Document:

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                                                                    Exhibit 10.3

                               AMENDMENT NO. 1 TO

                             SUBSCRIPTION AGREEMENT

     THIS AMENDMENT NO. 1 TO THE SUBSCRIPTION AGREEMENT (this "Amendment") is
dated as of March 31, 2003, and amends that certain Subscription Agreement
("Subscription Agreement") by and among Argonaut Group, Inc. (the "Corporation")
and HCC Insurance Holdings, Inc. ("Investor") dated as of March 12, 2003.

                                    RECITALS

     WHEREAS, Seller and Purchaser wish to amend the Subscription Agreement.

     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties to this
Amendment hereby agree as follows:

                                   Article I.
                                   Amendments

     1.1. The Subscription Agreement is hereby amended by revising Section 1(a)
to read as follows:

          "a. Subscription. On the terms and subject to the conditions of this
          Agreement, the Investor hereby irrevocably subscribes for and the
          Corporation hereby irrevocably agrees to sell to Investor 2,453,310
          shares of Series A Mandatory Convertible Preferred Stock (the
          "Shares") of the Corporation (the terms of which are described in the
          form of Certificate of Designations, Preferences and Rights of the
          Series A Mandatory Convertible Preferred Stock of the Corporation,
          attached hereto as Exhibit A (the "Certificate of Designations") for a
          purchase price of $12.00 per share for an aggregate purchase price of
          Twenty Nine Million Four Hundred Thirty-Nine Thousand Seven Hundred
          Twenty Dollars ($29,439,720) payable in cash at the Closing. At any
          time prior to Closing, the Corporation shall have the right to require
          Investor, subject to Investor's receiving all necessary regulatory
          approvals, to increase its investment to $49.9 million and to acquire
          additional Shares at the per share purchase price provided herein. If
          Investor is unable to obtain all necessary regulatory approvals,
          Investor will not be required to purchase more than 2,453,310 Shares.
          Nothing contained in this Section 1(a) shall be deemed to modify,
          amend, waive or alter the Investor's conditions to Closing set forth
          in Section 4."

     1.2. The Subscription Agreement is hereby amended by revising Section 3(l)
to read as follows:

          "l. Right of Participation. If the Corporation authorizes or creates a
          new class or series of capital stock and proposes to issue such
          capital stock (which for the avoidance of doubt, shall not include
          additional shares of its current outstanding class of common stock in
          a capital-raising transaction) (a "New Stock Offering"), then the
          Corporation shall provide as much advance notice as reasonably
          practicable

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          (without jeopardizing the Corporation's ability to reasonably conduct
          the offering on advantageous terms, but in no event less than ten
          business days) to Investor of such issuance, which notice shall
          include the proposed amount of shares to be offered, the material
          terms of such shares and the price at which shares shall be offered
          (the "Stock Offering Notice"), so as to enable Investor the
          opportunity to purchase all or any portion of such securities in
          connection with such issuance. If the Corporation proposes to issue
          debt securities (other than bank debt) in a capital raising
          transaction (a "New Debt Offering"), the Corporation shall provide as
          much advance notice as reasonably practicable (without jeopardizing
          the Corporation's ability to reasonably conduct the offering on
          advantageous terms, but in no event less than three (3) business days)
          to Investor of such issuance, which notice shall include the proposed
          amount of debt securities to be offered and the proposed material
          terms of such debt securities (the "Debt Offering Notice"), so as to
          enable Investor the opportunity to purchase all or any portion of such
          debt securities in connection with such issuance. Investor may
          exercise the foregoing rights by delivering a notice of such exercise
          (the "Notice of Exercise") to the Corporation within two business days
          after the time notice of the New Stock Offering or the New Debt
          Offering is given to Investor by the Corporation. Such Notice of
          Exercise shall state the number of shares of capital stock or amount
          of debt securities, as the case may be, that Investor desires to
          purchase in such offering. Subject to the following provisions, the
          Corporation shall issue to Investor in such offering such number of
          shares of capital stock or amount of debt securities, as the case may
          be, to the Investor as specified in such Notice of Exercise. It is
          hereby understood that, pursuant to the Subscription Agreement, dated
          March 31, 2003, between the Corporation and Century Capital Partners
          III, L.P. ( "Century"), the Corporation has granted rights to Century
          to participate in New Stock Offerings and New Debt Offerings, and the
          Corporation is obligated to offer such securities to Century on the
          same basis as offered to Investor. In the event that Century and
          Investor deliver Notices of Exercise that would collectively obligate
          the Corporation to issue more capital stock or debt securities, as the
          case may be, than set forth in the Stock Offering Notice or Debt
          Offering Notice, as the case may be (the "Maximum Offering Size"),
          then (i) the Corporation shall not be obligated to issue more capital
          stock or debt securities than the Maximum Offering Size and (ii) the
          shares of capital stock or the amount of debt securities, as the case
          may be, shall be allocated pro rata among Century on the one hand and
          Investor on the other hand on the basis of the number of Shares owned
          by each of them (ownership of Common Stock into which Shares were
          converted shall not be considered for purposes of determining such
          number of Shares) until such time as (A) a party is allocated the
          amount of capital stock or debt securities specified in its Notice of
          Exercise, in which case, the remaining unallocated capital stock or
          debt securities that comprise the Maximum Offering Size will be
          allocated to the other party or (B) if clause (A) does not apply, the
          entire Maximum Offering Size is allocated among the parties. The
          Corporation's obligations in this section shall remain in effect as
          long as Investor holds, directly or indirectly, 30% or more of the
          originally issued Shares (and ownership of Common Stock into which
          such Shares were converted shall not be considered for purposes of
          such calculation). The rights set forth in this section shall only
          apply to a successor of Investor, or a purchaser or

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          other owner of a portion of Investor's Shares, if at the time of such
          successor's, owner's, or purchaser's acquisition, Investor, directly
          or indirectly, disposed of, and the successor, owner or purchaser,
          acquired, all of the then remaining Shares held by Investor directly
          or indirectly."

     1.3. The Subscription Agreement is hereby amended by adding a new Section
3(m) to read as follows:

          "m. Confidentiality Agreement. The Corporation acknowledges and
          agrees that effective as of the Closing the standstill provisions in
          the 4th full paragraph of page 2 beginning "You agree..." and ending
          "this paragraph." set forth in that certain Confidentiality Agreement
          dated February 14, 2003 between Investor and the Corporation are
          invalid and are of no further force or effect."

     1.4 The Subscription Agreement is hereby amended by revising Section 3(g)
to read as follows:

          "g. Repurchase. If by April 22, 2003 Century Capital Partners III,
          L.P. ("CCP") has not closed its subscription for shares of the Series
          A Preferred and become the owner of 500,000 shares of the Series A
          Preferred at an aggregate purchase price of $6,000,000 as agreed in
          the Subscription Agreement dated March 31, 2003, between CCP and the
          Corporation at Investor's election, shall repurchase shares of the
          Series A Preferred from Investor in an amount such that Investor's
          total ownership of the Corporation is equal to 9.99% (and no greater)
          of the issued and outstanding stock of the Corporation at the purchase
          price of $12.00 per share. "

                                   Article II.
                                  Miscellaneous

     2.1. Interpretation. This Amendment has been negotiated at arm's length and
between Persons sophisticated and knowledgeable in the matters dealt with in
this Amendment. Each party has been represented by experienced and knowledgeable
legal counsel. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Amendment against the party that has
drafted it is not applicable and is waived. The provisions in this Amendment
shall be interpreted in a reasonable manner to effect the purposes of the
parties, this Amendment and the Subscription Agreement.

     2.2. Counterparts. This Amendment may be executed simultaneously in
multiple counterparts, each of which shall be an original, but all of which
taken together shall constitute one and the same instrument. Execution and
delivery of this Amendment by exchange of facsimile copies bearing a facsimile
signature of a party hereto shall constitute a valid and binding execution and
delivery of this Amendment by such party. Such facsimile copies shall constitute
enforceable original documents.

     2.3. Governing Law; Jurisdiction. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might

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otherwise govern under applicable principles of conflicts of laws thereof.
Regardless of any present or future domicile or principal place of business of
the parties hereto, each party hereby irrevocably consents and agrees that any
claims or disputes between or among the parties hereto pertaining to this
Amendment or to any matter arising out of or related to this Amendment may be
brought in any federal court of competent jurisdiction in the State of Delaware.
By execution and delivery of this Amendment, each party submits and consents in
advance to such non-exclusive jurisdiction in any action or suit commenced in
any such court. Each party hereby waives any objection which it may have based
upon lack of personal jurisdiction, improper venue or forum non conveniens and
hereby consents to the granting of such legal or equitable relief as deemed
appropriate by such court and service of process in accordance with Delaware
law.

     2.4. Severability. In the event that any provision of this Amendment shall
be determined to be invalid or unenforceable under applicable law, all other
provisions of this Amendment shall continue in full force and effect unless such
invalidity or unenforceability causes substantial deviation from the underlying
intent of the parties expressed in this Amendment or unless the invalid or
unenforceable provisions comprise an integral part of, or are inseparable from,
the remainder of this Amendment. If this Amendment continues in full force and
effect as provided, the parties shall replace the invalid provision with a valid
provision which corresponds as far as possible to the spirit and purpose of the
invalid provision.

     2.5. No Other Amendments or Modification. Except as expressly modified and
amended by this Amendment, the Subscription Agreement shall remain in full force
and effect.

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.

                                         ARGONAUT GROUP, INC.

                                         By: /s/ Mark E. Watson III
                                             -----------------------------------
                                                 Name: Mark E. Watson III
                                                 Title: President & CEO

                                         HCC INSURANCE HOLDINGS, INC.

                                         By: /s/ Stephen L. Way
                                             -----------------------------------
                                                 Name: Stephen L. Way
                                                 Title: Chief Executive Officer

                                         HOUSTON CASUALTY COMPANY

                                         By: /s/ Edward H. Ellis, Jr.
                                             -----------------------------------
                                                 Name: Edward H. Ellis, Jr.
                                                 Title: Executive Vice President

                                         US SPECIALTY INSURANCE COMPANY

                                         By: /s/ Edward H. Ellis, Jr.
                                             -----------------------------------
                                                 Name: Edward H. Ellis, Jr.
                                                 Title: Executive Vice President

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                                         HCC LIFE INSURANCE COMPANY

                                         By: /s/ Edward H. Ellis, Jr.
                                             -----------------------------------
                                                 Name: Edward H. Ellis, Jr.
                                                 Title: Executive Vice President

                                         AVEMCO INSURANCE COMPANY

                                         By: /s/ Edward H. Ellis, Jr.
                                             -----------------------------------
                                                 Name: Edward H. Ellis, Jr.
                                                 Title: Executive Vice President

                                       6<PAGE>
                                                                    Exhibit 10.4

                          REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (the "Agreement") is entered into as of
as of March 31, 2003, among Argonaut Group Inc., a Delaware corporation (the
"Corporation"), and the other parties identified on the signature pages hereto
(individually, a "Holder" and collectively, the "Holders").

     This Agreement is made pursuant to those certain Subscription Agreements,
and any amendments thereto by and among the Corporation and the Holders (the
"Subscription Agreements") pursuant to which the Holders each subscribed for
shares of the Company's Series A Mandatory Convertible Preferred Stock, par
value $.10 per share. The execution of this Agreement is a condition to the
closing of the transactions contemplated by the Subscription Agreements.

     1. Definitions. As used herein, unless the context otherwise requires, the
following terms have the following meanings:

     "Closing Date" is defined in Section 2.1.

     "Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.

     "Common Stock" means the common stock of the Corporation, par value $0.10
per share.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

     "Initiating Holder" is defined in Section 2.2.

     "Permitted Assignee(s)" means an assignee or assignees permitted pursuant
to paragraph 7 of this Agreement. The terms "Holder" and "Holders" as used
herein shall include Permitted Assignee(s) except where the context explicitly
limits those terms to parties identified on the signature pages to this
Agreement.

     "Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.

     "Piggyback Notice" is defined in Section 2.3(a).

     "Piggyback Registration" is defined in Section 2.3(a).

     "Registration Expenses" means all expenses incident to the Corporation's
performance of or compliance with this Agreement, including, without limitation,
all registration, listing, filing and stock exchange and NASD fees, as
applicable, all fees and expenses of complying with securities or blue sky laws,
all word processing, duplicating and printing expenses (including

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expenses of printing certificates for Registrable Securities in a form eligible
for deposit with The Depository Trust Company), messenger and delivery expenses,
any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities (excluding underwriting discounts and commissions),
registrar and transfer agent's fees, the fees and disbursements of counsel for
the Corporation and of its independent public accountants, including the
expenses of "cold comfort" letters required by or incident to such performance
and compliance, reasonable fees and expenses of one counsel to the Holders
(selected by Holders representing at least 50% of the Registrable Securities
covered by each registration statement filed pursuant to Section 2 and the fees
and expenses of any other Persons retained by the Corporation).

     "Registrable Securities" means the Series A Preferred Stock, the Common
Stock issuable or issued upon conversion of the Series A Preferred Stock and any
capital stock issued or issuable with respect to such shares by way of stock
dividend, stock split or in connection with a combination of shares,
reclassification, recapitalization, merger, consolidation, reorganization or
otherwise; provided, however, that securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities are disposed of in accordance with such registration statement, (b)
sold as permitted by Rule 144 (or any successor provisions) under the Securities
Act, or (c) they cease to be outstanding.

     "Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

     "Selling Holder" is defined in Section 2.2.

     "Series A Preferred Stock" means the Series A Mandatory Convertible
Preferred Stock of the Corporation, par value $0.10 per share, the designation,
preferences and rights of which are set forth in that certain Certificate of
Designations, Preferences and Rights filed with the Secretary of the state of
Delaware on March    , 2003.
                  ---

     "Shelf Registration" is defined in Section 2.1.

     2. Registration Under Securities Act, Etc.

     2.1 Shelf Registration.

          The Corporation agrees to file as soon as reasonably practicable after
the closing of the transactions contemplated under the Subscription Agreements
(the "Closing Date") (but in no event later than 10 days after the effective
date of SEC Registration Statement No. 333-100321 and 60 days after the Closing
Date) a registration statement with respect to all of the Registrable Securities
on Form S-3 (or any other appropriate form) covering the offer and sale of the
Registrable Securities by the Holders or their Permitted Assignee(s) on a
delayed and continuous basis pursuant to Rule 415 under the Securities Act (the
"Shelf Registration"). The Corporation agrees to use its reasonable best efforts
to have the Shelf Registration declared effective no later than 120 days after
the Closing Date and to keep the Shelf Registration with

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respect to the Registrable Securities continuously effective, supplemented and
amended, as required by the Securities Act, in order to permit the prospectus
forming a part thereof to be usable under the Securities Act by the Holders and
their Permitted Assignees from the date the Shelf Registration is declared
effective by the Commission; provided, however, that the effectiveness of the
Shelf Registration may be terminated with respect to the Registrable Securities
if and to the extent that all of the Registrable Securities registered therein
cease to be Registrable Securities in accordance with the terms hereof. The
Corporation shall be deemed not to have used its reasonable best efforts to keep
the Shelf Registration effective if it voluntarily takes any action that would
result in a holder of Registrable Securities not being able to offer and sell
such Registrable Securities, unless (a) such action is required by applicable
law, or (b) upon the occurrence of any event that requires the Corporation to
make changes in any registration statement or the prospectus in order that such
registration statement or prospectus does not contain an untrue statement of a
material fact and does not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were made) not
misleading, such action is taken by the Corporation in good faith and for valid
business reasons and the Corporation thereafter promptly complies with the
requirements of Section 2.5(g) below if the Corporation has determined in good
faith that there are no material legal or commercial impediments in so doing.
Notwithstanding the forgoing, if the Corporation shall furnish to each holder of
Registrable Securities, a certificate signed by the President or chief financial
officer of the Corporation stating that in the good faith judgment of the Board
of Directors of the Corporation, it would be seriously detrimental to the
Corporation and its stockholders for such Shelf Registration to be amended or
supplemented and it is therefore in the best interests of the Corporation and
its stockholders to defer the amendment or supplement of such Shelf
Registration, the Corporation shall have the right to defer taking action with
respect to such amendment or supplement for a period of not more than 30
calendar days after furnishing such certificate to each holder of Registrable
Securities; provided, however, that the Corporation may not utilize this right
more than a total of 30 calendar days in any 12 month period.

     Notwithstanding any other provision of this Agreement to the contrary, the
Corporation shall cause (a) the Shelf Registration and the related prospectus
and any amendment or supplement thereto to comply in all material respects with
the applicable requirements of the Securities Act and the rules and regulations
of the Commission thereunder, (b) the Shelf Registration and any amendment
thereto not to contain, when it becomes effective, an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (c) any prospectus
forming a part of the Shelf Registration, and any amendment or supplement to
such prospectus, not to contain, as of the date of such prospectus or amendment
or supplement, any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Corporation will have no obligations
under this paragraph with respect to the Plan of Distribution as described in
any prospectus related to the Shelf Registration or as to any written
information furnished to the Corporation through an instrument specifically
stating that it is for use in the preparation of the Shelf Registration.

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     The Corporation agrees to pay all Registration Expenses in connection with
the Shelf Registration, whether or not it becomes effective.

     2.2 Demand Registration.

          (a) Request. At any time a Shelf Registration is not effective
pursuant to Section 2.1, upon the written request of one or more holders (each,
an "Initiating Holder") of the Registrable Securities representing not less than
40% of the Registrable Securities then outstanding that the Corporation effect
the registration under the Securities Act of all or part of such Initiating
Holders' Registrable Securities (which written request shall specify the
intended number of Registrable Securities to be disposed of by such holder(s)
and the intended method of disposition thereof), the Corporation will promptly
give written notice of such requested registration to all registered holders of
the Registrable Securities. The Corporation will use its reasonable best efforts
to effect the registration under the Securities Act, including by means of a
shelf registration pursuant to Rule 415 under the Securities Act or any similar
rule then in effect, if so requested in such request and the Corporation is then
eligible to use such registration, of the Registrable Securities which the
Corporation has been so requested to register by (i) such Initiating Holders and
(ii) all such other holders (such holders together with the Initiating Holders
are hereinafter referred to as the "Selling Holders") who by written request
(which written request shall specify the intended number of Registrable
Securities to be disposed of by such holder(s) and the intended method of
disposition thereof) given to the Corporation within 30 days after the giving of
such written notice by the Corporation request the Corporation to register all
or part of their Registrable Securities, all to the extent requisite to permit
the disposition of the Registrable Securities so to be registered; provided,
that the Corporation shall not be obligated to effect any registration
hereunder, if the aggregate offering price of the Registrable Securities to be
so registered is less than $2,000,000.

          (b) Registration of Other Securities. Whenever the Corporation shall
effect a registration pursuant to this Section 2.2 in connection with an
underwritten offering by one or more Selling Holders of Registrable Securities,
no securities other than Registrable Securities shall be included among the
securities covered by such registration unless the managing underwriter of such
offering shall have consented in writing to the inclusion of such other
securities. The Corporation shall not enter into an agreement providing for the
right to be included in any such offering with any of its security holders
(other than the Holders) unless such agreement shall be expressly subject to the
provisions of this Section 2.2(b).

          (c) Registration Statement Form. Registrations under this Section 2.2
shall be on such appropriate registration form of the Commission as shall be
selected by the Selling Holders of more than 50% of the Registrable Securities
to be so registered and that shall be reasonably acceptable to the Corporation.

          (d) Effective Registration Statement. A registration request pursuant
to this Section 2.2 shall not be deemed to have been effected (i) unless a
registration statement with respect thereon has become effective, (ii) if after
it has become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Selling Holders and has

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not thereafter become effective, (iii) if after it has become effective, such
registration statement is withdrawn or abandoned by the Selling Holders due to a
material adverse change to the Corporation and less than 50% of the Registrable
Securities included in such registration statement have been sold, or (iv) if
the conditions to closing specified in the underwriting agreement, if any,
entered into a connection with such registration are not satisfied or waived,
other than by reason of a failure on the part of the Selling Holders.

          (e) Selection of Underwriters. The underwriter or underwriters of each
underwritten offering of the Registrable Securities to be so registered shall be
selected by the Selling Holders of more than 50% of the Registrable Securities
to be so registered, subject to the Corporation's approval which will not be
unreasonably withheld, conditioned, or delayed.

          (f) Priority in Requested Registration. If the managing underwriter of
any underwritten offering shall advise the Corporation in writing (with a copy
to each Selling Holder of Registrable Securities requesting registration) that,
in its opinion, the number or amount of securities requested to be included in
such registration exceeds the number or amount which can be sold in such
offering within a price range acceptable to the Selling Holders of more than 50%
of the Registrable Securities requested to be included in such registration, the
Corporation will include in such registration only the number or amount of
Registrable Securities which the Corporation is so advised in writing (with a
copy to each Selling Holder of Registrable Securities requesting registration)
by the managing underwriter can be sold in such offering. Any such limitation of
Registrable Securities requested to be included in such registration shall be
applied pro rata among the Selling Holders requesting such registration on the
basis of the aggregate number or amount of the Registrable Securities of such
Selling Holders requested to be so registered.

          (g) Right to Postpone Registration. Notwithstanding the forgoing, if
the Corporation shall furnish to each Selling Holder of Registrable Securities,
a certificate signed by the President or chief financial officer of the
Corporation stating that in the good faith judgment of the Board of Directors of
the Corporation, it would be seriously detrimental to the Corporation and its
stockholders for such registration statement to be filed and it is therefore in
the best interests of the Corporation and its stockholders to defer the filing
of such registration statement, the Corporation shall have the right to defer
taking action with respect to such filing for a period of not more than 90
calendar days after receipt of the request of the Initiating Holders; provided,
however, that the Corporation may not utilize this right more than once in any
12 month period.

          (h) Limitations on Demand Registrations. Notwithstanding anything in
this Section 2.2 to the contrary, the Corporation will be required to effect, in
the aggregate, without regard to the holder of Registrable Securities making
such request, one registration pursuant to this Section 2.2 and in the event
that the Selling Holders are limited by the managing underwriter as to the
number or amount of Registrable Securities requested for registration by such
Selling Holders, then the Corporation shall be required to effect one additional
registration pursuant to this Section 2.2.

     2.3  Piggyback Registrations.

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          (a) Right to Piggyback. If at any time, the Corporation proposes to
file a registration statement under the Securities Act (except on Form S-4, Form
S-8, or any successor forms thereto) whether or not for its own account (other
than a registration effected pursuant to Section 2.2 hereof), then the
Corporation shall give written notice of such proposed filing to the holders of
Registrable Securities at least 15 days before the anticipated filing date (the
"Piggyback Notice"). The Piggyback Notice shall offer such holders the
opportunity to register such amount of Registrable Securities as each such
holder may request (a "Piggyback Registration"). Subject to Section 2.3(b)
hereof, upon the written request of any such holders of Registrable Securities
made within 10 days of the date of the Piggyback Notice (which request shall
specify the aggregate number of the Registrable Securities to be registered and
will also specify the intended method of disposition thereof), the Corporation
will use its reasonable best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Corporation has been so
requested to register by the holders thereof, to the extent required to permit
the public disposition (without limitation or restriction as to amount or number
of Registrable Securities to be sold) (in accordance with such intended methods
thereof) of the Registrable Securities to be so registered; provided, however,
that if any time after giving written notice of the proposed filing and prior to
the effective date of the registration statement filed in connection with such
registration the Corporation shall determine for any reason not to pursue the
effectiveness of the registration, the Corporation shall give written notice of
such determination to each holder of Registrable Securities and, thereupon,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith). The holders of Registrable
Securities shall be permitted to withdraw all or part of the Registrable
Securities from a Piggyback Registration at any time prior to the effective date
of such Piggyback Registration.

          (b) Priority on Piggyback Registrations. The Corporation shall cause
the managing underwriters of a proposed underwritten offering to permit holders
of Registrable Securities requested to be included in the registration for such
offering to include all such Registrable Securities on the same terms and
conditions as any similar securities, if any, of the Corporation or any selling
security holder included therein; provided, however, if the managing
underwriters of such underwritten offering determine in good faith that the
total number of securities that such holders, the Corporation, and any other
persons having rights to participate in such registration, propose to include in
such offering is such as to materially and adversely affect the success of such
offering, then (i) if such Piggyback Registration is a primary registration on
behalf of the Corporation, the securities to be offered shall be allocated as
follows: (A) first, up to the full number of securities to be offered by the
Corporation shall be included in such registration, (B) then to the extent an
amount of securities recommended by the managing underwriters remains available,
up to that amount of securities shall be included in such registration for the
account of the holders of the Registrable Securities (allocated among them pro
rata in proportion to their respective dollar amounts of securities owned to the
extent necessary to reduce the total number of securities to be included in such
offering to the amount recommended by such managing underwriters), and (C) to
the extent an amount of securities recommended by the managing underwriters
remains available, up to that amount of securities shall be included in such
registration for the account of all such other persons (allocated among

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them pro rata in proportion to the respective dollar amounts of securities owned
to the extent necessary to reduce the total number of securities to be included
in such offering to the amount recommended by such managing underwriters), and
(ii) if such Piggyback Registration is an underwritten secondary registration on
behalf of the holders of securities of the Corporation, the Corporation shall
include in such registration: (A) first, up to the full number of securities of
such persons exercising "demand" registration rights that in the opinion of such
underwriter can be sold (allocated among such holders as they may so determine),
and (B) second, the number of securities included in such registration pursuant
to this Section 2.3 in excess of the securities such persons exercising "demand"
registration rights proposed to sell that, in the opinion of such managing
underwriter, can be sold (allocated pro rata on the basis of aggregate dollar
amount of securities requested to be included therein).

          (c) No Liability for Delay. So long as the Corporation complies with
the terms and conditions of this Agreement and its obligations hereunder, the
Corporation shall not be held responsible for any delay in the filing or
processing of a registration statement which includes any Registrable Securities
nor for any delay in requesting the effectiveness of such registration statement
due to requests by holders of Registrable Securities pursuant to this Section
2.3.

     2.4  "Market Stand-Off" Agreement.

          (a) Restrictions on Public Sale by Holders of Registrable Securities.
Each holder of Registrable Securities which are covered by a registration
statement filed pursuant to Sections 2.2 or 2.3, hereof agrees, if requested
(pursuant to a timely written notice) by the managing underwriters in an
underwritten offering, not to effect any public sale or distribution of any of
the Corporation's securities, including a sale pursuant to Rule 144 (except as
part of such underwritten offering), during the period beginning five days prior
to, and ending 90 days after (or such shorter period as may be agreed to by any
managing underwriter of an underwritten offering effected pursuant to Sections
2.2 or 2.3), the closing date of each underwritten offering made pursuant to
such registration statement, provided that the Corporation shall have used its
reasonable best efforts to cause all officers, directors and holders of 5% or
more of the then outstanding equity securities of the Corporation to enter into
similar agreements.

          (b) Restrictions on Public Sale by the Corporation and Others. The
Corporation agrees (i) without the written consent of the managing underwriters
in an underwritten offering of Registrable Securities covered by a registration
statement filed pursuant to Sections 2.2 or 2.3 hereof, not to effect any public
or private sale or distribution of its securities, including a sale pursuant to
Regulation D under the Securities Act, during the period beginning five days
prior to, and ending 90 days after (or such shorter period as may be agreed to
by any managing underwriter of an underwritten offering effected pursuant to
Sections 2.2 or 2.3), the closing date of each underwritten offering made
pursuant to such registration statement (except on Forms S-4 or S-8, or any
successor forms to such forms) and (ii) to use its reasonable best efforts to
cause each holder of its securities purchased from the Corporation at any time
on or after the date of this Agreement (other than securities purchased in a
registered public offering) to agree not to effect any public sale or
distribution of any such securities during such periods, including a sale
pursuant to Rule 144.

                                        7

<PAGE>

     2.5 Registration Procedures. In connection with any registration of any
Registrable Securities under the Securities Act pursuant to Sections 2.1, 2.2
and 2.3, the Corporation will as expeditiously as possible:

          (a) prepare and (except as otherwise provided in Section 2.1) within
60 days after the end of the period within which requests for registration may
be given to the Corporation or in any event as soon thereafter as practicable
file with the Commission the requisite registration statement to effect such
registration and thereafter use its reasonable best efforts to cause such
registration statement to become effective; provided, however, that before
filing a registration statement or prospectus or any amendments or supplements
thereto required to be filed hereunder, the Corporation shall furnish, without
charge, to the holders of the Registrable Securities covered by such
registration statement, their counsel and the managing underwriters, if any,
copies of any such registration statement, prospectus, amendment or supplement,
and of all such documents proposed to be filed, which documents will be subject
to the review of such holders, their counsel and such underwriters, if any, and
the Corporation shall not file any such registration statement or prospectus or
any amendments or supplements thereto to which the holders of a majority of the
Registrable Securities covered by such registration statement, their counsel, or
the managing underwriters, if any, shall reasonably object, in writing, on a
timely basis;

          (b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
for such period as shall be required for the disposition of all of such
Registrable Securities in accordance with the intended methods of distribution
set forth in such registration statement which shall be to the reasonable
satisfaction of the holders of Registrable Securities covered by such
registration statement;

          (c) furnish to each holder of Registrable Securities covered by such
registration statement, such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents, as such holder may reasonably request;

          (d) (i) use its reasonable best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of such states of the
United States of America where an exemption is not available and as the holders
of Registrable Securities covered by such registration statement shall
reasonably request, (ii) keep such registration or qualification in effect for
so long as such registration statement remains in effect, and (iii) take any
other action which may be reasonably necessary or advisable to enable such
holders to consummate the disposition in such jurisdictions of the securities to
be sold by such holders, except that the Corporation shall not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any

                                        8

<PAGE>

jurisdiction wherein it would not but for the requirements of this subdivision
(d) be obligated to be so qualified or to consent to general service of process
in any such jurisdiction;

          (e) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities as
may be necessary in the opinion of counsel to the Corporation and counsel to the
holders of Registrable Securities covered by such registration statement to
enable such holders to consummate the disposition of such Registrable
Securities;

          (f) in the case of an underwritten offering, use its reasonable best
efforts to furnish to each such holder a signed counterpart of

               (i) an opinion of counsel for the Corporation which can and shall
     be reasonably satisfactory to the holders of a majority of the Registrable
     Securities to be sold, and

               (ii) a "comfort" letter signed by the independent public
     accountants who have certified the Corporation's financial statements
     included or incorporated by reference in such registration statement,

covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated);

          (g) (i) notify in writing each holder of Registrable Securities at any
time when a prospectus relating to Registrable Securities covered by such
registration statement is required to be delivered under the Securities Act, (A)
upon discovery that, or upon the happening of any event as a result of which,
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, in the light of the circumstances under which they were made,
and at the request of any such holder promptly prepare and furnish to it a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
the light of the circumstances under which they were made, (B) of any request by
the Commission or any other Federal or state governmental authority for
amendments or supplements to a registration statement or related prospectus
covering Registrable Securities or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement covering Registrable Securities or the
initiation of any proceeding for that purpose, or (D) of the receipt by the
Corporation of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of

                                        9

<PAGE>

any proceeding for such purpose and (ii) notify each holder of Registrable
Securities covered by such registration statement when each registration
statement or any amendment thereto has been filed with the Commission and when
each registration statement or any post-effective amendment thereto has become
effective;

          (h) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of any
of the Registrable Securities for sale in any jurisdiction, at the earliest
possible moment;

          (i) otherwise use it reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first full
calendar 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 promptly furnish to each such holder of Registrable
Securities covered by the registration statement a copy of any amendment or
supplement to such registration statement or prospectus;

          (j) permit any holder of Registrable Securities which might be deemed,
in the sole and exclusive judgment of such holder, to be an underwriter or a
controlling person of the Corporation to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Corporation and the Corporation's counsel in writing,
which in the reasonable judgment of such holder and its counsel and the
Corporations' counsel should be included;

          (k) enter into customary agreements (including an underwriting
agreement, if such proposed registration is to be an underwritten offering,
containing representations and warranties, conditions to closing and
indemnification and contribution obligations in customary form), use its
reasonable best efforts to obtain any necessary consents, including without
limitation any necessary consents of the Corporation's lenders, in connection
with any proposed registration and sale of Registrable Securities;

          (l) provide and cause to be maintained a transfer agent and registrar
(which, in each case, may be the Corporation) for all Registrable Securities
covered by such registration statement from and after a date not later than the
effective date of such registration;

          (m) use its reasonable best efforts to (i) list all Common Stock
covered by such registration statement on any national securities exchange on
which Registrable Securities of the same class and, if applicable, series,
covered by such registration statement are then listed, or (ii) seek the
authority for such Common Stock to be quoted on the NASDAQ or the National
Market System of NASDAQ if the securities so qualify; and

          (n) take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities.

                                       10

<PAGE>

          (o) The Corporation may require each holder of Registrable Securities
as to which any registration is being effected to furnish the Corporation such
information regarding such holder and the distribution of such securities as the
Corporation may from time to time reasonably request in writing. However, no
holders of Registrable Securities shall be required to make any representations
or warranties to or agreements with the Corporation or any underwriter other
than customary representations, warranties or agreements regarding such holder,
such holder's Registrable Securities and such holder's intended method of
distribution and any other representation required by law.

          (p) Each holder agrees that upon receipt of any written notice from
the Corporation of the happening of any event of the kind described in
subdivision (g)(i) of this Section 2.5, such holder will forthwith discontinue
such holder's disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by subdivision
(g)(i) of this Section 2.5 and, if so directed by the Corporation, will deliver
to the Corporation (at the Corporation's expense) all copies, other than
permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.

     2.6 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Corporation will give the holders of the
Registrable Securities registered under such registration statement, and their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and, to the
extent practicable, each amendment thereof or supplement thereto, and give each
of them such access to its books and records (to the extent customarily given to
the underwriters of the Corporation's securities), such opportunities to discuss
the business of the Corporation with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such holders', such underwriters' and such respective counsel
and accountants, to conduct a reasonable investigation within the meaning of the
Securities Act.

     2.7 Indemnification.

          (a) Indemnification by the Corporation. In the event of any
registration of any securities of the Corporation under the Securities Act, the
Corporation will, and hereby does, indemnify and hold harmless, in the case of
any registration statement filed pursuant to this Agreement, each seller of any
Registrable Securities covered by such registration statement, its directors,
officers, partners, members, agents and affiliates and each other Person, if
any, who controls such seller within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
seller or any such Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any

                                       11

<PAGE>

amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading, and, subject to Section 2.7(c), the Corporation will reimburse any
Holder, such seller, and each such director, officer, partner, member, agent, or
affiliate and controlling Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Corporation shall not
be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Corporation through an instrument duly executed by or on behalf of such seller
or such controlling person, as the case may be, specifically stating that it is
for use in the preparation thereof. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of any Holder,
such seller, or any such director, officer, partner, agent or affiliate or
controlling person and shall survive the transfer of such securities by such
seller.

          (b) Indemnification by the Selling Holders. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder will furnish to the Corporation in writing such
information and affidavits as the Corporation reasonably requests for use in
connection with any such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, and, to the extent permitted by law, each such holder hereby
agrees to indemnify and hold harmless the Corporation, its directors, officers
and agents, and each other Person, if any, who controls the Corporation within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller or any such Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement of any material fact or alleged untrue statement of any material fact
contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading,
and, subject to Section 2.7(c), each such Holders will reimburse the
Corporation, its director, officers and agents and each other controlling
Person, if any, for any legal or any other expenses reasonably incurred by them
in connection with investigating or defending any such loss, liability, action
or proceeding; but only to the extent that it is contained in any written
information or affidavit so furnished in writing by such holder; provided, that
the obligation to indemnify will be individual to each holder and will be
limited to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.

          (c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of written notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 2.7,
such indemnified party will, if a claim in respect

                                       12

<PAGE>

thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action, provided, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligation s under the preceding subdivisions of this
Section 2.7, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party shall be entitled to
participate in and, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with one
counsel reasonable satisfactory to such indemnified party and all other
indemnified parties that may be represented without conflict by one counsel, and
after written notice from the indemnifying party to such indemnified party and
all other indemnified parties that may be represented without conflict by one
counsel, and after written notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other that reasonable costs of investigation. No indemnifying
party shall be liable for any settlement of any action or proceeding effected
without its written consent. No indemnifying party shall, without the consent of
the indemnified party, consent to entry of any judgment or enter into any
settlement, which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

          (d) Contribution. If the indemnification provided for in this Section
2.7 shall for any reason be held by a court to be unavailable to an indemnified
party under subparagraph (a) or (b) hereof in respect of any loss, claim, damage
or liability, or any action in respect thereof, then, in lieu of the amount paid
or payable under subparagraph (a) or (b) hereof, the indemnified party and the
indemnifying party under subparagraph (a) or (b) hereof shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), (i) in
such proportion as is appropriate to reflect the relative fault of the
Corporation and the prospective sellers of Registrable Securities covered by the
registration statement which resulted in such loss, claims, damage or liability,
or action in respect thereof, with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received by
the Corporation and such prospective sellers from the offering of the securities
covered by such registration statement. 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. Such prospective sellers' obligations to
contribute as provided in this subparagraph (d) are several in proportion to the
relative value of their respective Registrable Securities covered by such
registration statement and not joint. In addition, no Person shall be obligated
to contribute hereunder any amounts in payment for any settlement of any action
or claim effected without such Person's consent, which consent shall not be
unreasonable withheld.

                                       13

<PAGE>

          (e) Other Indemnification. Indemnification and contribution similar to
that specified in the preceding subdivisions of this Section 2.7 (with
appropriate modifications) shall be given by the Corporation and each seller of
Registrable Securities with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of any
governmental authority other than the Securities Act.

          (f) Indemnification Payments. The indemnities and contribution
required by this Section 2.7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expenses, loss, damage or liability is incurred.

          (g) Underwriting Agreement. To the extent that the provisions
regarding indemnification and contribution contained in any underwriting
agreement entered into in connection with an underwritten public offering of
Registrable Securities are in conflict with the provisions of this Section 2.7,
the provisions contained in the underwriting agreement shall control.

     2.8 Certain Other Agreements.

          (a) No agreement granting any registration rights to any Person with
respect to any of the Corporation's securities currently remains in force and
effect. The Corporation will not hereafter enter into any agreement with respect
to its securities which is inconsistent with the rights granted to the holders
of Registrable Securities in this Agreement, including without limitation
entering into any agreement which would permit the registration of any
securities to the exclusion of any portion of the Registrable Securities, unless
such exclusion is first waived in writing by the holders of more than 50% or the
Registrable Securities then outstanding. Without limiting the generality of the
foregoing, any registration rights hereafter granted by the Corporation shall be
subordinate to the registration rights granted under this Agreement, and the
Corporation shall obtain the written agreement of each Person to whom such other
registration rights may be granted or may become available to such effect.

          (b) The Corporation will not effect or permit to occur, any
combination or subdivision of Registrable Securities, which would adversely
affect the ability of the holders of Registrable Securities to include such
Registrable Securities in any registration of its securities contemplated by
this Section 2 or the marketability of such Registrable Securities under any
such registration.

     2.9 Certain Rights If Named in a Registration Statement. If any statement
contained in a registration statement under the Securities Act refers to the
holder of Registrable Securities by name or otherwise as the holder of any
securities of the Corporation, then such holder shall have the right to require
(a) the insertion therein of language, in form and substance reasonably
satisfactory to such holder, to the effect that the holding by such holder of
such securities does not necessarily make such holder a "controlling person" of
the Corporation within the meaning of the Securities Act or (b) in the event
that such reference to such holder by name or otherwise is not required by the
Securities Act or any of the rules and regulations promulgated thereunder, the
deletion of the reference to such holder.

                                       14

<PAGE>

     2.10 Registration Expenses. The Corporation shall pay the Registration
Expenses in connection with any registration requested pursuant to this Section
2.

     3. Rule 144. The Corporation shall take all actions reasonably necessary to
enable the holders of Registrable Securities to sell such Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission including, without limiting the generality of the foregoing,
filing on a timely basis all reports required to be filed by the Exchange Act.
Upon the request of any holder of Registrable Securities, the Corporation will
deliver to such holder a written statement as to whether it has complied with
such requirements.

     4. Amendments and Waivers. This Agreement may be amended with the consent
of the Corporation and the Corporation may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, in each of the
foregoing cases only if the Corporation shall have obtained the written consent
to such amendment, action or omission to act, of the holder or holders of at
least a majority of each issue of the Registrable Securities at the time of such
consent. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of holders or Registrable Securities whose securities are being sold
pursuant to a registration statement and that does not directly or indirectly
affect the rights of other holders of Registrable Securities may be given by
holders of least a majority of the Registrable Securities being sold by such
holders pursuant to such Registration Statement, provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence.

     5. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Corporation, be treated as the holder of such Registrable Securities for
purposes of any request or other action by any holder or holders of Registrable
Securities pursuant to this Agreement or any determination of any number or
percentage of shared of Registrable Securities held by any holder or holders of
Registrable Securities contemplated by this Agreement. If the beneficial owner
of any Registrable Securities so elects, the Corporation may require assurances
reasonable satisfactory to it of such owner's beneficial ownership of such
Registrable Securities.

     6. Notices. All communications provided for hereunder shall be sent by
postage prepaid first-class mail, receipted courier service or facsimile
telecommunication, shall be deemed to be received three days after being sent,
or, if earlier, the date of actual receipt at the indicated address, and shall
be addressed as follows:

          (a) if to any Holder or any transferee of Registrable Securities,
addressed to such person(s) at such address as shown on stock ledger of the
Corporation;

                                       15

<PAGE>

          (b) if to the Corporation, addressed to it at its principal executive
officer or at such other address as the Corporation shall have furnished to each
holder of Registrable Securities at the time outstanding.

     7. Assignment; Calculation of Percentage Interests in Registrable
Securities.

          (a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns, including any Person to whom Registrable Securities are transferred;
provided that the securities so transferred continue to be considered
Registrable Securities in the hands of such Person.

          (b) For purposes of this Agreement, all references to a percentage of
the Registrable Securities shall be calculated based upon the number of such
shares held by those holders needed to be included for purposes of such
calculation.

     8. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.

     9. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by the internal
laws of the State of Delaware.

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

     11. Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.

     12. Entire Agreement. This Agreement embodies the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements relating to such subject matter.

     13. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

     14. Further Assurances. Each party to this Agreement hereby covenants and
agrees, without the necessity of any further consideration, to execute and
deliver any and all such further documents and take any and all such other
actions as may be necessary or appropriate to carry

                                       16

<PAGE>

out the intent and purposes of this Agreement and to consummate the transactions
contemplated hereby.

                            [signature pages follow]

                                       17

<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their respective officers thereunto duly authorized as of the date
first above written.

                                 CORPORATION:
                                 Argonaut Group, Inc.

                                 By: /s/ Mark E. Watson III
                                    --------------------------------------------
                                 Name: Mark E. Watson III
                                      ------------------------------------------
                                 Title: President & CEO
                                       -----------------------------------------

                                 Address for Notices:

                                 10101 Reunion Place, Suite 500
                                 San Antonio, Texas 78216
                                 Fax No.: 210-377-2637
                                 Telephone No.: 210-321-8400
                                 Attention: General Counsel

<PAGE>

                                 HOLDERS:
                                 Houston Casualty Company

                                 By: /s/ Edward H. Ellis, Jr.
                                     -------------------------------------------
                                 Name: Edward H. Ellis, Jr.
                                 Title: Executive Vice President

                                 Address for Notices:

                                 13403 Northwest Freeway
                                 Houston, Texas  77040
                                 Fax No.: 713-744-9648
                                 Telephone No.: 713-462-1000
                                 Attention: General Counsel

                                 US Specialty Insurance Company

                                 By: /s/ Edward H. Ellis, Jr.
                                     -------------------------------------------
                                 Name: Edward H. Ellis, Jr.
                                 Title: Executive Vice President

                                 Address for Notices:

                                 13403 Northwest Freeway
                                 Houston, Texas  77040
                                 Fax No.: 713-744-9648
                                 Telephone No.: 713-744-3700
                                 Attention: General Counsel

                                 HCC Life Insurance Company

                                 By: /s/ Edward H. Ellis, Jr.
                                     -------------------------------------------
                                 Name: Edward H. Ellis, Jr.
                                 Title: Executive Vice President

                                 Address for Notices:

                                 13403 Northwest Freeway
                                 Houston, Texas  77040
                                 Fax No.: 713-744-9648
                                 Telephone No.: 713-744-3700
                                 Attention: General Counsel

<PAGE>

                                 Avemco Insurance Company

                                 By: /s/ Edward H. Ellis, Jr.
                                     -------------------------------------------
                                 Name: Edward H. Ellis, Jr.
                                 Title: Executive Vice President

                                 Address for Notices:

                                 Frederick Municipal Airport
                                 411 Aviation Way
                                 Frederick, Maryland  21701
                                 Fax No.: 301-694-4242
                                 Telephone No.: 301 694-5700
                                 Attention: General Counsel

<PAGE>

                                 Century Capital Partners III, L.P.

                                 By: CCP Capital III, L.P., its general partner

                                 By:  CCP Capital III, Inc., its general partner

                                 By: /s/ Craig Eisenacher
                                     -------------------------------------------
                                 Name: Craig Eisenacher
                                 Title: Managing Director

                                 Address for Notices:

                                 Century Capital Management, Inc.
                                 1 Liberty Square
                                 Boston, MA 02109
                                 Attention: Steven Alfano, Chief Fin'l Officer
                                 Facsimile: 617-542-9398

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