Document:

Filed by Bowne Pure Compliance

Exhibit 10.51

AMENDMENT TO THE

EMPLOYMENT AGREEMENT

This Amendment to the Employment Agreement (the “Amendment”) is made and entered into
effective as of January 1, 2009, by and between Brigham Exploration Company, a Delaware corporation
(the “Company”) and Ben M. Brigham (“Employee”).

W I T N E S S E T H:

WHEREAS, the Company and Employee entered into an Employment Agreement effective as of May 14,
1997 (the “Agreement”); and

WHEREAS, the Company and Employee now desire to amend the Agreement for compliance with
Internal Revenue Code Section 409A and the Treasury Regulations thereunder;

NOW, THEREFORE, in consideration of the premises, the parties do hereby agree as follows:

1. Section 3(b) of the Agreement is hereby amended by the addition of the following sentence:

Any bonus, or portion thereof, due to Employee shall be paid no later than the
March 15 following the end of the calendar year in which such bonus, or portion
thereof, is no longer subject to a “substantial risk of forfeiture” as determined
in accordance with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and the regulations thereunder.

2. Section 5 of the Agreement is hereby amended and restated in its entirety as follows:

5. Business Expenses. Employee shall be reimbursed by the Company
for expenses reasonably paid or incurred by him during the term of his employment
in connection with the performance of his duties hereunder upon presentation of
expense statements, receipts or vouchers or such other supporting information
reasonably evidencing such expenses. Any such reimbursement shall be made as soon
as reasonably practicable, but in no event later than the March 15 following the
end of the calendar year in which the related expense was incurred.

 

 

 

3. Section 11 of the Agreement is hereby amended and restated in its entirety as follows:

11. Termination by Employee.

(a) Employee may terminate his employment hereunder for Good Reason. To
exercise the right to terminate for Good Reason, Employee must provide written
notice to the Company of the belief that Good Reason exists within 90 days of the
initial existence of the condition(s) giving rise to Good Reason, and that notice
shall describe the condition(s) believed to constitute Good Reason. The Company
shall have 30 days to remedy such condition(s). If not remedied within that
30-day period, Employee may terminate his employment with the Company; provided,
however, that such termination must occur no later than two (2) years after the
initial existence of the circumstance(s) believed to constitute Good Reason. For
purposes of this Agreement, “Good Reason” shall mean any of the following (without
Employee’s express written consent): (A) a material breach by the Company of this
Agreement, or (B) a material diminution of Employee’s authority, duties, or
responsibilities. An election by Employee to terminate for Good Reason shall not
be deemed a voluntary termination of employment by Employee for purposes of this
Agreement.

(b) Employee may terminate his employment hereunder for any other reason upon
providing at least 30 days advance written notice.

4. Section 14 of the Agreement is hereby amended and restated in its entirety as follows:

14. Other Termination of Employment. If Employee shall terminate his
employment for Good Reason under Section 11 hereof or if the employment of
Employee hereunder is terminated by the Company under any circumstances other than
those set forth in Sections 8, 9, 10 or 13 hereof, then (i) provided that
Employee’s termination of employment constitutes a “separation from service” under
Treasury Regulation Section 1.409A-1(h), the Company shall pay to Employee within
30 days following such termination a lump sum cash payment equal to (A) the amount
of Employee’s annual base salary (as in effect at the time of termination) that
Employee would have received during the remainder of Employee’s employment term
hereunder, plus (B) an amount equal to the average annual bonus received by
Employee pursuant to Section 3(b) hereof during the immediately preceding two (2)
years, multiplied by the number of years (with portions of a year expressed as a
fraction) in the remainder of Employee’s employment term hereunder, (ii) all
restricted stock, options or other rights with respect to equity interests in the
Company and/or its affiliates granted to Employee on or before such date of
termination shall immediately vest as of the date of such termination, (iii) the
Company shall continue to provide Employee with life insurance coverage pursuant
to the terms of Section 8 hereof for a period of twenty years following
termination, and (iv) if Employee is participating in a hospital, surgical,
medical or dental benefit plan maintained by the Company as of his termination of employment, then Employee shall be entitled to
continue such participation on the same terms and at the same cost as
similarly-situated current employees, provided that such coverage is either
nontaxable to Employee or otherwise exempt from Code Section 409A.

 

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5. The Agreement is hereby amended by the addition of the following as Section 18:

18. Code Section 409A.

(a) Notwithstanding anything to the contrary contained herein, this Agreement
is intended to satisfy the requirements of Code Section 409A. Accordingly, all
provisions herein, or incorporated by reference, shall be construed and
interpreted to satisfy the requirements of Code Section 409A. For purposes of
Code Section 409A, each payment of compensation under this Agreement shall be
treated as a separate payment of compensation.

(b) Notwithstanding anything to the contrary contained herein, in the event
Employee is a “specified employee” (as defined below) and is entitled to receive a
payment, or portion thereof, on account of “separation from service” (as defined
under Treasury Regulation Section 1.409A-1(h)) that is subject to Code Section
409A, the payment, or portion thereof, may not be made earlier than six months
following the date of Employee’s separation from service if required by Code
Section 409A and the regulations thereunder, in which case, the accumulated
postponed amount shall be paid in a lump sum payment within 10 days after the end
of the six-month period. If Employee dies during the postponement period prior to
the payment of the postponed amount, the amounts withheld on account of Code
Section 409A shall be paid to the personal representative of Employee’s estate
within 60 days after the date of Employee’s death. A “specified employee” shall
mean an employee who, at any time during the 12-month period ending on the
identification date, is a “specified employee” under Code Section 409A, as
determined by the Board of Directors of the Company. The determination of
“specified employees,” including the number and identity of persons considered
“specified employees” and the identification date, shall be made by the Board of
Directors of the Company in accordance with the provisions of Code Sections 416(i)
and 409A and the regulations issued thereunder.

6. Except as otherwise specifically set forth herein, all other terms and conditions of the
Agreement shall remain in full force and effect.

 

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IN WITNESS WHEREOF, the Company has caused this Amendment to be executed on its behalf by its
duly authorized officer, and Employee has executed this Amendment, on this the 23rd day of
December, 2008.

	 	 	 	 	 
	 	 	BRIGHAM EXPLORATION COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/ DAVID T. BRIGHAM
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Its: Executive Vice President — Land and       Administration
	 
	 	 	 	 
	 	 	EMPLOYEE
	 
	 	 	 	 
	 	 	/s/ BEN M. BRIGHAM
	 	 	 
	 	 	Ben M. Brigham

 

4Filed by Bowne Pure Compliance

Exhibit 10.112

 

STOCKHOLDERS AGREEMENT

OF

THE RUSS COMPANIES, INC.

Dated as of

December 23, 2008

 

 

 

 

STOCKHOLDERS AGREEMENT

OF

THE RUSS COMPANIES, INC.

This STOCKHOLDERS AGREEMENT (this “Agreement”) is entered into and shall be effective as of
December 23, 2008 (the “Effective Date”), by and among The Russ Companies, Inc., a Delaware
corporation (the “Company”), and those persons listed on Schedule A hereto as stockholders,
as such Schedule may be amended from time to time (each a “Stockholder” and collectively, the
“Stockholders”).

RECITALS

WHEREAS, on December 23, 2008, the Company has entered into that certain Purchase Agreement
(the “Purchase Agreement”) with Russ Berrie and Company, Inc. (“RB”), pursuant to which RB has sold
to the Company, and the Company has acquired from RB, its Gift Business (as defined in the Purchase
Agreement); and

WHEREAS, entering into this Agreement is a condition to closing the transactions contemplated
by the Purchase Agreement; and

WHEREAS, pursuant to the provisions of the Purchase Agreement, RB has been issued 199 shares
of the Common Stock, par value $.001 per share, of the Company (the “Common Stock”), having such
rights, preferences and privileges as set forth in the Certificate and in this Agreement; and

WHEREAS, the Company has authorized 1,000 shares of Common Stock, 1000 shares of which are
issued and outstanding: 199 of such shares are owned by RB and 801 of such shares of owned by
Encore Investors II, Inc. (“EI”), all as set forth on Schedule A attached hereto; and

WHEREAS, the Stockholders and the Company wish to make arrangements concerning transfers of
Company Capital Stock, the election of Directors, registration rights and certain other matters
relating to the operation and governance of the Company.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINED TERMS

Section 1.1 Defined Terms. In addition to terms defined elsewhere in this Agreement,
the following terms have the meanings set forth below. Capitalized terms used but undefined herein
shall have the meanings ascribed to them in the Purchase Agreement.

 

 

 

“Affiliate” means, with respect to a specified Person: (a) any Person that directly or
indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under
common control with, such specified Person, including for this purpose each Person that serves as a
director or officer of such specified Person. For purposes of this definition, (a) control”
(including “controlling,” “controlled by,” and “under common control with”) means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or otherwise, and shall
be construed as such term is used in the rules promulgated under the Securities Act.

“Applicable Law” means, relative to any Person, any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, Order, ordinance, principle of common law,
code, regulation, statute or treaty.

“Applicable Share Price” shall initially be $30,150.76, as adjusted for any stock splits,
stock dividends, recapitalizations of or any other changes to the Common Stock, and as further
adjusted upon the closing of any Dilutive Transactions as provided in Section 5.3 below. All
references herein to the Applicable Share Price shall mean the Applicable Share Price as so
adjusted.

“Appraised Value” shall mean, in respect of any share of Common Stock on any date herein
specified, the fair saleable value of such share of Common Stock (determined without giving effect
to the discount for (i) a minority interest, (ii) a lack of voting power or (iii) any lack of
liquidity of the Common Stock or to the fact that the Company may have no class of equity
registered under the Exchange Act) as of the last day of most recent fiscal month to end within 60
days prior to such date specified, based on the value of the entire equity of the Company, as
determined by an investment banking firm selected as described below, adjusted to reflect the
aggregate consideration receivable by the Company or the aggregate principal amount of indebtedness
of the Company that would be extinguished upon the issuance of any and all securities not
outstanding but deemed to be outstanding in the computation of Fully Diluted Outstanding shares of
Common Stock, divided by the number of Fully Diluted Outstanding shares of Common Stock. The
determination of the Appraised Value per share of Common Stock shall be made by mutual agreement of
the Company and RB, or in the absence of such agreement, by an investment banking firm of
nationally recognized standing selected by the Company and acceptable to RB. If the investment
banking firm selected by the Company is not acceptable to RB and the Company and RB cannot agree on
a mutually acceptable investment banking firm, then RB and the Company shall each choose one such
investment banking firm and the respective chosen firms shall agree on another investment banking
firm which shall make the determination. The Company shall retain, at its sole cost, such
investment banking firm(s) as may be necessary for the determination of Appraised Value.

“Business Day” means any day other than Saturday, Sunday, or any legal holiday on which banks
are required or permitted to be closed in the State of New York.

 

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“Certificate” means the Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware on July 3, 2008, as it may hereafter be amended from
time to time in accordance with the terms of this Agreement and the DGCL.

“Change of Control” means, with respect to a Person, (i) the sale, lease, exchange or other
transfer (other than to a wholly-owned subsidiary of the Person or to an existing stockholder
thereof on the date hereof or an Affiliate thereof) by the Person of all or substantially all of
its assets to a single purchaser or to a group of associated purchasers; (ii) the purchase of at
least a majority of the shares of voting Company Capital Stock, in the case of the Company, and the
equivalent thereof, in the case of a Person other than the Company, pursuant to a tender offer or
exchange offer (other than an offer by the Person or any stockholder thereof on the date hereof or
any Affiliate thereof); (iii) a merger or consolidation pursuant to which the Person shall not
survive as an independent corporation and where existing stockholders thereof or their Affiliates
immediately prior to the consummation of such merger or consolidation hold less than a majority of
the voting stock of the surviving company or (iv) the acquisition (including by means of a merger)
by a single purchaser or a group of associated purchasers (other than by an existing stockholder of
such Person on the date hereof or any Affiliate thereof) of shares of voting Company Capital Stock,
in the case of the Company, and the equivalent thereof, in the case of a Person other than the
Company, representing at least a majority of the voting power of the then outstanding Company
Capital Stock, in the case of the Company, and the equivalent thereof, in the case of a Person
other than the Company, in one or a related series of transactions.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Common Stock” has the meaning set forth in the Recitals.

“Common Stockholders” shall mean those Stockholders owning Common Stock.

“Company Capital Stock” shall mean the Common Stock, Preferred Securities, any Convertible
Securities, or any other class of capital stock of the Company, in each case whether owned on the
date of this Agreement or acquired thereafter.

“Convertible Securities” shall mean any evidences of indebtedness, shares of stock, warrants
or other securities (including Preferred Securities, as appropriate) which are directly or
indirectly convertible into or exchangeable for, or constitute or provide a right to acquire, with
or without payment of additional consideration in cash or property, additional shares of Common
Stock, either immediately or upon the occurrence of a specified date or a specified event.

“Current Market Price” shall mean, in respect of any share of Common Stock on any date herein
specified, (a) the Appraised Value per share of Common Stock as at such date, or (b) if there shall
then be a public market for the Common Stock, the average of the daily market prices for 30
consecutive Business Days commencing 45 days before such date. The daily market price for each
such Business Day shall be (i) the last sale price on such day on the principal stock exchange on
which such Common Stock is then listed or admitted to trading, (ii) if no sale takes place on such
day on any such exchange, the average of the last reported closing bid and asked prices on such day
as officially quoted on any such exchange, (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange, the average of
the last reported closing bid and asked prices on such day in the over-the-counter market, as
furnished by the National Association of Securities Dealers Automatic Quotation System or the
National Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged in the
business of reporting such prices, as furnished by any similar firm then engaged in such business,
or (v) if there is no such firm, as furnished by any member of the NASD selected mutually by the
Company and RB or, if they cannot agree upon such selection, as selected by two such members of the
NASD, one of which shall be selected by the Company and one of which shall be selected by RB. The
parties hereto agree that as of the date of this Agreement, the Current Market Price shall equal
$30,150.76 per share.

 

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“DGCL” means the Delaware General Corporation Law.

“Director” means any member of the Company’s Board of Directors.

“Effective Date” means December 23, 2008.

“Encore” means The Encore Group, Inc., a California corporation.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Registration” means (i) a registration relating to the sale of Common Stock to
employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar
plan; or (ii) a registration relating to an SEC Rule 145 transaction.

“Fair Market Value” means, with respect to assets or non-cash consideration, the fair market
value thereof as determined in good faith by the Board of Directors; provided, however, that if the
relevant Stockholders in good faith disagree with the Board’s valuation, and so indicate by notice
to the Company within 30 days of receipt of such valuation, fair market value shall be as
determined by an Independent Financial Expert.

“Former Encore Stockholders” means the following individuals: Richard D. Snow, Eldridge C.
Hanes, Jose E. Munoz, Jr. Employee Retirement Trust, Ken Siemers, Alan G. Sanford, Edward W.
Sanford, III, Garyr Frankhauser, Saverio Barbiere, Jeffrey S. Grissen and Barbara B. Campbell.

“Form S-3” means such form under the Securities Act as in effect on the date hereof or any
registration form under the Securities Act subsequently adopted by the SEC that permits
incorporation of substantial information by reference to other documents filed by the Company with
the SEC.

“Fully Diluted Outstanding” shall mean, when used with reference to Common Stock, at any date
as of which the number of shares thereof is to be determined, all shares of Common Stock
outstanding at such date and all shares of Common Stock issuable in respect of any Convertible
Securities outstanding on such date which would be deemed outstanding in accordance with GAAP for
purposes of determining book value or net income per share on a
fully-diluted basis, but excluding any shares of Common Stock issuable in respect of
Convertible Securities if including them in the calculation of Fully Diluted Outstanding would
result in an increase in book value or net income per share.

 

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“GAAP” means Generally Accepted Accounting Principles, as such term is defined by the Federal
Accounting Standards Advisory Board.

“Governmental Authority” means any: (a) nation, state, county, city, town, borough, village,
district or other jurisdiction; (b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature (including any agency, branch,
department, board, commission, court, tribunal or other entity exercising governmental or
quasi-governmental powers); (d) multinational organization or body; (e) body exercising, or
entitled or purporting to exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power; or (f) official of any of the foregoing.

“Independent Financial Expert” means a nationally recognized independent valuation or
appraisal firm selected by the Board and reasonably acceptable to the Stockholders to whom the
relevant valuation relates as having appropriate experience in valuations of the nature required
and which certifies that it does not (and the directors and officers of which do not) have a
material direct or indirect financial interest in either the Company or the determination of Fair
Market Value. The fees and costs of any Independent Financial Expert selected by the Company shall
be paid by the Company.

“IPO” — as defined in Section 2.3.

“Order” — any order, injunction, judgment, decree, ruling, assessment or arbitration award of
any Governmental Authority or arbitrator.

“Ownership Percentage” means, with respect to any Stockholder, a fraction (expressed as a
percentage), the numerator of which is the total number of shares of Common Stock then owned by
such holder, and the denominator of which is the total number of shares of Common Stock then
outstanding.

“Permitted Transfer” means any Transfer of all or any part of the shares of Common Stock; (1)
pursuant to SEC Rule 144 or pursuant to an effective registration statement under the Securities
Act, (2) by a Former Encore Stockholder (i) to another Former Encore Stockholder or RB; (ii) to any
revocable United States trust for the benefit of such Former Encore Stockholder of which such
former Encore Stockholder is the trustee; (iii) with respect to any such Former Encore Stockholder
that is a natural Person, to any United States trust for the benefit of such Former Encore
Stockholder’s immediate family provided that (A) such Former Encore Stockholder or another
Former Encore Stockholder acts as trustee or co-trustee for such trust and (B) such trust agrees to
be bound, for so long as it holds such shares of Common Stock, by the same terms and conditions of
this Agreement, as if the shares of Common Stock were still held by such transferor; (iv) that has
been approved by the prior written consent of the Stockholders, or (v) to the heirs of a Former
Encore Stockholder upon the death of a Former Encore Stockholder; or (3) by RB (i) to an affiliate
of RB, (ii) to a Former Encore Stockholder or the
Company, or (iii) that has been approved by the prior written consent of the Stockholders.
Following a Permitted Transfer, the transferee in such transfer may further transfer any shares of
Common Stock and have such further transfer constitute a “Permitted Transfer” hereunder only to the
extent such further transfer would have been a Permitted Transfer under the foregoing definition if
made by the Person who was the transferor in such original Transfer. Notwithstanding the
foregoing, for any Transfer to be deemed a “Permitted Transfer”, such Transfer must be made in
compliance with the Securities Act and applicable state securities laws.

 

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

“Preferred Securities” means any series or class of equity securities of the Company other
than Common Stock that has priority in terms of operating and/or liquidating distributions from the
Company over the Common Stock.

“RB” means Russ Berrie and Company, Inc., a New Jersey corporation.

“Registrable Securities” means, as of any date, with respect to any Stockholder, all shares of
Common Stock and shares of Common Stock underlying any Convertible Securities owned by such
Stockholder on such date (in each case whether owned on the date hereof or hereafter acquired),
excluding in all cases, however, any securities with respect to which registration rights have
terminated pursuant to Section 6.8 of this Agreement.

“SEC” means the Securities and Exchange Commission.

“SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act, as amended, or
any successor thereto.

“SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act, as amended, or
any successor thereto.

“Securities Act” means the Securities Act of 1933, as amended.

“Selling Expenses” means all underwriting discounts and selling commissions applicable to the
sale of Registrable Securities, and fees and disbursements of counsel for any Stockholder, except
for the fees and disbursements of the selling Stockholders’ counsel borne and paid by the Company
as provided in Section 6.5.

“Subsidiary” means, with respect to any specified Person, any other Person of which a majority
of the outstanding voting securities or other voting equity interests are owned, directly or
indirectly, by such specified Person.

“Transfer” means, with respect to shares of the Company Capital Stock, any direct or indirect
sale, transfer, assignment, pledge, hypothecation, mortgage or other disposition thereof.

 

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ARTICLE II

INFORMATION RIGHTS

Section 2.1 Delivery of Financial Statements.

(a) The Company shall deliver to each Stockholder:

(i) as soon as practicable, but in any event within two business days after the
required date of delivery to the Company’s senior lender: (i) a balance sheet as of the end
of such year, (ii) statements of income and of cash flows for such year, and (iii) a
statement of stockholders’ equity as of the end of such year, all such financial statements
shall be prepared in accordance with GAAP and shall be audited and certified by independent
public accountants of nationally recognized standing selected by the Company, and shall set
forth in each case in comparative form the figures for the corresponding periods in the
previous fiscal year; notwithstanding the foregoing, the Company agrees to provide the
information required under this subsection (a)(i) for fiscal year end December 31, 2008 no
later than the earlier of (x) sixty (60) days after the end of such fiscal year of the
Company or (y) the date specified above, and

(ii) as soon as practicable (for each of the first three (3) quarters of each fiscal
year of the Company), but in any event within two business days after the required date of
delivery to the Company’s senior lender: unaudited statements of income and of cash flows
for each such fiscal quarter, and an unaudited balance sheet and a statement of
stockholders’ equity as of the end of each such fiscal quarter, and, in the case of the
second and third quarters, for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all prepared in accordance with GAAP (except that such financial
statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all
notes thereto that may be required in accordance with GAAP); and

(iii) with respect to the financial statements called for above in Sections 2.1
(a) and (b), an instrument executed by the chief financial officer and chief
executive officer of the Company certifying that such financial statements were true,
complete, and correct, prepared in accordance with GAAP consistently applied with prior
practice for earlier periods, and fairly present the financial condition of the Company and
its results of operation for the periods specified therein.

(b) If, for any period, the Company has any Subsidiary whose accounts are consolidated with
those of the Company, then in respect of such period the financial statements delivered pursuant to
the foregoing sections shall be the consolidated and consolidating financial statements of the
Company and all such consolidated Subsidiaries.

(c) If applicable, the Company will file on or before the required date all regular or
periodic reports (pursuant to the Exchange Act) with the SEC and will deliver to each Stockholder
promptly upon their becoming available one copy of each report, notice or proxy
statement sent by the Company to its stockholders generally, and of each regular or periodic
report (pursuant to the Exchange Act) and any registration statement, prospectus or written
communication, filed or otherwise furnished by the Company with or to (i) the SEC or (ii) any
securities exchange on which shares of Common Stock are listed.

 

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(d) Notwithstanding the foregoing, at the request of RB, the Company shall provide to RB, as
soon as practicable following such request, any additional financial information and/or statements
readily available to the Company (and/or not unreasonably burdensome to produce) that RB reasonably
determines in good faith is necessary or appropriate in connection with the preparation of RB’s
public filings. The Company agrees that upon receipt of any such request, it shall in good faith
use its best efforts to produce such information sufficiently in advance of any applicable filing
deadline of RB.

Section 2.2 Inspection. The Company shall permit each Stockholder, at the
Stockholder’s expense, to visit and inspect the Company’s properties; examine its books of account
and records; and discuss the Company’s affairs, finances, and accounts with its officers, during
normal business hours of the Company as may be reasonably requested by the Stockholder;
provided, however, that the Company shall not be obligated pursuant to this Section
2.2 to provide access to any information the disclosure of which would adversely affect the
attorney-client privilege between the Company and its counsel. Any such examination or audit
undertaken pursuant to this Section 2.2 shall be made only upon not less than two (2) days’
prior written notice to the Company.

Section 2.3 Termination of Information Rights. The covenants set forth in Sections
2.1 and 2.2 above shall terminate and be of no further force or effect (i) immediately
after the consummation of any initial underwritten public offering of the Company’s Common Stock
that results in the listing of such Common Stock on a national securities exchange (an “IPO”), or
(ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g)
or 15(d) of the Exchange Act, whichever event occurs first.

Section 2.4 Confidentiality. Each Stockholder will keep confidential and will not
disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any
non-public information of the Company obtained from the Company pursuant to the terms of this
Agreement (including notice of the Company’s intention to file a registration statement)
(“Confidential Information”), unless such Confidential Information (a) is known or becomes known to
the public in general (other than as a result of a breach of this Section 2.4 by such
Stockholder), (b) is or has been independently developed or conceived by the Stockholder without
use of the Company’s Confidential Information, or (c) is or has been made known or disclosed to the
Stockholder by a third party without a breach of any obligation of confidentiality such third party
may have to the Company; provided, however, that a Stockholder may disclose Confidential
Information (i) to its attorneys, accountants, consultants, and other professionals to the extent
necessary to obtain their services in connection with monitoring its investment in the Company;
(ii) to any prospective purchaser of any Registrable Securities from such Stockholder, if such
prospective purchaser agrees to be bound by the provisions of this Section 2.4; (iii) to
any existing or prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of
such Stockholder in the ordinary course of business, provided that such Stockholder
informs such Person that such information is confidential and directs such Person to maintain the
confidentiality of such information; or (iv) as may otherwise be required by law, provided
that the Stockholder promptly notifies the Company of such disclosure and takes reasonable steps to
minimize the extent of any such required disclosure.

 

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ARTICLE III

GOVERNANCE OF THE COMPANY

Section 3.1 Board of Directors. Each Stockholder shall vote, or cause to be voted,
all shares of voting Company Capital Stock now owned or hereafter acquired by such Stockholder, or
over which such Stockholder has voting control, from time to time and at all times, in whatever
manner as shall be necessary to ensure that the size of the Board shall be set and remain at seven
(7) directors; provided however, that upon the issuance of any Preferred Securities in accordance
with the terms of Section 5.1 hereof, the number of persons serving on the Board may be
increased to no more than nine (9) Directors.

Section 3.2 Board Composition.

(a) Election of Directors. Subject to Section 3.3 below and the provisions of the
License Agreement pertaining to the right of RB to designate one additional director during any
period in which royalties under such License Agreement are in arrears, which are incorporated by
reference herein, each Stockholder shall vote, or cause to be voted, all shares of voting Company
Capital Stock now owned or hereafter acquired by such Stockholder, or over which such Stockholder
has voting control, from time to time and at all times, in whatever manner as shall be necessary to
ensure that at each annual or special meeting of stockholders at which an election of directors is
held, and at any adjournment or postponement thereof, or pursuant to any written consent of the
stockholders, the following persons shall be elected to the Board: 

(i) Subject to the right of the holders of any Preferred Securities issued in
accordance with Section 5.1 to elect directors, five (5) Directors designated by the
Common Stockholders other than RB (the “Common Designees”), which individuals shall
initially include Richard Snow (“Snow”) and Eldridge Hanes (“Hanes”).

(ii) Two (2) Directors designated by RB (the “RB Designees”), which individuals shall
initially be Bruce G. Crain and Mario Ciampi.

(b) Failure to Designate a Board Member. In the absence of any designation from the
Persons or groups with the right to designate a director as specified above, the director
previously designated by them and then serving shall be reelected if still eligible to serve as
provided herein.

(c) Quorum and Voting. At all meetings of the Board, a majority of the total number
of Directors (whether present in person or by telephone or other means of telecommunication) shall
constitute a quorum for the transaction of business and, unless otherwise specified herein, or
otherwise provided by law, the act of the majority of the Directors shall be the act of the
Board. If a quorum shall not be present, the Directors present thereat may adjourn the
meeting from time to time, without notice, other than an announcement at the meeting, until a
quorum shall be present.

 

9

 

(d) Removal of Board Members. Each Stockholder also shall vote, or cause to be voted,
all shares of voting Company Capital Stock now owned or hereafter acquired by such Stockholder, or
over which such Stockholder has voting control, from time to time and at all times, in whatever
manner as shall be necessary to ensure that:

(i) no Director elected pursuant to subsection (a) above may be removed from office
unless (A) such removal is directed or approved by the affirmative vote of the Stockholders
entitled under subsection (a) to designate that director, or (B) to the extent such Director
is an employee of the Company, such Director’s employment with the Company has been
terminated for Cause, or (C) such removal is for cause in accordance with the DGCL;

(ii) any vacancies created by the resignation, removal or death of a Director elected
pursuant to subsection (a) above shall be filled pursuant to the provisions of this
Section 3.2; and

(iii) upon the request of any party entitled to designate a Director as provided in
subsection (a) above to remove such Director, such Director shall be removed and replaced in
accordance with the provisions of this Section 3.2.

All Stockholders shall execute any written consents required to perform the obligations of this
Agreement, and the Company shall at the request of any party entitled to designate Directors to
call a special meeting of stockholders for the purpose of electing Directors. In connection
therewith, the Company shall conduct a background check, at the Company’s expense, on all persons
proposed to become a member of the Board of Directors.

Section 3.3 Election of Directors by RB pursuant to the License Agreement.
Notwithstanding the foregoing, and in addition to the rights granted to RB pursuant to Section 3.2,
in the event the Company at any time fails to pay any royalty required under the License Agreement
pursuant to the terms thereof (a “Royalty Default”), during the continuance of any such Royalty
Default, pursuant to the terms of the License Agreement, RB shall have the right to appoint one of
the seven directors required under Section 3.1 above (the “Licensor Designee”), and each
Stockholder shall vote, or cause to be voted, all shares of voting Company Capital Stock now owned
or hereafter acquired by such Stockholder, or over which such Stockholder has voting control, as
shall be necessary to ensure that the Licensor Designee shall be elected to the Board, at the
request of RB, at all times during the continuance of a Royalty Default. Upon the curing of any
such Royalty Default by the Company, the right of RB to elect a Licensor Designee shall cease; and
thereafter, the members of the Board shall be elected in accordance with Section 3.2 above. At any
time during a Royalty Default, notwithstanding the provisions of Section 3.2(a)(i), the Common
Stockholders other than RB shall be entitled to designate one fewer Common Designees than the
number specified in Section 3.2(a)(i), and RB
shall be entitled to designate two (2) RB Designees and one (1) Licensor Designee. The provisions
of Section 3.2(b) and (d) will apply to any Licensor Designee.

 

10

 

Section 3.4 Dividend Restrictions. The Stockholders agree that the Company shall not
pay any dividends (other than dividends payable solely in Common Stock) with respect to its Common
Stock: (i) until such time as all amounts outstanding under the Seller Note shall have been paid in
full, (ii) during the existence of any Royalty Default, and (iii) if the Licensor under the License
Agreement has exercised its option to require the Licensee thereunder to purchase the Retained IP
under Section 2.3 thereof, during any period in which any portion of the purchase price therefor
remains unpaid.

Section 3.5 Board Meetings. The Stockholders and the Company agree that the Bylaws of
the Company shall provide for the following: (i) a minimum of four (4) meetings of the Board of
Directors which must actually be held annually, (ii) three (3) business days’ prior written notice
will be required for any meeting of the Board of Directors; and (iii) telephonic meetings of the
Board of Directors.

ARTICLE IV

TRANSFER OF SHARES

Section 4.1 Transfers by Stockholders.

(a) Limitations on Transfer. From and after the Effective Date, no Stockholder shall
Transfer, directly or indirectly, all or any portion of such Stockholder’s shares of Company
Capital Stock (whether owned on the date hereof or hereafter acquired) unless such transfer is a
Permitted Transfer or otherwise made in accordance with the provisions of this Article IV. Any
such Transfer (i) must be made pursuant to and in accordance with this Article IV and (ii) must be
made in compliance with the Securities Act and applicable state securities laws. No Transfer shall
be recognized by the Company, nor shall the Company be liable or responsible in respect of any
Transfer or transferee, until the requirements of this Article IV have been complied with.

(b) Notice of Transfer, Limitations, etc. Notwithstanding anything to the contrary
set forth in this Agreement:

(i) Each Stockholder agrees, prior to any Transfer of any shares of Company Capital
Stock to give written notice to the Company of such holder’s intention to affect such
Transfer and to comply in all other respects with the provisions of this Article IV. Each
such notice shall describe the manner and circumstances of the proposed Transfer and shall
be accompanied, if reasonably requested by the Company, by the written opinion, addressed to
the Company, of counsel for the holder of the shares of Company Capital Stock as to whether
in the opinion of such counsel (which counsel shall be reasonably satisfactory to the
Company) such proposed Transfer involves a transaction requiring registration of such shares
of Company Capital Stock under the Securities Act; provided, however, that no
opinion of counsel shall be required for any Transfer pursuant to SEC Rule 144 or an
effective registration statement under the Securities Act, provided
that the Company shall be provided with customary written representations relating to such
transaction.

 

11

 

(ii) If in the opinion of such counsel (if such opinion is required hereunder) the
proposed Transfer of the shares of Company Capital Stock may be effected without
registration under the Securities Act, the holder of the shares of Company Capital Stock
shall thereupon be entitled to Transfer the shares of Company Capital Stock in accordance
with the terms of the notice delivered by it to the Company to the extent such Transfer is
otherwise permitted under this Article IV.

(iii) No Transfer of any Stockholder’s shares of Company Capital Stock to any
transferee or assignee (other than a transferee or assignee that was already a Stockholder
immediately prior to such Transfer; or a Transfer pursuant to SEC Rule 144 or an effective
registration statement under the Securities Act), shall be effective until such transferee
or assignee executes and delivers to the Board of Directors a copy of this Agreement or a
counterpart hereof whereby such transferee or assignee agrees to be bound by the provisions
of this Agreement. Any Stockholder who is admitted as a Stockholder of the Company pursuant
to an effective Transfer consummated in accordance with this Article IV shall succeed to all
the rights and be subject to all the obligations of the transferring Stockholder hereunder
in respect of the interest as to which it was substituted. The terms “Stockholder” and
“Stockholders” used in this Agreement shall be deemed to apply to and include each
substituted and additional Stockholder admitted as a Stockholder to the Company pursuant to
this Article IV, and Schedule A shall be amended accordingly.

(c) Notwithstanding anything herein to the contrary, subject only to Sections 4.1(b) and 4.2,
and except for a Transfer in accordance with Section 4.4(c) or 4.5 (which shall be permitted
without limitation), RB shall be permitted to Transfer any shares of Company Capital Stock held by
it to any Person other than a direct competitor of the Company’s gift business upon the Company’s
approval, which shall not be unreasonably withheld or delayed (for purposes of clarity, the Company
may reasonably withhold its approval if the proposed RB transferee is a direct competitor of the
Company’s gift business).

Section 4.2 Right of First Offer.

(a) Transfers of Shares of Company Capital Stock. If any Stockholder (the “Offerer”)
proposes to make a sale, other than a Permitted Transfer or a Transfer pursuant to Section
4.4(a) or 4.5, of all or any portion of such Offerer’s shares of Company Capital Stock
(a “Proposed Transfer”) to one or more Persons then, prior to engaging in such Proposed Transfer,
the Offerer shall first comply with this Section 4.2.

(b) Notice. The Offerer shall give written notice (the “Offering Notice”) to each
other Common Stockholder, which Offering Notice shall set forth (i) the number of shares of Common
Stock that the Offerer desires to Transfer (the “Offered Shares”); (ii)) the proposed selling price
per share for such Offered Shares (the “Offer Price”); (iv) a scheduled closing date for the
Proposed Transfer (the “Scheduled Closing Date”) (which Scheduled Closing Date shall
in no event be less than forty five (45) days nor more than one hundred twenty (120) days
after the Offerer’s delivery of the Offering Notice) and (v) the other material terms and
conditions of such Proposed Transfer. Each such Offering Notice shall constitute an offer by the
Offerer to each other Common Stockholder (each a “ROFO Purchaser”) to sell to each ROFO Purchaser
the Offered Shares at the Offer Price per share.

 

12

 

(c) Action by Purchaser. Within thirty (30) days of receipt of an Offering Notice
(the “ROFO Period”), each ROFO Purchaser desiring to purchase all or any portion of the Offered
Shares shall deliver to the Offerer a written notice (a “ROFO Notice”) setting forth the number of
the Offered Shares that such ROFO Purchaser desires to purchase. Delivery of a ROFO Notice by a
ROFO Purchaser shall constitute an irrevocable and unconditional offer by such ROFO Purchaser to
purchase the number of Offered Shares set forth therein for the Offer Price per share in cash and
upon the other applicable terms and conditions set forth in the Offering Notice. Failure by a ROFO
Purchaser to deliver a ROFO Notice with respect to a Proposed Transfer prior to the expiration of
the applicable ROFO Period shall be regarded as a waiver by such ROFO Purchaser of its rights set
forth in this Section 4.2 with respect to such Proposed Transfer.

(d) Transfer of Offered Shares. In the event that, upon expiration of the ROFO
Period, the Offerer shall have received ROFO Notices which collectively offer to purchase all of
the Offered Shares, then the Offerer shall be obligated to Transfer to each ROFO Purchaser that has
delivered a ROFO Notice the number of Offered Shares set forth in each such ROFO Purchaser’s ROFO
Notice; provided that, in the event the Offerer shall have received ROFO Notices which
collectively offer to purchase more Offered Shares than the Offerer is offering to sell, then the
Offered Shares shall be allocated among the ROFO Purchasers, pro rata, in accordance with their
respective Ownership Percentage (as determined immediately prior to the relevant Proposed Transfer
and as determined without giving effect to any shares of Common Stock held by the Offerer in either
the numerator or denominator of the fraction set forth in the definition of “Ownership
Percentage”). The closing of any Transfer pursuant to this Section 4.2 shall be held at
the principal office of the Company at 11:00 a.m. local time on a Business Day chosen by the
Company which date shall be no later than the applicable Scheduled Closing Date; provided
that such closing may be held at such other time and place as the Offerer and the ROFO Purchasers
may agree. At such closing, the Offerer shall deliver such instruments to the ROFO Purchasers,
executed by it and in form and substance reasonably satisfactory to the ROFO Purchasers purchasing
the Offered Shares as shall be necessary to transfer, assign and convey the Offered Shares to such
purchasers, which Offered Shares shall be transferred free and clear of all liens or other
encumbrances (other than those imposed under applicable securities laws and this Agreement),
against payment of the aggregate Offer Price.

(e) Sale of Offered Shares to Third Party. In the event that, upon expiration of the
ROFO Period, the Offerer shall have not received ROFO Notices which collectively offer to purchase
all of the Offered Shares, then the Offerer shall have the right, subject to the provisions of
Section 4.3, for a period of one hundred twenty (120) days after the expiration of the ROFO
Period (the “Sale Period”) to enter into a binding agreement to sell or to sell all or any portion
of the Offered Shares to one or more Persons (herein “Proposed Purchasers”), and to Transfer such
Offered Shares to the Proposed Purchasers on or prior to the expiration of the Sale Period
(A) at a price no lower than the Offer Price per share, payable in cash at the closing and (B) on
terms in all material respects no more favorable to the Proposed Purchasers than those contained in
the Offering Notice.

 

13

 

(f) Price Below Offer Price.

(i) In the event that on or prior to the Scheduled Closing Date the Offerer receives
and desires to accept a bona fide offer from a bona fide potential purchaser which is more
favorable to the potential purchaser than contained in the Offering Notice (the “Revised
Offer Price”), the Offerer shall give a written notice (the “Revised Offering Notice”) to
each of the remaining Common Stockholders, which Revised Offering Notice shall set forth the
Revised Offer Price, which must be payable in cash at the closing of the sale, and other
material terms and conditions of such proposed sale. The Revised Offering Notice shall
constitute an irrevocable offer by the Offerer to sell the Offered Shares at the Revised
Offer Price per share. Within ten (10) days of receipt of a Revised Offering Notice (the
“Revised ROFO Period”), the remaining Stockholders may elect, in accordance with
Sections 4.2 (b), (c) and (d) above, to purchase all, but not less than all,
of the Offered Shares at the Revised Offer Price.

(ii) In the event that, upon expiration of the Revised ROFO Period, the Offerer shall
not have received ROFO Notices which collectively offer to purchase all of the Offered
Shares, then the Offerer shall be permitted to sell or to enter into a binding agreement to
sell all or any portion of the Offered Shares to the Proposed Purchasers, subject to the
provisions of Section 4.3, so long as the price and terms at which the Offered Shares are
actually sold to the Proposed Purchasers are no more favorable in all material respects than
those contained in the Revised Offering Notice and the closing of the sale to the Proposed
Purchasers occurs within thirty days following the expiration of the Revised ROFO Period.

(g) If the Offerer shall fail to consummate the Proposed Transfer as to all of the Offered
Shares on or prior to the later of the (i) expiration of the Sale Period or (ii) the expiration of
the permitted sale period described in (f)(ii) above, if applicable, the Offered Shares that have
not been sold shall again become subject to all of the restrictions of this Agreement, including,
without limitation, the restrictions on transfer set forth in this Section 4.2.

(h) The Company shall use commercially reasonable efforts to assist an Offerer and potential
purchasers of the Offered Shares by providing information about the Company, subject to the
execution of a confidentiality agreement in form and substance satisfactory to the Company by such
potential purchasers.

 

14

 

(i) Notwithstanding the foregoing, the provisions of this Section 4.2 shall be
inapplicable to Sale of the Company in accordance with Section 4.4(a) below.

Section 4.3 Tag Along Rights.

(a) Transfers by Common Stockholders. If one or more Common Stockholders other than
RB propose to sell at least 5% of the issued and outstanding shares of Common Stock (the “Selling
Stockholders”), other than a Permitted Transfer or a transaction that is subject to the provisions
of Section 4.4 (a “Tag Along Transfer”, and the shares of Common Stock so proposed to be
Transferred, the “Tag Shares”) to one or more Persons (the “Tag Purchasers”) then, after complying
with the provisions of Sections 4.2, if applicable, but prior to engaging in such Tag Along
Transfer, the Selling Stockholders shall first comply with this Section 4.3.

(b) Proposed Tag Notices. The Selling Stockholders shall give written notice (a
“Proposed Tag Notice”) to each other Common Stockholder (a “Tag Holder”), which Proposed Tag Notice
shall set forth (i) that the Selling Stockholders are offering the Tag Holder the opportunity to
participate in the Tag Along Transfer in the manner set forth in this Section 4.3; (ii) the
number of Tag Shares that the Selling Stockholders desire to Transfer in such Tag Along Transfer;
(iii) the consideration being offered by the Tag Purchasers per share for such Tag Shares (the “Tag
Price”); (iv) a description of any non-cash consideration being offered by the Tag Purchasers; (v)
any other material terms and conditions of the Tag Along Transfer (including, without limitation,
conditions precedent) and (vi) notice of the proposed closing date for such Tag Along Transfer,
which shall not be less than thirty (30) days following such notice. If the consideration offered
by the Tag Purchasers consists in whole or in part of consideration other than cash, the Selling
Stockholders will provide such information, to the extent reasonably available to the Selling
Stockholders, relating to such consideration as each of the Tag Holders may reasonably request in
order to evaluate such non-cash consideration.

(c) Tag Elections. Within thirty (30) days of receipt of a Proposed Tag Notice (the
“Tag Along Period”), each Tag Holder that desires to participate in such Tag Along Transfer shall
deliver to the Selling Stockholders and each other Tag Holder a written notice (a “Tag Along
Notice”) setting forth the number of shares of Common Stock that such Tag Holder desires to sell to
the Tag Purchasers in the Tag Along Transfer. Delivery of a Tag Along Notice by a Tag Holder (a
“Tag Along Participant”) shall constitute an irrevocable and unconditional offer by such Tag Along
Participant to the Tag Purchasers to sell to the Tag Purchasers the number of shares of Common
Stock set forth therein on the same terms and conditions as the Selling Stockholders as set forth
in the Proposed Tag Notice; provided that such Tag Along Participant shall not be obligated
to consummate such sale if the Selling Stockholders either fail to sell its Tag Shares or otherwise
deviate from the terms set forth in such Proposed Tag Notice.

(d) Right to Transfer. In the event that no Tag Holder delivers a Tag Along Notice
prior to the expiration of the Tag Along Period, the Selling Stockholders shall have the right to
sell all or any of the Tag Shares to the Tag Purchasers (i) at a price no lower than the Tag Price;
and (ii) on terms in all material respects no more favorable to the Selling Stockholders than those
contained in the Proposed Tag Notice; provided, however, that (A) in the event that the
consideration to be received by the Selling Stockholders from the Tag Purchasers in connection with
the Tag Along Transfer consists in whole or in part of consideration other than cash, in
determining whether such Tag Along Transfer complies with the requirement set forth in clause (i)
above, the Common Stockholders agree that the Fair Market Value of such non-cash consideration,
determined as set forth in the definition thereof, shall be binding upon the
Common Stockholders, and (B) such Tag Purchasers shall agree in writing with the Company and
the other Common Stockholders, as a condition to such Tag Along Transfer, to be bound by all of the
provisions of this Agreement to the same extent as the other parties are bound by this Agreement.
With respect to any proposed Tag Along Transfer, if the Selling Stockholders shall fail to
consummate a sale of all of the Tag Shares to the Tag Purchasers on or prior to the one hundred
eightieth (180th) day following the expiration of the Tag Along Period relating to such
Tag Along Transfer, any Tag Shares not so sold within such one hundred eighty (180) day period
shall again become subject to all of the restrictions of this Agreement, including, without
limitation, the restrictions on transfer set forth in this Section 4.3.

 

15

 

(e) Delivery of a Tag Along Notice. In the event that one or more Tag Along
Participants delivers a Tag Along Notice prior to the termination of the Tag Along Period, the
Selling Stockholders shall use all commercially reasonable efforts to cause the Tag Purchasers to
agree to acquire all of the shares of Common Stock desired to be sold by such Tag Along
Participants, as set forth in each such Tag Along Participant’s Tag Along Notice, for the same
consideration and upon the same terms and conditions as applicable to the Selling Stockholders, as
set forth in the Proposed Tag Notice.

(i) In the event that the Tag Purchasers agree to purchase all such shares of Common
Stock, (i) the Selling Stockholders shall be entitled to sell to the Tag Purchasers all of
the Tag Shares and (ii) each of the Tag Along Participants shall be entitled to sell to the
Tag Purchasers all of the shares of Common Stock identified on each such Tag Along
Participant’s Tag Along Notice, in each case in accordance with Section 4.3(f).

(ii) In the event that the Tag Purchaser is unwilling or unable to acquire all such
 shares of Common Stock proposed to be included in the Tag Along Transfer upon such terms,
such Tag Along Participants shall have the opportunity and right to sell to the Tag
Purchasers (upon the same terms and conditions as the Selling Stockholders) up to that
number of shares of Common Stock representing Common Stock at the time held by such Tag
Along Participant as shall equal the product of (i) a fraction, the numerator of which is
the number of shares of Common Stock owned by such Tag Along Participant as of the date of
such proposed Transfer and the denominator of which is the aggregate number of shares of
Common Stock owned as of the date of such Tag Along Notice by the Selling Stockholders and
by all Tag Along Participants so electing to sell Common Stock pursuant to this Section,
multiplied by (ii) the number of shares of Common Stock proposed to be transferred. The
amount of Tag Along Shares to be sold by the Selling Stockholders shall be reduced to the
extent necessary to provide for such sales of shares by Tag Along Participants, and the Tag
Along Participants shall be entitled to sell to the Tag Purchasers the number of shares of
Common Stock so allocated to such Person, in each case in accordance with Section
4.3(f), and any shares of Common Stock not sold to such Tag Purchasers shall remain
subject to all restrictions of this Agreement, including, without limitation, the provisions
of this Section 4.3.

 

16

 

(f) Closing. The closing of any Transfer pursuant to Section 4.3(e)(i) or
(ii) shall be held at the principal office of the Company at 11:00 a.m. local time on a
Business Day chosen by
the Selling Stockholders (upon at least five days notice to the other parties to the
transaction); provided that such closing may be held at such other time and place as the
parties to the transaction may agree. At such closing each Tag Along Participant shall sell its
portion of the shares of Common Stock allocated to it for the same consideration (including
non-cash consideration) and on the same terms and conditions as apply to the Tag Along Transfer by
the Selling Stockholders to the Tag Purchasers as set forth in the Proposed Tag Notice and shall
execute and deliver all documents and instruments which are necessary or desirable to effectuate
such sale. Any term or provision hereof to the contrary notwithstanding, a Tag Along Participant
shall only be required to make representations and warranties as to its title to the shares of
Common Stock being sold by it, and its power, authority and right to enter into the pertinent
transaction without contravention of Applicable Law, and no Tag Along Participant shall be
obligated in connection with any Tag Along Transfer to agree to indemnify the Tag Purchaser
thereunder with respect to representations and warranties other than its own, or (i) in an amount
in excess of the proceeds received or to be received by such Tag Along Participant in such Tag
Along Transfer or (ii) for any losses arising out of the willful misconduct or fraud of such Tag
Purchaser. For the avoidance of doubt, in the event that the Tag Purchasers have offered non-cash
consideration for the shares of Common Stock to be purchased by the Tag Purchasers in such Tag
Along Transfer, the Selling Stockholders and each Tag Along Participant shall be entitled to
receive the same cash and non-cash consideration per share, on a pro rata basis in the same
proportion.

Section 4.4 Drag Along Right.

(a) If at any time after the Effective Date, Stockholders holding a majority of the issued and
outstanding shares of Common Stock (the “Drag Stockholders”) desire to effect a sale of the Company
or all or substantially all of the Company’s assets in either case resulting in a Change of Control
of the Company, whether in a single transaction or a series of related transactions and whether by
means of merger, consolidation, or sale of stock, assets or otherwise (a “Sale of the Company”),
then, the Drag Stockholders desiring to effect such sale shall give written notice thereof to the
remaining Stockholders, not less than thirty (30) days prior to taking an action in connection
which such sale (the “Sale Consideration Period”). Following the Sale Consideration Period,
subject to Section 4.4(b), all Stockholders shall, promptly upon the request of the Drag
Stockholders, take all actions set forth below in this clause (a):

(i) consent to, approve, and, to the extent applicable, vote their shares of
voting Company Capital Stock in favor of the Sale of the Company, provided that it
shall be a condition of such consent that all Stockholders receive the same
consideration (in form, amount and proportion) per share of Common Stock to be
transferred in connection with the proposed Sale of the Company;

(ii) subject to paragraph (b) below, execute and deliver all documents,
instruments and consents which are necessary or desirable to effectuate such Sale of
the Company;

 

17

 

(iii) in the event that such Sale of the Company is structured as a merger,
consolidation or similar transaction, or a sale of all or substantially all of the
Company’s assets, waive any and all dissenters’ rights, appraisal rights or similar
rights in connection with such Sale of the Company; and

(iv) in the event that such Sale of the Company is structured as a sale of
 shares of Common Stock or a similar transaction, sell their shares of Common Stock
on the terms and conditions approved by and applicable to the Drag Stockholders.

(b) The rights and obligations of the Stockholders in connection with a Sale of the Company
are subject to the following conditions:

(i) all reasonable expenses incurred by the Company in connection with any Sale
of the Company shall be borne ratably by the Stockholders in accordance with the
proceeds received or to be received by such Stockholders, and all individual
expenses incurred by any Stockholder in connection with the Sale of the Company
shall be borne by such Stockholder; and

(ii) each Stockholder shall make representations and warranties as to its title
to the shares of Common Stock being sold and its power, authority, and right to
enter into the pertinent transaction without contravention of Applicable Law, and no
Stockholder shall be obligated in connection with any Sale of the Company to agree
to indemnify the purchaser thereunder for any representations and warranties other
than its own or (i) in an amount in excess of the proceeds received or to be
received by such Stockholder in such Sale of the Company or (ii) for any losses
arising out of the willful misconduct or fraud of such purchaser.

(iii) in connection with any Sale of the Company, no Stockholders shall be
required to agree to limit in any manner the conduct of its business, including, but
not limited to, any non-competition agreement, nor shall any Stockholder be required
to become subject to any continuing obligations except as provided in clause (ii)
above.

(c) In the event a Sale of the Company has not occurred within five years following the
Effective Date, and provided RB remains a Stockholder at that time, RB shall have the right to
effect a Sale of the Company, subject to compliance with Section 4.2 (other than paragraph (e)
thereof), in accordance with the provisions of this Section 4.4, and each of the other
Stockholders agree to take the actions required under Section 4.4(a) above as if such Sale
of the Company were being effected by Drag Stockholders.

(d) The Drag Stockholders (including RB in the case of a Sale of the Company by RB pursuant to
Section 4.4(c) above) agree that in exercising their rights under this Section 4.4, they shall use
all commercially reasonable efforts to realize the best possible price for the Company.

 

18

 

Section 4.5 Put by RB.

(a) During the 90-day period following the fifth anniversary of the date of this Agreement (a
“Put Event”), RB shall have the right (the “Put Option”), by delivery of a written notice to the
Company (the “Put Notice”), and without adherence to Sections 4.2 or 4.3, to cause the Company to
purchase, and the Company shall purchase, all of the Common Stock then owned by RB (the “Put
Securities”), at a price per share equal to the Applicable Share Price then in effect plus interest
at an annual rate of 5%, compounded annually from the Effective Date until the date of closing of
the Put Option (the “Put Price”), payable by wire transfer of immediately available federal funds
to an account specified by RB.

(b) The closing of the purchase of any Put Securities by the Company pursuant to this Section
4.5 shall take place at the principal office of the Company on such date within 10 Business Days
after the Put Notice is delivered to the Company as the Company shall specify to RB in writing. At
any such closing, the Company shall deliver the payment for the Put Securities in accordance with
paragraph (a) above against delivery of certificates and or other instruments representing,
together with stock or other appropriate powers duly endorsed with respect to, the Put Securities
specified in the Put Notice, free and clear of all claims, liens and encumbrances (other than
pursuant to securities laws or this Agreement).

Section 4.6 Pre-emptive Rights. 

(a) Issuances of Company Capital Stock

(i) Proposed Issuances. If the Company proposes to authorize, issue or sell any
Company Capital Stock, (a “Proposed Company Transfer”) to one or more Persons then, prior to
engaging in such Proposed Company Transfer, the Company shall first comply with this Section
4.6(a).

(ii) Notice. The Company shall give written notice (the “Company Notice”) to each
Stockholder, which Company Notice shall set forth (i) the number of shares of Company Capital Stock
that the Company desires to issue (the “Sale Shares”); (ii) the proposed selling price per share
for such Sale Shares (the “Sale Price”); (iv) a scheduled closing date for the Proposed Company
Transfer (the “Scheduled Company Closing Date”) (which Scheduled Company Closing Date shall in no
event be less than forty five (45) days nor more than one hundred twenty (120) days after the
Company’s delivery of the Company Notice) and (v) the other material terms and conditions of such
Proposed Company Transfer. Each such Company Notice shall constitute an offer by the Company to
each Stockholder (each a “ROFR Purchaser”) to sell to each ROFR Purchaser the Sale Shares at the
Sale Price per share.

(iii) Action by Purchaser. Within thirty (30) days of receipt of a Company Notice
(the “ROFR Period”), each ROFR Purchaser desiring to purchase all or any portion of the Sale Shares
shall deliver to the Company a written notice (a “ROFR Notice”) setting forth the number of the
Sale Shares that such ROFR Purchaser desires to purchase. Delivery of a ROFR Notice by a ROFR
Purchaser shall constitute an irrevocable and unconditional offer by such ROFR Purchaser to
purchase the number of Sale Shares set forth therein for the Sale Price per share in cash and upon
the other applicable terms and conditions set forth in the Company Notice. Failure by a ROFR
Purchaser to deliver a ROFR Notice with respect to a Proposed Company
Transfer prior to the expiration of the applicable ROFR Period shall be regarded as a waiver
by such ROFR Purchaser of its rights with respect to such Proposed Company Transfer.

 

19

 

(iv) Issuance of Sale Shares. In the event that, upon expiration of the ROFR Period,
the Company shall have received ROFR Notices which collectively offer to purchase all of the Sale
Shares, then the Company shall be obligated to issue to each ROFR Purchaser that has delivered a
ROFR Notice (an “Accepting Purchaser”) the number of Sale Shares set forth in each such Accepting
Purchaser’s ROFR Notice; provided that, in the event the Company shall have received ROFR
Notices which collectively offer to purchase more Sale Shares than the Company is offering to sell,
then the Sale Shares shall be allocated among the Accepting Purchasers, pro rata, in accordance
with their respective Ownership Percentage (as determined immediately prior to the relevant
Proposed Company Transfer). In the event the Company shall have received ROFR Notices which
collectively offer to purchase less Sale Shares than the Company is offering to sell, the Company
shall provide a notice of such event (the “Re-Offer Notice”) to each Accepting Purchaser (“Re-Offer
Purchasers”), specifying the aggregate number of shares of Sale Shares as to which elections to
purchase were not received. Each Re-Offer Purchaser shall have the right, within five business
days after the date the Re-Offer Notice is given, to elect to purchase (subject to the pro rata
adjustments set forth below) all, but not less than all, Sale Shares specified in the Re-Offer
Notice. Each Re-Offer Purchaser that desires to exercise such right to purchase additional Sale
Shares shall provide the Company with written notice (specifying the number of Sale Shares that it
elects to purchase pursuant to the Re-Offer Notice) within such five-day period; the Company shall
promptly provide copies of each such notice to the other Re-Offer Purchasers. If the aggregate
number of Sale Shares as to which notices of election to purchase are provided with respect to the
Re-Offer Notice exceeds the number of Sale Shares available, the right to purchase the Sale Shares
shall be allocated pro rata among the Re-Offer Purchasers. The closing of any issuance pursuant to
this Section 4.6 shall be held at the principal office of the Company at 11:00 a.m. local
time on a Business Day chosen by the Company which date shall be no later than the applicable
Scheduled Company Closing Date; provided that such closing may be held at such other time
and place as the Company and the Accepting Purchasers may agree. At such closing, the Company
shall deliver such instruments to the Accepting Purchasers, executed by it and in form and
substance reasonably satisfactory to the Accepting Purchasers purchasing the Sale Shares as shall
be necessary to issue the Sale Shares to such purchasers, which Sale Shares shall be transferred
free and clear of all liens or other encumbrances (other than those imposed under applicable
securities laws and this Agreement), against payment of the aggregate Sale Price.

(v) Issuance of Sale Shares to Third Party. In the event that, upon expiration of the
ROFR Period, the Company shall have not received ROFR Notices which collectively offer to purchase
all of the Sale Shares, then the Offerer shall have the right, for a period of one hundred twenty
(120) days after the expiration of the ROFR Period (the “Issuance Period”) to enter into a binding
agreement to sell or to sell all or any portion of the Sale Shares to one or more Persons (herein
“Proposed Purchasers”), and to issue such Sale Shares to the Proposed Purchasers on or prior to the
expiration of the Issuance Period (A) at a price no lower than the Sale Price per share, payable in
cash at the closing and (B) on terms in all material respects no more favorable to the Proposed
Purchasers than those contained in the Company Notice.

 

20

 

(vi) Price Below Sale Price.

(A) In the event that on or prior to the Scheduled Company Closing Date the Company
desires to issue Sale Shares to a potential purchaser on terms more favorable to the
potential purchaser than contained in the Company Notice (the “Revised Company Offer
Price”), the Company shall give a written notice (the “Revised Company Offering Notice”) to
the Stockholders, which Revised Company Offering Notice shall set forth the Revised Company
Offer Price, which must be payable in cash at the closing of the sale, and other material
terms and conditions of such proposed sale. The Revised Company Offering Notice shall
constitute an irrevocable offer by the Company to sell the Sale Shares at the Revised
Company Offer Price per share. Within ten (10) days of receipt of a Revised Company
Offering Notice (the “Revised ROFR Period”), the Stockholders may elect, in accordance with
Sections 4.6 (ii), (iii) and (iv) above, to purchase all, but not less than
all, of the Sale Shares at the Revised Company Offer Price.

(B) In the event that, upon expiration of the Revised ROFR Period, the Company shall
not have received ROFR Notices which collectively offer to purchase all of the Sale Shares,
then the Company shall be permitted to sell or to enter into a binding agreement to sell all
or any portion of the Sale Shares to the Proposed Purchasers, so long as the price and terms
at which the Sale Shares are actually sold to the Proposed Purchasers are no more favorable
in all material respects than those contained in the Revised Company Offering Notice and the
closing of the sale to the Proposed Purchasers occurs within thirty days following the
expiration of the Revised ROFR Period.

(vii) If the Company shall fail to consummate the Proposed Company Transfer as to all of the
Sale Shares on or prior to the later of the (i) expiration of the Issuance Period or (ii) the
expiration of the permitted sale period described in (vi)(B) above, if applicable, the Sale Shares
that have not been sold shall again become subject to the provisions of this Section 4.6.

(b) The provisions of this Section 4.6 shall not apply to a public offering registered under
the Securities Act.

Section 4.7 IPO or Change of Control of Encore Investors II, Inc.

(a) In the event of the initial sale of the common stock of EI in a public offering registered
under the Securities Act, RB shall have the option to exchange all of the Common Stock then owned
by RB for that number of shares of common stock of EI sufficient to provide RB a percentage
ownership of the issued and outstanding shares of EI common stock (determined after giving effect
to the conversion) equal to the percentage ownership of RB in the Company immediately prior to the
conversion (all shares so exchanged, the “Parent Shares”)1.
In the event that RB exercises this option, (i) all Parent Shares shall be entitled to the
rights and subject to the obligations set forth in Article VI hereof, treating all such Parent
Shares as Registrable Securities thereunder, and (ii) such Parent Shares: (x) shall not be subject
to the transfer restrictions set forth in Article IV, and (y) shall be subject to only such
transfer restrictions as may be thereafter applicable to all outstanding shares of common stock of
EI after the consummation of such public offering.

 

	 	 	 
	1	 	For example, if RB hold 20 shares of Common Stock in
the Company and EI holds 80 shares of Common Stock in the Company (for a total
of 100 shares of Common Stock outstanding), and there are 300 shares of EI
Common Stock outstanding immediately prior to the consummation of the exchange,
75 Parent Shares shall be issued to RB in exchange for its 20 shares of Common
Stock in the Company.

 

21

 

(b) In the event of a Change of Control of EI, on or prior to the consummation of such Change
of Control, RB shall have the option to exchange all of the Common Stock then owned by RB for an
equivalent amount of Parent Shares (determined as set forth in paragraph (a) above), such that RB
may participate in any such Change of Control on the same terms and on the same basis as all other
holders of common stock of EI.

(c) By execution of this Agreement, EI agrees not to change its capital structure as in
existence on the date hereof, and to act solely as a holding company, engaging in no activity other
than the holding, owning and/or disposing of shares of Common Stock pursuant to this Agreement.

ARTICLE V

ISSUANCE OF ADDITIONAL SHARES; ANTI-DILUTION PROTECTION AND REDEMPTION RIGHTS

Section 5.1 Additional Stockholders.

(a) Notwithstanding anything to the contrary contained herein, if the Company issues
additional shares of the Company Capital Stock after the date hereof to any Person other than a
Stockholder on the date hereof, any Person acquiring shares of Company Capital Stock shall become a
party to an agreement, satisfactory in form and substance to the Company’s Board of Directors,
requiring such Person to be bound by the provisions of Articles III and IV of this Agreement, as
appropriate, and Schedule A shall be amended to reflect the status of such Person as a Stockholder
hereunder.

(b) Except as provided below, and subject to the provisions of Section 5.1(a) and 5.3 hereof,
nothing herein shall prevent the Company from authorizing, issuing or selling any shares of any
series or class of Preferred Securities (or Convertible Securities); provided that (i) any such
issuance or sale shall be at a price and on such terms and conditions approved by a majority of the
Board of Directors and considered fair to the Company by an investment banking firm of nationally
recognized standing selected by the Company and reasonably acceptable to RB, and (ii) to the extent
the Company authorizes, issues or sells any shares of any series or class of Preferred Securities
other than Convertible Securities, such Preferred Securities shall be non-participating. The
Company shall retain, at its sole cost, any such investment banking firm(s). In addition, any
Preferred Securities and/or Convertible Securities authorized, issued or sold pursuant to this
paragraph (b) must provide for mandatory conversion or redemption in the event of a Sale of the
Company, as appropriate. Notwithstanding the foregoing, without the prior
written consent of RB, no Company Capital Stock may be issued or sold to EI or any Former Encore
Stockholder or any of their Affiliates.

 

22

 

Section 5.2 Approved Plans. Subject to the compliance by the Company with the
provisions of Article V, the Board of Directors is hereby authorized to cause the Company from time
to time to issue additional shares of Common Stock to employees of, or consultants or advisors to,
the Company or its Subsidiaries (each a “Recipient”) pursuant to equity compensation plans approved
by the Board of Directors (“Approved Plans”). Recipients under any Approved Plan will at no time
have the right to acquire an aggregate of more than ten percent (10%) of the then outstanding
shares of Common Stock (determined on a Fully-Diluted Outstanding basis).

Section 5.3 Anti-Dilution Protection.

(a) Notwithstanding the foregoing, in the event that the Company at any time after the second
anniversary of the date hereof, issues or sells: (i) additional shares of Common Stock, or (ii)
any Convertible Securities or rights to acquire Common Stock or Convertible Securities
(individually, an “Applicable Security”, and collectively, “Applicable Securities” for
consideration in an amount per Applicable Security less than the Current Market Price then in
effect (herein a “Dilutive Transaction”) prior to the consummation of an IPO, the number of shares
of Common Stock then held by RB and its permitted transferees will automatically be increased (and
the additional number of shares of Common Stock to which RB shall become entitled pursuant to this
Section 5.3 shall be issued to RB concurrently with the consummation of the applicable Dilutive
Transaction), to equal the number determined by dividing $6,000,000 by an “Adjusted Share Price”
that is determined upon the closing of the Dilutive Transaction in accordance with the following
formula:

Adjusted Share Price = A x [(P + N) / (P + F)], where

	 	 	 	 	 
	 

	 	A =
	 	the Applicable Share Price in effect immediately prior to the closing of the
Dilutive Transaction
	 
	 	 	 	 
	 

	 	P =
	 	the number of shares of Common Stock outstanding immediately prior to the
closing of the Dilutive Transaction
	 
	 	 	 	 
	 

	 	N =
	 	the number of shares of Common Stock which the net consideration, if any,
received by the Company in the Dilutive Transaction would purchase at the Current
Market Price per share of Common Stock in effect immediately prior to the closing of
the Dilutive Transaction
	 
	 	 	 	 
	 

	 	F =
	 	the number of additional shares of Common Stock (including the maximum number
of shares of Common Stock issuable upon the exchange, conversion or exercise of the
Applicable Securities, whether immediately or after the lapse of time or the occurrence
of any event) so issued or sold in the Dilutive Transaction

(b) The adjustments required by this Section 5.3 shall be made whenever and as often as any
specified event requiring an adjustment shall occur. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on the date of its
occurrence.

 

23

 

(c) To the extent that any Applicable Securities shall be issued for cash consideration, the
consideration received by the Company therefor shall be the amount of the cash received by the
Company therefor, or, if such Applicable Securities are offered by the Company for subscription,
the subscription price, or, if such Applicable Securities are sold to underwriters or dealers for
public offering without a subscription offering, the initial public offering price (in any such
case subtracting (x) any amounts paid or receivable for accrued interest or accrued dividends and
(y) any compensation, discounts or expenses paid or incurred by the Company for and in the
underwriting of, or otherwise in connection with, the issuance thereof). To the extent that such
issuance shall be for a consideration other than cash, then, except as herein otherwise expressly
provided, the amount of such consideration shall be deemed to be the Fair Market Value of such
consideration at the time of such issuance. In case any Applicable Securities shall be issued in
connection with any merger in which the Company issues any securities, the amount of consideration
therefor shall be deemed to be the Fair Market Value of such portion of the assets and business of
the nonsurviving corporation as such Board in its reasonable good faith judgment shall determine to
be attributable to such Applicable Securities. The consideration for any Applicable Securities
issuable pursuant to any warrants or other rights to subscribe for or purchase the same shall be
the consideration received by the Company for issuing such warrants or other rights plus the lowest
amount of additional consideration payable to the Company upon exercise of such warrants or other
rights. The consideration for any Applicable Securities issuable pursuant to the terms of any
convertible or exchangeable securities shall be the consideration received by the Company for
issuing such securities, plus the lowest amount of additional consideration, if any, payable to the
Company upon the exercise of the right of conversion or exchange in such securities. In case of
the issuance at any time of any Applicable Securities in payment or satisfaction of any dividends
upon any class of stock other than Common Stock, the Company shall be deemed to have issued such
Applicable Securities for no consideration.

(d) In computing adjustments under this Section 5.3, fractional interests in Common Stock
shall be taken into account to the nearest 1/1,000th of a share.

(e) Whenever the number of shares of Common Stock held by RB shall be adjusted pursuant to
this Section 5.3, the Company shall forthwith prepare and deliver to RB a certificate to be
executed by the chief financial officer of the Company setting forth, in reasonable detail, the
event requiring the adjustment and the method by which such adjustment was calculated (including a
description of the basis on which the Board of Directors of the Company determined the Fair Market
Value of any evidences of indebtedness, shares of stock, other securities or property or warrants
or other subscription or purchase rights), specifying the additional number of shares of Common
Stock to which RB has become entitled.

(f) Notwithstanding anything herein to the contrary, the rights provided to RB under this
Section 5.3 shall terminate on: (i) the date that the time period for RB to exercise the Put Option
in accordance with the provisions of Section 4.5(a) hereof expires without such exercise, or (ii)
the date that Encore pays the purchase price for the Put Option in full in accordance with the
provisions of Section 4.5(b) hereof.

 

24

 

Section 5.4 Optional Redemption of RB Common Stock. The Company shall have the option
to repurchase all or any portion of the Common Stock held by RB at any time until 5:00 p.m. E.S.T.
on the 90th day following the Effective Date in increments of $1,000,000, at a price equal to the
Applicable Share Price per share, by wire transfer of immediately available federal funds to an
account specified by RB. The Company shall exercise this option by giving at least 2 Business
Day’s prior written notice to RB.

ARTICLE VI

REGISTRATION RIGHTS

Any and all Transfers of Company Capital Stock permitted pursuant to Article IV of this
Agreement shall include the Transfer of the registration rights granted pursuant to this Article VI
attached to any Registrable Securities comprising such Company Capital Stock.

Section 6.1 Registrations.

(a) Demand Registration Rights. If at any time following one hundred eighty (180)
days after the effective date of the registration statement for the Company’s initial public
offering, the Company receives a request from a Stockholder or group of Stockholders in the
aggregate holding at least ten percent (10%) of the then outstanding Registrable Securities (the
“Registrant”) that the Company effect the registration of Registrable Securities, and specifying
the intended method or methods of disposition thereof, then the Company shall (i) within ten (10)
Business Days after the date such request is given by the Registrant, give notice thereof (the
“Demand Notice”) to all other Stockholders and (ii) as soon as practicable, and in any event within
forty-five (45) Business Days after the date such request is given, effect the registration under
the Securities Act of all Registrable Securities that the Registrant requested to be registered and
any additional Registrable Securities requested to be included in such registration by any other
Stockholder, as specified by notice given by each such Stockholder to the Company within ten (10)
Business Days of the date the Demand Notice is given, and in each case, subject to the limitations
set forth in this Article VI.

(b) Piggy-Back Registrations. If the Company at any time proposes to register any
Common Stock under the Securities Act in connection with the public offering of such securities
(other than in an Excluded Registration), whether on behalf of the Company or any Stockholder, the
Company shall, at such time, promptly, but in no event less than 20 Business Days prior to the
initial filing with the SEC of such registration statement, give each Stockholder notice of such
proposed registration, which notice shall set forth the intended method of disposition of the
securities proposed to be registered by the Company. Upon the request of each Stockholder given
within fifteen (15) Business Days after such notice is given by the Company, the Company
shall, subject to the provisions of Section 6.2, cause to be registered all of the
Registrable Securities that each such Stockholder has requested to be included in such
registration. The Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 6.1 before the effective date of such registration, whether or not
any Stockholder has elected to include Registrable Securities in such registration. The expenses
of such withdrawn registration shall be borne by the Company in accordance with Section
6.5.

 

25

 

(c) S-3 Registrations. At any time after the Company becomes eligible to file a
registration statement on Form S-3, a Stockholder or group of Stockholders in the aggregate holding
at least ten percent (10%) of the then outstanding Registrable Securities may request, in writing,
that the Company effect the registration on Form S-3 of Registrable Securities. Upon receipt of
any request for registration pursuant to this Section 6.1(c), the Company shall promptly
give written notice of such proposed registration to all other Stockholders. Such Stockholders
shall have the right, by giving written notice to the Company within thirty (30) days after the
Company provides its notice, to elect to have included in such registration such of their
Registrable Securities as such Stockholders may request in such notice of election, subject in the
case of an underwritten offering to the terms of Section 6.2. Thereupon, the Company
shall, as expeditiously as possible, use its commercially reasonable efforts to effect the
registration on Form S-3 of all Registrable Securities which the Company has been requested to so
register. Notwithstanding the foregoing, no Stockholder shall have the right to require the
Company to file a Registration Statement on Form S-3 under this Section 6.1(c) if such
Stockholder was given the opportunity to register all of such Stockholder’s Registrable Securities
on a Registration Statement filed by the Company pursuant to Section 6.1(a) above or this
Section 6.1(c) within the one hundred and twenty (120) days immediately preceding such
request and provided further that the Company may delay effecting a registration on Form
S-3 requested to be filed by a Stockholder hereunder for a period not to exceed seventy-five (75)
days if declaring such a registration statement effective would require the preparation by the
Company of financial statements other than those required to be filed by the Company pursuant to
its quarterly and annual period reporting requirements pursuant to the Exchange Act.

(d) IF RB holds less than 10% of the then outstanding Registrable Securities, it shall
nonetheless be entitled to require registration as contemplated by (a) and (c) above so long as it
holds at least 25% of the shares of Common Stock held by it on the date of this Agreement.

Section 6.2 Underwriting Requirements. In the case of any registration to be effected
pursuant to an underwritten public offering, the underwriter will be selected by the Company
provided that such underwriter is reasonably acceptable to a majority in interest of
Stockholders participating in such offering. In such event, the right of any Stockholder to
include such Stockholder’s Registrable Securities in such registration shall be conditioned upon
such Stockholder’s participation in such underwriting and the inclusion of such Stockholder’s
Registrable Securities in the underwriting to the extent provided herein. All Stockholders
proposing to distribute their securities through such underwriting shall (together with the Company
as provided in Section 6.3(v)) enter into an underwriting agreement in customary form with
the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this
Section 6.2, if the underwriter(s) advise(s) the Stockholders in writing that marketing
factors
require a limitation on the number of shares to be underwritten, then the number of
Registrable Securities that may be included in the underwriting shall be allocated among such
Stockholders in proportion (as nearly as practicable) to the number of Registrable Securities owned
by each Stockholder or in such other proportion as shall mutually be agreed to by all such selling
Stockholders; provided, however, that the number of Registrable Securities held by the
Stockholders to be included in such underwriting shall not be reduced unless all other securities
(other than those being offered by the Company) are first entirely excluded from the underwriting
and in no event will the number of Registrable Securities held by any Stockholder to be included in
such underwriting be reduced unless the number of Registrable Securities held by each other
Stockholder to be included in such underwriting is also proportionately reduced.

 

26

 

Section 6.3 Obligations of the Company. Whenever the Company intends to or is
required under this Article VI to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:

(a) prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use its commercially reasonable efforts to cause such registration statement to
become effective and keep such registration statement effective for a period of at least one
hundred eighty (180) days or, if earlier, until the distribution contemplated in the registration
statement has been completed; provided, however, that (i) such one hundred eighty (180) day
period shall be extended for a period of time equal to the period the Stockholder refrains, at the
request of an underwriter in any such offering, from selling any securities included in such
registration; and (ii) in the case of any registration of Registrable Securities on Form S-3 that
are intended to be offered on a continuous or delayed basis, subject to compliance with applicable
SEC rules, such one hundred eighty (180) day period shall be extended for up to three hundred
sixty-five (365) days, if necessary, to keep the registration statement effective until all such
Registrable Securities are sold; one legal counsel representing the holders of Registrable
Securities selected in accordance with Section 6.5 (“Legal Counsel”) shall be entitled to review
and comment on any such registration statement within a reasonable number of days prior to its
filing with the SEC;

(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 Securities Act in order to enable the disposition of all securities
covered by such registration statement; Legal Counsel shall be entitled to review and comment on
any such amendments, supplements and prospectuses within a reasonable number of days prior to their
respective filing with the SEC;

(c) furnish to the selling Stockholders such numbers of copies of a prospectus, including a
preliminary prospectus, and a summary prospectus, as required by the Securities Act, and such other
documents as the Stockholders may reasonably request in order to facilitate their disposition of
their Registrable Securities;

(d) use its commercially 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 selling Stockholders; provided
that the Company shall not be required to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is already subject to
service in such jurisdiction and except as may be required by the Securities Act, and do such other
reasonable acts and things as may be required of it to enable such holder to consummate the
disposition in such jurisdiction of the securities covered by such registration statement;

(e) in the event of any underwritten public offering, enter into and perform its obligations
under, and use its commercially reasonable efforts to satisfy the conditions to the obligations
under, an underwriting agreement, in usual and customary form, with the underwriter(s) of such
offering, and take such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities, including, but not limited to, making appropriate
members of management available for participation in roadshows and other marketing events;

 

27

 

(f) use its commercially reasonable efforts to cause all such Registrable Securities covered
by such registration statement to be listed on a national securities exchange or trading system and
each securities exchange and trading system (if any) on which similar securities issued by the
Company are then listed;

(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant
to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not
later than the effective date of such registration;

(h) promptly make available for inspection by the selling Stockholders, any underwriter(s)
participating in any disposition pursuant to such registration statement, and any attorney or
accountant or other agent retained by any such underwriter or selected by the selling Stockholders,
all financial and other records, pertinent corporate documents, and properties of the Company, and
cause the Company’s officers, directors, employees, attorneys and independent accountants to supply
all information reasonably requested by any such seller, underwriter, attorney, accountant, or
agent, in each case, as necessary or advisable to verify the accuracy of the information in such
registration statement and to conduct appropriate due diligence in connection therewith;

(i) notify each selling Stockholder, promptly after the Company receives notice thereof, of
the time when such registration statement has been declared effective or a supplement to any
prospectus forming a part of such registration statement has been filed;

(j) furnish, at the request of any holder requesting registration of Registrable Securities
pursuant to Section 6.1(a), on the date that such Registrable Securities are delivered to the
underwriters for sale pursuant to such registration or, if such Registrable Securities are not
being sold through underwriters, on the date that the registration statement with respect to such
shares becomes effective, (1) an opinion, dated such date, of the independent counsel representing
the Company for the purposes of such registration, addressed to the underwriters, if any, and if
such securities are not being sold through underwriters, then to the holders making such request,
stating that such registration statement has become effective under the Securities
Act and that (i) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Securities Act, (ii) the registration statement, the related
prospectus, and each amendment or supplement thereto, comply as to form in all material respects
with the requirements of the Securities Act and the applicable rules and regulations of the SEC
thereunder (except that such counsel need express no opinion as to financial statements contained
therein), (iii) the descriptions in the registration statement or the prospectus, or any amendment
or supplement thereto, of all legal matters and contracts and other legal documents or instruments
are accurate and

 

28

 

fairly present the information required to be shown, and (iv) such counsel does
not know of any legal or governmental proceedings, pending or contemplated, required to be
described in the registration statement or prospectus, or any amendment or supplement thereto,
which are not described as required, nor of any contracts or documents or instruments of a
character required to be described in the registration statement or prospectus, or any amendment or
supplement thereto, or to be filed as exhibits to the registration statement which are not
described and filed or incorporated by reference as required; such counsel shall also confirm that
he has no reason to believe that either the registration statement or the prospectus, or any
amendment or supplement thereto (other than financial material as to which such counsel need make
no statement) contains any 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, in light of the
circumstances in which made, not misleading; and (2) a letter dated such date, from the independent
certified public accountants of the Company, addressed to the underwriters, if any, and if such
securities are not being sold through underwriters, then to the holder making such request and, if
such accountants refuse to deliver such letter to such holder, then to the Company stating that
they are independent certified public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements and other financial data of the
Company included in the registration statement or the prospectus, or any amendment or supplement
thereto, comply as to form in all material respects with the applicable accounting requirements of
the Securities Act. Such opinion of counsel shall additionally cover such other legal matters with
respect to the registration in respect of which such opinion is being given as such holders of
Registrable Securities may reasonably request. Such letter from the independent certified public
accountants shall additionally cover such other financial matters (including information as to the
period ending not more than 5 Business Days prior to the date of such letter) with respect to the
registration in respect of which such letter is being given as the holders holding a majority of
the Registrable Securities being so registered may reasonably request;

(k) otherwise use its best efforts to comply with all applicable rules and regulations of the
SEC, and make available to its security holders, as soon as reasonably practicable, but not later
than 18 months after the effective date of the registration statement, an earnings statement
covering the period of at least 12 months beginning with the first full month after the effective
date of such registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act; and

(l) after such registration statement becomes effective, notify each selling Stockholder of
any request by the SEC that the Company amend or supplement such registration statement or
prospectus.

Section 6.4 Obligation to Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Article VI with respect to the
Registrable Securities of any selling Stockholder that such Stockholder shall furnish to the
Company such information regarding itself, the Registrable Securities held by it, and the intended
method of disposition of such securities as is reasonably required to effect the registration of
such Stockholder’s Registrable Securities.

 

29

 

Section 6.5 Expenses of Registration. All expenses (other than Selling Expenses)
incurred in connection with registrations, filings, or qualifications pursuant to Article VI,
including all registration, filing, and qualification fees; printers’ and accounting fees; fees and
disbursements of counsel for the Company; and the reasonable fees and disbursements of one counsel
for the selling Stockholders (selected by those holding a majority of the securities being
registered), expenses of any special audits incident to or required by any such registration and
expenses of complying with securities or blue sky laws, shall be borne and paid by the Company.
All Selling Expenses relating to Registrable Securities registered pursuant to this Article VI
shall be borne and paid by the Stockholders pro rata on the basis of the number of Registrable
Securities registered on their behalf.

Section 6.6 “Market Stand-off” Agreement. Each Stockholder hereby agrees that it will
not, without the prior written consent of the managing underwriter, during the period commencing on
the date of the final prospectus relating to any underwritten public offering of shares of Common
Stock, and ending on the date specified by the Company and the managing underwriter for such
offering (such period not to exceed one hundred eighty (180) days, which period may be extended
upon the request of the underwriter for an additional period of up to fifteen (15) days if the
Company issues or proposes to issue an earnings or other public release within fifteen (15) days of
the expiration of the 180-day lockup period), (i) lend; offer; pledge; sell; contract to sell; sell
any option or contract to purchase; purchase any option or contract to sell; grant any option,
right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any
shares of Company Capital Stock held immediately before the effective date of the registration
statement for such offering or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of such securities,
whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of
shares of Company Capital Stock or other securities, in cash, or otherwise. The foregoing
provisions of this Section 6.6 shall apply to any underwritten public offering conducted by
the Company, shall not apply to the sale of any shares to an underwriter pursuant to an
underwriting agreement, and shall be applicable to the Stockholders only if all Stockholders
individually owning more than five percent (5%) of the outstanding shares of the Company Capital
Stock or who are directors or executive officers of the Company are subject to the same
restrictions. Each Stockholder further agrees to execute such agreements as may be reasonably
requested by the underwriters in connection with such registration that are consistent with this
Section 6.6 or that are necessary to give further effect thereto.

Section 6.7 Indemnification and Contribution. (a) In the event of any registration
of any of Registrable Securities under the Securities Act pursuant to this Article VI, the Company
shall indemnify and hold harmless the holder of such Registrable Securities, such holder’s
directors and officers, and each other Person (including each underwriter) who participated in the
offering of such Registrable Securities and each other Person, if any, who controls such holder or
such participating Person within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such holder or any such director or officer or
participating Person or controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any alleged untrue statement of any material
fact contained, on the effective date thereof, in any registration

 

30

 

statement
under which such securities were registered under the Securities Act, any preliminary prospectus or final prospectus
contained therein, any free-writing prospectus, or any amendment or supplement thereto, or (ii) any
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse such holder or such director,
officer or participating Person or controlling Person for any legal or any other expenses
reasonably incurred by such holder or such director, officer or participating Person or controlling
Person in connection with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any alleged untrue
statement or alleged omission made in such registration statement, preliminary prospectus,
prospectus or amendment or supplement in reliance upon and in conformity with written information
furnished to the Company by such holder specifically for use therein. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of such holder or
such director, officer or participating Person or controlling Person, and shall survive the
transfer of such securities by such holder.

(b) Each holder of any Registrable Securities agrees to indemnify and hold harmless the
Company, its directors and officers and each other person, if any, who controls 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 or officer or any such Person may become subject
under the Securities Act or any other statute or at common law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon information
in writing provided to the Company by such holder of such Registrable Securities contained, on the
effective date thereof, in any registration statement under which securities were registered under
the Securities Act at the request of such holder, any preliminary prospectus or final prospectus
contained therein, any free-writing prospectus, or any amendment or supplement thereto.

(c) If the indemnification provided for in this Section 6.7 from the indemnifying party is
unavailable to an indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then 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, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue statement of a
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 parties, 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,
liabilities and expenses 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.

 

31

 

The parties hereto agree that it would not be just and equitable if contribution pursuant to this
Section 6.7(c) 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.

The benefits afforded by this Section 6.7 shall be in addition to, not in lieu of, those in any
relevant underwriting agreement.

Section 6.8 Termination of Registration Rights. The right of any Stockholder to
request inclusion of Registrable Securities in any registration pursuant to this Article VI shall
terminate when all of such Stockholder’s Registrable Securities can be sold without restriction
under SEC Rule 144 within any ninety (90) day period.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

Each Stockholder makes the following representations and warranties as of the date hereof,
with respect to itself only (and not with respect to any other Stockholder), to and for the benefit
of the Company:

(a) Organization; Authority. If the Stockholder is not a natural person, then it is duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization. If the Stockholder is a natural Person, then it has the legal capacity to enter
into, and to be bound by, this Agreement. The Stockholder has the requisite authority to enter
into and perform its obligations under this Agreement.

(b) Due Authorization; Binding Agreement. The execution, delivery and performance of this
Agreement by the Stockholder has been duly and validly authorized by all necessary action of the
Stockholder. This Agreement has been duly executed and delivered by the Stockholder, or an
authorized representative of the Stockholder, and assuming the due authorization, execution and
delivery by the other parties hereto, constitutes the legally valid and binding obligations of such
Stockholder, enforceable against such Stockholder in accordance with its terms; subject, however,
as to enforcement only, to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws at the time in effect affecting the enforceability of the rights of
creditors generally and general principles of equity (regardless of
whether considered in a proceeding at law or in equity). The execution, delivery and
performance of this Agreement by such Stockholder will not violate, or constitute a breach or
default (whether upon lapse of time and/or the occurrence of any act or event or otherwise) under,
the organizational documents of such Stockholder or any Applicable Law.

 

32

 

(c) Legal Proceedings. There is no litigation, arbitration or governmental investigation or
proceeding pending or, to the knowledge of such Stockholder, threatened against or affecting such
Stockholder that individually or when aggregated with one or more other such litigations,
arbitrations or governmental investigations or proceedings has or might reasonably be expected to
have a material adverse effect on such Stockholder’s ability to execute, deliver and perform this
Agreement.

(d) Consents and Approvals. No consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any Governmental Authority is required to be
made, obtained or given by the Stockholder in connection with the execution, delivery or
performance of this Agreement that has not been so made, obtained or given.

ARTICLE VIII

GENERAL PROVISIONS

Section 8.1 Amendment and Waiver. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance, and either retroactively or prospectively) only with the written consent of (i)  EI and
(ii) RB, or their permitted assigns. The Company shall give prompt notice of any amendment or
waiver hereunder to any party hereto whose consent was not required and that did not consent in
writing to such amendment or waiver. Any amendment or waiver effected in accordance with this
Section 8.1 shall be binding on all parties hereto, regardless of whether any such party has
consented thereto. No waivers of or exceptions to any term, condition, or provision of this
Agreement, in any one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such term, condition, or provision.

Section 8.2 Successors. This Agreement and all of the terms and provisions hereof
shall be binding upon and shall inure to the benefit of all Stockholders, and their legal
representatives, heirs and successors and permitted assigns.

Section 8.3 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in conformity with the laws of the State of Delaware without regard to any conflict of
laws thereof. Any action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any of the parties in the Chancery Court of
the State of Delaware (or if the Chancery Court does not have jurisdiction, any other state or
federal court within the State of Delaware), and each of the parties hereby irrevocably agrees to
the exclusive jurisdiction of such courts (and of the appropriate appellate courts) in any such
action or proceeding and waives any objection to venue laid therein. Process in any such action or
proceeding may be served on any party anywhere in the world, whether within or without the State of
Delaware.

Section 8.4 Waiver of Jury Trial. To the fullest extent permitted by law, each
Stockholder hereby waives trial by jury in any action, proceeding or counterclaim brought by a
Stockholder or the Company with respect to any matter whatsoever arising out of or in any way
connected with this Agreement, or the enforcement of any remedy under any statute with respect
thereto.

 

33

 

Section 8.5 Counterparts; Facsimile. This Agreement may be executed and delivered by
facsimile signature (including in Adobe Acrobat format) and in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

Section 8.6 Construction of Agreement. As used herein, the singular shall be deemed
to include the plural, and the plural shall be deemed to include the singular, and all pronouns
shall include the masculine, feminine and neuter, whenever the context and facts require such
construction. The headings, captions, titles and subtitles herein are inserted for convenience of
reference only and are to be ignored in any construction of the provisions hereof.

Section 8.7 Notices. All notices and other communications given or made pursuant to
this Agreement shall be in writing and shall be deemed effectively given when: (i) delivered by
hand to the party to be notified; (ii) when sent by electronic mail or facsimile with confirmation
of transmission by the transmitting equipment, (iii) three (3) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) Business
Day after the business day of deposit with a nationally recognized overnight courier, freight
prepaid, specifying next-day delivery, with written verification of receipt. All communications
shall be sent to the respective parties at their addresses as set forth on the Signature Page
hereto, or to the principal office of the Company and to the attention of the Chief Executive
Officer, in the case of the Company, or to such electronic mail address, facsimile number, or
address as subsequently modified by written notice given in accordance with this Section
8.7.

Section 8.8 Severability. In case any one or more of the provisions contained in this
Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement,
and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it
will be valid, legal, and enforceable to the maximum extent permitted by law.

Section 8.9 Aggregation of Stock. All shares of Registrable Securities held or
acquired by Affiliates of Stockholders shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement and such Affiliated persons may apportion such
rights as among themselves in any manner they deem appropriate.

Section 8.10 Entire Agreement. This Agreement (including any Schedules and Exhibits
hereto) the License and the Certificate constitute the full and entire understanding and agreement
among the parties with respect to the subject matter hereof, and any other written or oral
agreement relating to the subject matter hereof existing between the parties is expressly canceled.

 

34

 

Section 8.11 Assurances. Each of the Stockholders shall hereafter execute and deliver
such further instruments and do such further acts and things as may be required or useful to carry
out the intent and purpose of this Agreement and as are not inconsistent with the terms hereof.

Section 8.12 Parties in Interest. This Agreement shall be binding upon and inure to
the benefit of each party bound hereby, and nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature whatsoever
(including, without limitation, third party beneficiary rights) under or by reason of this
Agreement or by Applicable Law. Nothing in this Agreement is intended to relieve or discharge the
obligation of any third person to (or to confer any right of subrogation or action over against)
any party to this Agreement.

Section 8.13 Delays or Omissions. No delay or omission to exercise any right, power,
or remedy accruing to any party under this Agreement, upon any breach or default of any other party
under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or
nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach
or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded
to any party, shall be cumulative and not alternative.

[Remainder of Page Intentionally Left Blank]

 

35

 

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

	 	 	 	 	 
	 	THE RUSS COMPANIES, INC.

 	 
	 	By:  	/s/ Richard Snow
 	 
	 	 	Name:  	Richard Snow 	 
	 	 	Title:  	President 	 
	 
	 	Address for Notices:

111 Cloverleaf Drive

Winston-Salem, NC 27103

Attention: Richard Snow, CEO

Fax no.: 858-485-1233

RUSS BERRIE AND COMPANY, INC.

 	 
	 	By:  	/s/ Bruce G. Crain
 	 
	 	 	Name:  	Bruce G. Crain 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	Address for Notices:

111 Bauer Drive

Oakland, New Jersey 07436

Attention: Marc S. Goldfarb,

SVP and General Counsel

Fax no.: 201-405-7377

ENCORE INVESTORS II, INC.

 	 
	 	By:  	/s/ Richard Snow
 	 
	 	 	Name:  	Richard Snow 	 
	 	 	Title:  	President 	 
	 
	 	Address for Notices:

111 Cloverleaf Drive

Winston-Salem, NC 27103

Attention: Richard Snow, CEO

Fax no.: 858-485-1233
	 

Stockholders Agreement

 

36

 

SCHEDULE A

THE
RUSS COMPANIES, INC.

LIST OF STOCKHOLDERS

	 	 	 	 	 
	 	 	Number of shares of Company	 
	Name and Address of Stockholders	 	Capital Stock	 
	 
	 	 	 	 
	Encore Investors II, Inc.
	 	 	801	 
	Russ Berrie and Company, Inc.
	 	 	199

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