Document:

EX-10.6

 

 EXHIBIT 10.6

STOCKHOLDERS AGREEMENT

dated as of

April 18, 2002

among

PIKE EQUIPMENT AND SUPPLY COMPANY

(TO BE RENAMED PIKE HOLDINGS, INC.),

CERTAIN ROLLOVER HOLDERS,

CERTAIN MANAGEMENT STOCKHOLDERS

and

LGB PIKE LLC

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	RESTRICTIONS ON TRANSFER
	 	 	 	 
	 
	 	 	 	 
	SECTION 2.01. General Restrictions
	 	 	10	 
	SECTION 2.02. Legend
	 	 	11	 
	SECTION 2.03.  Additional Restrictions
on Transfer
	 	 	11	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	TAG-ALONG RIGHTS; BRING-ALONG RIGHTS
	 	 	 	 
	 
	 	 	 	 
	SECTION 3.01. Tag-Along Rights
	 	 	12	 
	SECTION 3.02. Bring-Along Rights
	 	 	14	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	VOTING; COVENANT OF COMPANY; BOARD REPRESENTATION
	 	 	 	 
	 
	 	 	 	 
	SECTION 4.01. Management Proxies; Voting
	 	 	15	 
	SECTION 4.02. Transactions with LGB
Affiliates
	 	 	15	 
	SECTION 4.03. Joseph Eric Pike’s Right to
Board Seat
	 	 	16	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	PREEMPTIVE RIGHTS; CALL OPTION; PUT OPTION; DEFERRAL OF PURCHASE; PAYMENT FOR PURCHASES
	 	 	 	 
	 
	 	 	 	 
	SECTION 5.01. Preemptive Rights
	 	 	16	 
	SECTION 5.02. Company Call Option
	 	 	18	 
	SECTION 5.03. Put Option
	 	 	21	 
	SECTION 5.04. Deferral of Purchases
	 	 	23	 
	SECTION 5.05. Payment for Purchases
	 	 	24	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	REGISTRATION RIGHTS
	 	 	 	 
	 
	 	 	 	 
	SECTION 6.01. Demand Registration
	 	 	26	 
	SECTION 6.02. Incidental Registration
	 	 	27	 
	SECTION 6.03. Additional Rights
of LGB Group
	 	 	29	 
	SECTION 6.04. Registration Expenses
	 	 	31	 
	SECTION 6.05. Restrictions on Public Sale by
Sellers and the Company
	 	 	31	 
	SECTION 6.06. Registration Procedures
	 	 	32	 
	SECTION 6.07.  Obligations of Sellers
	 	 	38	 

 

 

	 	 	 	 	 
	SECTION 6.08. Indemnification
	 	 	39	 
	SECTION 6.09.  Inconsistent Actions
	 	 	44	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	SECTION 7.01. Notices
	 	 	44	 
	SECTION 7.02. Applicable Law
	 	 	46	 
	SECTION 7.03. Integration
	 	 	46	 
	SECTION 7.04. Descriptive Headings
	 	 	46	 
	SECTION 7.05. Severability
	 	 	46	 
	SECTION 7.06. Agreement To Be Bound
	 	 	46	 
	SECTION 7.07. Additional Holders
	 	 	46	 
	SECTION 7.08. Other Agreements
	 	 	47	 
	SECTION 7.09. Successors, Assigns,
Transferees
	 	 	47	 
	SECTION 7.10. Defaults
	 	 	48	 
	SECTION 7.11. Amendments; Waivers
	 	 	48	 
	SECTION 7.12. Counterparts
	 	 	48	 
	SECTION 7.13. Specific Performance
	 	 	48	 
	SECTION 7.14. Exclusive Jurisdiction;
Waiver of Jury Trial
	 	 	48	 
	SECTION 7.15. Rights to Negotiate
	 	 	49	 
	SECTION 7.16. Limited Liability
	 	 	49	 
	SECTION 7.17. Attorneys’ Fees
	 	 	50	 
	SECTION 7.18. Recapitalization, Exchanges,
etc., Affecting Common Stock
	 	 	50	 
	 
	 	 	 	 
	Exhibit A
– Irrevocable Proxy
	 	 	 	 

 

 

     STOCKHOLDERS
AGREEMENT dated as of April 18, 2002, among
PIKE EQUIPMENT AND SUPPLY COMPANY (to be renamed PIKE HOLDINGS, INC.), a
North Carolina corporation (the “Company”), REGINALD L. BANNER, AS
TRUSTEE UNDER IRREVOCABLE T/A WITH JOE B. PIKE F/B/O JOSEPH ERIC PIKE (the
“Trust”), JERRY E. BOATRIGHT, JOHN H. MERRITT, ROBERT B. RATLIFF,
JR., DONALD B. ANDERSON, JAMES T. BENFIELD, ZACK W. BLACKMON, JR., MICHAEL
L. HEATH, JONATHAN H. MULLINS AND KELLY G. SURRATT (each, including the
Trust, a “Rollover Holder” and collectively, the “Rollover
Holders”), Persons who become Management Stockholders pursuant to
Section 7.07 (individually, a “Management Stockholder” and
collectively, the “Management Stockholders”), and LGB PIKE LLC, a
Delaware limited liability company (“LGB LLC”).

          WHEREAS pursuant to the Recapitalization and Investment Agreement dated March 15, 2002, by and
among LGB LLC, LGB Acquisition Corp., a North Carolina corporation, the Company, Pike Electric,
Inc., a North Carolina corporation (“Pike”), Pike Merger Sub, Inc., a North Carolina
corporation, and certain shareholders of Pike, as amended by the Amendment Agreement and Consent
dated as of April 11, 2002 (as so amended, the “Recapitalization Agreement”), (a) LGB LLC
shall purchase a number of shares of common stock of Pike, (b) LGB Acquisition Corp. shall merge
with and into Pike as a result of which certain shareholders of Pike shall exchange certain capital
stock of the Company owned by them for cash and shares of preferred stock of Pike, (c) the Rollover
Holders shall exchange certain capital stock of the Company owned by them for cash and shares of
preferred stock of Pike and retain their shares of capital stock not so exchanged, (d) LGB LLC
shall retain its shares of common stock of Pike, and (e) pursuant to a merger of Pike Merger Sub,
Inc. with and into Pike, the Rollover Holders and LGB LLC will receive shares of Common Stock and
holders of shares of preferred stock of Pike shall receive shares of preferred stock of the
Company;

 

 

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          WHEREAS it is in the best interests of LGB LLC, the Company and the Rollover Holders to set
forth certain additional provisions governing certain aspects of their relationship.

          NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:

ARTICLE I

DEFINITIONS

          As used in this Agreement, the following terms shall have the meanings ascribed to them below:

          “Affiliate” of any Person means any Person that, directly or indirectly through one or
more intermediaries, controls, is controlled by or is under common control with such Person. For
the purposes of this Agreement, (a) each member of LGB LLC shall be considered an Affiliate of LGB
LLC, (b) each member and any Person who controls any member from time to time of LGB LLC shall be
considered an Affiliate of LGB LLC, and (c) neither the Company nor any subsidiary of the Company
shall be considered an Affiliate of any member of the LGB Group.

          “Attributed LGB Percentage” shall mean the percentage of Common Stock outstanding that
is owned by the LGB Group or any other Person who may be deemed to be a member of a collaborative
group with LGB LLC within the meaning of Issue Topic No. E-97, issued by the Financial Accounting
Standards Board Emerging Issues Task Force. For the purpose of calculating the Attributed LGB
Percentage at any time, unless the Company otherwise determines, effect shall be given to all
previous exercises of the Put Option and all previous exercises of the Call Option that have not
been irrevocably withdrawn but have not yet closed, including exercises of the Put Option and the
Call Option the closing of which have been postponed by reason of a Deferral Event.

          “Board” shall mean the Board of Directors of the Company.

          “Call Option” shall have the meaning set forth in Section 5.02(a).

 

 

  3

          “Change of Control” means the consummation of any transaction (including any merger or
consolidation) the result of which is that any “person” or “group”, other than a member of the LGB
Group, becomes the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any particular “person”
(as such term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to
have beneficial ownership of all securities that such “person” has the right to acquire by
conversion or exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition), directly or indirectly, of
securities representing both more than 50% of the voting power of the Company and more than the
voting power of the Company represented by securities beneficially owned by the LGB Group.

          “Clear Date” shall have the meaning set forth in Section 5.04(b).

          “Common Stock” shall mean shares of common stock, no par value per share, of the
Company and other capital stock or securities into which Common Stock or any securities are
reclassified or changed, including by reason of a merger, consolidation, reorganization or
recapitalization or otherwise are distributed with respect to Common Stock or any securities.

          “Company” shall have the meaning set forth in the preamble to this Agreement.

          “Company Call Assignees” shall have the meaning set forth in Section 5.02(b).

          “control”, unless otherwise specified herein, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise.
“controlling” and “controlled” have meanings correlative thereto.

          “Covered Equity Securities” shall have the meaning set forth in Section 5.01(a).

 

 

 4

          “Credit Facilities” shall mean the senior secured credit facilities to which the
Company or any of its subsidiaries is a party and any refinancing thereof.

          “Default Shares” shall have the meaning set forth in Section 5.02(b).

          “Default Share Notice” shall have the meaning set forth in Section 5.02(b).

          “Deferral Event” shall have the meaning set forth in Section 5.04(a).

          “Demand Registration Statement” shall have the meaning set forth in Section 6.01(a).

          “Employee” shall mean a full-time employee of the Company or any subsidiary thereof.

          “Equity Securities” shall have the meaning set forth in Section 5.01(a).

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and all
rules and regulations promulgated thereunder.

          “Fair Market Value” used in connection with the value of shares of Common Stock shall
mean, with respect to each share, either (i) if an “Appraised Value” (as defined below) has not
previously been determined for shares of Common Stock and an election has not been made to obtain
an “Appraised Value” as contemplated by the next sentence, the higher of (x) the last price paid by
the Company or any member of the LGB Group for shares of Common Stock purchased from a
non-Affiliate pursuant to this Agreement and (y) the Final Share Value per share if there has not
been any previous sale of Common Stock, or (ii) the Appraised Value thereof determined as provided
herein. An election to obtain an Appraised Value may be made by the Board in its sole discretion
upon notice being given pursuant to Section 5.02, 5.03 or 5.04. The “Appraised Value” of a
share of Common Stock means (x) if any election has been made by the Company as provided above to
determine an Appraised Value, the fair market value thereof determined by an independent appraiser
or investment banking firm selected by the Board, such fair market value being determined within
120 days after the date, as the case may be, that notice is given pursuant to Section 5.02,

 

 

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5.03 or 5.04 or (y) if no such election has been made by the Company, the most recent
Appraised Value.

          “Final Share Value” shall mean the Net Merger Consideration (as defined in the
Recapitalization Agreement) divided by the total number of shares of common stock of Pike
outstanding immediately prior to the Pike Merger Effective Time (as defined in the Recapitalization
Agreement), other than shares held by LGB LLC.

          “Financing Default” shall mean an event or condition which would constitute (or with
notice or lapse of time or both, unless cured or waived, would constitute) an event of default
(which event of default has not, at the time of determination of the existence of a Financing
Default, been cured or waived) under or a violation or breach of any of the provisions of, any of
the following as they may be amended from time to time: (i) the Credit Facilities, (ii) any other
debt of the Company or any of its subsidiaries existing at the time of determination of the
existence of a Financing Default, and (iii) any of the notes, debentures, warrants, preferred stock
or other securities issued pursuant to or whose terms are governed by the terms of any of the
agreements set forth in clauses (i) through (ii) above and any extensions, renewals, refinancings
or refundings thereof in whole or in part.

          “Good Cause” shall mean:

     (i) Employee’s willful, repeated failure to comply with the lawful and material
instructions of a more senior officer or the Board;

     (ii) Employee’s engaging in conduct that is illegal, that brings (or if widely known
would bring) Employee or the Company or any of its subsidiaries into substantial disrepute
or that is materially detrimental or damaging in a significant way to the goodwill or trade
names of the Company or any of its subsidiaries; or

     (iii) Employee’s commission of an act of dishonesty, a crime involving moral turpitude
or a felony.

          “Holders” shall mean LGB LLC, the Rollover Holders, the Management Stockholders, any
other Person who

 

 

  6

shall become a party to this Agreement pursuant to Section 7.06 or 7.07, and any combination
of them.

          “Incidental Registration Statement” shall have the meaning set forth in Section
6.02(a).

          “Initial Public Offering” shall mean the sale, pursuant to one or more effective
registration statements under the Securities Act (other than in connection with employee benefit or
similar plans or acquisitions of companies or businesses by the Company or any of its subsidiaries)
of at least 15% of the total number of shares of Common Stock of the Company that are then
outstanding.

          “Interest Rate” shall mean the rate per annum equal to the prime rate of interest in
effect from time to time used for purposes of calculating interest rates under the largest of the
Credit Facilities that uses such a prime rate; provided, however, that if such rate
exceeds the highest legal rate permitted by applicable law, such rate shall be reduced to the
permitted rate.

          “Junior Subordinated Note” shall have the meaning set forth in Section 5.05.

          “LGB Group” shall mean LGB LLC and (a) any Affiliate of LGB LLC (collectively, the
“LGB LLC Affiliates”), (b) any officer or employee of LGB LLC or any LGB LLC Affiliate
(collectively, the “LGB LLC Associates”), (c) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any LGB LLC Associate, (d) a trust, the
beneficiaries of which, or a corporation or partnership, the stockholders or general or limited
partners of which, include only LGB LLC, LGB LLC Affiliates, LGB LLC Associates, their spouses,
their lineal descendants and any other members of their families and (e) any other Person
(including any other shareholder of the Company) that LGB LLC informs the Company should be deemed
a member of the LGB Group for purposes of this Agreement, if, in the cases of clauses (a) through
(e) above, such Person agrees to be bound by this Agreement as a member of the LGB Group.

          “Management Stockholder” shall have the meaning set forth in the preamble to this
Agreement.

          “NASD” shall mean the National Association of Securities Dealers, Inc.

 

 

  7

          “Organizational Documents” shall mean the Amended and Restated Articles of
Incorporation and Amended and Restated By-laws of the Company.

          “Permitted Transferees” shall mean:

     (i) in the case of any member of the LGB Group, (A) any other Person who is a member
of the LGB Group or (B) the Company;

     (ii) in the case of any Rollover Holder other than the Trust, (A) such Rollover
Holder’s heirs, executors, administrators, testamentary trustees, legatees or beneficiaries
and (B) a trust, the beneficiaries of which include only such Rollover Holder, the spouse,
the lineal descendants or any other member of the family of such Rollover Holder approved
by the Board;

     (iii) in the case of the Trust, (A) Joseph Eric Pike, his spouse, his lineal
descendants or any other member of his family approved by the Board or (B) a trust, the
beneficiaries of which include only persons described in clause (A) above; and

     (iv) in the case of a Management Stockholder, (A) such Management Stockholder’s heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries and (B) a
trust, the beneficiaries of which include only such Management Stockholder, the spouse, the
lineal descendants or any other member of the family of such Management Stockholder
approved by the Board.

          “Person” shall mean any individual, corporation, partnership, company, limited
liability company, trust, joint venture, unincorporated organization or government or political
department or agency thereof or other entity of whatever nature.

          “Pike” shall have the meaning set forth in the recitals to this Agreement.

          “Preemptive Buyers” shall have the meaning set forth in Section 5.01(a).

          “Put Holder” shall have the meaning set forth in Section 5.03(a).

 

 

 8

          “Put Option” shall have the meaning set forth in Section 5.03(a).

          “Recapitalization Agreement” shall have the meaning set forth in the recitals to this
Agreement.

          “Registrable Securities” shall mean the Common Stock. As to any particular
Registrable Securities, once issued, such securities shall cease to be Registrable Securities if
(i) such securities have been registered under the Securities Act, the registration statement with
respect to the sale of such securities has become effective under the Securities Act and such
securities have been disposed of pursuant to such effective registration statement, (ii) such
securities have been distributed pursuant to Rule 144 or Rule 144A (or any similar provision then
in force) under the Securities Act, (iii) such securities have been otherwise transferred, if new
certificates or other evidences of ownership for them not bearing a legend restricting further
transfer and not subject to any stop-transfer order or other restrictions on transfer have been
delivered by the Company and subsequent disposition of such securities does not require
registration or qualification of such securities under the Securities Act or any state securities
laws then applicable, (iv) following the Initial Public Offering, such securities may be sold
without restriction under Rule 144(k) (or any similar provision then in force) under the Securities
Act, or (v) such securities shall cease to be outstanding.

          “Registration Expenses” shall mean all expenses incident to the Company’s performance
of or compliance with Article VI, including all registration and filing fees and expenses
(including SEC, stock exchange and NASD fees), fees and expenses of compliance with state
securities or “blue sky” laws (including reasonable fees and disbursements of counsel for the
underwriters in connection with “blue sky” qualifications of the Registrable Securities), printing
expenses, messenger and delivery expenses, the fees and expenses incurred in connection with the
listing, if any, of the securities to be registered on each securities exchange or national market
system on which the Common Stock is then listed, fees and disbursements of counsel for the Company
and of the independent certified public accountants of the Company (including the expenses of any
annual audit, special audit and “cold comfort” letters required by or incident to such performance
and

 

 

 9

compliance), the fees and disbursements of underwriters customarily paid by issuers or sellers
of securities (including, if applicable, the fees and expenses of any “qualified independent
underwriter” (and its counsel) that is required to be retained in accordance with the rules and
regulations of the NASD), the reasonable fees and expenses of any special experts retained by the
Company in connection with such registration, and fees and expenses of other Persons retained by
the Company (but not including any underwriting discounts or commissions or transfer taxes, if any,
attributable to the sale of Registrable Securities by holders of such Registrable Securities).

          “Required Registration Statement” shall mean any Demand Registration Statement or any
Shelf Registration Statement, as applicable.

          “Rollover Holders” shall have the meaning set forth in the preamble to this Agreement.

          “Scheduled Call Closing Date” shall have the meaning set forth in Section 5.02(c).

          “Scheduled Put Closing Date” shall have the meaning set forth in Section 5.03(b).

          “Securities Act” shall mean the Securities Act of 1933, and all rules and regulations
promulgated thereunder.

          “SEC” shall mean the Securities and Exchange Commission.

          “Seller” shall mean any Selling LGB Stockholder or any Selling Incidental Stockholder,
as applicable.

          “Selling Incidental Stockholder” shall have the meaning set forth in Section 6.02(a).

          “Selling LGB Stockholder” shall have the meaning set forth in Section 6.01(a).

          “Shelf Registration Statement” shall mean a “shelf” registration statement filed by
the Company pursuant to the provisions of Section 6.03 with the SEC covering offers and sales in
accordance with Rule 415 under the Securities Act, or any similar rule that may be adopted by the
SEC (whether or not the Company is then eligible to use Form S-3), that covers some or all of the
Registrable

 

 

10

Securities, and any amendments and supplements to such registration statement, including
post-effective amendments, in each case including the prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.

          “Subscription Notice” shall have the meaning set forth in Section 5.01(b).

          “Subscription Period” shall have the meaning set forth in Section 5.01(b).

          “Suspension Period” shall mean any period during which the Company fails to keep any
Required Registration Statement effective and usable for resale of Registrable Securities held by
any Seller.

          “Terminated Management Stockholder” shall have the meaning set forth in Section
5.02(a).

          “Terminated Rollover Holder” shall have the meaning set forth in Section 5.02(a).

          “Termination Shares” shall have the meaning set forth in Section 5.02(a).

          “Transfer” shall have the meaning set forth in Section 2.01.

          “Underwritten Offering” shall have the meaning set forth in Section 6.02(b).

ARTICLE II

RESTRICTIONS ON TRANSFER

          SECTION 2.01. General Restrictions. Each Holder shall not, directly or indirectly,
offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of (collectively,
“Transfer”) any shares of Common Stock, or solicit any offers to purchase or otherwise
acquire or take a pledge of any shares of Common Stock, unless such Transfer is expressly permitted
by, and complies with the provisions of, this Agreement, and (i) such Transfer is pursuant to an
effective registration statement under the Securities Act and has been registered under all
applicable state securities or “blue sky” laws or (ii) unless consented to by the Company, such Holder shall have

 

 

11

furnished the Company with an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to the Company, to the effect that no such registration is required because
of the availability of an exemption from registration under the Securities Act and all applicable
state securities or “blue sky” laws; provided, however, that no such opinion shall
be required in the case of a Transfer by a Holder to a Permitted Transferee.

          SECTION 2.02. Legend. Each certificate representing shares of Common Stock held by a
Holder shall bear substantially the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF, AND IN
PARTICULAR MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF, A STOCKHOLDERS AGREEMENT (THE “AGREEMENT”) (A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF PIKE EQUIPMENT AND SUPPLY COMPANY (TOGETHER
WITH ITS SUCCESSORS, THE “COMPANY”) AND WHICH WILL BE MAILED TO A STOCKHOLDER WITHOUT
CHARGE WITHIN FIVE DAYS AFTER RECEIPT BY THE COMPANY OF A WRITTEN REQUEST THEREFOR FROM
SUCH STOCKHOLDER). THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE,
AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT.”

          SECTION 2.03. Additional Restrictions on Transfer. (a) Neither a Rollover Holder
nor a Management Stockholder may Transfer any shares of Common Stock other than to its Permitted
Transferees.

          (b) This Section 2.03 does not prohibit any Transfer of Common Stock in accordance with
Section 3.01 or 3.02. This Section 2.03 shall terminate upon the closing of the Initial Public
Offering.

          (c) No Transfer of Common Stock in violation of this Agreement shall be made or recorded on
the books of the Company and any such Transfer shall be void and of no effect.

ARTICLE III

TAG-ALONG RIGHTS; BRING-ALONG RIGHTS

 

 

12

          SECTION 3.01. Tag-Along Rights. (a) No member of the LGB Group shall sell or
otherwise dispose of shares of Common Stock to any Person (other than a Permitted Transferee) (a
“Third Party”), unless the terms and conditions of such sale or other disposition to such
Third Party shall include an offer to each Rollover Holder and each Management Stockholder (the
“Tag-Along Offerees”) to include, at the option of each Tag-Along Offeree, in the sale or
other disposition to the Third Party such number of shares of Common Stock owned by each such
Tag-Along Offeree determined in accordance with this Section 3.01. The member of the LGB Group
proposing to effect such sale or other disposition (the “Transferor”) shall send a written
notice (the “Tag-Along Notice”) to each Tag-Along Offeree setting forth the maximum number
of shares of Common Stock the Third Party is willing to purchase or otherwise acquire. At any time
within 15 days after its receipt of the Tag-Along Notice, each Tag-Along Offeree may exercise its
option to sell a number of shares of Common Stock owned by such Tag-Along Offeree determined in
accordance with the provisions of this Section 3.01 by furnishing written notice of such acceptance
(the “Tag-Along Acceptance Notice”) to the Transferor, which Tag-Along Acceptance Notice
shall set forth the maximum number of shares of Common Stock that such Tag-Along Offeree wishes to
sell or otherwise dispose of to the Third Party, and delivering to the Transferor the certificate
or certificates representing the maximum number of shares of Common Stock to be sold or otherwise
disposed of pursuant to such offer by such Tag-Along Offeree, together with a limited
power-of-attorney authorizing the Transferor to sell or otherwise dispose of such shares of Common
Stock to the Third Party as part of such proposed sale or other disposition.

          (b) If the proposed sale or other disposition to the Third Party by the Transferor is
consummated, each Tag-Along Offeree shall have the right to sell to the Third Party as part of such
proposed sale or other disposition the same percentage of the total number of outstanding shares of
Common Stock then owned by such Tag-Along Offeree as the percentage of the total number of
outstanding shares of Common Stock then owned by all members of the LGB Group
to be sold by the Transferor. In the event that the total number of shares of Common Stock
proposed to be sold or otherwise disposed of by the Transferor and all Tag-Along Offerees as set
forth in the Tag-Along Acceptance Notices and all other stockholders of the Company (the “Other

 

 

13

Accepting Stockholders”) who are entitled to sell shares of Common Stock to the Third Party
pursuant to this Section 3.01 exceeds the maximum number of shares of Common Stock that the Third
Party is willing to purchase or otherwise acquire, then the number of shares of Common Stock to be
sold by the Transferor, the Tag-Along Offerees who have given Tag-Along Acceptance Notices and the
Other Accepting Stockholders shall be allocated among the Transferor, such Tag-Along Offerees and
the Other Accepting Stockholders (with rounding to avoid fractional shares) in proportion to the
maximum number of shares of Common Stock that each of them originally proposed to sell or otherwise
dispose of to the Third Party.

          (c) Each of the Transferor and the Third Party shall have the right, in its sole discretion,
at all times prior to consummation of the proposed sale or other disposition giving rise to the
tag-along right granted by this Section 3.01, to abandon or otherwise terminate such sale or other
disposition, whereupon all tag-along rights in respect of such sale or other disposition shall
become null and void, and neither the Transferor nor the Third Party shall have any liability or
obligation to any Tag-Along Offeree with respect thereto by virtue of such abandonment or
termination.

          (d) The purchase from the Tag-Along Offerees pursuant to this Section 3.01 shall be on the
same terms and conditions, including the per share price and the date of sale or other disposition,
as are applicable to the Transferor, which shall be not less favorable than as stated in the
Tag-Along Notice provided to the Tag-Along Offerees by the Transferor.

          (e) If within 15 days after the receipt of the Tag-Along Notice, any Tag-Along Offeree has
not delivered a Tag-Along Acceptance Notice, such Tag-Along Offeree shall be deemed to have waived
any and all of such Tag-Along Offeree’s rights with respect to the sale or other disposition of
Common Stock described in the Tag-Along Notice.

          (f) The provisions of this Section 3.01 shall not be applicable to any transfer of Common
Stock made pursuant to a registered offering under the Securities Act. This Section 3.01 shall
terminate upon the closing of the Initial Public Offering.

 

 

14

          SECTION 3.02. Bring-Along Rights. (a) If the Board approves the sale of the Company
to another entity (whether by merger, consolidation, sale of all or substantially all of the
Company’s assets or sale of all or substantially all of the outstanding shares of the Company’s
capital stock) (an “Approved Sale”), then (i) each Management Stockholder shall consent to,
vote for and raise no objections against the Approved Sale and (ii) if the Approved Sale is
structured as a sale of capital stock, each Holder shall sell all Common Stock held by the Holder
on the terms and conditions approved by the Board. Each Holder shall promptly take all actions as
the Board shall deem necessary and appropriate in connection with the consummation of the Approved
Sale. In the event of an Approved Sale, all Holders, unless they agree otherwise, shall receive as
consideration upon such Approved Sale for their shares of Common Stock the same type of
consideration and the same amount of consideration per share as shall be received by members of the
LGB Group in connection with such Approved Sale; provided, however, that if the
purchase price for the shares is to be paid, in whole or in part, other than in cash, then the
Board may elect to have the Holders (other than members of the LGB Group) paid cash in lieu of, and
in an amount equal to the fair market value of, such noncash consideration.

          (b) If the Board desires to consummate an Approved Sale, the Board shall provide a written
notice to the Holders, which notice shall describe the proposed transaction in summary terms and,
if the Approved Sale is structured as a sale of capital stock, contain the price, terms and
conditions of the sale of Common Stock by the Holders to the entity to which such Common Stock is
to be sold. Upon not less than two business days’ request, each Holder shall enter into (i) a
binding agreement with the entity to which such Common Stock is to be sold to sell to such entity
all of its shares of Common Stock, free and clear of all liens, charges, pledges, security
interests and encumbrances and at the price and on the terms contained in said notice and (ii) any
binding interseller
agreement relating to such Approved Sale that the Board may approve, which agreements may
provide for escrows, holdbacks, expense reimbursement and other purchase price reductions or
deferrals which shall apply pro rata to all sellers.

 

 

15

          (c) This Section 3.02 shall terminate upon the closing of the Initial Public Offering.

ARTICLE IV

VOTING; COVENANT OF COMPANY; BOARD REPRESENTATION

          SECTION 4.01. Management Proxies; Voting. (a) Each Management Stockholder and its
Permitted Transferees shall grant to LGB LLC a proxy dated as of the date of their first purchase
or other acquisition of shares of Common Stock to vote such Management Stockholder’s or Permitted
Transferee’s shares of Common Stock, substantially in the form of Exhibit A attached hereto. If at
any time any such proxy shall not be in full force and effect for any reason other than termination
pursuant to the next sentence, each Management Stockholder and each such Permitted Transferee shall
vote, or cause to be voted, all shares of Common Stock held of record by such Management
Stockholder or Permitted Transferee and all shares as to which such Management Stockholder or
Permitted Transferee has voting control, as directed by LGB LLC, as to all matters except any
amendment to the Certificate of Incorporation or the By-laws of the Company that would adversely
affect the terms of the Common Stock. This Section 4.01 is a voting agreement under Section
55-07-30 of the North Carolina Business Corporation Act.

          (b) Such proxies and this Section 4.01 shall terminate upon the closing of the Initial Public
Offering.

          SECTION 4.02. Transactions with LGB Affiliates. (a) The Company shall not, nor
shall it permit any of its subsidiaries to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property, assets or services from, or
otherwise engage in any other transactions with, any member of the LGB Group or any Affiliate of
any such member, except transactions in the ordinary course of business that
are at prices and on terms and conditions not less favorable to the Company or such subsidiary
than could be obtained on an arm’s-length basis from unrelated third parties.

          (b) Notwithstanding any of the foregoing, this Section 4.02 shall not prohibit (i) the
Company or Pike from entering into the Management Advisory Services Agreement (the “MASA”)
with Goldberg Lindsay & Co. LLC or the Company or Pike performing its obligations thereunder

 

 

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or
(ii) any amendment to the MASA to increase the annual fees due from the Company or Pike thereunder.

          (c) This Section 4.02 shall terminate upon the closing of the Initial Public Offering.

          SECTION 4.03. Joseph Eric Pike’s Right to Board Seat. From and after the Closing
Date and so long as Joseph Eric Pike is Chief Executive Officer of the Company and the Trust and
Joseph Eric Pike together retain a number of shares of Common Stock that is equal to at least
one-half of the number of shares of Common Stock owned by the Trust immediately following the
execution hereof, Joseph Eric Pike, individually, shall have the right to occupy one seat on the
Board. For so long as Joseph Eric Pike has the right to a seat on the Board, each member of the
LGB Group shall vote all shares of Common Stock held of record by such member of the LGB Group in
favor of the election of Joseph Eric Pike.

ARTICLE V

PREEMPTIVE RIGHTS; CALL OPTION; PUT OPTION; DEFERRAL OF

PURCHASE; PAYMENT FOR PURCHASES

          SECTION 5.01. Preemptive Rights. (a) Each member of the LGB Group (collectively,
the “Preemptive Buyers”), shall have the preemptive right of subscription with respect to
all issuances by the Company of equity securities (or securities having significant equity
features) of the Company or securities convertible or exchangeable into, equity securities (or
securities having significant equity features) of the Company, including options, warrants and
convertible debt securities (collectively, “Equity Securities”); provided,
however,
that such preemptive right shall not be applicable to any issuance made pursuant to an
employee stock option plan, restricted stock plan or stock ownership plan of the Company. Equity
Securities (other than any issuance thereof made pursuant to an employee stock option plan of the
Company) are referred to herein as “Covered Equity Securities”.

          (b) If the Company proposes to issue any Covered Equity Securities, it shall deliver to each
Preemptive Buyer a notice to that effect, which notice shall set forth the amount and class of
Covered Equity Securities proposed

 

 

17

to be issued, the proposed issuance price and the other terms of
such proposed issuance. During the period of 15 days following the date of such notice (the
“Subscription Period”), each Preemptive Buyer shall have the right to deliver to the
Company and each other Preemptive Buyer an irrevocable notice (a “Subscription Notice”)
electing to purchase, at the proposed issuance price, an amount of such Covered Equity Securities
determined in accordance with Section 5.01(c).

          (c) If the proposed issuance of the Covered Equity Securities is consummated, each Preemptive
Buyer delivering one or more Subscription Notices shall have the right to purchase from the
Company, and the Company shall be required to sell to each such Preemptive Buyer, at the proposed
issuance price, up to an amount of Covered Equity Securities (rounded to avoid fractional Covered
Equity Securities) equal to the product of (i) the total amount of Covered Equity Securities
proposed to be issued by the Company multiplied by (ii) a fraction, the numerator of which shall be
equal to the number of shares of Common Stock then owned by such Preemptive Buyer and the
denominator of which shall be equal to the total number of shares of Common Stock then outstanding.
The closing of such sale shall occur at 12:00 noon on the first business day which is the later of
(i) the day of consummation of the issuance of such Covered Equity Securities to Persons other than
Preemptive Buyers (which may not be earlier than the date set forth in clause (ii) below) and (ii)
the day that is at least 15 days after the expiration of the Subscription Period at the principal
office of the Company, or at such other time and place as the Company and the Preemptive Buyers
exercising their preemptive rights shall mutually agree upon.

          (d) Any Covered Equity Securities proposed to be issued and not purchased by any Preemptive
Buyer pursuant to Section 5.01(c) may be sold by the Company to any other Person at a price not
lower than the proposed issuance price specified in the notice to Preemptive Buyers described in
Section 5.01(b).

          (e) In the event that the Company accepts consideration other than cash in connection with
any issuance of Covered Equity Securities, for purposes of determining the exercise price of any
preemptive right pursuant to this Article V, the value of the non-cash portion of the purchase
price paid by any Person to whom

 

 

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Covered Equity Securities are issued or sold shall be determined
by an independent appraiser selected jointly by the Board and the Preemptive Buyers. The exercise
price of such preemptive rights of subscription granted pursuant to this Article V shall be payable
in cash.

          (f) This Section 5.01 shall not apply to any registered offering of Common Stock. This
Section 5.01 shall terminate upon the closing of the Initial Public Offering.

          SECTION 5.02. Company Call Option. (a) If at any time prior to the closing of the
Initial Public Offering, a Management Stockholder (such Management Stockholder, a “Terminated
Management Stockholder”) or a Rollover Holder (such Rollover Holder, a “Terminated Rollover
Holder”) ceases to be an Employee (including due to the retirement, resignation, death or
disability of such Management Stockholder or Rollover Holder or otherwise), the Company shall have
the right and option to purchase all or any portion of the shares of Common Stock then held by such
Terminated Management Stockholder or Terminated Rollover Holder (such shares, the “Termination
Shares”) at a price per share equal to the Fair Market Value (the “Call Option”) as
follows:

     (i) For purposes of the Call Option relating to the Termination Shares of a
Terminated Management Stockholder, the Call Option shall be exercisable for a period of one
year from the date of termination of employment, and “Fair Market Value” shall be
calculated as of the date of termination; provided, however, that in the
case of a Terminated Management Stockholder whose employment is terminated for Good
Cause, the Call Option shall not expire for a period of two years from the date of
termination of employment and will be exercisable at a price per share equal to the lower
of (x) Fair Market Value on the date of such termination and (y) Fair Market Value on the
date of the exercise of the Call Option by the Company.

     (ii) For purposes of the Call Option relating to the Termination Shares of the
Terminated Rollover Holders, the Call Option shall be exercisable from the third
anniversary until the fourth anniversary of the Closing Date (in the case of a Terminated
Rollover Holder whose employment is terminated prior to the

 

 

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third anniversary of the
Closing Date) and for a period of one year from the date of termination of employment (in
the case of a Terminated Rollover Holder whose employment is terminated after the third
anniversary of the Closing Date). For purposes of this clause (ii), “Fair Market Value”
shall be calculated as of the date of exercise of the Call Option by the Company (in the
case of a Terminated Rollover Holder whose employment is terminated prior to the third
anniversary of the Closing Date) and as of the date of termination (in the case of a
Terminated Rollover Holder whose employment is terminated after the third anniversary of
the Closing Date).

     (iii) Notwithstanding any of the foregoing, in the case of a Terminated Rollover
Holder whose employment is terminated for Good Cause, (A) the Call Option shall be
exercisable (1) from the third anniversary to the fifth anniversary of the Closing Date if
such termination occurs prior to the third anniversary of the Closing Date, and (2) for a
period of two years from the date of termination of employment if such termination occurs
after the third anniversary of the Closing Date; and (B) the Call Option will be
exercisable at a price per share equal to (1) in the case of a Terminated Rollover Holder
whose employment is terminated prior to the third anniversary of the Closing Date, the
lower of (x) Fair Market Value on the third anniversary of the Closing Date and (y) Fair
Market Value on the date of the exercise of the Call Option by the Company, and (2) in the
case of a Terminated Rollover Holder whose
employment is terminated after the third anniversary of the Closing Date, the lower of
(x) Fair Market Value on the date of such termination and (y) Fair Market Value on the date
of the exercise of the Call Option by the Company.

          (b) In the event that an exercise in full by the Company of the Call Option would result,
after giving effect thereto, in a Financing Default, the Company may, in the sole discretion of the
Board, after purchasing the maximum number of Termination Shares which it is able to purchase
without a Financing Default resulting, assign its rights to purchase any of or all the remaining
Termination Shares (such shares, the “Default Shares”) to each member

 

 

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of the LGB Group
(collectively, the “Company Call Assignees”) in the manner specified below. If the Company
elects to assign its rights pursuant to this Section 5.02(b), the Company shall provide a Default
Share Notice (as defined below) to each of the Company Call Assignees advising them of such
election. Each Company Call Assignee that desires to purchase Default Shares pursuant to this
Section 5.02(b) shall provide the Company and the Terminated Management Stockholder with written
notice (a “Default Share Notice”) (specifying the number of Default Shares such Company
Call Assignee shall purchase) within 30 days (or such longer period as the Company may specify)
after notice is given to such Company Call Assignee. In the event that the aggregate number of
Default Shares as to which notices of acceptance are provided exceeds the number of Default Shares,
the Default Shares shall be allocated among such Company Call Assignees on a pro rata basis
according to the number of shares of Common Stock at such time owned by each Company Call Assignee
who wishes to purchase Default Shares. The Default Share Notice shall be delivered to LGB LLC (who
shall forward such notice to each other member of the LGB Group).

          (c) If the Company (or any Company Call Assignee) elects to exercise the Call Option with
respect to the Termination Shares of any Terminated Management Stockholder or the Terminated
Rollover Holder, the Company shall send to such Terminated Management Stockholder or Terminated
Rollover Holder (or his successor or representative, as the case may be) written notice of its
intention (and the intention of such Company Call Assignee) to purchase any such Termination
Shares. Subject to Section 5.04, the
closing of the purchase shall take place at the principal office of the Company no later than
the tenth business day (the “Scheduled Call Closing Date”) after the later of (i) the
giving of such notice by the Company, or (ii) if the Fair Market Value of the Termination Shares is
to be determined pursuant to clause (ii) of the definition thereof, the date of determination of
Fair Market Value; provided, however, that with respect to any Termination Shares
the repurchase of which is prevented by the occurrence of a Deferral Event, the Company shall give
the Terminated Management Stockholder or the Terminated Rollover Holder (or his successor or
representative, as the case may be) prompt notice of the number of Termination Shares, if any,
which it is able to repurchase without such

 

 

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repurchase resulting in a Deferral Event, and the
Company shall repurchase such number of Termination Shares on the Scheduled Call Closing Date.
Subject to Section 5.04, with respect to any such remaining Termination Shares that the Company was
unable to purchase on the Scheduled Call Closing Date, the Company shall promptly notify the
Terminated Management Stockholder or the Terminated Rollover Holder (or his successor or
representative, as the case may be) as soon as the application of Section 5.04 no longer prevents
the repurchase of any such Termination Shares (in whole or in part), whereupon the Company shall
again have the right, exercisable within 60 days of the Company’s notice, to purchase such
Termination Shares; provided, however, that the purchase price with respect to such
postponed repurchase shall be equal to the sum of the purchase price calculated as of the Scheduled
Call Closing Date plus interest on such purchase price from the Scheduled Call Closing Date to the
actual date of purchase at the Interest Rate. The foregoing procedure shall continue until all
Termination Shares which were subject to the Deferral Event are purchased.

          (d) For the purposes of this Section 5.02, (i) any Management Stockholder or Rollover Holder
who is a Permitted Transferee shall be deemed to have ceased to be an Employee when the initial
holder of shares of Common Stock held by such Management Stockholder or Rollover Holder, as
applicable, ceases to be an Employee and (ii) the Trust or any of its Permitted Transferees shall
be deemed to have ceased to be an Employee when Joseph Eric Pike ceases to be an Employee.

          SECTION 5.03. Put Option. (a) At any time prior to the closing of the Initial
Public Offering, (i) each Terminated Management Stockholder, (ii) each Terminated Rollover Holder
and (iii) any member of the LGB Group, upon the termination of the MASA (each such holder, a
“Put Holder”) shall have the right to require the Company to purchase all or a portion of
the shares of Common Stock held by such Put Holder (such shares, “Put Shares”), at a price
per share equal to the Fair Market Value of the Put Shares (the “Put Option”);
provided, however, that (x) no Put Holder shall be entitled to exercise a Put
Option if such exercise would cause the Attributed LGB Percentage to be equal to or exceed 94.0%;
and (y) a Put Holder whose employment with the Company is terminated for Good Cause or who resigned
from the Company shall not be entitled to a

 

 

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Put Option. For purposes of the Put Option, “Fair
Market Value” shall be calculated as of the date of termination of employment (in the case of a Put
Holder who is a Terminated Rollover Holder or a Terminated Management Stockholder) and as of the
date of termination of the MASA (in the case of a Put Holder who is a member of the LGB Group).

          (b) If a Put Holder elects to exercise the Put Option, such Put Holder shall send to the
Company written notice of its intention to sell the Put Shares, which notice shall be ineffective
to exercise the Put Option if not received by the Company within 30 days of termination of
employment (in the case of a Put Holder who is a Terminated Rollover Holder or a Terminated
Management Stockholder) or 30 days of termination of the MASA (in the case of a Put Holder who is a
member of the LGB Group). Subject to Section 5.04, the closing of the purchase shall take place at
the principal office of the Company no later than the tenth business day (the “Scheduled Put
Closing Date”) after the later of (i) the giving of such notice by the Put Holder, or (ii) if
the Fair Market Value of the Put Shares is to be determined pursuant to clause (ii) of the
definition thereof, the date of determination of Fair Market Value; provided,
however, that with respect to any Put Shares the repurchase of which is prevented by the
occurrence of a Deferral Event, the Company shall give the Put Holder (or his successor or
representative, as the case may be) prompt notice of the number of Put Shares, if any, which it is
able to repurchase without such repurchase resulting in a Deferral Event, and the Company shall
repurchase such number of Put Shares on the Scheduled Put
Closing Date. Subject to Section 5.04, with respect to any such remaining Put Shares that the
Company was unable to purchase on the Scheduled Put Closing Date, the Company shall promptly notify
the Put Holder (or his successor or representative, as the case may be) as soon as the application
of Section 5.04 no longer prevents the repurchase of any such Put Shares (in whole or in part),
whereupon the Put Holder shall again have the right, exercisable by written notice to the Company
within 60 days after the receipt of the Company’s notice, to require the Company to purchase such
Put Shares; provided, however, that the purchase price with respect to such
postponed repurchase shall be equal to the sum of the purchase price calculated as of the Scheduled
Put Closing Date plus interest on such purchase price from the Scheduled Put Closing Date to the
actual date of purchase at the Interest

 

 

23

Rate. The foregoing procedure shall continue until all Put
Shares which were subject to the Deferral Event are purchased.

          (c) For the purposes of this Section 5.03, (i) any Put Holder who is a Permitted Transferee
shall be deemed to become entitled to a Put Option when the initial holder of shares of Common
Stock held by such Put Holder becomes entitled to such Put Option and (ii) the Trust or any of its
Permitted Transferees shall be deemed to have ceased to be an Employee when Joseph Eric Pike ceases
to be an Employee.

          SECTION 5.04. Deferral of Purchases. (a) Notwithstanding any other provisions of
this Agreement, the Company shall not be obligated to purchase any shares of Common Stock at any
time (w) if there exists and is continuing a Financing Default, (x) to the extent that the purchase
of any shares of Common Stock pursuant to a Call Option or a Put Option or the declaration and
payment of a dividend by Pike or any other subsidiary of the Company to the Company in an amount
equal to that which would be paid in such purchase could, in the good faith judgment of the Board,
after giving effect thereto, result in or accelerate the occurrence of a Financing Default, (y) to
the extent that the Company does not have sufficient funds legally available therefor to effect
such a repurchase or (z) to the extent the repurchase by the Company of any shares of Common Stock
pursuant to a Call Option or a Put Option would result in a violation of any
law, statute, rule, regulation, policy, order, writ, injunction, decree or judgment
promulgated or entered by any federal, state, local or foreign court or any governmental authority
applicable to the Company or any of its property (each, a “Deferral Event”).

          (b) Upon the occurrence or existence of a Deferral Event, the Company shall give written
notice to the Holder (or his successor or representative, as the case may be) who would be selling
the shares of Common Stock to the Company but for the existence of a Deferral Event of the
occurrence or existence of a Deferral Event, setting forth in reasonable detail the specifics
thereof, (y) the Scheduled Put Closing Date or Scheduled Call Closing Date (as the case may be)
shall be deferred until the first business day that it may occur without any such Deferral Event
existing or resulting (the “Clear Date”) and (z) the period of time during which the Put
Holder (or his

 

 

24

successor or representative, as the case may be) may reexercise the Put Option, and
the period of time during which the Company may reexercise its Call Option, shall be extended until
the 30th day after the Clear Date. To the extent that any shares of Common Stock may be purchased
notwithstanding the existence of a Deferral Event, the Company shall do so in accordance with
Sections 5.02 and 5.03.

          SECTION 5.05. Payment for Purchases. (a) If at any time the Company elects or is
required to purchase any shares of Common Stock pursuant to a Put Option or a Call Option, the
Company shall pay the purchase price for the shares of Common Stock it purchases (i) by
cancellation of indebtedness, if any, owing from the holder of such shares of Common Stock to the
Company or any of its subsidiaries (such cancellation to be first of accrued interest and then
principal thereof (to be applied against sinking fund payments thereunder in the inverse order of
maturity)), and (ii) then, to the extent permitted by any loan agreement, indenture or other
agreement to which the Company or any subsidiary is a party or by which any of them or their
property is bound (but only to the extent any dividend needed to provide the Company with the
necessary funds to make such payment of the purchase price is so permitted), by the Company’s
delivery of a bank cashier’s check or certified check for the remainder of the purchase price, if
any; provided, however, that at the option of the Company,
any amounts due under this clause (ii) may, subject to Section 5.05(b), instead of being paid
in cash, be paid by the Company’s delivery of a junior subordinated promissory note of the Company
(which (x) shall be subordinated and subject in right of payment to the prior payment of all
indebtedness of the Company and any successor thereto, and any modifications, renewals, extensions,
replacements and refundings of all such indebtedness, and (y) may provide that any scheduled
payment of principal or interest thereon at a time when there exists a Financing Default, or any
scheduled payment of principal or interest thereon which could, in the good faith judgment of the
Board, result in or accelerate the occurrence of, a Financing Default may be deferred until no
Financing Default exists and, in the good faith judgment of the Board, it can be made without the
occurrence or acceleration of the occurrence of a Financing Default (such note, a “Junior
Subordinated Note”)) with a principal amount equal to the remainder, if any, of the purchase
price, payable in five equal annual installments

 

 

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commencing on the first anniversary of the
issuance thereof and bearing interest at the Interest Rate, against delivery by the applicable
Holder of certificates or other instruments representing the shares of Common Stock being
purchased, duly endorsed and with appropriate transfer tax stamps, if any, affixed, and free and
clear of any pledge, encumbrance, lien, security interest, purchase option, call or similar right.

          (b) The Company shall have the right to pay the purchase price for the Termination Shares or
the Put Shares, by use of a Junior Subordinated Note as follows:

          (i) if the Company exercises a Call Option with respect to the Termination Shares of a
Terminated Management Stockholder or Terminated Rollover Holder whose employment is terminated for
Good Cause, the Company may, in the sole discretion of the Board, cause the full purchase price of
such Termination Shares to be paid in the form of a Junior Subordinated Note;

          (ii) except as provided in clause (i) above, if the Company exercises a Call Option with
respect to the Termination Shares of a Terminated Management Stockholder or Terminated Rollover
Holder, the Company may not cause any portion of the purchase price of such Termination Shares to
be paid in the form of a Junior Subordinated Note; and

          (iii) if a Put Holder exercises a Put Option with respect to Put Shares, the Company may pay
with a Junior Subordinated Note only if (A) there exists at such time (or the use of cash, or
failure to use such Junior Subordinated Note as payment, could, in the good faith judgment of the
Board, result in or accelerate the occurrence of) a Financing Default or (B) the Board determines
in good faith that, based upon the Company’s or any of its subsidiaries’ cash flow or financial
condition or anticipated cash or financial requirements or plans, it would be prudent, advisable or
otherwise in the best interest of the Company to pay such purchase price in whole or in part by
delivery of a Junior Subordinated Note.

          (c) Any Junior Subordinated Note issued pursuant to this Section 5.05 shall be (i) prepayable
in whole or in part at any time without notice or penalty at the option of the Company, (ii) shall
be subject to mandatory prepayment upon the occurrence of a Change of Control and (iii) in the

 

 

26

case
of a Junior Subordinated Note issued pursuant to Section 5.05(b)(iii)(B), shall be subject to
mandatory prepayment upon the determination by the Board in good faith that conditions underlying
the Board’s decision to issue such Junior Subordinated Note no longer exist.

ARTICLE VI

REGISTRATION RIGHTS

     SECTION 6.01. Demand Registration. (a) At any time and from time to time, any one
or more members of the LGB Group (collectively, the “Selling LGB Stockholders”) shall have
the right to request in writing (which request shall specify the Registrable Securities intended to
be disposed of by such Selling LGB Stockholders and the intended method of distribution thereof)
that the Company register any and all of such Selling LGB Stockholders’ Registrable Securities by
filing with the SEC a registration statement covering such Registrable Securities (a “Demand
Registration Statement”). Upon the receipt of such a request, the Company shall, not later
than the 60th calendar day after the receipt of such a request, cause to be filed a Demand
Registration Statement providing for the registration under the Securities Act of the Registrable
Securities which the Company has been so requested to by such Selling LGB Stockholders, to the
extent necessary to permit the disposition of such
Registrable Securities in accordance with the intended methods of distribution thereof
specified in such request, and shall use its best efforts to have such Demand Registration
Statement declared effective by the SEC as soon as practicable thereafter (but in no event later
than the 120th calendar day after the receipt of such a request) and to keep such Demand
Registration Statement continuously effective for a period of at least 45 calendar days following
the date on which such Demand Registration Statement is declared effective (or such shorter period
which will terminate when all of the Registrable Securities covered by such Demand Registration
Statement have been sold pursuant thereto (including, if necessary, by filing with the SEC a
post-effective amendment or a supplement to the Demand Registration Statement or the related
Prospectus or any document incorporated therein by reference or by filing any other required
document or otherwise supplementing or amending the Demand Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the Company for such Demand

 

 

27

Registration Statement or by the Securities Act, any state securities or blue sky laws, or any
other rules and regulations thereunder).

          (b) A Demand Registration Statement shall be deemed not to have become effective (and the
related registration shall be deemed not to have been effected) unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of any Registrable Securities pursuant to such Demand Registration
Statement is interfered with by any stop order, injunction or other order or requirement of the SEC
or any other governmental agency or court (other than any such stop order or injunction issued as a
result of the inclusion in such Demand Registration Statement of any information supplied to the
Company for inclusion therein by a Selling LGB Stockholder) such Demand Registration Statement will
be deemed not to have become effective.

          (c) A Suspension Period with respect to any Demand Registration Statement shall commence on
and include the date that the Company gives notice that any Demand Registration Statement is no
longer effective or usable for resale of Registrable Securities of the Selling LGB Stockholders to
and including the date when each Selling LGB Stockholder covered by such Demand Registration
Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 6.06(j) or is advised in writing by the Company
that the use of the prospectus may be resumed. In the event of one or more Suspension Periods with
respect to any Demand Registration Statement, the 45-day period referenced in Section 6.01(a) shall
be extended by the number of days included in each such Suspension Period.

          (d) If at any time or from time to time any member of the LGB Group desires to sell
Registrable Securities in an Underwritten Offering pursuant to a Demand Registration Statement, the
underwriters, including the managing underwriter, shall be selected by LGB LLC.

          SECTION 6.02. Incidental Registration. (a) If at any time after the closing of the
Initial Public Offering, the Company proposes to register under the Securities Act any shares of
Common Stock for sale for its own account (and not solely in connection with a sale of warrants or
other rights to purchase, or securities convertible or exchangeable into, Common Stock and other

 

 

28

than (i) any registration relating to any employee benefit or similar plan, any dividend
reinvestment plan, or any acquisition by the Company or (ii) pursuant to a registration statement
filed in connection with an exchange offer), the Company shall give written notice to each member
of the LGB Group, to each Rollover Holder and to each Management Stockholder at least 20 days prior
to the initial filing of a registration statement with the SEC pertaining thereto (an
“Incidental Registration Statement”) informing such Person of its intent to file such
Incidental Registration Statement and of such Person’s rights under this Section 6.02 to request
the registration of the Registrable Securities held by such Person. Upon the written request of
any such LGB Stockholder, Rollover Holder or Management Stockholder (such Holder, a “Selling
Incidental Stockholder”) made within 10 days after any such notice is given (which request
shall specify the Registrable Securities intended to be disposed of by such Selling Incidental
Stockholder and the intended method of distribution thereof), the Company shall use reasonable
efforts to effect the registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by such Selling Incidental Stockholders, to the extent
required to permit the disposition of the Registrable Securities so requested to be registered, including, if necessary, by filing with the SEC a post-effective amendment or a
supplement to the Incidental Registration Statement or the related Prospectus or any document
incorporated therein by reference or by filing any other required document or otherwise
supplementing or amending the Incidental Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the Company for such
Incidental Registration Statement or by the Securities Act or by any other rules and regulations
thereunder.

          (b) If a registration pursuant to Section 6.01 or this Section 6.02 involves an underwritten
offering of the securities being registered (an “Underwritten Offering”), which securities
are to be distributed on a firm commitment basis by or through one or more underwriters of
recognized standing under underwriting terms appropriate for such transaction, and the underwriter
or the managing underwriter, as the case may be, of such Underwritten Offering shall inform the
Company, the Selling LGB Stockholders, if any, and the Selling Incidental

 

 

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Stockholders requesting such registration of Registrable Securities, if any, on or before the date five days prior to the
date then scheduled for such offering, that, in its opinion, the amount of securities requested to
be included in such registration exceeds the amount which can be sold in (or during the time of)
such offering within a proposed price range without adversely affecting the distribution of the
securities being offered, then the Company will include in such registration only the amount of
Registrable Securities and other securities that the Company is so advised can be sold in (or
during the time of) such offering within such price range; provided, however, that
the Company shall be required to include in such required registration: first, all the
securities initially proposed to be sold pursuant to such Incidental Registration Statement by the
Company (in the case of a primary offering by the Company), and second, the amount of
Registrable Securities and other securities requested to be included in such registration that the
Company is so advised can be sold in (or during the time of) such offering, allocated pro rata
among the Selling LGB Stockholders, the Selling Incidental Stockholders and other securityholders
of the Company requesting such registration on the basis of the number of Registrable Securities
and other securities requested to be included by all such Selling LGB Stockholders, all such Selling Incidental Stockholders and other securityholders.

          (c) No Selling Incidental Stockholder may participate in any Incidental Registration
Statement hereunder unless such Selling Incidental Stockholder (i) agrees to sell its Registrable
Securities on the basis provided in any arrangements approved by a majority of the Selling
Incidental Stockholders participating therein and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents required under the
terms of such arrangements.

          SECTION 6.03. Additional Rights of LGB Group. (a) At any time and from time to
time, any one or more of the Selling LGB Stockholders shall have the right to request in writing
(which request shall specify the Registrable Securities intended to be disposed of by such Selling
LGB Stockholders and the intended method of distribution thereof) that the Company register any and
all of such Selling LGB Stockholders’ Registrable Securities by filing with the SEC a Shelf
Registration Statement covering

 

 

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such Registrable Securities. No securities other than the
Registrable Securities specified by LGB LLC shall be included in any such initial Shelf
Registration Statement or any additional Shelf Registration Statement with respect thereto without
the consent of LGB LLC. Upon the receipt of such a request, the Company shall, not later than the
60th calendar day after the receipt of such a request, cause to be filed a Shelf Registration
Statement providing for the registration under the Securities Act of the Registrable Securities
which the Company has been so requested to by such Selling LGB Stockholders, to the extent
necessary to permit the disposition of such Registrable Securities in accordance with the intended
methods of distribution thereof specified in such request, and shall use its best efforts to have
such Shelf Registration Statement declared effective by the SEC as soon as practicable thereafter
(but in no event later than the 120th calendar day after the receipt of such a request) and to keep
such Shelf Registration Statement continuously effective during the period from the date a Shelf
Registration Statement is declared effective by the SEC until all Registrable Securities have been
sold or can be sold without restriction, including volume and manner of sale restrictions, under
the Securities Act.

          (b) A Shelf Registration Statement shall be deemed not to have become effective (and the
related registration shall be deemed not to have been effected) unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of any Registrable Securities pursuant to such Shelf Registration Statement
is interfered with by any stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court (other than any such stop order or injunction issued as a result
of the inclusion in such Shelf Registration Statement of any information supplied to the Company
for inclusion therein by a Selling LGB Stockholder) such Shelf Registration Statement will be
deemed not to have become effective.

          (c) A Suspension Period with respect to any Shelf Registration Statement shall commence on
and include the date that the Company gives notice that any Shelf Registration Statement is no
longer effective or usable for resale of Registrable Securities of the Selling LGB Stockholders to
and including the date when each Selling LGB Stockholder covered by such Shelf Registration

 

 

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Statement either receives the copies of the supplemented or amended Prospectus contemplated by
Section 6.06(j) or is advised in writing by the Company that the use of the Prospectus may be
resumed.

          (d) If at any time or from time to time any member of the LGB Group desires to sell
Registrable Securities in an Underwritten Offering pursuant to the Shelf Registration Statement,
the underwriters, including the managing underwriter, shall be selected by LGB LLC.

          SECTION 6.04. Registration Expenses. The Company shall pay all Registration Expenses
in connection with each registration pursuant to Sections 6.01, 6.02 and 6.03. Each Seller shall
pay all discounts and commissions payable to underwriters, selling brokers, managers or other
similar Persons related to the sale or disposition of such Seller’s Registrable Securities pursuant
to any Required Registration Statement or any Incidental Registration Statement.

          SECTION 6.05. Restrictions on Public Sale by Sellers and the Company. (a) If
requested by the underwriter or managing underwriter in any Underwritten Offering (by the Company or any other Person) of Common Stock
or of any securities convertible into or exchangeable for Common Stock, or of warrants or other
securities entitling the holder thereof to purchase Common Stock, each party hereto shall agree not
to effect any public sale or distribution of Common Stock during the 14-day period prior to, and
during the 90-day period beginning on, the date of sale of securities in connection with such
Underwritten Offering (except pursuant to such registration statement).

          (b) If requested by the underwriter or managing underwriter in any Underwritten Offering by
any member of the LGB Group pursuant to a Required Registration Statement or if requested by any
member of the LGB Group in an offering that is not an Underwritten Offering pursuant to a Required
Registration Statement, the Company shall agree not to effect any public sale or distribution of
Common Stock (or of any securities convertible into or exchangeable for Common Stock) during the
14-day period prior to, and during the 90-day period beginning on, the date of sale of securities
in connection with such Underwritten Offering.

 

 

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          SECTION 6.06. Registration Procedures. In connection with the obligations of the
Company pursuant to Sections 6.01, 6.02 and 6.03, the Company shall use its best efforts to effect
or cause to be effected the registration under the Securities Act of the Registrable Securities
entitled to be included in such registration in order to permit the sale of such Registrable
Securities (in accordance with their intended method or methods of distribution, in the case of a
Required Registration Statement), and the Company shall:

          (a) (i) prepare and file a Registration Statement with the SEC (within the time period
specified in Section 6.01 or 6.03, as applicable, in the case of a Required Registration Statement)
which Registration Statement (x) shall be on a form selected by the Company for which the Company
qualifies, (y) shall be available for the sale or exchange of the Registrable Securities in
accordance with the intended method or methods of distribution, in the case of a Required
Registration Statement, and (z) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, (ii) use its best efforts to cause such Registration Statement to become
effective and remain effective in accordance with Section 6.01 or 6.03, as applicable, in the case
of a Required Registration Statement, (iii) use its best efforts to prevent the happening of any
event that would cause a Registration Statement to contain a material misstatement or omission or
to be not effective and usable for resale of the Registrable Securities registered pursuant thereto
(during the period that such Registration Statement is required to be effective and usable);
provided, however, that the foregoing shall not apply to actions taken by the
Company in good faith and for valid business reasons, including the acquisition or divestiture of
assets, so long as the Company as promptly as reasonably possible thereafter complies with the
requirements of Section 6.06(j), if applicable, and (iv) cause each Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the effective date of such
Registration Statement, amendment or supplement (x) to comply in all material respects with any
requirements of the Securities Act and the rules and regulations of the SEC and (y) not to contain
any untrue statement of a material fact or omit to

 

 

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state a material fact required to be stated therein or necessary to make the statements therein not misleading;

          (b) in the case of a Required Registration Statement, and subject to Section 6.06(j), prepare
and file with the SEC such amendments and post-effective amendments to each such Required
Registration Statement as may be necessary to keep such Required Registration Statement effective
for the applicable period; cause each prospectus forming part of such Required Registration
Statement to be supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities covered by each
Required Registration Statement during the applicable period in accordance with the intended method
or methods of distribution by the applicable Sellers, as set forth in such Registration Statement;

          (c) furnish to each Seller holding Registrable Securities covered by a Registration Statement
and to each underwriter of an Underwritten Offering of Registrable Securities covered by a
Registration Statement, if any, without charge, as many copies of each prospectus forming part of such Registration Statement,
including each preliminary prospectus, and any amendment or supplement thereto and such other
documents as such Seller or underwriter may reasonably request in order to facilitate the public
sale or other disposition of such Registrable Securities; and the Company hereby consents to the
use of such prospectus, including each such preliminary prospectus, by each such holder and
underwriter, if any, in connection with the offering and sale of such Registrable Securities;

          (d) (i) use its best efforts to register or qualify the Registrable Securities covered by a
Registration Statement, no later than the time such Registration Statement is declared effective by
the SEC, under all applicable state securities or “blue sky” laws of such jurisdictions as each
underwriter, if any, or any Seller shall reasonably request; (ii) keep each such registration or
qualification effective during the period such Registration Statement is required to be kept
effective (in the case of a Required Registration Statement); and (iii) do any and all other acts
and things which may be reasonably necessary or advisable to enable

 

 

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each such underwriter, if any, and Seller to consummate the disposition in each such jurisdiction of the Registrable Securities
covered by such Registration Statement; provided, however, that the Company shall
not be required to register or qualify any Registrable Securities in any jurisdiction if
registration or qualification in such jurisdiction would subject the Company to unreasonable burden
or expense or, in the case of an Underwritten Offering, would unreasonably delay the commencement
of such Underwritten Offering; and provided, further, that the Company shall not be
obligated to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject or to consent to be subject to general service
of process (other than service of process in connection with such registration or qualification or
any sale of Registrable Securities in connection therewith) in any such jurisdiction;

          (e) notify each Seller promptly, and, if requested by such Seller, confirm such advice in
writing, (i) when a Registration Statement has become effective and when any post-effective amendments
and supplements thereto become effective, (ii) of the issuance by the SEC or any state securities
authority of any stop order, injunction or other order or requirement suspending the effectiveness
of a Registration Statement or the initiation of any proceeding for that purpose, (iii) if, between
the effective date of a Registration Statement and the closing of any sale of Registrable
Securities covered thereby pursuant to any agreement to which the Company is a party, the
representations and warranties of the Company contained in such agreement cease to be true and
correct in all material respects or if the Company receives any notification with respect to the
suspension of the qualification of such Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and (iv) of the happening of any event during the
period a Registration Statement is required to be effective as a result of which such Registration
Statement or the related Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the statements therein
not misleading;

 

 

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          (f) furnish counsel for each underwriter, if any, and for the Sellers copies of any request
by the SEC or any state securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;

          (g) make every reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible time;

          (h) upon request, furnish to the underwriter or managing underwriter of an Underwritten
Offering of Registrable Securities, if any, without charge, at least one signed copy of each
Registration Statement and any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits; and furnish to each
Seller, without charge, at least one conformed copy of each Registration Statement and any
post-effective amendment thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);

          (i) cooperate with each Seller and the underwriter or managing underwriter of an Underwritten
Offering of Registrable Securities, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations (consistent with the
provisions of the governing documents thereof) and registered in such names as each Seller or the
underwriter or managing underwriter of an Underwritten Offering of Registrable Securities, if any,
may reasonably request at least three business days prior to any sale of Registrable Securities;

          (j) upon the occurrence of any event contemplated by Section 6.06(e)(iv), during the period
in which a Registration Statement is required to be kept in effect, use reasonable best efforts to
prepare a supplement or post-effective amendment to a Registration Statement or the related
prospectus, or any document incorporated therein as thereafter delivered to the purchasers of the
Registrable Securities covered by such Registration Statement, such that such prospectus will not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to

 

 

36

make the statements therein, in the light of the circumstances under
which they were made, not misleading;

          (k) enter into customary agreements (including, in the case of an Underwritten Offering,
underwriting agreements in customary form, and including provisions with respect to indemnification
and contribution in customary form and consistent with the provisions relating to indemnification
and contribution contained herein) and, in the case of a Registration Statement relating to a
secondary offering filed at the request of a Seller, take all other customary and appropriate
actions in order to expedite or facilitate the disposition of the Registrable Securities covered by
a Registration Statement as shall be requested by the Seller (provided that, in the event of any
registration that is not part of an Underwritten Offering, no such agreement or action shall be
required to be taken if it is unduly burdensome to the Company), and in connection therewith:

     (i) make such representations and warranties to the Sellers and the underwriters, if
any, in form, substance and scope as are customarily made by issuers to underwriters in
similar underwritten offerings;

     (ii) obtain opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Sellers) addressed to each Seller and the underwriters, if
any, covering the matters customarily covered in opinions requested in sales of securities
or underwritten offerings and such other matters as may be reasonably requested by such
Sellers and underwriters;

     (iii) obtain “cold comfort” letters and updates thereof from the Company’s
independent certified public accountants addressed to each Seller and the underwriters, if
any, which letters shall be customary in form and shall cover matters of the type
customarily covered in “cold comfort” letters to underwriters in connection with primary
underwritten offerings;

     (iv) enter into a securities sales agreement, which shall be customary in form,
substance and scope

 

 

37

and shall contain customary representations, warranties and covenants;

     (v) if an underwriting agreement is entered into, cause the same to set forth
indemnification provisions and procedures substantially equivalent to the indemnification
provisions and procedures set forth in Section 6.08; and

     (vi) deliver such customary documents and certificates as may be reasonably requested
by the Sellers or by the managing underwriters, if any;

          (l) make available for inspection by representatives of the Sellers and any underwriters
participating in any disposition pursuant to a Registration Statement and any counsel or accountant
retained by such Sellers or underwriters all relevant financial and other records, pertinent
corporate documents and properties of the Company and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by any such representative,
underwriter, counsel or accountant in connection with a Registration Statement;

          (m) (i) within a reasonable time prior to the filing of any Registration Statement, any
related prospectus, any amendment to a Registration Statement or amendment or supplement to a
prospectus, provide copies of such document to the Sellers and to counsel to such Sellers and to
the underwriter or underwriters of an Underwritten Offering of Registrable Securities, if any; and,
consider in good faith such reasonable changes in any such document prior to or after the filing
thereof as counsel to the Sellers or the underwriter or underwriters may request and make available
such of the representatives of the Company as shall be reasonably requested by the Sellers or any
underwriter for discussion of such document; and (ii) within a reasonable time prior to the filing
of any document which is to be incorporated by reference into a Registration Statement or a related
prospectus, provide copies of such document to counsel for the Sellers; consider in good faith such
reasonable changes in such document prior to or after the filing thereof as counsel for such
Sellers or such underwriter shall request; and make available such of the representatives of the
Company as shall be reasonably requested by such counsel for discussion of such document;

 

 

38

          (n) use its best efforts to cause all Registrable Securities covered by a Required
Registration Statement to be listed on any securities exchange on which the Common Stock is then
listed if so requested by any applicable Seller;

          (o) provide a CUSIP number for all Registrable Securities covered by a Registration
Statement, no later than the effective date of such Registration Statement;

          (p) otherwise use its best efforts to comply with all applicable rules and regulations of the
SEC and make available to its securityholders, as soon as reasonably practicable, an earnings
statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder; and

          (q) cooperate and assist in any filing required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter (including any “qualified
independent underwriter” that is required to be retained in accordance with the rules and
regulations of the NASD).

          SECTION 6.07. Obligations of Sellers. (a) Each Seller shall, as a condition to the
registration obligations with respect to such Seller provided herein, furnish to the Company such
information regarding such Seller, the ownership of Registrable Securities by such Seller and the
proposed distribution by such Seller of such Registrable Securities as the Company may from time to
time reasonably request in writing.

          (b) Upon receipt of any notice of the Company of the happening of any event of the kind
described in Section 6.06(e)(iv), such Seller shall forthwith discontinue disposition of
Registrable Securities pursuant to the affected Registration Statement until such Seller’s receipt
of the copies of the supplemented or amended prospectus contemplated by Section 6.06(j), and, if so
directed by the Company, such Seller shall deliver to the Company (at the expense of the Company)
all copies in its possession, other than permanent file copies then in such Seller’s possession, of
the prospectus covering such Registrable Securities which was current at the time of receipt of
such notice.

 

 

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          SECTION 6.08. Indemnification. (a) The Company shall indemnify and hold harmless
each Person who participates as an underwriter (any such Person being an “Underwriter”),
each Seller and their respective partners, directors, officers and employees and each Person, if
any, who controls any Seller or Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act as follows:

     (i) against any and all losses, liabilities, claims, damages, judgments and reasonable
expenses whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any amendment
thereto) pursuant to which Registrable Securities were registered under the Securities Act,
including all documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any prospectus (or any amendment or supplement thereto) including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading;

     (ii) against any and all losses, liabilities, claims, damages, judgments and
reasonable expenses whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any other claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, if such settlement
is effected with the written consent of the Company; and

     (iii) against any and all reasonable expense whatsoever, as incurred (including,
subject to Section 6.08(c), fees and disbursements of counsel) incurred in investigating,
preparing or defending against any litigation, investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether or not such
Person is

 

 

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a party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above;

provided, however, that this indemnity agreement does not apply to any Seller or
Underwriter with respect to any loss, liability, claim, damage, judgment or expense to the extent
arising out of any untrue statement or omission or alleged untrue statement or omission (A) made in
reliance upon and in conformity with written information furnished to the Company by such Seller or
Underwriter expressly for use in a Registration Statement (or any amendment thereto) or any related
prospectus (or any amendment or supplement thereto) or (B) if such untrue statement or omission or
alleged untrue statement or omission was corrected in an amended or supplemented Registration
Statement or prospectus and the Company had furnished copies thereof to the Underwriter or Seller
from which the Person asserting such loss, liability, claim, damage, judgment or expense purchased
the securities that are the subject thereof prior to the date of sale by such Underwriter or Seller to such Person.

          (b) Indemnification by Sellers, Underwriters, Etc. Each Seller shall severally
indemnify and hold harmless the Company, each Underwriter and the other Sellers, and each of their
respective partners, directors, officers and employees (including each officer of the Company who
signed the Registration Statement) and each Person, if any, who controls the Company, any
Underwriter or any other Seller within the meaning of Section 15 of the Securities Act, against any
and all losses, liabilities, claims, damages, judgments and expenses described in the indemnity
contained in Section 6.08(a) (provided that any settlement of the type described therein is
effected with the written consent of such Seller) as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in a Registration
Statement (or any amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Seller expressly for use in such Registration
Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto);
provided, however, that an indemnifying Seller shall not be required to provide
indemnification in any

 

 

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amount in excess of the amount by which (x) the total price at which the
Registrable Securities sold by such indemnifying Seller and its affiliated indemnifying Sellers and
distributed to the public were offered to the public exceeds (y) the amount of any damages which
such indemnifying Seller has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Company shall be entitled, to the extent
customary, to receive indemnification and contribution from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the distribution, to the
same extent as provided above with respect to information so furnished in writing by such Persons
specifically for inclusion in any prospectus or Registration Statement.

          (c) Conduct of Indemnification Proceedings. Each indemnified party or parties shall
give reasonably prompt notice to each indemnifying party or parties of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but failure so to
notify an indemnifying party or parties shall not relieve it or them from any liability which it or they may have under this indemnity agreement, except
to the extent that the indemnifying party is materially prejudiced by such failure to give notice.
If the indemnifying party or parties so elects within a reasonable time after receipt of such
notice, the indemnifying party or parties may assume the defense of such action or proceeding at
such indemnifying party’s or parties’ expense with counsel chosen by the indemnifying party or
parties and approved by the indemnified party defendant in such action or proceeding, which
approval shall not be unreasonably withheld; provided, however, that, if such
indemnified party or parties reasonably determine that a conflict of interest exists and that
therefore it is advisable for such indemnified party or parties to be represented by separate
counsel or that, upon advice of counsel, there may be legal defenses available to it or them which
are different from or in addition to those available to the indemnifying party, then the
indemnifying party or parties shall not be entitled to assume such defense and the indemnified
party or parties shall be entitled to separate counsel (limited in each jurisdiction to one counsel
for all Underwriters and another counsel for all other indemnified parties under this Agreement) at
the indemnifying party’s or parties’ expense. If any indemnifying party or parties is not so

 

 

42

entitled to assume the defense of such action or does not assume such defense, after having
received the notice referred to in the first sentence of this paragraph, the indemnifying party or
parties will pay the reasonable fees and expenses of counsel for the indemnified party or parties
(limited in each jurisdiction to one counsel for all Underwriters and another counsel for all other
indemnified parties under this Agreement). In such event, however, no indemnifying party or
parties will be liable for any settlement effected without the written consent of such indemnifying
party or parties (which consent shall not be unreasonably withheld or delayed); provided,
however, that if at any time an indemnified party or parties shall have requested an
indemnifying party or parties to reimburse the indemnified party or parties for fees and expenses
of counsel as contemplated by this paragraph, the indemnifying party or parties shall be liable for
any settlement of any proceeding effected without the written consent of such indemnifying party or
parties if (x) such settlement is entered into more than 15 business days after receipt by such
indemnifying party or parties of the aforesaid request accompanied by supporting documents
reasonably satisfactory to the indemnifying party or parties and (y) such indemnifying party
or parties shall not have reimbursed the indemnified party or parties in accordance with such
request prior to the date of such settlement. If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this paragraph, such
indemnifying party or parties shall not, except as otherwise provided in this subsection (c), be
liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action or proceeding.

          (d) Contribution. (i) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section is for any reason held
to be unenforceable by the indemnified parties although applicable in accordance with its terms in
respect of any losses, liabilities, claims, damages, judgments and expenses suffered by an
indemnified party referred to therein, each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, liabilities, claims, damages, judgments and expenses in such proportion

 

 

43

as is appropriate to reflect the relative fault of the Company on the one hand and of the liable
Sellers (including, in each case, that of their respective officers, directors, employees and
agents) on the other in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages, judgments or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of the liable Sellers
(including, in each case, that of their respective officers, directors, employees and agents) on
the other shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or by or on behalf of the Sellers,
on the other, and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a party as a result
of the losses, liabilities, claims, damages, judgments and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 6.08(c), any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.

     (ii) The Company and each Seller agree that it would not be just and equitable if
contribution pursuant to this Section 6.08(d) were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable considerations
referred to in sub-paragraph (i) above. Notwithstanding this Section 6.08(d), in the case
of distributions to the public, an indemnifying Seller shall not be required to contribute
any amount in excess of the amount by which (A) the total price at which the Registrable
Securities sold by such indemnifying Seller and its affiliated indemnifying Sellers and
distributed to the public were offered to the public exceeds (B) the amount of any damages
which such indemnifying Seller has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to

 

 

44

contribution from any Person who was not guilty of such fraudulent
misrepresentation.

     (iii) For purposes of this Section, each Person, if any, who controls a Seller or an
Underwriter within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as such Seller or Underwriter; and each director of the Company,
each officer of the Company who signed the Registration Statement, and each Person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act, shall have
the same rights to contribution as the Company.

          SECTION 6.09. Inconsistent Actions. (a) The Company shall not grant to any Person
the right to include securities in any Required Registration Statement, other than the rights
granted in this Agreement.

          (b) The Company shall not seek to include in any Required Registration Statement any
securities other than Registrable Securities held by members of the LGB Group.

ARTICLE VII

MISCELLANEOUS

          SECTION 7.01. Notices. All notices and other communications provided for herein
shall be dated and in writing and shall be given:

          If to any member of the LGB Group, to it at the following address:

Goldberg Lindsay & Co. LLC

630 Fifth Avenue

New York, NY 10111

Attention: Adam Godfrey

Telecopy: 212-651-1101

          with
a copy to:

Cravath, Swaine & Moore

Worldwide Plaza

825 Eighth Avenue

New York, NY 10019

Attention: Richard Hall, Esq.

Telecopy: 212-474-3700

 

 

45

          If to a Management Stockholder, to such Management Stockholder at the following address:

c/o Pike Equipment and Supply Company

(To be renamed Pike Holdings, Inc.)

100 Pike Way

Mount Airy, NC 27030

Attention: Corporate Secretary

Telecopy: 336-719-4566

          If to the Company, to it at the following address:

Pike Equipment and Supply Company

(To be renamed Pike Holdings, Inc.)

100 Pike Way

Mount Airy, NC 27030

Attention: Corporate Secretary

Telecopy: 336-719-4566

          with a copy to:

LGB Pike LLC

c/o Goldberg Lindsay & Co. LLC

630 Fifth Avenue

New York, NY 10111

Attention: Adam Godfrey

Telecopy: 212-651-1101

          and a copy to:

Cravath, Swaine & Moore

Worldwide Plaza

825 Eighth Avenue

New York, NY 10019

Attention: Richard Hall, Esq.

Telecopy: 212-474-3700

or, in the case of any Holder or other Person who becomes a party to, or subject to, this
Agreement, to the address set forth in the written agreement executed pursuant to Section 7.06, or
to such other address as the party to whom notice is to be given may provide in a written notice to
the Company, a copy of which written notice shall be on file with the Secretary. Notice shall be
effective when received.

 

 

46

          SECTION 7.02. Applicable Law. The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement, regardless of the law that
might be applied under principles of conflicts of laws.

          SECTION 7.03. Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire understanding of the parties
with respect to the subject matter hereof. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.

          SECTION 7.04. Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the meaning of terms
contained herein.

          SECTION 7.05. Severability. The invalidity or unenforceability of any provisions of
this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of
this Agreement, or any provision hereof, in any other jurisdiction, it being intended that all
rights and obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.

          SECTION 7.06. Agreement To Be Bound. Notwithstanding anything to the contrary
contained in this Agreement, no shares of Common Stock held by the Holders may be Transferred to
any Permitted Transferee, unless such Permitted Transferee, prior to such Transfer, agrees in
writing to be bound by the terms of this Agreement to the same extent and in the same manner as the
transferor of such shares, a copy of which writing shall be maintained on file with the Secretary
of the Company and shall include the address of such Permitted Transferee to which notices
hereunder shall be sent.

          SECTION 7.07. Additional Holders. (a) Each Employee or officer or director of the
Company who becomes a holder of Common Stock after the date hereof shall become a party to this
Agreement and be bound by its terms and be able to enforce its rights as a Management Stockholder
hereunder. Each Permitted Transferee of any Management Stockholder shall become a party to this
Agreement and be

 

 

47

bound by its terms and be able to enforce its rights as a Management Stockholder
hereunder.

          (b) Each Permitted Transferee of a Rollover Holder who becomes a holder of Common Stock after
the date hereof shall become a party to this Agreement and be bound by its terms and be able to
enforce its rights as a Rollover Holder hereunder. Each Rollover Holder who is an Employee and who
acquires additional shares of Common Stock after the date hereof shall be treated for the purposes
of Sections 4.01, 5.02 and 5.03 as a Management Stockholder with respect to Common Stock acquired
after the date hereof and as a Rollover Holder with respect to Common Stock owned by such
Management Stockholder as of the date hereof.

          (c) Each Permitted Transferee of LGB LLC and any other member of the LGB Group who becomes a
holder of Common Stock after the date hereof shall become a party to this Agreement and be bound by
its terms and be able to enforce its rights as a member of the LGB Group hereunder.

          SECTION 7.08. Other Agreements. Nothing contained in this Agreement shall be deemed
to be a waiver of, or release from, any obligations any party hereto may have under, or any
restrictions on the Transfer of Common Stock or other securities of the Company imposed by, any
other agreement, if any.

          SECTION 7.09. Successors, Assigns, Transferees. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof may be Transferred by any party without the prior
written consent of (a) if the Transferor is a member of the LGB Group, by Management Stockholders
holding a majority of the Common Stock then held by the Management Stockholders and (b) if the
transferor is the Company, a Rollover Holder or a Management Stockholder, LGB LLC;
provided, however, that the foregoing shall not require the consent of any Person
to a Transfer of rights and liabilities in connection with a Transfer of Common Stock in accordance
with Sections 7.06 and 7.07 and the other provisions of this Agreement. Any purported Transfer of
rights under this Agreement in violation of this Section 7.09 shall be void and of no effect.

 

 

48

          SECTION 7.10. Defaults. A default by any party to this Agreement in such party’s
compliance with any of the conditions or covenants hereof or performance of any of the obligations
of such party hereunder shall not constitute a default by any other party.

          SECTION 7.11. Amendments; Waivers. This Agreement may not be amended, modified or
supplemented and no waivers of or consents to departures from the provisions hereof may be given
unless consented to in writing by (i) the Company, (ii) LGB LLC and (iii) if such amendment,
modification, supplement or waiver is adverse to the Rollover Holders or Management Stockholders, by
Rollover Holders or Management Stockholders holding a majority of the Common Stock then held by the
Rollover Holders or Management Stockholders, respectively.

          SECTION 7.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which, when taken together,
shall constitute one and the same Agreement.

          SECTION 7.13. Specific Performance. Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching parties would be
irreparably harmed and could not be made whole by monetary damages. It is accordingly agreed that
the parties hereto will waive the defense in any action for specific performance that a remedy at
law would be adequate and that the parties hereto, in addition to any other remedy to which they
may be entitled at law or in equity, shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically the terms and provisions
hereof without the necessity of proving actual damages or securing or posting any bond or providing
prior notice.

          SECTION 7.14. Exclusive Jurisdiction; Waiver of Jury Trial. (a) Each of the parties
hereto irrevocably submits to the exclusive jurisdiction of (i) the Supreme Court of the State of
New York, New York County, and (ii) United States District Court for the Southern District of New
York, for the purposes of any suit, action or other proceeding arising out of this Agreement, any
agreement entered into in connection with this Agreement or any transaction contemplated hereby or
thereby. Each of the parties hereto agrees to commence any action, suit or proceeding relating
hereto either in the United States

 

 

49

District Court for the Southern District of New York or if such
suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in
the Supreme Court of the State of New York, New York County. Each of the parties hereto further
agrees that service of any process, summons, notice or document by U.S. registered mail to such
party’s respective address set forth above shall be effective service of process for any action, suit or proceeding in New York with respect to any matters
to which it has submitted to jurisdiction in this clause. Each of the parties hereto irrevocably
and unconditionally waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement, any agreement entered into in connection with this Agreement or the
transactions contemplated hereby or thereby in (i) the Supreme Court of New York, New York County,
or (ii) the United States District Court for the Southern District of New York, and hereby and
thereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such
court that any such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.

          (b) Each party waives, to the fullest extent permitted by applicable law, any right it may
have to a trial by jury in respect of any litigation arising out of or relating to this Agreement.
Each party (i) certifies that no representative, agent or attorney of another party has
represented, expressly or otherwise, that such other party would not, in the event of litigation,
seek to enforce the foregoing waiver and (ii) acknowledges that it has been induced to enter into
this Agreement by, among other things, the mutual waivers and certifications set forth above in
this Section 7.14(b).

          SECTION 7.15. Rights to Negotiate. Nothing in this Agreement shall be deemed to
restrict or prohibit the Company or any subsidiary thereof from purchasing shares of Common Stock
from any Person at any time upon such terms and conditions and at such price as may be mutually
agreed upon between the Company and such Person, whether or not at the time of such purchase
circumstances exist which specifically grant the Company the right to purchase, or such Person the
right to sell, shares of Common Stock pursuant to the terms of this Agreement.

          SECTION 7.16. Limited Liability. Notwithstanding any other provision of this
Agreement, none

 

 

50

of the general partners (including officers and directors of such general
partners), limited partners or managing directors nor any future general partners (including
officers and directors of such general partners), limited partners or managing directors, if any,
of any member of the LGB Group shall have any personal liability for performance of any obligation of any member of the LGB Group
under this Agreement in excess of the respective capital contributions of such general partners
(including officers and directors of such general partners), limited partners or managing directors
of such member of the LGB Group.

          SECTION 7.17. Attorneys’ Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted as a defense, the
successful party shall be entitled to recover reasonable attorneys’ fees in addition to any other
available remedy.

          SECTION 7.18. Recapitalization, Exchanges, etc., Affecting Common Stock. The
provisions of this Agreement shall apply, to the full extent set forth herein with respect to
Common Stock, to any and all shares of capital stock of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for or in substitution of the Common Stock, by reason of any stock
dividend, stock split, stock issuance, reverse stock split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. Upon the occurrence of any of such events,
amounts hereunder shall be appropriately adjusted.

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

	 	 	 
	

	 	PIKE EQUIPMENT AND SUPPLY COMPANY

(TO BE RENAMED PIKE HOLDINGS, INC.),
	 
	 	 
	

	 	by /s/ J. Eric Pike
	 
	

	 	 
	

	 	Name: J. Eric Pike

Title: President

 

 

51

	 	 	 
	

	 	REGINALD L. BANNER, AS TRUSTEE
 UNDER IRREVOCABLE T/A WITH
JOE B.
 PIKE F/B/O JOSEPH ERIC PIKE
	 
	 	 
	

	 	/s/ Reginald L. Banner
	 
	 	 
	

	 	 
	 
	 	 
	

	 	JERRY E. BOATRIGHT
	 
	 	 
	

	 	/s/ Jerry E. Boatright
	 
	 	 
	

	 	 
	 
	 	 
	

	 	JOHN H. MERRITT
	 
	 	 
	

	 	/s/ John H. Merritt
	 
	 	 
	

	 	 
	 
	 	 
	

	 	ROBERT B. RATLIFF, JR.
	 
	 	 
	

	 	/s/ Robert B. Ratliff, Jr.
	 
	 	 
	

	 	 
	 
	 	 
	

	 	DONALD B. ANDERSON
	 
	 	 
	

	 	/s/ Donald B. Anderson
	 
	 	 
	

	 	 
	 
	 	 
	

	 	JAMES T. BENFIELD
	 
	 	 
	

	 	/s/ James T. Benfield
	 
	 	 
	

	 	 
	 
	 	 
	

	 	ZACK W. BLACKMON, JR.
	 
	 	 
	

	 	/s/ Zack W. Blackmon, Jr.
	 
	 	 
	

	 	 
	 
	 	 
	

	 	JONATHAN H. MULLINS
	 
	 	 
	

	 	/s/ Jonathan H. Mullins
	 
	 	 
	

	 	 
	 
	 	 

 

 

52

	 	 	 
	

	 	KELLY G. SURRATT
	 
	

	 	/s/ Kelly G. Surratt
	 
	 	 
	

	 	 
	 
	 	 
	

	 	MICHAEL L. HEATH
	 
	 	 
	

	 	/s/ Michael L. Heath
	 
	 	 
	

	 	 
	 
	 	 

 

 

53

LGB PIKE LLC,

by LINDSAY GOLDBERG & BESSEMER L.P., its manager,

by LINDSAY GOLDBERG & BESSEMER GP L.P., its general partner,

by LINDSAY GOLDBERG & BESSEMER GP LLC, its general partner,

	 	 	 
	

	 	by /s/ Alan E. Goldberg
	 
	

	 	 
	

	 	Name: Alan E. Goldberg

Title: Authorized Signatory
	 
	 	 
	

	 	by /s/ Robert D. Lindsay
	 
	

	 	 
	

	 	Name: Robert D. Lindsay

Title: Authorized Signatory

 

 

EXHIBIT A

IRREVOCABLE PROXY

          I, the undersigned, pursuant to Section 55-07-22 of the North Carolina Business Corporation
Act (the “NCBCA”), hereby irrevocably appoint LGB PIKE LLC (“LGB LLC”), a Delaware limited
liability company, as attorney and proxy for the undersigned, to vote, and to express written
consent to any corporate action with respect to, the total number of shares of Common Stock, par
value $0.01 per share, of Pike Equipment and Supply Company, a North Carolina corporation (the
“Company”), owned by the undersigned pursuant to the Recapitalization and Investment
Agreement dated as of March 15, 2002, among the Company, Pike Electric, Inc., Pike Merger Sub,
Inc., the shareholders listed therein, LGB Acquisition Corp. and LGB LLC, as amended by the
Amendment Agreement and Consent dated as of April 11, 2002 (as so amended, the
“Agreement”), and any shares of common stock of the Company acquired by the undersigned
from time to time subsequent to the date hereof (collectively, the “Shares”); to take
action by written consent and to attend any and all meetings, and adjournments thereof, of the
stockholders of the Company called for any purpose; and to represent and otherwise to act for the
undersigned in the same manner and with the same effect as if such action were taken by the
undersigned.

          The foregoing notwithstanding, the rights to exercise any and all voting and consensual rights
and powers accruing to the owner of the Shares shall remain with the undersigned with respect to
(i) the sale or merger of the Company and (ii) any amendment of the Certificate of Incorporation or
the By-laws of the Company that would adversely affect the terms of the Shares.

          The undersigned hereby revokes any previous proxies with respect to the Shares which are the
subject of this irrevocable proxy. This proxy is irrevocable, coupled with an interest and has
been granted pursuant to the Stockholders Agreement dated as of April 18, 2002, among the Company,
LGB LLC and the Management Stockholders (as defined therein)(which includes a voting agreement
under

 

 

Section 55-07-30 of the NCBCA). Notwithstanding anything to the contrary in the foregoing,
this proxy shall not be applicable to (and shall be deemed revoked as to) Shares otherwise covered
by this proxy which are sold by the undersigned (other than Shares sold subsequent to any record
date for any meeting of stockholders of the Company or any action by stockholders in lieu of a
meeting as to which the undersigned retains voting rights).

          The undersigned authorizes the attorney and proxy appointed herein to substitute any other
Person to act hereunder, to revoke any such substitution and to file this proxy or any substitution
or revocation with the Secretary of the Company.

          IN
WITNESS WHEREOF, the undersigned has executed this proxy this [
]th day of
[     ], 2002.

	 	 	 
	

	 	 
	

	 	Name:
	

	 	Address:

          YOUR SIGNATURE TO THIS PROXY FORM SHOULD BE EXACTLY THE SAME AS THE NAME IMPRINTED ON YOUR
STOCK CERTIFICATE. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS, TRUSTEES OR IN SIMILAR CAPACITIES
SHOULD SO INDICATE; FOR JOINT ACCOUNTS, THE NAME OF EACH OWNER MUST BE SIGNED.EX-10.7

 

EXHIBIT 10.7

April 18, 2002

Goldberg Lindsay & Co. LLC

630 Fifth Avenue

New York, NY 10111

Management Advisory Services Agreement

Dear Sirs:

          This letter is to confirm our understanding with regard to the payment of certain fees and
expenses related to your advisory services in connection with the Recapitalization and Investment
Agreement dated March 15, 2002, by and among LGB Pike LLC, a Delaware limited liability company
(“Parent”), LGB Acquisition Corp., a North Carolina corporation and a wholly owned subsidiary of
Parent, certain of our stockholders, Pike Equipment and Supply Company, a North Carolina
corporation, Pike Merger Sub, Inc., a North Carolina corporation, and us, as amended by the
Amendment Agreement and Consent dated as of April 11, 2002 (as so amended, the “Recapitalization
Agreement”). In connection therewith, you will (a) assist us in arranging new bank credit
facilities, negotiating the related credit agreements and various ancillary agreements (the “Loan
Documents”) to be entered into at the Closing (as defined in the Recapitalization Agreement) and
(b) if the Closing occurs, provide management, financial, strategic planning and similar advisory
services to us and our subsidiaries. This letter will also confirm our understanding with regard
to the payment of certain fees and expenses related to your advisory services to be provided to us
on an ongoing basis.

          We agree to pay or cause to be paid to you (x) at the Closing a fee of $3,750,000 for advisory
services related to the transactions contemplated by the Recapitalization Agreement and the Loan
Documents, (y) in quarterly installments of $250,000 payable on or prior to March 15, June 15,
September 15 and December 15 of each year this agreement is in effect for ongoing advisory services
during that period and (z) at the Closing all reasonable disbursements and out-of-pocket expenses
incurred by you or Parent (including but not limited to the reasonable fees and disbursements of
your counsel, consultants, accountants, advisors and financing sources (collectively,
“Representatives”) and Representatives of Parent) in connection with preparing, arranging,
negotiating, executing and delivering the Recapitalization Agreement, the

 

 

Loan Documents and any amendments thereto. We also agree to pay or cause to be paid to you,
promptly upon demand, all reasonable disbursements and out-of-pocket expenses incurred by you in
connection with your provision of services hereunder, the enforcement or protection of rights
hereunder or under any of the foregoing agreements and documents, including but not limited to the
reasonable fees and disbursements of any Representatives of you.

          We agree that this agreement shall commence on the date hereof, and shall continue in full
force and effect until terminated by either us or you on at least 30 days’ prior written notice to
the other party; provided that in the event of a termination that becomes effective on any
day other than March 15, June 15, September 15 or December 15 of a certain year, we shall pay you,
on or before the date of termination, a pro rata amount of the quarterly installment for your
ongoing advisory services during that quarter; and provided, further, that any
termination hereunder shall not affect our obligation to pay fees and expenses accrued prior to the
effective date of termination to the full extent provided for herein and to indemnify the persons
entitled to indemnification as discussed below.

          We agree to indemnify and hold harmless you and your members, partners and affiliates and the
respective directors, officers, agents and employees of you and your members, partners and
affiliates (you and each such other entity or person, an “Indemnified Person”) from and
against any losses, claims, damages, judgments, assessments, costs and other liabilities
(collectively, “Liabilities”), and will reimburse each Indemnified Person for all fees and
expenses (including the reasonable fees and expenses of counsel) (collectively, “Expenses”)
as they are incurred in investigating, preparing, pursuing or defending any claim, action,
proceeding or investigation, whether or not in connection with pending or threatened litigation and
whether or not any Indemnified Person is a party (collectively, “Actions”), arising out of
or in connection with this letter or any activities contemplated hereby or any services rendered
hereunder; provided that we will not be responsible for any Liabilities or Expenses of any
Indemnified Person that are determined by a judgment of a court of competent jurisdiction that is
no longer subject to appeal or further review to have resulted from such Indemnified Person’s gross
negligence or wilful misconduct in connection with this letter or any activities contemplated
hereby or any services rendered hereunder, to the extent that such Liabilities or Expenses are so
determined to have resulted from such gross negligence or wilful misconduct. We also agree to
reimburse each Indemnified Person for all Expenses as they are incurred in connection with
enforcing such Indemnified Person’s rights under this letter.

          Upon receipt by an Indemnified Person of actual notice of an Action against such Indemnified
Person with respect to which indemnity may be sought hereunder, such Indemnified Person shall
promptly notify us in writing; provided that failure so to notify us shall not relieve us
from any liability that we may have on account of this indemnity or otherwise, except to the extent
we have been materially prejudiced by such failure. We shall assume the defense of any such Action
including the employment of counsel reasonably satisfactory to you. Any Indemnified Person shall
have the right to employ separate counsel in any such action and participate in the

2

 

defense thereof, but the fees and expenses of such counsel shall be at the expense of such
Indemnified Person, unless: (i) we have failed promptly to assume the defense and employ counsel
reasonably satisfactory to you or (ii) the named parties to any such Action (including any
impleaded parties) include such Indemnified Person and us, and such Indemnified Person has been
advised by counsel that there may be one or more legal defenses available to us; provided
that we shall not in such event be responsible hereunder for the fees and expenses of more than one
firm of separate counsel in connection with any Action in the same jurisdiction, in addition to any
local counsel. We shall not be liable for any settlement of any Action effected without our
written consent. In addition, we shall not, without your prior written consent, settle, compromise
or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened
Action in respect of which indemnification or contribution may be sought hereunder (whether or not
any Indemnified Person is a party hereto) unless such settlement, compromise, consent or
termination includes complete and unconditional release of each Indemnified Person from all
Liabilities arising out of such Action.

          In the event the foregoing indemnity is unavailable to an Indemnified Person other than in
accordance herewith, we shall contribute to the Liabilities and Expenses paid or payable by such
Indemnified Person in such proportion as is appropriate to reflect (i) the relative benefits to us,
on the one hand, and to you, on the other hand, of the matters contemplated by this letter or (ii)
if the allocation provided by the immediately preceding clause is not permitted by the applicable
law, not only such relative benefits but also our relative fault, on the one hand, and yours, on
the other hand, in connection with the matters as to which such Liabilities or Expenses relate, as
well as any other relevant equitable considerations; provided that in no event shall we
contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate,
are not liable for any Liabilities and Expenses in excess of the amount of fees actually received
by you pursuant to this letter.

          We also agree that no Indemnified Person shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to us for or in connection with this letter or any activities
contemplated hereby or any services rendered hereunder except for Liabilities (and related
Expenses) that are determined by a judgment of a court of competent jurisdiction that is no longer
subject to appeal or further review to have resulted from such Indemnified Person’s gross
negligence or wilful misconduct in connection with this letter or any activities contemplated
hereby or any other services rendered hereunder, to the extent such Liabilities or Expenses are so
determined to have resulted from such gross negligence or wilful misconduct.

          If any term, provision, covenant or restriction contained in this indemnity is held by a court
of competent jurisdiction or other authority to be invalid, void, unenforceable or against its
regulatory policy, the remainder of the terms, provisions, covenants and restrictions contained in
this indemnity shall remain in full force and effect and shall in no way be affected, impaired or
invalidated.

          Our reimbursement, indemnity and contribution obligations set forth herein shall remain in
full force and effect regardless of the completion of any

3

 

Indemnified Person’s services under or in connection with this letter, shall be in addition to
any liability we may have to any Indemnified Person at common law or otherwise, and shall remain
operative and in full force regardless of any investigation made by or on behalf of any Indemnified
Person.

          This letter may be amended or modified only by a written instrument signed by each of the
parties hereto. Neither this letter nor any of the rights, interests or obligations hereunder
shall be assigned by any party hereto without the prior written consent of the other party, except
that you may transfer or assign all of your rights, interests and obligations hereunder to any
entity directly or indirectly succeeding you by merger, consolidation or reorganization or to any
of your limited or general partners or affiliates. This letter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted assigns.

          Each of the parties hereto irrevocably submits to the exclusive jurisdiction of (a) the
Supreme Court of the State of New York, New York County, and (b) United States District Court for
the Southern District of New York, for the purposes of any suit, action or other proceeding arising
out of this letter or any transaction contemplated hereby. Each of the parties hereto agrees to
commence any action, suit or proceeding relating hereto either in the United States District Court
for the Southern District of New York or if such suit, action or other proceeding may not be
brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York,
New York County. Each of the parties hereto further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party’s respective address set forth above shall
be effective service of process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction in this clause. Each of the parties hereto
irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or
proceeding arising out of this letter or the transactions contemplated hereby in (i) the Supreme
Court of New York, New York County, or (ii) the United States District Court for the Southern
District of New York, and further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.

          Each party hereby waives, to the fullest extent permitted by applicable law, any right it may
have to a trial by jury in respect to any litigation directly or indirectly arising out of, under
or in connection with this letter or any transaction contemplated hereby. Each party (a) certifies
that no representative, agent or attorney of any other party has represented, expressly or
otherwise, that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to
enter into this letter by, among other things, the mutual waivers and certifications in this
paragraph.

          We agree that the foregoing shall be governed by, and construed in accordance with, the laws
of the State of New York regardless of the laws that might otherwise govern under applicable
principles of conflict of laws thereof.

4

 

          Please confirm that the foregoing accurately sets forth our understanding by signing below in
the space provided.

	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	PIKE ELECTRIC, INC.,
	 
	 	 	 	 	 	 
	

	 	by
	 	/s/ J. Eric Pike	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	Name: J. Eric Pike	 	 
	

	 	 	 	Title: President	 	 

	 	 	 
	Accepted and agreed to:
	 	 
	 
	 	 
	GOLDBERG LINDSAY & CO. LLC,
	 	 
	 
	by /s/ Alan E. Goldberg
	 	 
	 
	 	 
	

	 	 
	Name: Alan E. Goldberg

Title: Authorized Signatory
	 	 
	 
	 	 
	by /s/ Robert D. Lindsay
	 	 
	 
	

	 	 
	Name: Robert D. Lindsay

Title: Authorized Signatory
	 	 

5

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