Document:

Exhibit 4.3

 

 

Back to School Acquisition, L.L.C.

767 Fifth Avenue

New York, New York 10153

 

 

	
   

  	
  August 9,
  2000

  

 

 

	
  VIA TELECOPIER

  
	
  AND FIRST CLASS MAIL

  
	
   

  
	
  Hart Capital
  LLC

  
	
  131 Rowayton
  Avenue

  
	
  Rowayton,
  Connecticut  06853

  
	
  Attention:

  	
   

  	
  Steven W.
  Hart

  

 

Re:          Stockholders’ Agreement

 

Gentlemen:

 

In the event
that Hart Capital LLC or any of its affiliates or any investment vehicle
sponsored by it (the “Purchaser”) elects to exercise the option to purchase any
or all of the shares of Lincoln Technical Institute, Inc. (“LTI”) currently
owned by P.J. Santangelo and James Santangelo, Back to School Acquisition LLC
(“Stonington”) hereby agrees that, effective upon the exercise of such option,
Stonington and its affiliates hereby waive their respective rights of first refusal
with respect to such shares pursuant to Section 3.03 of the stockholders’
agreement among LTI, Stonington, P.J. Santangelo and James Santangelo and
hereby consent to the transfer of such shares to the Purchaser, provided that the Purchaser agrees to be
bound by the terms of such stockholders’ agreement.

 

Stonington
recognizes that, in the event such option to purchase the Santangelo shares is
exercised by Hart Capital for or on behalf of Five Mile River Capital Partners
LLC (“FMRCP”), it will result in the same entity owning shares of LTI that are
subject to two different stockholders’ agreements (i.e., one of which covers the shares currently owned by
FMRCP and the other of which covers the shares currently owned by P.J. and
James Santangelo).  Accordingly,
Stonington agrees that, effective upon the purchase of the Santangelo shares by
FMRCP, the stockholders’ agreement covering the shares currently owned by FMRCP
will be deemed to cover all of the shares owned by FMRCP, and the Santangelo
stockholders’ agreement will be deemed no longer effective.

 

Stonington
also hereby agrees that, effective upon the purchase of the Santangelo shares
by FMRCP, the FMRCP stockholders’ agreement shall be deemed amended to
incorporate the following provisions of the Santangelo stockholders’
agreement:  (A) Section 2.01(a), (b),
(c) and (e), except that the words “P J. Santangelo” shall be changed to
“Steven W. Hart,” and the words

 

 

Hart Capital LLC

Page 2

August 9, 2000

 

 

“Initial Stockholders” shall be
changed to “Other Stockholders,” (B) Section 2.03, (C) the definition of “New
Securities” contained in Section 1.01 and (D) Section 2.07, except that the
words “Initial Stockholders” shall be changed to “Other Stockholders.”

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  Back to
  School Acquisition LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alexis P. Michas

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Alexis P.
  Michas

  
	
   

  	
   

  	
  Title:

  	
   Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  The
  foregoing is hereby acknowledged and agreed to by Lincoln Technical
  Institute, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ David F. Carney

  	
   

  	
   

  
	
   

  	
  Name:

  	
  David F.
  Carney

  	
   

  
	
   

  	
  Title:

  	
  Chairman
  & CEO

  	
   

  
								

 

2Exhibit 4.4

 

	
  

  	
  LINCOLN TECHNICAL INSTITUTE, INC.  200 EXECUTIVE DRIVE, SUITE 340 • WEST ORANGE, NEW JERSEY 07052

  
	
   

  	
   

  
	
   

  	
  CORPORATE OFFICE

  
	
   

  	
   

  	
  973 736 9340

  
	
   

  	
  FAX: 

  	
  973 736 1750

  

 

August 9, 2000

 

 

VIA
TELECOPIER

AND
FIRST CLASS MAIL

 

Hart Capital LLC

131 Rowayton Avenue

Rowayton, Connecticut 06853

Attn: Steven W. Hart

 

Re: Option
to Purchase Shares

 

Gentlemen:

 

As you are
aware, Lincoln Technical Institute, a New Jersey corporation (the “Company”),
intends to sell up to 75,726 additional shares of its common stock to its four
existing stockholders, on a pro rata basis, at a price of $309.65 per share. In
connection with such proposed sale, the Company has given P.J. Santangelo and
James Santangelo the right to purchase up to 5,918 shares and 1,655 shares,
respectively, of the Company’s common stock (the “Additional Shares”).

 

In accordance
with our discussions with you, the Company and its majority stockholder, Back
to School Acquisition, LLC (“Stonington”), have agreed that, to the extent P.J.
Santangelo and James Santangelo do not elect to exercise their respective
rights to purchase the Additional Shares offered by the Company, you, or any
affiliate of yours or any investment vehicle sponsored by you, may purchase any
or all of such Additional Shares not purchased by them at a price of $309.65
per share.

 

The Company
will promptly notify you in writing if either or both P.J. Santangelo and James
Santangelo do not elect to exercise their respective rights to purchase the
Additional Shares, or if either or both elect to exercise their respective
rights with respect to less than all of the Additional Shares (the “Offer
Notice”). If you intend to purchase any or all of such Additional Shares on the
above terms, you must so notify the Company, within ten (10) business days
after receiving the Offer Notice, by delivery, in person, by courier service,
by telecopy or by registered mail or certified mail (postage prepaid, return
receipt requested), of a written notice to the Company at:

 

	
  Lincoln
  Technical Institute, Inc.

  
	
  200
  Executive Drive, Suite 340

  
	
  West Orange,
  NJ 07052

  

 

LINCOLN

TECHNICAL

INSTITUTE

 

 

If you wish to
purchase Additional Shares pursuant to this letter, you must consummate said
purchase of Additional Shares on or before October 31, 2000.

 

In addition,
the Company understands that Hart Capital has been granted an option to
purchase the shares of the Company currently owned by P.J. and James Santangelo
and that, in the event the option is exercised by Hart Capital for or on behalf
of Five Mile River Capital Partners LLC (“FMRCP”), it will result in the same
entity owning shares of the Company that are subject to two different
stockholders’ agreements (i.e.
one of which covers the shares currently owned by FMRCP and the other of which
covers the shares currently owned by P.J. and James Santangelo). Accordingly,
the Company agrees that, effective upon the purchase of the Santangelo shares
by FMRCP, the stockholders’ agreement covering the shares currently owned by
FMRCP will be deemed to cover all shares owned by FMRCP, and the Santangelo
stockholders’ agreement will be deemed no longer effective.

 

The Company
also hereby agrees that, effective upon the purchase of the Santangelo shares
by FMRCP, the FMRCP stockholders’ agreement shall be deemed amended to incorporate
the following provisions of the Santangelo stockholders’ agreement: (A) Section
2.01(a),(b),(c) and (e), except that the words “P.J. Santangelo” shall be
changed to “Steven W. Hart,” and the words “Initial Stockholders” shall be
changed to “Other Stockholders,” (B) Section 2.03, (C) the definition of “New
Securities” contained in Section 1.01 and (D) Section 2.07, except that the
words “Initial Stockholders” shall be changed to “Other Stockholders.”

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  Lincoln
  Technical Institute, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David F.
  Carney

  	
   

  
	
   

  	
   

  	
  David F.
  Carney

  
	
   

  	
   

  	
  Chairman
  & CEO

  

 

 

cc: Back to School Acquisition,
LLCExhibit 4.5

 

 

 

STOCKHOLDERS’ AGREEMENT

 

among

 

LINCOLN TECHNICAL INSTITUTE, INC.

 

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

 

P.J. SANTANGELO

 

and

 

JAMES SANTANGELO

 

Dated as of June 21, 1999

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I

  	
  Page

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01.  Certain Defined Terms

  	
  1

  
	
   

  	
   

  
	
  ARTICLE
  II

  	
   

  
	
   

  	
   

  
	
  CERTAIN AGREEMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01.  Board of Directors

  	
  6

  
	
  SECTION 2.02.  Officers

  	
  7

  
	
  SECTION 2.03.  Certain Issuances of
  New Securities

  	
  7

  
	
  SECTION 2.04.  Affiliate Transactions

  	
  8

  
	
  SECTION 2.05.  Company Financial
  Statements

  	
  8

  
	
  SECTION 2.06.  Certificate of
  Incorporation and By-Laws

  	
  9

  
	
  SECTION 2.07.  Redemptions and
  Repurchases

  	
  9

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  RESTRICTIONS ON TRANSFER

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01.  General Restriction

  	
  10

  
	
  SECTION 3.02.  Legends

  	
  10

  
	
  SECTION 3.03.  Certain Restrictions
  on Transfer

  	
  11

  
	
  SECTION 3.04.  Rights to Participate
  in Certain Sales

  	
  12

  
	
  SECTION 3.05.  “Drag-Along” Rights

  	
  14

  
	
  SECTION 3.06.  Certain Persons to
  Execute Agreement

  	
  16

  
	
  SECTION 3.07.  Improper Sale or
  Encumbrance

  	
  17

  
	
   

  	
   

  
	
  ARTICLE
  IV

  	
   

  
	
   

  	
   

  
	
  REGISTRATION RIGHTS

  	
   

  
	
   

  	
   

  
	
  SECTION 4.01.  Incidental
  Registration

  	
  17

  
	
  SECTION 4.02.  Furnish Information.

  	
  18

  

 

 

	
  SECTION 4.03.  Expenses of
  Registration

  	
  18

  
	
  SECTION 4.04.  Underwriting
  Requirements

  	
  18

  
	
  SECTION 4.05.  Registration
  Procedures.

  	
  18

  
	
  SECTION 4.06.  Rule 144 Information

  	
  19

  
	
  SECTION 4.07.  Indemnification

  	
  20

  
	
   

  	
   

  
	
  ARTICLE
  V

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01.  Termination

  	
  22

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

  	
  23

  
	
  SECTION 5.03.  Expenses

  	
  23

  
	
  SECTION 5.04.  Notices

  	
  23

  
	
  SECTION 5.05.  Public Announcements

  	
  24

  
	
  SECTION 5.06.  Headings

  	
  24

  
	
  SECTION 5.07.  Severability

  	
  24

  
	
  SECTION 5.08.  Entire Agreement

  	
  25

  
	
  SECTION 5.09.  Assignment

  	
  25

  
	
  SECTION 5.10.  No Third Party
  Beneficiaries

  	
  25

  
	
  SECTION 5.11.  Amendment

  	
  25

  
	
  SECTION 5.12.  Governing Law

  	
  25

  
	
  SECTION 5.13.  Counterparts

  	
  25

  
	
  SECTION 5.14.  Specific Performance

  	
  25

  
	
  SECTION 5.15.  Waiver of Jury Trial

  	
  26

  

 

ii

 

STOCKHOLDERS’
AGREEMENT, dated as of June 21, 1999, among LINCOLN TECHNICAL INSTITUTE, INC.,
a New Jersey corporation (the “Company”); BACK TO SCHOOL ACQUISITION,
L.L.C., a Delaware limited liability company (“Stonington”); and 
P.J. Santangelo and James Santangelo (together, the “Initial Stockholders”).

 

WHEREAS,
on the date hereof, the Company, Stonington, P.J. Santangelo and James
Santangelo are consummating the transactions contemplated by the
Recapitalization Agreement, dated April 26, 1999 (the “Recapitalization
Agreement”), among the Company, Stonington, P.J. Santangelo and James
Santangelo; and

 

WHEREAS,
as a condition to the consummation of the transactions contemplated by the
Recapitalization Agreement and in order to make certain agreements with respect
to their respective rights and obligations as holders of common stock, no par
value per share, of the Company (the “Common Stock”) the parties hereto
have determined that it is in their best interests to enter into this
Agreement;

 

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

 

ARTICLE I

 

DEFINITIONS

 

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

 

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

 

“Agreement” or “this
Agreement” means this Stockholders’ Agreement, dated as of
            , 1999,
among the Company and each of the other parties signatory hereto, and all
amendments hereto made in accordance with the provisions of Section 5.11.

 

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

 

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

 

 

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

 

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

 

“Capital Stock”
means, with respect to any Person at any time, any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of capital stock, partnership interests (whether general or
limited) or equivalent ownership interests in or issued by such Person.

 

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

 

“Cause” has the
meaning specified in Section 2.01(c).

 

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

 

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

 

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

 

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

 

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

 

2

 

“Employment Agreement”
means the Employment Agreement between the Company and P. J. Santangelo of even
date herewith.

 

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

 

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

 

“Executive Committee”
has the meaning specified in Section 2.01(d).

 

“Fair Value” means
(a) as to publicly traded securities, the average of the daily closing prices
or last reported sales price, as applicable, or if closing prices or last reported
sales prices are not available, the average of the highest reported bid and the
lowest reported asked price, for the ten (10) consecutive trading days ending
on the most recent trading day prior to the date of determination, and (b) as
to other assets, the fair market value of such assets determined in good faith
by an independent nationally recognized investment banking firm selected by the
Company and approved (which approval shall not be unreasonably withheld) by the
(i) Initial Stockholders and their Permitted Transferees and (ii) Stonington
and its Affiliates, by action of the majority in number of Shares held by each
such group, and which investment banking firm shall have provided no material
services to the Company or any Stockholder within the preceding year.

 

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

 

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

 

“Marketable Securities”
means securities that are (a) (i) securities of or other interests in any
Person that are traded on a national securities exchange, reported on the
Nasdaq Stock Market System or otherwise actively traded over-the-counter or
(ii) debt securities of an issuer that has debt or equity securities that
are so traded or so reported on and which a nationally recognized securities
firm has agreed to make a market in, and (b) not subject to restrictions
on

 

3

 

transfer as a result of any applicable contractual
provisions or the provisions of the Securities Act or, if subject to such
restrictions under the Securities Act, are also subject to registration rights
reasonably acceptable to Stonington.

 

“New Securities”
means any Capital Stock of the Company, whether or not now authorized, and
rights, options or warrants to purchase such Capital Stock, and securities of
any type whatsoever that are, or may become, convertible into or exchangeable
or exercisable for Capital Stock of the Company; provided, however,
that the term “New Securities” does not include (i) securities of the Company
issued to employees, officers or directors of the Company, or which have been
reserved for issuance, pursuant to any employee or executive stock option,
stock purchase, stock bonus plan, or other similar stock agreement or
arrangement approved by the Board; (ii) securities of the Company issued in
connection with any stock split, stock dividend or recapitalization or other
pro rata distribution of the Company; (iii) securities of the Company
issued in connection with the acquisition of the capital stock, other ownership
units or assets of another Person or (iv) securities of the Company issued
in a Public Offering.

 

“Other Stockholders”
means the Initial Stockholders and their Permitted Transferees.

 

“Permitted Transferee”
means in the case of each Initial Stockholder, (a) any Affiliate of the Initial
Stockholder or members of his immediate family, (b) spouses, lineal descendants
and members of the Initial Stockholder’s immediate family or trusts for their
benefits (c) upon such Initial Stockholder’s death, such Initial Stockholder’s
executors, administrators, testamentary trustees, legatees, heirs and
beneficiaries, or (d) any Person with respect to which the Stockholders
agree that they have no objection if a Sale of Shares is made to such Person.

 

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

 

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

 

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

 

“Recapitalization
Agreement” has the meaning specified in the recitals hereto.

 

“Registrable Shares”
means the Shares and any securities issued or issuable with respect to any
Shares by way of conversion, exchange, replacement, stock dividend, stock split
or other

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

“Share” means any
share of Common Stock.

 

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

 

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

 

5

 

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

 

“Third Party”
means, with respect to any Stockholder, any Person, other than (i) the
Company, (ii) any Subsidiary of the Company or (iii) any Affiliate of such
Stockholder or, in the case of the Initial Stockholders, any Person described
in clause (a), (b) or (c) of the definition of Permitted Transferee.

 

ARTICLE II

 

CERTAIN AGREEMENTS

 

SECTION 2.01.  Board of Directors.  (a)  P.J.
Santangelo.  As long as the Initial Stockholders and their Permitted
Transferees (other than those Persons described in clause (d) of the definition
of Permitted Transferee), in the aggregate, own Shares constituting at least 5%
of the outstanding Shares, the parties hereto will exercise all authority under
applicable law to cause the Board to include P.J. Santangelo or his designee,
such designee to be reasonably acceptable to Stonington (for so long as P.J.
Santangelo wishes to be a member of, or designate a Person to, the Board).

 

(b)          
Voting Agreement.  Each Stockholder shall take all actions
necessary to vote all Shares entitled to vote and owned or held of record by
such Stockholder at any annual or special stockholders’ meeting at which one or
more directors are elected in favor of, or shall take all actions by written
consent in lieu of any such meeting necessary to cause, the election of P.J.
Santangelo or his designee to the Board, so long as P.J. Santangelo is entitled
to be a member of, or to designate a member to, the Board, and the Initial
Stockholders shall take all actions necessary to vote all Shares entitled to
vote and owned or held of record by them at any annual or special stockholders
meeting at which one or more directors are elected in favor of, or shall take
all actions by written consent to lieu of such meeting necessary to cause, the
election of any individuals designated by Stonington to the Board; provided,
that no Stockholder shall be obligated to vote for or consent to the election
of an individual pursuant to this Section 2.01 who would at such time be
subject to removal for Cause (as defined below).  If any Stockholder shall
refuse to vote the Shares held by such Stockholder as provided in this Section
2.01 at any meeting of stockholders of the Company, or shall refuse to give its
written consent in lieu of a meeting, thereupon, without further action by such
Stockholder, the Stockholders entitled to the benefits of this Section 2.01
shall be, and hereby are, irrevocably constituted the attorney-in-fact and
proxy of such Stockholder for the purpose of voting, and shall vote such shares
at such meeting as provided in this Section 2.01 or give such consent, as the
case may be.

 

(c)          
Removal.  Each Stockholder agrees that, if, at any time, such
Stockholder is then entitled to vote for the removal of directors of the
Company, such Stockholder will not vote any Shares in favor of the removal of
any director elected pursuant to Section 2.01(b) unless such removal

 

6

 

shall be for Cause (as
defined below); provided, however, that if the Initial
Stockholders and their Permitted Transferees (other than those Persons
described in clause (d) of the definition of Permitted Transferee) no longer
own in the aggregate at least five per cent (5%) of the outstanding Shares,
P.J. Santangelo will forthwith, upon Stonington’s request, resign as a director
of the Company or cause his designee to so resign, as applicable.  Removal
for “Cause” shall mean removal of a director because of such director’s
(A) willful or persistently repeated material non-performance of the director’s
duties to the Company (other than by reason of the incapacity of the director
due to physical or mental illness) after notice by the Executive Committee (as
defined below) of such failure and the director’s non-performance and
continued, willful or persistently repeated material non-performance after such
notice, (B) the indictment of the director for a felony offense, or (C) the
commission by the director of fraud or any willful misconduct that brings the
reputation of the Company into serious disrepute or causes the director to
cease to be able to perform his duties.

 

(d)          
Executive Committee.   As soon as reasonably practicable
following this date hereof, the Company shall establish an Executive Committee
to consist initially of P. J. Santangelo, Miryam Knutson (as chairperson) and
the other individuals nominated by Stonington (the “Executive Committee”). 
P. J. Santangelo shall remain a member of the Executive Committee until such
time as the Consulting Period (as defined in the Employment Agreement) has
expired, or earlier termination of the Employment Agreement in accordance with
its terms.

 

(e)          
No Transfer.  Notwithstanding any other provision of this
Agreement, the rights of P.J. Santangelo pursuant to this Section 2.01 shall
not be transferrable by him.

 

SECTION 2.02.  Officers.  The Company and the
Stockholders agree, for the benefit of P. J. Santangelo, that, upon expiration
of the Employment Term (as defined in the Employment Agreement), Laurence Brown
will be offered the position of President of the Company and will, unless he
earlier resigns or is terminated for Cause, act as the most senior executive
officer of the Company until December 31, 1999.

 

SECTION 2.03.  Certain Issuances of New Securities. 
(a)  Until such time as the Company is a Public Company, in the event the
Company proposes to issue New Securities to any Person, each Other Stockholder
will have the right to purchase, in accordance with Section 2.03(b), the amount
of any New Securities which the Company proposes to issue equal to the product
of (a) the total amount of such New Securities which the Company proposes to
issue at such time, multiplied  by (b) a fraction, (i) the
numerator of which shall be the total number of Fully Diluted Shares then
beneficially owned by such Other Stockholder and (ii) the denominator of which
shall be the total number of Fully Diluted Shares then beneficially owned by
all Stockholders.

 

(b)          
In the event that, prior to the Company being a Public Company, the Company
proposes to issue New Securities to any Person, it shall give each Other
Stockholder written notice (a

 

7

 

“Notice of Issuance”)
of its intention, describing all material terms of the New Securities and the
price upon which the Company proposes to issue such New Securities.  Each
Other Stockholder shall have ten (10) Business Days from the date of the Notice
of Issuance to agree to purchase all or any portion of such Other Stockholder’s
pro rata share of such New Securities (as determined pursuant to Section
2.03(a)) at the price and upon the terms stated in the Notice of Issuance; provided,
however, that if the Company is proposing to issue New Securities for
consideration other than all cash, the Company shall accept from the Other
Stockholders either non-cash consideration which is reasonably comparable, as
reasonably determined by the Company, to the non-cash consideration specified
in the Notice of Issuance or cash in an amount equal to the Fair Value of the
non-cash consideration.  Any purchase by the Other Stockholders of New
Securities shall be consummated on the date on which all other New Securities
described in the applicable Notice of Issuance are issued to such Person.

 

(c)          
If effective acceptance shall not be received pursuant to Section 2.03(b) with
respect to all New Securities proposed to be issued pursuant to a Notice of
Issuance, then the Company may sell all or any part of the remaining New
Securities so proposed to be issued at a price not less than the price, and on
terms not more favorable to the purchaser thereof, than the price and terms
stated in the original Notice of Issuance, at any time within one hundred
twenty (120) days after the expiration of the offer required by Section
2.03(b).  In the event the remaining New Securities are not issued by the
Company during such one hundred twenty (120) day period, the right of the
Company to issue such remaining New Securities shall expire and the obligations
of this Section 2.03 shall be reinstated.

 

(d)          
Notwithstanding any other provision of this Agreement, the rights of the Other
Stockholders pursuant to this Section 2.03 shall not be transferrable to a
Third Party by the Other Stockholders.

 

SECTION 2.04.  Affiliate Transactions.
 Stonington and the Company agree, for the benefit of P. J. Santangelo,
that the Company shall not enter into any agreements or transactions with,
purchase any services from, sell any services to, grant any loans to, or borrow
from, Stonington or any of its Affiliates, unless such transactions are (i) on
terms no less favorable to the Company than could have been obtained by arm’s
length negotiations with a Person other than Stonington or any of its
Affiliates, (ii) in the ordinary course of the Company’s business, and (iii) in
connection with the operations of the Company.

 

SECTION 2.05.  Company Financial Statements.  For
such time as the Initial Stockholders and their Permitted Transferees (other
than the Persons described in clause (d) of the definition of Permitted
Transferee) hold any Shares, the Company agrees to provide each of them with
(i) unaudited quarterly financial statements of the Company within 45 days of
the end of each fiscal quarter of the Company, and (ii) audited financial
statements of the Company within 90 days of  the end of each fiscal year
of the Company.  In addition, for the period from the date hereof through
December 31, 1999, the Company agrees to provide the Initial Stockholders with
(x) monthly financial statements

 

8

 

within 45 days of the end
of each month and (y) the right to inspect the Company’s managerial financial
records (so-called “Brown Books”) and other financial books and records upon
reasonable notice to the Company and in a manner that does not disrupt the
business or operations of the Company.  The Company will use all
reasonable efforts to cause Deloitte & Touche, LLP, (“Deloitte”) to give
the Initial Stockholders and their accountants access to Deloitte’s audit
working papers prepared with respect to the fiscal year ended December 31,
1999, it being understood that Deloitte has agreed that, if the Initial
Stockholders and their accountants execute an indemnity letter in the form
provided by Deloitte, they will receive such access.

 

SECTION 2.06.  Certificate of Incorporation and By-Laws. 
For such time as the Initial Stockholders and their Permitted Transferees hold
any Shares, each other Stockholder agrees, for the benefit of the Initial
Stockholders, not to vote in favor of any amendments to the Certificate of
Incorporation or the By-Laws that in any way would affect the Initial Stockholders
adversely in a manner different from the other holders of Common Stock.

 

SECTION 2.07.  Redemptions and Repurchases. 
(a)  For such time as the Initial Stockholders and their Permitted
Transferees (other than the Persons described in clause (d) of the definition
of Permitted Transferee) hold any Shares, the Company and Stonington agree that
the Company will not redeem or repurchase any Shares held by any other
Stockholder without offering the Initial Stockholders and their Permitted
Transferees  (other than the Persons described in clause (d) of the
definition of Permitted Transferee) the opportunity to have redeemed or
repurchased a number of Shares equal to the product of (a) the total number of
Shares that the Company proposes to redeem or repurchase from the other 
Stockholders at such time, multiplied  by (b) a fraction, (i) the
numerator of which shall be the total number of Shares then owned by the
Initial Stockholders and such Permitted Transferees and (ii) the denominator of
which shall be the total number of Shares then beneficially owned by the
Initial Stockholders and such Permitted Transferees, and the Stockholder(s)
from whom or which the Company proposes to redeem or repurchase Shares.

 

(b)          
In the event that the Company proposes to redeem or repurchase Shares from any
Stockholder other than the Initial Stockholders and their Permitted Transferees
(other than the Persons described in clause (d) of the definition of Permitted
Transferee), it shall give the Initial Stockholders written notice (a “Notice
of Repurchase”) of its intention, describing all material terms of the
redemption or repurchase and the price and all material terms upon which the
Company proposes to redeem or repurchase such Shares.  The Initial
Stockholders and such Permitted Transferees shall have ten (10) business days
from the date of the Notice of Repurchase to agree to have redeemed or
repurchased, as applicable, all or any portion of their pro rata share of the
Shares being redeemed or repurchased from such other Stockholder or
Stockholders (as determined pursuant to Section 2.07(a)) at the price and upon
the terms stated in the Notice of Repurchase.  Any redemption or
repurchase from the Initial Stockholders and such Permitted Transferees of
Shares shall be consummated on the date on which all other Shares described in
the applicable Notice of Repurchase are redeemed or repurchased from any such
other Stockholder.

 

9

 

 

ARTICLE III

 

RESTRICTIONS ON TRANSFER

 

SECTION 3.01.  General Restriction.  The Other
Stockholders agree that they will not, directly or indirectly, make or solicit
any Sale of, or create, incur, solicit or assume any Encumbrance with respect
to, any Share, except in compliance with the Securities Act and this Agreement.

 

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

 

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

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS’
AGREEMENT, DATED AS OF               ,
1999, AS IT MAY THEREAFTER BE AMENDED, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.  NO REGISTRATION OF TRANSFER OF
SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS AND UNTIL SUCH
RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH.

 

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

 

THE HOLDER OF THE SECURITIES EVIDENCED BY THIS
CERTIFICATE IS ENTITLED TO CERTAIN RIGHTS AND SUBJECT TO CERTAIN OBLIGATIONS AS
SET FORTH IN A STOCKHOLDERS’ AGREEMENT, DATED AS OF          ,
1999, AS IT MAY THEREAFTER BE AMENDED, A COPY

 

10

 

OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES
OF THE ISSUER.”

 

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

 

SECTION 3.03.  Certain Restrictions on Transfer. 
(a)  So long as (i) the Company is not a Public Company and (ii)
Stonington and its Affiliates, in the aggregate, own Shares representing at
least fifty percent (50%) of the Fully Diluted Shares, each Other Stockholder
agrees that such Other Stockholder will not, directly or indirectly, make any
Sale of, or create, incur, or assume any Encumbrance with respect to, any Shares
held by such Other Stockholder other than any Sale or Encumbrance to a
Permitted Transferee (other than the Persons described in clause (d) of the
definition of Permitted Transferee), without first granting Stonington and/or
its Affiliates, the option to acquire those Shares in accordance with this
Section 3.03.

 

(b)          
If, so long as (i) the Company is not a Public Company and (ii) Stonington and
its Affiliates, in the aggregate, own Shares representing at least fifty
percent (50%) of the Fully Diluted Shares, an Other Stockholder receives a bona
fide offer from a Third Party with respect to the Sale of such Other
Stockholder’s Shares, such Other Stockholder shall give to Stonington written
notice (the “Transfer Notice”) of such proposed Sale, specifying the
proposed transferee, the number of Shares proposed to be disposed of, the
proposed purchase price to be received in exchange therefor, and the other
material terms of the proposed Sale.  Delivery of the Transfer Notice to
Stonington shall constitute an irrevocable offer to sell such Shares to
Stonington on the terms and conditions set forth therein; provided, however,
that if the proposed purchase price set out in the Transfer Notice is other
than all cash, such Other Stockholder shall accept an amount of cash equivalent
to the Fair Value of such non-cash consideration, such Fair Value to be
determined at the cost of the Company.

 

(c)          
Stonington shall have the right, exercisable by written notice given to such
Other Stockholder within ten (10) Business Days after receipt of such Transfer
Notice, to purchase (or to

 

11

 

cause an Affiliate of
Stonington to purchase) all, but not less than all, of the Shares specified in
such Transfer Notice at the purchase price and on the other terms set forth
therein.

 

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

 

SECTION 3.04.  Rights to Participate in Certain Sales. 
(a)  (i)  So long as the Company is not a Public Company, neither
Stonington nor any of its Affiliates shall, in one or more transactions,
directly or indirectly, make any Sale of Shares held by them constituting more
than forty-five percent (45%) of the then outstanding Shares to any Third Party
or Third Parties, unless the terms and conditions of such Sale shall include an
offer to include, at the option of the Other Stockholders, in such Sale to the
Third Party or Third Parties, the number of Shares then owned by such Other
Stockholders, as determined by Section 3.04(a)(iii).

 

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

 

(iii)         
Each of the Other Stockholders shall have the right and option, for the period
of ten (10) days after the date the Offer Notice is given (for purposes of this
Section 3.04, the “Notice Period”), to notify the Prospective Sellers of
such Other Stockholder’s interest in selling or otherwise

 

12

 

disposing of up to the
Pro Rata Portion of such Other Stockholder’s Shares pursuant to the
Offer.  For purposes of this subsection 3.04, “Pro Rata Portion”
means, with respect to each Other Stockholder, a number of Shares equal to the
product of (x) the total number of Shares then owned by such Other Stockholder,
multiplied  by (y) a fraction, the numerator of which shall be the
total number of Tag-Along Shares, and the denominator of which shall be the
total number of Shares owned by the Prospective Sellers on the date of the
first sale of Tag-Along Shares.

 

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

 

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

 

(vi)         
If at the end of the Notice Period any Other Stockholder shall not have given a
Notice of Interest (and delivered all other required documents) with respect to
some or all of such Other Stockholder’s Shares, such Other Stockholder will be
deemed to have waived all of such Other

 

13

 

Stockholder’s rights
under this Section 3.04 with respect to the portion of such Other Stockholder’s
Shares for which a Notice of Interest shall not have been given.  If, at
the end of the 180-day period following the giving of the Offer Notice, the
Prospective Sellers shall not have completed the Sale of all the Offered Shares
and the Shares with respect to which any Other Stockholders shall have given
Notices of Interest pursuant to this Section 3.04, the Prospective Sellers
shall return to such Other Stockholders all certificates evidencing the unsold
Shares that such Other Stockholders delivered for Sale pursuant to this Section
3.04 and such Other Stockholders’ related instruments of assignment and
powers-of-attorney and the Prospective Sellers shall not consummate the Sale
with such Third Party or Third Parties without again complying with the terms
and procedures set forth in this Section 3.04, including providing to the Other
Stockholders another Offer Notice.

 

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

 

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

 

SECTION 3.05.  “Drag-Along” Rights.  (a) 
Prior to such time as the Company is a Public Company, and so long as
Stonington or its Affiliates, in the aggregate, own Shares representing more
than fifty percent (50%) of the then outstanding Shares, if Stonington and/or
any of its Affiliates shall, in any transaction or series of related
transactions, directly or indirectly, propose to make a Sale of Shares
constituting more than 50% of the Fully Diluted Shares (for purposes of this
Section 3.05, the “Controlling Shares”) to a Third Party or Third
Parties (for purposes of this Section 3.05, an “Offer”), Stonington
and/or such Affiliates may, at their option, require each of the Other
Stockholders to sell the Pro Rata Portion of such Stockholder’s Shares to such
Third Party or Third Parties for the same consideration per Share and otherwise
upon the same terms and conditions upon which Stonington and/or such Affiliates
sell their Shares.  For purposes of this Section 3.05, “Pro Rata
Portion” means, with respect to each Other Stockholder, a number of Shares
equal to the product of (x) the total number

 

14

 

of Shares then owned by
such Other Stockholder, multiplied  by (y) a fraction, the
numerator of which shall be the total number of Shares proposed to be sold by
Stonington and/or such Affiliates, and the denominator of which shall be the
total number of such Stockholder’s Shares then owned by Stonington and/or its
Affiliates.

 

(b)          
(i)  Stonington and/or such Affiliates shall provide a written notice (for
purposes of this Section 3.05, the “Offer Notice”) of such Offer to
each of the Other Stockholders not later than the fifteenth Business Day prior
to the consummation of the Sale contemplated by the Offer.  The Offer
Notice shall contain written notice of the exercise of the “drag-along” rights
of Stonington and/or its Affiliates pursuant to Section 3.05(a), setting
forth the consideration per Share to be paid by the Third Party or Third
Parties and the other material terms and conditions of the Offer.  Within
ten (10) Business Days following the date the Offer Notice is given, each
of the Other Stockholders shall deliver to Stonington and/or such Affiliates,
to be held in trust, (A) the certificate or certificates evidencing the
Pro Rata Portion of Shares owned or held by such Other Stockholder duly
endorsed in blank or accompanied by written instruments of transfer in form
reasonably satisfactory to Stonington and/or such Affiliate executed by such
Other Stockholder, (B) a special irrevocable power-of-attorney authorizing
Stonington and/or such Affiliate, on behalf of such Other Stockholder, to sell
or otherwise dispose of such Shares pursuant to the terms of the Offer and to
take all such actions as shall be necessary or appropriate in order to
consummate such Sale; provided, however, that Stonington and/or
such Affiliate shall not have the authority to incur or create liabilities or
to give representations and warranties on behalf of such Other Stockholder, and
(C) wire transfer instructions for payment of the purchase price of the Other
Stockholder’s Shares; provided that no Other Stockholder shall have any
liability to any purchaser of the Shares pursuant to the Offer in excess of the
aggregate proceeds received by such Other Stockholder in exchange for such
Stockholder’s Shares or in a manner that is disproportionate or different from
Stonington and its Affiliates.  Stonington and/or such Affiliate shall
cause the Third Party to whom or which the Shares of the Stockholders are being
sold or otherwise disposed to deliver the appropriate amount of immediately
available funds for the purchase of such Shares to the Other Stockholders
pursuant to the wire transfer instructions described in clause (C) above. If in
connection with such Sale, Stonington and/or such Affiliate are to receive
consideration other than cash, Cash Equivalents or Marketable Securities, each
Other Stockholder shall have the right to elect to receive in lieu thereof cash
or Cash Equivalents equal to the Fair Value of the consideration otherwise
payable to such Other Stockholder.  Such Other Stockholder shall make such
election in a written notice to Stonington and/or such Affiliate within ten
(10) Business Days following the date the Offer Notice is provided to such
Other Stockholder.

 

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

 

(iii)         
If, at the end of the 180-day period following the giving of the Offer Notice,
Stonington and/or its Affiliates shall not have completed the Sale of all the
Controlling Shares and the

 

15

 

Other Stockholders’
Shares delivered pursuant to Section 3.05(b)(i), Stonington and/or its
Affiliates shall return to each of the Other Stockholders all certificates
evidencing unsold Shares and related powers-of-attorney that such Other
Stockholder delivered pursuant to this Section 3.05.

 

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

 

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

 

(b)          
Anything in this Section 3.06 to the contrary notwithstanding, the provisions
of this Section 3.06 will not be applicable to (i) any Sale of Shares pursuant
to a Public Offering or (ii) any

 

16

 

Sale of Shares in a Rule
144 Transaction so long as immediately prior to, and immediately after the
consummation of, such Rule 144 Transaction the Company is a Public Company.

 

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

 

ARTICLE IV

 

REGISTRATION RIGHTS

 

SECTION 4.01.  Incidental Registration.  If at
any time the Company determines that it shall file a registration statement
under the Securities Act (other than a registration statement on a Form S-4 or
S-8 or filed in connection with an exchange offer or an offering of securities
solely to the Company’s employee benefit plans) on any form that would also permit
the registration of the Registrable Shares and such filing is to be on behalf
of the Company and/or on behalf of selling holders of its securities for the
general registration of its Common Stock to be sold for cash, the Company shall
each such time promptly give each Other Stockholder written notice of such
determination setting forth the date on which the Company proposes to file such
registration statement, which date shall be no earlier than thirty (30) days
from the date of such notice, and advising each Other Stockholder of its right
to have such Other Stockholder’s Registrable Shares included in such
registration; provided that the Other Stockholders shall not have any
right to have their Registrable Shares included in the initial public offering
of the Company if no other Stockholder has its Registrable Shares so
included.  Upon the written request of any Other Stockholder received by
the Company no later than fifteen (15) days after the date of the Company’s
notice, the Company shall use all reasonable efforts to cause to be registered
under the Securities Act all of the Registrable Shares that each such Other
Stockholder has so requested to be registered.  If, in the written opinion
of the managing underwriter (or, in the case of a non-underwritten offering, as
reasonably determined by the Board and communicated in writing to the Other
Stockholders), the total amount of such securities to be so registered,
including such Registrable Shares, will exceed the maximum amount of the
Company’s securities which can be marketed (i) at a price reasonably
related to the then current market value of such securities, or (ii) without
otherwise materially and adversely affecting the entire offering, then the
Company shall be entitled to reduce the number of Registrable Shares to be sold
in the offering by the Other Stockholders, and any other stockholders of the
Company exercising incidental registrations rights similar to those set forth
herein, to that number which in the written opinion of the managing underwriter
(or, in the case of a non-underwritten offering, as reasonably determined by
the Board and communicated in writing to the Other Stockholders) would permit
all such securities (including Shares held by any other stockholder of the
Company who proposes to exercise such incidental registration rights) to be so
marketed.  Such reduction shall be allocated

 

17

 

among the Stockholders in
proportion (as nearly as practicable) to the amount of Registrable Shares owned
by each such Stockholder at the time of filing the registration statement.

 

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

 

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

 

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

 

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

 

(a)          
furnish to each Other Stockholder of Registrable Shares covered by such
registration statement and each underwriter thereof, if any, such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in each case including all

 

18

 

exhibits), such number of
copies of the prospectus contained in such registration statement filed under
Rule 424 under the Securities Act, and such other documents, as such Other
Stockholder and underwriter may reasonably request in order to facilitate the
public sale or other disposition of such Registrable Shares;

 

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

 

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

 

SECTION 4.06.  Rule 144 Information.  With a
view to making available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the Registrable Shares to
the public without registration, at all times after ninety (90) days after any
registration statement covering a public offering of securities of the Company
under the Securities Act shall have become effective, the Company agrees to:

 

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

 

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

 

(iii)         
furnish to each Other Stockholder holding Registrable Shares forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such Other
Stockholder may reasonably request in availing itself of any rule or

 

19

 

regulation of the Commission allowing such Other
Stockholder to sell any Registrable Shares without registration.

 

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

 

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

 

20

 

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

 

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

 

21

 

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

 

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

 

The parties hereto agree
that it would not be just and equitable if contribution pursuant to this
Section 4.07(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

 

ARTICLE V

 

MISCELLANEOUS

 

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

 

22

 

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

 

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

 

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

 

	
  (a)

  	
  if to the Initial
  Stockholders:

  
	
   

  	
   

  
	
   

  	
  P. J. Santangelo

  
	
   

  	
  5 Country Squire Road

  
	
   

  	
  Saddle River,
  NJ  07458

  
	
   

  	
  Telecopy:  (201)
  818-8599

  
	
   

  	
  (call prior to faxing)

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Shipman & Goodwin,
  LLP

  
	
   

  	
  One American Row

  
	
   

  	
  Hartford, CT 
  06103-2819

  
	
   

  	
  Telecopy:  (860)
  251-5900

  
	
   

  	
  Attention:  Thomas
  P. Flynn, Esq.

  
	
   

  	
   

  
	
  (b)

  	
  if to the Company:

  
	
   

  	
   

  
	
   

  	
  Lincoln Technical
  Institute, Inc.

  
	
   

  	
  200 Executive Drive

  
	
   

  	
  West Orange, NJ 
  07052

  
	
   

  	
  Telecopy:  (973)
  243-0841

  
	
   

  	
  Attention: 
  President

  

 

23

 

	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Stonington Partners,
  Inc.

  
	
   

  	
  767 Fifth Avenue, 48th
  Floor

  
	
   

  	
  New York, NY 
  10153

  
	
   

  	
  Telecopy:  (212)
  339-8585

  
	
   

  	
  Attention:  James
  J. Burke, Jr.

  
	
   

  	
   

  
	
  (c)

  	
  if to Stonington:

  
	
   

  	
   

  
	
   

  	
  c/o Stonington
  Partners, Inc.

  
	
   

  	
  767 Fifth Avenue, 48
  Floor

  
	
   

  	
  New York, NY 10153

  
	
   

  	
  Telecopy:  (212)
  339-8585

  
	
   

  	
  Attention:  James
  J. Burke, Jr.

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Shearman & Sterling

  
	
   

  	
  599 Lexington Avenue

  
	
   

  	
  New York, NY 
  10022

  
	
   

  	
  Telecopy:  (212)
  848-7179

  
	
   

  	
  Attention:  Clare
  O’Brien, Esq.

  

 

 

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

 

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

 

SECTION 5.07.  Severability.  If any term or
other provision of this Agreement is invalid, illegal or incapable of being
enforced by any law, governmental regulation or public policy, all other terms
and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner

 

24

 

materially adverse to any
party.  Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

26

 

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

 

	
   

  	
  LINCOLN TECHNICAL
  INSTITUTE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BACK TO SCHOOL
  ACQUISITION, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  P.J. SANTANGELO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ P.J.
  Santangelo

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JAMES SANTANGELO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ James
  Santangelo

  	
   

  

 

27

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