Document:

exv4w1xcy

 

Exhibit 4.1(c)

 

REGISTRATION RIGHTS AGREEMENT

Dated as of May 5, 2006

by and among

Rural Cellular Corporation

as Issuer,

the Guarantors

and

Lehman Brothers Inc.,

Morgan Stanley & Co. Incorporated

and

Lazard Capital Markets

as the Initial Purchasers

 

 

 

          This Registration Rights Agreement (this “Agreement”) is dated as of May 5, 2006, by and among
Rural Cellular Corporation, a Minnesota corporation (the “Company”), RCC Atlantic, Inc., RCC
Atlantic Licenses, Inc., RCC Minnesota, Inc., TLA Spectrum, LLC, RCC Transport, Inc., Alexandria
Indemnity Corporation (collectively, the “Guarantors”) and Lehman Brothers Inc., Morgan Stanley &
Co. Incorporated and Lazard Capital Markets (each, an “Initial Purchaser” and, collectively, the
“Initial Purchasers”), each of whom has agreed to purchase the $160,000,000 in aggregate principal
amount of the Company’s 81/4% Senior Secured Notes due March 15, 2012 (the “Notes”), which Notes are
guaranteed by the Guarantors (the “Guarantees”), in each case, pursuant to the Purchase Agreement
(as defined below). The Notes and the Guarantees are referred to together as the “Securities”.

          This Agreement is made pursuant to the Purchase Agreement, dated as of April 26, 2006 (the
“Purchase Agreement”), by and among the Company, the Guarantors and the Initial Purchasers. In
order to induce the Initial Purchasers to purchase the Securities, the Company has agreed to
provide the registration rights set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 5(j) of
the Purchase Agreement. Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Indenture, dated as of March 25, 2004, and as supplemented by the
Supplemental Indenture, dated as of July 29, 2004 (the “Indenture”), among the Company, the
Guarantors and U.S. Bank National Association, as Trustee (the “Trustee”), relating to the
Securities and the Exchange Securities (as defined below).

          The parties hereby agree as follows:

SECTION 1. DEFINITIONS

          As used in this Agreement, the following capitalized terms shall have the following meanings:

          Act: The U.S. Securities Act of 1933.

          Affiliate: As defined in Rule 144 of the Act.

          Broker-Dealer: Any broker or dealer registered under the Exchange Act.

          Closing Date: The date of this Agreement.

          Commission: The U.S. Securities and Exchange Commission.

          Consummate: An Exchange Offer shall be deemed “Consummated” for purposes of this Agreement
upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer
Registration Statement relating to the Exchange Securities to be issued in the Exchange Offer, (b)
the maintenance of such Exchange Offer Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period required pursuant
to Section 3(b) hereof and (c) the delivery by the Company to the Registrar under the Indenture of

 

 

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Exchange Securities in the same aggregate principal amount as the aggregate principal amount
of Securities of like class tendered by Holders thereof pursuant to the Exchange Offer.

          Consummation Deadline: As defined in Section 3(b) hereof.

          Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.

          Exchange Act: The U.S. Securities Exchange Act of 1934.

          Exchange Offer: The offer to exchange New Securities (whose issuance shall be registered
pursuant to the Exchange Offer Registration Statement) for a like outstanding principal amount of
Securities that are tendered by the Holders thereof.

          Exchange Offer Registration Statement: The Registration Statement relating to the Exchange
Offer, including the related Prospectus.

          Exempt Resales: The transactions in which the Initial Purchasers propose to sell the
Securities to certain “qualified institutional buyers,” as such term is defined in Rule 144A under
the Act, and pursuant to Regulation S under the Act.

          Exchange Securities: The New Securities whose issuance is registered under the Act, to be
issued pursuant to the Indenture (a) in the Exchange Offer or (b) as contemplated by Section 4
hereof.

          Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.

          Holders: As defined in Section 2 hereof.

          Interest Payment Date: Each March 15 and September 15, commencing on September 15, 2006.

          New Securities: The Company’s Series B 8 1/4 % Senior Secured Notes due 2012 and the guarantees
of the Guarantors thereof.

          Person: As defined in the Indenture.

          Prospectus: The prospectus included in a Registration Statement at the time such Registration
Statement is declared effective, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.

          Recommencement Date: As defined in Section 6(e) hereof.

          Registration Default: As defined in Section 5 hereof.

          Registration Statement: Any registration statement of the Company relating to (a) an offering
of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf

 

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Registration Statement, in each case (i) that is filed pursuant to the provisions of this
Agreement and (ii) including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material incorporated by
reference therein.

          Regulation S: Regulation S promulgated under the Act.

          Rule 144: Rule 144 promulgated under the Act.

          Shelf Registration Statement: As defined in Section 4(a) hereof.

          Suspension Notice: As defined in Section 6(e) hereof.

          TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on
the date of the Indenture.

          Transfer Restricted Securities: Each Security, until the earliest to occur of (a) the date on
which such Security has been exchanged by a Person other than a Broker-Dealer for an Exchange
Security in the Exchange Offer, (b) following the exchange by a Broker-Dealer in the Exchange Offer
of a Security for an Exchange Security, the date on which such Exchange Security is sold to a
purchaser who receives from such Broker-Dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement, (c) the date on which such
Security has been effectively registered under the Act and disposed of in accordance with the Shelf
Registration Statement, (d) the date on which such Security is distributed to the public pursuant
to Rule 144 under the Act, or is saleable pursuant to Rule 144(k) under the Act (or similar
provision then in effect), or (e) the date on which such Security ceases to be outstanding;
provided, however, that for purposes of this Agreement (other than Section 9 hereof), Securities
with respect to which the Company has caused to be filed and declared effective an Exchange Offer
Registration Statement and has Consummated an Exchange Offer, in each case pursuant to and in
accordance with Section 3 hereof, and which have not been tendered by the date such Exchange Offer
is Consummated by the holder thereof shall not be deemed to be Transfer Restricted Securities,
except to the extent the holder thereof provides the notice contemplated by Section 4(a)(ii).

          Underwritten Registration or Underwritten Offering: A registration in which securities of the
Company and/or the Guarantors are sold to an underwriter for reoffering to the public.

SECTION 2. HOLDERS

          A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”)
whenever such Person owns Transfer Restricted Securities.

SECTION 3. REGISTERED EXCHANGE OFFER

          (a) Unless the Exchange Offer shall not be permitted by applicable law or Commission policy
(after the procedures set forth in Section 6(a)(iii)(A) below

 

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have been complied with), the Company and the Guarantors shall (i) cause the Exchange Offer
Registration Statement to be filed with the Commission on or prior to 180 days after the Closing
Date (the “Filing Deadline”), (ii) use their commercially reasonable efforts to cause such Exchange
Offer Registration Statement to become effective on or prior to 60 days after the Exchange Offer
Registration Statement is filed (the “Effectiveness Deadline”), (iii) in connection with the
foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as
may be reasonably necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under
the Act and (C) cause all necessary filings, if any, in connection with the registration and
qualification of the Exchange Securities to be made under the Blue Sky laws of such jurisdictions
as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of
such Exchange Offer Registration Statement, commence, and use their commercially reasonable efforts
to Consummate, the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting
(I) registration of the Exchange Securities to be offered in exchange for the Securities that are
Transfer Restricted Securities and (II) resales of Exchange Securities by Broker-Dealers that
tendered into the Exchange Offer Securities that such Broker-Dealer acquired for its own account as
a result of market making activities or other trading activities (other than Securities acquired
directly from the Company or any Affiliate of the Company) as contemplated by Section 3(c) below.

          (b) The Company and the Guarantors shall use their commercially reasonable efforts to cause
the Exchange Offer Registration Statement to be effective continuously, and shall keep the Exchange
Offer open for a period of not less than the minimum period required under applicable federal and
state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall cause the Exchange
Offer to comply with all applicable federal and state securities laws. No securities other than
the Exchange Securities shall be included in the Exchange Offer Registration Statement. The
Company and the Guarantors shall use their commercially reasonable efforts to cause the Exchange
Offer to be Consummated no later than 30 Business Days after the Exchange Offer Registration
Statement is declared effective (the “Consummation Deadline”).

          (c) The Company and the Guarantors shall include a “Plan of Distribution” section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate therein that any
Broker-Dealer who holds Transfer Restricted Securities that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company or any Affiliate of the Company),
may exchange such Transfer Restricted Securities pursuant to the Exchange Offer. Such “Plan of
Distribution” section shall also contain all other information with respect to such sales by such
Broker-Dealers that the Commission may require in order to permit such sales pursuant thereto, but
such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of
Transfer Restricted Securities held by any such

 

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Broker-Dealer, except to the extent required by the Commission as a result of a change in
policy, rules or regulations after the date of this Agreement.

          Because such a Broker-Dealer may be deemed to be an “underwriter” within the meaning of the
Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection
with its initial sale of any Exchange Securities received by such Broker-Dealer in the Exchange
Offer, the Company and the Guarantors shall permit the use of the Prospectus contained in the
Exchange Offer Registration Statement by such Broker-Dealer to satisfy such prospectus delivery
requirement. To the extent necessary to ensure that the prospectus contained in the Exchange Offer
Registration Statement is available for sales of Exchange Securities by Broker-Dealers, the Company
and the Guarantors agree to use their commercially reasonable efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented, amended and current as required by and
subject to the provisions of Section 6(a) and (c) hereof and in conformity with the requirements of
this Agreement, the Act and the policies, rules and regulations of the Commission as announced from
time to time, for a period of one year from the date on which the Exchange Offer is Consummated or
such shorter period as will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company and the Guarantors shall
provide sufficient copies of the latest version of such Prospectus to such Broker-Dealers, promptly
upon request, at any time during such period.

SECTION 4. SHELF REGISTRATION

          (a) Shelf Registration. If (i) the Exchange Offer Registration Statement is not
required to be filed or the Exchange Offer is not permitted by applicable law or Commission policy
(after the Company and the Guarantors have complied with the procedures set forth in Section
6(a)(iii)(A) hereof) or (ii) any Holder of Transfer Restricted Securities shall notify the Company
and the Guarantors within 20 Business Days following the Consummation of the Exchange Offer that
(A) such Holder was prohibited by applicable law or Commission policy from participating in the
Exchange Offer, (B) such Holder may not resell the Exchange Securities acquired by it in the
Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such resales by such
Holder or (C) such Holder is a Broker-Dealer and holds Securities acquired directly from the
Company or any Affiliate of the Company, then the Company and the Guarantors shall:

               (I) cause to be filed, on or prior to 180 days after the earlier of (x) the date on which the
Company and the Guarantors determine that the Exchange Offer Registration Statement cannot be filed
as a result of clause (a)(i) of this Section and (y) the date on which the Company receives the
notice specified in clause (a)(ii) of this Section (such earlier date, the “Filing Deadline”), a
shelf registration statement pursuant to Rule 415 under the Act (which may be an amendment to the
Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”)),
relating to all Transfer Restricted Securities; and

 

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               (II) use their commercially reasonable efforts to cause such Shelf Registration Statement to
be declared effective on or prior to 60 days after the Filing Deadline for the Shelf Registration
Statement (the “Effectiveness Deadline”).

          If, after the Company and the Guarantors have filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company and the Guarantors are required
to file and make effective a Shelf Registration Statement solely because the Exchange Offer is not
permitted under applicable law or Commission policy, then the filing of the Exchange Offer
Registration Statement shall be deemed to satisfy the requirements of clause (I) above; provided
that, in such event, the Company and the Guarantors shall remain obligated to meet the
Effectiveness Deadline in the manner set forth in clause (II) above.

          To the extent necessary to ensure that the Shelf Registration Statement is available for sales
of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section
4(a) and the other securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company and the Guarantors shall use their commercially reasonable efforts to keep any
Shelf Registration Statement required by this Section 4(a) continuously effective, supplemented,
amended and current as required by and subject to the provisions of Sections 6(b) and (c) hereof
and in conformity with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at least two years
(as extended pursuant to Section 6(c)(i) hereof) following the Closing Date, or such shorter period
as will terminate when all Transfer Restricted Securities covered by such Shelf Registration
Statement have been sold pursuant thereto.

          (b) Provision by Holders of Certain Information in Connection with the Shelf Registration
Statement. No Holder of Transfer Restricted Securities may include any of its Transfer
Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and
until such Holder furnishes to the Company in writing, within 20 days after receipt of a request
therefor, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act
for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be entitled to liquidated
damages pursuant to Section 5 hereof unless and until such Holder shall have provided all such
information. By its acceptance of Transfer Restricted Securities, each Holder agrees to promptly
furnish additional information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.

SECTION 5. LIQUIDATED DAMAGES

          If (a) any Registration Statement required by this Agreement is not filed with the Commission
on or prior to the applicable Filing Deadline, (b) any such Registration Statement has not been
declared effective by the Commission on or prior to the applicable Effectiveness Deadline, (c) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline or (d) any
Registration

 

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Statement required by this Agreement is filed and declared effective but shall thereafter
cease to be effective or fail to be usable for its intended purpose during the periods in which it
is required to be effective pursuant to Section 3 or 4 without being succeeded within two Business
Days by a post-effective amendment to such Registration Statement that cures such failure and that
is itself declared effective within five Business Days after filing such post-effective amendment
to such Registration Statement (each such event referred to in clauses (a) through (d), a
“Registration Default”), then the Company and the Guarantors hereby jointly and severally agree to
pay to each Holder of Transfer Restricted Securities affected thereby liquidated damages in an
amount equal to $0.05 per week per $1,000 in principal amount of Transfer Restricted Securities
held by such Holder for the first 90-day period immediately following the occurrence of such
Registration Default. The amount of the liquidated damages shall increase by an additional $0.05
per week per $1,000 in principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of
liquidated damages of $0.50 per week per $1,000 in principal amount of Transfer Restricted
Securities; provided that the Company and the Guarantors shall in no event be required to pay
liquidated damages for more than one Registration Default at any given time. Notwithstanding
anything to the contrary set forth herein, (i) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (a) above, (ii)
upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (b) above, (iii) upon Consummation of the Exchange
Offer, in the case of (c) above, or (iv) upon the filing of a post-effective amendment to the
Registration Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable, in the case of (d) above, the liquidated damages payable with
respect to the Transfer Restricted Securities as a result of such clause (a), (b), (c) or (d), as
applicable, shall cease to accrue.

          All accrued liquidated damages shall be paid to the Holders of a class of Transfer Restricted
Securities entitled thereto, in the manner provided for the payment of interest in the Indenture,
on each Interest Payment Date for such class of Transfer Restricted Securities, as more fully set
forth in the Indenture and the Securities and the Exchange Securities. Notwithstanding the fact
that any securities for which liquidated damages are due cease to be Transfer Restricted
Securities, all obligations of the Company and the Guarantors to pay liquidated damages with
respect to securities shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.

SECTION 6. REGISTRATION PROCEDURES

          (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the
Company and the Guarantors shall (i) comply with all applicable provisions of Section 6(c) below,
(ii) use their commercially reasonable efforts to effect such exchange and to permit the resale of
Exchange Securities by any Broker-Dealer that tendered Securities in the Exchange Offer that such
Broker-Dealer acquired for its own account as a result of its market-making activities or other
trading activities (other than

 

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Securities acquired directly from the Company, the Guarantors or any Affiliate of the Company
or the Guarantors) being sold in accordance with the intended method or methods of distribution
thereof, and (iii) comply with all of the following provisions:

     (A) If, following the date hereof, there has been announced a change in Commission
policy with respect to exchange offers such as the Exchange Offer that in the reasonable
opinion of counsel to the Company raises a substantial question as to whether the Exchange
Offer is permitted by applicable federal law or Commission policy, the Company and the
Guarantors hereby agree to seek a no-action letter or other favorable decision from the
Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such
Transfer Restricted Securities. The Company and the Guarantors hereby agree to pursue the
issuance of such a decision to the Commission staff level. In connection with the
foregoing, the Company and the Guarantors hereby agree to take all such other actions as
may be requested by the Commission or otherwise required in connection with the issuance of
such decision, including without limitation (I) participating in telephonic conferences
with the Commission staff, (II) delivering to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (III) diligently pursuing a
resolution (which need not be favorable) by the Commission staff.

     (B) As a condition to its participation in the Exchange Offer, each Holder of Transfer
Restricted Securities (including, without limitation, any Holder who is a Broker-Dealer)
shall furnish, upon the request of the Company or any of the Guarantors, prior to the
Consummation of the Exchange Offer, a written representation to the Company and the
Guarantors (which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (I) it is not an Affiliate of the
Company or any of the Guarantors, (II) it is not engaged in, and does not intend to engage
in, and has no arrangement or understanding with any person to participate in, a
distribution of the Exchange Securities to be issued in the Exchange Offer, (III) it is
acquiring the Exchange Securities in its ordinary course of business and (IV) such other
representations as may be necessary under applicable Commission rules, regulations or
interpretations. Each Holder using the Exchange Offer to participate in a distribution of
the Exchange Securities will be required to acknowledge and agree that, if the resales are
of Exchange Securities obtained by such Holder in exchange for Securities acquired directly
from the Company or an Affiliate thereof, it (1) could not, under Commission policy as in
effect on the date of this Agreement, rely on the position of the Commission enunciated in
Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s
letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to clause (A) above), and
(2) must comply with the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a secondary resale transaction
must be covered by an effective

 

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registration statement containing the selling security holder information required by
Item 507 or 508, as applicable, of Regulation S-K.

     (C) Prior to effectiveness of the Exchange Offer Registration Statement, the Company
and the Guarantors shall provide a supplemental letter to the Commission (I) stating that
the Company and the Guarantors are registering the Exchange Offer in reliance on the
position of the Commission enunciated in Exxon Capital Holdings Corporation
(available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991), as
interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993,
and, if applicable, any no-action letter obtained pursuant to clause (A) above, (II)
including a representation that the Company and the Guarantors have not entered into any
arrangement or understanding with any Person to distribute the Exchange Securities to be
received in the Exchange Offer and that, to the best of the Company’s and the Guarantors’
information and belief, each Holder participating in the Exchange Offer is acquiring the
Exchange Securities in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the Exchange Securities
received in the Exchange Offer and (III) any other undertaking or representation required
by the Commission as set forth in any no-action letter obtained pursuant to clause (A)
above, if applicable;

     (D) At the completion of the Exchange Offer, each Guarantor shall affirm in writing to
the Trustee that its Guarantee applies to each Exchange Security. The Exchange Offer
Registration Statement shall state that the receipt of such affirmations is a condition to
the closing of the Exchange Offer, and the Exchange Offer shall be deemed not to have been
Consummated unless such affirmations have been made at the closing of the Exchange Offer.

          (b) Shelf Registration Statement. In connection with the Shelf Registration
Statement, the Company shall:

               (i) comply with all the provisions of Section 6(c) and (d) below and use its commercially
reasonable efforts to effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company and the Guarantors will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form under the Act, which
form shall be available for the sale of the Transfer Restricted Securities in accordance with the
intended method or methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof; and

               (ii) issue, upon the request of any Holder or purchaser of Securities covered by any Shelf
Registration Statement contemplated by this Agreement, Exchange Securities of the same class having
an aggregate principal amount equal to the aggregate principal amount of Securities sold pursuant
to the Shelf Registration Statement and surrendered to the Company for cancellation; the Company
and the

 

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Guarantors shall register the Exchange Securities on the Shelf Registration Statement for this
purpose and issue the Exchange Securities to the purchaser(s) of securities subject to the Shelf
Registration Statement in such names as the purchaser(s) shall designate.

          (c) General Provisions. In connection with any Registration Statement and any related
Prospectus required by this Agreement, the Company and the Guarantors shall:

               (i) use their commercially reasonable efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements for the period specified in Section 3 or 4
hereof, as applicable. Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact
or omit to state any material fact necessary to make the statements therein not misleading or (B)
not to be effective and usable for resale of Transfer Restricted Securities during the periods
required by this Agreement, the Company and the Guarantors shall file promptly an appropriate
amendment to such Registration Statement curing such defect, and, if Commission review is required,
use their commercially reasonable efforts to cause such amendment to be declared effective as soon
as practicable. If at any time the Commission shall issue any stop order suspending the
effectiveness of any Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws, the Company and the
Guarantors shall use their commercially reasonable efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;

               (ii) use their commercially reasonable efforts to prepare and file with the Commission such
amendments and post-effective amendments to the applicable Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable period set forth in
Section 3 or 4 hereof, as the case may be; use its commercially reasonable efforts to cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner during the applicable period; and comply with the
provisions of the Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;

               (iii) in connection with any sale of Transfer Restricted Securities that will result in such
securities no longer being Transfer Restricted Securities, cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing such Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the selling Holders may request at
least two Business Days prior to such sale of Transfer Restricted Securities;

 

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               (iv) use their commercially reasonable efforts to cause the disposition of the Transfer
Restricted Securities covered by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable the seller or sellers
thereof to consummate the disposition of such Transfer Restricted Securities; provided, however,
that none of the Company and the Guarantors shall be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and transactions relating to
the Registration Statement, in any jurisdiction where it is not now so subject;

               (v) provide a CUSIP number for all Transfer Restricted Securities not later than the effective
date of a Registration Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with the Depositary under the Indenture;

               (vi) otherwise (A) use their commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and (B) make generally available to its security holders
with regard to any applicable Registration Statement, as soon as reasonably practicable, a
consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the Registration Statement (as
such term is defined in paragraph (c) of Rule 158 under the Act); and

               (vii) cause the Indenture to be deemed qualified under the TIA upon the effectiveness of the
applicable Registration Statement required by this Agreement and, in connection therewith,
cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms of the TIA; and
execute, and use their commercially reasonable efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms and documents required to
be filed with the Commission to enable such Indenture to be so qualified in a timely manner.

          (d) Additional Provisions Applicable to Shelf Registration Statements and Certain Exchange
Offer Prospectuses. In connection with each Shelf Registration Statement, and each Exchange
Offer Registration Statement if and to the extent that an Initial Purchaser has notified the
Company and the Guarantors that it is a holder of Exchange Securities that are Transfer Restricted
Securities (for so long as such Exchange Securities are Transfer Restricted Securities or for the
period provided in Section 3 hereof, whichever is shorter), the Company and the Guarantors shall:

               (i) advise each selling Holder promptly and, if requested by such Holder, confirm such advice
in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any applicable Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the Prospectus or for
additional

 

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information relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act or of the suspension by
any state securities commission of the qualification of the Transfer Restricted Securities for
offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, (D) of the existence of any fact or the happening of any event that makes any statement
of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make the statements therein
not misleading, or that requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading (it being understood that in the case of this clause 6(d)(i)(D), only the existence
of the fact or event must be disclosed and the nature of the facts or events may be kept
confidential for such period as reasonably required for bona fide business reasons);

               (ii) if any fact or event contemplated by Section 6(d)(i)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading;

               (iii) subject to Section 6(e), furnish to each selling Holder in connection with such exchange
or sale, if any, before filing with the Commission, copies of any Registration Statement or any
Prospectus included therein (except the Prospectus included in the Exchange Offer Registration
Statement at the time it was declared effective) or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be subject to the review and
comment of such Holders in connection with such sale, if any, for a period of at least five
Business Days, and the Company will not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus (including all such
documents incorporated by reference) to which a Holder of Transfer Restricted Securities covered by
such Registration Statement shall reasonably object in writing within five Business Days after the
receipt thereof. A Holder shall be deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains an untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein not misleading or fails to comply with the applicable
requirements of the Act;

               (iv) promptly prior to the filing of any document that is to be incorporated by reference into
a Registration Statement or Prospectus, provide copies of such document to each selling Holder
named in the Registration Statement in connection

 

13

with such exchange or sale, if any, make the Company’s representatives available as may be
reasonably necessary for discussion of such document and other customary due diligence matters, and
include such information in such document prior to the filing thereof as such Holders may
reasonably request;

               (v) make available, subject to appropriate confidentiality agreements, during reasonable
business hours, for inspection in the offices where such records are normally maintained by each
selling Holder and any attorney or accountant retained by such selling Holders, all relevant
financial and other records, pertinent corporate documents of the Company and the Guarantors as may
be reasonably necessary to enable them to exercise the appropriate due diligence responsibility,
and cause the Company’s officers, directors and employees to supply all information that is (a)
reasonably requested by any such selling Holder, attorney or accountant in connection with such
Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness and (b) customarily furnished in transactions of the type contemplated
by such Registration Statement;

               (vi) if requested by any selling Holders in connection with such exchange or sale, promptly
include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders may reasonably request to have
included therein, including, without limitation, information relating to the “Plan of Distribution”
of the Transfer Restricted Securities; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Company is notified of the matters to
be included in such Prospectus supplement or post-effective amendment;

               (vii) furnish to each selling Holder in connection with such exchange or sale without charge,
at least one copy of the Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);

               (viii) deliver to each selling Holder without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto as such Holders
reasonably may request; the Company and the Guarantors hereby consent to the use (in accordance
with law) of the Prospectus and any amendment or supplement thereto by each selling Holder in
connection with the offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;

               (ix) upon the request of any selling Holder, enter into such agreements (including
underwriting agreements) and make such reasonable representations and warranties and take all such
other reasonable actions in connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable Registration Statement
contemplated by this Agreement as may be reasonably requested by any Holder in connection with any
sale or resale pursuant to any applicable Registration Statement contemplated by this

 

14

Agreement, which agreements must be in customary form. In such connection, the Company shall:

     (A) upon request of any selling Holder, furnish (or in the case of paragraphs (2) and
(3), use their commercially reasonable efforts to cause to be furnished) to each selling
Holder, upon Consummation of the Exchange Offer or upon the effectiveness of the Shelf
Registration Statement, as the case may be:

          (1) a certificate, dated such date, signed on behalf of the Company and the Guarantors
by an appropriate officer of the Company and the Guarantors confirming, as of the date
thereof, the accuracy of the representations and warranties made by the Company and the
Guarantors in the Purchase Agreement as if made on such date, (ii) the matters set forth in
Sections 5(o), 5(p) and 5(r) of the Purchase Agreement, and such other similar matters as
such Holders may reasonably request;

          (2) an opinion, dated the date of Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the
Company and the Guarantors (which may include in-house counsel of the Company and the
Guarantors) covering matters customarily covered in such opinions as such parties may
reasonably request, and in any event including a statement to the effect that such counsel
has participated in conferences with officers and other representatives of the Company and
the Guarantors and representatives of the independent public accountants for the Company
and the Guarantors, and has considered the matters required to be stated therein and the
statements contained therein, although such counsel has not independently verified the
accuracy, completeness or fairness of such statements; and that such counsel advises that,
on the basis of the foregoing, no facts came to such counsel’s attention that caused such
counsel to believe that the applicable Registration Statement, at the time such
Registration Statement or any post-effective amendment thereto became effective and, in the
case of the Exchange Offer Registration Statement, as of the date of Consummation of the
Exchange Offer, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such Registration Statement as of its date
and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of
the date of Consummation, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such counsel assumes no responsibility for,
and has not independently verified, the accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial data included in any Registration
Statement contemplated by this Agreement or the related Prospectus; and

 

15

          (3) a customary comfort letter, dated the date of Consummation of the Exchange Offer,
or as of the date of effectiveness of the Shelf Registration Statement, as the case may be,
from the independent accountants for the Company and the Guarantors, in the customary form
and covering matters of the type customarily covered in comfort letters to underwriters in
connection with underwritten offerings;

     (B) deliver such other documents and certificates as may be reasonably requested by
the selling Holders to evidence compliance with the matters covered in clause (A) above and
with any customary conditions contained in any agreement entered into by the Company or any
of the Guarantors pursuant to this clause (ix);

               (x) prior to any public offering of Transfer Restricted Securities, cooperate with the selling
Holders and their counsel in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling
Holders may reasonably request and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities
covered by the applicable Registration Statement; provided, however, that none of the Company and
the Guarantors shall be required to register or qualify as a foreign corporation where it is not
now so qualified or to take any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the Registration Statement, in
any jurisdiction where it is not now so subject; and

               (xi) provide promptly to each Holder, upon request, each document filed with the Commission
pursuant to the requirements of Section 13 or Section 15(d) of the Exchange Act.

          (e) Restrictions on Holders. Each Holder’s acquisition of a Transfer Restricted
Security constitutes such Holder’s agreement that, upon receipt of the notice referred to in
Section 6(d)(i)(C) or any notice from the Company or any of the Guarantors of the existence of any
fact of the kind described in Section 6(d)(i)(D) hereof (a “Suspension Notice”), such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(d)(ii) hereof or (ii) such Holder is advised in writing by the
Company or any of the Guarantors that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by reference in the
Prospectus (in each case, the “Recommencement Date”). Each Holder receiving a Suspension Notice
shall be required to either (I) destroy any Prospectuses, other than permanent file copies, then in
such Holder’s possession which have been replaced by the Company with a more recently dated
Prospectus or (II) deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies, then in such Holder’s possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Suspension Notice. The time
period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4
hereof, as applicable, shall be extended

 

16

by a number of days equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the Recommencement Date.

SECTION 7. REGISTRATION EXPENSES

          (a) All expenses incident to the performance of or compliance with this Agreement by the
Company and the Guarantors will be borne by the Company and the Guarantors jointly and severally,
regardless of whether a Registration Statement becomes effective, including without limitation: (i)
all registration and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including
certificates for the Exchange Securities to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of
counsel for the Company and the Guarantors and one counsel for the Holders of Transfer Restricted
Securities (which shall be Paul, Weiss, Rifkind, Wharton & Garrison LLP or such other counsel as
may be selected by the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Registration Statement is being prepared); (v) all application
and filing fees in connection with listing the Exchange Securities on a national securities
exchange or automated quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company and the Guarantors
(including the expenses of any special audit and comfort letters required by or incident to such
performance).

          The Company and the Guarantors will, in any event, bear their internal expenses (including,
without limitation, all salaries and expenses of their officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Company or any of the Guarantors.

          (b) In connection with any Registration Statement required by this Agreement (including,
without limitation, the Exchange Offer Registration Statement and the Shelf Registration
Statement), the Company and the Guarantors will jointly and severally reimburse the Initial
Purchasers and the Holders of Transfer Restricted Securities who are tendering Securities into the
Exchange Offer and/or selling or reselling Securities or Exchange Securities pursuant to the “Plan
of Distribution” contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel
(who shall be Paul, Weiss, Rifkind, Wharton & Garrison LLP unless another firm shall be chosen by
the Initial Purchasers or the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Registration Statement is being prepared). Each Holder shall pay
all expenses of its counsel except as set forth in this Section, all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s
Transfer Restricted Securities pursuant to a Shelf Registration Statement.

 

17

SECTION 8. INDEMNIFICATION

          (a) The Company and each of the Guarantors jointly and severally agree to indemnify and hold
harmless each Holder, its directors, officers and each Person, if any, who controls such Holder
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from and against
any and all losses, claims, damages, liabilities or judgments (including without limitation, any
legal or other expenses incurred in connection with investigating or defending any matter,
including any action that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement, preliminary prospectus or Prospectus (or any amendment or supplement
thereto) provided by the Company or any of the Guarantors to any Holder or any prospective
purchaser of Exchange Securities or registered Securities, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by an untrue statement or omission or alleged untrue statement or omission
that is based upon information relating to any of the Holders furnished in writing to the Company
by any of the Holders expressly for use in any Registration Statement; provided, however, that the
Company and the Guarantors shall not be liable to any indemnified party (as defined below) under
this Section 8 to the extent, but only to the extent, that (i) such loss, claim, damage or
liability of such indemnified party results in connection with an initial resale by such
indemnified party, (ii) such loss, claim, damage or liability of such indemnified party results
from an untrue statement of a material fact or an omission of a material fact contained in the
preliminary prospectus, which untrue statement or omission was completely corrected in the
Prospectus, (iii) the Company and the Guarantors had previously furnished sufficient quantities of
the Prospectus to such indemnified party within a reasonable amount of time prior to such sale,
(iv) such indemnified party failed to deliver the Prospectus in connection with such initial resale
and (v) the Company or any of the Guarantors sustains the burden of proving that such indemnified
party sold the Securities or Exchange Securities to the person alleging such loss, claim, damage or
liability without sending or giving, at or prior to written confirmation of such sale, a copy of
the Prospectus.

          (b) By its acquisition of Transfer Restricted Securities, each Holder of Transfer Restricted
Securities agrees, severally and not jointly, to indemnify and hold harmless the Company and the
Guarantors, and their directors and officers, and each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company or any of the
Guarantors to the same extent as the foregoing indemnity from the Company and the Guarantors set
forth in Section 8(a) hereof, but only with reference to information relating to such Holder
furnished in writing to the Company by such Holder expressly for use in any Registration Statement.
In no event shall any Holder, its directors, officers or any Person who controls such Holder be
liable or responsible for any amount in excess of the amount by which the total amount received by
such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and
(ii) the amount of any damages that such Holder, its directors,

 

18

officers or any Person who controls such Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.

          (c) In case any action shall be commenced involving any Person in respect of which indemnity
may be sought pursuant to Section 8(a) or (b) hereof (the “indemnified party”), the indemnified
party shall promptly notify the Person against whom such indemnity may be sought (the “indemnifying
party”) in writing and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and the payment of all
fees and expenses of such counsel, as incurred (except that in the case of any action in respect of
which indemnity may be sought pursuant to both Sections 8(a) and (b) hereof, a Holder shall not be
required to assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of the Holder). Any indemnified party shall have
the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i)
the employment of such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such
action or (iii) the named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party shall have been advised
by its counsel that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in connection any one action or
separate but substantially similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all
such reasonable fees and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by a majority of the Holders, in the case of the parties indemnified pursuant
to Section 8(a) hereof, and by the Company and the Guarantors, in the case of parties indemnified
pursuant to Section 8(b) hereof. The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (A) effected with its written consent or (B) effected
without its written consent if the settlement is entered into more than 20 Business Days after the
indemnifying party shall have received a request from the indemnified party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses are at the expense of
the indemnifying party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or compromise of, or consent
to the entry of judgment with respect to, any pending or threatened action in respect of which the
indemnified party is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement, compromise or judgment (I)
includes an unconditional release of the indemnified party from all liability on claims that are or
could have been the subject

 

19

matter of such action and (II) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.

          (d) To the extent that the indemnification provided for in this Section 8 is unavailable to an
indemnified party in respect of any losses, claims, damages, liabilities or judgments referred to
herein, then each indemnifying party, in lieu of indemnifying such indemnified party shall
contribute to the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors on the one hand, and the Holders, on
the other hand, from their initial sale of Transfer Restricted Securities (or in the case of
Exchange Securities that are Transfer Restricted Securities, the sale of the Securities for which
such Exchange Securities were exchanged) or (ii) if the allocation provided by clause 8(d)(i) above
is not permitted by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in such clause 8(d)(i) but also the relative fault of the Company and
the Guarantors, on the one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages, liabilities or judgments,
as well as any other relevant equitable considerations. The relative fault of the Company and the
Guarantors, on the one hand, and of the Holder, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company and the Guarantors, on the one hand, or by the Holder, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and judgments referred to above shall be deemed to include, subject to the
limitations set forth in Section 8(c) hereof, any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action or claim.

          The Company and the Guarantors, on the one hand, and each Holder (by its acquisition of
Transfer Restricted Securities), on the other hand, agree that it would not be just and equitable
if contribution pursuant to this Section 8(d) 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 which
does not take account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any
matter, including any action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and
(ii) the amount of any damages which such Holder has

 

20

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 Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective principal amount of Transfer Restricted
Securities held by each Holder hereunder and not joint.

SECTION 9. RULE 144A AND RULE 144

          The Company and the Guarantors agree with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which the Company (a) is not subject to
Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder of Transfer
Restricted Securities, to such Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant
to Rule 144A, and (b) is subject to Section 13 or 15(d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.

SECTION 10. UNDERWRITTEN REGISTRATIONS

          No Holder may participate in any Underwritten Registration unless such Holder (a) agrees to
sell such Holder’s Transfer Restricted Securities proposed to be included in such Underwritten
Registration on the basis provided in customary underwriting arrangements entered into in
connection therewith and (b) completes and executes all reasonable questionnaires, powers of
attorney, and other documents required under the terms of such underwriting arrangements.

SECTION 11. SELECTION OF UNDERWRITERS

          For any Underwritten Offering, the investment banker or investment bankers and manager or
managers for any Underwritten Offering that will administer such offering will be selected by the
Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included
in such offering and consented to by the Company and the Guarantors, which consent shall not be
unreasonably withheld. Such investment bankers and managers are referred to herein as the
“underwriters.”

SECTION 12. MISCELLANEOUS

          (a) Remedies. The Company and the Guarantors acknowledge and agree that any failure
by the Company and the Guarantors to comply with their obligations under Sections 3 and 4 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

 

21

required to specifically enforce the Company’s obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.

          (b) No Inconsistent Agreements. The Company and the Guarantors will not, on or after
the date of this Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. The Company and the Guarantors have not previously entered into any
agreement granting any registration rights with respect to its securities to any Person that would
require such securities to be included in any Registration Statement filed hereunder. 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 the Company’s securities under any agreement in effect on the date
hereof.

          (c) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the provisions hereof may
not be given unless (i) in the case of Section 5 hereof and this Section 10(c)(i), the Company and
the Guarantors have obtained the written consent of Holders of all outstanding Transfer Restricted
Securities and (ii) in the case of all other provisions hereof, the Company and the Guarantors have
obtained the written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities (excluding Transfer Restricted Securities held by the Company, the
Guarantors or any of their Affiliates). Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of Holders whose
Transfer Restricted Securities are being tendered pursuant to the Exchange Offer, and that does not
affect directly or indirectly the rights of other Holders whose Transfer Restricted Securities are
not being tendered pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to such Exchange Offer.

          (d) Third Party Beneficiary. The Holders shall be third party beneficiaries to the
agreements made hereunder between the Company and the Guarantors, 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 they may deem such enforcement necessary or advisable to protect their rights hereunder.

          (e) Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, first-class mail (registered or certified, return
receipt requested), telecopier, or air courier guaranteeing overnight delivery:

               (i) if to a Holder, at the address set forth on the records of the Registrar under the
Indenture, with a copy to the Registrar under the Indenture; and

 

22

	 	(ii)	 	if to the Company or any Guarantor:
	 
	 	 	 	Rural Cellular Corporation

P.O. Box 2000

3905 Dakota Street, S.W.

Alexandria, Minnesota 56308

Telecopier No.: 320-808-2102

Attention: President

	 
	 	 	 	With a copy to:
	 
	 	 	 	Moss & Barnett, A Professional Association

4800 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota 55402

Telecopier No.: 612-339-6686

Attention: Richard J. Kelber

          All such notices and communications shall be deemed to have been duly given at the time
delivered by hand, when receipt acknowledged, if telecopied; and on the next Business Day, if
timely delivered to an 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.

          (f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including without limitation and
without the need for an express assignment, subsequent Holders; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer Restricted Securities;
provided, that nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms hereof or of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by taking and holding
such Transfer Restricted 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, including the
restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and
such Person shall be entitled to receive the benefits hereof.

          (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.

 

23

          (h) Headings. The headings in this Agreement are for convenience of reference only
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 WITHOUT REGARD TO THE RULES OF CONFLICT OF LAWS OF THE
STATE OF NEW YORK OR ANY OTHER STATE THAT WOULD INDICATE THE APPLICABILITY OF THE LAWS OF ANY OTHER
JURISDICTION.

          (i) Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable,
the validity, legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.

          (j) Entire Agreement. This Agreement is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the Transfer Restricted
Securities. This Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

 

24

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

	 	 	 	 	 
	 	RURAL CELLULAR CORPORATION

 	 
	 	By:  	/s/ Wesley E. Schultz
	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 
	 	ALEXANDRIA INDEMNITY

          CORPORATION

RCC ATLANTIC, INC.

RCC ATLANTIC LICENSES, INC.

RCC MINNESOTA, INC.

RCC TRANSPORT, INC.

TLA SPECTRUM, LLC

 	 
	 	 	 
	 	 	 
	 	 	 
	 
	 	 	 
	 	By:  	
/s/ Wesley E. Schultz	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer of each Guarantor,

except Treasures of

Alexandria Indemnity

Corporation	 

 

25

	 	 	 	 	 

	 	 	 	 	 
	 	LEHMAN BROTHERS INC.

MORGAN STANLEY & CO. INCORPORATED

LAZARD CAPITAL MARKETS

Acting severally on behalf of themselves and the several

Initial Purchasers

 	 
	 	    By:  	LEHMAN BROTHERS INC., as representative
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	        By:  	
/s/ Anthony Maniscalco	 
	 	 	Name:  	Anthony Maniscalco	 
	 	 	Title:  	Managing Directorexv10w30

 

Exhibit 10.30

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into by and between Uroplasty,
Inc., a Minnesota corporation (“the Company”), and David B. Kaysen (the “Executive”) effective as
of the 17th day of May, 2006.

R E C I T A L S:

     WHEREAS, Uroplasty is a medical device company that develops, manufactures and markets
innovative, proprietary products for the treatment of voiding dysfunctions; and

     WHEREAS, the Company and the Executive desire to set forth in this Agreement the terms under
which Executive will serve as President and Chief Executive Officer of the Company;

     NOW, THEREFORE, the parties hereto agree as follows:

1. Employment and Duties. The Company hereby agrees to employ the Executive, and the
Executive hereby accepts the Company’s offer to serve, as President and Chief Executive Officer of
the Company beginning on May 21, 2006 (the “Start Date”). As such, the Executive shall have
responsibilities, duties and authority reasonably accorded to and expected of such an officer of
the Company and will report directly to the Company’s Board of Directors. The Executive agrees to
devote the Executive’s full business time, attention and efforts to promote and further the
business of the Company. The Executive will faithfully adhere to, execute and fulfill all policies
established by the Company’s Board of Directors. The Executive also agrees to serve as a director
of the Company (without additional consideration other than provided by this Agreement) until the
Executive’s successor is duly elected and qualified or until the Executive’s earlier resignation,
removal or death.

     The Executive will not, during the Term of Executive’s employment hereunder, be engaged in any
other business activity pursued for gain, profit or other pecuniary advantage if such activity
interferes with the Executive’s duties and responsibilities hereunder. The foregoing limitations
will not be construed to prohibit the Executive from making personal investments in such form or
manner as will neither require the Executive’s services in the operation or affairs of the
companies or enterprises in which such investments are made nor violate the terms of Section 4
hereof. The Executive may also continue to serve as a board member for the three other public
companies on whose boards he currently serves.

2. Compensation. For all services rendered by the Executive on and after the Start Date
hereof, the Company will compensate the Executive as follows:

     (a) Base Salary. Commencing on the Start Date hereof, the base salary payable to the
Executive shall be $255,000 per year, payable on a regular basis in accordance with the

 

 

Company’s standard payroll procedures but not less than semi-monthly. Such base salary will
be subject to annual review and adjustment by the Company’s Compensation Committee.

     (b) Incentive Bonus Plan. During the Term, the Executive is entitled to an annual
cash bonus (the “Annual Bonus”), a part of which will be based on attainment of particular
financial milestones (the “Financial Milestones”) and the other part of which will be based on
attainment of particular business milestones (the “Business Milestones”). The Annual Bonus is
computed as a percentage (not exceeding 50%) of the Executive’s base salary for the fiscal year for
which achievement of the Financial and Business Milestones relate.

          (i) Financial and Business Milestones. The Executive and the Company’s Compensation
Committee shall mutually agree upon the Financial and Business Milestones (and the percentages of
the Executive’s base salary payable upon various levels of achievement) for each fiscal year by May
1 of each year (except as to the balance of fiscal 2007, by July 31, 2006). The Financial
Milestones shall be based on line items regularly appearing on the Company’s audited financial
statements.

          (ii) Special Fiscal 2007 Annual Bonus. On a one-time basis, and conditioned on the
Executive’s continuous full-time employment through the balance of the Company’s fiscal year ending
on March 31, 2007, the Company will pay the Executive a minimum Annual Bonus for such fiscal year
equal to 25% of the Executive’s base salary paid during such fiscal year (the “Special Fiscal 2007
Annual Bonus”). The Special Fiscal 2007 Annual Bonus will be deducted from any Annual Bonus
otherwise earned by the Executive for fiscal 2007.

          (iii) Payment. Each Annual Bonus amount is payable within 15 days of the completion
of the audit of the financial statements for the related fiscal year.

     (c) Executive Perquisites, Benefits and Other Compensation. Commencing on the Start
Date hereof, the Executive shall be entitled to receive additional benefits and compensation from
the Company in such form and to such extent as specified below:

          (i) Payment of premiums for coverage for the Executive and the Executive’s dependent family
members under health, hospitalization and dental insurance plans that the Company may have in
effect from time to time, at the levels, and with the co-payments, as established by the Company
under such plans.

          (ii) Reimbursement of up to $11,500 on an annual basis for the premiums for Executive’s
personal life and disability insurance policies.

          (iii) Reimbursement for all business travel and other out-of-pocket expenses reasonably
incurred by the Executive in the performance of the Executive’s services pursuant to this
Agreement. All reimbursable expenses shall be appropriately documented in reasonable

-2-

 

detail by the Executive upon submission of any request for reimbursement, and in a format and
manner consistent with the Company’s expense reporting policy.

          (iv) Four weeks of paid vacation during each calendar year. If the Executive does not utilize
all vacation time during a year, it is forfeited.

3. Stock Options. The Company hereby grants to the Executive options (the “Options”), to
acquire 300,000 shares of the Company’s Common Stock, par value $.01 per share (the “Common
Stock”), at an exercise price per share (the “Exercise Price”) equal to the closing price of the
Company’s Common Stock on the American Stock Exchange as reported by bigcharts.com for the date of
this Agreement. The Options are not pursuant to the Company’s 2006 Stock and Incentive Plan. The
Options will not be treated as “incentive options” within the meaning of Section 422 of the Code.

     (a) Anti-Dilution Adjustments. The Options are subject to adjustment as provided in
this subsection (a).

          (i) Exercise Price Adjustments. The Exercise Price shall be adjusted from time to
time such that in case the Company shall hereafter:

               (A) pay any dividends on any class of stock of the Company payable in Common Stock or
securities convertible into Common Stock;

               (B) subdivide its then outstanding shares of Common Stock into a greater number of shares; or

               (C) combine outstanding shares of Common Stock, by reclassification or otherwise;

then, in any such event, the Exercise Price in effect immediately prior to such event shall (until
adjusted again pursuant hereto) be adjusted immediately after such event to a price (calculated to
the nearest full cent) determined by dividing (A) the number of shares of Common Stock outstanding
immediately prior to such event, multiplied by the then existing Exercise Price, by (B) the total
number of shares of Common Stock outstanding immediately after such event (including in each case
the maximum number of shares of Common Stock issuable in respect of any securities convertible into
Common Stock), and the resulting quotient shall be the adjusted Exercise Price per share. An
adjustment made pursuant to this subsection shall become effective immediately after the record
date in the case of a dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this subsection, the Executive shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and other capital stock of
the Company, the Board of Directors (whose determination shall be conclusive) shall determine the
allocation of the adjusted Exercise Price between or among shares of such classes of capital stock
or shares of Common Stock and other

-3-

 

capital stock. All calculations under this subsection shall be made to the nearest cent or to the
nearest 1/100 of a share, as the case may be. In the event that at any time as a result of an
adjustment made pursuant to this subsection, the Executive shall become entitled to receive any
shares of the Company other than shares of Common Stock, thereafter the Exercise Price of such
other shares so receivable upon exercise of any Options shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in this subsection.

          (ii) Share Adjustments. Upon each adjustment of the Exercise Price pursuant to
subsection (a)(i) above, the Executive shall thereafter (until another such adjustment) be entitled
to purchase at the adjusted Exercise Price the number of shares, calculated to the nearest full
share, obtained by multiplying the number of shares covered by the Options (as adjusted as a result
of all adjustments in the Exercise Price in effect prior to such adjustment) by the Exercise Price
in effect prior to such adjustment and dividing the product so obtained by the adjusted Exercise
Price.

          (iii) Reorganization Events. In case of any consolidation or merger to which the
Company is a party other than a merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of
securities with another corporation (including any exchange effected in connection with a merger of
a third corporation into the Company), there shall be no adjustment under subsection (a)(i) above;
but the Executive shall have the right thereafter to convert the Options into the kind and amount
of shares of stock and other securities and property which the Executive would have owned or have
been entitled to receive immediately after such consolidation, merger, statutory exchange, sale or
conveyance had the Options been converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale or conveyance and, in any such case, if necessary,
appropriate adjustment shall be made in the application of the provisions set forth in this
subsection with respect to the rights and interests thereafter of the Executive, to the end that
the provisions set forth in this subsection shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares of stock and other securities and property
thereafter deliverable on the exercise of the Options. The provisions of this subsection shall
similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances.

          (iv) Notice of Adjustments. Upon any adjustment of the Exercise Price, then and in
each such case, the Company shall give written notice thereof, by first-class mail, postage
prepaid, addressed to the Executive, which notice shall state the Exercise Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares of Common Stock
purchasable at such price upon the exercise of the Options, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.

     (b) Vesting; Change of Control. Notwithstanding anything else, the Executive may
exercise the Options only to the extent that the Executive is vested in them. Vested Options will

-4-

 

be exercisable for ten (10) years from the date hereof. The Options will vest in installments of
1/3rd on each of the Start Date hereof and the first and second anniversaries of the date hereof;
provided, however, that the Executive must continue in the employ of the Company through the
applicable anniversary date in order to vest in the Options for such anniversary date. Despite the
foregoing, the Options will fully vest upon a “Change of Control,” which will be deemed to occur as
of the first day after the date hereof that any one or more of the following conditions is
satisfied:

          (i) any person or entity, or group of persons or entities acting together, other than the
Company or an employee benefit plan of the Company, acquires directly or indirectly the beneficial
ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
of any voting security of the Company and, immediately after such acquisition, such person, entity
or group is, directly or indirectly, the beneficial owner of voting securities representing a
majority of the total voting power of all of the then-outstanding voting securities of the Company
and has a larger percentage of voting securities of the Company than any other person, entity or
group holding voting securities of the Company;

          (ii) the following individuals no longer constitute a majority of the members of the Board:
(A) Daniel G. Holman, Sam B. Humphries, Joel R. Pitlor, Thomas E. Jamison, R. Patrick Maxwell and
the Executive (the “Original Directors”); (B) the individuals who thereafter are elected to the
Company’s Board of Directors and whose election, or nomination for election, to the Board of
Directors was approved by a vote of at least a majority of the Original Directors then still in
office (such directors becoming “Additional Original Directors” immediately following their
election); and (C) the individuals who are elected to the Board of Directors and whose election,
or nomination for election, to the Board of Directors was approved by a vote of at least a majority
of the Original Directors and Additional Original Directors then still in office (such directors
also becoming “Additional Original Directors” immediately following their election);

          (iii) the stockholders of the Company approve a merger, consolidation, recapitalization or
reorganization of the Company, or a reverse stock split of outstanding voting securities, other
than any such transaction which results in at least a majority of the total voting power
represented by the voting securities of the surviving entity outstanding immediately after such
transaction being beneficially owned by at least a majority of the holders of outstanding voting
securities of the Company immediately prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not substantially altered in the
transaction; or

          (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or a substantial portion of the
Company’s assets (i.e., 50% or more of the total assets of the Company).

-5-

 

     However, no “Change in Control” will be deemed to have occurred with respect to Executive if
Executive is part of a purchasing group which consummates the Change in Control transaction. The
Executive will be deemed “part of a purchasing group” for purposes of the preceding sentence if the
Executive is an equity participant in the purchasing company or group except for (i) passive
ownership of less than three percent (3%) of the stock of the purchasing company or (ii) ownership
of an equity participation in the purchasing company or group which is otherwise not significant,
as determined prior to the Change in Control by a majority of the Original and Additional Original
Directors.

     (c) Payment of Exercise Price and Required Withholding Taxes. The Executive may
exercise the Options by cash payment (including by check or wire transfer). The Company may
condition any exercise upon the Executive’s payment of the minimum required withholding taxes. As
to the minimum required withholding taxes, the Executive may pay such amount in cash or by
instructing the Company to cancel a number of otherwise then exercisable Options equal in value to
the minimum required withholding taxes. In determining the number of Options so cancelable, each
Option is deemed to have a value equal to (i) the “Market Price” (as defined below) of a share of
Common Stock as of the close of business on the date of the Option exercise less (ii) the Exercise
Price per share.

     The term “Market Price” with respect to shares of Common Stock of any class or series means
the last reported sale price or, if none, the average of the last reported closing bid and asked
prices on any national or regional securities exchange or quoted in the National Association of
Securities Dealers, Inc.’s Automated Quotations System (“Nasdaq”), or if not listed on a national
or regional securities exchange or quoted in Nasdaq, the closing price as reported by bigcharts.com
(or if this service is discontinued, such other reporting service acceptable to the Holder), or if
no quotations in such Common Stock are available, the fair market value of the shares as determined
in good faith by the Board of Directors of the Company.

     (d) Subscription Representations; Transfer Restrictions. The Executive understands
that the Options, and the shares of Common Stock issuable upon their exercise, are and will be
“restricted securities” within the meaning of the Securities Act of 1933, as amended (the “Act”).
Accordingly, even if the Executive is fully vested in the Options, the Executive may never be able
to resell the underlying shares for a profit, or at all. In any event, the Executive will be able
to resell or otherwise transfer the underlying shares only if the sale or other transfer is
registered under the Act and applicable state securities laws or there is an available exemption
from this registration. The Executive confirms that Executive can bear the loss of Executive’s
entire investment in the Company.

     The Executive agrees and acknowledges that (i) none of the Options may be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of
decent and distribution and then only to Executive’s spouse and/or children (or a trust for their
benefit) and (ii) the vested Options may be exercised during the Executive’s lifetime only by the
Executive or the Executive’s legal representative.

-6-

 

     (e) Lock-Up Agreement. The Executive agrees that, in the event of each future public
offering of the Company’s equity securities (an “Offering”), the Executive will agree to such
restrictions on the resale of any shares of the Company’s Common Stock (including the shares
underlying the Options) then beneficially owned by Executive as requested by the managing
underwriter or underwriters of the Offering; provided, however, that such restrictions run no
longer than the period of resale restriction imposed by such underwriters on the Company’s other
executive officers and directors. The Executive agrees not to sell or otherwise transfer
(including upon death) any of the shares underlying the Options, or any other shares beneficially
owned by the Executive, unless the purchaser or recipient agrees in writing to be bound by the
foregoing lock-up agreement.

     (f) Stock Certificate Restrictions. The Executive acknowledges that the Company will
place a restrictive legend on any certificate representing the shares underlying the Options, and a
“stop transfer order” with any transfer agent of the Company’s securities, barring the sale or
other transfer of such shares without registration under the Act or an exemption therefrom, and
noting the existence of the lock-up agreement above.

     (g) Registration of Shares Underlying the Options. Notwithstanding the above
provisions, the Company shall use its best efforts, at its expense, to register the issuance or
resale of the shares underlying the Options on Form S-8 under the Act and under applicable state
securities laws, and to maintain the effectiveness of the Form S-8 registration statement during
the Term of this Agreement and for two years thereafter.

4. Non-Competition and Non-Solicitation.

     (a) Basic Terms. The Executive will not, during the period of the Executive’s
employment with the Company and for a period of one (1) year immediately following the termination
of the Executive’s employment under this Agreement, for any reason whatsoever, directly or
indirectly, for the Executive or on behalf of or in conjunction with any other person, persons,
entity, company, business, partnership, corporation, limited liability company or limited liability
partnership of whatever nature:

          (i) engage anywhere worldwide (the “Territory”) as an officer, director, shareholder, owner,
partner, joint venturer or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor or as a sales representative, in the development, manufacturing,
licensing, marketing or distribution of products or services for the diagnosis or treatment of
urinary or fecal voiding dysfunctions (the “Uroplasty Line of Business”) or in any other business
in competition with the Company;

          (ii) initiate or enter into any agreement or other arrangement to develop, manufacture,
license, market, distribute or acquire any technology, business or entity in the Uroplasty Line of
Business, or participate in discussions or provide information relating to or in anticipation of
such an agreement or arrangement;

-7-

 

          (iii) call upon or solicit any person who is at that time within the Territory an employee of
the Company for the purpose or with the intent of enticing such employee away from or out of the
employ of the Company;

          (iv) call upon or solicit any person or entity which is, at that time, or which has been,
within one (1) year prior to that time, a customer or prospective customer (such prospective status
being determined by whether the Company within the prior year solicited such person or entity’s
business) of the Company within the Territory for the purpose of selling products or services in
the Uroplasty Line of Business or otherwise in competition with the Company within the Territory;
or

          (v) call upon or solicit any prospective acquisition candidate, on the Executive’s own behalf
or on behalf of any competitor, which candidate was, to the Executive’s actual knowledge after due
inquiry, either called upon by the Company or for which the Company made an acquisition analysis,
for the purpose of acquiring such entity or its assets.

     Notwithstanding the above, the Executive may acquire as a passive investment not more than two
percent (2%) of the capital stock of a competing business, whose stock is traded on a national
securities exchange or over-the-counter.

     (b) Equitable Relief. Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenants, and because of the immediate and
irreparable damage that could be caused to the Company for which it would have no other adequate
remedy, the Executive agrees that the foregoing covenants may be enforced by the Company in the
event of breach by the Executive by injunctions and restraining orders.

     (c) Severability and/or Reformation. The covenants in this Section 4 are severable
and separate, and the unenforceability of any specific covenant shall not affect the provisions of
any other covenant. Moreover, in the event any court of competent jurisdiction determines that the
scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the court deems reasonable,
and the Agreement shall be reformed in accordance therewith.

     (d) Independently Enforceable. All of the covenants in this Section 4 shall be
construed as an agreement independent of any other provision in this Agreement, and the existence
of any claim or cause of action of the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such
covenants. It is specifically agreed that the period of one (1) year following termination of
employment stated at the beginning of this Section 4, during which the agreements and covenants of
the Executive made in this Section 4 shall be effective, shall be computed by excluding from such
computation any time during which the Executive is in violation of any provision of this Section 4.

-8-

 

5. Term; Termination; Rights on Termination.

     The term of Executive’s employment under this Agreement begins on the Start Date hereof and
continues through May 16, 2007, and, unless terminated sooner as herein provided, will continue
thereafter on a year-to-year basis on the same terms and conditions contained herein in effect as
of the time of renewal. As used herein, the word “Term” means (i) during the initial period
referred to in the preceding sentence, such initial period and (ii) during any one-year renewal
pursuant to the terms hereof, such one-year period. This Agreement and the Executive’s employment
may be terminated in any one of the following ways:

     (a) Death. The Executive’s death will immediately terminate this Agreement. The
Company will pay the Executive’s estate any of Executive’s accrued base salary and any earned, but
unpaid, Annual Bonus (at the time otherwise payable under this Agreement) through the date of
termination and reimbursement of expenses.

     (b) Disability. If, as a result of incapacity due to physical or mental illness or
injury, as reasonably determined by the Executive’s physician, the Executive is absent from the
Executive’s full-time duties hereunder for four (4) consecutive months, then thirty (30) days after
receiving written notice (which notice may occur before or after the end of such four (4) month
period, but which will not be effective earlier than the last day of such four (4) month period),
the Company may terminate the Executive’s employment hereunder; provided that the Executive is
unable to resume the Executive’s full-time duties at the conclusion of such notice period. The
Company will pay the Executive any of the Executive’s accrued base salary and any earned, but
unpaid, Annual Bonus (at the time otherwise payable under this Agreement) through the date of
termination and reimbursement of expenses.

     (c) Good Cause. The Company may terminate this Agreement ten (10) days after
delivery of written notice to the Executive for “good cause,” which is (i) the Executive’s willful,
material and irreparable breach of this Agreement; (ii) the Executive’s gross negligence in the
performance or intentional nonperformance (continuing for thirty (30) days after receipt of written
notice of need to cure) of any of the Executive’s material duties and responsibilities under this
Agreement; (iii) the Executive’s willful dishonesty, fraud or misconduct with respect to the
business or affairs of the Company which materially and adversely affects the operations or
reputation of the Company; or (iv) the Executive’s conviction of a felony crime which materially
and adversely affects the operations or reputation of the Company. Upon any termination for good
cause above, the Executive will receive no severance compensation other than base salary accrued
through the date of termination and reimbursement of expenses.

     (d) Without Good Cause. At any time, either the Executive or the Company may
terminate this Agreement and the Executive’s employment, effective thirty (30) days after written
notice is provided to the other. If (i) the Company terminates the Executive’s employment without
good cause during or at the end of any Term, (ii) this Agreement expires or otherwise terminates at
the end of a Term without renewal, (iii) the Executive voluntarily terminates employment with the
Company as a result of the Company’s imposition of material

-9-

 

and adverse changes, without the Executive’s consent, in the Executive’s principal duties,
(iv) the Executive voluntarily terminates employment after the Company moves its principal
executive offices more than 100 miles from its current location without the Executive’s consent or
(v) in connection with a Change of Control, the Company terminates the Executive’s employment
without good cause during the Term, the Executive will receive from the Company any base salary
accrued through the date of termination and reimbursement of expenses. In addition, in any of
these circumstances, and conditioned on the Executive’s continuing compliance with the other
provisions of this Agreement, including Section 4 above, the Company shall pay the Executive, as
severance pay, an aggregate amount equal to 100% (160% if the termination is covered by
circumstance (v)) of Executive’s base salary in effect at the time of termination. The severance
payments will be subject to customary tax withholdings.

     The severance payments will be payable in equal monthly installments on the first day of each
month over the first year after the date of termination; provided, however, that if the Company
determines in its discretion that the Executive is a “specified employee” (as defined in Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the “Code”)) as of the date of
termination and that Section 409A of the Code applies with respect to a payment to Executive
pursuant to this Section 5(d), the severance payments will commence on the six-month anniversary of
the date of termination. The Company reserves the right to revise the timing of any payments
hereunder in order to comply with Section 409A of the Code. As a condition to receiving the
severance payments provided in this Section 5(d), the Company may require the Executive to execute
a full release and waiver of all claims against Employer (excluding claims for amounts required
under this Agreement to be paid upon severance and any then existing indemnification obligations to
Executive) in a form reasonably acceptable to the Company. If the Company requires such a release,
the Company will further delay the commencement of severance payments until the period of
rescission for the release has lapsed.

6. Excise Tax Limitation. Notwithstanding anything contained in this Agreement to the
contrary, to the extent that the payments and benefits provided under this Agreement and benefits
provided to, or for the benefit of, the Executive under any other Company plan or agreement (such
payments or benefits are collectively referred to as the “Payments”) would be subject to the excise
tax (the “Excise Tax”) imposed under Section 4999 of the Code, the Payments shall be reduced (but
not below zero) if and to the extent necessary so that no Payment to be made or benefit to be
provided to Executive shall be subject to the Excise Tax (such reduced amount is hereinafter
referred to as the “Limited Payment Amount”). Unless the Executive shall have given prior written
notice specifying a different order to the Company to effectuate the foregoing, the Company shall
reduce or eliminate the Payments, by first reducing or eliminating the portion of the Payments
which are not payable in cash and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid the farthest in time from
the Determination (as hereinafter defined). Any notice given by Executive pursuant to the
preceding sentence shall take precedence over the provisions of any other plan, arrangement or
agreement governing the Executive’s rights and entitlements to any benefits or compensation.

-10-

 

     The determination of whether the Payments shall be reduced to the Limited Payment Amount
pursuant to this Agreement and the amount of such Limited Payment Amount shall be made, at the
Company’s expense, by a reputable accounting firm selected by the Executive and reasonably
acceptable to the Company (the “Accounting Firm”). The Accounting Firm shall provide its
determination (the “Determination”), together with detailed supporting calculations and
documentation, to the Company and the Executive within ten (10) days after the end of the Term
hereof, if applicable, or such other time as specified by mutual agreement of the Company and the
Executive. If the Accounting Firm determines that no Excise Tax is payable by the Executive with
respect to the Payments, it shall furnish the Executive with an opinion reasonably acceptable to
the Executive that no Excise Tax will be imposed with respect to any such Payments. The
Determination shall be binding, final and conclusive upon the Company and the Executive.

7. Return of Company Property. All records, designs, tradenames and trademarks, service
names and service marks, patents, business plans, financial statements, manuals, memoranda,
customer and other lists and other property delivered to or compiled by the Executive by or on
behalf of the Company, or its representatives, vendors or customers which pertain to the business
of the Company are and will remain the property of the Company, and be subject at all times to its
discretion and control. Likewise, all correspondence, reports, records, charts, advertising and
marketing materials and other similar data pertaining to the business, activities or future plans
of the Company which is collected by or in the possession of the Executive shall be delivered
promptly to the Company without request by it upon termination of the Executive’s employment.

8. Inventions. The Executive will disclose promptly to the Company any and all significant
conceptions and ideas for inventions, improvements and valuable discoveries, whether patentable or
not, which are conceived or made by the Executive, solely or jointly with another, during the
period of employment, and which are directly related to the business or activities of the Company
and which the Executive conceives as a result of the Executive’s employment by the Company. The
Executive hereby assigns and agrees to assign all of the Executive’s interests therein to the
Company or its nominee. Whenever requested to do so by the Company, the Executive will execute any
and all applications, assignments or other instruments that the Company shall deem necessary to
apply for and obtain letters patent of the United States or any foreign country or to otherwise
protect the Company’s interest therein. Nothing in this Agreement shall apply to an invention for
which no equipment, supplies, facility or trade secret information of the Company was used and
which was developed entirely on the Executive’s own time and (i) which does not relate (a) directly
to the business of the Company or (b) to the Company’s actual or demonstrably anticipated research
or development or (ii) which does not result from any work performed by the Executive for the
Company.

9. Trade Secrets. The Executive will not, other than as required by court order, during or
after employment with the Company, disclose the confidential terms of the Company’s relationships
or agreements with its significant vendors or customers or any other significant and

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material trade secret of the Company to any person, firm, partnership, corporation or business for
any reason or purpose whatsoever.

10. Complete Agreement. This Agreement is the final, complete and exclusive statement and
expression of the agreement between the Company and the Executive and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This document may not be later modified except by a
written instrument signed by a duly authorized officer of the Company and the Executive, and no
term of this Agreement may be waived except by a written instrument signed by the party waiving the
benefit of such term.

11. Notice. Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:

	 	 	 
	To the Company:

	 	Uroplasty, Inc.

5420 Feltl Road

Minnetonka, Minnesota 55343

Attention: Daniel G. Holman, Chairman
	 
	 	 
	To the Executive:

	 	David B. Kaysen

8725 Sandro Road

Bloomington, Minnesota 55438

Notice is given and effective three (3) days after the deposit in the U.S. mail of a writing
addressed as above and sent first class mail, certified, return receipt requested, or when actually
received. Either party may change the address for notice by notifying the other party of such
change in accordance with this Section 10.

12. Arbitration. Except as to matters of injunctive or equitable relief (over which the
parties agree that the federal and state courts located in Minneapolis, Minnesota will have
exclusive jurisdiction and are deemed to be of proper venue and convenience to the parties), any
unresolved dispute or controversy arising under or in connection with this Agreement will be
settled exclusively by arbitration, conducted before a panel of three (3) arbitrators in
Minneapolis, Minnesota, in accordance with the rules of the American Arbitration Association then
in effect. The arbitrators will not have the authority to add to, detract from or modify any
provision hereof nor to award punitive damages to any injured party. A decision by a majority of
the arbitration panel will be final and binding. Judgment may be entered on the arbitrators’ award
in any court having jurisdiction. The direct expense of any arbitration proceeding will be borne
by the Company.

[continued on next page]

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13. Binding Effect; Governing Law. This Agreement will inure to the benefit of
the successors or assigns of the Company. The Company agrees that, as a condition of any merger of
the Company into or with, or the sale of all or substantially all of the Company’s assets to,
another person, firm or entity, it will require the successor expressly to assume the Company’s
obligations hereunder. This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota, exclusive of its conflicts of laws rules.

     IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures.

	 	 	 	 	 	 	 	 	 
	UROPLASTY, INC.	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	  /s/ Thomas E. Jamison
	 	 	 	  /s/ David B. Kaysen	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Thomas E. Jamison, Chairman
	 	 	 	David B. Kaysen	 	 
	 

	 	Compensation Committee	 	 	 	 	 	 

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