Document:

TERMINATION AGREEMENT AND GENERAL RELEASE

 

EXHIBIT 10.11

THOMAS M. BEGEL

TERMINATION AGREEMENT AND GENERAL RELEASE

     This Termination Agreement and General Release (this “Agreement”) is made
by and between Thomas M. Begel (“Executive”) and Transportation Technologies
Industries, Inc., a Delaware corporation (the “Company”),
as of August 2,
2004 (the “Effective Date”). Executive and the Company may be referred to
collectively herein as the “Parties.”

     WHEREAS, Executive and the Company are parties to that certain Employment
Agreement dated July 1, 1999, as amended by that certain First Amendment to
Employment Agreement dated March 9, 2000 (together the “Employment Agreement”);

     WHEREAS, the parties agree that as of the earlier of (a) the consummation
of the IPO and (b) August 15, 2004, Executive’s active employment as Chief
Executive Officer of the Company shall terminate (the “Active Employment End
Date”); and

     WHEREAS, Executive and the Company agree that the Parties desire to reach
a mutually satisfactory separation arrangement relating to Executive’s
severance and termination of employment with the Company.

     In consideration of the mutual promises contained in this Agreement, the
Company and Executive agree as follows:

     1. As
of the Active Employment End Date, Executive shall no longer perform
services as an employee of the Company.

     2. Executive shall resign as Chairman of the Company’s Board of Directors
as of the earlier of (a) the date of the next meeting of the Company’s Board of
Directors following the date of this Agreement and (b) December 31, 2004.

     3. Executive and the Company further agree as follows:

	 	(a)	 	The Company shall pay Executive his full base
salary through the Active Employment End Date at the rate in
effect at the time of the Notice of Termination (as such term
is defined in the Employment Agreement). Executive shall not,
however, accrue or receive any paid time off pay after the
Active Employment End Date.

 

 

	 	(b)	 	The Company shall pay Executive any unpaid
amounts in connection with any reimbursement for Executive’s
reasonable travel and entertainment expenses and other
out-of-pocket business expenses incurred by Executive in
fulfilling his duties and responsibilities as an employee of
the Company prior to the Active Employment End Date, including
all expenses of travel and living while away from home on
business or at the request of and in the service of the
Company, provided that such expenses were incurred in
accordance with the policies and procedures established by the
Company.
	 
	 	(c)	 	The Company shall pay Executive any vested
accrued benefits under any other compensation plan or program
of the Company, if any, at the time such payments are payable
to Executive under the terms of such plan.
	 
	 	(d)	 	The Company shall pay Executive ten (10%) per
cent of the aggregate bonus amount that the Company is paying
to members of management upon the consummation of the
Company’s initial public offering (the “IPO”).

     4. (a) In addition to the salary and benefits provided for in Paragraph 3
above, following the Active Employment End Date, the Company shall, at its sole
expense, provide continued medical and dental insurance benefits to Executive,
Executive’s Spouse (as such term is defined in the Employment Agreement) and
Executive’s dependents substantially similar to those provided to them
immediately prior to the Active Employment End Date or, if more favorable to
Executive, those provided to them on the Effective Date (in this case, as such
term is defined in the Employment Agreement), in either case until the later of
the death of Executive or the death of Executive’s Spouse. The provision of
continued medical and dental benefits under this Paragraph 4 should in all
other respects be in accordance with Section 5(d) of the Employment Agreement.

	 	(b)	 	Following the Active Employment End Date, the
Company shall, at its own cost, continue Executive for a period of three (3) years in all life and other
employee “welfare” benefit plans and programs (including, without limitation,
all qualified, non-qualified and supplemental retirement and welfare benefit
plans) in which Executive was entitled to participate immediately prior to the
Active Employment End Date, provided that Executive’s continued participation
is permitted under the terms and provisions of such plans and programs as in
effect on the Active Employment End Date. In the event that Executive’s
participation in any such plan or program is barred, the Company shall arrange
to provide Executive with benefits substantially similar to those which
Executive would otherwise have been entitled to receive under such plans and
programs from which his continued participation is barred.

     5. Executive shall automatically receive a lump sum payment of
$2,700,000.00 at the earlier of (a) the consummation of the IPO and (b) in the
case the IPO is not consummated (i) one-half of such amount on the Effective
Date and (ii) one-half of such amount no later than October 2, 2004.

     6. Only in the event of the consummation of the IPO, Executive shall
receive:

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	 	(a)	 	approximately 76,244 shares (or the equivalent
value of shares depending on the price of the Company’s common
stock in effect at the time of the consummation of the IPO) of
the Company’s common stock issued by the Company to Executive,
which amount shall be determined at the time of the
consummation of the IPO and which shares shall be fully vested
and unrestricted, and
	 
	 	(b)	 	options to purchase shares of the Company’s
common stock representing 0.75% of the Company’s fully diluted
equity at the price in effect at the time of the consummation
of the IPO, which shares shall be fully vested and
unrestricted.

     7. The Company shall, at its own cost, continue to provide Executive for a
period of three (3) years following the Active Employment End Date with the
other benefits and perquisites provided to Executive immediately prior to the
Active Employment Date pursuant to Section 5(e) of the Employment Agreement.

     8. It is understood and agreed by the Parties that only the payments made
to Executive through his Active Employment End Date shall be considered benefit
earnings for applicable benefit plans of the Company. Any other monies paid to
Executive pursuant to this Agreement shall not constitute earnings for benefit
plan purposes. It is further understood and agreed by the Parties that no
portion of any payments made to Executive for periods after the Active
Employment End Date may be contributed to the Company’s 401k plan nor will any
matching contributions under the Company’s 401k plan be made after the Active
Employment End Date

     9. Executive agrees:

	 	(a)	 	to cooperate with and assist the Company whenever
reasonably possible, so that all Executive’s duties,
responsibilities and pending matters can be transferred in an
orderly way;
	 
	 	(b)	 	to return all Company materials that may have
been issued to Executive, including, but not limited to,
books, credit cards, cash advances, and to file an outstanding
final expense report;
	 
	 	(c)	 	not to use or to disclose, either directly or
indirectly, to anyone not connected with the Company any
confidential information or trade secrets which Executive
obtained during the term of his employment with the Company;
provided, however, that the confidential information shall not
include any information required to be disclosed by law or
readily ascertainable from public information; and
	 
	 	(d)	 	not to make any copies for use outside of the
Company of any client lists or any memoranda, books, records
or documents which contain confidential information or trade
secrets belonging to the Company.

     10. In return for the consideration and other promises by the Company
described in this Agreement, Executive for himself and his heirs, executors,
and assigns, hereby releases and forever discharges the Company, and any
predecessor, successor, parent, affiliate, or subsidiary company of

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the Company, their present and former officers, directors, employees,
agents, representatives, legal representatives, attorneys, accountants,
successors and assigns, and any and all employee benefit plans of the Company,
including current and former trustees and administrators of such employee
benefit plans, from all claims, demands, and actions of any nature, known or
unknown, that he may have, including, but not limited to, claims that in any
manner relate to, arise out of or involve any aspect of his employment with the
Company or its affiliates, and the termination of that employment, as well as
his status as a securityholder of the Company or any affiliate or subsidiary
company of the Company, including, but not limited to, any rights or claims
under the Federal Family and Medical Leave Act, 29 U.S.C. §2601 et seq.;
Federal Age Discrimination in Employment Act, 29 U.S.C. §621 et seq.; Federal
Civil Rights Act of 1964, as amended, 42 U.S.C., §2000e, et seq.; Federal Civil
Rights Act of 1991; Federal Vocational Rehabilitation Act, 29 U.S.C. §701, et
seq.; Federal Americans with Disabilities Act, 42 U.S.C. §12101, et seq.;
Executive Order 11246; the Civil Rights Act of 1866, as reenacted, 42 U.S.C.
§1981; the Fair Labor Standards Act of 1938, as amended; the Employee
Retirement Income Security Act of 1974, as amended; and any and all other
municipal, state, and/or federal statutory, executive order or constitutional
provisions pertaining to an employment relationship or prohibiting
discrimination. This release and waiver also specifically includes, but is not
limited to, any claims in the nature of tort or contract claims, including
specifically but not limited to any claim of wrongful discharge, breach of
contract, promissory estoppel, intentional or negligent infliction of emotional
distress, interference with contract, libel, slander, breach of covenant of
good faith and fair dealing, or other such claims, including, but not limited
to, those arising out of or involving any aspect of his employment with the
Company or under the Employment Agreement as well as his status as a
securityholder of the Company or any affiliate or subsidiary company of the
Company. This release includes any and all claims concerning attorney fees,
costs, and any and all other expenses related to the claims released herein.
Provided, however, that his release and waiver shall not apply to (a) any
rights which, by law, may not be waived, (b) rights and claims which arise from
acts or events occurring after the Effective Date or (c) claims for breach of
this Agreement. Executive also specifically covenants that he will not bring
suit or file any charge, grievance or complaint of any nature in relation to
any claim or right waived herein.

     11. Following the Active Employment End Date, the Company and Executive
agree not to make any statements, in writing or otherwise, that disparage the
reputation or character of the other, including the Company’s affiliates,
subsidiaries, divisions and directors, officers, employees or shareholders, at
any time for any reason whatsoever, except that nothing in this Paragraph 11
shall prohibit the Company or Executive from giving truthful testimony in any
litigation, administrative or arbitration proceeding either between the Company
and Executive or in connection with which the Company or Executive is required
by law to give testimony.

     12. Executive understands and agrees that, if he should attempt to
prosecute claims waived in Paragraph 10 above in a court or other forum and if
he is allowed to do so despite the release and waiver of such claims stated in
this Agreement, to the extent permissible under applicable law, he immediately
forfeits any right to the consideration listed in Paragraphs 3 (other than that
paid through the Active Employment End Date), 4, 5 and 6 above, and to all
other promises of the Company in this Agreement, and he must return and/or take
such other steps as are necessary to reimburse the Company for all expenses,
costs and losses of any nature, incurred in providing the consideration and to
divest himself of any benefits realized by him as a result of his receipt of
the consideration. To the extent permissible under applicable law, Executive
must do so immediately upon receipt of a written demand from the Company, and
his failure to do so shall be grounds for a stay of his prosecution of the
claim until such time as he has complied fully.

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     13. The entry into this Agreement by the Parties is not and shall not be
construed to be an admission of any act, practice or policy by the Company in
violation of any statute, common law duty, constitution or administrative rule
or regulation. Further, this Agreement shall not constitute evidence of any
such proscribed or wrongful act, practice or policy by the Company.

     14. The Parties agree that this Agreement shall not be tendered or
admissible as evidence in any proceeding by either Party for any purpose,
except that this Agreement may be offered as evidence in a proceeding involving
one or both of the Parties in which this Agreement or any part of this
Agreement an alleged breach of this Agreement, the enforcement of this
Agreement, and/or the validity of any term of this Agreement is at issue.

     15. Except as may be required by applicable law or the disclosure rules of
applicable securities law or the Nasdaq National Market relating to the
Company, the Company and Executive shall refrain from disclosing to any person
or entity the terms and conditions of this Agreement. Executive may, however,
disclose this Agreement to Executive’s immediate family, legal counsel and tax
advisor, as necessary, provided that they are instructed and agree not to
disclose the terms and conditions to anyone, and the Company may disclose to
its personnel on a need-to-know basis for purposes of their job function or
expert advice. Executive understands and agrees that the Company may include
the terms of this Agreement in its proxy statement, and may file this Agreement
as an exhibit to any public filing if required by applicable law and rules and
regulations.

     16. The Company advises Executive to consult with an attorney before
signing this Agreement.

     17. Executive acknowledges the adequacy and sufficiency of the
consideration for his promises set forth in this Agreement. Executive is
estopped from raising and hereby expressly waives any defense regarding the
receipt and/or legal sufficiency of the consideration provided under this
Agreement.

     18. Executive hereby acknowledges his understanding that, had he wished to
do so, he could have taken up to twenty-one (21) days to consider this
Agreement, that he has read this Agreement and understands its terms and
significance, and that he has executed this Agreement voluntarily and with full
knowledge of its effect, having carefully read and considered all terms of this
Agreement and, if he has chosen to consult with an attorney, having had all
terms and their significance fully explained to him by his attorney.

     19. Executive hereby certifies his understanding that he may revoke this
Agreement, as it applies to him, within seven (7) days following execution of
this Agreement and that this Agreement, as it applies to him, shall not become
effective or enforceable until that revocation period has expired. He also
understands that, should he revoke this Agreement within the seven-day period,
this Agreement, as it applies to him, would be voided in its entirety.

     20. This Agreement and all the rights of Executive hereunder shall be
binding upon the Parties and shall inure to the benefit of and be enforceable
by Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should
die while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided for herein,
shall be paid in accordance with the terms of this Agreement to Executive’s
devisee, legatee or other designee or, if there be no such designee, to
Executive’s estate. There are no promises, terms, conditions or obligations
other than

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those contained herein; and this contract shall supersede all previous
communications, representations or agreements, either oral or written, between
the Parties, including (except as otherwise expressly provided herein) the
Employment Agreement.

     21. There may be no modification of this Agreement, except in writing,
executed with the same formalities as this Agreement.

     22. All options to purchase stock of the Company held by Executive which
were unvested on the date of execution of this Agreement shall vest at the time
Executive resigns as Chairman of the Company’s Board of Directors.

     23. Notwithstanding any provision in this Agreement to the contrary,
Sections 9, 10, 13 and 19 of the Employment Agreement shall survive in
accordance with their terms.

     24. All items provided for herein shall be net of applicable income and
employment taxes required to be withheld therefrom. Except as otherwise
provided in the Employment Agreement, Executive agrees and understands that
Executive is responsible for paying all applicable income tax in respect of the
payments, benefits and perquisites provided under or in connection with this
Agreement.

     25. Following the Active Employment End Date, the Company shall continue
Executive’s D&O insurance and related indemnification at a level consistent
with that being provided to all other directors of the Company as long as
Executive is a director of the Company. The Company shall also provide
Executive with D&O insurance and related indemnification for claims or
threatened, pending or completed actions, suits or proceedings, and appeals in
such actions, suits or proceedings, that arise after the time Executive is a
director of the Company as long as such claims, actions, suite or proceedings
arose by reason of the fact that Executive was an employee or director of the
Company.

     26. Notices, demands and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered, if delivered personally, or (unless otherwise specified) mailed by
United States certified or registered mail, return receipt requested, postage
prepaid, and when received if delivered otherwise, addressed as follows:

     If to Executive:

Thomas M. Begel

c/o Transportation Technologies Industries, Inc.

980 North Michigan Avenue

Suite 1000

Chicago, Illinois 60611

     With a copy to:

Winston & Strawn LLP

35 West Wacker Drive

Chicago, Illinois 60601

Attn: Robert F. Wall, Esq.

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     If to the Company:

Transportation Technologies Industries, Inc.

980 North Michigan Avenue

Suite 1000

Chicago, Illinois 60611

Attn: Secretary

     With a copy to:

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

Attn: Roger Meltzer, Esq.

or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

     27. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware without regard
to its conflicts of law principles.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed
this Agreement as of the Effective Date:

	 	 	 
	Executive	 	
TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
	/s/ Thomas M. Begel

Thomas M. Begel	 	
/s/ Andrew M. Weller

Name:  Andrew M. Weller

Title:  President

-8-FORM OF SERIES C PREFERRED STOCK EXCHANGE AGRMNT

 

Exhibit 10.14

[FORM OF]

SERIES A PREFERRED STOCK

EXCHANGE AGREEMENT

     THIS SERIES A PREFERRED STOCK EXCHANGE AGREEMENT (this “Agreement”), dated
as of August    , 2004, is by and between Transportation Technologies
Industries, Inc., a Delaware corporation (the “Company”), and each of the
holders of the Company’s Series A Preferred Stock listed on Schedule I hereto
(each, a “Holder” and collectively, the “Holders”).

W I T N E S S E T H :

     WHEREAS,
on August [17], 2004, the Company will issue an aggregate of [     ]
shares of its common stock, par value $0.01 per share (the “Common
Shares”), in an initial public offering (the “IPO”);

     WHEREAS, each Holder owns the number of shares of Series A Preferred Stock
of the Company set forth opposite its name on Schedule I hereto (the “Preferred
Shares”), in each case representing the aggregate liquidation preference
applicable to each Holder’s Preferred Shares, which shall be determined in
accordance with the Certificate of Designations for the Preferred Shares and
the stockholders’ agreement (as amended) of the Company (the “Exchange Value”);

     WHEREAS, substantially concurrently with the consummation of the IPO and
following the 100,000-for-one reverse split of the Common Shares, each Holder
and the Company has proposed to exchange such Holder’s Preferred Shares for the
number of the Common Shares obtained by dividing the Exchange Value of such
Holder’s Preferred Shares by the price at which the Common Shares are offered
to the public pursuant to the IPO (the “IPO Price”) (such number of Common
Shares, the “Exchange Amount”); and

     WHEREAS, the parties intend each of the exchanges to be effected
hereunder to qualify
as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the
Internal Revenue Code of 1986, as amended (a “Recapitalization”).

     NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and promises herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1. Exchange.

     1.1 Exchange. Each Holder shall acquire from the
Company at the Closing (as de
fined below), and the Company shall issue and deliver to each Holder, upon the
terms and subject to the conditions set forth in this Agreement, the number of
Common Shares equal to the Exchange Amount applicable to such Holder in
exchange for the number of Preferred Shares owned by such Holder, issuable upon
the date of the Closing. Each Holder shall grant, convey, transfer and deliver
to the Company, upon the terms and subject to the conditions set forth in this
Agreement, all right, title and interest in and to such Holder’s Preferred
Shares as of the date of the Closing.

     1.1. Sole Consideration. The sole consideration to be issued by the
Company to each Holder in exchange for each Holder’s Preferred Shares is the
number of Common Shares equal to the Exchange Amount; provided the Company
shall not be required to issue fractions of Common Shares upon

 

 

exchange of each Holder’s Preferred Shares and each Holder shall not be
entitled to receive any consideration whatsoever in respect of any such
fractions of Common Shares otherwise issuable.

     1.2. Plan of Reorganization. This Agreement constitutes a “plan of
reorganization” within the meaning of Treasury Regulation Section 1.368-2(g).
Unless otherwise required by law (including the good faith resolution of an
audit), each party hereto shall treat each exchange of Preferred Shares for
Common Shares to which it is a party as a Recapitalization for all income tax
purposes.

     2. The Closing. The closing (the “Closing”) of the exchange of each
Holder’s Preferred Shares for Common Shares shall take place at the offices of
Cahill Gordon & Reindel LLP, located at 80 Pine Street, New York, New York
10005, or its designated agent, at 8:00 AM Eastern Standard Time on August
[17], 2004, or such later time and date as the Company and the Holders may
agree. At the Closing, the Company shall deliver to each Holder a certificate,
in the name of such Holder, evidencing the acquisition by such Holder of the
Common Shares issuable to such Holder. Simultaneously at the Closing, each
Holder shall deliver to the Company the Holder’s Preferred Shares, together
with any reasonably requested instruments of transfer duly endorsed in blank.
Each Holder understands that the Company intends to promptly deliver such
Holder’s Preferred Shares to the transfer agent for the Preferred Shares (the
“Transfer Agent”) for cancellation. Accordingly, each Holder agrees to deliver
to the Company promptly upon request, at or after the Closing, any and all such
instruments and documents relating to the aforementioned transfer as the
Company or the Transfer Agent may reasonably request to facilitate the
cancellation of such Preferred Shares.

     3. Representations and Warranties of the Company. The Company represents
and warrants to each Holder as follows:

     3.1. Organization. The Company is a corporation duly incorporated and
validly existing as a corporation and is in good standing under the laws of the
State of Delaware. The Company has full corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.

     3.2. Due Authorization, Execution and Delivery. The Company has duly
authorized, executed and delivered this Agreement. This Agreement constitutes
a valid, binding and enforceable agreement of the Company, except as
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

     3.3. No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for such conflicts,
breaches, violations or defaults that would not have or be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect (as
defined below) on the consummation of the transactions contemplated herein, nor
will such actions result in any violation of the provisions of the charter or
bylaws of the Company or any of its subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for those which have already been obtained, no
consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body is required

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for the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby.

     3.4. Due Authorization and Issuance. The Common Shares, upon issuance by
the Company following receipt of the consideration provided for herein and
satisfaction of the other conditions set forth herein, will be duly and validly
authorized and issued, fully paid and non-assessable, will have been issued in
compliance with all federal and state securities laws and will not have been
issued in violation of any preemptive right, resale right, right of first
refusal or similar right.

     4. Representations and Warranties of each Holder. Each Holder represents
and warrants to the Company as follows:

     4.1. Organization. Each Holder, to the extent applicable, is an entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation. Each Holder has full power and authority to execute
and deliver this Agreement and to perform its obligations hereunder.

     4.2. Due Authorization, Execution and Delivery. Each Holder has duly
authorized, executed and delivered this Agreement. This Agreement constitutes
a valid, binding and enforceable agreement of each Holder, except as
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

     4.3. No Conflicts. The execution, delivery and performance of this
Agreement by each Holder and the consummation of the transactions contemplated
hereby will not result in, as applicable, any violation of the provisions of
the charter or bylaws of any Holder or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Holder or any of its properties or assets; and except for those which have
already been obtained, no consent, approval, authorization or order of, or
filing or registration with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by any
Holder and the consummation of the transactions contemplated hereby.

     4.4. Ownership. Each Holder is the sole beneficial owner (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of such
Holder’s Preferred Shares, free and clear of any preemptive rights or any
liens, claims, security interests or other encumbrances of any kind or nature
whatsoever (“Encumbrances”) and has the complete power to transfer and deliver
such Holder’s Preferred Shares to the Company as contemplated by this
Agreement, free and clear of Encumbrances. Upon transfer to the Company by
each Holder of each Holder’s Preferred Shares, the Company will have good and
marketable title to each Holder’s Preferred Shares, free and clear of all
Encumbrances.

     4.5. Investment Decision; Subsequent Transactions. Each Holder is a
sophisticated investor with substantial assets under management and substantial
experience in making investment decisions in securities such as the Preferred
Shares and the Common Shares, and in transactions such as the exchange of the
Holders’ Preferred Shares for Common Shares of the Company as contemplated by
this Agreement. Each Holder is fully capable of bearing the economic
consequences of the transactions contemplated by this Agreement. Each Holder
understands that, prior to the consummation of the IPO, the Common Shares are
not traded on any National Securities Exchange nor on the NASDAQ National
Market and are likely to be highly illiquid, particularly as measured against
the number of Common Shares each Holder is acquiring hereby, and volatile. In
making its decision to enter into this Agreement, each Holder has relied on its
own examination of the Company, including, but not limited to, all information

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relating to the Company filed with the U.S. Securities and Exchange
Commission. Each Holder has had an opportunity to make inquiries of the
Company in connection with this Agreement and has done so to its satisfaction.
The Company has not made any representations to any of the Holders other than
those expressly set forth in this Agreement. The Holders further understand
that the Company may, from time to time, enter into transactions with other
holders of capital stock, as a whole or individually, that may involve
exchanges of amounts of cash, securities or other property that the Holders may
consider more attractive than the Common Shares being acquired by each Holder
in exchange for such Holder’s Preferred Shares, and that following execution of
this Agreement, the Holders shall have no right whatsoever to seek any
adjustment or modification to the consideration afforded to the Holders
hereunder or to otherwise “unwind” the transactions contemplated by this
Agreement. The Holders acknowledge that the Company has no obligation
whatsoever to make any future transaction relating to capital stock available
to the Holders on any basis whatsoever.

     5. No Registration. Each Holder understands that the exchange of Common
Shares for such Holder’s Preferred Shares hereby is intended to be exempt from
registration under the Securities Act of 1933, as amended, pursuant to Section
3(a)(9) and Section 4(2) thereunder. In this regard, each Holder represents
that it has not provided any item of value to any person other than the
Holder’s Preferred Shares provided to the Company in connection with the
transactions contemplated by this Agreement.

     6. Conditions. The obligations of the Company and the Holders hereunder
to exchange the Holders’ Preferred Shares for Common Shares at the Closing are
subject to the following conditions:

     6.1. Completion of the Reverse Stock Split. The 100,000-for-one reverse
split of the Common Shares shall have been completed prior to the cancellation
of the Series D Preferred Stock and prior to the exchanges of both the Series A
Preferred Stock and the Series C Preferred Stock for Common Shares.

     6.2. Cancellation of Series D Preferred Stock and Exchange of Series C
Preferred Stock. The Company shall have completed the cancellation of its
Series D Preferred Stock prior to the exchange contemplated by this Agreement,
and shall have completed the exchange of its Series C Preferred Stock for
approximately 641,619 sharesa of the Common Shares simultaneously with the
exchange contemplated by this Agreement.

     6.3. Use of Proceeds. The Company shall have obtained the additional
amendment and waivers under its existing credit facilities described under the
“Description of Certain Indebtedness” section of the Company’s Registration
Statement, File number 333-115156, as amended, which are necessary to the
consummation of the exchange contemplated by this Agreement.

     6.4. Accuracy of Representation and Warranties. The representations and
warranties made by the Company and the Holders in connection with this
Agreement shall be true and correct in all material respects on and as of the
Closing.

	a	 	This number of shares is subject to change based upon the final valuation of
the shares.

-4-

 

     6.5. No Challenges. No action or event shall have occurred or been
threatened, no action shall have been taken, and no statute, rule, regulation,
judgment, order, stay, decree or injunction shall have been promulgated,
enacted, entered, enforced or deemed applicable to the exchange of the Common
Shares for each Holder’s Preferred Shares, by or before any court or
governmental regulatory or administrative agency, authority or tribunal, in the
Company’s reasonable judgment, could materially adversely affect the Company’s
business, condition (financial or otherwise), income, operations, properties,
assets, liabilities or prospects and that of the Company’s subsidiaries, taken
as a whole, or materially impair the contemplated benefits to the Company of
the transactions contemplated hereby.

     6.6. Waiver of Conditions. Notwithstanding any other provisions of this
Agreement, the Company, to the extent permitted by law, may waive any or all of
the conditions contained herein; provided, however, that in no event shall the
Company be required to consummate the transactions contemplated hereby in such
circumstance.

     7. Other Provisions.

     7.1. Effectiveness of this Agreement. This Agreement and the exchange
contemplated hereby will take effect immediately prior to the consummation of the IPO.

     7.2. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered or sent by mail, telex or
facsimile transmission as follows:

	 	(i)	 	if to the Company, to:

Transportation Technologies Industries, Inc.

980 North Michigan Avenue, Suite 1000

Chicago, IL 60611

Attention: General Counsel

Facsimile: (312) 280-4820

	 
	 	 	 	With a copy to:
	 
	 	 	 	Cahill Gordon & Reindel LLP

80 Pine Street

New York, NY 10005

Attention: Roger Meltzer, Esq.

	 	(ii)	 	if to a Holder, to:
	 
	 	 	 	c/o Transportation Technologies Industries, Inc.

980 North Michigan Avenue, Suite 1000

Chicago, IL 60611

Attention: General Counsel

Facsimile: (312) 280-4820

     7.3. Waivers and Amendments. This Agreement may be amended or modified,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right,

-5-

 

power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.

     7.4. Further Assurances. Each of the parties hereto covenants and agrees
upon the request of the other, to do, execute, acknowledge and deliver or cause
to be done, executed, acknowledged and delivered all such further acts, deeds,
documents, assignments, transfers, conveyances, powers of attorney and
assurances as may be reasonably necessary or desirable to give full effect to
this Agreement.

     7.5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.

     7.6. Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.

     7.7. Binding Effect. The provisions of this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and the heirs, legal
representatives and successors of the parties hereto.

     7.8. Assignment. None of the parties hereto may assign any rights under
this Agreement and any such purported assignment of rights hereunder shall be
void.

     7.9. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

     7.10. Third Party Beneficiaries. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give to any third
party any rights or remedies against any party hereto.

     7.11. Expenses. The Company will bear the costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.

     7.12. Entire Agreement. This Agreement constitutes the entire agreement
as among the parties with respect to the transactions contemplated hereby and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any such party.

     7.13. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute but one and the same instrument.

     7.14. Definition of the Term “Material Adverse Effect”. For purposes of
this Agreement, the term “Material Adverse Effect” shall mean a material
adverse effect on the consolidated financial condition, results of operations,
stockholders’ equity, management, general affairs or business of the Company
and its subsidiaries, taken as a whole.

[Signature Pages Follow]

-6-

 

     IN WITNESS WHEREOF, the Company and each Holder have executed this
Agreement as of the date first written above.

	 	 	 	 	 
	 	TRANSPORTATION TECHNOLOGIES

INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

	 	 	 	 	 
	 	 	HOLDERS:
	 
	 	 	 	 
	 	 	TRANSPORTATION INVESTMENT PARTNERS, L.L.C.
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	CARAVELLE INVESTMENT FUND, L.L.C.
	 
	 	 	 	 
	

	 	By:
	 	Trimaran Advisors, L.L.C., its investment
manager and attorney-in-fact
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ALBION ALLIANCE MEZZANINE FUND, L.P.
	 
	 	 	 	 
	

	 	By:
	 	Albion Alliance LLC, its general partner
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ALBION ALLIANCE MEZZANINE FUND II, L.P.
	 
	 	 	 	 
	

	 	By:
	 	AA MEZZ II GP, LLC, its general partner
	
	
	
	

	
	
	
	

	
	
	
	

	
	
	
	

	

	 	By:
	 	Albion Alliance LLC, its sole member
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 

 

 

Schedule Ia

	 	 	 	 	 	 	 	 	 
	 	 	Number of Preferred	 	Number of Common
	 	 	Shares Being	 	Shares Being Received
	Name of Holder
	 	Exchanged by Holder
	 	by Holder

	Albion Alliance
	 	 	 	 	 	 	 	 
	Mezzanine Fund, L.P.
	 	 	[     ]	 	 	 	 	 
	Albion Alliance
	 	 	 	 	 	 	 	 
	Mezzanine Fund II,
	 	 	 	 	 	 	 	 
	L.P.
	 	 	[     ]	 	 	 	 	 
	Caravelle Investment
	 	 	 	 	 	 	 	 
	Fund, L.L.C.
	 	 	[     ]	 	 	 	 	 
	Transportation
	 	 	 	 	 	 	 	 
	Investment Partners,
	 	 	 	 	 	 	 	 
	L.L.C.
	 	 	[     ]	 	 	 	 	 
	Total:
	 	 	[     ]	 	 	 	 	 

	a	 	These numbers are to be filled in at the time of Pricing.

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