnished
to the Company by such holder expressly for use therein. Any indemnities
required to be delivered pursuant to clause (ii) shall be limited with respect
to each person to the amount equal to the aggregate net proceeds (after
deducting underwriting discounts and commissions but before deducting any other
expenses incident to the consummation of the transactions contemplated by this
paragraph) to such holder from the sale of Registrable Securities by it in such
offering.

-14-

 

               (b) Each Person that is participating in any Registration hereunder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 7(e), such Person will forthwith discontinue
the disposition of its Registrable Securities pursuant to the registration
statement until such Person’s receipt of the copies of a supplemented or
amended prospectus as contemplated by Section 7(e). In the event the Company
will give any such notice, the applicable time period mentioned in Section 7(b)
during which a Registration Statement is to remain effective will be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to this Section 10(b) to and including the date
when each seller of a Registrable Security covered by such registration
statement will have received the copies of the supplemented or amended
prospectus contemplated by Section 7(e).

               11. Further Assurances. Each party hereto or person subject hereto shall
do and perform or cause to be done and performed all such further acts and
things and shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party hereto or person subject hereto
may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, compliance with all
applicable laws and regulations.

               12. Term. This Agreement shall terminate, and be of no further force or
effect, automatically without any further action on the part of any parties
hereto, upon the earliest of (a) the tenth anniversary of the Effective Time,
(b) a sale of all or substantially all of the assets or Capital Stock of the
Company to a Person that is not an Affiliate of the Company (whether by merger,
consolidation, sale of assets or Capital Stock or otherwise) or (c) upon the
agreement of holders of 75% of the Common Stock subject to this Agreement
(including the agreement of Institutional Investors holding not less than 75%
of the shares of Common Stock held by all Institutional Investors).

               13. Definitions. Capitalized terms set forth below shall have the
following meanings. Certain other capitalized terms may be defined elsewhere
in the text of this Agreement and, unless otherwise indicated, shall have such
meaning throughout this Agreement:

               “Affiliate” of a Person means any other Person directly or indirectly
through one or more intermediaries controls, is controlled by or is under
common control with such Person. The term “control” shall mean, as applied to
any Person, the possession directly or indirectly of the power to direct or
cause the direction of the management of such Person through the ownership of
voting securities or otherwise and the terms “controlling” and “controlled”
have the correlative meanings.

               “Agreement” shall have the meaning ascribed to such term in the Preamble
to this Agreement.

               “Albion I” shall have the meaning ascribed to such term in the Preamble to
this Agreement.

               “Albion II” shall have the meaning ascribed to such term in the Preamble
to this Agreement.

-15-

 

               “Albion Observer” shall have the meaning ascribed to such term in Section
2(e).

               “Associated Entities” means (1) members in [TIP], (2) employees of CIBC or
Caravelle or any of their Affiliates, (3) any Affiliate or associate of any
such members or employees, (4) any investor in the [TIP] program that has
co-investment rights or (5) any combination of the persons named in the
immediately preceding clauses (1), (2), (3), or (4).

               “Audit Committee Expert” shall have the meaning ascribed to such term in
Section 2(b)(iii).

               “Board” shall have the meaning ascribed to such term in Section 2(a)(i).

               “Caravelle” shall have the meaning ascribed to such term in the Preamble
to this Agreement.

               “CIBC” shall have the meaning ascribed to such term in the Preamble to
this Agreement.

               “Commission” means the United States Securities and Exchange Commission
and any successor federal agency administering the Securities Act.

               “Common Stock” shall have the meaning ascribed to such term in the
Recitals to this Agreement.

               “Company” shall have the meaning ascribed to such term in the Preamble to
this Agreement.

               “Current Market Value” means, for any security, the average of the last
reported sales prices of such class of security for the ten consecutive trading
days ending on the most recent trading day prior to the date of the notice of
Demand Registration (or, if such sales prices are not readily available, the
average closing “bid” prices for the ten consecutive trading days ending on the
trading day prior to such date).

               “Demand Registration” shall have the meaning ascribed to such term in
Section 5(a).

               “DGCL” means the Delaware General Corporation Law, as the same may
hereafter be amended from time to time.

               “Effective Time” shall have the meaning ascribed to such term in the
Recitals to this Agreement.

               “Exchange Act” means the Securities Exchange Act of 1934 and all rules,
regulations and orders issued thereunder, as any of the same may be amended.

               “Excluded Stockholders” means Adam Gottlieb, David Riesmeyer and Lee
Swafford.

-16-

 

               “Independent Nominee” shall have the meaning ascribed to such term in
Section 2(b)(i).

               “Individual Investors” shall have the meaning ascribed to such term in the
Preamble to this Agreement.

               “Institutional Investors” shall have the meaning ascribed to such term in
the Preamble to this Agreement.

               “IPO” shall have the meaning ascribed to such term in the Recitals to this
Agreement.

               “Managed Funds” means, with respect to Albion I or Albion II, any
Affiliate or associate or fund managed by it.

               “Minimum Value” shall have the meaning ascribed to such term in Section
5(a).

               “Original Stockholders’ Agreement” shall have the meaning ascribed to such
term in the Recitals to this Agreement.

               “Person” means any individual, partnership, corporation, limited liability
company, trust, joint venture, unincorporated organization or other entity.

               “Piggyback Registration” shall have the meaning ascribed to such term in
Section 6(a).

               The terms “register”, “registered” and “registration” refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement by the Commission.

               “Registrable Securities” means (i) any Common Stock, (ii) any common stock
or other equity securities of the Company issued or issuable directly or
indirectly with respect to the securities referred to in clause (i) by way of
stock dividend, stock conversion or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization and (iii) any Successor Securities
thereof, all to the extent held by a Stockholder, or any transferee thereof.

               “Registration Expenses” shall have the meaning ascribed to such term in
Section 8.

               “Related Person” means, with respect to any Individual Investor, any
individual related by blood or marriage (no more remote than first cousin) to
such Individual Investor.

               “Related Transferee” means

        (1) in the case of any Institutional Investor, any Affiliate,
Associated Entity or Managed Fund of such Institutional Investor, and

-17-

 

        (2) in the case of any Individual Investor, (a) any other Individual
Investor, (b) any Affiliate or (c) a Related Person of such Individual
Investor or a trust or similar entity which is controlled by such
Individual Investor and is established entirely for the benefit of such
Individual Investor or his Related Persons, or an individual retirement
account or pension plan for the Individual Investor’s benefit (each
Individual Investor agrees to provide the Company and each other
Stockholder, upon request, with evidence reasonably acceptable to it that
such Transfer complies with this clause (c)).

               “SEC” shall have the meaning ascribed to such term in Section
2(a)(i).

               “Securities Act” means the Securities Act of 1933 and all rules,
regulations and orders issued thereunder, as any of the same may be amended
from time to time.

               “Stockholders” shall have the meaning ascribed to such term in the
Preamble to this Agreement.

               “Subsidiary” of any specified Person means any corporation, partnership,
limited liability company, joint venture, association or other business entity,
whether now or hereafter existing or hereafter organized or acquired,

        (i) in the case of a corporation, of which more than 50% of the
total voting power of the Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
officers or trustees thereof is held by such first-named Person or any of
its Subsidiaries; or

        (ii) in the case of a partnership, limited liability company, joint
venture, association or other business entity, with respect to which such
first-named Person or any of its Subsidiaries has the power to direct or
cause the direction of the management and policies of such entity by
contract or otherwise or if in accordance with generally accepted
accounting principles such entity is consolidated with the first-named
Person for financial statement purposes.

               “Successor Securities” means any securities of the Company or any
successor Person (by merger, consolidation, operation of law or otherwise)
which shall have been issued in exchange for the Common Stock or into which the
Common Stock shall have been converted (by reclassification, recapitalization,
merger, consolidation or otherwise).

               “TIP” shall have the meaning ascribed to such term in the Preamble to this
Agreement.

               “TIP Designators” shall have the meaning ascribed to such term in Section
2(b)(i).

               “TIP Nominees” shall have the meaning ascribed to such term in Section
2(b)(i).

               “Transfer” (or any correlative term) means with respect to any share of
Common Stock, any sale, transfer, assignment or other disposition of such share
of Common Stock.

-18-

 

               14. Miscellaneous.

               (a) Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved in writing by (i) a majority-in-interest of the
Individual Investors and (ii) a majority-interest of the Institutional
Investors; provided that no such amendment or waiver that has a materially
disproportionate effect on any Stockholder shall be effective unless approved
in writing by the Stockholder(s) so affected. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.

               (b) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.

               (c) Entire Agreement. Except as otherwise expressly set forth herein,
this document embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.

               (d) Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall bind and inure to the benefit of and be
enforceable by the respective successors, personal representatives and assigns
of the parties hereto whether or not expressed.

               (e) Reorganization, etc. The provisions of this Agreement shall apply
mutatis mutandis to any shares or other securities resulting from any stock
split or reverse split, stock dividend, reclassification, subdivision,
consolidation or reorganization of any shares or other securities of the
Company and to any shares or other securities of the Company or of any
successor company which may be received by any of the parties hereto by virtue
of their respective ownership of any shares of Capital Stock of the Company.

               (f) Counterparts. This Agreement may be executed in separate
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Agreement, but the failure to deliver a manually executed
counterpart of this Agreement shall not effect the delivery, enforceability or
binding effect of this Agreement.

               (g) Remedies. The Company and the Stockholders shall be entitled to
enforce their rights under this Agreement specifically to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties

-19-

 

hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that the Company and any Stockholder may in
its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
a bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.

               (h) Notice. All notices, demands or other communication to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, transmitted via telefacsimile, sent to the recipient by reputable
express courier service (charges prepaid) or mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid.
Such notices, demands and other communications shall be sent to the Company at
the address or fax number indicated below, with a copy to Cahill Gordon &
Reindel LLP, 80 Pine Street, New York, New York 10005, Attention: Roger
Meltzer, Esq., and to any other recipient at the address indicated on Exhibit A
hereto and to any subsequent holder of shares of Common Stock subject to this
Agreement at such address as indicated by the Company’s records, or at such
address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. The Company’s address
is:

Transportation Technologies Industries, Inc.

980 North Michigan Avenue

Suite 1000

Chicago, IL 60611

Attention: General Counsel

Fax No.: (312) 280-4820

               (i) Governing Law. All questions concerning the relative rights of the
Company and its Stockholders and the construction, validity and interpretation
of this Agreement and the exhibits and schedules hereto shall be governed by
and construed in accordance with the domestic laws of the State of Delaware, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Delaware
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.

               (j) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

[signature pages follow]

-20-

 

               IN WITNESS WHEREOF, the parties hereto have executed this Stockholders’
Agreement on the day and year first above written.

	 	 	 	 	 
	 	 	INSTITUTIONAL INVESTORS
	 
	 	 	 	 
	 	 	TRANSPORTATION INVESTMENT PARTNERS, L.L.C.
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	CARAVELLE INVESTMENT FUND, L.L.C.
	 
	 	 	 	 
	

	 	By:
	 	Trimaran Advisors, L.L.C., its
investment manager and
attorney-in-fact
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ALBION ALLIANCE MEZZANINE FUND, L.P.
	 
	 	 	 	 
	

	 	By:
	 	Albion Alliance LLC, its general partner
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ALBION ALLIANCE MEZZANINE FUND II, L.P.
	 
	 	 	 	 
	

	 	By:
	 	AA MEZZ II GP, LLC, its general partner
	 
	 	 	 	 
	

	 	By:
	 	Albion Alliance LLC, its sole member
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 

S-1

 

	 	 	 	 	 
	 	 	CIBC INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	HESED FOUNDATION
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:

S-2

 

	 	 	 
	

	 	INDIVIDUAL INVESTORS
	 
	 	 
	

	 	THOMAS M. BEGEL:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	CAMILLO M. SANTOMERO III:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	FRED CULBREATH:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	JOE HICKS:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	JAMES D. CIRAR:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	ANDREW M. WELLER:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	KENNETH M. TALLERING:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	JOHN WILKINSON:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	TIM MASEK:
	 
	 	 
	

	 	
 

S-3

 

	 	 	 
	

	 	ROBERT JACKSON:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	DONALD C. MUELLER:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	LEE SWAFFORD:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	KELLY BODWAY:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	DAVID REISMEYER:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	BRENT WILLIAMS:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	JEFFREY ELMER:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	ADAM GOTTLIEB:
	 
	 	 
	

	 	
 
	 
	 	 
	

	 	STEVEN SHULMAN:
	 
	 	 
	

	 	
 

S-4

 

	 	 	 	 	 
	 	 	COMPANY
	 
	 	 	 	 
	 	 	TRANSPORTATION TECHNOLOGIES INDUSTRIES,
INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:

S-5FORM OF STOCK OPTION AGREEMENT

 

Exhibit 10.4

[Form of]

Transportation Technologies Industries, Inc.

Stock Option Agreement

          THIS
STOCK OPTION AGREEMENT (this “Agreement”) is made and entered into
this    day of August, 2004 by and between Transportation Technologies
Industries, Inc., a Delaware corporation (the “Company”), and [
] (the “Option Holder”).

          WHEREAS, the Option Holder has been designated by the Compensation
Committee of the Board of Directors of the Company (the “Committee”) to
participate in the 2004 Long Term Incentive and Share Award Plan (the
“Plan”)
(capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Plan);

          NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the Company
and the Option Holder agree as follows:

          (a) Grant. Pursuant to the provisions of the Plan, all of the terms of
which are incorporated herein by reference unless otherwise provided herein,
the Company hereby grants to the Option Holder an option (the “Option”) to
purchase [ ] shares of the Company’s common stock (the “Common
Stock”). The Option is granted as of August [17],
2004 (the “Date of Grant”),
and such grant is subject to all of the terms and conditions herein and to all
of the terms and the conditions of the Plan, provided that, in the event of a
conflict between the Plan and this Agreement, the terms of this Agreement shall
govern. The Option is intended to be non-qualified, and is not intended to be
an incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended.

          (b) Exercise Price. The exercise price of the shares subject to the
Option shall be equal to the per share price at the time of the consummation of
the Company’s initial public offering, subject to adjustment as provided in the
Plan.

          (c) Term of Option. The Option may, subject to the vesting and
termination provisions of paragraphs (d) and (e) below, be exercised only
during the period commencing on the Date of Grant and continuing until the
close of business on tenth anniversary of the Date of Grant (the “Option
Period”). At the end of the Option Period, the Option shall terminate, unless
sooner terminated pursuant to paragraph (e) below.

          (d) Vesting. The Option Holder’s right to purchase shares of Common Stock
under the Option shall be exercisable only to the extent that the Option has
vested. Subject to subparagraph (g) below, the Option shall vest and become
exercisable upon the following schedule (provided the Option Holder remains in
the employ of the Company on the applicable vesting date):

	 	(i)	 	one-third (1/3) of the shares
subject to the Option vest on the first anniversary of
the Date of Grant;

 

 

 2 

	 	(ii)	 	an additional one-third (1/3) of
the shares subject to the Option vest on the second
anniversary of the Date of Grant; and
	 
	 	(iii)	 	the final one-third (1/3) of the
            shares subject to the Option vest on the third
anniversary of the Date of Grant.
	 
	 	(iv)	 	In addition, the Option shall vest
and become exercisable upon a termination by the
Company without Cause (as defined in Appendix A) or a
termination by the Option Holder for Good Reason (as
defined in Appendix A).1

          (e) Termination of Employment. If the employment of the Option Holder
terminates for any reason other than a Qualifying Termination (as defined
below) during the Option Period, the Option shall immediately terminate. If
the employment of the Option Holder terminates by reason of a Qualifying
Termination during the Option Period, the Option shall be exercisable only to
the extent that it was exercisable on the date of the Option Holder’s
termination of employment and shall terminate on the earlier of (i) the first
anniversary of the date of the Option Holder’s termination of employment or
(ii) the end of the Option Period. For purposes of this Agreement, the term
“Qualifying Termination” shall mean a termination of the Option Holder’s
employment by reason of the Option Holder’s death, Disability (as defined in
Appendix A) or Retirement (as defined in Appendix A), a termination by the
Company without Cause (as defined in Appendix A) or a termination by the Option
Holder for Good Reason (as defined in Appendix A).2

          (f) Exercise of Option. In order to exercise the Option, the Option
Holder shall submit to the Secretary of the Company an instrument in writing
specifying the number of shares of Common Stock in respect of which the Option
is being exercised, accompanied by payment, in a manner acceptable to the
Committee, of the exercise price of the shares in respect of which the Option
is being exercised. Shares shall then be issued by the Company and a share
certificate delivered to the Option Holder; provided, however, that the Company
shall not be obligated to issue any Shares hereunder if the issuance of such
Shares would violate the provisions of any applicable law.

          (g) Change of Control. In the event of a Change of Control (as defined in
the Plan), the Option shall become fully vested and exercisable.

	1	 	This sub-provision shall not be included in the option agreements of Option
Holders who are not party to employment agreements with the Company.
	 
	2	 	For Option Holders (a) other than Begel, Weller, Cirar, Mueller and Tallering
and (b) who are not party to an employment agreement with the Company, the
definition of “Qualifying Termination” shall be limited to a termination of the
Option Holder’s employment by reason of the Option Holder’s death or Retirement
(as defined in Appendix A).

 

 

 3 

          (h) Non-Transferable. The Option may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the laws of
descent.

          (i) References. References herein to rights and obligations of the Option
Holder shall apply, where appropriate, to the Option Holder’s legal
representative or guardian without regard to whether specific reference to such
legal representative or guardian is contained in a particular provision of this
Agreement or the Plan.

          (j) Taxes. The Option Holder shall be responsible for all taxes required
to be paid under applicable tax laws with respect to the Option.

          (k) Entire Agreement. This Agreement contains all the understandings
between the parties hereto pertaining to the matters referred to herein, and
supersedes all undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto. The Option Holder
represents that, in executing this Agreement, he does not rely and has not
relied upon any representation or statement not set forth herein made by the
Company with regard to the subject matter, bases or effect of this Agreement or
otherwise.

          (l) Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing,
and is signed by both the Option Holder and a duly authorized officer of the
Company. No waiver by any party hereto of any breach by another party hereto
of any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same time, any prior time or any subsequent time.

          (m) Notices. Any notice to be given hereunder shall be in writing and
shall be deemed given hereunder when delivered personally, sent by courier or
telecopy or registered or certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or
to such other address as such party may subsequently give notice of hereunder
in writing:

          To Option Holder at:

[                    ]

c/o Transportation Technologies Industries, Inc.

980 North Michigan Avenue

Suite 1000

Chicago, IL 60611

          To the Company at:

Transportation Technologies Industries, Inc.

980 North Michigan Ave.

Suite 1000

Chicago, IL 60611

Attention: Secretary

 

 

 4 

          Any notice delivered personally or by courier under this paragraph (m)
shall be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.

          (n) Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable, shall not be affected thereby, and each provision
hereof shall be validated and shall be enforced to the fullest extent
permitted by law.

          (o) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
conflicts of laws principles.

          (p) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

 

 5 

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year set forth above.

	 	 	 	 	 
	 	 	TRANSPORTATION TECHNOLOGIES
INDUSTRIES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	OPTION HOLDER:
	 
	 	 	 	 
	 	 	
 
	 	 	Name: [                    ]

 

 

APPENDIX A3

For purposes of this Agreement:

1. “Disability” means that, in the written opinion of a qualified physician
selected by the Company, the Option Holder shall become unable to perform his
duties hereunder due to physical or mental illness that continues for one year.

2. “Cause” means

	 	(i)	 	the willful and continuous neglect
or refusal to perform the Option Holder’s duties or
responsibilities, or the willful taking of actions (or
willful failures to take actions) that materially
impair the Option Holder’s ability to perform his
duties or responsibilities that in each case continues
after being communicated in writing to the Option
Holder (other than any such failure resulting from the
Option Holder’s incapacity due to physical or mental
illness or any such actual or anticipated failure after
the issuance of a written notice of termination of the
Option Holder’s employment by the Company; or
	 
	 	(ii)	 	any act by the Option Holder that
constitutes gross negligence or willful misconduct in
the performance of his duties hereunder, or the
conviction of the Option Holder for any felony, in each
case which is materially and manifestly injurious to
the Company and which is brought to the attention of
the Option Holder in writing not more than thirty days
from the date of its discovery by the Company or the
Board of Directors of the Company (the “Board”).

          For purposes of this definition, no act, or failure to act, on the Option
Holder’s part shall be considered “willful,” unless done, or omitted to be
done, by him not in good faith or without reasonable belief that his action or
omission was in the best interest of the Company. Any act, or fail-

	3	 	The definitions of the terms
“Disability,” “Cause,” and
“Good Reason” in this
Appendix A may differ for Option Holders (a) other than Begel, Weller,
Cirar, Mueller and Tallering and (ii) who are party to an employment
agreement with the Company, depending on the definitions of such terms in
each Option Holder’s respective employment agreement. The definitions of
the terms “Disability,” “Cause,”
and “Good Reason” in this Appendix A
shall not be included in the option agreements of Option Holders who are
not party to employment agreements with the Company.

 

 

 2 

ure to act, based upon the direction or instruction of the Board pursuant
to a resolution duly adopted by the Board or based upon the advice of counsel
for the Company shall be presumed to be done, or omitted to be done, in good
faith and in the best interests of the Company absent knowledge by the Option
Holder the contrary. Notwithstanding the foregoing, the Option Holder shall
not be deemed to have been terminated for Cause without (1) written notice to
the Option Holder specifying in detail the specific reasons for the Company’s
intention to terminate for Cause, (2) an opportunity for the Option Holder,
together with his counsel, to be heard before the Board, (3) with respect to
actions or inaction specified in paragraph (i) above, a reasonable opportunity
for the Option Holder to cure the action or inaction specified by the Company
and (4) delivery to the Option Holder of a written notice of termination of the
Option Holder’s employment by the Company.

3. “Good Reason” means, without the Option Holder’s express written consent,
the occurrence of any of the following circumstances unless such circumstances
are fully corrected prior to the date of termination of employment (which date
shall not be less than twenty (20) nor more than thirty (30) days from the date
of the issuance of a written notice of termination of the Option Holder’s
employment by the Company) specified in such written notice of termination
given in respect thereof: (A) a material change in the Option Holder’s
position, duties, responsibilities (including reporting responsibilities) or
authority (except during periods when the Option Holder is unable to perform
all or substantially all of the Option Holder’s duties and/or responsibilities
on account of the Option Holder’s illness (either physical or mental) or other
incapacity), which, in the Option Holder’s reasonable judgment, represent an
adverse change, (B) a reduction in either the Option Holder’s annual rate of
base salary or level of participation in any bonus plans for which he is
eligible, (C) failure to provide facilities or services that are suitable as
determined by the Board to the Option Holder’s position and adequate for the
performance of the Option Holder’s duties and responsibilities, including the
failure to maintain the Chicago office (or comparable office facilities so long
as the Option Holder does not have to relocate outside the city of Chicago,
Illinois), without the prior written consent of the Option Holder, (D) any
purported termination by the Company of the Option Holder’s employment that is
not effected pursuant to a written notice of termination of the Option Holder’s
employment by the Company or (E) failure of any successor (by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to become liable for the performance of the Option
Holder’s employment agreement with the Company by assumption or by operation of
law or otherwise. The Option Holder’s right to terminate employment pursuant
to this definition shall not be affected by the Option Holder’s incapacity due
to physical or mental illness.

4. “Retirement” shall have the same meaning ascribed to such term in the
corporate policy and/or relevant document of the Option Holder’s employment
entity.

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