Document:

CONTINGENT WARRANT AGREEMENT

 

Exhibit 4.10

Execution Copy

Contingent Warrant

WARRANT AGREEMENT

Dated as of February 28, 2001

By and among

TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.,

TRANSPORTATION INVESTMENT PARTNERS L.L.C.,

CARAVELLE INVESTMENT FUND, L.L.C.,

the PARTIES listed on Schedule A hereto

and

FIRST UNION NATIONAL BANK

Warrants to Purchase Common Stock,

Par Value $0.01 Per Share

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page

	 
	 	ARTICLE I	 	 	 	 
	 
	 	ISSUANCE, FORM, EXECUTION, TRANSFER, DELIVERY
 AND REGISTRATION OF WARRANT CERTIFICATES	 	 	 	 
	SECTION 1.01.
	 	Issuance of Warrants	 	 	2	 
	SECTION 1.02.
	 	Form of Warrant Certificates	 	 	2	 
	SECTION 1.03.
	 	Execution of Warrant Certificates	 	 	2	 
	SECTION 1.04.
	 	Authentication and Delivery	 	 	3	 
	SECTION 1.05.
	 	Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates	 	 	3	 
	SECTION 1.06.
	 	Form of Legend for the Warrant Certificates	 	 	4	 
	SECTION 1.07.
	 	Assignment and Transfer Restrictions	 	 	4	 
	 
	 	ARTICLE II	 	 	 	 
	 
	 	DURATION, EXERCISE OF WARRANTS,
 EXERCISE PRICE AND REPURCHASE OF WARRANTS	 	 	 	 
	SECTION 2.01.
	 	Duration of Warrants	 	 	5	 
	SECTION 2.02.
	 	Exercise, Exercise Price, Settlement and Delivery	 	 	6	 
	SECTION 2.03.
	 	Cancellation of Warrant Certificates	 	 	9	 
	 
	 	ARTICLE III	 	 	 	 
	 
	 	OTHER PROVISIONS RELATING TO
 RIGHTS OF HOLDERS OF WARRANTS	 	 	 	 
	SECTION 3.01.
	 	Enforcement of Rights	 	 	9	 
	 
	 	ARTICLE IV	 	 	 	 
	 
	 	CERTAIN COVENANTS OF THE COMPANY	 	 	 	 
	SECTION 4.01.
	 	Payment of Taxes	 	 	9	 
	SECTION 4.02.
	 	Rules 144 and 144A	 	 	9	 
	SECTION 4.03.
	 	Form of Initial Public Equity Offering	 	 	10	 
	 
	 	ARTICLE V	 	 	 	 
	 
	 	ADJUSTMENTS	 	 	 	 
	SECTION 5.01.
	 	Adjustment of Exercise Rate; Notices	 	 	10	 
	SECTION 5.02.
	 	Fractional Shares	 	 	15	 
	SECTION 5.03.
	 	Certain Distributions	 	 	15	 

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	 	 	 	 	Page

	 
	 	ARTICLE VI	 	 	 	 
	 
	 	CONCERNING THE WARRANT AGENT	 	 	 	 
	SECTION 6.01.
	 	Warrant Agent	 	 	15	 
	SECTION 6.02.
	 	Conditions of Warrant Agent’s Obligations	 	 	15	 
	SECTION 6.03.
	 	Resignation and Appointment of Successor	 	 	18	 
	 
	 	ARTICLE VII	 	 	 	 
	 
	 	MISCELLANEOUS	 	 	 	 
	SECTION 7.01.
	 	Definitions	 	 	20	 
	SECTION 7.02.
	 	Amendment	 	 	22	 
	SECTION 7.03.
	 	Notices and Demands to the Company and Warrant Agent	 	 	22	 
	SECTION 7.04.
	 	Addresses for Notices to Parties and for Transmission of Documents	 	 	22	 
	SECTION 7.05.
	 	Notices to Purchasers	 	 	23	 
	SECTION 7.06.
	 	APPLICABLE LAW; SUBMISSION TO JURISDICTION	 	 	23	 
	SECTION 7.07.
	 	Persons Having Rights Under Agreement	 	 	23	 
	SECTION 7.08.
	 	Headings	 	 	23	 
	SECTION 7.09.
	 	Counterparts	 	 	23	 
	SECTION 7.10.
	 	Inspection of Agreement	 	 	23	 
	SECTION 7.11.
	 	Availability of Equitable Remedies	 	 	24	 
	SECTION 7.12.
	 	Obtaining of Governmental Approvals	 	 	24	 

	 	 	 	 	 
	SCHEDULE.A

	 	–
	 	List of Management Purchasers
	SCHEDULE B

	 	–
	 	List of Stock Purchasers
	SCHEDULE C

	 	–
	 	List of Asset Purchasers
	EXHIBIT A

	 	–
	 	Form of Warrant Certificate

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INDEX OF DEFINED TERMS

	 	 	 
	                     Defined Term
	 	Section

	Accredited Investor
	 	1.07
	Affiliate
	 	7.01
	Agreement
	 	Recitals
	Asset Purchasers
	 	Recitals
	Assignment Agreement
	 	Recitals
	Bridge Note Amended Agreement
	 	Recitals
	Bridge Note Purchasers
	 	Recitals
	Bridge Note Waiver and Consent
	 	7.01
	Capital Stock
	 	7.01
	Caravelle
	 	Recitals
	Cashless Exercise
	 	2.02(d)
	Cashless Exercise Ratio
	 	2.02(d)
	CIBC Ireland
	 	Recitals
	CIBC Partners
	 	Recitals
	Common Stock
	 	Recitals
	Company
	 	Recitals
	Conversion Contingent Warrants
	 	Recitals
	Conversion Option
	 	Recitals
	Conversion Purchasers
	 	1.01
	Credit Agreement
	 	7.01
	Current Market Value
	 	7.01
	Distribution
	 	5.03
	Distribution Rights
	 	5.03
	EBITDA
	 	7.01
	Election To Exercise
	 	2.02(c)
	Exchange Act
	 	4.02
	Exercisability Notice
	 	2.02(b)
	Exercise Date
	 	2.02(e)
	Exercise Price
	 	2.02(a)
	Exercise Rate
	 	2.02(a)
	Expiration Date
	 	2.01
	Fully Diluted Shares
	 	5.01(b)
	Fully Exercised Shares
	 	2.02(a)
	Fundamental Transaction
	 	5.01(c)
	Incremental Bridge Warrant Agreement
	 	Recitals
	Incremental Bridge Warrants
	 	Recitals
	Independent Financial Expert
	 	7.01
	Initial Public Equity Offering
	 	7.01
	IRR
	 	7.01
	Leverage Ratio
	 	7.01
	Management Purchasers
	 	Recitals
	New Equity Contingent Warrants
	 	Recitals

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	          Defined Term
	 	Section

	New Equity Warrants
	 	Recitals
	Person
	 	7.01
	Purchase Agreement
	 	Recitals
	Purchasers
	 	1.01
	Qualified Institutional Buyer
	 	1.07
	Related Parties
	 	6.02(e)
	Report Date
	 	7.01
	Requisite Warrant Holders
	 	7.02
	sale
	 	1.07
	Sales Transaction
	 	7.01
	Securities Act
	 	1.07
	Shares
	 	1.01
	Stock Purchasers
	 	Recitals
	Stockholders Agreement
	 	Recitals
	Subject Class
	 	4.03
	Surviving Person
	 	5.01(c)
	Test Date
	 	2.02(a)
	TIP
	 	Recitals
	Trimaran
	 	Recitals
	Trimaran Capital
	 	Recitals
	Trimaran Fund
	 	Recitals
	Trimaran Parallel
	 	Recitals
	Warrant Agent
	 	Recitals
	Warrant Certificates
	 	Recitals
	Warrant Exercise Office
	 	2.02(c)
	Warrants
	 	Recitals

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WARRANT AGREEMENT

          WARRANT AGREEMENT, dated as of February 28, 2001 (the “Agreement”), by and
among Transportation Technologies Industries, Inc., a Delaware corporation
(together with any successor thereto, the “Company”), Transportation Investment
Partners L.L.C., a Delaware limited liability company (“TIP”), Caravelle
Investment Fund, L.L.C., a Delaware limited liability company (“Caravelle”),
the parties listed on Schedule A hereto (the “Management Purchasers”), and
First Union National Bank, as warrant agent (the “Warrant Agent”). Certain
defined terms used herein are defined in Section 7.01.

          WHEREAS, the Company has entered into a purchase agreement (the “Purchase
Agreement”), dated as of February 20, 2001, by and among the Company, Trimaran,
Caravelle and the Management Purchasers (each a “Stock Purchaser” and,
collectively, the “Stock Purchasers”) pursuant to which the Company has agreed
to issue and sell to the Stock Purchasers an aggregate of 465,116 shares of
Common Stock, par value $.01 per share (the “Common Stock”), of the Company at
a price of $21.50 per share, warrants (the “New Equity Warrants”) to purchase
100,000 shares of Common Stock at a price of $21.50 per share, and warrants
(the “New Equity Contingent Warrants”) to purchase up to an aggregate of
465,116 shares of Common Stock at a price of $0.01 per share;

          WHEREAS,
pursuant to the Purchase Agreement, the Company will also sell
to Trimaran, Caravelle and Camillo M. Santomero (each an “Asset Purchaser” and,
collectively, the “Asset Purchasers”) 2,500 shares of Common Stock, par value
$.01 per share, and 2,500 shares of Series B Non-Voting Preferred Stock, par
value $.01 per share, of Rabbit Hill Holdings, Inc. and the Company’s rights to
the CAC (as defined in the Purchase Agreement);

          WHEREAS, in connection with the transactions contemplated by the Purchase
Agreement, the Company and the Asset Purchasers have entered into a conversion
option, dated as of February 28, 2001 (the “Conversion Option”), pursuant to
which the Company has agreed to issue to the Asset Purchasers up to 697,674
shares of Common Stock and warrants (the “Conversion Contingent Warrants” and,
collectively with the New Equity Contingent Warrants, the “Warrants”) to
purchase up to an aggregate of 697,674 shares of Common Stock, in exchange for
the assignment to the Company of a portion of the Rail Car Assets (as defined
in the Conversion Option);

          WHEREAS, the Company and certain bridge note purchasers (the “Bridge Note
Purchasers”) have entered into an agreement, dated as of February 28, 2001 (the
“Bridge Note Amended Agreement”), pursuant to which, among other things, the
Company has agreed, under certain circumstances, to issue warrants (the
“Incremental Bridge Warrants”) to the Bridge Note Purchasers to purchase up to
an aggregate of 200,656 shares of Common Stock at an exercise price equal to
$0.01 per share pursuant to a warrant agreement, dated as of February 28, 2001
(the “Incremental Bridge Warrant Agreement”) by and among the Company, the
Warrant Agent and the Bridge Note Purchasers;

          WHEREAS, the Purchasers (as defined below) are entitled to the benefits of
a Stockholders Agreement, dated as of February 28, 2001, by and among the
Company and the shareholders named therein (the “Stockholders Agreement”);

          WHEREAS, the Bridge Note Purchasers are entitled to the benefits of an
Amended and Restated Common Stock Registration Rights and Stockholders
Agreement, dated as of February 28, 2001, by and among the Company and the
shareholders named therein.

          WHEREAS, the Company and the Purchasers desire the Warrant Agent as
warrant agent to assist the Company in connection with the issuance, exchange,
cancellation, replacement and exercise of the Warrants, and in this Agreement
wish to set forth, among other things, the terms and conditions on

 

 

which the Warrants may be issued, exchanged, cancelled, replaced and
exercised. The certificates evidencing the Warrants are collectively herein
referred to as the “Warrant Certificates.”

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

ISSUANCE, FORM, EXECUTION, TRANSFER, DELIVERY

AND REGISTRATION OF WARRANT CERTIFICATES

     SECTION 1.01. Issuance of Warrants. (a) Subject to the terms and
conditions of this Agreement, (i) the Company hereby issues to the Stock
Purchasers, such number of New Equity Contingent Warrants as set opposite the
name of such Stock Purchaser on Schedule B and (ii) on each Exercise Date (as
defined in the Conversion Option), the Company shall issue to each Holder (as
defined in the Conversion Option) exercising the Conversion Option on such
date, the number of Conversion Contingent Warrants issuable pursuant to the
terms of the Conversion Option, in respect of such exercise. Each exercising
holder referred to in the immediately preceding clause (ii) shall become a
party to this Agreement (with such Persons being referred to herein as the
“Conversion Purchasers”, and the Stock Purchasers and Conversion Purchasers
collectively referred to herein as the “Purchasers”) and the Company shall list
the name and the number of Warrants so issued to such holder on Schedule C.

     (b) Each Warrant Certificate shall evidence the number of Warrants
specified therein, and each Warrant evidenced thereby shall, when exercisable
as provided herein and therein, represent the right, subject to the provisions
contained herein and therein, to purchase from the Company (and the Company
shall issue and sell to the holder of such Warrant upon exercise thereof) one
fully paid and non-assessable share of Common Stock at an exercise price of
$0.01 per share. The shares issuable upon exercise of a Warrant are
hereinafter referred to as the “Shares” and are subject to adjustment as
provided herein and in the Warrant, and, unless the context otherwise requires,
such term shall also include any other securities or property purchasable and
deliverable upon exercise of a Warrant as provided in Article V, subject to
adjustment as provided herein and in the Warrant.

     SECTION 1.02. Form of Warrant Certificates. The Warrant Certificates will
initially be issued substantially in the form of Exhibit A hereto.

     SECTION 1.03. Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by the chairman of its Board of
Directors, its president or any vice president and attested by its secretary or
assistant secretary. Such signatures may be the manual or facsimile signatures
of the present or any future such officers. Typographical and other minor
errors or defects in any such reproduction of any such signature shall not
affect the validity or enforceability of any Warrant Certificate that has been
duly countersigned and delivered by the Warrant Agent.

          In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificate so signed shall be countersigned and delivered by the Warrant Agent
or disposed of by the Company, such Warrant Certificate nevertheless may be
countersigned and delivered or disposed of as though the person who signed such
Warrant Certificate had not ceased to be such officer of the Company; and any Warrant Certificate
may be signed on behalf of the Company by such persons as, at the actual date
of the execution of such Warrant Certificate, shall be the proper officers of
the Company, although at the date of the execution and delivery of this
Agreement any such person was not such an officer.

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          SECTION 1.04. Authentication and Delivery. Subject to the immediately
following paragraph, Warrant Certificates shall be authenticated by manual or
facsimile signature and dated the date of authentication by the Warrant Agent
and shall not be valid for any purpose unless so authenticated and dated.

          Upon the receipt by the Warrant Agent of a written order of the Company,
which order shall be signed by the chairman of its Board of Directors, its
president, chief financial officer or any vice president and attested
to by its
secretary or assistant secretary, and shall specify the amount of Warrants to
be authenticated, the date of such Warrants and such other information as the
Warrant Agent may reasonably request, without any further action by the
Company, the Warrant Agent is authorized, upon receipt from the Company at any
time and from time to time of the Warrant Certificates, duly executed as
provided in Section 1.03 hereof, to authenticate the Warrant Certificates and
upon the holder’s request deliver them. Such authentication shall be by a duly
authorized signatory of the Warrant Agent (although it shall not be necessary
for the same signatory to sign all Warrant Certificates).

          In case any authorized signatory of the Warrant Agent who shall have
authenticated any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company or
the Warrant Agent, such Warrant Certificate nevertheless may be delivered or
disposed of as though the person who authenticated such Warrant Certificate had
not ceased to be such authorized signatory of the Warrant Agent; and any
Warrant Certificate may be authenticated on behalf of the Warrant Agent by such
persons as, at the actual time of authentication of such Warrant Certificates,
shall be the duly authorized signatories of the Warrant Agent, although at the
time of the execution and delivery of this Agreement any such person is not
such an authorized signatory.

          The Warrant Agent’s authentication on all Warrant Certificates shall be in
substantially the form set forth in Exhibit A hereto.

     SECTION 1.05. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant
Certificates. Upon receipt by the Company and the Warrant Agent (or any agent
of the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement or mutilation
of any Warrant Certificate and of an indemnity bond satisfactory to them and,
in the case of mutilation or defacement, upon surrender thereof to the Warrant
Agent for cancellation, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser or holder in due course, the Warrant Agent shall execute and an
authorized signatory of the Warrant Agent shall manually authenticate and
deliver, in exchange for or in lieu of the lost, stolen, destroyed, defaced or
mutilated Warrant Certificate, a new Warrant Certificate representing a like
number of Warrants, bearing a number or other distinguishing symbol not
contemporaneously outstanding. The Company or the Warrant Agent may require an
indemnity bond that is sufficient in the judgment of the Company and the
Warrant Agent to protect the Company and the Warrant Agent from any loss which
any of them may suffer if a Warrant Certificate is replaced. Upon the issuance
of any new Warrant Certificate under this Section in a name other than the
prior registered holder of the lost, stolen, destroyed, defaced or mutilated
Warrant Certificate, the Company may require the payment from the holder of
such Warrant Certificate of a sum sufficient to cover any tax, stamp tax or
other governmental charge that may be imposed in relation thereto and any other
expenses in connection
therewith (including the fees and expenses of the Warrant Agent). Every
substitute Warrant Certificate executed and delivered pursuant to this Section
in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute
an additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of (but shall be subject to all
the limitations of rights set forth in) this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section 1.05 are exclusive with
respect to the replacement of lost, stolen, destroyed, defaced or mutilated
Warrant Certificates and shall preclude (to the extent lawful) any and all
other rights or remedies notwithstanding any

-3-

 

law or statute existing or
hereafter enacted to the contrary with respect to the replacement of lost,
stolen, destroyed, defaced or mutilated Warrant Certificates.

     The Warrant Agent is hereby authorized to authenticate in accordance with
the provisions of this Agreement, and deliver the new Warrant Certificates
required pursuant to the provisions of this Section.

     SECTION 1.06. Form of Legend for the Warrant Certificates. Every Warrant
shall bear a legend in substantially the following form:

          THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR QUALIFIED UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT IS IN EFFECT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. THE HOLDER OF THIS CERTIFICATE IS SUBJECT TO THE TERMS OF THE
WARRANT AGREEMENT, DATED AS OF FEBRUARY 28, 2001 (THE “WARRANT
AGREEMENT”), AMONG TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC. (THE
“COMPANY”) AND THE PURCHASERS NAMED THEREIN. A COPY OF SUCH WARRANT
AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.

     SECTION 1.07. Assignment and Transfer Restrictions. (a) This Agreement
may not be assigned by any Purchaser (or any assignee thereof) and no Warrant
may be sold, transferred or otherwise disposed of (any such sale, transfer or
other disposition is herein referred to as a “sale”), except in compliance with
this Section 1.07. Subject to the other provisions of this Section 1.07, a
Purchaser (or an assignee thereof) may only transfer Warrants to a Person to
whom such Purchaser (or such assignee thereof) could have transferred the
Shares issuable upon exercise thereof assuming such Shares were subject to the
Stockholders Agreement; provided, however, that for purposes hereof, the
requirement in the Stockholders Agreement that a transferee agrees to become a
party to the Stockholders Agreement does not apply to such transfer. Such
transferee shall become a party to the Stockholders Agreement prior to the
exercise of such Warrant. Each Purchaser (and each assignee thereof) may
assign any or all of its rights in this Agreement to any Person to whom it
would have been permitted to sell Warrants (as provided in Section 1.07(b) or
(d)), so long as such assignee assumes in a writing reasonably satisfactory to
the Company all obligations of the assignor hereunder.

     (b) A holder of a Warrant may sell any Warrant to a transferee that is an
Accredited Investor (within the meaning of Rule 501(a) under the Securities Act
of 1933, as amended (the “Securities Act”)), or a Qualified Institutional Buyer
(within the meaning of Rule 144A under the Securities Act); provided,
however, that such holder gives prior written notice to the Company of its
intention to sell such Warrant and that each of the following conditions is
satisfied:

          (i) such holder or transferee represents that it is acquiring the
Warrant for its own account and that it is not acquiring such Warrant
with a view to, or for offer or sale in connection with, any distribution
thereof (within the meaning of the Securities Act) that would be in
violation of the securities laws of the United States or any state
thereof, but subject, nevertheless, to the disposition of its property
being at all times within its control; and

          (ii) such transferee agrees to be bound by the provisions of this
Section 1.07 with respect to any resale of the Warrants.

-4-

 

     (c) A holder may sell its Warrants to a transferee in accordance with
Regulation S under the Securities Act; provided, however, that each of the
following conditions is satisfied:

          (i) the offer of Warrants is not made to a Person in the United
States;

          (ii) either:

          (A) at the time the buy order is originated, the transferee is
outside the United States or the holder and any Person acting on its
behalf reasonably believe that the transferee is outside the United
States, or

          (B) the transaction is executed in, on or through the facilities of
a designated offshore securities market and neither the holder nor any
Person acting on its behalf knows that the transaction was prearranged
with a buyer in the United States;

          (iii) no directed selling efforts are made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S under the
Securities Act, as applicable; and

          (iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.

     (d) In the event of a proposed exercise or sale that does not qualify
under ether Section 1.07(b) or 1.07(c) above, a holder may sell its Warrants
only if:

          (i) such holder gives written notice to the Company of its intention
to exercise or effect such sale, which notice (A) shall describe the
manner and circumstances of the proposed transaction in reasonable detail
and (B) shall designate the counsel for such holder, which counsel shall
be reasonably satisfactory to the Company;

          (ii) counsel for the holder shall render an opinion, to the effect
that such proposed sale may be effected without registration under the
Securities Act; and

          (iii) such holder or transferee complies with Sections 1.07(b)(i)
and 1.07(b)(ii).

ARTICLE II

DURATION, EXERCISE OF WARRANTS,

EXERCISE PRICE AND REPURCHASE OF WARRANTS

     SECTION 2.01. Duration of Warrants. Subject to the terms and conditions
established herein, the Warrants shall expire at 5:00 p.m., Chicago time, on
February 28, 2010. The applicable date of expiration of a particular Warrant
(whether or not then exercisable) is referred to herein as the “Expiration
Date” of such Warrant. Each Warrant may be exercised on any Business Day on or
prior to the close of business on the Expiration Date; provided, however, in no
event may any Warrant be exercised prior to its date of exercisability (as
determined pursuant to Section 2.02(a)).

          Any Warrant not exercised before the close of business on the Expiration
Date shall become void, and all rights of the holder under the Warrant
Certificate evidencing such Warrant and under this Agreement shall cease.

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     SECTION 2.02. Exercise, Exercise Price, Settlement and Delivery. (a)
Subject to the provisions of this Agreement, a holder of a Warrant shall have
the right to purchase from the Company on or prior to the close of business on
the Expiration Date the number of fully paid, registered and non-assessable
shares of Common Stock specified in Section 1.01, subject to adjustment in
accordance with Article V hereof, at the purchase price of $0.01 for each share
purchased (the “Exercise Price”) but only to the extent such Warrant is then
exercisable on the date of such exercise. The number of Shares for which a
particular Warrant may be exercised (the “Exercise Rate”) shall be subject to
adjustment from time to time as set forth in Article V hereof. The Warrants
shall become exercisable as follows:

          (i) If on any of the following dates (a “Test Date”), the Company’s
Leverage Ratio is greater than the ratio set opposite such date, then from and
after the Report Date in respect of any such date, each Warrant shall become
exercisable for an additional 20% of the shares of Common Stock otherwise
issuable (regardless of the extent to which such Warrant is then exercisable or
has previously been exercised) upon full exercise thereof (the “Fully Exercised
Shares”):

	 	 	 	 	 
	Test Date
	 	Leverage Ratio

	June 30, 2002
	 	 	5.75	 
	September 30, 2002
	 	 	5.50	 
	December 31, 2002
	 	 	5.25	 
	March 31, 2003
	 	 	5.00	 
	June 30, 2003
	 	 	4.75	 

; provided that the additional percentage of Fully Exercised Shares in respect
of which such Warrant shall become exercisable pursuant to this Section
2.02(a)(i) shall be reduced by the additional percentage of Fully Exercised
Shares in respect of which such Warrant has become exercisable (prior to the
date on which such Warrant became exercisable for such additional percentage
pursuant to this Section 2.02(a)(i)) pursuant to Section 2.02(a)(ii); provided
further that if there has been no Report Date in respect of any Test Date
within 60 days (90 days in the case of December 31, 2002) after such date,
then, subject to the immediately preceding proviso, such Warrants shall become
exercisable as of such sixtieth (or ninetieth, as the case may be) day, for an
additional 20% of the Fully Exercised Shares (as if the Company’s Lever
age Ratio was in fact greater then the ratio set opposite such date).
Concurrently with the Company’s delivery to the Agent and each of the Lenders
(each as defined in the Credit Agreement) of a certificate of a Responsible
Officer (as defined in the Credit Agreement) pursuant to Section 5.2(b) of the
Credit Agreement in respect of any computation described in Section 5.2(b) of
the Credit Agreement as of a Test Date, the Company shall deliver to each
Purchaser: (x) a copy of such certificate (which copy shall be addressed to
each Purchaser), (y) an additional certificate addressed to each Purchaser
including in reasonable detail the calculation of the Company’s Leverage Ratio
as of such Test Date and (z) the financial statements referred to in Section
5.1 (a) and (b) of the Credit Agreement in respect of such date (including, in
the case of financial statements described in Sections 5.1(a), the certificate
of the Company’s independent certified public accountants described in Section
5.2(a) of the Credit Agreement).

          (ii) If a Sales Transaction occurs before June 30, 2003, then each Warrant
shall become exercisable for an additional percentage of the Fully Exercised
Shares in respect thereof such that the product of (i) the per share cash
consideration paid to the holders of Common Stock in such transaction and (ii)
the number of shares of Common Stock in respect of which each Warrant is then
exercisable (including pursuant to Section 2.02(a)(ii) and disregarding any
prior exercise of such Warrant for these purposes) plus one share (subject to
adjustment in the event of any subdivision, combination or recapitalization in
respect of the Common Stock) shall result in an IRR of 20%..

-6-

 

          The sum of the percentage of the Fully Exercised Shares in respect of
which each Warrant shall become exercisable pursuant to Sections 2.02(a)(i) and
(ii) shall not exceed 100%.

          A Conversion Contingent Warrant shall, as of the date of its issuance
pursuant to Section 1.01(a)(ii), be initially exercisable to the extent the
same would have become exercisable had it been outstanding on any date
specified in this Section 2.02(a) in respect of which Warrants become
exercisable.

     (b) Whenever any portion of a Warrant becomes exercisable, as provided in
Section 2.02(a) (and no later than 10 Business Days before the consummation of
a Sales Transaction, Fundamental Transaction or distribution in respect of the
Common Stock), the Company shall promptly mail to the Purchasers at the
Purchasers’ addresses appearing on Schedule B or C, as applicable, and in the
manner provided in Section 7.05, a notice (an “Exercisability Notice”) of such
exercisability (a notice of possible exercisability, in the case of a notice
given prior to the date of consummation of a Sales Transaction, Fundamental
Transaction or distribution in respect of the Common Stock). In the case of an
Exercisability Notice, the Company shall file with the Warrant Agent such
notice and a certificate from the Company’s independent public accountants
briefly stating the facts causing such exercisability and the manner of
computing it. The certificate shall be conclusive evidence that determinations
in respect of such Exercisability Notice are correct. The Warrant Agent shall
be under no duty or responsibility with respect to any such certificate except
to exhibit the same during normal business hours to any holder desiring
inspection thereof.

          Portions of a Warrant that may become exercisable pursuant to Section
2.02(a) may be provisionally exercised for purposes of participation in any
Sales Transaction, Fundamental Transaction or distribution in respect of the
Common Stock; provided that the extent of such participation shall be adjusted
to reflect the extent to which such Warrant actually became so exercisable and
such exercise may be rescinded by the holder of such Warrant if such
transaction does not occur. The Company shall, as a condition to consummating
any such transaction or making any such distribution, insure that the holder of
a Warrant has the right to participate therein as aforesaid.

          Any determination that the Company or the Board of Directors must make
pursuant to Section 2.02(a) or (b) is conclusive. The Warrant Agent has no
duty to determine when a portion of a Warrant becomes exercisable pursuant to
Section 2.02(a) or to what extent they become so exercisable.
The Warrant Agent shall not be responsible for the Company’s failure to
comply with Section 2.02(a) or (b).

     (c) Warrants may be exercised on or after the date they are exercisable
hereunder by (i) surrendering at the office of the Warrant Agent at the address
set forth in Section 7.04 (the “Warrant Exercise Office”) the Warrant
Certificate evidencing such Warrants with the form of election to exercise set
forth on the reverse side of the Warrant Certificate (the “Election to
Exercise”) duly completed and signed by the registered holder or holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney, and in the case of a transfer, such signature shall be
guaranteed by an eligible guarantor institution, and (ii) paying in full the
Exercise Price for each such Warrant exercised. The exercisable portion (as
determined pursuant to Section 2.02(a)) may be exercised only in whole. No
exercise of Warrants may be effected which does not call for the issuance of a
number of shares of Common Stock in direct proportion (subject only to rounding
with respect to fractional shares) to the aggregate number of shares of Common
Stock then issuable upon exercise of the Warrants evidenced by the relevant
Warrant Certificate.

     (d) Simultaneously with the exercise of each Warrant, payment in full of
the aggregate Exercise Price may be made, at the option of the holder, (i) by
wire transfer or by certified check, (ii) by the surrender (which surrender
shall be evidenced by cancellation of the number of Warrants represented by

-7-

 

any
Warrant Certificate presented in connection with a Cashless Exercise) of a
Warrant or Warrants (represented by one or more Warrant Certificates), and
without payment of the Exercise Price in cash, which are exercisable for such
number of Shares equal to the product of (1) the number of Shares for which
such Warrant is exercisable with payment in cash of the aggregate Exercise
Price as of the date of exercise and (2) the applicable Cashless Exercise Ratio
or (iii) with any combination of (i) and (ii); provided that only the
exercisable portion (as determined pursuant to Section 2.02(a)) of a Warrant
may be surrendered in the case of a Cashless Exercise. For purposes of this
Agreement, the “Cashless Exercise Ratio” shall equal a fraction, the numerator
of which is the Exercise Price per share as of the date of exercise and the
denominator of which is the Current Market Value (as defined in Section 7.01)
per share of the Common Stock on the date of exercise. An exercise of a
Warrant in accordance with the immediately preceding sentences is herein called
a “Cashless Exercise”. Upon surrender of a Warrant Certificate representing more
than one Warrant in connection with the holder’s option to elect a Cashless
Exercise, the number of Shares deliverable upon a Cashless Exercise shall be
equal to the product of (A) one minus the Cashless Exercise Ratio, (B) the
number of Warrants that the holder specifies are to be exercised pursuant to a
Cashless Exercise and (C) the number of Shares for which such Warrants are then
exercisable (without giving effect to the Cashless Exercise option). All
provisions of this Agreement shall be applicable with respect to an exercise of
a Warrant Certificate pursuant to a Cashless Exercise for less than the full
number of Warrants represented thereby. No payment or adjustment shall be made
on account of any dividends on the Shares issued upon exercise of a Warrant.
The Warrant Agent shall have no obligation under this Section to calculate the
Cashless Exercise Ratio. The Company shall calculate the Exercise Price and
the Cashless Exercise Ratio whenever such calculation is necessary and shall
deliver an officers’ certificate to the Warrant Agent specifying such numbers.

     (e) Upon such surrender of a Warrant Certificate and payment and
collection of the Exercise Price at the Warrant Exercise Office, such Warrant
Certificate and payment shall be promptly delivered to the Warrant Agent. The
“Exercise Date” for a Warrant shall be the date when all of the items referred
to in the first sentence of paragraphs (c) and (d) of this Section 2.02 are
received by the Warrant Agent at or prior to 11:00 a.m., Chicago time, on a
Business Day and the exercise of the Warrants will be effective as of such
Exercise Date. If any items referred to in the first sentence of paragraphs
(c) and (d) are received after 11:00 a.m., Chicago time, on a Business Day, the
exercise of the Warrants to which such items relate will be effective on the
next succeeding Business Day. Notwithstanding the foregoing, in the case of an
exercise of Warrants on the Expiration Date, if all of the items referred to in
the first sentence of paragraphs (c) and (d) are received by the Warrant Agent at or prior to 5:00
p.m., Chicago time, on the Expiration Date, the exercise of the Warrants to
which such items relate will be effective on the Expiration Date.

     (f) Upon the exercise of a Warrant in accordance with the terms hereof,
the receipt of a Warrant Certificate and payment of the Exercise Price (or
election of the Cashless Exercise option), the Warrant Agent shall: (i) except
to the extent exercise of the Warrant has been effected through Cashless
Exercise, cause an amount equal to the aggregate Exercise Price to be paid to
the Company by crediting the same to the account designated by the Company in
writing to the Warrant Agent for that purpose; (ii) advise the Company
immediately by telephone of the amount so deposited to the Company’s account
and promptly confirm such telephonic advice in writing; and (iii) as soon as
practicable, advise the Company in writing of the number of Warrants exercised
in accordance with the terms and conditions of this Agreement and the Warrant
Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the Shares to which such holder is
entitled upon such exercise, and such other information as the Company shall
reasonably request.

     (g) Subject to Section 5.02 hereof, as soon as practicable after the
exercise of any Warrant or Warrants in accordance with the terms hereof, the
Company shall issue or cause to be issued to or upon the written order of the
registered holder of the Warrant Certificate evidencing such exercised Warrant
or

-8-

 

Warrants, a certificate or certificates evidencing the Shares to which such
holder is entitled, registered in such name or names as may be directed by such
holder pursuant to the Election to Exercise, as set forth on the reverse of the
Warrant Certificate. Such certificate or certificates evidencing the Shares
shall be deemed to have been issued and any Persons who are designated to be
named therein shall be deemed to have become the holder of record of such
Shares as of the close of business on the Exercise Date. After such exercise
of any Warrant or Warrants, the Company shall also issue or cause to be issued
to or upon the written order of the registered holder of such Warrant
Certificate, a new Warrant Certificate, countersigned by the Warrant Agent
pursuant to written instruction, evidencing the number of Warrants, if any,
remaining unexercised unless such Warrants shall have expired.

     SECTION 2.03. Cancellation of Warrant Certificates. In the event the
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants shall thereupon be delivered to the Warrant Agent, and
if so delivered, shall at the Company’s written instruction be canceled by it
and retired. The Warrant Agent shall cancel all Warrant Certificates properly
surrendered for exchange, substitution, transfer or exercise in accordance with
its customary procedures.

ARTICLE III

OTHER PROVISIONS RELATING TO

RIGHTS OF HOLDERS OF WARRANTS

     SECTION 3.01. Enforcement of Rights. (a) Notwithstanding any of the
provisions of this Agreement, any holder of any Warrant Certificate, without
the consent of the Warrant Agent, the holder of any Shares or the holder of any
other Warrant Certificate, may, in and for his own behalf, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, his right to exercise the Warrant or Warrants evidenced by
his Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.

     (b) Neither the Warrants nor any Warrant Certificate shall entitle the
holders thereof to any of the rights of a holder of Shares, including, without
limitation, the right to vote or to receive any dividends or other payments or
to consent or to receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or any other
matter, or any rights whatsoever as stockholders of the Company, except as
expressly provided herein (including Section 5.03 hereof).

ARTICLE IV

CERTAIN COVENANTS OF THE COMPANY

     SECTION 4.01. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrants and of the Shares
upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or other governmental charge which may be payable in
respect of any transfer or exchange of any Warrant Certificates or any
certificates for Shares in a name other than the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant. In any such case, no
transfer or exchange shall be made unless or until the Person or Persons
requesting issuance thereof shall have paid to the Company the amount of such
tax or other governmental charge or shall have established to the satisfaction
of the Company that such tax or other governmental charge has been paid or an
exemption is available therefrom.

     SECTION 4.02. Rules 144 and 144A. The Company covenants that it will file
the reports required to be filed by it under the Securities Act and the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules
and regulations adopted by the Securities and Exchange Commission

-9-

 

thereunder in
a timely manner in accordance with the requirements of the Securities Act and
the Exchange Act and, if at any time the Company is not required to file such
reports, it will, upon the request of any holder or beneficial owner of
Warrants, make available such information necessary to permit sales pursuant to
Rule 144A under the Securities Act.

     SECTION 4.03. Form of Initial Public Equity Offering. The Company agrees
that it will not make an Initial Public Equity Offering of any class of its
Capital Stock (other than the class to which the Shares belong) without
amending the terms of the Company’s certificate of incorporation to provide
that the Common Stock is convertible into the class of Capital Stock subject to
the Initial Public Equity Offering (the “Subject Class”) on a share-for share
basis and that the rights, conditions and privileges of the Subject Class shall
not be adverse to the holders of the Common Stock.

ARTICLE V

ADJUSTMENTS

     SECTION 5.01. Adjustment of Exercise Rate; Notices. The Exercise Rate and
the Exercise Price are subject to adjustment from time to time as provided in
this Section.

          (a) Adjustment for Change in Capital Stock. If, after the date of
this Agreement (regardless, in the case of the Conversion Contingent
Warrants, whether the same are issued pursuant to Section 1.01(a)(ii)),
the Company:

               (i) subdivides any of its outstanding shares of Common Stock
into a greater number of shares;

               (ii) combines any of its outstanding shares of Common Stock
into a smaller number of shares;

               (iii) pays a dividend or makes a distribution on any of its
Common Stock in shares of any of its Capital Stock (other than
Common Stock or rights, warrants or options for its Common Stock to
the extent such issuance or distribution is covered by Section
5.03); or

               (iv) issues by reclassification of any of its Common Stock any shares of any of its Capital Stock;

then the Exercise Rate and Exercise Price in effect immediately prior to such
action for each Warrant then outstanding shall be proportionately adjusted so
that the holder of a Warrant thereafter exercised may receive the number of
shares of Capital Stock of the Company which such holder would have owned
immediately following such action if such holder had exercised the Warrant
immediately prior to such action or immediately prior to the record date
applicable thereto (regardless of the extent to which such Warrant was then
exercisable). With respect to the subdivisions, combinations or dividends and
distributions described in Section 5.01(a)(i), (ii) or (iii), the adjustment
described in the immediately preceding sentence shall be effected as follows:
the Exercise Price in effect immediately prior to such action shall be adjusted
to a price determined by multiplying the Exercise Price in effect immediately
prior to such action by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding before giving effect to such action and
the denominator of which shall be the number of shares of Common Stock and/or
such other capital stock outstanding referred to in the foregoing clause
(a)(iii) after giving effect to such action, if any (regardless of whether the
Warrants then outstanding are then exercisable and without giving effect to the
Cashless Exercise option), and the Exercise Rate in effect immediately

-10-

 

prior to
such action shall be adjusted to a rate determined by multiplying the Exercise
Rate in effect immediately prior to such action by the reciprocal of such
fraction. If there are no outstanding shares of Capital Stock that are of the
same class as the Shares at the time of any such action and such action has
therefore been taken only in respect of the Shares, the adjustment shall relate
to the Shares in their same form if it would not frustrate the intent and
purposes of this Section 5.01.

          The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification. In the event
that such dividend or distribution is not so paid or made or such subdivision,
combination or reclassification is not effected, the Exercise Rate and Exercise
Price shall again be adjusted to be the Exercise Rate and Exercise Price which
would then be in effect if such record date or effective date had not been so
fixed.

          If after an adjustment a holder of a Warrant upon exercise of such Warrant
may receive shares of two or more classes of Capital Stock of the Company, the
Exercise Rate and Exercise Price shall thereafter be subject to adjustment upon
the occurrence of an action taken with respect to any such class of Capital
Stock as is contemplated by this Article V with respect to the Common Stock, on
terms comparable to those applicable to Common Stock in this Article V.

          Such adjustment shall be made successively whenever any event listed above
shall occur.

          (b) If, after the date hereof (regardless, in the case of the
Conversion Contingent Warrants, whether the same are issued pursuant to
Section 1.01(a)(ii)), the Company grants or sells to any Affiliate of the
Company (or generally to stockholders of the Company or their Affiliates)
any Common Stock or any securities convertible into or exchangeable or
exercisable for any Common Stock at a price below the then Current Market
Value (other than (1) pursuant to the exercise of the Warrants, (2)
pursuant to the exercise of the New Equity Warrants, (3) pursuant to the
exercise of the Incremental Bridge Warrants, (4) pursuant to any security
convertible into, or exchangeable or exercisable for, shares of Common
Stock outstanding as of the date of this Agreement, (5) upon the
conversion, exchange or exercise of any convertible, exchangeable or
exercisable security as to which upon the issuance thereof an adjustment
pursuant to this Article V has been made and (6) upon the conversion,
exchange or exercise of any convertible, exchangeable or exercisable
securities of the Company outstanding on the date of this Agreement (to
the extent in accordance with the terms of such securities as in effect
on the date of this Agreement)), the Exercise Rate for each Warrant then
outstanding (regardless of the extent to which such Warrant was then
exercisable) shall be adjusted in accordance with the formula:

and the Exercise Price shall be adjusted in accordance with the following
formula:

where:

	 	 	 	 	 
	E’

	 	=
	 	the adjusted Exercise Rate.

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	E

	 	=
	 	the Exercise Rate immediately prior to the date of
determination for any such issuance, sale or distribution.
	 
	 	 	 	 
	EP’

	 	=
	 	the adjusted Exercise Price.
	 
	 	 	 	 
	EP

	 	=
	 	the Exercise Price immediately prior to the date of
determination for any such issuance, sale or distribution.
	 
	 	 	 	 
	O

	 	=
	 	the number of Fully Diluted Shares (as defined below)
outstanding immediately prior to the date of determination
for any such issuance, sale or distribution.
	 
	 	 	 	 
	N

	 	=
	 	the number of additional shares of Common Stock issued or
sold, or issuable or saleable, upon exercise of such rights,
options or warrants.
	 
	 	 	 	 
	P

	 	=
	 	the per share price received and receivable by the Company in
the case of any issuance or sale of Common Stock or rights,
options or warrants inclusive of the exercise price per share
of Common Stock payable upon exercise of such rights, options
or warrants.
	 
	 	 	 	 
	M

	 	=
	 	the Current Market Value per share of Common Stock on the
date of determination for any such issuance, sale or
distribution.

          For purposes of this Section 5.01 the term “Fully Diluted Shares” shall
mean (i) the shares of Common Stock outstanding as of a specified date, and
(ii) the shares of Common Stock into or for which rights, options, warrants or
other securities outstanding as of such date are exercisable or convertible and
which (x) have exercise or conversion prices that are not in excess of Current
Market Value on the date of determination and (y) are exercisable at such date
of determination (for these purposes (A) the Warrants and Incremental Bridge
Warrants shall not be deemed outstanding (or otherwise included within this
clause (ii)) until they are exercisable pursuant to this Agreement or the
Incremental Bridge Warrant Agreement, as the case may be, and (B) the Shares
issuable upon exercise of then exercisable Conversion Contingent Warrants shall
not be deemed outstanding unless the Common Stock issuable upon exercise of the
Conversion Option is deemed to be outstanding pursuant to this clause (ii)).

          The adjustments shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
relevant date of determination. In the event that such rights or warrants are
not so issued, the Exercise Rate and Exercise Price for each Warrant then
outstanding shall again be adjusted to be the Exercise Rate and Exercise Price
which would then be in effect if such date fixed for determination of
stockholders entitled to receive such rights or warrants had not been so fixed.
To the extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Exercise Rate and Exercise Price for
each Warrant then outstanding shall be readjusted to the Exercise Rate and
Exercise Price which would otherwise be in effect had the adjustment made upon
the issuance of such rights or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered.

          No adjustment shall be made under this paragraph (b) if the application of
the formula stated above in this paragraph (b) would result in a value of E’
that is lower than the value of E.

          No adjustment in the Exercise Rate and Exercise Price shall be made under
this paragraph (b) upon the conversion, exchange or exercise of options to
acquire shares of Common Stock by officers,

-12-

 

directors, employees or consultants
of the Company; provided that the exercise price of such options, at the time
of issuance thereof, is at least equal to the then Current Market Value of the
Common Stock underlying such options.

          (c) Reorganization of Company; Special Distributions. (i) If the
Company, in a single transaction or through a series of related
transactions, merges, consolidates or amalgamates with or into any other
Person or sells, assigns, transfers, leases, conveys or otherwise
disposes of all or substantially all of its properties and assets to
another Person or group of Affiliated Persons or is a party to a merger
or binding share exchange which reclassifies or changes its outstanding
Common Stock (a “Fundamental Transaction”), as a condition to
consummating any such transaction, the Person formed by or surviving any
such consolidation or merger (if other than the Company) or the Person to
whom such transfer has been made (the “Surviving Person”) shall enter
into a supplemental warrant agreement. The supplemental warrant
agreement shall provide that the holder of a Warrant then outstanding may
exercise it for the kind and amount of securities, cash or other assets
which such holder would have received immediately after the Fundamental
Transaction if such holder had exercised the Warrant immediately before
the effective date of the transaction (regardless of whether the Warrants
are then exercisable and without giving effect to the Cashless Exercise
option), assuming (to the extent applicable) that such holder (x) was not
a constituent Person or an Affiliate of a constituent Person to such
transaction, (y).
made no election with respect thereto, and (z) was treated alike
with the plurality of non-electing holders.

               (ii) Notwithstanding the foregoing, if the Company enters into
a Fundamental Transaction with another Person (other than a
subsidiary of the Company) and consideration is payable to holders
of shares of Capital Stock (or other securities or property)
issuable or deliverable upon exercise of the Warrants which
consists solely of cash, then the holders of Warrants shall be
entitled to receive distributions on the date of such event on an
equal basis with holders of such shares (or other securities or
property issuable upon exercise of the Warrants) as if the Warrants
had been exercised immediately prior to such event, less the
Exercise Price therefor; provided that such distribution shall, in
the case of portions of Warrants that are not then exercisable, be
paid on the date such portions become exercisable to the holder of
such Warrant on such date. Upon receipt of such payment, if any,
the rights of a holder of such a Warrant shall terminate and cease
and such holder’s Warrants shall expire.

     (iii) If this paragraph (c) applies, it shall supersede the application of
paragraph (a) of this Section 5.01.

     (d) Notice of Adjustment. Whenever the Exercise Rate or Exercise Price is
adjusted, the Company shall promptly mail to the Purchasers at the Purchasers’
addresses appearing on Schedule B or C, as applicable, a notice of the
adjustment in accordance with Section 7.05. The Company shall file with the
Warrant Agent such notice and a certificate from the Company’s independent
public accountants briefly stating the facts requiring the adjustment and the
manner of computing it. The certificate shall be conclusive evidence that the
adjustment is correct. The Warrant Agent shall be under no duty or
responsibility with respect to any such certificate except to exhibit the same
during normal business hours to any holder desiring inspection thereof.

     (e) Company Determination Final. Any determination that the Company or
the Board of Directors of the Company must make pursuant to this Section 5.01
is conclusive.

-13-

 

     (f) Warrant Agent’s Adjustment Disclaimer. The Warrant Agent has no duty
to determine when an adjustment under this Section 5.01 should be made, how it
should be made or what it should be. The Warrant Agent has no duty to
determine whether a supplemental warrant agreement under paragraph (c) need be
entered into or whether any provisions of any supplemental warrant agreement
are correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company’s failure to comply with this Section 5.01.

     (g) Adjustment for Tax Purposes. The Company may make such increases in
the Exercise Rate, in addition to those otherwise required by this Section, as
it considers to be advisable in order that any event treated for Federal income
tax purposes as a dividend of stock or stock rights shall not be taxable to the
recipients.

     (h) Underlying Shares. The Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock or Common Stock held in the treasury of the Company, for the
purpose of effecting the exercise of Warrants, the full number of Shares then
deliverable upon the exercise of all Warrants then outstanding and payment of
the exercise price, and the shares so deliverable shall be fully paid and
nonassessable and free from all liens and security interests.

     (i) Specificity of Adjustment. Irrespective of any adjustments in the
number or kind of shares purchasable upon the exercise of the Warrants, Warrant
Certificates theretofore or thereafter issued may continue to express the same
number and kind of shares per Warrant as are stated on the Warrant Certificates
initially issuable pursuant to this Agreement.

     (j) Voluntary Adjustment. The Company from time to time may increase the
Exercise Rate or reduce the Exercise Price by any number and for any period of
time (provided that such period is not less than 20 Business Days). Whenever
the Exercise Rate is so increased or the Exercise Price so reduced, the Company
shall mail to Purchasers at their addresses appearing on Schedule B or C, as
applicable, and file with the Warrant Agent a notice of the increase. The
Company shall give the notice at least 15 days before the date the increased.
Exercise Rate or decreased Exercise Price takes effect. The notice shall state
the increased Exercise Rate or decreased Exercise Price and the period it will
be in effect. A voluntary increase in the Exercise Rate or decrease in the
Exercise Price does not change or adjust the Exercise Rate or Exercise Price
otherwise in effect as determined by this Section 5.01.

     (k) Multiple Adjustments. After an adjustment to the Exercise Rate or
Exercise Price for outstanding Warrants under this Article V, any subsequent
event requiring an adjustment under this Article V shall cause an adjustment to
the Exercise Rate or Exercise Price for outstanding Warrants as so adjusted.

     (l) Minimum Exercise Price. Notwithstanding anything to the contrary
contained in this Agreement, if the Exercise Price, as adjusted pursuant to
this Agreement shall be less than the par value of the related Share, then the
Company shall use its best efforts to cause an amendment to its Certificate of
Incorporation to reduce the par value of the Common Stock.

     (m) When De Minimis Adjustment May Be Deferred. No adjustment in the
Exercise Rate or Exercise Price need be made unless the adjustment would
require an increase of at least 1% in the Exercise Rate. Any adjustments that
are not made shall be carried forward and taken into account in any subsequent
adjustments. All calculations under this Section 5.01 shall be made to the
nearest 1/100th of a share, as the case may be.

-14-

 

     SECTION 5.02. Fractional Shares. The Company will not be required to
issue fractional Shares upon exercise of the Warrants or distribute Share
certificates that evidence fractional Shares. In the event a holder is
required by Section 2.02(d) to make a Cashless Exercise, and the Company
determines not to issue fractional Shares, the number of Shares issuable shall
be rounded up to the nearest whole number. In addition, in no event shall any
holder of Warrants be required to make any payment of a fractional cent. In
lieu of fractional Shares, the Company may pay to the registered holders of
Warrant Certificates at the time Warrants evidenced thereby are exercised as
herein provided an amount in cash equal to the same fraction of the Current
Market Value per Share on the Business Day preceding the date the Warrant
Certificates evidencing such Warrants are surrendered for exercise. Such
payments will be made by check or by transfer to an account maintained by such
registered holder with a bank in New York City. If any holder surrenders for
exercise more than one Warrant Certificate, the number of Shares deliverable to
such holder may, at the option of the Company, be computed on the basis of the
aggregate amount of all the Warrants exercised by such holder.

     SECTION 5.03. Certain Distributions. If at any time the Company grants,
issues or sells options, convertible securities, or rights to purchase Capital
Stock, warrants or other securities pro rata to the record holders of any Common Stock (the “Distribution Rights”) or, without duplication, makes any
dividend or otherwise makes any distribution, including, subject to applicable
law, pursuant to any plan of liquidation (“Distribution”), on Common Stock
(whether in cash, property, evidences of indebtedness or otherwise), then the
Company shall grant, issue, sell or make to each registered holder of Warrants
then outstanding, the aggregate Distribution Rights or Distribution, as the
case may be, which such holder would have acquired if such holder had held the
maximum number of Shares acquirable upon complete exercise of such holder’s
Warrants (to the extent then exercisable) immediately before the record date
for the grant, issuance or sale of such Distribution Rights or Distribution, as
the case may be, or, if there is no such record date, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or
sale of such Distribution Rights or Distribution, as the case may be.

ARTICLE VI

CONCERNING THE WARRANT AGENT

     SECTION 6.01. Warrant Agent. The Company hereby appoints First Union
National Bank as Warrant Agent of the Company in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein
and in the Warrant Certificates set forth; and First Union National Bank hereby
accepts such appointment. The Warrant Agent shall have the powers and
authority specifically granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of the Company as the Company may hereafter grant to or confer upon it and it
shall accept in writing. All of the terms and provisions with respect to such
powers and authority contained herein and the Warrant Certificates are subject
to and governed by the terms and provisions hereof. The Warrant Agent may act
through agents and shall not be responsible for the misconduct or negligence of
any such agent appointed with due care.

     SECTION 6.02. Conditions of Warrant Agent’s Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof and in the Warrant Certificates, including the following, to all of
which the Company agrees and to all of which the rights hereunder of the
holders from time to time of the Warrant Certificates shall be subject:

          (a) The Warrant Agent shall be entitled to compensation to be agreed upon
with the Company in writing for all services rendered by it and the Company
agrees promptly to pay such compensation and to reimburse the Warrant Agent for
its reasonable out-of-pocket expenses (including reasonable fees and expenses
of counsel) incurred without gross negligence or willful misconduct on its part

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in connection with the services rendered by it hereunder. The Company also
agrees to indemnify the Warrant Agent and any predecessor Warrant Agent, their
directors, officers, Affiliates, agents and employees for, and to hold them and
their directors, officers, Affiliates, agents and employees harmless against,
any loss, liability or expense of any nature whatsoever (including, without
limitation, reasonable fees and expenses of counsel) incurred without gross
negligence or willful misconduct on the part of the Warrant Agent, arising out
of or in connection with its acting as such Warrant Agent hereunder and its
exercise of its rights and performance of its obligations hereunder. The
obligations of the Company under this Section 6.02 shall survive the exercise
and the expiration of the Warrant Certificates and the resignation and removal
of the Warrant Agent.

          (b) In acting under this Agreement and in connection with the Warrant
Certificates, the Warrant Agent is acting solely as agent of the Company and
does not assume any obligation or relationship of agency or trust for or with
any of the owners or holders of the Warrant Certificates.

          (c) The Warrant Agent may consult with counsel of its selection and any
advice or written opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice or
opinion.

          (d) The Warrant Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, opinion of counsel, instruction, statement or
other paper or document reasonably believed by it to be genuine and to have
been presented or signed by the proper parties.

          (e) The Warrant Agent, and its officers, directors, Affiliates and
employees (“Related Parties”), may become the owners of, or acquire any
interest in, Warrant Certificates, shares or other obligations of the Company
with the same rights that it or they would have it if were not the Warrant
Agent hereunder and, to the extent permitted by applicable law, it or they may
engage or be interested in any financial or other transaction with the Company
and may act on, or as depository, trustee or agent for, any committee or body
of holders of shares or other obligations of the Company as freely as if it
were not the Warrant Agent hereunder. Nothing in this Agreement shall be
deemed to prevent the Warrant Agent or such Related Parties from acting in any
other capacity for the Company.

          (f) The Warrant Agent shall not be under any liability for interest on,
and shall not be required to invest, any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.

          (g) The Warrant Agent shall not be under any responsibility in respect of
the validity of this Agreement (or any term or provision hereof) or the
execution and delivery hereof (except the due execution and delivery hereof by
the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its authentication thereof).

          (h) The recitals and other statements contained herein and in the Warrant
Certificates (except as to the Warrant Agent’s authentication thereon) shall be
taken as the statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same. The Warrant Agent does not
make any representation as to the validity or sufficiency of this Agreement or
the Warrant Certificates, except for its due execution and delivery of this
Agreement; provided, however, that the Warrant Agent shall not be relieved of
its duty to authenticate the Warrant Certificates as authorized by this
Agreement. The Warrant Agent shall not be accountable for the use or
application by the Company of the proceeds of the exercise of any Warrant.

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          (i) Before the Warrant Agent acts or refrains from acting with respect to
any matter contemplated by this Agreement, it may require:

          (1) an officers’ certificate stating on behalf of the Company
that, in the opinion of the signers, all conditions precedent, if
any, provided for in this Warrant Agreement relating to the
proposed action have been complied with; and

          (2) if reasonably necessary in the sole judgment of the
Warrant Agent, an opinion of counsel for the Company stating that,
in the opinion of such counsel, all such
conditions precedent have been complied with provided that
such matter is one customarily opined on by counsel.

          Each officers’ certificate or, if requested, an opinion of counsel
with respect to compliance with a condition or covenant provided for in
this Warrant Agreement shall include:

          (1) a statement that the person making such certificate or
opinion has read such covenant or condition;

          (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

          (3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or
not such covenant or condition has been complied with; and

          (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

     (j) The Warrant Agent shall be obligated to perform such duties as are
herein and in the Warrant Certificates specifically set forth and no implied

duties or obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and
delivered by it to the Company pursuant to this Agreement. The Warrant Agent
shall have no duty or responsibility in case of any default by the Company in
the performance of its covenants or agreements contained in the Warrant
Certificates or in the case of the receipt of any written demand from a holder
of a Warrant Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or, except
as provided in Section 7.03 hereof, to make any demand upon the Company.

     (k) Unless otherwise specifically provided herein, any order, certificate,
notice, request, direction or other communication from the Company made or
given under any provision of this Agreement shall be sufficient if signed by
its chairman of the Board of Directors, its president, its treasurer, its
controller or any vice president or its secretary or any assistant secretary.

     (l) The Warrant Agent shall have no responsibility in respect of the
exercise of Warrants pursuant to Section 1.01(a)(ii), any determination of
exercisability pursuant to Section 2.02(a) or any adjustment pursuant to
Article V hereof.

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     (m) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing by the Warrant
Agent of the provisions of this Agreement.

     (n) The Warrant Agent is hereby authorized and directed to accept written
instructions with respect to the performance of its duties hereunder from any
one of the chairman of the Board of Directors, the president, the treasurer,
the controller, any vice president or the secretary or assistant secretary of
the Company or any other officer or official of the Company reasonably believed
to be authorized to give such instructions and to apply to such officers or
officials for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions with respect to any
matter arising in connection with the Warrant Agent’s duties and obligations
arising under this Agreement. Such application by the Warrant Agent for
written instructions from the Company may, at the option of the Warrant Agent,
set forth in writing any action proposed to be taken or omitted by the Warrant
Agent with respect to its duties or obligations under this Agreement and the
date on or after which such action shall be taken and the Warrant Agent shall
not be liable for any action taken or omitted in accordance with a proposal
included in any such application on or after the date specified therein (which
date shall be not less than 10 Business Days after the Company receives such
application unless the Company consents to a shorter period), provided that (i)
such application includes a statement to the effect that it is being made
pursuant to this paragraph (n) and that unless objected to prior to such date
specified in the application, the Warrant Agent will not be liable for any such
action or omission to the extent set forth in such paragraph (n) and (ii) prior
to taking or omitting any such action, the Warrant Agent has not received
written instructions objecting to such proposed action or omission.

     (o) Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed on behalf of the Company by any one of the
chairman of the Board of Directors, the president, the treasurer, the
controller, any vice president or the secretary or assistant secretary of the
Company or any other officer or official of the Company reasonably believed to
be authorized to give such instructions and delivered to the Warrant Agent; and
such certificate shall be full authorization to the Warrant Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

     (p) The Warrant Agent shall not be required to risk or expend its own
funds in the performance of its obligations and duties hereunder.

     SECTION 6.03. Resignation and Appointment of Successor. (a) The Company
agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder.

     (b) The Warrant Agent may at any time resign as Warrant Agent by giving
written notice to the Company of such intention on its part, specifying the
date on which its desired resignation shall become effective; provided,
however, that such date shall be at least 30 days after the date on which such
notice is given unless the Company agrees to accept less notice. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor Warrant Agent, qualified as provided in Section 6.03(d) hereof, by
written instrument in duplicate signed on behalf of the Company, one copy of
which shall be delivered to the resigning Warrant Agent and one copy to the
successor Warrant Agent. As provided in Section 6.03(d) hereof, such
resignation shall become effective upon the earlier of (x) the acceptance of
the appointment by the successor Warrant Agent or (y) 30 days after receipt by
the Company of

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notice of such resignation. The Company may, at any time and
for any reason, and shall, upon any event set forth in the next succeeding
sentence, remove the Warrant Agent and appoint a successor Warrant Agent by
written instrument in duplicate, specifying such removal and the date on which
it is intended to become effective, signed on behalf of the Company, one copy
of which shall be delivered to the Warrant Agent being removed and one copy to
the successor Warrant Agent. The Warrant Agent shall be removed as aforesaid
if it shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Warrant Agent or of its property shall be
appointed, or any public officer shall take charge or control of it or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation. Any removal of the Warrant Agent and any appointment of a
successor Warrant Agent shall be
come effective upon acceptance of appointment by the successor Warrant
Agent as provided in Section 6.03(d). As soon as practicable after appointment
of the successor Warrant Agent, the Company shall cause written notice of the
change in the Warrant Agent to be given to each of the Purchasers in the manner
provided for in Section 7.05 hereof.

     (c) Upon resignation or removal of the Warrant Agent, if the Company shall
fail to appoint a successor Warrant Agent within a period of 60 days after
receipt of such notice of resignation or removal, then the holder of any
Warrant Certificate or the retiring Warrant Agent may apply to a court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a successor to the Warrant Agent, either by the Company
or by such a court, the duties of the Warrant Agent shall be carried out by the
Company.

     (d) Any successor Warrant Agent, whether appointed by the Company or by a
court, shall be a bank or trust company in good standing, incorporated under
the laws of the United States of America or any State thereof and having, at
the time of its appointment, a combined capital surplus of at least $250
million. Such successor Warrant Agent shall execute and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder and all the provisions of this Agreement, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Warrant Agent
hereunder, and such predecessor shall thereupon become obligated to (i)
transfer and deliver, and such successor Warrant Agent shall be entitled to
receive, all securities, records or other property on deposit with or held by
such predecessor as Warrant Agent hereunder and (ii) upon payment of the
amounts then due it pursuant to Section 6.02(a) hereof, pay over, and such
successor Warrant Agent shall be entitled to receive, all monies deposited with
or held by any predecessor Warrant Agent hereunder.

     (e) Any corporation or bank into which the Warrant Agent hereunder may be
merged or converted, or any corporation or bank with which the Warrant Agent
may be consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation or bank to which the Warrant Agent shall sell or otherwise transfer
all or substantially all of its corporate trust business, shall be the
successor to the Warrant Agent under this Agreement (provided that such
corporation or bank shall be qualified as aforesaid) without the execution or
filing of any document or any further act on the part of any of the parties
hereto.

     (f) No Warrant Agent under this Warrant Agreement shall be personally
liable for any action or omission of any successor Warrant Agent.

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ARTICLE VII

MISCELLANEOUS

     SECTION 7.01. Definitions. Capitalized terms set forth below shall have
the following meanings. Certain other capitalized terms may be defined
elsewhere in the text of this Agreement and, unless otherwise indicated, shall
have such meaning throughout this Agreement.

          “Affiliate” means with respect to any specified Person any other Person
that directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlling,” “controlled by” and “under common control with”), as
used with respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise. Each of TIP, Trimaran and each investor in the Trimaran program
shall be deemed to be an “Affiliate” of the other. Except for the purposes of
Section 5.01(b) (in which case each of the same shall be deemed to be
Affiliates of the Company), none of the Purchasers (or any of their Affiliates)
shall be deemed to be Affiliates of the Company.

          “Bridge Note Waiver and Consent” means the Limited and Conditional Waiver
and Consent and Agreement, dated as of February 28, 2001, by and among the
Company and the Bridge Note Purchasers, as the same exists on the date hereof.

          “Business Day” shall mean any day on which (i) banks in New York City or
Chicago, Illinois, (ii) the principal U.S. Securities exchange or market, if
any, on which the Common Stock or a Subject Class (as defined in Section 4.03)
is listed or admitted to trading and (iii) the principal U.S. securities
exchange or market, if any, on which the Warrants are listed or admitted to
trading are open for business.

          “Capital Stock” means, with respect to any Person, any and all shares,
interests, participations or, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such Person’s capital stock,
and any and all rights, warrants or options exchangeable for or convertible
into such capital stock.

          “Credit Agreement” means the Credit Agreement among the Company, certain
of its subsidiaries, the Lenders parties thereto and First Union National Bank,
as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication
Agent, and Bank One, Michigan, as Documentation Agent, and First Union
Securities, Inc. and CIBC World Markets Corp., as Co-Lead Arrangers, dated as
of March 9, 2000, as amended on February 28, 2001, in the form that the same
exists, as so amended, on February 28, 2001.

          “Current Market Value” per share of Common Stock of the Company or any
other security at any date means (i) if the security is not registered under
the Exchange Act, the fair market value of the security, determined by a
unanimous vote of the Board of Directors of the Company, or in the absence of
such unanimous vote, an Independent Financial Expert, or (ii) (a) if the
security is registered under the Exchange Act, the average of the daily closing
sales prices of the security for the 20 consecutive days immediately preceding
such date, or (b) if the security has been registered under the Exchange Act
for less than 20 consecutive trading days immediately preceding such date, then
the offering price of the security in the transaction causing registration
under the Exchange Act, in the case of each of (ii)(a) and (ii)(b), as
certified to the Warrant Agent by the president, any vice president or the
chief financial officer of the Company. The closing sales price for each such
trading day shall be: (A) in the case of a security listed or admitted to
trading on any United States national securities exchange or quotation system, the

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closing sales price, regular way, on such day, or if no sale takes place on
such day, the average of the closing bid and asked prices on such day, (B) in
the case of a security not then listed or admitted to trading on any United
States national securities exchange or quotation system, the last reported sale
price on such day, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day, as reported by a reputable quotation
source designated by the Company, (C) in the case of a security not then listed
or admitted to trading on any United States national securities exchange or
quotation system and as to which no such reported sale price or bid and asked
prices are available, the average of the reported high bid and low asked prices
on such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New York
customarily published on each Business Day, designated by the Company, or, if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than 30
days prior to the date in question) for which prices have been so reported and
(D) if there
are not bid and asked prices reported during the 30 days prior to the date
in question, the Current Market Value shall be determined by a unanimous vote
of the Board of Directors of the Company, or in the absence of such unanimous
vote, an Independent Financial Expert.

          “Deferred Amounts Bridge Notes” shall have the meaning ascribed thereto in
the Bridge Note Waiver and Consent.

          “Independent Financial Expert” means a United States investment banking
firm of national or regional standing in the United States (i) which does not,
and whose directors, officers and employees or Affiliates do not, have a direct
or indirect material financial interest for its proprietary account in the
Company or any of its Affiliates and (ii) which, in the judgment of the Board
of Directors of the Company, is otherwise independent with respect to the
Company and its Affiliates and qualified to perform the task for which it is to
be engaged. Notwithstanding the definition of the term “Affiliate” in this
Section 7.01, for purposes of this definition, the Purchasers (and any of their
Affiliates) shall be deemed to be Affiliates of the Company.

          “Initial Public Equity Offering” means a primary public offering (whether
or not underwritten, but excluding any offering pursuant to Form S-4 or Form
S-8 under the Securities Act or any other publicly registered offering pursuant
to the Securities Act pertaining to an issuance of shares of Capital Stock of
the Company or securities exercisable therefor under any benefit plan, employee
compensation plan or employee or director stock purchase plan) of the Common
Stock pursuant to an effective registration statement under the Securities Act.

          “IRR” means, in respect of a Sales Transaction and any Warrant, the rate
at which the discounted present value of $21.50 shall be equal to the
discounted present value of the product in Section 2.02(a)(ii) based on the
actual date on which cash consideration is received by holders of Common Stock
as a result of such Sales Transaction and discounted back to the date hereof,
on the basis of annual compounding.

          “Leverage Ratio” shall have the meaning ascribed to such term (and shall
be calculated as provided for) in the Credit Agreement; provided, however,
that, for purposes of the calculations required by this Agreement, any Deferred
Amounts Bridge Notes which are outstanding as of the Test Date shall be
included in the calculation of Leverage Ratio.

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

-21-

 

          “Report Date” means the date on which the certificate and financial
statements required by Sections 2.02(a)(i)(x) and (z) are delivered to the
Agent and Lender (each as defined in the Credit Agreement) and the certificate
and financial statements required by Sections 2.02(a)(i)(x), (y) and (z) are
delivered to the Purchasers.

          “Sales Transaction” means the sale (however effected, whether by merger,
consolidation or otherwise) in one or a series of related transactions of all
(or substantially all) the Common Stock or all or substantially of the assets
of the Company and its subsidiaries.

     SECTION 7.02. Amendment. This Agreement and the terms of the Warrants may
be amended by the Company and the Warrant Agent, without the consent of the
holder of any Warrant Certificate or Purchaser, for the pur
pose of curing any ambiguity, or of curing, correcting or supplementing
any defective or inconsistent provision contained herein or therein, or to
effect any assumptions of the Company’s obligations hereunder and thereunder by
a successor corporation under the circumstances described in Section 5.01(c) or
in any other manner which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of the Warrant
Certificates.

          The Company and the Warrant Agent may amend, modify or supplement this
Agreement and the terms of the Warrants, and waivers to departures from the
terms hereof and thereof may be given, with the consent of the Requisite
Warrant Holders (as defined below). “Requisite Warrant Holders” means (i) the
holders of a majority in number of the outstanding Warrants so affected and
(ii) if such amendment affects the rights of holders of the Conversion Option
(in respect of the Conversion Contingent Warrants exercisable thereto upon
exercise thereof) in a manner that is materially different than its effects on
holders of outstanding Warrants, the holders described in clause (i) of this
definition and the Persons holding a portion (or portions) of the Conversion
Option exercisable for a majority of the Common Stock then issuable upon
exercise of such option; provided, however, that Warrants or portions of the
Conversion Option, as the case may be, held by the Company or any of its
Affiliates shall be disregarded. Notwithstanding any other provision of this
Agreement, the Warrant Agent’s consent must be obtained regarding any
supplement or amendment which alters the Warrant Agent’s rights or duties (it
being expressly understood that the foregoing shall not be in derogation of the
right of the Company to remove the Warrant Agent in accordance with Section
6.03 hereof).

          Any modification or amendment made in accordance with this Agreement will
be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or
on behalf of any holder of a Warrant Certificate in connection with any consent
to any modification or amendment will be conclusive and binding on all
subsequent holders of such Warrant Certificate.

     SECTION 7.03. Notices and Demands to the Company and Warrant Agent. If
the Warrant Agent shall receive any notice or demand addressed to the Company
by the holder of a Warrant Certificate pursuant to the provisions hereof or of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.

     SECTION 7.04. Addresses for Notices to Parties and for Transmission of
Documents. All notices hereunder to the parties hereto shall be deemed to have
been given when sent by certified or registered mail, postage prepaid, or by
facsimile transmission, confirmed by first class mail, postage prepaid,
addressed to any party hereto as follows:

	 	 	 	To the Company:

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	 	 	 	Transportation Technologies Industries, Inc.

980 North Michigan Avenue

Suite 1000

Chicago, IL 60611
	 
	 	 	 	Attention: General Counsel
	 
	 	 	 	Facsimile: (312) 280-4820

Telephone: (312) 280-8844
	 
	 	 	 	To the Warrant Agent:
	 
	 	 	 	First Union National Bank

1525 West W.T. Harris Blvd. 3C3

Charlotte, NC 28262
	 
	 	 	 	Attention: Corporate Trust Group
	 
	 	 	 	Facsimile: (704) 590-7598

Telephone: (312) 590-4520

or at any other address of which either of the foregoing shall have notified
the other in writing.

     SECTION 7.05. Notices to Purchasers. Notices to Purchasers shall be
mailed to such Purchasers at the addresses of such Purchasers as they appear on
Schedule B or C, as applicable. Any such notice shall be sufficiently given if
sent by first-class mail, postage prepaid.

     SECTION 7.06. APPLICABLE LAW; SUBMISSION TO JURISDICTION. THE VALIDITY,
INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT CERTIFICATE
ISSUED HEREUNDER AND OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.

     SECTION 7.07. Persons Having Rights Under Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any Person, other than the Company, the Warrant Agent and the holders of
the Warrant Certificates, any right, remedy or claim under or by reason of this
Agreement or of any covenant, condition, stipulation, promise or agreement
hereof; and all covenants, conditions, stipulations, promises and agreements in
this Agreement contained shall be for the sole and exclusive benefit of the
Company and the Warrant Agent and their successors and of the holders of the
Warrant Certificates.

     SECTION 7.08. Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

     SECTION 7.09. Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same
instrument.

     SECTION 7.10. Inspection of Agreement. A copy of this Agreement shall be available during regular business
hours at the principal corporate trust office of the Warrant Agent and the
office of the

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Company, for inspection by the holder of any Warrant Certificate.
The Warrant Agent or the Company, as applicable, may require such holder to
submit his Warrant Certificate for inspection by it.

     SECTION 7.11. Availability of Equitable Remedies. Since a breach of the
provisions of this Agreement could not adequately be compensated by money
damages, holders of Warrants shall be entitled, in addition to any other right
or remedy available to them, to an injunction restraining such breach or a
threatened breach and to specific performance of any such provision of this
Agreement, and in either case no bond or other security shall be required in
connection therewith, and the parties hereby consent to such injunction and to
the ordering of specific performance.

     SECTION 7.12. Obtaining of Governmental Approvals. The Company will from
time to time take all action required to be taken by it which may be necessary
to obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under United
States Federal and state laws, and the rules and regulations of all stock
exchanges on which the Warrants are listed which may be or become requisite in
connection with the issuance, sale, transfer and delivery of the Warrant
Certificates, the exercise of the Warrants or the issuance, sale, transfer and
delivery of the Shares issued upon exercise of the Warrants.

[Signature Pages Follow]

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     IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by the
panics hereto as of the day and year first above written.

	 	 	 	 	 
	 	TRANSPORTATION TECHNOLOGIES 

    INDUSTRIES, INC.

 	 
	 	By:  	/s/ Donald C. Mueller
 	 
	 	 	Name:  	Donald C. Mueller 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	TRANSPORTATION INVESTMENT PARTNERS
    L.L.C.

 	 
	 	                               By:  /s/ Illegible
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

	 	 	 	 	 
	 	CARAVELLE INVESTMENT FUND, L.L.C.

 	 
	 	By:  	Caravelle Advisors, L.L.C., its Investment Manager
and Attorney-in-Fact
 
	 	 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ Illegible
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	

C-+H ENTERPRISES GROUP. INC.

 	 
	 	By:  	/s/ Illegible
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Thomas M. Begel
 	 
	 	         Thomas M. Begel 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Camillo M. Santomero III
 	 
	 	         Camillo M. Santomero III 	 
	 	 	 

-25-

 

	 	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Andrew M. Weller
 	 
	 	         Andrew M. Weller 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  James D. Cirar
 	 
	 	         James D. Cirar 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Kenneth M. Tallering
 	 
	 	         Kenneth M. Tallering 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Timothy M. Masek
 	 
	 	         Timothy M. Masek 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  John Wilkinson
 	 
	 	         John Wilkinson 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Robert C. Jackson
 	 
	 	         Robert C. Jackson 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Donald C. Mueller
 	 
	 	         Donald C. Mueller 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Lee Swafford
 	 
	 	         Lee Swafford 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Kelly Bodway
 	 
	 	         Kelly Bodway 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  David W. Riesmeyer
 	 
	 	         David W. Riesmeyer 	 
	 	 	 

-26-

 

	 	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Brent Williams
 	 
	 	         Brent Williams 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/ Jeffrey Elmer
 	 
	 	         Jeffrey Elmer 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                    /s/  Adam Gottlieb
 	 
	 	         Adam Gottlieb 	 
	 	 	 
	 

	 	 	 	 	 
	 	FIRST UNION NATIONAL BANK, as Warrant Agent

 	 
	 	By:  	                                       /s/ Kenneth E. Staab
 	 
	 	Name:  	Kenneth E. Staab 	 
	 	Title:  	Vice President 	 

-27-

 

	 	 	 	 	 

SCHEDULE A

LIST OF MANAGEMENT PURCHASERS

Thomas M. Begel

Camillo M. Santomero III

C+H Enterprises Group, Inc.

Andrew M. Weller

James D. Cirar

Kenneth M. Tallering

Timothy M. Masek

John Wilkinson

Robert C. Jackson

Donald C. Mueller

Lee Swafford

Kelly Bodway

David W. Riesmeyer

Brent Williams

Jeffrey Elmer

Adam Gottlieb

 

 

SCHEDULE B

INFORMATION RELATING TO STOCK PURCHASERS

	 	 	 	 	 
	 	 	Number of
	 	 	Warrants to be
	Name and Address of Purchaser
	 	Purchased

	TRANSPORTATION INVESTMENT PARTNERS L.L.C.
	 	 	338,872	 
	c/o Trimaran Fund II, L.L.C.
	 	 	 	 
	425 Lexington Avenue, 3rd Floor
	 	 	 	 
	New York, New York 10017
	 	 	 	 
	Telecopy: (212) 885-4962
	 	 	 	 
	Attn: Steven A. Flyer
	 	 	 	 
	 
	 	 	 	 
	CARAVELLE INVESTMENT FUND, L.L.C.
	 	 	56,476	 
	425 Lexington Avenue
	 	 	 	 
	New York, New York 10017
	 	 	 	 
	Telecopy: (212) 885-4546
	 	 	 	 
	Attn: Jason Block
	 	 	 	 
	 
	 	 	 	 
	THOMAS M. BEGEL
	 	 	23,255	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue
	 	 	 	 
	Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	CAMILLO M. SANTOMERO III
	 	 	13,138	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue
	 	 	 	 
	Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	C+H ENTERPRISES GROUP, INC.
	 	 	10,582	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue
	 	 	 	 
	Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 

 

 

	 	 	 	 	 
	 	 	Number of
	 	 	Warrants to be
	Name and Address of Purchaser
	 	Purchased

	ANDREW M. WELLER
	 	 	4,537	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	JAMES D. CIRAR
	 	 	5,579	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	KENNETH M. TALLERING
	 	 	2,558	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	TIMOTHY M. MASEK
	 	 	2,047	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	JOHN WILKINSON
	 	 	2,325	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	ROBERT C. JACKSON
	 	 	1,511	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue
	 	 	 	 
	Suite 1000
	 	 	 	 
	Chicago, Illinois 6061
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 

-2-

 

	 	 	 	 	 
	 	 	Number of
	 	 	Warrants to be
	Name and Address of Purchaser
	 	Purchased

	DONALD C. MUELLER
	 	 	1,396	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	LEE SWAFFORD
	 	 	770	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	KELLY BODWAY
	 	 	563	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	DAVID W. RIESMEYER
	 	 	466	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	BRENT WILLIAMS
	 	 	413	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue
	 	 	 	 
	Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	 	 
	JEFFREY ELMER
	 	 	456	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue
	 	 	 	 
	Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 

-3-

 

	 	 	 	 	 
	 	 	Number of
	 	 	Warrants to be
	Name and Address of Purchaser
	 	Purchased

	ADAM GOTTLIEB
	 	 	172	 
	c/o Transportation Technologies Industries, Inc.
	 	 	 	 
	980 North Michigan Avenue
	 	 	 	 
	Suite 1000
	 	 	 	 
	Chicago, Illinois 60611
	 	 	 	 
	Telecopy: (312) 280-4820
	 	 	 	 
	Attn: Kenneth M. Tallering
	 	 	 	 
	 
	 	 	
 	 
	TOTAL
	 	 	465,116	 
	 
	 	 	
 	 

-4-

 

SCHEDULE C

INFORMATION RELATING TO ASSET PURCHASERS

To Be Completed As Conversion Option Is Exercised

 

 

EXHIBIT A

[FORM OF WARRANT CERTIFICATE]

[FACE]

          THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

A-1

 

No. [  ] [        
   ] Warrants

WARRANT CERTIFICATE

TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.

          This Warrant Certificate certifies that [
           ], or registered
assigns, is the registered holder of [
           ] Warrants (the “Warrants”)
to purchase shares of Common Stock, par value $0.01 per share (the “Common
Stock”), of TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC., a Delaware
corporation (the “Company”, which term includes its successors and assigns).
Each Warrant entitles the holder to purchase from the Company at any time from
9:00 a.m., Chicago time, until 5:00 p.m., Chicago time, on February 28, 2010
(the “Expiration Date”), one fully paid, registered and non-assessable share of
Common Stock, subject to adjustment as provided in Article V of the Warrant
Agreement, at the exercise price of $0.01 for each share purchased (the
“Exercise Price”), (the shares of Common Stock purchasable upon exercise of
Warrants being herein referred to as the “Shares” and, unless the context
otherwise requires, such term shall also mean the other securities or property
purchasable and deliverable upon exercise of a Warrant as provided in the
Warrant Agreement), upon surrender of this Warrant Certificate and payment of
the Exercise Price (i) by wire transfer or certified check, (ii) pursuant to
the next sentence or (iii) in any combination of (i) and (ii), at the office or
agency maintained for that purpose by the Company (the “Warrant Exercise
Office”), subject to the conditions set forth herein and in the Warrant
Agreement. A Warrant may also be exercised solely by the surrender of the
Warrant, and without the payment of the Exercise Price in cash, for such number
of Shares equal to the product of (1) the number of Shares for which such
Warrant is exercisable with payment of the Exercise Price as of the date of
exercise and (2) the Cashless Exercise Ratio. For purposes of this Warrant,
the “Cashless Exercise Ratio” shall equal a fraction, the numerator of which is
the Exercise Price per share as of the date of exercise and the denominator of
which is the Current Market Value per share of the Common Stock on the date of
exercise. An exercise of a Warrant in accordance with the immediately
preceding sentences is herein called a “Cashless Exercise.” Upon surrender of a
Warrant Certificate representing more than one Warrant in connection with the
holder’s option to elect a Cashless Exercise, the number of Shares deliverable
upon a Cashless Exercise shall be equal to the Cashless Exercise Ratio
multiplied by the product of (A) one minus the Cashless Exercise Ratio, (B) the
number of Warrants that the holder specifies is to be exercised pursuant to a
Cashless Exercise and (C) the number of Shares for which such Warrant is then
exercisable (without giving effect to the Cashless Exercise option). All
provisions of the Warrant Agreement shall be applicable with respect to an
exercise of a Warrant Certificate pursuant to a Cashless Exercise for less than
the full number of Warrants represented thereby. Capitalized terms used herein
without being defined herein shall have the definitions ascribed to such terms
in the Warrant Agreement.

     “Current Market Value” per share of Common Stock or any other security at
any date means (i) if the security is not registered under the Exchange Act,
the fair market value of the security, determined by a unanimous vote of the
Board of Directors of the Company, or in the absence of such unanimous vote, an
Independent Financial Expert or (ii) (a) if the security is registered under
the Exchange Act, the average of the daily closing sales prices of the
securities for the 20 consecutive days immediately preceding such date, or (b)
if the security has been registered under the Exchange Act for less than 20
consecutive trading days immediately preceding such date, then the offering
price of the security in the transaction causing registration under the
Exchange Act in the case of each of (ii)(a) and (ii)(b), as certified to the
Warrant Agent by the president, any vice president or the chief financial
officer of the Company. The closing sales price for each such trading day
shall be: (A) in the case of a security listed or admitted to trading on any
United States national securities exchange or quotation system, the closing
sales price, regular way, on such day, or if no sale takes place on such day,
the average of the closing bid and asked prices on such day, (B) in the case of
a security not then listed or admitted to trading on any United States national
securities exchange or quotation system, the last reported sale price on such
day, or

A-2

 

if no sale takes place on such day, the average of the closing bid and
asked prices on such day, as reported by a reputable quotation source
designated by the Company, (C) in the case of a security not then listed or
admitted to trading on any United States national securities exchange or
quotation system and as to which no such reported sale price or bid and asked
prices are available, the average of the reported high bid and low asked prices
on such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New York
customarily published on each Business Day, designated by the Company, or, if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than 30
days prior to the date in question) for which prices have been so reported and
(D) if there are not bid and asked prices reported during the 30 days prior to
the date in question, the Current Market Value shall be determined by a
unanimous vote of the Board of Directors of the Company, or in the absence of
such unanimous vote, an Independent Financial Expert.

          “Independent Financial Expert” means a United States investment banking
firm of national or regional standing, (i) which does not, and whose directors,
officers and employees or Affiliates do not have a direct or indirect material
financial interest for its proprietary account in the Company or any of its
Affiliates and (ii) which, in the judgment of the Board of Directors of the
Company, is otherwise independent with respect to the Company and its
Affiliates and qualified to perform the task for which it is to be engaged.
Notwithstanding the definition of the term “Affiliate” in this Section 7.01 of
the Warrant Agreement, for purposes of this definition, the Purchasers (and any
of their Affiliates) shall be deemed to be Affiliates of the Company.

          No exercise of the Warrants may be effected which does not call for the
issuance of a number of shares of Common Stock in direct proportion (subject
only to rounding with respect to fractional shares) to the aggregate number of
shares of Common Stock then issuable upon exercise of the Warrants evidenced
hereby.

          The Company has initially designated the principal corporate trust office
of the Warrant Agent in the Borough of Manhattan, The City of New York, as the
initial Warrant Agent Office. The number of Shares issuable upon exercise of
the Warrants (“Exercise Rate”) is subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement.

          Any Warrants not exercised on or prior to 5:00 p.m., Chicago time, on
February 28, 2010 shall thereafter be void.

          If the Company merges, amalgamates or consolidates with or into, or sells
all or substantially all of its property and assets to, another Person solely
for cash, the holders of Warrants shall be entitled to receive distributions on
the date of such event on an equal basis with holders of Shares (or other
securities issuable upon exercise of the Warrants) as if the Warrants had been
exercised immediately prior to such event (less the Exercise Price), provided
that such distribution shall, in the case of Warrants that have are not then
exercisable pursuant to Section 2.02(a) of the Warrant Agreement, be paid to
the Person to whom such Warrant would otherwise have issuable, for the exercise
price therefor, on the date of such exercisee.

          Reference is hereby made to the further provisions on the reverse hereof
which provisions shall for all purposes have the same effect as though fully
set forth at this place.

          This Warrant Certificate shall not be valid unless authenticated by the
Warrant Agent, as such term is used in the Warrant Agreement.

A-3

 

          THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.

A-4

 

          WITNESS the seal of the Company and signatures of its duly authorized
officers.

Dated:

	 	 	 	 	 
	 	TRANSPORTATION TECHNOLOGIES 

   INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Attest:

	 	 	 	 	 
	By:
	 	 	 	 
	

	 	

	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 

A-5

 

Certificate of Authentication:

This is one of the Warrants

referred to in the within mentioned

Warrant Agreement:

	 	 	 	 	 
	FIRST UNION NATIONAL BANK,

   as Warrant Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	

	 	

	 	 
	

	 	Authorized Signatory	 	 

A-6

 

[FORM OF WARRANT CERTIFICATE]

[REVERSE]

TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.

          The
Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring at 5:00 p.m., Chicago time, on February
28, 2010 (the “Expiration Date”), each of which represents the right to
purchase at any time on or prior to the Expiration Date one share of Common
Stock, subject to adjustment as set forth in the Warrant Agreement.

          Warrants
may be exercised by (i) surrendering at the Warrant Exercise
Office this Warrant Certificate with the form of Election to Exercise set forth
hereon duly completed and executed and (ii) to the extent such exercise is not
being effected through a Cashless Exercise by paying in full the Warrant
Exercise Price for each such Warrant exercised and any other amounts required
to be paid pursuant to the Warrant Agreement.

          If all of
the items referred to in the preceding paragraph are received by
the Warrant Agent at or prior to 11:00 a.m., Chicago time, on a Business Day,
the exercise of the Warrant to which such items relate will be effective on
such Business Day. If any items referred to in the preceding paragraph are
received after 11:00 a.m., Chicago time, on a Business Day, the exercise of the
Warrants to which such item relates will be deemed to be effective on the next
succeeding Business Day. Notwithstanding the foregoing, in the case of an
exercise of Warrants on February 28, 2010, if all of the items referred to in
the preceding paragraph are received by the Warrant Agent at or prior to 5:00
p.m., Chicago time, on such Expiration Date, the exercise of the Warrants to
which such items relate will be effective on the Expiration Date.

          As soon as
practicable after the exercise of any Warrant or Warrants, the
Company shall issue or cause to be issued to or upon the written order of the
holder of this Warrant Certificate, a certificate or certificates evidencing
the Share or Shares to which such holder is entitled, registered in such name
or names as may be directed by such holder pursuant to the Election to
Exercise, as set forth on the reverse of this Warrant Certificate. Such
certificate or certificates evidencing the Share or Shares shall be deemed to
have been issued and any Persons who are designated to be named therein shall
be deemed to have become the holder of record of such Share or Shares as of the
close of business on the date upon which the exercise of this Warrant was
deemed to be effective as provided in the preceding paragraph.

          The Company
will not be required to issue fractional shares of Common
Stock upon exercise of the Warrants or distribute Share certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the
registered holder of this Warrant Certificate at the time such Warrant
Certificate is exercised an amount in cash equal to the same fraction of the
Current Market Value per share of Common Stock on the Business Day preceding
the date this Warrant Certificate is surrendered for exercise.

          Warrant
Certificates, when surrendered at any office or agency maintained

by the Company for that purpose by the registered holder thereof in person or
by legal representative or attorney duly authorized in writing, may be
exchanged for a new Warrant Certificate or new Warrant Certificates evidencing
in the aggregate a like number of Warrants, in the manner and subject to the
limitations provided in the Warrant Agreement, without charge except for any
tax or other governmental charge imposed in connection therewith.

A-7

 

          Upon due
presentment for registration of transfer of this Warrant
Certificate at any office or agency maintained by the Company for that purpose,
a new Warrant Certificate evidencing in the aggregate a like number of Warrants
shall be issued to the transferee in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection
therewith.

          The Company
and the Warrant Agent may deem and treat the holder hereof as
the absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone) for the purpose of any
exercise hereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.

          The term
“Business Day” shall mean any day on which (i) banks in New York
City or Chicago, Illinois, (ii) the principal U.S. securities exchange or
market, if any, on which the Common Stock is listed or admitted to trading and
(iii) the principal U.S. securities exchange or market, if any, on which the
Warrants are listed or admitted to trading are open for business.

          The
Warrants and the Shares are entitled to certain registration rights
that provide certain holders of securities of the Company with the right,
subject to the conditions and limitations contained in the operative
agreements, to include such securities in certain registration statements filed
by the Company for its account or for the account of any of its
securityholders.

A-8

 

(FORM OF ELECTION TO EXERCISE)

(To be executed
upon exercise of Warrants on the Exercise Date)

          The
undersigned hereby irrevocably elects to exercise [  ] of the Warrants
represented by this Warrant Certificate and purchase the whole number of Shares
issuable upon the exercise of such Warrants and herewith tenders payment for
such Shares as follows:

          $[    ] in cash
or by certified or official bank check; or by
surrender of Warrants pursuant to a Cashless Exercise (as defined in the
Warrant Agreement) for [    ] shares of Common Stock at the current
Cashless Exercise Ratio.

          The
undersigned requests that a certificate representing such Shares be
registered in the name of                   whose
address is                        
             
and that such shares be delivered to                  
 whose address is                    .
Any cash payments to be paid in lieu of a fractional Share should be made to
whose address is                       
               and the check representing
payment thereof should be delivered to                  
                    whose address is 
                            
       .

	 	 	 	 	 	 	 
	

	 	Dated	 	 
	

	 	 	                
    ,          
	 	 	 	 	 
	

	 	 	 	Name of holder of
	

	 	 	 	Warrant Certificate:
	 
	 	 	 	 
	

	 	 	 	

	

	 	 	 	(Please Print)
	 
	 	 	 	 
	

	 	 	 	Tax Identification or
	

	 	 	 	Social Security Number:
	 
	 	 	 	 
	

	 	 	 	

	

	 	 	 	Address:
	 
	 	 	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	 	 	

	 	 	 	 	 	 	 
	

	 	Signature:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	

	

	 	 	 	Note:
	 	The above signature must
correspond with the name as
written upon the face of this
Warrant Certificate in every
particular, without
alteration or enlargement or any change whatever
and if the certificate
representing the Shares or
any Warrant Certificate
representing Warrants not
exercised is to be
registered in a name other
than that in which this
Warrant Certificate is
registered, or if any cash
payment to be paid in lieu
of a fractional share is to
be

A-9

 

	 	 	 	 	 	 	 
	

	 	 	 	 	 	 made to a person other
than the registered holder
of this Warrant Certificate,
the signature of the holder
hereof must be guaranteed as
provided in the Warrant
Agreement.
	 
	 	 	 	 	 	 
	

	Dated	                ,
          	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Signature:	 	 	 
	 	 	 	

	

	 	 	 	Note:
	 	The above signature must
correspond with the name as
written upon the face of this
Warrant Certificate in every
particular, without alteration
or enlargement or any change
whatever.
	

	 	Signature Guaranteed:	 	 	 	 
	 	 	 	 	

A-10

 

[FORM OF ASSIGNMENT]

     
For value received                       
               hereby sells, assigns and
transfers unto                      
               the within Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint                     
                  attorney, to transfer said Warrant
Certificate on the books of the
within-named Company, with full power of substitution in the premises.

	 	 	 	 	 	 	 
	

	Dated	                ,
          	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Signature:	 	 	 
	 	 	 	

	

	 	 	 	Note:
	 	The above signature must
correspond with the name as
written upon the face of this
Warrant Certificate in every
particular, without alteration
or enlargement or any change
whatever.
	

	 	Signature Guaranteed:	 	 	 	 
	 	 	 	 	

A-112004 LONG TERM INCENTIVE & SHARE AWARD PLAN

 

Exhibit 10.2

TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.

2004 LONG TERM INCENTIVE AND SHARE AWARD PLAN

          1. Purposes.

          The purposes of the 2004 Long Term Incentive and Share Award Plan are to
advance the interests of Transportation Technologies Industries, Inc. and its
shareholders by providing a means to attract, retain, and motivate employees,
consultants and directors of the Company, its subsidiaries and affiliates, to
provide for competitive compensation opportunities, to encourage long term
service, to recognize individual contributions and reward achievement of
performance goals, and to promote the creation of long term value for
stockholders by aligning the interests of such persons with those of
stockholders.

          2. Definitions.

          For purposes of the Plan, the following terms shall be defined as set
forth below:

          (a) “Affiliate” means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a
participating employer under the Plan; provided, however, that the Company
directly or indirectly owns at least 20% of the combined voting power of all
classes of stock of such entity or at least 20% of the ownership interests in
such entity.

          (b) “Award” means any Option, SAR, Restricted Share, Restricted Share
Unit, Performance Share, Performance Unit, Dividend Equivalent, or Other
Share-Based Award granted to an Eligible Person under the Plan.

          (c) “Award Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award.

          (d) “Beneficiary” means the person, persons, trust or trusts which have
been designated by an Eligible Person in his or her most recent written
beneficiary designation filed with the Company to receive the benefits
specified under this Plan upon the death of the Eligible Person, or, if there
is no designated Beneficiary or surviving designated Beneficiary, then the
person, persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

          (e) “Board” means the Board of Directors of the Company.

 

 

          (f) “Code” means the Internal Revenue Code of 1986, as amended from time
to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

          (g) “Committee” means the Compensation Committee of the Board, or such
other Board committee (which may include the entire Board) as may be designated
by the Board to administer the Plan; provided, however, that, unless otherwise
determined by the Board, the Committee shall consist of two or more directors
of the Company, each of whom is a “non-employee director” within the meaning of
Rule 16b-3 under the Exchange Act, to the extent applicable, and each of whom
is an “outside director” within the meaning of Section 162(m) of the Code, to
the extent applicable; provided, further, that the mere fact that the Committee
shall fail to qualify under either of the foregoing requirements shall not
invalidate any Award made by the Committee which Award is otherwise validly
made under the Plan.

          (h) “Company” means Transportation Technologies Industries, Inc., a
corporation organized under the laws of Delaware, or any successor corporation.

          (i) “Director” means a member of the Board who is not an employee of the
Company, a Subsidiary or an Affiliate.

          (j) “Dividend Equivalent” means a right, granted under Section 5(g), to
receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded
on a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.

          (k) “Effective Date” means                 , 2004 [date of consummation
of IPO].

          (l) “Eligible Person” means (i) an employee or consultant of the Company,
a Subsidiary or an Affiliate, including any director who is an employee, or
(ii) a Director. Notwithstanding any provisions of this Plan to the contrary,
an Award may be granted to an employee, consultant or Director, in connection
with his or her hiring or retention prior to the date the employee, consultant
or Director first performs services for the Company, a Subsidiary or an
Affiliate; provided, however, that any such Award shall not become vested or
exercisable prior to the date the employee, consultant or Director first
performs such services.

          (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.

          (n) “Fair Market Value” means, with respect to Shares or other property,
the fair market value of such Shares or other property determined by such
methods or proce-

-2-

 

dures as shall be established from time to time by the Committee. If the
Shares are listed on any established stock exchange or a national market
system, unless otherwise determined by the Committee in good faith, the Fair
Market Value of Shares shall mean the mean between the high and low selling
prices per Share on the date (or, if the Shares were not traded on that day,
the next preceding day that the Shares were traded) on the principal exchange
or market system on which the Shares are traded, as such prices are officially
quoted on such exchange.

          (o) “ISO” means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.

          (p) “NQSO” means any Option that is not an ISO.

          (q) “Option” means a right, granted under Section 5(b), to purchase
Shares.

          (r) “Other Share-Based Award” means a right, granted under Section 5(h),
that relates to or is valued by reference to Shares.

          (s) “Participant” means an Eligible Person who has been granted an Award
under the Plan.

          (t) “Performance Share” means a performance share granted under Section
5(f).

          (u) “Performance Unit” means a performance unit granted under Section
5(f).

          (v) “Plan” means this 2004 Long Term Incentive and Share Award Plan.

          (w) “Restricted Shares” means an Award of Shares under Section 5(d) that
may be subject to certain restrictions and to a risk of forfeiture.

          (x) “Restricted Share Unit” means a right, granted under Section 5(e), to
receive Shares or cash at the end of a specified deferral period.

          (y) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

          (z) “SAR” or “Share Appreciation Right” means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.

-3-

 

          (aa) “Shares” means common stock, $.01 par value per share, of the
Company, and such other securities as may be substituted for Shares pursuant to
Section 4(c) hereof.

          (bb) “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns
shares possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.

          (cc) “Termination of Service” means the termination of the Participant’s
employment, consulting services or directorship with the Company, its
Subsidiaries and its Affiliates, as the case may be. A Participant employed by
a Subsidiary of the Company or one of its Affiliates shall also be deemed to
incur a Termination of Service if the Subsidiary of the Company or Affiliate
ceases to be such a Subsidiary or an Affiliate, as the case may be, and the
Participant does not immediately thereafter become an employee or director of,
or a consultant to, the Company, another Subsidiary of the Company or an
Affiliate. Temporary absences from employment because of illness, vacation or
leave of absence and transfers among the Company and its Subsidiaries and
Affiliates shall not be considered a Termination of Service.

          3. Administration.

          (a) Authority of the Committee. The Plan shall be administered by the
Committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions
of the Plan:

     (i) to select Eligible Persons to whom Awards may be granted;

     (ii) to designate Affiliates;

     (iii) to determine the type or types of Awards to be granted to each
Eligible Person;

     (iv) to determine the type and number of Awards to be granted, the
number of Shares to which an Award may relate, the terms and conditions
of any Award granted under the Plan (including, but not limited to, any
exercise price, grant price, or purchase price, any restriction or
condition, any schedule for lapse of restrictions or conditions relating
to transferability or forfeiture, exercisability, or settlement of an
Award, and waiver or accelerations thereof, and waivers of performance
conditions relating to an Award, based in each case on such
considerations as the Committee shall determine), and all other matters
to be determined in connection with an Award;

-4-

 

     (v) to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Shares, other Awards, or other property, or an
Award may be canceled, forfeited, exchanged, or surrendered;

     (vi) to determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, or other property payable with
respect to an Award will be deferred either automatically, at the
election of the Committee, or at the election of the Eligible Person;

     (vii) to prescribe the form of each Award Agreement, which need not
be identical for each Eligible Person;

     (viii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;

     (ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement, or other instrument
hereunder;

     (x) to accelerate the exercisability or vesting of all or any
portion of any Award or to extend the period during which an Award is
exercisable;

     (xi) to determine whether uncertificated Shares may be used in
satisfying Awards and otherwise in connection with the Plan; and

     (xii) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.

          (b) Manner of Exercise of Committee Authority. The Committee shall have
sole discretion in exercising its authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, Subsidiaries, Affiliates, Eligible Persons,
any person claiming any rights under the Plan from or through any Eligible
Person, and shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee
may delegate to other members of the Board or officers or managers of the
Company or any Subsidiary or Affiliate the authority, subject to such terms as
the Committee shall determine, to perform administrative functions and, with
respect to Awards granted to persons not subject to Section

-5-

 

16 of the Exchange Act, to perform such other functions as the Committee
may determine, to the extent permitted under Rule 16b-3 (if applicable) and
applicable law.

          (c) Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or other employee of the Company or any
Subsidiary or Affiliate, the Company’s independent certified public
accountants, or other professional retained by the Company to assist in the
administration of the Plan. No member of the Committee, and no officer or
employee of the Company acting on behalf of the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Committee and any
officer or employee of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company with
respect to any such action, determination, or interpretation.

          (d) Limitation on Committee’s Discretion. Anything in this Plan to the
contrary notwithstanding, in the case of any Award which provides that it is
intended to qualify as “performance-based compensation” within the meaning of
Section 162(m)(4)(C) of the Code, the Committee shall have no discretion to
increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as such
performance-based compensation.

          (e) Option or SAR Repricing. The Committee is authorized to reprice
outstanding Options and SARs, including without limitation by lowering their
exercise price or exchanging them for other Options or SARs with lower exercise
prices; provided, however, that, without the consent of a Participant, no such
repricing may materially and adversely affect the rights of the Participant
under any Option or SAR theretofore granted to him or her.

          4. Shares Subject to the Plan.

          (a) Subject to adjustment as provided in Section 4(c) hereof, the total
number of Shares reserved for issuance in connection with Awards under the Plan
shall be [10% of the outstanding shares on a fully diluted basis at the time of
consummation of IPO]. No Award may be granted if the number of Shares to which
such Award relates, when added to the number of Shares previously issued under
the Plan, exceeds the number of Shares reserved under the preceding sentence.
If any Awards are forfeited, canceled, terminated, exchanged or surrendered or
such Award is settled in cash or otherwise terminates without a distribution of
Shares to the Participant, any Shares counted against the number of Shares
reserved and available under the Plan with respect to such Award shall, to the
extent of any such forfeiture, settlement, termination, cancellation, exchange
or surrender, again be available for Awards under the Plan. Upon the exercise
of any Award granted in tandem with any other Awards, such related Awards shall
be canceled to the extent of the number of Shares as to which the Award is
exercised.

-6-

 

          (b) Subject to adjustment as provided in Section 4(c) hereof, the maximum
number of Shares (i) with respect to which Options or SARs may be granted
during a calendar year to any Eligible Person under this Plan shall be [5% of
the outstanding shares on a fully diluted basis at the time of consummation of
IPO] Shares, and (ii) with respect to Performance Shares, Performance Units,
Restricted Shares or Restricted Share Units intended to qualify as
performance-based compensation within the meaning of Section 162(m)(4)(C) of
the Code shall be the equivalent of [5% of the outstanding shares on a fully
diluted basis at the time of consummation of IPO] Shares during a calendar year
to any Eligible Person under this Plan.

          (c) In the event that the Committee shall determine that any dividend in
Shares, recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Eligible Persons under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate and, in such manner as
it may deem equitable, adjust any or all of (i) the number and kind of shares
which may thereafter be issued under the Plan, (ii) the number and kind of
shares, other securities or other consideration issued or issuable in respect
of outstanding Awards, and (iii) the exercise price, grant price, or purchase
price relating to any Award; provided, however, in each case that, with respect
to ISOs, such adjustment shall be made in accordance with Section 424(a) of the
Code, unless the Committee determines otherwise. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
and performance objectives, if any, included in, Awards in recognition of
unusual or non-recurring events (including, without limitation, events
described in the preceding sentence) affecting the Company or any Subsidiary or
Affiliate or the financial statements of the Company or any Subsidiary or
Affiliate, or in response to changes in applicable laws, regulations, or
accounting principles; provided, however, that, if an Award provides that it is
intended to qualify as “performance-based compensation” within the meaning of
Section 162(m)(4)(C) of the Code, the Committee shall not have discretion to
increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of the Code
and the regulations thereunder.

          (d) Any Shares distributed pursuant to an Award may consist, in whole or
in part, of authorized and unissued Shares or treasury Shares including Shares
acquired by purchase in the open market or in private transactions.

          5. Specific Terms of Awards.

          (a) General. Awards may be granted on the terms and conditions set forth
in this Section 5. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 9(d)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine,

-7-

 

including terms regarding forfeiture of Awards or continued exercisability
of Awards in the event of Termination of Service by the Eligible Person.

          (b) Options. The Committee is authorized to grant Options, which may be
NQSOs or ISOs, to Eligible Persons on the following terms and conditions:

     (i) Exercise Price. The exercise price per Share purchasable under
an Option shall be determined by the Committee. The Committee may,
without limitation, set an exercise price that is based upon achievement
of performance criteria if deemed appropriate by the Committee.

     (ii) Option Term. The term of each Option shall be determined by
the Committee.

     (iii) Time and Method of Exercise. The Committee shall determine at
the date of grant or thereafter the time or times at which an Option may
be exercised in whole or in part (including, without limitation, upon
achievement of performance criteria if deemed appropriate by the
Committee), the methods by which such exercise price may be paid or
deemed to be paid (including, without limitation, broker-assisted
exercise arrangements), the form of such payment (including, without
limitation, cash, Shares or other property), and the methods by which
Shares will be delivered or deemed to be delivered to Eligible Persons;
provided, however, that in no event may any portion of the exercise price
be paid with Shares acquired either under an Award granted pursuant to
this Plan, upon exercise of a stock option granted under another Company
plan or as a stock bonus or other stock award granted under another
Company plan unless, in any such case, the Shares were acquired and
vested more than six months in advance of the date of exercise.

     (iv) ISOs. The terms of any ISO granted under the Plan shall comply
in all respects with the provisions of Section 422 of the Code, including
but not limited to the requirement that the ISO shall be granted within
ten years from the earlier of the date of adoption or shareholder
approval of the Plan. ISOs may only be granted to employees of the
Company or a Subsidiary.

          (c) SARs. The Committee is authorized to grant SARs (Share Appreciation
Rights) to Eligible Persons on the following terms and conditions:

     (i) Right to Payment. A SAR shall confer on the Eligible Person to
whom it is granted a right to receive with respect to each Share subject
thereto, upon exercise thereof, the excess of (1) the Fair Market Value
of one Share on the date of exercise (or, if the Committee shall so
determine in the case of any such right, the Fair Market Value of one
Share at any time during a specified period before or after the date of
ex-

-8-

 

ercise) over (2) the exercise price per Share of the SAR as
determined by the Committee as of the date of grant of the SAR (which, in
the case of a SAR granted in tandem with an Option, shall be equal to the
exercise price of the underlying Option).

     (ii) Other Terms. The Committee shall determine, at the time of
grant or thereafter, the time or times at which a SAR may be exercised in
whole or in part, the method of exercise, method of settlement, form of
consideration payable in settlement, method by which Shares will be
delivered or deemed to be delivered to Eligible Persons, whether or not a
SAR shall be in tandem with any other Award, and any other terms and
conditions of any SAR. Unless the Committee determines otherwise, a SAR
(1) granted in tandem with an NQSO may be granted at the time of grant of
the related NQSO or at any time thereafter and (2) granted in tandem with
an ISO may only be granted at the time of grant of the related ISO.

          (d) Restricted Shares. The Committee is authorized to grant Restricted
Shares to Eligible Persons on the following terms and conditions:

     (i) Issuance and Restrictions. Restricted Shares shall be subject
to such restrictions on transferability and other restrictions, if any,
as the Committee may impose at the date of grant or thereafter, which
restrictions may lapse separately or in combination at such times, under
such circumstances (including, without limitation, upon achievement of
performance criteria if deemed appropriate by the Committee), in such
installments, or otherwise, as the Committee may determine. Except to
the extent restricted under the Award Agreement relating to the
Restricted Shares, an Eligible Person granted Restricted Shares shall
have all of the rights of a shareholder including, without limitation,
the right to vote Restricted Shares and the right to receive dividends
thereon.

     (ii) Forfeiture. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon Termination of Service during
the applicable restriction period, Restricted Shares and any accrued but
unpaid dividends or Dividend Equivalents that are at that time subject to
restrictions shall be forfeited; provided, however, that the Committee
may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Shares will be waived in whole or in
part in the event of Termination of Service resulting from specified
causes, and the Committee may in other cases waive in whole or in part
the forfeiture of Restricted Shares.

     (iii) Certificates for Shares. Restricted Shares granted under the
Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Shares are registered in the name
of the Eligible Person, such certificates shall bear an appropriate
legend referring to the terms, conditions, and restric-

-9-

 

tions applicable to such Restricted Shares, the Company shall retain
physical possession of the certificate and the Participant shall deliver
a stock power to the Company, endorsed in blank, relating to the
Restricted Shares.

     (iv) Dividends. Dividends paid on Restricted Shares shall be either
paid at the dividend payment date, or deferred for payment to such date
as determined by the Committee, in cash or in unrestricted Shares having
a Fair Market Value equal to the amount of such dividends. Shares
distributed in connection with a Share split or dividend in Shares, and
other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the
Restricted Shares with respect to which such Shares or other property has
been distributed.

          (e) Restricted Share Units. The Committee is authorized to grant
Restricted Share Units to Eligible Persons, subject to the following terms and
conditions:

     (i) Award and Restrictions. Delivery of Shares or cash, as the case
may be, will occur upon expiration of the deferral period specified for
Restricted Share Units by the Committee (or, if permitted by the
Committee, as elected by the Eligible Person). In addition, Restricted
Share Units shall be subject to such restrictions as the Committee may
impose, if any (including, without limitation, the achievement of
performance criteria if deemed appropriate by the Committee), at the date
of grant or thereafter, which restrictions may lapse at the expiration of
the deferral period or at earlier or later specified times, separately or
in combination, in installments or otherwise, as the Committee may
determine.

     (ii) Forfeiture. Except as otherwise determined by the Committee at
date of grant or thereafter, upon Termination of Service during the
applicable deferral period or portion thereof to which forfeiture
conditions apply (as provided in the Award Agreement evidencing the
Restricted Share Units), or upon failure to satisfy any other conditions
precedent to the delivery of Shares or cash to which such Restricted
Share Units relate, all Restricted Share Units that are at that time
subject to deferral or restriction shall be forfeited; provided, however,
that the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Share Units will be waived
in whole or in part in the event of Termination of Service resulting from
specified causes, and the Committee may in other cases waive in whole or
in part the forfeiture of Restricted Share Units.

     (iii) Dividend Equivalents. Unless otherwise determined by the
Committee at date of grant, Dividend Equivalents on the specified number
of Shares covered by a Restricted Share Unit shall be either (A) paid
with respect to such Restricted Share Unit at the dividend payment date
in cash or in unrestricted Shares having a Fair Mar-

-10-

 

ket Value equal to the amount of such dividends, or (B) deferred
with respect to such Restricted Share Unit and the amount or value
thereof automatically deemed reinvested in additional Restricted Share
Units or other Awards, as the Committee shall determine or permit the
Participant to elect.

          (f) Performance Shares and Performance Units. The Committee is authorized
to grant Performance Shares or Performance Units or both to Eligible Persons on
the following terms and conditions:

     (i) Performance Period. The Committee shall determine a performance
period (the “Performance Period”) of one or more years and shall
determine the performance objectives for grants of Performance Shares and
Performance Units. Performance objectives may vary from Eligible Person
to Eligible Person and shall be based upon the performance criteria as
the Committee may deem appropriate. The performance objectives may be
determined by reference to the performance of the Company, or of a
Subsidiary or Affiliate, or of a division or unit of any of the
foregoing. Performance Periods may overlap and Eligible Persons may
participate simultaneously with respect to Performance Shares and
Performance Units for which different Performance Periods are prescribed.

     (ii) Award Value. At the beginning of a Performance Period, the
Committee shall determine for each Eligible Person or group of Eligible
Persons with respect to that Performance Period the range of number of
Shares, if any, in the case of Performance Shares, and the range of
dollar values, if any, in the case of Performance Units, which may be
fixed or may vary in accordance with such performance or other criteria
specified by the Committee, which shall be paid to an Eligible Person as
an Award if the relevant measure of Company performance for the
Performance Period is met.

     (iii) Significant Events. If during the course of a Performance
Period there shall occur significant events as determined by the
Committee which the Committee expects to have a substantial effect on a
performance objective during such period, the Committee may revise such
objective; provided, however, that, if an Award provides that it is
intended to qualify as “performance-based compensation” within the
meaning of Section 162(m)(4)(C) of the Code, the Committee shall not have
any discretion to increase the amount of compensation payable under the
Award to the extent such an increase would cause the Award to lose its
qualification as performance-based compensation for purposes of Section
162(m)(4)(C) of the Code and the regulations thereunder.

     (iv) Forfeiture. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon Termination of Service during
the applicable Per-

-11-

 

formance Period, Performance Shares and Performance Units for which
the Performance Period was prescribed shall be forfeited; provided,
however, that the Committee may provide, by rule or regulation or in any
Award Agreement, or may determine in an individual case, that
restrictions or forfeiture conditions relating to Performance Shares and
Performance Units will be waived in whole or in part in the event of
Termination of Service resulting from specified causes, and the Committee
may in other cases waive in whole or in part the forfeiture of
Performance Shares and Performance Units.

     (v) Payment. Each Performance Share or Performance Unit may be paid
in whole Shares, or cash, or a combination of Shares and cash either as a
lump sum payment or in installments, all as the Committee shall
determine, at the time of grant of the Performance Share or Performance
Unit or otherwise, commencing as soon as practicable after the end of the
relevant Performance Period.

          (g) Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Eligible Persons. The Committee may provide, at the date of
grant or thereafter, that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Shares,
or other investment vehicles as the Committee may specify; provided, however,
that Dividend Equivalents (other than freestanding Dividend Equivalents) shall
be subject to all conditions and restrictions of the underlying Awards to which
they relate.

          (h) Other Share-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Eligible Persons such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including, without
limitation, unrestricted shares awarded purely as a “bonus” and not subject to
any restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash,
Shares, notes or other property, as the Committee shall determine. Cash
awards, as an element of or supplement to any other Award under the Plan, shall
also be authorized pursuant to this Section 5(h).

          6. Certain Provisions Applicable to Awards.

          (a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted to Eligible
Persons

-12-

 

either alone or in addition to, in tandem with, or in exchange or
substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of an Eligible Person to receive payment from the
Company or any Subsidiary or Affiliate. Awards may be granted in addition to
or in tandem with such other Awards or awards, and may be granted either as of
the same time as or a different time from the grant of such other Awards or
awards. The per Share exercise price of any Option, grant price of any SAR, or
purchase price of any other Award conferring a right to purchase Shares which
is granted in connection with the substitution of awards granted under any
other plan or agreement of the Company or any Subsidiary or Affiliate or any
business entity to be acquired by the Company or any Subsidiary or Affiliate,
shall be determined by the Committee, in its discretion.

          (b) Term of Awards. The term of each Award granted to an Eligible Person
shall be for such period as may be determined by the Committee; provided,
however, that in no event shall the term of any ISO or a SAR granted in tandem
therewith exceed a period of ten years from the date of its grant (or such
shorter period as may be applicable under Section 422 of the Code).

          (c) Form of Payment Under Awards. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Company or a
Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award may
be made in such forms as the Committee shall determine at the date of grant or
thereafter, including, without limitation, cash, Shares, notes or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The Committee may make rules relating to installment or
deferred payments with respect to Awards, including the rate of interest to be
credited with respect to such payments, and the Committee may require deferral
of payment under an Award if, in the sole judgment of the Committee, it may be
necessary in order to avoid nondeductibility of the payment under Section
162(m) of the Code.

          (d) Nontransferability. Unless otherwise set forth by the Committee in an
Award Agreement, Awards shall not be transferable by an Eligible Person except
by will or the laws of descent and distribution (except pursuant to a
Beneficiary designation) and shall be exercisable during the lifetime of an
Eligible Person only by such Eligible Person or his or her guardian or legal
representative. An Eligible Person’s rights under the Plan may not be pledged,
mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to
claims of the Eligible Person’s creditors.

          (e) Other Conditions. The Committee may, by way of the Award Agreements
or otherwise, establish such other terms, conditions, restrictions and/or
limitations, if any, of any Award, provided they are not inconsistent with the
Plan.

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          7. Performance Awards.

          (a) Performance Awards Granted to Covered Employees. If the Committee
determines that an Award (other than an Option or SAR) to be granted to an
Eligible Person should qualify as “performance-based compensation” for purposes
of Section 162(m) of the Code, the grant, vesting, exercise and/or settlement
of such Award (each, a “Performance Award”) shall be contingent upon
achievement of preestablished performance goals and other terms set forth in
this Section 7(a).

     (i) Performance Goals Generally. The performance goals for such
Performance Awards shall consist of one or more business criteria and a
targeted level or levels of performance with respect to each of such
criteria, as specified by the Committee consistent with this Section
7(a). The performance goals shall be objective and shall otherwise meet
the requirements of Section 162(m) of the Code and regulations thereunder
(including Treasury Regulation 1.162-27 and successor regulations
thereto), including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of
performance goals being “substantially uncertain.” The Committee may
determine that such Performance Awards shall be granted, vested,
exercised and/or settled upon achievement of any one performance goal or
that two or more of the performance goals must be achieved as a condition
to grant, vesting, exercise and/or settlement of such Performance Awards.
Performance goals may differ for Performance Awards granted to any one
Participant or to different Participants.

     (ii) Business Criteria. One or more of the following business
criteria for the Company, on a consolidated basis, and/or for specified
Subsidiaries or Affiliates or other business units or lines of business
of the Company shall be used by the Committee in establishing performance
goals for such Performance Awards: (1) earnings per share (basic or fully
diluted); (2) revenues; (3) earnings, before or after taxes, from
operations (generally or specified operations), or before or after
interest expense, depreciation, amortization, incentives, or
extraordinary or special items; (4) cash flow, free cash flow, cash flow
return on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital; (5) return on net
assets, return on assets, return on investment, return on capital, return
on equity; (6) economic value added; (7) operating margin or operating
expense; (8) net income; (9) Share price or total stockholder return; and
(10) strategic business criteria, consisting of one or more objectives
based on meeting specified market penetration, geographic business
expansion goals, cost targets, customer satisfaction, supervision of
litigation and information technology, and goals relating to acquisitions
or divestitures of Subsidiaries, Affiliates or joint ventures. The
targeted level or levels of performance with respect to such business
criteria may be established at such levels and in such terms as the
Committee

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may determine, in its discretion, including in absolute terms, as a
goal relative to performance in prior periods, or as a goal compared to
the performance of one or more comparable companies or an index covering
multiple companies.

     (iii) Performance Period; Timing for Establishing Performance Goals;
Per-Person Limit. Achievement of performance goals in respect of such
Performance Awards shall be measured over a performance period, as
specified by the Committee. A performance goal shall be established not
later than the earlier of (A) 90 days after the beginning of any
performance period applicable to such Performance Award or (B) the time
25% of such performance period has elapsed. In all cases, the maximum
Performance Award of any Participant shall be subject to the limitation
set forth in Section 4(b).

     (iv) Settlement of Performance Awards; Other Terms. Settlement of
such Performance Awards shall be in cash, Shares, other Awards or other
property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in
connection with such Performance Awards, but may not exercise discretion
to increase any such amount payable to the Participant in respect of a
Performance Award subject to this Section 7(a). Any settlement which
changes the form of payment from that originally specified shall be
implemented in a manner such that the Performance Award and other related
Awards do not, solely for that reason, fail to qualify as
“performance-based compensation” for purposes of Section 162(m) of the
Code. The Committee shall specify the circumstances in which such
Performance Awards shall be paid or forfeited in the event of Termination
of Service of the Participant or other event (including a Change of
Control) prior to the end of a performance period or settlement of such
Performance Awards.

          (b) Written Determinations. Determinations by the Committee as to the
establishment of performance goals, the amount potentially payable in respect
of Performance Awards, the level of actual achievement of the specified
performance goals relating to Performance Awards and the amount of any final
Performance Award shall be recorded in writing in the case of Performance
Awards intended to qualify under Section 162(m) of the Code. Specifically, the
Committee shall certify in writing, in a manner conforming to applicable
regulations under Section 162(m), prior to settlement of each such Award, that
the performance objective relating to the Performance Award and other material
terms of the Award upon which settlement of the Award was conditioned have been
satisfied.

          8. Change of Control Provisions.

          (a) Acceleration of Exercisability and Lapse of Restrictions. Unless
otherwise provided by the Committee at the time of the Award grant, in the
event of a Change of Control, (i) all outstanding Awards pursuant to which the
Participant may have rights the ex-

-15-

 

ercise of which is restricted or limited, shall become fully exercisable
at the time of the Change of Control, and (ii) unless the right to lapse of
restrictions or limitations is waived or deferred by a Participant prior to
such lapse, all restrictions or limitations (including risks of forfeiture and
deferrals) on outstanding Awards subject to restrictions or limitations under
the Plan shall lapse, and all performance criteria and other conditions to
payment of Awards under which payments of cash, Shares or other property are
subject to conditions shall be deemed to be achieved or fulfilled and shall be
waived by the Company at the time of the Change of Control.

          (b) Definitions of Certain Terms. For purposes of this Section 8, the
following definitions, in addition to those set forth in Section 2, shall
apply:

     (i) “Change of Control” means and shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall
have been satisfied:

     (a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates) representing
20 percent or more of the combined voting power of the Company’s
then outstanding securities; or

     (b) during any period of two consecutive years (not including
any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into
an agreement with the Company to effect a transaction described in
clause (a), (b) or (c) of this subsection) whose election by the
Board or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority of the members of the Board; or

     (c) a merger or consolidation of the Company with any other
corporation is consummated, other than (i) a merger or
consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, at least
75 percent of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (ii) a merger of consolidation
effected to implement a recapitalization of the Company (or similar
trans-

-16-

 

action) in which no Person acquires more than 50 percent of
the combined voting power of the Company’s then outstanding
securities; or

     (d) a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets is consummated.

     (ii) “Beneficial Owner” shall have the meaning defined in Rule 13d-3
under the Exchange Act.

     (iii) “Person” shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used herein; however, a Person shall
not include (i) the Company or any of its Subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or any of its Subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of the
stock of the Company.

          9. General Provisions.

          (a) Compliance with Legal and Trading Requirements. The Plan, the
granting and exercising of Awards thereunder, and the other obligations of the
Company under the Plan and any Award Agreement, shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approvals by any stock exchange, regulatory or governmental agency as may be
required. The Company, in its discretion, may postpone the issuance or
delivery of Shares under any Award until completion of such stock exchange or
market system listing or registration or qualification of such Shares or other
required action under any state, federal or foreign law, rule or regulation as
the Company may consider appropriate, and may require any Participant to make
such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of Shares in compliance
with applicable laws, rules and regulations. No provisions of the Plan shall
be interpreted or construed to obligate the Company to register any Shares
under federal, state or foreign law. The Shares issued under the Plan may be
subject to such other restrictions on transfer as determined by the Committee.

          (b) No Right to Continued Employment or Service. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee, consultant
or director the right to be retained in the employ or service of the Company or
any of its Subsidiaries or Affiliates, nor shall it interfere in any way with
the right of the Company or any of its Subsidiaries or Affiliates to terminate
any employee’s, consultant’s or director’s employment or service at any time.

-17-

 

          (c) Taxes. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to an Eligible Person, amounts of withholding and other taxes due in connection
with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company and Eligible Persons to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to
withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of an Eligible Person’s tax obligations;
provided, however, that the amount of tax withholding to be satisfied by
withholding Shares shall be limited to the minimum amount of taxes, including
employment taxes, required to be withheld under applicable Federal, state and
local law.

          (d) Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee’s authority to grant Awards
under the Plan without the consent of shareholders of the Company or
Participants, except that (i) any such amendment or alteration shall be subject
to shareholder approval to the extent such shareholder approval is required
under the rules of any stock exchange or automated quotation system on which
the Shares may then be listed or quoted and (ii) any such amendment or
alteration as it applies to ISOs shall be subject to the approval of the
Company’s shareholders to the extent such shareholder approval is required
under Section 422 of the Code; provided, however, that, without the consent of
an affected Participant, no amendment, alteration, suspension, discontinuation,
or termination of the Plan may materially and adversely affect the rights of
such Participant under any Award theretofore granted to him or her. The
Committee may waive any conditions or rights under, amend any terms of, or
amend, alter, suspend, discontinue or terminate, any Award theretofore granted,
prospectively or retrospectively; provided, however, that, without the consent
of a Participant, no amendment, alteration, suspension, discontinuation or
termination of any Award may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him or her.

          (e) No Rights to Awards; No Shareholder Rights. No Eligible Person or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Eligible Persons and employees.
No Award shall confer on any Eligible Person any of the rights of a
shareholder of the Company unless and until Shares are duly issued or
transferred to the Eligible Person in accordance with the terms of the Award.

          (f) Unfunded Status of Awards. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan
or any Award shall give any such Participant any rights that are greater than
those of a general creditor of the Company;

-18-

 

provided, however, that the Committee may authorize the creation of trusts
or make other arrangements to meet the Company’s obligations under the Plan to
deliver cash, Shares, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the “unfunded”
status of the Plan unless the Committee otherwise determines with the consent
of each affected Participant.

          (g) Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of options and other awards otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.

          (h) Not Compensation for Benefit Plans. No Award payable under this Plan
shall be deemed salary or compensation for the purpose of computing benefits
under any benefit plan or other arrangement of the Company for the benefit of
its employees, consultants or directors unless the Company shall determine
otherwise.

          (i) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu
of such fractional Shares or whether such fractional Shares or any rights
thereto shall be forfeited or otherwise eliminated.

          (j) Governing Law. The validity, construction, and effect of the Plan,
any rules and regulations relating to the Plan, and any Award Agreement shall
be determined in accordance with the laws of Delaware without giving effect to
principles of conflict of laws thereof.

          (k) Effective Date; Plan Termination. The Plan shall become effective as
of               , 2004 [date of consummation of IPO] (the “Effective
Date”). The Plan shall terminate as to future awards on the date which is ten
(10) years after the Effective Date.

          (l) Titles and Headings. The titles and headings of the sections in the
Plan are for convenience of reference only. In the event of any conflict, the
text of the Plan, rather than such titles or headings, shall control.

-19-

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