Document:

Exhibit 4.2

 

 

 

 

STOCKHOLDERS’ AGREEMENT

 

 

 

among

 

LINCOLN EDUCATIONAL SERVICES CORPORATION,

 

BACK TO SCHOOL ACQUISITION, L.L.C.,

 

STEVEN W. HART

 

And

 

STEVEN W. HART 2003 GRANTOR RETAINED ANNUITY TRUST

 

 

Dated as of June 22, 2005

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  DEFINITIONS

  
	
   

  
	
  SECTION 1.01.
  Certain Defined Terms

  
	
   

  
	
  ARTICLE II

  CERTAIN
  AGREEMENTS

  
	
   

  
	
  SECTION 2.01.
  Voting

  
	
  SECTION 2.02.
  Company Financial Statements

  
	
   

  
	
  ARTICLE III

  RESTRICTIONS
  ON TRANSFER

  
	
   

  
	
  SECTION 3.01.
  General Restriction

  
	
  SECTION 3.02.
  Legends

  
	
  SECTION 3.03.
  Certain Restrictions on Transfer

  
	
  SECTION 3.04.
  Rights to Participate in Certain Sales

  
	
  SECTION 3.05. “Drag-Along”
  Rights

  
	
  SECTION 3.06.
  Certain Persons to Execute Agreement

  
	
  SECTION 3.07.
  Improper Sale or Encumbrance

  
	
   

  
	
  ARTICLE IV

  REGISTRATION
  RIGHTS

  
	
   

  
	
  SECTION 4.01.
  Incidental Registration

  
	
  SECTION 4.02.
  Furnish Information

  
	
  SECTION 4.03.
  Expenses of Registration

  
	
  SECTION 4.04.
  Underwriting Requirements

  
	
  SECTION 4.05.
  Registration Procedures

  
	
  SECTION 4.06. Rule 144
  Information

  
	
  SECTION 4.07.
  Indemnification

  
	
   

  
	
  ARTICLE V

  MISCELLANEOUS

  
	
   

  
	
  SECTION 5.01.
  Termination

  
	
  SECTION 5.02.
  Conflict with Certificate of Incorporation or By-Laws

  
	
  SECTION 5.03.
  Expenses

  
	
  SECTION 5.04.
  Notices

  
	
  SECTION 5.05.
  Public Announcements

  
	
  SECTION 5.06.
  Headings

  
	
  SECTION 5.07.
  Severability

  
	
  SECTION 5.08.
  Entire Agreement

  

 

 

	
  SECTION 5.09.
  Assignment

  
	
  SECTION 5.10.
  No Third Party Beneficiaries

  
	
  SECTION 5.11.
  Amendment

  
	
  SECTION 5.12.
  Governing Law

  
	
  SECTION 5.13.
  Counterparts

  
	
  SECTION 5.14.
  Specific Performance

  
	
  SECTION 5.15.
  Waiver of Jury Trial

  

 

 

STOCKHOLDERS’ AGREEMENT, dated as of June 22,
2005 among LINCOLN EDUCATIONAL SERVICES CORPORATION, a New Jersey corporation
(the “Company”); BACK TO SCHOOL ACQUISITION, L.L.C., a Delaware limited
liability company (“Stonington”); STEVEN W. HART and STEVEN W. HART 2003
GRANTOR ANNUITY TRUST (the “Hart Trust”).

 

WHEREAS, by a Stock Option and Consulting Agreement,
dated June 21, 1999, between the Company and Steven W. Hart, the Company
granted an option to Steven W. Hart to acquire 1,615 new shares of Common Stock
of the Company (“Common Stock”), which now constitutes an option to
acquire 161,500 new shares of Common Stock as a result of a stock split
effected by the Company (the “S. Hart Option”); and

 

WHEREAS, by an Assignment of Stock Options of Lincoln
Educational Services Corp., Inc. dated December 24, 2003 between
Steven W. Hart and the Hart Trust, Steven W. Hart assigned to the Hart Trust
all of his rights, title and interest as to 100,000 of the options included in
the S. Hart Option; and

 

WHEREAS, as a condition to the exercise of part of the
S. Hart Option and in order to make certain agreements with respect to their
respective rights and obligations as holders of Common Stock, the parties
hereto have determined that it is in their best interests to enter into this Agreement;

 

NOW, THEREFORE, in consideration of the premises and
the mutual agreements and covenants hereinafter set forth, the parties hereto
hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01. 
Certain Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings:

 

“Affiliate”
means, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, such specified Person.

 

“Agreement”
or “this Agreement” means this Stockholders’ Agreement, dated as of June 22,
2005, among the Company and each of the other parties signatory hereto, and all
amendments hereto made in accordance with the provisions of Section 5.11.

 

“beneficial
owner” or “beneficially own” has the meaning given such term in Rule 13d-3
under the Exchange Act.

 

“Board”
means the Board of Directors of the Company.

 

“Business Day”
means any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by law to be closed in the City of New York.

 

 

“By-Laws”
means the Company’s by-laws, as in effect from time to time.

 

“Cash
Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either Standard &
Poor’s Ratings Services, a Division of The McGraw-Hill Companies, Inc. (“S&P”)
or Moody’s Investors Service, Inc.; or (c) commercial paper maturing
not more than one year from the date of issuance thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or Moody’s
Investors Service, Inc.

 

“Certificate of
Incorporation” means the Company’s Certificate of Incorporation as in
effect from time to time.

 

“Commission”
means the Securities and Exchange Commission, and any successor commission or
agency having similar powers.

 

“Common Stock”
has the meaning specified in the recitals to this Agreement.

 

“Company”
has the meaning specified in the preamble to this Agreement.

 

“Control”
(including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two or more Persons, means
the possession, directly or indirectly or as trustee or executor, of the power
to direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise, including, without limitation, the ownership, directly
or indirectly, of securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such Person.

 

“Encumbrance”
means any security interest, pledge, mortgage, lien (including, without
limitation, environmental and tax liens), charge, encumbrance, adverse claim,
preferential arrangement or restriction of any kind, including, without
limitation, any restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.

 

“Fair Value”
means (a) as to publicly traded securities, the average of the daily
closing prices or last reported sales price, as applicable, or if closing
prices or last reported sales prices are not available, the average of the
highest reported bid and the lowest reported asked price, for the ten (10) consecutive
trading days ending on the most recent trading day prior to the date of
determination, and (b) as to other assets, the fair market value of such
assets determined in good faith by an independent nationally

 

2

 

recognized investment
banking firm selected by the Company and approved (which approval shall not be
unreasonably withheld) by (i) Steven W. Hart, the Hart Trust and their
Permitted Transferees and (ii) Stonington and its Affiliates, by action of
the majority in number of Fully Diluted Shares held by each such group, and
which investment banking firm shall have provided no material services to the
Company or any Stockholder within the preceding year.

 

“Fully Diluted
Shares” means the aggregate of (a) the number of Shares issued and
outstanding (other than Shares held in the treasury of the Company or held by
any Subsidiary) and (b) the number of Shares issuable upon (i) the
exercise of any then outstanding options, warrants or similar instruments
(other than such instruments held by the Company or any Subsidiary) and (ii) the
exercise of any conversion or exchange rights with respect to any outstanding
securities or instruments (other than such securities or instruments held by
the Company or any Subsidiary).

 

“Marketable
Securities” means securities that are (a) (i) securities of or
other interests in any Person that are traded on a national securities
exchange, reported on the Nasdaq Stock Market System or otherwise actively
traded over-the-counter or (ii) debt securities of an issuer that has debt
or equity securities that are so traded or so reported on and which a
nationally recognized securities firm has agreed to make a market in, and (b) not
subject to restrictions on transfer as a result of any applicable contractual
provisions or the provisions of the Securities Act or, if subject to such
restrictions under the Securities Act, are also subject to registration rights reasonably
acceptable to Stonington.

 

“Other
Stockholder” means any of Steven W. Hart, the Hart Trust and any of their
Permitted Transferees.

 

“Permitted
Transferee” means, in the case of Steven W. Hart or the Hart Trust, (a) any
of their Affiliates or, in the case of Steven W. Hart, members of his immediate
family, and (b) any Person with respect to which the Stockholders agree
that they have no objection if a Sale of Shares is made to such Person.

 

“Person”
means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization or other entity, as
well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Exchange Act.

 

“Public Company”
means that, as of the date of determination, the shares of Common Stock that
have been sold in Public Offerings shall equal not less than 10% of the Fully
Diluted Shares.

 

“Public
Offering” means an underwritten public offering of equity securities of the
Company pursuant to an effective registration statement under the Securities
Act.

 

“Registrable
Shares” means the Shares, including the Shares issued or issuable pursuant
to the S. Hart Option, and any securities issued or issuable with respect to
any Shares by way of conversion, exchange, replacement, stock dividend, stock
split or other distribution or in connection with a combination of shares,
recapitalization, merger,

 

3

 

consolidation or other
reorganization or otherwise.  For purposes of this Agreement, any
Registrable Shares shall cease to be Registrable Shares when (a) a
registration statement covering such Registrable Shares has been declared
effective and such Registrable Shares have been disposed of pursuant to such
effective registration statement, (b) such Registrable Shares are sold by
a Person in a transaction in which the rights under the provisions of this
Agreement are not assigned or (c) such Registrable Shares are sold
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule 144A)
under the Securities Act without registration under the Securities Act.

 

“Restricted
Shares” means all Shares other than (a) Shares that have been
registered under a registration statement pursuant to the Securities Act; (b) Shares
with respect to which a Sale has been made in reliance upon, and in accordance
with, Rule 144; or (c) Shares with respect to which the holder
thereof shall have delivered to the Company either (i) a written opinion,
in form and substance reasonably satisfactory to the Company, of counsel, who
shall be reasonably satisfactory to the Company, or (ii) a “no action”
letter from the Commission, to the effect that subsequent transfers of such
Shares may be effected without registration under the Securities Act.

 

“Rule 144”
means Rule 144 (or any successor provision) under the Securities Act.

 

“Rule 144
Transaction” means any Sale of Shares made in reliance upon, and in
accordance with, Rule 144.

 

“Sale”
means any sale, assignment, transfer, distribution or other disposition of
Shares or of a participation or other right therein, whether voluntarily or by
operation of law.

 

“Securities Act”
means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

 

“Share”
means any share of Common Stock.

 

“S. Hart Option”
has the meaning specified in the recitals to this Agreement.

 

“Stockholder”
means each Person (other than the Company) who or which shall be a party to
this Agreement, whether in connection with the execution and delivery hereof as
of the date hereof, pursuant to Section 3.06 or otherwise, so long as such
Person shall own, beneficially or of record, any Shares.

 

“Subsidiary”
or “Subsidiaries” of any Person means any corporation, partnership,
joint venture, association or other entity, all of the capital stock or other
similar equity interests of which, are owned beneficially and of record by such
Person directly or indirectly through one or more intermediaries.

 

“Stonington”
has the meaning specified in the preamble to this Agreement.

 

“Third Party”
means, with respect to any Stockholder, any Person, other than (i) the
Company, (ii) any Subsidiary of the Company or (iii) any Affiliate of
such

 

4

 

Stockholder or, in the
case of Steven W. Hart or the Hart Trust, any Person described in clause (a) of
the definition of Permitted Transferee.

 

ARTICLE II

 

CERTAIN
AGREEMENTS

 

SECTION 2.01. 
Voting.  Steven W. Hart and the Hart Trust hereby agree to vote all
Shares owned or held of record by each of them as directed by Stonington at any
annual or special stockholders’ meeting, or to take all actions by written
consent in lieu of any such meeting as directed by Stonington.

 

SECTION 2.02. 
Company Financial Statements.  For such time as Steven W. Hart, the
Hart Trust and their Permitted Transferees (other than the Persons described in
clause (b) of the definition of Permitted Transferee) hold any Shares, the
Company agrees to provide each of them with (i) unaudited quarterly
financial statements of the Company within 45 days of the end of each fiscal
quarter of the Company and (ii) audited financial statements of the
Company within 90 days of the end of each fiscal year of the Company.

 

ARTICLE III

 

RESTRICTIONS
ON TRANSFER

 

SECTION 3.01. 
General Restriction.  The Other Stockholders agree that they will
not, directly or indirectly, make or solicit any Sale of, or create, incur,
solicit or assume any Encumbrance with respect to, any Share, except in
compliance with the Securities Act and this Agreement.  Notwithstanding
the foregoing, Steven W. Hart, the Hart Trust and their Permitted Transferees
may make or solicit sales to Permitted Transferees, subject to compliance with
this Article III.

 

SECTION 3.02.  Legends. 
(a)  The Company shall affix to each certificate evidencing Shares of the
Other Stockholders a legend in substantially the following form:

 

THE SECURITIES EVIDENCED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.  NO REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL BE MADE
ON THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS MADE IN CONNECTION WITH AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH ACT DOES NOT APPLY.

 

THE SECURITIES EVIDENCED
BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET
FORTH IN A STOCKHOLDERS’ AGREEMENT, DATED AS OF JUNE 22, 2005, AS IT MAY THEREAFTER
BE AMENDED, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
THE ISSUER.  NO REGISTRATION OF

 

5

 

TRANSFER OF SUCH
SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS AND UNTIL SUCH
RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH.

 

(b)          
The Company shall affix to each certificate evidencing Shares of any
Stockholder a legend in substantially the following form:

 

THE HOLDER OF THE
SECURITIES EVIDENCED BY THIS CERTIFICATE IS ENTITLED TO CERTAIN RIGHTS AND
SUBJECT TO CERTAIN OBLIGATIONS AS SET FORTH IN A STOCKHOLDERS’ AGREEMENT, DATED
AS OF JUNE___, 2005, AS IT MAY THEREAFTER BE AMENDED, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.

 

(c)          
In the event that any Shares shall cease to be Restricted Shares, the Company
shall, upon the written request of the holder thereof, issue to such holder a
new certificate evidencing such Shares without the first paragraph of the
legend required by Section 3.02(a) endorsed thereon; provided,
however, that such holder shall furnish the Company or its transfer
agent such certificates, legal opinions or other information as the Company or
its transfer agent may reasonably require to confirm that the legend is not
required on such certificate.  In the event that any Shares shall cease to
be subject to the restrictions on transfer set forth in this Agreement, the
Company shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such Shares without the second paragraph of
the legend required by Section 3.02(a).  In the event that any Shares
shall cease to be entitled to any rights and subject to any obligations set
forth in this Agreement, the Company shall, upon the written request of the
holder thereof, issue to such holder a new certificate evidencing such Shares
without the legend required by Section 3.02(b).

 

SECTION 3.03.  Certain
Restrictions on Transfer.  (a)  So long as Stonington and/or its
Affiliates own at least twenty percent (20%) of the then outstanding Shares,
each Other Stockholder agrees that such Other Stockholder will not, directly or
indirectly, make any Sale of, or create, incur, or assume any Encumbrance with
respect to, any Shares held by such Other Stockholder other than any Sale or
Encumbrance to a Permitted Transferee (other than the Persons described in
clause (b) of the definition of Permitted Transferee), without first
granting Stonington and/or its Affiliates, the option to acquire those Shares
in accordance with this Section 3.03.

 

(b)          
If an Other Stockholder receives a bona fide offer that such Other Stockholder
desires to accept from a Third Party with respect to the Sale of such Other
Stockholder’s Shares, such Other Stockholder shall give to Stonington written
notice (the “Transfer Notice”) of such proposed Sale, specifying the
proposed transferee, the number of Shares proposed to be disposed of, the
proposed purchase price to be received in exchange therefor, and the other
material terms of the proposed Sale.  Delivery of the Transfer Notice to Stonington
shall constitute an irrevocable offer to sell such Shares to Stonington on the
terms and conditions set forth therein; provided, however, that
if the proposed purchase price set out in the Transfer Notice is other than all
cash, such Other Stockholder shall accept an amount of cash equivalent to the
Fair Value of such non-cash consideration, such Fair Value to be determined at
the cost of the Company.

 

6

 

(c)          
Stonington shall have the right, exercisable by written notice given to such
Other Stockholder within ten (10) Business Days after receipt of such
Transfer Notice, to purchase (or to cause an Affiliate of Stonington to
purchase) all, but not less than all, of the Shares specified in such Transfer
Notice at the purchase price and on the other terms set forth therein.

 

(d)          
If Stonington exercises its right of first refusal pursuant to this Section 3.03,
the closing of the purchase of the Shares with respect to which such right has
been exercised shall take place within five Business Days after Stonington
gives notice of such exercise.  If Stonington does not exercise its right
of first refusal pursuant to this Section 3.03 within the time specified
for such exercise, the Other Stockholder shall be free during the 90-day period
following the expiration of such time to sell the Shares specified in such
Transfer Notice to the Person specified therein for the consideration (or at
any price in excess thereof) and on substantially the same terms (or on other
terms more favorable to the Other Stockholder) specified therein.

 

SECTION 3.04.  Rights
to Participate in Certain Sales.  (a)  (i)  Neither
Stonington nor any of its Affiliates shall, in one or more transactions,
directly or indirectly, make any Sale of Shares held by them constituting more
than forty-five percent (45%) of the then outstanding Shares to any Third Party
or Third Parties, unless the terms and conditions of such Sale shall include an
offer to include, at the option of the Other Stockholders, in such Sale to the
Third Party or Third Parties, the number of Shares then owned by such Other
Stockholders, as determined by Section 3.04(a)(iii).

 

(ii)          
If Stonington and/or any of its Affiliates receives from a Third Party or Third
Parties a bona fide offer or offers to purchase or otherwise acquire (for
purposes of this Section an “Offer”) any Shares held by Stonington
or such Affiliates (for purposes of this Section 3.04, the “Offered
Shares”) that, together with Shares previously disposed of by Stonington or
any of such Affiliates to Third Parties aggregate more than forty-five percent
(45%) of the then outstanding Shares (such Shares, together with the Offered
Shares, for purposes of this Section 3.04, the “Tag-Along Shares”),
and Stonington and/or such Affiliates intends to sell such Offered Shares to
such Third Party or Third Parties, then Stonington and such Affiliate (for
purposes of this Section 3.04, the “Prospective Sellers”) shall
jointly provide written notice (for purposes of this Section 3.04, the “Offer
Notice”) of such Offer to each of the Other Stockholders not later than
thirty (30) days prior to the consummation of the Sale contemplated by the
Offer.  The Offer Notice shall identify the Offered Shares, the price
offered for such Offered Shares (for purposes of this Section 3.04, the “Offer
Price”), all other material terms and conditions of the Offer and, in the
case of an Offer in which the consideration payable for Offered Shares consists
in whole or in part of consideration other than cash, such information relating
to such other consideration as may be reasonably necessary to ascertain the
value of such other consideration.

 

(iii)         
Each of the Other Stockholders shall have the right and option, for the period
of ten (10) days after the date the Offer Notice is given (for purposes of
this Section 3.04, the “Notice Period”), to notify the Prospective
Sellers of such Other Stockholder’s interest in selling or otherwise disposing
of up to the Pro Rata Portion of such Other Stockholder’s Shares pursuant to
the Offer.  For purposes of this subsection 3.04, “Pro Rata
Portion” means, with

 

7

 

respect
to each Other Stockholder, a number of Fully Diluted Shares equal to the
product of (x) the total number of Fully Diluted Shares then owned by such
Other Stockholder, multiplied  by (y) a fraction, the numerator of
which shall be the total number of Tag-Along Shares, and the denominator of
which shall be the total number of Shares owned by the Prospective Sellers on
the date of the first sale of Tag-Along Shares.

 

(iv)         
Each Other Stockholder desiring to sell such Other Stockholder’s Pro Rata
Portion of Shares pursuant to this Section 3.04 shall, prior to the expiration
of the Notice Period, provide the Prospective Sellers with a written notice
specifying the number of Shares as to which such Other Stockholder has an
interest in selling or otherwise disposing of pursuant to the Offer (for
purposes of this Section 3.04, a “Notice of Interest”), and shall
deliver to the Prospective Sellers, to be held in trust, (A) the
certificate or certificates evidencing the Shares to be sold or otherwise
disposed of by such Other Stockholder duly endorsed in blank or accompanied by
written instruments of transfer in form reasonably satisfactory to the
Prospective Sellers executed by such Other Stockholder; (B) an instrument
of assignment reasonably satisfactory to the Prospective Sellers assigning, as
of the consummation of the Sale to the Third Party or Third Parties, all of
such Stockholder’s rights under this Agreement with respect to the Shares to be
sold or otherwise disposed of (to the extent assignable); (C) a special
irrevocable power-of-attorney authorizing the Prospective Sellers, on behalf of
such Other Stockholder, to sell or otherwise dispose of such Shares pursuant to
the terms of the Offer (at a price equal to the Offer Price) and to take all
such actions as shall be necessary or appropriate in order to consummate such
Sale; provided, however, that the Prospective Sellers shall not
have the authority to incur or create liabilities or to give representations or
warranties on behalf of such Other Stockholder; and (D) wire transfer
instruction for payment of the purchase price (if cash) for the purchase of the
Other Stockholder’s Shares.  Delivery of such certificate or certificates
evidencing the Shares to be sold, the instrument of assignment, the special
irrevocable power-of-attorney authorizing the Prospective Sellers and wire
transfer instructions, on behalf of such Other Stockholder, to sell or
otherwise dispose of such Shares shall constitute an irrevocable election by
such Other Stockholder to authorize and permit the Prospective Sellers to sell
such Shares, on behalf of such Other Stockholder, pursuant to the Offer. 
The Prospective Sellers shall cause the Third Party to whom or which the Shares
of the Other Stockholders are being sold or otherwise disposed of to deliver
the appropriate purchase price for the purchase of such Shares to the Other
Stockholders, against delivery of the Shares being sold or otherwise disposed
of.

 

(v)          
Each Stockholder shall bear such Stockholder’s own expenses in connection with
any such Sale pursuant to this Section 3.04.

 

(vi)         
If at the end of the Notice Period any Other Stockholder shall not have given a
Notice of Interest (and delivered all other required documents) with respect to
some or all of such Other Stockholder’s Shares, such Other Stockholder will be
deemed to have waived all of such Other Stockholder’s rights under this Section 3.04
with respect to the portion of such Other Stockholder’s Shares for which a
Notice of Interest shall not have been given.  If, at the end of the 180-day
period following the giving of the Offer Notice, the Prospective Sellers shall
not have completed the Sale of all the Offered Shares and the Shares with
respect to which any Other Stockholders shall have given Notices of Interest
pursuant to this Section 3.04, the Prospective Sellers shall return to
such Other Stockholders all certificates evidencing the unsold Shares that such
Other Stockholders delivered for Sale pursuant to this Section 3.04 and
such

 

8

 

Other
Stockholders’ related instruments of assignment and powers-of-attorney and the
Prospective Sellers shall not consummate the Sale with such Third Party or
Third Parties without again complying with the terms and procedures set forth
in this Section 3.04, including providing to the Other Stockholders
another Offer Notice.

 

(vii)        
Except as expressly provided in this Section 3.04, no Prospective Seller
shall have any obligation to any Other Stockholder with respect to the Sale of
any Shares owned by any Other Stockholder in connection with this Section 3.04. 
Anything herein to the contrary notwithstanding and irrespective of whether any
Notice of Interest shall have been given, no Prospective Seller shall have any
obligation to any Other Stockholder to sell or otherwise dispose of any Offered
Shares pursuant to this Section 3.04 as a result of any decision by such
Prospective Seller not to accept or consummate any Offer or Sale with respect
to the Offered Shares (it being understood that any and all such decisions
shall be made by such Prospective Seller in its sole discretion).  Except
as otherwise permitted herein, no Other Stockholder shall be entitled to sell
or otherwise dispose of Shares directly to any Third Party or Third Parties
pursuant to an Offer (it being understood that all such Sales shall be made
only on the terms and pursuant to the procedures set forth in this Section 3.04).

 

(b)          
Anything in this Section 3.04 to the contrary notwithstanding, in the
event that Stonington and/or its Affiliates shall exercise their rights under Section 3.05,
the Other Stockholders shall thereafter have no right pursuant to this Section 3.04
to participate in any Sale pursuant to this Section 3.04 with respect to
the Sale the subject of Section 3.05.  Nothing in this Section 3.04
shall affect any of the obligations of any of the Stockholders under any other
provision of this Agreement.

 

SECTION 3.05.  “Drag-Along”
Rights.  (a)  If Stonington and/or any of its Affiliates shall,
in any transaction or series of related transactions, directly or indirectly,
propose to make a Sale of Shares constituting more than 50% of the Fully
Diluted Shares (for purposes of this Section 3.05, the “Controlling
Shares”) to a Third Party or Third Parties (for purposes of this Section 3.05,
an “Offer”), Stonington and/or such Affiliates may, at their option,
require each of the Other Stockholders to sell the Pro Rata Portion of such
Stockholder’s Shares to such Third Party or Third Parties for the same
consideration per Share and otherwise upon the same terms and conditions upon
which Stonington and/or such Affiliates sell their Shares.  For purposes
of this Section 3.05, “Pro Rata Portion” means, with respect to
each Other Stockholder, a number of Shares equal to the product of (x) the
total number of Fully Diluted Shares then owned by such Other Stockholder, multiplied
by (y) a fraction, the numerator of which shall be the total number of
Shares proposed to be sold by Stonington and/or such Affiliates, and the
denominator of which shall be the total number of Shares then owned by
Stonington and/or its Affiliates.

 

(b)          
(i)  Stonington and/or such Affiliates shall provide a written notice (for
purposes of this Section 3.05, the “Offer Notice”) of such Offer to
each of the Other Stockholders not later than the fifteenth Business Day prior
to the consummation of the Sale contemplated by the Offer.  The Offer
Notice shall contain written notice of the exercise of the “drag-along” rights
of Stonington and/or its Affiliates pursuant to Section 3.05(a), setting
forth the consideration per Share to be paid by the Third Party or Third
Parties and the other material terms and conditions of the Offer.  Within
ten (10) Business Days following the date the Offer Notice is given, each
of the Other Stockholders shall deliver to Stonington and/or such Affiliates,

 

9

 

to
be held in trust, (A) the certificate or certificates evidencing the Pro
Rata Portion of Shares owned or held by such Other Stockholder duly endorsed in
blank or accompanied by written instruments of transfer in form reasonably
satisfactory to Stonington and/or such Affiliate executed by such Other
Stockholder, (B) a special irrevocable power-of-attorney authorizing
Stonington and/or such Affiliate, on behalf of such Other Stockholder, to sell
or otherwise dispose of such Shares pursuant to the terms of the Offer and to
take all such actions as shall be necessary or appropriate in order to
consummate such Sale; provided, however, that Stonington and/or
such Affiliate shall not have the authority to incur or create liabilities or
to give representations and warranties on behalf of such Other Stockholder, and
(C) wire transfer instructions for payment of the purchase price of the
Other Stockholder’s Shares; provided that no Other Stockholder shall
have any liability to any purchaser of the Shares pursuant to the Offer in
excess of the aggregate proceeds received by such Other Stockholder in exchange
for such Stockholder’s Shares or in a manner that is disproportionate or
different from Stonington and its Affiliates.  Stonington and/or such
Affiliate shall cause the Third Party to whom or which the Shares of the
Stockholders are being sold or otherwise disposed to deliver the appropriate
amount of immediately available funds for the purchase of such Shares to the
Other Stockholders pursuant to the wire transfer instructions described in
clause (C) above.  If in connection with such Sale, Stonington and/or
such Affiliate are to receive consideration other than cash, Cash Equivalents
or Marketable Securities, each Other Stockholder shall have the right to elect
to receive in lieu thereof cash or Cash Equivalents equal to the Fair Value of
the consideration otherwise payable to such Other Stockholder.  Such Other
Stockholder shall make such election in a written notice to Stonington and/or
such Affiliate within ten (10) Business Days following the date the Offer
Notice is provided to such Other Stockholder.

 

(ii)          
Each Stockholder shall bear such Stockholder’s own expenses incurred in
connection with a Sale pursuant to this Section 3.05.

 

(iii)         
If, at the end of the 180-day period following the giving of the Offer Notice,
Stonington and/or its Affiliates shall not have completed the Sale of all the
Controlling Shares and the Other Stockholders’ Shares delivered pursuant to Section 3.05(b)(i),
Stonington and/or its Affiliates shall return to each of the Other Stockholders
all certificates evidencing unsold Shares and related powers-of-attorney that
such Other Stockholder delivered pursuant to this Section 3.05.

 

(iv)         
Except as expressly provided in this Section 3.05, Stonington and its
Affiliates shall have no obligation to any Other Stockholder with respect to
the Sale of any Shares owned by any Other Stockholder in connection with this Section 3.05. 
Anything herein to the contrary notwithstanding, Stonington and/or its
Affiliates shall have no obligation to any Other Stockholder to sell or
otherwise dispose of any Controlling Shares pursuant to this Section 3.05
as a result of any decision by Stonington and/or its Affiliates not to accept
or consummate any Offer or Sale with respect to the Controlling Shares (it
being understood that any and all such decisions shall be made by Stonington
and/or its Affiliates in their sole discretion).  No Other Stockholder
shall be entitled to make any Sale of Shares directly to any Third Party
pursuant to an Offer (it being understood that all such Sales shall be made
only on the terms and pursuant to the procedures set forth in this Section 3.05). 
Nothing in this Section 3.05 shall affect any of the obligations of any of
the Stockholders under any other provision of this Agreement.

 

10

 

SECTION 3.06.  Certain
Persons to Execute Agreement.  (a)  Each Stockholder agrees that
it will not directly or indirectly make any Sale of, or create, incur or assume
any Encumbrance with respect to, any Shares held by such Stockholder, unless,
prior to the consummation of any such Sale or the creation, incurrence or
assumption of any such Encumbrance, the Person to whom or which such Sale is
proposed to be made or the Person in whose favor such Encumbrance is proposed
to be created, incurred or assumed (for purposes of this Section 3.06, a “Prospective
Transferee”) (i) executes and delivers to the Company an agreement, in
form and substance reasonably satisfactory to the Company, whereby such
Prospective Transferee confirms that, with respect to the Shares that are the subject
of such Sale or Encumbrance, it shall be deemed to be a “Stockholder” for the
purposes of this Agreement and agrees to be bound by all the terms of this
Agreement and (ii) delivers to the Company a written opinion of counsel,
satisfactory in form and substance to the Company, to the effect that the
agreement referred to above that is delivered by such Prospective Transferee is
a legal, valid and binding obligation of such Prospective Transferee
enforceable against such Prospective Transferee in accordance with its
terms.  Upon the execution and delivery by such Prospective Transferee of
the agreement referred to in clause (i) of the next preceding sentence
and, the delivery of the opinion of counsel referred to in clause (ii) of
the next preceding sentence, such Prospective Transferee shall be deemed a “Stockholder”
for the purposes of this Agreement, and shall have the rights and be subject to
the obligations of a Stockholder hereunder with respect to the Shares held by
such Prospective Transferee or in respect of which such Encumbrance shall have
been created, incurred or assumed.

 

(b)          
Anything in this Section 3.06 to the contrary notwithstanding, the
provisions of this Section 3.06 will not be applicable to (i) any
Sale of Shares pursuant to a Public Offering or (ii) any Sale of Shares in
a Rule 144 Transaction so long as immediately prior to, and immediately
after the consummation of, such Rule 144 Transaction the Company is a
Public Company.

 

SECTION 3.07.  Improper
Sale or Encumbrance.  Any attempt by any Stockholder to make any Sale
of, or create, incur or assume any Encumbrance with respect to, any Shares not
in compliance with this Agreement shall be null and void and the Company shall
not give any effect in the Company’s stock records to such attempted Sale or
Encumbrance.

 

ARTICLE IV

 

REGISTRATION
RIGHTS

 

SECTION 4.01.  Incidental
Registration.  If at any time the Company determines that it shall
file a registration statement under the Securities Act (other than a
registration statement on a Form S-4 or S-8 or filed in connection with an
exchange offer or an offering of securities solely to the Company’s employee
benefit plans) on any form that would also permit the registration of the
Registrable Shares and such filing is to be on behalf of the Company and/or on
behalf of selling holders of its securities for the general registration of its
Common Stock to be sold for cash, the Company shall each such time promptly
give each Other Stockholder written notice of such determination setting forth
the date on which the Company proposes to file such registration statement,
which date shall be no earlier than thirty (30) days

 

11

 

from
the date of such notice, and advising each Other Stockholder of its right to
have such Other Stockholder’s Registrable Shares included in such registration;
provided that the Other Stockholders shall not have any right to have
their Registrable Shares included in the initial public offering of the Company
if no other Stockholder has its Registrable Shares so included.  Upon the
written request of any Other Stockholder received by the Company no later than
fifteen (15) days after the date of the Company’s notice, the Company shall use
all reasonable efforts to cause to be registered under the Securities Act all
of the Registrable Shares that each Other Stockholder has so requested to be
registered.  If, in the written opinion of the managing underwriter (or,
in the case of a non-underwritten offering, as reasonably determined by the
Board and communicated in writing to the Stockholders), the total amount of
such securities to be so registered, including such Registrable Shares, will
exceed the maximum amount of the Company’s securities which can be marketed (i) at
a price reasonably related to the then current market value of such securities,
or (ii) without otherwise materially and adversely affecting the entire
offering, then the Company shall be entitled to reduce the number of
Registrable Shares to be sold in the offering by the Other Stockholders, and
any other stockholders of the Company exercising incidental registrations
rights similar to those set forth herein, to that number which in the written
opinion of the managing underwriter (or, in the case of a non-underwritten
offering, as reasonably determined by the Board and communicated in writing to
the Other Stockholders) would permit all such securities (including Shares held
by any other stockholder of the Company who proposes to exercise such
incidental registration rights) to be so marketed.  Such reduction shall
be allocated among the Other Stockholders in proportion (as nearly as
practicable) to the amount of Registrable Shares owned by each such Other
Stockholder and the number of Shares owned by any other stockholders of the
Company which are sought to be included in the registration statement by such
other stockholders of the Company, all measured at the time of filing the
registration statement.

 

SECTION 4.02.  Furnish
Information.  It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Section 4.01 that the Other
Stockholders shall furnish to the Company such information regarding
themselves, the Registrable Shares held by them, and the intended method of
disposition of such securities as the Company shall reasonably request and as
shall be required in connection with the action to be taken by the Company.

 

SECTION 4.03.  Expenses
of Registration.  All expenses incurred in connection with each
registration pursuant to Section 4.01, excluding underwriters’ discounts
and commissions, but including without limitation all registration, filing and
qualification fees, word processing, duplicating, printers’ and accounting fees
(including the expenses of any special audits or “cold comfort” letters
required by or incident to such performance and compliance), fees of the
National Association of Securities Dealers, Inc. or listing fees,
messenger and delivery expenses, all fees and expenses of complying with state
securities or blue sky laws, fees and disbursements of counsel for the Company,
and the fees and disbursements of one counsel for the selling Other
Stockholders (which counsel shall be selected by the Other Stockholders holding
a majority in interest of the Registrable Shares being registered), shall be
paid by the Company.  The Other Stockholders shall bear and pay the
underwriting commissions and discounts applicable to securities offered for
their account in connection with any registrations, filings and qualifications
made pursuant to this Agreement.

 

12

 

SECTION 4.04.  Underwriting
Requirements.  In connection with any underwritten offering, the
Company shall not be required under Section 4.01 to include Registrable Shares
in such underwritten offering unless the Other Stockholders holding such
Registrable Shares accept the terms of the underwriting of such offering that
have been reasonably agreed upon between the Company and the underwriters
selected by the Company and which are customary with respect to such an
offering and not inconsistent with this Article IV.  No such Other
Stockholder shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Other Stockholder, such Other
Stockholders’ Registrable Shares and such Stockholders’ intended method of
distribution customarily given to underwriters and any other representation
required by law.

 

SECTION 4.05.  Registration
Procedures.  If and whenever the Company is required by the provisions
of Section 4.01 to effect the registration of any Registrable Shares under
the Securities Act, the Company shall, as expeditiously as possible:

 

(a)          
furnish to each Other Stockholder of Registrable Shares covered by such
registration statement and each underwriter thereof, if any, such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement filed under Rule 424
under the Securities Act, and such other documents, as such Other Stockholder
and underwriter may reasonably request in order to facilitate the public sale
or other disposition of such Registrable Shares;

 

(b)          
use all reasonable efforts to register or qualify all Registrable Shares
covered by such registration statement under such other securities laws or blue
sky laws of such jurisdictions as any Other Stockholder thereof and any
underwriter thereof shall reasonably request; and

 

(c)          
notify each Other Stockholder of Registrable Shares covered by such
registration statement and each underwriter thereof, if any, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, upon the Company’s discovery that, or upon the happening of any event of
which the Company has knowledge as a result of which, the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing, and at the request of any such Other
Stockholder or such underwriter promptly prepare and furnish to such Other
Stockholder or such underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.

 

SECTION 4.06.  Rule 144
Information.  With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of the
Registrable Shares to the public without registration, at all times after
ninety (90) days

 

13

 

after
any registration statement covering a public offering of securities of the
Company under the Securities Act shall have become effective, the Company
agrees to:

 

(i)           
make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act;

 

(ii)          
use its reasonable efforts to file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and

 

(iii)         
furnish to each Other Stockholder holding Registrable Shares forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such
Other Stockholder may reasonably request in availing itself of any rule or
regulation of the Commission allowing such Other Stockholder to sell any
Registrable Shares without registration.

 

SECTION 4.07.  Indemnification. 
In the event any Registrable Shares are included in a registration statement
under Section 4.01:

 

(a)          
The Company shall indemnify and hold harmless each Other Stockholder, such
Other Stockholder’s managers, directors and officers, each Person who
participates in the offering of such Registrable Shares, including underwriters
(as defined in the Securities Act), and each Person, if any, who controls such
Stockholder or participating Person within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
they may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or proceedings in respect thereof)
arise out of or are based on any untrue or alleged untrue statement of any
material fact contained in such registration statement on the effective date
thereof (including any prospectus filed under Rule 424 under the
Securities Act or any amendments or supplements thereto) or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder, and shall reimburse each such Other Stockholder, such
Other Stockholder’s managers, directors and officers, such participating person
or controlling person for any legal or other expenses reasonably incurred by
them (but not in excess of expenses incurred in respect of one counsel for all
of them unless there is an actual conflict of interest between any indemnified
parties, which indemnified parties may be represented by separate counsel) in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity
agreement contained in this Section 4.07(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld); provided  further
that the Company shall not be liable to any Other  Stockholder, such Other
Stockholder’s managers, directors and officers, participating person or
controlling person in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
connection with such registration statement, preliminary

 

14

 

prospectus,
final prospectus or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Other Stockholder, such Other Stockholder’s
directors and officers, participating person or controlling person.  Such
indemnity shall remain in full force regardless of any investigation made by or
on behalf of any such Other Stockholder, such Other Stockholder’s directors and
officers, participating person or controlling person, and shall survive the
transfer of such securities by such Other Stockholder.

 

(b)          
Each Other Stockholder joining in a registration severally and not jointly
shall indemnify and hold harmless the Company, each of its directors and
officers, each person, if any, who controls the Company within the meaning of
the Securities Act, and each agent and any underwriter for the Company (within
the meaning of the Securities Act) against any losses, claims, damages or liabilities,
joint or several, to which the Company or any such director, officer,
controlling person, agent or underwriter may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or proceedings in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in such registration statement on the effective date thereof (including any
prospectus filed under Rule 424 under the Securities Act or any amendments
or supplements thereto) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by or on behalf of such Other Stockholder expressly for use in connection with
such registration; and each such Other Stockholder shall reimburse any legal or
other expenses reasonably incurred by the Company or any such director,
officer, controlling person, agent or underwriter  (but not in excess of
expenses incurred in respect of one counsel for all of them unless there is an
actual conflict of interest between any indemnified parties, which indemnified
parties may be represented by separate counsel) in connection with
investigating or defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 4.07(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
Other Stockholder (which consent shall not be unreasonably withheld), and provided
further that the liability of each Other Stockholder hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the net proceeds from the sale of the
Shares sold by such Other Stockholder under such registration statement bears
to the total net proceeds from the sale of all securities sold thereunder, but
not in any event to exceed the net proceeds received by such Other Stockholder
from the sale of Registrable Securities covered by such registration statement.

 

(c)          
Promptly after receipt by an indemnified party under this Section 4.06 of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party under
this Section 4.06, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in and assume the defense thereof with counsel selected by the
indemnifying party and reasonably satisfactory to the indemnified party; provided,
however, that an indemnified party shall have the right to retain its
own counsel, with all reasonable fees and

 

15

 

expenses
thereof to be paid by such indemnified party, and to be apprised of all
progress in any proceeding the defense of which has been assumed by the
indemnifying party.  The failure to notify an indemnifying party promptly
of the commencement of any such action, if and to the extent prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 4.07, but the
omission so to notify the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this Section 4.07.

 

(d)          
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified party in connection with the actions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.  The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.  The amount paid or payable by a party as a result of the losses,
claims, damages or liabilities referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding.

 

The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 4.07(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 the
immediately preceding paragraph.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

 

ARTICLE V

 

MISCELLANEOUS

 

SECTION 5.01.  Termination. 
Unless otherwise expressly provided herein, the obligations of the parties
hereto shall terminate on the date upon which the Other Stockholders or their
Permitted Transferees cease to own any Shares.

 

SECTION 5.02.  Conflict
with Certificate of Incorporation or By-Laws.  In the event any
provision of this Agreement conflicts with any provision of the Certificate of
Incorporation or the By-Laws, the terms of this Agreement shall control, and
each Stockholder shall vote all Shares which such Stockholder holds of record,
and shall take all actions necessary, to ensure that at all times the
Certificate of Incorporation and the By-Laws do not conflict with any provision
of this Agreement.

 

16

 

SECTION 5.03.  Expenses. 
Except as expressly set forth herein, costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Person incurring such costs and
expenses.

 

SECTION 5.04.  Notices. 
All notices, requests, claims, demands and other communications hereunder shall
be in writing and shall be given or made (and shall be deemed to have been duly
given or made upon receipt) by delivery in person, by courier service, by
telecopy or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 5.04):

 

(a)          if
to Steven W. Hart or the Hart Trust:

 

Steven W. Hart

131 Rowayton Avenue

Rowayton, CT  06851

Telecopy: (203) 857-6051

 

with a copy to:

 

Shipman &
Goodwin LLP

One Constitution Plaza

Hartford, CT  06103

Telecopy:  (860) 251-5311

Attention:  Marcus
D. Wilkinson, Esq.

 

(b)         
if to the Company:

 

Lincoln Educational
Services Corporation

200 Executive Drive

West Orange, NJ
 07052

Telecopy:  (973) 243-0841

Attention: 
President

 

with a copy to:

 

Stonington Partners, Inc.

767 Fifth Avenue, 48th
Floor

New York, NY  10153

Telecopy:  (212) 339-8585

Attention:  James J.
Burke, Jr.

 

17

 

(c)          if
to Stonington:

 

c/o Stonington Partners, Inc.

767 Fifth Avenue, 48
Floor

New York, NY  10153

Telecopy:  (212) 339-8585

Attention:  James J.
Burke, Jr.

 

with a copy to:

 

Shearman &
Sterling

599 Lexington Avenue

New York, NY  10022

Telecopy:  (212) 848-7179

Attention:  Clare O’Brien, Esq.

 

SECTION 5.05.  Public
Announcements.  Unless otherwise required by applicable law, no party
to this Agreement shall make, or cause to be made, any press release or public
announcement in respect of this Agreement or the transactions contemplated
hereby or otherwise communicate with any news media without the prior written
consent of the other party, and the parties shall cooperate as to the timing
and contents of any such press release or public announcement.

 

SECTION 5.06.  Headings. 
The descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

SECTION 5.07.  Severability. 
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law, governmental regulation or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.  Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.

 

SECTION 5.08.  Entire
Agreement.  This Agreement and the agreements referred to herein
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, between the Company, Stonington, Steven W. Hart and the
Hart Trust with respect to the subject matter hereof and thereof.

 

SECTION 5.09.  Assignment. 
Except as expressly provided herein, this Agreement shall not be assigned
without the express written consent of each of the Company, Stonington, Steven
W. Hart and the Hart Trust (which consent may be granted or withheld in the
sole discretion of each of the Company, Stonington, Steven W. Hart and the Hart
Trust).

 

18

 

SECTION 5.10.  No
Third Party Beneficiaries.  Except as set forth in Sections 2.01 and
4.07, this Agreement shall be binding upon and inure solely to the benefit of
the parties hereto, their successors and their permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other
Person, any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.

 

SECTION 5.11.  Amendment. 
This Agreement may not be amended or modified except by an instrument in
writing signed by, or on behalf of, each of the parties.

 

SECTION 5.12.  Governing
Law.  This Agreement shall be governed by the laws of the State of New
York.  All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in any New York state or federal court
sitting in The City of New York, and the parties hereto hereby consent to the
jurisdiction of such courts in any such action or proceeding.

 

SECTION 5.13.  Counterparts. 
This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.

 

SECTION 5.14.  Specific
Performance.  The parties hereto agree that irreparable damage would
occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at
law or equity.

 

SECTION 5.15.  Waiver
of Jury Trial.  Each of the parties hereto irrevocably and
unconditionally waives trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to
this Agreement or the actions of the Company, Stonington, Steven W. Hart or the
Hart Trust in the negotiation, administration, performance and enforcement
thereof.

 

19

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed, as of the day and year first above written,
by their respective authorized signatories thereunto duly authorized.

 

	
   

  	
  LINCOLN
  EDUCATIONAL SERVICES CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  David F. Carney

  
	
   

  	
   

  	
  Name:

  	
  David
  F. Carney

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer and Chairman

  of the Board of Directors.

  
	
   

  	
   

  	
   

  
	
   

  	
  BACK
  TO SCHOOL ACQUISITION, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  James J. Burke, Jr.

  
	
   

  	
   

  	
  Name:

  	
  James
  J. Burke, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  STEVEN
  W. HART

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Steven W. Hart

  
	
   

  	
   

  	
   

  
	
   

  	
  STEVEN
  W. HART 2003 GRANTOR RETAINED ANNUITY TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven W. Hart

  
	
   

  	
   

  	
    Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Marilyn D. Hart

  
	
   

  	
   

  	
    Trustee

  

 

20EXHIBIT
        4.3

       

      REGISTRATION
        RIGHTS AGREEMENT

       

      This
        Registration Rights Agreement (this “Agreement”)
        is
        made and entered into as of September 16, 2004, by and among Mobilepro Corp.,
        a
        Delaware corporation (the “Company”),
        and
        the persons and entities listed on Exhibit A
        attached
        hereto (the “Noteholders”)
        and
        the persons and entities listed on Exhibit
        B
        attached
        hereto (the “New
        Stockholders”).

       

      A.  Pursuant
        to that certain Agreement and Plan of Merger (the “Merger
        Agreement”)
        dated
        of even date herewith, by and among the Company, The River Internet Access
        Company, an Arizona corporation and
        the
        Stockholders identified therein (the “Merger”),
        the
        Stockholders have been issued, as part of the Merger Consideration (as such
        term
        is defined in the Merger Agreement), certain Convertible Promissory Notes
        (the
“Notes”).

       

      B.  Pursuant
        to Section 4.5(d) of the Merger Agreement, as part of any increase in the
        Merger
        Consideration, the Company may issue shares of the Company’s Common Stock to the
        New Stockholders.

       

      C.  Pursuant
        to the Merger Agreement, the Company is required to provide the Noteholders
        and
        the New Stockholders certain registration rights with respect to the shares
        of
        the Company’s Common Stock issuable upon conversion of the Notes or issued
        pursuant to Section 4.5(d) of the Merger Agreement.

       

      1.  REGISTRATION
        RIGHTS.

       

      1.1  Definitions.
        For
        purposes of this Section 1:

       

      (a)  Common
        Stock.
        The
        term “Common
        Stock”
        means
        the Company’s common stock, $0.001 par value per share.

       

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

       

      (c)  Registrable
        Securities.
        The
        term “Registrable
        Securities”
        means
        the
        Common Stock issuable upon conversion of the Notes and Common Stock issued
        pursuant to Section 4.5(d) Merger Agreement.

       

      (d)  Registrable
        Securities Then Outstanding.
        The
        number of shares of “Registrable
        Securities then outstanding”
        shall
        mean the number of shares of Common Stock which are Registrable Securities
        that
        are then (1) issued and outstanding or (2) issuable pursuant
        to the
        exercise or conversion of then outstanding and then exercisable and qualifying
        options, warrants or convertible securities.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (e)  Holder.
        The
        term “Holder”
        means
        any person owning of record Registrable Securities or any assignee of record
        of
        such Registrable Securities to whom rights set forth herein have been duly
        assigned in accordance with this Agreement; provided,
        however,
        that
        for purposes of this Agreement, a record holder of the Notes convertible
        into
        such Registrable Securities shall be deemed to be the Holder of such Registrable
        Securities; provided,
        further,
        that
        the Company shall in no event be obligated to register shares of Common Stock,
        and that Holders of Registrable Securities will not be required to convert
        their
        Notes into shares of Common Stock in order to exercise the registration rights
        granted hereunder, until immediately before the closing of the offering to
        which
        the registration relates.

       

      (f)  SEC.
        The
        term “SEC”
        or
“Commission”
        means
        the U.S. Securities and Exchange Commission.

       

      1.2  Piggyback
        Registrations.
        The
        Company shall notify all Holders of Registrable Securities in writing at
        least
        thirty (30) days prior to filing any registration statement under the Securities
        Act for purposes of effecting a public offering of securities of the Company
        (including, but not limited to, registration statements relating to secondary
        offerings of securities of the Company, but excluding
        registration statements relating to any employee benefit plan or a corporate
        reorganization or other transaction covered by Rule 145 promulgated under
        the
        Securities Act, or a registration on any registration form which does not
        permit
        secondary sales or does not include substantially the same information as
        would
        be required to be included in a registration statement covering the sale
        of
        Registrable Securities) and will afford each such Holder an opportunity to
        include in such registration statement all or any part of the Registrable
        Securities then held by such Holder. Each Holder desiring to include in any
        such
        registration statement all or any part of the Registrable Securities held
        by
        such Holder shall, within twenty (20) days after receipt of the above-described
        notice from the Company, so notify the Company in writing, and in such notice
        shall inform the Company of the number of Registrable Securities such Holder
        wishes to include in such registration statement. If a Holder decides not
        to
        include all of its Registrable Securities in any registration statement
        thereafter filed by the Company, such Holder shall nevertheless continue
        to have
        the right to include any Registrable Securities in any subsequent registration
        statement or registration statements as may be filed by the Company with
        respect
        to offerings of its securities, all upon the terms and conditions set forth
        herein.

       

      (a)  Underwriting.
        If a
        registration statement under which the Company gives notice under this Section
        1.2
        is for
        an underwritten offering, then the Company shall so advise the Holders of
        Registrable Securities. In such event, the right of any such Holder’s
        Registrable Securities to be included in a registration pursuant to this
        Section
1.2
        shall be
        conditioned upon such Holder’s participation in such underwriting and the
        inclusion of such Holder’s Registrable Securities in the underwriting to the
        extent provided herein. All Holders proposing to distribute their Registrable
        Securities through such underwriting shall enter into an underwriting agreement
        in customary form with the managing underwriter or underwriter(s) selected
        for
        such underwriting. Notwithstanding any other provision of this Agreement,
        if the
        managing underwriter determine(s) in good faith that marketing factors require
        a
        limitation of the number of shares to be underwritten, then the managing
        underwriter(s) may exclude shares (including Registrable Securities) from
        the
        registration and the underwriting, and the number of shares that may be included
        in the registration and the underwriting shall be allocated, first,
        to the
        Company, second
        to
        Holders requesting inclusion of their Registrable Securities in such
        registration statement on a pro rata basis based on the number 

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      of
        Registrable Securities each such Holder has requested to be included in the
        registration. If any Holder disapproves of the terms of any such underwriting,
        such Holder may elect to withdraw therefrom by written notice, given in
        accordance with Section 3.1
        hereof,
        to the Company and the underwriter, delivered at least twenty (20) days prior
        to
        the effective date of the registration statement. Any Registrable Securities
        excluded or withdrawn from such underwriting shall be excluded and withdrawn
        from the registration. For any Holder that is a partnership or corporation,
        the
        partners, retired partners and shareholders of such Holder, or the estates
        and
        family members of any such partners and retired partners and any trusts for
        the
        benefit of any of the foregoing persons shall be deemed to be a single “Holder,”
        and any pro rata reduction with respect to such “Holder” shall be based upon the
        aggregate amount of shares carrying registration rights owned by all entities
        and individuals included in such “Holder,” as defined in this
        sentence.

       

      (b)  Expenses.
        All
        expenses incurred in connection with a registration pursuant to this Section
        1.2,
        including without limitation all registration and qualification fees up to
        a
        maximum of $50,000, printers’ and accounting fees, fees and disbursements of
        counsel for the Company (but excluding underwriters’ discounts and commissions)
        shall be borne by the Company. Each Holder participating in a registration
        pursuant to this Section 1.2
        shall
        bear such Holder’s proportionate share (based on the number of shares sold by
        such Holder over the total number of shares included in such registration
        at the
        time it goes effective) of any registration and qualification fees in excess
        of
        $50,000 and all
        discounts, commissions or other amounts payable to underwriters or brokers
        in
        connection with such offering and the fees and disbursements of any counsel
        for
        the participating Holders. 

       

      1.3  Obligations
        of the Company.
        Whenever required to effect the registration of any Registrable Securities
        under
        this Agreement, the Company shall, subject to the provisions of Section
1.3(g)
        below,
        as expeditiously as reasonably possible:

       

      (a)  Prepare
        and file with the SEC a registration statement with respect to such Registrable
        Securities and use reasonable efforts to cause such registration statement
        to
        become effective, and, upon the request of the Holders of a majority of the
        Registrable Securities registered thereunder, keep such registration statement
        effective for up to ninety (90) days during which the Company has not exercised
        its right to suspend the registration statement pursuant to Section 1.3(g)
        below.

       

      (b)  Prepare
        and file with the SEC such amendments and supplements to such registration
        statement and the prospectus used in connection with such registration statement
        as may be necessary to comply with the provisions of the Securities Act with
        respect to the disposition of all securities covered by such registration
        statement.

       

      (c)  Furnish
        to the Holders such number of copies of a prospectus, including a preliminary
        prospectus, in conformity with the requirements of the Securities Act, and
        such
        other documents as they may reasonably request in order to facilitate the
        disposition of the Registrable Securities owned by them that are included
        in
        such registration.

       

      (d)  Use
        reasonable efforts to register and qualify the securities covered by such
        registration statement under such other securities or Blue Sky laws of such
        jurisdictions as shall be reasonably requested by the Holders, provided that
        the
        Company shall not be required in connection therewith or as a condition thereto
        to qualify to do business or to file a general consent to service of process
        in
        any such states or jurisdictions.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      (e)  In
        the
        event of any underwritten public offering, enter into and perform its
        obligations under an underwriting agreement, in usual and customary form,
        with
        the managing underwriter(s) of such offering. Each Holder participating in
        such
        underwriting hereby agrees to also enter into and perform its obligations
        under
        such an agreement.

       

      (f)  Notify
        each Holder of Registrable Securities covered by such registration statement
        at
        any time when a prospectus relating thereto is required to be delivered under
        the Securities Act of the happening of any event as a result of which the
        prospectus included in such registration statement, as then in effect, includes
        an untrue statement of a material fact or omits to state a material fact
        required to be stated therein or necessary to make the statements therein
        not
        misleading in the light of the circumstances then existing.

       

      (g)  Notwithstanding
        any other provision of this Agreement, from and after the time a registration
        statement filed under this Section 2 covering Registrable Securities is declared
        effective, the Company shall have the right to suspend the registration
        statement and the related prospectus in order to prevent premature disclosure
        of
        any material non-public information related to corporate developments by
        delivering notice of such suspension to the Holders, provided,
        however,
        that the
        Company may exercise the right to such suspension only once in any 12-month
        period and for a period not to exceed 90 days. From and after the date of
        a
        notice of suspension under this Section 1.3(g),
        each
        Holder agrees not to use the registration statement or the related prospectus
        for resale of any Registrable Security until the earlier of (1) notice from
        the
        Company that such suspension has been lifted or (2) the 90th
        day
        following the giving of the notice of suspension.

       

      1.4  Furnish
        Information.
        It
        shall be a condition precedent to the obligations of the Company to take
        any
        action pursuant to Section 1.2
        that the
        selling Holders shall furnish to the Company such information regarding
        themselves, the Registrable Securities held by them, and the intended method
        of
        disposition of such securities as shall be required to timely effect the
        registration of their Registrable Securities.

       

      1.5  Delay
        of Registration.
        No
        Holder shall have any right to obtain or seek an injunction restraining or
        otherwise delaying any such registration as the result of any controversy
        that
        might arise with respect to the interpretation or implementation of this
        Section 1.

       

      1.6  Indemnification.
        In the
        event any Registrable Securities are included in a registration statement
        under
        Section 1.2:

       

      (a)  By
        the
        Company.
        To the
        extent permitted by law, the Company will indemnify and hold harmless each
        Holder, the partners, officers and directors of each Holder, any underwriter
        (as
        defined in the Securities Act) for such Holder and each person, if any, who
        controls such Holder or underwriter within the meaning of the Securities
        Act or
        the Securities Exchange Act of 1934, as amended, (the “Exchange
        Act”),
        against any losses, claims, damages, or liabilities (joint or several) to
        which
        they may become subject under the Securities Act, the Exchange Act or other
        federal or state law, insofar as such losses, claims, damages, or liabilities
        (or actions in respect thereof) arise out of or are based upon any of the
        following statements, omissions or violations (collectively, the “Violations”
        and,
        individually, a “Violation”):

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      (1)  any
        untrue statement or alleged untrue statement of a material fact contained
        in
        such registration statement, including any preliminary prospectus or final
        prospectus contained therein or any amendments or supplements thereto;
        or

       

      (2)  the
        omission or alleged omission to state therein a material fact required to
        be
        stated therein, or necessary to make the statements therein not misleading;
        or

       

      (3)  any
        violation or alleged violation by the Company of the Securities Act, the
        Exchange Act, any federal or state securities law or any rule or regulation
        promulgated under the Securities Act, the Exchange Act or any federal or
        state
        securities law in connection with the offering covered by such registration
        statement.

       

      The
        Company will reimburse each such Holder, partner, officer or director,
        underwriter or controlling person for any legal or other expenses reasonably
        incurred by them, within three months after a request for reimbursement has
        been
        received by the Company, in connection with investigating or defending any
        such
        loss, claim, damage, liability or action; provided however,
        that
        the indemnity agreement contained in this Section 1.6(a)
        shall
        not apply to amounts paid in settlement of any such loss, claim, damage,
        liability or action if such settlement is effected without the consent of
        the
        Company (which consent shall not be unreasonably withheld), nor shall the
        Company be liable in any such case for any such loss, claim, damage, liability
        or action to the extent that it arises out of or is based upon a Violation
        which
        occurs in reliance upon and in conformity with written information furnished
        expressly for use in connection with such registration by such Holder, partner,
        officer, director, underwriter or controlling person of such
        Holder.

       

      (b)  By
        Selling Holders.
        To the
        extent permitted by law, each selling Holder will indemnify and hold harmless
        the Company, each of its directors, each of its officers who have signed
        the
        registration statement, each person, if any, who controls the Company within
        the
        meaning of the Securities Act, any underwriter and any other Holder selling
        securities under such registration statement or any of such other Holder’s
        partners, directors or officers or any person who controls such Holder within
        the meaning of the Securities Act or the Exchange Act, against any losses,
        claims, damages or liabilities (joint or several) to which the Company or
        any
        such director, officer, controlling person, underwriter or other such Holder,
        partner or director, officer or controlling person of such other Holder may
        become subject under the Securities Act, the Exchange Act or other federal
        or
        state law, insofar as such losses, claims, damages or liabilities (or actions
        in
        respect thereto) arise out of or are based upon any Violation, in each case
        to
        the extent (and only to the extent) that such Violation occurs in reliance
        upon
        and in conformity with written information furnished by such Holder expressly
        for use in connection with such registration. Each such Holder will reimburse
        any legal or other expenses reasonably incurred by the Company or any such
        director, officer, controlling person, underwriter or other Holder, partner,
        officer, director or controlling person of such other Holder in connection
        with

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      investigating
        or defending any such loss, claim, damage, liability or action; within three
        months after a request for reimbursement has been received by the indemnifying
        Holder, provided,
        however,
        that
        the indemnity agreement contained in this Section 1.6(b)
        shall
        not apply to amounts paid in settlement of any such loss, claim, damage,
        liability or action if such settlement is effected without the consent of
        the
        Holder, which consent shall not be unreasonably withheld; and provided further,
        that
        the total amounts payable in indemnity by a Holder under this
        Section 1.6(b)
        in
        respect of any Violation shall not exceed the net proceeds received by such
        Holder in the registered offering out of which such Violation
        arises.

       

      (c)  Notice.
        Promptly after receipt by an indemnified party under this
        Section  1.6
        of
        notice of the commencement of any action (including any governmental action),
        such indemnified party will, if a claim in respect thereof is to be made
        against
        any indemnifying party under this Section  1.6,
        deliver
        to the indemnifying party a written notice of the commencement thereof. The
        indemnifying party shall have the right to participate in, and, to the extent
        the indemnifying party so desires, jointly with any other indemnifying party
        similarly noticed, to assume the defense thereof with counsel mutually
        satisfactory to the parties; provided,
        however,
        that an
        indemnified party shall have the right to retain its own counsel, with the
        fees
        and expenses to be paid by the indemnifying party, if representation of such
        indemnified party by the counsel retained by the indemnifying party would
        be
        inappropriate due to actual or potential conflict of interests between such
        indemnified party and any other party represented by such counsel in such
        proceeding. The failure to deliver written notice to the indemnifying party
        within a reasonable time of the commencement of any such action, if prejudicial
        to its ability to defend such action, shall relieve such indemnifying party
        of
        any liability to the indemnified party under this Section 1.6,
        but the
        failure to deliver written notice to the indemnifying party will not relieve
        it
        of any liability that it may have to any indemnified party otherwise than
        under
        this Section 1.6.

       

      (d)  Defect
        Eliminated in Final Prospectus.
        The
        foregoing indemnity agreements of the Company and Holders are subject to
        the
        condition that, insofar as they relate to any Violation made in a preliminary
        prospectus but eliminated or remedied in the amended prospectus on file with
        the
        SEC at the time the registration statement in question becomes effective
        or the
        amended prospectus filed with the SEC pursuant to SEC Rule 424(b)
        (the
“Final
        Prospectus”),
        such
        indemnity agreement shall not inure to the benefit of any person if a copy
        of
        the Final Prospectus was furnished to the indemnified party and was not
        furnished to the person asserting the loss, liability, claim or damage at
        or
        prior to the time such action is required by the Securities Act.

       

      (e)  Contribution.
        If the
        indemnification provided for in this Section 1.6
        is held
        by a court of competent jurisdiction to be unavailable to an indemnified
        party
        with respect to any loss, liability, claim, damage or expense referred to
        herein, then the indemnifying party, in lieu of indemnifying the indemnified
        party, shall contribute to the amount paid or payable by such indemnified
        party
        with respect to such loss, liability, claim, damage or expense in the proportion
        that is appropriate to reflect the relative fault of the indemnifying party
        and
        the indemnified party in connection with the statements or omissions that
        resulted in such loss, liability, claim, damage or expense, as well as any
        other
        relevant equitable considerations. The relative fault of the indemnifying
        party
        and the indemnified party shall be determined by reference to, among other
        things, whether the untrue or alleged untrue statement of material fact or
        the
        omission to state a material fact relates to information supplied by the
        indemnifying party or by the indemnified party, and the parties’ relative
        intent, knowledge, access to information and opportunity to correct or prevent
        such statement or omission. In any such case, (A) no such Holder will
        be
        required to contribute any amount in excess of the public offering price
        of all
        such Registrable Securities offered and sold by such Holder pursuant to such
        registration statement; and (B) no person or entity guilty of fraudulent
        misrepresentation (within the meaning of Section 11(f) of the Securities
        Act) will be entitled to contribution from any person or entity who was not
        guilty of such fraudulent misrepresentation.

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      (f)  Conflict
        with Underwriting Agreement.
        Notwithstanding the foregoing, to the extent that the provisions on
        indemnification and contribution contained in the underwriting agreement
        entered
        into in connection with the underwritten public offering are in conflict
        with
        the foregoing provisions, the provisions in the underwriting agreement will
        control.

       

      (g)  Survival.
        The
        obligations of the Company and Holders under this Section 1.6
        shall
        survive the completion of any offering of Registrable Securities in a
        registration statement, and otherwise.

       

      1.7  Rule 144
        Reporting.
        With a
        view to making available the benefits of certain rules and regulations of
        the
        Commission which may at any time permit the sale of the Registrable Securities
        to the public without registration, the Company agrees to:

       

      (a)  Make
        and
        keep public information available, as those terms are understood and defined
        in
        Rule 144 under the Securities Act;

       

      (b)  Use
        reasonable, diligent efforts to file with the Commission in a timely manner
        all
        reports and other documents required of the Company under the Securities
        Act and
        the Exchange Act (at any time after it has become subject to such reporting
        requirements); and

       

      (c)  So
        long
        as a Holder owns any Registrable Securities, to furnish to the Holder forthwith
        upon request a written statement by the Company as to its compliance with
        the
        reporting requirements of said Rule 144 (at any time after ninety
        (90) days
        after the effective date of the first registration statement filed by the
        Company for an offering of its securities to the general public), and of
        the
        Securities Act and the Exchange Act (at any time after it has become subject
        to
        the reporting requirements of the Exchange Act), a copy of the most recent
        annual or quarterly report of the Company, and such other reports and documents
        of the Company as a Holder may reasonably request in availing itself of any
        rule
        or regulation of the Commission allowing a Holder to sell any such securities
        without registration (at any time after the Company has become subject to
        the
        reporting requirements of the Exchange Act).

       

      1.8  Termination
        of the Company’s Obligations.
        The
        Company shall have no obligations pursuant to Section 1.2
        with
        respect to any Registrable Securities proposed to be sold by a Holder in
        a
        registration pursuant to Section 1.2
        if, in
        the opinion of counsel to the Company, all such Registrable Securities proposed
        to be sold by a Holder may be sold in a three (3) month period without
        registration under the Securities Act pursuant to Rule 144 under the
        Securities Act.

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      2.  ASSIGNMENT
        AND AMENDMENT.

       

      2.1  Assignment.
        Notwithstanding anything herein to the contrary:

       

      (a)  Registration
        Rights.
        The
        registration rights of a Holder under Section 1
        hereof
        may be assigned only to a party who acquires at least 500,000 shares of Common
        Stock (including the Common Stock issuable upon conversion of the Notes);
        provided,
        however
        that no
        party may be assigned any of the foregoing rights unless the Company is given
        written notice by the assigning party at the time of such assignment stating
        the
        name and address of the assignee and identifying the securities of the Company
        as to which the rights in question are being assigned; provided further,
        that
        any such assignee of such rights is not deemed by the Board of Directors
        of the
        Company, in its reasonable judgment, to be a competitor of the Company; and
        provided further
        that any
        such assignee shall receive such assigned rights subject to all the terms
        and
        conditions of this Agreement, including without limitation the provisions
        of
        this Section 2.
        Assignments may be made without the Company’s consent or obtaining the minimum
        number of shares of Registrable Securities noted above if the assignment
        is to a
        partner, affiliate, shareholder, parent, child or spouse of the holder or
        to the
        holder’s estate, or with respect to the shares issuable upon conversion of the
        Notes, otherwise in accordance with the assignment provisions of the
        Notes.

       

      2.2  Amendment
        and Waiver of Rights.
        Any
        provision of this Agreement may be amended and the observance thereof may
        be
        waived (either generally or in a particular instance and either retroactively
        or
        prospectively), only with the written consent of the Company and Holders
        (and/or
        any of their permitted successors or assigns) holding Registrable Securiteis
        (including Notes representing and/or convertible into a majority of all the
        Holders’ Shares (as defined below)); provided,
        further,
        that
        the grant to third parties of piggyback registration rights under
        Section 1.2
        hereof
        on a pari passu basis with the piggyback registration rights of the Holders
        under Section 1.2
        shall
        not be deemed to be a material and adverse change to the piggyback registration
        rights of the Holders under this Agreement and shall not require the consent
        of
        Holders. As used herein, the term “Holders’
        Shares”
        shall
        mean the shares of Common Stock then issuable upon conversion of all then
        outstanding Notes. Any amendment or waiver effected in accordance with this
        Section 2.2
        shall be
        binding upon each Holder, each permitted successor or assignee of such Holder
        and the Company.

       

      3.  GENERAL
        PROVISIONS.

       

      3.1  Notices.
        Any and
        all notices required or permitted to be given to a party pursuant to the
        provisions of this Agreement will be in writing and will be effective and
        deemed
        to provide such party sufficient notice under this Agreement on the earliest
        of
        the following: (i) at the time of personal delivery, if delivery is
        in
        person; (ii)  at the time of transmission by facsimile, addressed
        to the
        other party at its facsimile number specified herein (or hereafter modified
        by
        subsequent notice to the parties hereto), with confirmation of receipt made
        by
        both telephone and printed confirmation sheet verifying successful transmission
        of the facsimile; (iii) one
        (1) business day after deposit with an express overnight courier for United
        States deliveries, or two (2) business days after such deposit for deliveries
        outside of the United States, with proof of delivery from the courier requested;
        or (iv) three (3) business days after deposit in the United States
        mail by
        certified mail (return receipt requested) for United States
        deliveries.

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      All
        notices for delivery outside the United States will be sent by facsimile
        or by
        express courier. Notices by facsimile shall be machine verified as received.
        All
        notices not delivered personally or by facsimile will be sent with postage
        and/or other charges prepaid and properly addressed to the party to be notified
        at the address or facsimile number as follows, or at such other address or
        facsimile number as such other party may designate by one of the indicated
        means
        of notice herein to the other parties hereto as follows:

       

      (a)  if
        to a
        Note Holder, at such Note Holder’s respective address as set forth on
Exhibit A
        hereto.

       

      (b)  if
        to the
        Company, marked “Attention: President”, at 6701 Democracy Blvd., Suite 300,
        Bethesda, MD 20817.

       

      3.2  Entire
        Agreement.
        This
        Agreement and the documents referred to herein, together with all the Exhibits
        hereto, constitute the entire agreement and understanding of the parties
        with
        respect to the subject matter of this Agreement, and supersede any and all
        prior
        understandings and agreements, whether oral or written, between or among
        the
        parties hereto with respect to the specific subject matter hereof. 

       

      3.3  Governing
        Law.
        This
        Agreement will be governed by and construed in accordance with the laws of
        the
        State of Delaware, without giving effect to that body of laws pertaining
        to
        conflict of laws.

       

      3.4  Severability.
        If any
        provision of this Agreement is determined by any court or arbitrator of
        competent jurisdiction to be invalid, illegal or unenforceable in any respect,
        such provision will be enforced to the maximum extent possible given the
        intent
        of the parties hereto. If such clause or provision cannot be so enforced,
        such
        provision shall be stricken from this Agreement and the remainder of this
        Agreement shall be enforced as if such invalid, illegal or unenforceable
        clause
        or provision had (to the extent not enforceable) never been contained in
        this
        Agreement. Notwithstanding the forgoing, if the value of this Agreement based
        upon the substantial benefit of the bargain for any party is materially
        impaired, which determination as made by the presiding court or arbitrator
        of
        competent jurisdiction shall be binding, then both parties agree to substitute
        such provision(s) through good faith negotiations.

       

      3.5  Third
        Parties.
        Nothing
        in this Agreement, express or implied, is intended to confer upon any person,
        other than the parties hereto and their successors and assigns, any rights
        or
        remedies under or by reason of this Agreement.

       

      3.6  Successors
        And Assigns.
        Subject
        to the provisions of Section 2.1,
        this
        Agreement, and the rights and obligations of the parties hereunder, will
        be
        binding upon and inure to the benefit of their respective successors, assigns,
        heirs, executors, administrators and legal representatives.

       

      3.7  Titles
        and Headings.
        The
        titles, captions and headings of this Agreement are included for ease of
        reference only and will be disregarded in interpreting or construing this
        Agreement. Unless otherwise specifically stated, all references herein to
        “sections” and “exhibits” will mean “sections” and “exhibits” to this
        Agreement.

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      3.8  Counterparts.
        This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed and delivered will be deemed an original, and all of which together
        shall constitute one and the same agreement.

       

      3.9  Costs
        And Attorneys’ Fees.
        In the
        event that any action, suit or other proceeding is instituted concerning
        or
        arising out of this Agreement or any transaction contemplated hereunder,
        the
        prevailing party shall recover all of such party’s costs and attorneys’ fees
        incurred in each such action, suit or other proceeding, including any and
        all
        appeals or petitions therefrom.

       

      3.10  Adjustments
        for Stock Splits, Etc.
        Wherever
        in this Agreement there is a reference to a specific number of shares of
        Common
        Stock of the Company of any class or series, then, upon the occurrence of
        any
        subdivision, combination or stock dividend of such class or series of stock,
        the
        specific number of shares so referenced in this Agreement shall automatically
        be
        proportionally adjusted to reflect the affect on the outstanding shares of
        such
        class or series of stock by such subdivision, combination or stock
        dividend.

       

      3.11  Further
        Assurances.
        The
        parties agree to execute such further documents and instruments and to take
        such
        further actions as may be reasonably necessary to carry out the purposes
        and
        intent of this Agreement.

       

      3.12  Facsimile
        Signatures.
        This
        Agreement may be executed and delivered by facsimile and upon such delivery
        the
        facsimile signature will be deemed to have the same effect as if the original
        signature had been delivered to the other party. The original signature copy
        shall be delivered to the other party by express overnight delivery. The
        failure
        to deliver the original signature copy and/or the nonreceipt of the original
        signature copy shall have no effect upon the binding and enforceable nature
        of
        this Agreement.

       

      
 

      
        
           

        

        
          -10-

          
            

          

        

        
           

          
          

        

      

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

       

      
        	
                THE
                  COMPANY:

                 

                MOBILEPRO
                  CORP.

              	 
	
                Name:

              	    
	 	 
	
                By:

              	
                Jay
                  O. Wright

              	 	 
	
                Title:

              	
                Chief
                  Executive Officer

              	 
	 	 
	
                NOTE
                  HOLDERS:

              	 
	 	 
	
                [FOR
                  ENTITY INVESTOR USE 

                FOLLOWING
                  SIGNATURE BLOCK:]

                 

              	
                [FOR
                  INDIVIDUAL INVESTOR USE 

                FOLLOWING
                  SIGNATURE BLOCK:]

                 

              
	
                Name:

              	    
	
                Name:

              	     

	 	 	 	
                [TYPE
                  NAME ON LINE]

              
	
                By:

              	    
	
                By:

              	    

	
                Title:

              	    
	 	
                [SIGN
                  HERE]

              

      

      

       

      
        
          
            SIGNATURE
              PAGE TO REGISTRATION
              RIGHTS
              AGREEMENT

             

             

          

           

        

        
          -11-

          
            

          

        

        
           

          
          

        

      

      EXHIBIT A

       

      List
        of Note Holders

       

      
        	
                 

                Name
                  and Address 

              	 	
                Number
                  of Shares

                of
                  Common Stock Underlying Notes Held

              
	 	 	 

      

       

       

       

       

      
        
           

        

          A-1

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