SHAREHOLDERS AGREEMENT

 

 

                                  BY AND AMONG

 

 

                                 MASCOTECH, INC.

 

 

                                MASCO CORPORATION

 

 

                                RICHARD MANOOGIAN

 

 

                      RICHARD AND JANE MANOOGIAN FOUNDATION

 

 

                      THE HEARTLAND ENTITIES LISTED ON THE

                             SIGNATURE PAGES HERETO

 

 

            THE HIP CO-INVESTORS LISTED ON THE SIGNATURE PAGES HERETO

 

                 -----------------------------------------------

 

                          DATED AS OF NOVEMBER 28, 2000

                 -----------------------------------------------

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                                TABLE OF CONTENTS

 

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                                    ARTICLE I

 

                       DEFINITIONS; RULES OF CONSTRUCTION

 

SECTION 1.01.         Definitions............................................................................        1

SECTION 1.02.         Rules of Construction..................................................................       10

 

                                   ARTICLE II

 

                         REPRESENTATIONS AND WARRANTIES

 

SECTION 2.01.         Authority; Enforceability..............................................................       10

SECTION 2.02.         No Breach..............................................................................       10

SECTION 2.03.         Consents...............................................................................       11

SECTION 2.04.         Share Ownership........................................................................       11

 

                                   ARTICLE III

 

                                 SHARE TRANSFERS

 

SECTION 3.01.         Restrictions on Transfer...............................................................       12

SECTION 3.02.         Exceptions to Restrictions.............................................................       12

SECTION 3.03.         Improper Transfer......................................................................       13

SECTION 3.04.         Restrictive Legend.....................................................................       13

 

                                   ARTICLE IV

 

                         RIGHTS OF CERTAIN SHAREHOLDERS

 

SECTION 4.01.         Rights of First Offer..................................................................       13

SECTION 4.02.         Tag-Along Rights.......................................................................       15

SECTION 4.03.         Drag-Along Rights......................................................................       17

SECTION 4.04.         Information............................................................................       17

SECTION 4.05.         Preemptive Rights......................................................................       20

SECTION 4.06.         Board of Directors.....................................................................       23

SECTION 4.07.         Right to Observer......................................................................       24

SECTION 4.08.         Consultation Right.....................................................................       25

SECTION 4.09.         Approval Rights........................................................................       25

SECTION 4.10.         Transactions with Affiliates...........................................................       26

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                                    ARTICLE V

 

                               REGISTRATION RIGHTS

 

SECTION 5.01.         Company Registration...................................................................       27

SECTION 5.02.         Demand Registration Rights.............................................................       28

SECTION 5.03.         Registration Procedures................................................................       31

SECTION 5.04.         Registration Expenses..................................................................       36

SECTION 5.05.         Indemnification........................................................................       37

SECTION 5.06.         1934 Act Reports.......................................................................       39

SECTION 5.07.         Holdback Agreements....................................................................       39

SECTION 5.08.         Participation in Registrations.........................................................       40

SECTION 5.09.         Remedies...............................................................................       41

SECTION 5.10.         Other Registration Rights..............................................................       41

SECTION 5.11.         Rule 144...............................................................................       41

 

                                   ARTICLE VI

 

                  RIGHTS OF HOLDERS OF CLASS A PREFERRED STOCK

 

SECTION 6.01.         Series A Preferred Stock...............................................................       41

SECTION 6.02.         Management Fee.........................................................................       42

 

                                   ARTICLE VII

 

                                  MISCELLANEOUS

 

SECTION 7.01.         Notices................................................................................       42

SECTION 7.02.         Binding Effect; Benefits; Entire Agreement.............................................       42

SECTION 7.03.         Waiver.................................................................................       42

SECTION 7.04.         Amendment..............................................................................       43

SECTION 7.05.         Assignability..........................................................................       43

SECTION 7.06.         Applicable Law.........................................................................       43

SECTION 7.07.         Specific Performance...................................................................       43

SECTION 7.08.         Severability...........................................................................       44

SECTION 7.09.         Additional Securities Subject to Agreement.............................................       44

SECTION 7.10.         Name Change............................................................................       44

SECTION 7.11.         Section and Other Headings.............................................................       44

SECTION 7.12.         Counterparts...........................................................................       44

SECTION 7.13.         Termination of Certain Provisions......................................................       44

SECTION 7.14.         ERISA Matters..........................................................................       45

SECTION 7.15.         Regulatory Cooperation.................................................................       45

SECTION 7.16.         Publicity..............................................................................       45

SECTION 7.17.         Expenses...............................................................................       45

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                             SHAREHOLDERS AGREEMENT

 

 

                  THIS AGREEMENT (the "Agreement"), dated as of November 28,

2000, by and among MASCOTECH, INC. a Delaware corporation (the "Company"),

Richard Manoogian ("IS"), the Richard and Jane Manoogian Foundation ("Foundation

Shareholder" and, together with IS, "RM"), MASCO CORPORATION, a Delaware

corporation (together with RM, the "Rollover Investors"), the HEARTLAND ENTITIES

(as defined herein), LONG POINT CAPITAL FUND, L.P. and LONG POINT CAPITAL

PARTNERS L.L.C. (collectively "Long Point"), CRM 1999 ENTERPRISE FUND, LLC

("Cramer" and with Long Point collectively the "Masco Transferees" or

individually as a "Masco Transferee") and the entities identified as HIP

CO-INVESTORS on the signature pages hereof (the HIP Co-Investors (including,

without limitation, the Masco Transferees), the Rollover Investors, Sponsor and

each Person executing a Joinder Agreement are collectively referred to herein as

the "Shareholders" and individually as a "Shareholder").

 

                  WHEREAS, the Company and Riverside Acquisition Corporation

(formerly Riverside Company LLC), a Delaware corporation ("Riverside") and an

affiliate of Sponsor, have entered into a Recapitalization Agreement, dated as

of August 1, 2000, as amended by Amendment No. 1 thereto, dated as of October

23, 2000, and Amendment No. 2 thereto, dated as of November 28, 2000 (the

"Recapitalization Agreement"), which provides for, among other things, the

merger of Riverside with and into the Company (the "Recapitalization Merger").

 

                  WHEREAS, as a result of and in connection with the

Recapitalization Merger, each Shareholder will own the number of shares of

common stock of the Company, $1.00 par value (the "Common Stock"), set forth on

Schedule 2.04 hereto and Company Shareholder will own 361,001 shares of class A

preferred stock of the Company, $1.00 par value (the "Class A Preferred Stock").

 

                  WHEREAS, the parties hereto desire to enter into this

agreement to provide for certain rights and restrictions with respect to the

Common Stock.

 

                  NOW, THEREFORE, in consideration of the mutual covenants and

agreements contained herein, the parties mutually agree as follows:

 

                                    ARTICLE I

 

                       DEFINITIONS; RULES OF CONSTRUCTION

 

                  SECTION 1.01. Definitions. The following terms, as used

herein, have the following meanings:

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                                      -2-

 

 

                  "ADJUSTMENTS" means adjustments to the number of shares of

Common Stock outstanding as a result of a stock split, stock dividend,

reclassification, subdivision or reorganization, recapitalization or similar

event.

 

                  "ADVICE" see Section 5.03(p).

 

                  "AFFILIATE" of any specified Person means any other Person

directly or indirectly controlling, controlled by or under direct or indirect

common control with such specified Person. For the purposes of this definition,

"control" when used with respect to any Person means the power to direct the

management and policies of such Person, directly or indirectly, whether through

the ownership of voting securities, by contract or otherwise; and the terms

"controlling" and "controlled" have meanings correlative to the foregoing.

 

                  "AGREEMENT" see the recitals to this Agreement.

 

                  "ASSIGNEE" see Section 4.01(c).

 

                  "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday

and Friday which is not a day on which banking institutions in the City of New

York are authorized or obligated by law or executive order to close.

 

                  "CAPITAL STOCK" means, with respect to any Person, except as

otherwise provided in Section 4.05, any and all shares, interests,

participations, rights in or other equivalents (however designated) of such

Person's capital stock, and any rights (other than debt securities convertible

into capital stock), warrants or options exchangeable for or convertible into

such capital stock.

 

                  "CLASS A PREFERRED STOCK" see the recitals to this Agreement.

 

                  "COMMISSION" means the Securities and Exchange Commission.

 

                  "COMMON STOCK" see the recitals to this Agreement.

 

                  "COMPANY" see the recitals to this Agreement.

 

                  "COMPANY OPTION PERIOD" see Section 4.01(b).

 

                  "COMPANY SHAREHOLDER" means Masco Corporation, a Delaware

corporation, provided that upon the transfer of all of Masco Corporation's

shares of Common Stock to Masco Capital Corporation, a wholly-owned subsidiary

of Masco Corporation, Masco Capital Corporation shall also be deemed Company

Shareholder for all purposes of this Agreement; provided that Masco Capital

Corporation executes a Joinder Agreement.

<PAGE>   6

                                      -3-

 

 

                  "CSFB" means, collectively, the CSFB Plan Partner and the CSFB

Funds, or the CSFB Plan Partner acting on behalf of such other Persons.

 

                  "CSFB DIRECTOR" see Section 4.06(a)(ii)(c).

 

                  "CSFB FUNDS" means, collectively, Credit Suisse First Boston

Equity Partners (Bermuda), L.P., Credit Suisse First Boston U.S. Executive

Advisors, L.P., EMA Partners Fund 2000, L.P. and EMA Private Equity Fund 2000,

L.P.

 

                  "CSFB PLAN PARTNER" means Credit Suisse First Boston Equity

Partners, L.P.

 

                  "DEMAND HOLDERS" means any of Company Shareholder (on behalf

of itself and its Direct Permitted Transferees), RM (on behalf of himself,

itself and his or its Direct Permitted Transferees), a QI Demand Holder (on

behalf of itself and its Direct Permitted Transferees), CSFB (on behalf of

itself and its Direct Permitted Transferees and other Transferees to the extent

permitted by Section 5.02(g)) or Sponsor (on behalf of itself and its Direct

Permitted Transferees).

 

                  "DEMAND REGISTRATION" see Section 5.02(a).

 

                  "DIRECT PERMITTED TRANSFEREE" means:

 

         (i) with respect to any Shareholder who is a natural person, (1) the

         spouse or any lineal descendant (including by adoption and

         stepchildren) of such Shareholder, (2) any trust of which such

         Shareholder is the trustee and which is established solely for the

         benefit of any of the foregoing individuals or (3) any partnership, all

         of the general partner(s) and limited partner(s) (if any) of which are

         one or more Persons identified in this clause (i);

 

         (ii)     with respect to Sponsor, any Affiliate of Sponsor;

 

         (iii) with respect to Company Shareholder, any controlled Affiliate of

         Company Shareholder (including any wholly-owned subsidiary of Company

         Shareholder);

 

         (iv) with respect to any Institutional Shareholder, any Affiliate of

         such Institutional Shareholder;

 

         (v) with respect to Foundation Shareholder, any Affiliate of Foundation

         Shareholder;

 

         (vi) with respect to MetLife, (a) any Affiliates of MetLife or (b)

         Portfolio Advisors, LLC or any controlled Affiliate of Portfolio

         Advisors, LLC; and

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                                      -4-

 

 

         (vii) with respect to any Shareholder, any institutional lender to

         which such Shareholder pledges or grants a security interest in shares

         of Common Stock in a bona fide transaction effected in good faith,

         provided that (x) such pledgee executes a Joinder Agreement and (y)

         prior to any subsequent foreclosure or sale of such shares or any

         Transfer resulting from such foreclosure is effected, the provisions of

         Section 4.01 must be satisfied.

 

                  "ELIGIBLE OFFERING" see Section 4.05(a).

 

                  "FIRST OPTION" see Section 4.01(b).

 

                  "FIRST UNION CAPITAL PARTNERS" means First Union Capital

Partners, LLC.

 

                  "FOUNDATION SHAREHOLDER" see the recitals to this Agreement.

 

                  "GAAP" means United States generally accepted accounting

principles consistently applied throughout the specified period.

 

                  "HEARTLAND ENTITIES" means Heartland Industrial Partners,

L.P., Heartland Industrial Partners (FF), L.P., Heartland Industrial Partners

(E1), L.P., Heartland Industrial Partners (K1), L.P., Heartland Industrial

Partners (C1), L.P. and Direct Permitted Transferees of any of the foregoing.

 

                  "HIP CO-INVESTOR" means (i) each Shareholder that is a limited

partner, or an Affiliate of a limited partner, in Sponsor or in any other fund

or investment vehicle established or managed by Sponsor or an Affiliate of

Sponsor, (ii) CSFB, (iii) each Masco Transferee and (iv) MetLife; provided that,

upon the Transfer by MetLife of all of its shares of Common Stock to Portfolio

Advisors, LLC or any controlled Affiliate of Portfolio Advisors, LLC in

accordance with Section 3.02(a) of this Agreement, Portfolio Advisors, LLC or

such controlled Affiliate of Portfolio Advisors, LLC shall be deemed to be a HIP

Co-Investor under this Agreement.

 

                  "HOLDER" means any Demand Holder or Incidental Demand Holder.

 

                  "INCIDENTAL DEMAND HOLDER" see Section 5.02.

 

                  "INITIAL PUBLIC OFFERING" means either (x) an underwritten

initial public offering of the Company pursuant to an effective registration

statement filed under the 1933 Act (excluding registration statements filed on

Form S-8, or any similar successor form or another form used for a purpose

similar to the intended use for such forms) or (y) the listing of the Common

Stock on a national securities exchange or authorization for quotation on the

Nasdaq National Market System.

<PAGE>   8

                                      -5-

 

 

                  "INSTITUTIONAL SHAREHOLDER" means any Shareholder that is not

a natural person (other than Company Shareholder, Foundation Shareholder or

Sponsor).

 

                  "INVESTORS" see Section 4.01(a).

 

                  "INVESTOR'S NOTICE" see Section 4.01(a).

 

                  "IS" see the recitals to this Agreement.

 

                  "JOINDER AGREEMENT" means a joinder agreement, a form of which

is attached hereto as Exhibit A.

 

                  "MASCO TRANSFEREES" see the recitals to this Agreement.

 

                  "MATERIAL EVENT" see Section 4.09(a).

 

                  "METLIFE" means Metropolitan Life Insurance Company.

 

                  "1933 ACT" means the Securities Act of 1933.

 

                  "1934 ACT" means the Securities Exchange Act of 1934, as

amended.

 

                  "OBSERVER" see Section 4.07.

 

                  "OFFERED SHARES" see Section 4.01(a).

 

                  "PERMITTED TRANSFEREE" means:

 

         (i) with respect to any Shareholder who is a natural person, (1) the

         spouse or any lineal descendant (including by adoption and

         stepchildren) of such Shareholder, (2) any trust of which such

         Shareholder is the trustee and which is established solely for the

         benefit of any of the foregoing individuals, (3) any charitable

         foundation selected by such Shareholder, or (4) any partnership, all of

         the general partner(s) and limited partner(s) (if any) of which are one

         or more Persons identified in this clause (i), provided that, in the

         case of clauses (1), (2), (3) or (4), such Person executes a Joinder

         Agreement;

 

         (ii) with respect to Sponsor, (a) any investor in Sponsor or an

         Affiliate of such investor in Sponsor or an investor in any fund or

         other investment vehicle established or managed by Sponsor or any of

         its controlled Affiliates or any other Person which is an Affiliate of

         Sponsor on the date hereof, (b) any of the Shareholders and any of

         their respective Affiliates, (c) any controlled Affiliate of Sponsor,

         and (d) any investor in Sponsor that is an investment fund in

         connection with a pro rata distribution of shares of Common Stock to

         all investors in Sponsor at the time of the

<PAGE>   9

                                      -6-

 

 

         expiration or termination of the fund, provided that, in the case of

         clauses (a), (b), (c) or (d), any such investor executes a Joinder

         Agreement; and provided, further, that, in the case of these clauses

         (a), (b) or (c) Transfers to such Persons would not cause Sponsor to

         own, together with its Affiliates, a number of shares equal to less

         than thirty percent (30%) of the outstanding shares of Common Stock of

         the Company as of the date of any such Transfer;

 

         (iii) with respect to Company Shareholder, any controlled Affiliate of

         Company Shareholder (including any wholly-owned subsidiary of Company

         Shareholder), provided that such Affiliate or wholly-owned subsidiary

         executes a Joinder Agreement;

 

         (iv) with respect to any Institutional Shareholder (other than

         MetLife), (a) any Affiliate of such Institutional Shareholder, (b) any

         investor of such Institutional Shareholder that is an investment fund

         in connection with a pro rata distribution of shares of Common Stock to

         all investors (a "Shareholder Investor" or collectively "Shareholder

         Investors") in such Institutional Shareholder at the time of the

         expiration or termination of the fund, or (c) any Person acquiring all

         or substantially all of the investment portfolio of such Institutional

         Holder; and provided, further, that, in the case of clause (a), (b) or

         (c), all such investors execute a Joinder Agreement;

 

         (v) with respect to Foundation Shareholder, any Affiliate of Foundation

         Shareholder, provided such Affiliate executes a Joinder Agreement;

 

         (vi) with respect to MetLife, (a) any Affiliate of MetLife, (b)

         Portfolio Advisors, LLC or any controlled Affiliate of Portfolio

         Advisors, LLC or (c) any Shareholder Investor of such Institutional

         Shareholder that is an investment fund in connection with a pro rata

         distribution to all Shareholder Investors of such Institutional

         Shareholder at the time of the expiration or termination of the fund;

         provided, further, that, in the case of clause (a), (b) or (c), such

         investors execute a Joinder Agreement; and

 

         (vii) with respect to any Shareholder, any institutional lender to

         which such Shareholder pledges or grants a security interest in shares

         of Common Stock in a bona fide transaction effected in good faith,

         provided that (x) such pledgee executes a Joinder Agreement and (y)

         prior to any subsequent foreclosure or sale of such shares or any

         Transfer resulting from such foreclosure is effected, the provisions of

         Section 4.01 must be satisfied.

 

                  "PERSON" means an individual, a corporation, a partnership, an

association, a trust or any other entity or organization, including a

government, a political subdivision or an agency or instrumentality thereof.

<PAGE>   10

                                      -7-

 

 

                  "PIGGYBACK HOLDER" see Section 5.01(a).

 

                  "PIGGYBACK REGISTRATION" see Section 5.01(a).

 

                  "PROPORTIONATE PERCENTAGE" see Section 4.05(a).

 

                  "PRO RATA PORTION" means, with respect to shares of Common

Stock held by a Shareholder at any date of determination such number of shares

of Common Stock owned by such Shareholder as would result in such Shareholder

selling the same percentage of the total number of shares of Common Stock held

by such Shareholder in the Transfer subject to the applicable Transfer Notice

(the "Subject Sale") as the Sponsor Transferor sells in the Subject Sale

(assuming, with respect to the Transfer Notice, that all Shareholders have

exercised their Tag-Along Right).

 

                  "PUBLIC OFFERING" see Section 4.05(a)(i).

 

                  "PURCHASER" see Section 4.02(a).

 

                  "QI DEMAND HOLDER" means any Qualified Investor other than

CSFB.

 

                  "QUALIFIED INVESTOR" means a HIP Co-Investor who (x), together

with its Affiliates, at or prior to any date of determination, has made an

aggregate cash investment in Common Stock of the Company equal to at least $40.0

million (based upon the original cost of such investment) or (y) owns, together

with its Direct Permitted Transferees, at least 10% or more of the outstanding

shares of Common Stock of the Company at the date of determination. For purposes

of this definition and any other definitions containing thresholds for the

dollar amount of cash invested in Common Stock of the Company or the percentage

ownership of Common Stock of the Company, the cash investments and the

beneficial ownership of the CSFB Funds and the CSFB Plan Partner will be deemed

to be aggregated.

 

                  "QUALIFYING PUBLIC EQUITY OFFERING" means either (x) one or

more underwritten public offerings of common equity securities of the Company

pursuant to an effective registration statement filed under the 1933 Act

(excluding registration statements filed on Form S-8, or any similar successor

form) resulting in aggregate gross proceeds to the Company of $100,000,000 or

more or (y) the listing of the Common Stock on a national securities exchange or

authorization for quotation on the Nasdaq National Market System for which there

is a public float of least $100,000,000 held by non-Affiliates of the Company.

 

                  "RECAPITALIZATION AGREEMENT" see the recitals to this

Agreement.

 

                  "RECAPITALIZATION MERGER" see the recitals to this Agreement.

<PAGE>   11

                                      -8-

 

 

                  "REGISTRABLE SECURITIES" shall mean any of (i) the shares of

Common Stock owned by any Shareholder at the time of determination and (ii) any

other securities issued or issuable with respect to the Common Stock by way of a

stock split, stock dividend, reclassification, subdivision or reorganization,

recapitalization or similar event. As to any particular Registrable Securities,

such securities shall cease to be Registrable Securities when (a) a registration

statement with respect to the offering of such securities by the holder thereof

shall have been declared effective under the 1933 Act and such securities shall

have been disposed of by such holder pursuant to such registration statement,

(b) such securities have been sold to the public pursuant to Rule 144 (or any

similar provision then in force) promulgated under the 1933 Act, (c) except for

purposes of Section 5.02, such securities shall have been otherwise transferred

and new certificates for such securities not bearing a legend restricting

further transfer shall have been delivered by the Company or its transfer agent

and subsequent disposition of such securities shall not require registration or

qualification under the 1933 Act or any similar state law then in force or (d)

such securities shall have ceased to be outstanding.

 

                  "REGISTRATION" see Section 5.03.

 

                  "REPRESENTATIVES" means the officers, employees, directors and

agents of such Shareholder, including, representatives of its legal, accounting

and financial advisors.

 

                  "REQUEST NOTICE" see Section 5.02(a).

 

                  "REQUISITE INVESTORS" means (i) Company Shareholder for so

long as Company Shareholder either (a) has outstanding commitments or loans

under the Subordinated Loan Agreement, (b) owns, together with its Permitted

Transferees, $10.0 million or more in liquidation preference of Class A

Preferred Stock, or (c) owns, together with its Direct Permitted Transferees, at

least 1,571,569 shares (as adjusted for Adjustments) of Common Stock, (ii) RM,

(iii) CSFB (on behalf of itself and its Direct Permitted Transferees) and (iv)

HIP Co-Investors (other than CSFB) (on behalf of the HIP Co-Investors and their

Direct Permitted Transferees) owning a majority of the number of shares of

Common Stock owned by all HIP Co-Investors (other than CSFB) and their Direct

Permitted Transferees as a group at the applicable date of determination.

 

                  "RIVERSIDE" see the recitals to this Agreement.

 

                  "RM" see the recitals to this Agreement.

 

                  "ROLLOVER DEMAND HOLDERS" means Company Shareholder, RM and

their respective Direct Permitted Transferees.

 

                  "ROLLOVER INVESTORS" see the recitals to this Agreement.

 

                  "SECOND OPTION" see Section 4.01(c).

<PAGE>   12

                                      -9-

 

 

                  "SENIOR CREDIT FACILITIES" means the Credit Agreement, dated

as of the date hereof, among The Chase Manhattan Bank, Chase Securities Inc.,

the Company and certain of its subsidiaries and the other lenders and financial

institutions party thereto from time to time, as the same may be amended,

modified, waived, refinanced or replaced from time to time (whether under a new

credit agreement or otherwise).

 

                  "SHAREHOLDERS" see the recitals to this Agreement.

 

                  "SIGNIFICANT SUBSIDIARY" means any subsidiary of the Company

that would be a "significant subsidiary" as such term is defined in Rule 1.02 of

Regulation S-X under the 1933 Act.

 

                  "SPONSOR" means collectively the Heartland Entities or

Heartland Industrial Partners, L.P. acting on behalf of the other Heartland

Entities.

 

                  "SPONSOR OPTION PERIOD" see Section 4.01(c).

 

                  "SUBORDINATED LOAN AGREEMENT" means the subordinated loan

agreement dated the date hereof between Company Shareholder and the Company.

 

                  "SUBSTANTIAL CHANGE OF CONTROL" means the sale, lease or

transfer in one or a series of related transactions of at least a majority of

the consolidated assets of the Company and its subsidiaries or a majority of the

Capital Stock of the Company representing the right to vote for directors to any

Person or "group" of Persons (other than Sponsor and its Affiliates) whether

direct or indirect or by way of any merger, consolidation or other business

combination or purchase of beneficial ownership or otherwise.

 

                  "TRANSACTIONS" means (i) the Recapitalization Merger and (ii)

all of the other transactions contemplated by the Recapitalization Agreement,

including the transactions contemplated by the subscription agreements to be

entered into in connection with the Recapitalization Merger.

 

                  "TRANSFER" means the direct or indirect offer, sale, donation,

assignment (as collateral or otherwise), pledge, hypothecation, encumbrance,

transfer or disposition of any security.

 

                  "TRANSFER NOTICE" see Section 4.02(a).

 

                  "TRANSFEREE" means any Person who acquires shares of Common

Stock from a Shareholder and who is not a Permitted Transferee.

 

 

<PAGE>   13

                                      -10-

 

 

                  "TRIGGERING EVENT" means:

 

                  (i) with respect to a Rollover Demand Holder or CSFB, after

         the earlier of (1) the fifth anniversary of the date hereof if an

         Initial Public Offering has not been consummated by the fifth

         anniversary of the date hereof and (2) 180 days after an Initial Public

         Offering;

 

                  (ii) with respect to a QI Demand Holder, 180 days after an

         Initial Public Offering; and

 

                  (iii) with respect to Sponsor, at any time.

 

                  SECTION 1.02. Rules of Construction. For purposes of this

Agreement whenever a threshold for the dollar amount of cash invested in Common

Stock of the Company or the percentage of ownership of Common Stock is to be

determined as to a Shareholder, the cash investments and the beneficial

ownership of Direct Permitted Transferees of such Shareholder shall be

aggregated with the cash investments and beneficial ownership of such

Shareholder and the cash investments and the beneficial ownership of the

Heartland Entities will be deemed to be aggregated.

 

                                   ARTICLE II

 

                         REPRESENTATIONS AND WARRANTIES

 

                  Each of the parties hereby severally represents and warrants

to each of the other parties as follows:

 

                  SECTION 2.01. Authority; Enforceability. Such party has the

legal capacity or corporate power and authority to enter into this Agreement and

to carry out its obligations hereunder. Such party (in the case of parties that

are not natural persons) is duly organized and validly existing under the laws

of its jurisdiction of organization, and the execution of this Agreement and the

consummation of the transactions contemplated herein have been duly authorized

by all necessary action. No other act or proceeding, corporate or otherwise, on

its part is necessary to authorize the execution of this Agreement or the

consummation of any of the transactions contemplated hereby. This Agreement has

been duly executed by such party and constitutes its legal, valid and binding

obligation, enforceable against it in accordance with the terms of this

Agreement, subject to applicable bankruptcy, insolvency, reorganization,

moratorium and other laws affecting the rights of creditors generally and to the

exercise of judicial discretion in accordance with general principles of equity

(whether applied by a court of law or of equity).

 

                  SECTION 2.02. No Breach. Neither the execution of this

Agreement nor the performance by such party of its obligations hereunder nor the

consummation of the transactions contemplated hereby or by the Transactions does

or will:

<PAGE>   14

                                      -11-

 

 

                  (a) in the case of parties that are not natural persons,

         conflict with or violate its certificate of incorporation, bylaws or

         other organizational documents;

 

                  (b) violate, conflict with or result in the breach or

         termination of, or otherwise give any other person the right to

         accelerate, renegotiate or terminate or receive any payment or

         constitute a default or an event of default (or an event which with

         notice, lapse of time, or both, would constitute a default or event of

         default) under the terms of, any contract or agreement to which it is a

         party or by which it or any of its assets or operations are bound or

         affected, including, in the case of the Company, the Senior Credit

         Facilities or Subordinated Loan Agreement; or

 

                  (c) constitute a violation by such party of any laws, rules or

         regulations of any governmental, administrative or regulatory authority

         or any judgments, orders, rulings or awards of any court, arbitrator or

         other judicial authority or any governmental, administrative or

         regulatory authority.

 

                  SECTION 2.03. Consents. No consent, waiver, approval,

authorization, exemption, registration, license or declaration is required to be

made or obtained by such party, other than those which have been made or

obtained, in connection with (i) the execution or enforceability of this

Agreement or (ii) the consummation of any of the transactions contemplated

hereby or by the Transactions.

 

                  SECTION 2.04. Share Ownership. (a) The Company represents and

warrants that in the case of a Shareholder, such party will own, immediately

following the consummation of the transactions contemplated by the

Recapitalization Agreement, the number of shares of Capital Stock of the Company

set forth opposite such party's name in Schedule 2.04 attached hereto, free and

clear of any and all liens, claims and encumbrances, other than those created by

this Agreement.

 

                  (b) The Company represents and warrants that, as of the

date hereof after giving effect to the Transactions, the authorized capital

stock of the Company consists of (A) 250,000,000 shares of Common Stock, of

which 30,177,943 shares of Common Stock are issued and outstanding (without

giving effect to the restricted stock awards, whether or not vested, or shares

of Common Stock issuable to the former stockholders of K-Tech Mfg., Inc.

pursuant to documentation in existence prior to the Transactions), and (B)

25,000,000 shares of preferred stock, of which 361,001 shares of Class A

Preferred Stock are issued and outstanding. Without giving effect to any cash

elections or any accretion in respect of restricted stock awards after the date

of the Transactions and assuming full vesting of restricted stock awards granted

as of the date of the Transactions, there are approximately 3,741,325 shares of

Common Stock subject to restricted stock awards on the date hereof after giving

effect to the Transactions. The maximum number of shares of Common Stock

issuable to the former K-Tech Mfg., Inc. stockholders is not presently

determinable, but is estimated at up to approximately 550,000 shares of Common

Stock. Except (i) as provided for in this Agreement,

<PAGE>   15

                                      -12-

 

 

(ii) for accretion in respect of restricted stock awards after the date hereof,

(iii) for Common Stock to be issued to former stockholders of K-Tech Mfg., Inc.

arising out of obligations existing prior to the Transactions, as of the date of

the Transactions, no subscription, warrant, option, convertible or exchangeable

security or other right to purchase or acquire any shares of Capital Stock of

the Company is authorized or outstanding and the Company has no obligation to

issue any subscription, warrant, option, convertible or exchangeable security or

other such right.

 

                  (c) The Company represents and warrants that the shares of

Common Stock issued to each Shareholder in connection with the Recapitalization

Merger were duly and validly authorized, and when issued to each Shareholder in

connection with the Recapitalization Merger will be duly and validly issued,

fully paid and non-assessable and such shares are not subject to preemptive or

similar rights except as provided by this Agreement.

 

                  (d) Each Shareholder hereby consents to and approves of the

contribution by the Company in connection with the Transactions of all of its

assets to Metalync Company LLC, its wholly-owned subsidiary, as required by the

Senior Credit Facilities.

 

                                   ARTICLE III

 

                                 SHARE TRANSFERS

 

                  SECTION 3.01. Restrictions on Transfer. During the term of

this Agreement, each Shareholder agrees that it will not Transfer any Common

Stock, except as permitted by or in accordance with this Agreement.

 

                  SECTION 3.02. Exceptions to Restrictions. Subject to all

applicable laws, the restrictions on Transfer set forth in Section 3.01 hereof

shall not apply to any of the following:

 

                  (a) a Transfer by a Shareholder of Common Stock to one of its

         Permitted Transferees; provided that such Permitted Transferee shall

         agree to execute a Joinder Agreement in the form annexed hereto as

         Exhibit A (the "Joinder Agreement");

 

                  (b) a Transfer of Common Stock by a Shareholder in accordance

         with Sections 4.02 and 4.03 of this Agreement;

 

                  (c) a Transfer by a Shareholder after such Shareholder has

         complied with Section 4.01; provided that the Transferee shall agree to

         execute a Joinder Agreement; and

 

                  (d) a Transfer of Common Stock by a Shareholder pursuant to an

         effective registration statement under the 1933 Act or a Transfer

         pursuant to Rule 144 under the 1933 Act.

<PAGE>   16

                                      -13-

 

 

                  SECTION 3.03. Improper Transfer. Any attempt to Transfer any

shares of Common Stock not in accordance with this Agreement shall be null and

void and the Company will not give nor permit the Company's transfer agent to

give any effect to such attempted Transfer in its stock records.

 

                  SECTION 3.04. Restrictive Legend. Each certificate

representing shares of Common Stock and held by a Shareholder will bear a legend

substantially similar to the following (with such additions thereto or changes

therein as the Company may be advised by counsel are required by law or

necessary to give full effect to this Agreement):

 

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR

         SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER

         THE UNITED STATES SECURITIES ACT OF 1933 OR (ii) AN APPLICABLE

         EXEMPTION FROM REGISTRATION THEREUNDER. ANY SALE PURSUANT TO CLAUSE

         (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF

         COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH

         EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.

 

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE

         TERMS AND CONDITIONS, INCLUDING WITH RESPECT TO THE DIRECT OR INDIRECT

         TRANSFER THEREOF, OF A SHAREHOLDERS AGREEMENT DATED AS OF NOVEMBER 28,

         2000. THE SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER THINGS,

         SIGNIFICANT RESTRICTIONS ON TRANSFER OF THE SECURITIES OF THE COMPANY.

         A COPY OF THE SHAREHOLDERS AGREEMENT IS AVAILABLE UPON REQUEST FROM THE

         COMPANY."

 

                                   ARTICLE IV

 

                         RIGHTS OF CERTAIN SHAREHOLDERS

 

                  SECTION 4.01. Rights of First Offer. (a) At any time or from

time to time prior to a Qualifying Public Equity Offering, in the event that (x)

at any time following the first anniversary of the date hereof (provided,

however, that, prior to the second anniversary of the date hereof, such Rollover

Investor does not in the good faith judgment of the Company jeopardize the

"recapitalization" accounting treatment afforded the Company in the

Recapitalization Merger), a Rollover Investor desires to Transfer, or (y) at any

time following the date hereof, a HIP Co-Investor desires to Transfer, all or

part of its Common Stock ("Offered Shares"), other than pursuant to Section

3.02(a), 3.02(d), 4.02 or 4.03 of this Agreement, such Rollover Investor or HIP

Co-Investor (individually, an "Investor") shall give prompt written

<PAGE>   17

                                      -14-

 

 

notice (an "Investor's Notice") of its desire to sell the Offered Shares to the

Company and Sponsor. The Investor's Notice shall identify (i) the number of

Offered Shares and (ii) all other material terms and conditions of the proposed

Transfer including the purchase price and the form of the consideration.

 

                  (b) The Company shall have the right, but not the obligation,

to purchase all, but not less than all, the Offered Shares (the "First Option")

on the same terms and conditions as set forth in the Investor's Notice, which

option shall be exercised by delivering to such Investor irrevocable written

notice of its commitment to purchase the Offered Shares within fifteen (15)

business days after receipt of the Investor's Notice (the "Company Option

Period"). Failure by the Company to give such notice within such fifteen (15)

business day period shall be deemed an election by the Company not to purchase

the Offered Shares.

 

                  (c) In the event that the Company decides not to purchase the

Offered Shares pursuant to Section 4.01(b), then Sponsor shall have the right,

but not the obligation, to purchase all, but not less than all, the Offered

Shares (the "Second Option") on the same terms and conditions as set forth in

the Investor's Notice, which option shall be exercised by delivering to such

Investor irrevocable written notice of its commitment to purchase the Offered

Shares within ten (10) business days after the termination of the Company Option

Period (the "Sponsor Option Period"); provided that Sponsor may, at its sole

option, assign its rights to purchase an Investor's Offered Shares pursuant to

this Section 4.01 to another Shareholder or a Permitted Transferee of Sponsor

(such person an "Assignee"); provided that if the Assignee is a HIP Co-Investor,

each HIP Co-Investor will be able to participate in such assignment on a pro

rata basis. Failure by Sponsor or its Assignee to give such notice within such

ten (10) business day period shall be deemed an election by Sponsor or its

Assignee not to purchase the Offered Shares.

 

                  (d) Delivery of written notice by the Company, Sponsor or its

Assignee accepting the First Option or the Second Option, as the case may be,

shall constitute a contract between the Company, Sponsor or its Assignee, on the

one hand, and such Investor on the other hand, for the purchase and sale of the

Offered Shares on the terms and conditions set forth in the Investor's Notice.

The purchase of any shares pursuant to the exercise of the First Option or the

Second Option, as the case may be, shall be completed not later than forty-five

(45) days following receipt of the Investor's Notice with respect to the Offered

Shares, subject to receipt of any required material third-party or governmental

approvals, compliance with applicable laws and the absence of any injunction or

similar legal order preventing such transaction (collectively, the "Conditions")

in which case the purchase of the Offered Shares shall be delayed pending the

satisfaction of the Conditions up to an additional thirty (30) days. As a

condition to entering into the contract referred to above, the Company, Sponsor

and its Assignee will agree to use commercially reasonable efforts to satisfy

the Conditions as soon as possible. In the event that neither the First Option

nor the Second Option is exercised, the Investor shall have the right for a

period of seventy-five (75) days after the termination of the

<PAGE>   18

                                      -15-

 

 

Sponsor Option Period to Transfer (the "Investor Sale") the Offered Shares at a

price not less than ninety percent (90%) of the price contained in, and

otherwise on terms and conditions no less favorable to such Investor than those

set forth in, the Investor's Notice, except that the purchase of the Offered

Shares may be delayed up to an additional thirty (30) days pending satisfaction

of the Conditions; provided that the Transferee agrees to execute a Joinder

Agreement. If the Investor Sale is not consummated pursuant to the terms of the

immediately preceding sentence, the Investor will not effect Transfer of any of

the Offered Shares without commencing de novo the procedures set forth in this

Section 4.01.

 

                  SECTION 4.02. Tag-Along Rights. (A) If, at any time or from

time to time prior to a Qualifying Public Equity Offering, Sponsor or any of its

Affiliates (the "Sponsor Transferor") proposes to Transfer any shares of Common

Stock to a Person (the "Purchaser"), other than pursuant to Section 3.02(a),

3.02(d), 5.01 or 5.02 or in a circumstance where all of the shares owned by all

of the Shareholders are being purchased pursuant to Section 4.03, the Sponsor

Transferor shall give written notice (a "Transfer Notice") of such proposed

Transfer to the Shareholders at least fifteen (15) days prior to the

consummation of such proposed Transfer, setting forth (A) the total number of

shares of Common Stock offered to be Transferred to Purchaser, (B) the

consideration to be received for such shares of Common Stock by the Sponsor

Transferor, (C) the identity of the Purchaser(s), (D) any other material terms

and conditions of the proposed Transfer, (E) the expected date of the proposed

Transfer and (F) that each such Shareholder shall have the right (the "Tag-Along

Right") to elect to sell up to its Pro Rata Portion of such shares of Common

Stock to be Transferred to Purchaser. If any portion of the consideration

contained in the Transfer Notice includes consideration other than cash, the

Sponsor Transferor shall provide the Shareholders with a summary of a valuation

study, if any, that the Sponsor Transferor has prepared concerning such

consideration, but the Sponsor Transferor shall have no liability to any

Shareholder with respect to any such summary or study and no obligation to

undertake any such valuation. Notwithstanding the first sentence of this Section

4.02(a), a Shareholder will have a Tag-Along Right in connection with Transfers

of shares of Common Stock by the Sponsor Transferor to a Permitted Transferee

(other than an Affiliate of the Sponsor Transferor) when the Sponsor Transferor

Transfers shares of Common Stock to such Person at a price per share (as

adjusted for Adjustments) that is greater than the price per share (as adjusted

for Adjustments) paid for such shares by the Sponsor Transferor.

 

                  (b) Upon delivery of a Transfer Notice, each Shareholder has

the option, but not the obligation, to sell up to the Pro Rata Portion of its

shares of Common Stock at the same price per share of Common Stock and pursuant

to the same terms and conditions with respect to payment for the shares of

Common Stock as agreed to by the Sponsor Transferor, by sending written notice

to the Sponsor Transferor within ten (10) days of the date of the Transfer

Notice, indicating its election to sell up to the Pro Rata Portion of its shares

of Common Stock in the same transaction. To the extent that elections pursuant

to this Section 4.02(b) are not made with respect to any shares of Common Stock

included in a Transfer

<PAGE>   19

                                      -16-

 

 

Notice within such 10-day period, then the Sponsor Transferor shall re-offer to

Shareholders who have elected to sell their Pro Rata Portion (the "Tag-Along

Shareholders") for one additional three day period, the right to sell such

additional number of shares as will result in the Tag-Along Shareholders being

able to sell their pro rata share of such remaining shares of Common Stock,

based upon all the shares of Common Stock being sold by all the Tag Along

Shareholders (not including the remaining shares). For a sixty (60) day period

following such ten (10) day period (which period may be extended an additional

thirty (30) days in order to satisfy the Conditions), each Tag-Along Shareholder

shall be permitted to sell to the Purchaser(s) on the terms and conditions set

forth in the Transfer Notice that amount of its shares of Common Stock as to

which it has made its election and the Sponsor Transferor shall be permitted to

concurrently sell the balance of the shares of Common Stock that are the subject

of the Transfer Notice that are not sold by the Tag-Along Shareholders.

 

                  (c)      The provisions of Section 4.02(a) and (b) shall not

apply to any Transfer or series of Transfers by Sponsor of shares of Common

Stock to one or more Persons other than Permitted Transferees which in the

aggregate do not exceed ten percent (10%) of such shares of Common Stock owned

by Sponsor immediately following the Transactions.

 

                  (d)      Each Tag-Along Shareholder shall not be required to

make representations and warranties in connection with such sale other than

customary representations and warranties with respect to (i) such Shareholder's

due organization, power and authority, (ii) such Shareholder's ownership of the

shares of Common Stock and ability to freely convey such shares of Common Stock

without liens or encumbrances, (iii) customary representations regarding

non-contravention of such Shareholder's charter, bylaws or other organizational

documents or material agreements of such Tag-Along Shareholder and (iv) the

enforceable nature of such Tag-Along Shareholder's obligations under the

documents for such sale to which it is a party (collectively, the "Shareholder

Representations"). No Tag-Along Shareholder shall be liable in respect of any

indemnification provided in connection with a Tag-Along Sale (with respect to

such Shareholder's Shareholder Representations) in excess of the consideration

received by such Tag-Along Shareholder in such Tag-Along Sale and no Tag-Along

Shareholder shall be required to participate in any escrow relating to such

Tag-Along Sale in excess of such Tag-Along Shareholder's participation in the

Tag-Along Sale.

 

                  (e)      In the event that no Shareholder elects to sell

shares of Common Stock pursuant to this Section 4.02, Sponsor and/or its

Affiliates (as the case may be) shall have the right for a period of

seventy-five (75) days (which period may be extended by an additional thirty

(30) days to satisfy the Conditions) after the expiration of the 10-day period

referred to in Section 4.02(b) to Transfer the Shares subject to the Transfer

Notice to the Purchaser at a price not greater than the price contained in, and

otherwise on terms and conditions no more favorable to Sponsor and/or such

Affiliates than those set forth in, the Transfer Notice; it being agreed that,

after the end of the 75-day period referred to in this Section 4.02(e)

(including any permitted extension thereof), Sponsor and/or such Affiliates will

not effect any

<PAGE>   20

                                      -17-

 

transaction in any shares of Common Stock that are the subject of the Transfer

Notice without commencing de novo the procedures set forth in this Section 4.02.

 

                  SECTION 4.03. Drag-Along Rights. If at any time prior to a

Qualifying Public Equity Offering, Sponsor and its Affiliates intend to effect a

Substantial Change of Control, Sponsor shall have the right to require the other

Shareholders (the "Drag-Along Shareholders") to sell the same percentage of

Common Stock held by them relative to such Shareholder's ownership of Common

Stock as Sponsor and its Affiliates are selling in such transaction in

connection with such Substantial Change of Control; to vote such Common Stock,

whether by proxy, voting agreement or otherwise in favor of the transactions

constituting a Substantial Change of Control; to waive their appraisal or

dissenters' rights with respect to such transaction; or otherwise, participate

in such Substantial Change of Control and each other Shareholder agrees to take

any and all reasonably necessary action in furtherance of the foregoing;

provided that (a) the consideration to be received by the other Shareholders

shall be for the same type and amount per share of consideration received by

Sponsor, and (b) after giving effect to such transaction, Sponsor and its Direct

Permitted Transferees shall have sold the same percentage of their holdings of

Common Stock of the Company as sold by the Drag-Along Shareholders; provided,

however, that CSFB will not be obligated to participate in such transaction if

the consideration per share in such transaction is less than $16.90 per share

(as adjusted for Adjustments) of the Common Stock of the Company paid by CSFB in

connection with the Transactions and provided, further, that if Sponsor and its

Affiliates are selling all of their shares of Common Stock in connection with

such Substantial Change of Control, the Drag-Along Shareholders will be required

to sell all of their shares pursuant to this Section 4.03. In connection with

the sale of their shares of Common Stock pursuant to this Section 4.03, the

Drag-Along Shareholders shall not be required to make any representations and

warranties other than the Shareholder Representations. In addition, no

Drag-Along Shareholder shall be liable in respect of any indemnification in

connection with a transaction effected pursuant to this Section 4.03 (a

"Drag-Along Transaction") (with respect to such Shareholder's Shareholder

Representations) in excess of the consideration received by such Drag-Along

Shareholder in such Drag-Along Transaction and no such Drag-Along Shareholder

shall be required to participate in any escrow relating to such Drag-Along

Transaction in excess of such Drag-Along Shareholder's Pro Rata Portion.

 

                  SECTION 4.04. Information. (a) Prior to the occurrence of an

Initial Public Offering, the Company shall deliver to each Shareholder:

 

                    (1) as soon as available, but in any event within forty-five

         (45) days after the end of each quarter, copies of:

 

                           (i) consolidated balance sheets of the Company and

                  its subsidiaries as at the end of such quarter, and

<PAGE>   21

                                      -18-

 

 

                          (ii) consolidated statements of income, stockholders'

                  equity and cash flows of the Company and its subsidiaries, for

                  such quarter and for the portion of the fiscal year ending

                  with such quarter,

 

         in each case prepared in accordance with GAAP applicable to periodic

         financial statements generally, fairly presenting, in all material

         respects, the financial position of the Persons being reported on and

         their results of operations and cash flows, subject to changes

         resulting from normal year-end adjustments;

 

                    (2) as soon as available, but in any event within ninety

         (90) days after the end of each fiscal year of the Company, copies of:

 

                           (i) consolidated balance sheets of the Company and

                  its subsidiaries as at the end of such year, and

 

                           (ii) consolidated statements of income, stockholders'

                  equity and cash flows of the Company and its subsidiaries for

                  such year,

 

         in each case prepared in accordance with GAAP, fairly presenting, in

         all material respects, the financial position of the Persons being

         reported on and their results of operations and cash flows, and

         accompanied by an opinion thereon of independent certified public

         accountants of recognized national standing, which opinion shall state

         that such financial statements present fairly, in all material

         respects, the financial position of the Persons being reported upon and

         their results of operations and cash flows and have been prepared in

         conformity with GAAP;

 

                  (b)      In the case of any Shareholder (other than CSFB)

prior to the occurrence of a Qualifying Public Equity Offering, and for so long

as such Shareholder owns twenty-five percent (25%) or more of the number of

shares of Common Stock (as adjusted for Adjustments) owned by such Shareholder

immediately following the Transactions, or in the case of CSFB, for so long as

CSFB retains a number of shares of Common Stock equal to at least twenty-five

(25%) of the number of shares of Common Stock (as adjusted for Adjustments)

owned by CSFB immediately following the Transactions, the Company shall deliver

to each such Shareholder and CSFB:

 

                  (1) the information and reports provided pursuant to Sections

         4.04(a)(1) and (2);

 

                  (2) monthly "flash reports" utilized by the Company in its own

         management containing summarized, abbreviated data with respect to

         income statement amounts, balance sheet data and cash flows; and

<PAGE>   22

                                      -19-

 

 

                    (3) such other information concerning the condition or

         operations, financial or otherwise, of the Company and its Subsidiaries

         as a Shareholder may, from time to time, reasonably request.

 

                  (c)      The rights to receive the information set forth in

subsections (1) and (2) of paragraph (a) shall be assignable to Transferees of

Common Stock. The rights to receive the information set forth in subsections (2)

and (3) of paragraph (b) shall be assignable to a Transferee that acquires from

CSFB at least 25% of the shares of Common Stock owned by CSFB as of the date

hereof (as adjusted for Adjustments).

 

                  (d)      Prior to the occurrence of a Qualifying Public Equity

Offering, and for so long as a Shareholder owns twenty-five percent (25%) or

more of the number of shares of Common Stock owned by such Shareholder

immediately following the Transactions (as adjusted for Adjustments),

Representatives of such Shareholder shall be provided with a reasonable

opportunity to discuss the business and affairs of the Company with the

Company's senior managers, directors, officers and senior employees upon

reasonable advance notice during normal business hours; provided that such

Company representatives shall be available (A) to such Shareholder for an annual

meeting with senior management at which the following year's budget is presented

and (B) to Qualified Investors, RM and Company Shareholder for quarterly

meetings at which the most recent quarterly results are discussed.

 

                  (e)      Each Shareholder hereby agrees that neither it nor

its Representatives will disclose to any third party any information provided to

it or its Representatives by the Company hereunder which is not generally

available to the public, except with the prior express approval of the Company

or as may be required by applicable law; it being understood that nothing in

this Section 4.04(e) will restrict the ability of Sponsor or a HIP Co-Investor

to disclose certain information to its investors in accordance with the

governing documents of their partnership arrangement; provided that such

investors agree to be bound by the confidentiality provisions of this Agreement.

 

                  (f)      Notwithstanding the above, access to highly

confidential proprietary information and facilities need not be provided by the

Company, nor shall the Company be required to provide information to any

Shareholder that is a competitor or reasonably likely to become a competitor of

the Company or any of its subsidiaries; it being understood that the

Shareholders existing as of the date hereof are not competitors.

 

                  (g)      Notwithstanding the foregoing, (x) MetLife in

addition to Portfolio Advisors, LLC or any controlled Affiliate of Portfolio

Advisors, LLC shall have the rights provided by this Section 4.04

notwithstanding the fact it has transferred all of its shares of Common Stock to

Portfolio Advisors, LLC or any controlled Affiliate of Portfolio Advisors, LLC,

provided such Person would have such rights as a Shareholder (it being agreed

that, solely for purposes of paragraphs (b) and (d) of this Section 4.04, such

Person shall be deemed to have held its shares of Common Stock since the

consummation of the

<PAGE>   23

                                      -20-

 

 

Transactions) and (y) Company Shareholder shall be entitled to receive the

information provided by this Section 4.04 so long as Company Shareholder owns

any Class A Preferred Stock or has outstanding commitments or loans under the

Subordinated Loan Agreement.

 

                  SECTION 4.05. Preemptive Rights. (a) Prior to the occurrence

of an Initial Public Offering, the Company hereby grants and hereby agrees to

cause each Significant Subsidiary of the Company to grant to each HIP

Co-Investor and its Direct Permitted Transferees and Sponsor and its Direct

Permitted Transferees the right to purchase up to such Shareholder's

Proportionate Percentage (as hereinafter defined) of any future Eligible

Offering (as hereinafter defined) and in the case such Eligible Offering is in

whole or in part to Sponsor or any of its Affiliates, then the Company shall

also grant Company Shareholder and RM the right to purchase up to their

Proportionate Percentage. For purposes of this Section 4.05, the following terms

shall have the meanings set forth below.

 

                  "Proportionate Percentage" means, with respect to any

         Shareholder as of any given date with respect to an Eligible Offering,

         the lower of (i) twenty percent (20%) of such Eligible Offering or (ii)

         the number (expressed as a percentage) obtained by dividing (A) the

         number of shares of Common Stock owned by such Shareholder as of such

         date by (B) the total number of shares of Common Stock outstanding as

         of such date, in each case, assuming all shares of Capital Stock of the

         Company convertible into or exercisable for Common Stock have been so

         converted; provided that CSFB should not be limited by the foregoing

         clause (i) in the event that the Eligible Offering consists of Capital

         Stock of the Company for a consideration per share of Capital Stock

         which is less than the purchase price per share of Common Stock paid by

         CSFB in connection with the Transactions (as such price is adjusted by

         the Adjustments).

 

                  "Eligible Offering" means an offer by the Company or a

         Significant Subsidiary of the Company to sell to any Person or Persons

         (including any of the Shareholders) for cash, any Capital Stock of the

         Company or any Significant Subsidiary, other than an offering by the

         Company or a Significant Subsidiary of the Company:

 

                           (i) of Common Stock in an underwritten public

                  offering (a "Public Offering") registered under the 1933 Act

                  or pursuant to a Rule 144A offering under the 1933 Act;

 

                           (ii) of Common Stock of the Company issued upon the

                  exercise of options, warrants or convertible securities

                  outstanding as of the date hereof;

 

                         (iii) of Common Stock of the Company or options to

                  purchase shares of Common Stock in connection with or pursuant

                  to any stock option, stock purchase plan or agreement or other

                  benefit plans approved by the Board of Directors of the

                  Company to full-time employees, officers, directors,

 

<PAGE>   24

                                      -21-

 

 

                  consultants and/or advisors to the Company or its

                  subsidiaries;(excluding employees of Sponsor)

 

                           (iv) of Common Stock of the Company issued in

                  connection with restricted stock awards pursuant to and in

                  accordance with the Recapitalization Agreement;

 

                           (v) of Common Stock of the Company having a value of

                  up to $5.2 million in order to comply with Section 5.15 of the

                  Senior Credit Facilities;

 

                          (vi) of Capital Stock of the Company issued as

                  consideration to any seller in connection with the acquisition

                  by the Company or any subsidiary of the Company of the assets

                  of any Person in any transaction approved by the Board of

                  Directors of the Company;

 

                         (vii) of Capital Stock of the Company issued as an

                  inducement in connection with any debt financing of the

                  Company, subject to terms and conditions approved by the Board

                  of Directors of the Company;

 

                        (viii) of Capital Stock of a Significant Subsidiary of

                  the Company in connection with any sale of control of such

                  Significant Subsidiary to, or any joint venture between such

                  Significant Subsidiary and, a third party that is not a

                  financial sponsor or investor, which sale or joint venture is

                  approved by the Board of the Directors of the Company;

 

                           (ix) of director qualifying or similar shares of a

                  Significant Subsidiary;

 

                           (x) of Capital Stock of the Company issued as

                  consideration in connection with the acquisition by the

                  Company or any subsidiary of the Company of Simpson

                  Industries, Inc. or Global Metal Technologies, Inc. (or any

                  parent company thereof); and

 

                           (xi) of Capital Stock of the Company issued to former

                  stockholders of K-Tech Mfg., Inc. arising out of obligations

                  existing prior to the Transactions.

 

                  For purposes of this Section 4.05 only, "Capital Stock" means

any and all shares of common stock or options, warrants or similar instruments

or any other securities convertible or exchangeable therefor (collectively,

"Equity Interests") or any equity security linked to or offered or sold in

connection with any Equity Interests of such Person or any of its Significant

Subsidiaries, as the case may be.

<PAGE>   25

                                      -22-

 

 

                  (b)      The Company shall, before any securities are issued

pursuant to an Eligible Offering, give written notice (a "Preemptive Notice")

thereof to each Shareholder that is entitled to preemptive rights hereunder.

Such notice shall specify the security or securities proposed to be issued, the

proposed date of issuance, the consideration that the Company or such

Significant Subsidiary, as the case may be, intends to receive therefor and all

other material terms and conditions of such proposed issuance. For a period of

ten (10) business days following the date of such notice, each such Shareholder

shall be entitled, by written notice to the Company, to elect to purchase all or

part of such Shareholder's Proportionate Percentage of the securities being sold

in the Eligible Offering. To the extent that elections pursuant to this Section

4.05(b) shall not be made with respect to any shares of Common Stock included in

a Preemptive Notice within such 10-day period, then the Company shall re-offer

to Shareholders who have elected to purchase their Proportionate Percentage (the

"Preemptive Shareholders") for one additional three-day period, the right to

purchase any part of the shares of Common Stock not purchased by other

Shareholders (the "Section 4.05 Remaining Shares") pursuant to this Section 4.05

which is equal to the product obtained by multiplying (i) the number of Section

4.05 Remaining Shares by (ii) a fraction, the numerator of which is the number

of shares of Common Stock then owned by any such Preemptive Shareholder and the

denominator of which is the aggregate number of shares owned by all Preemptive

Shareholders. To the extent that elections pursuant to this Section 4.05(b)

shall not be made with respect to any securities included in an Eligible

Offering within such ten (10) business day period, then the Company or such

Significant Subsidiary, as the case may be, shall not be obligated to issue to

such Shareholder such securities for which such Shareholder has elected not to

purchase. To the extent that there are securities that have not been purchased

pursuant to this Section 4.05, then the Company or such Significant Subsidiary,

as the case may be, may issue such securities, but only for consideration not

less than, and otherwise on no less favorable terms to the Company or such

Significant Subsidiary, as the case may be, than, those set forth in the

Company's notice and only within thirty (30) days after the end of such ten (10)

business day period. In the event that any such offer is accepted by any such

Shareholder or Shareholders, the Company or such Significant Subsidiary, as the

case may be, shall sell to such Shareholder or Shareholders, and such

Shareholder or Shareholders shall purchase from the Company or such Significant

Subsidiary, as the case may be, for the consideration and on the terms set forth

in the notice as aforesaid, the securities that such Shareholder or Shareholders

shall have elected to purchase within ten (10) business days of such

Shareholder's election to purchase such Proportionate Percentage (subject to

delay for an additional thirty days for satisfaction of the Conditions).

 

                  (c)      Each of the Shareholders granted rights pursuant to

this Section 4.05 acknowledges that it has been given the opportunity to

purchase their Proportionate Percentage of Common Stock in connection with the

acquisition of Simpson Industries, Inc. and accordingly this Section 4.05 shall

not apply to the acquisition of Simpson Industries, Inc.

<PAGE>   26

                                      -23-

 

 

                  (d)      The Company may comply with any applicable securities

laws before issuing any shares of Common Stock pursuant to this Section 4.05 and

shall not be in violation of the provisions hereof by reason of such compliance;

provided it is using commercially reasonable efforts to so comply.

 

                  SECTION 4.06. Board of Directors. (a) At each annual or

special stockholders meeting called for the election of directors, and whenever

the Shareholders of the Company act by written consent with respect to the

election of directors, each Shareholder agrees to vote or otherwise give such

Shareholder's consent in respect of all shares of the Capital Stock of the

Company (whether now owned or hereafter acquired) owned by such Shareholder, and

take all other appropriate action and the Company shall take all necessary and

desirable actions within its control in order to cause:

 

                  (i) an amendment to the Bylaws of the Company to provide that

         the authorized number of directors on the Board of Directors of the

         Company shall be as recommended by the Sponsor in its sole discretion.

 

                 (ii) the election to the Board of Directors of:

 

                           (a) such number of directors as shall constitute a

                  majority of the Board of Directors as designated by Heartland

                  Industrial Partners, L.P.;

 

                           (b) one director designated by the Company

                  Shareholder; provided, however, that except as set forth in

                  the immediately following sentence of this subpart (b) upon

                  Company Shareholder and its Direct Permitted Transferees

                  ceasing to own at least 1,571,569 shares of Common Stock or,

                  upon a Qualifying Public Equity Offering, Company Shareholder

                  shall no longer have the right to designate one director to

                  the Board. Notwithstanding the foregoing, Company Shareholder

                  shall maintain the right to designate one director to the

                  Board of Directors for so long as Company Shareholder or its

                  Affiliates, own (x) $10.0 million or more of liquidation

                  preference of the Class A Preferred Stock or (y) have

                  outstanding loans or unfunded commitments under the

                  Subordinated Loan Agreement; and

 

                           (c) one director designated by the CSFB Plan Partner

                  (the "CSFB Director") after consultation with Sponsor;

                  provided, however, that upon CSFB and its Direct Permitted

                  Transferees ceasing to own a number of shares of Common Stock

                  which would equal at least a majority of the shares of Common

                  Stock owned by CSFB immediately following the Transactions (as

                  adjusted for Adjustments), CSFB shall no longer have the right

                  to designate one director to the Board of Directors;

<PAGE>   27

                                      -24-

 

 

         all of which persons shall hold office subject to their earlier removal

         in accordance with clause (iii) below, the Bylaws of the Company and

         applicable corporate law, until their respective successors shall have

         been elected and shall have qualified;

 

                (iii) the removal from the Board of Directors (with or without

         cause) of any director elected in accordance with subpart (a), (b) or

         (c) of clause (ii) above upon the written request of the Shareholders

         that designated such director; and

 

                 (iv) upon any vacancy in the Board of Directors as a result of

         any individual designated as provided in clause (ii) above ceasing to

         be a member of the Board of Directors whether by resignation or

         otherwise, the election to the Board of Directors as promptly as

         possible of an individual designated by the Shareholders that

         designated such individual; provided that the CSFB Plan Partner will

         consult with Sponsor prior to designating a replacement to serve as the

         CSFB Director.

 

                  (b)      The ability of a Shareholder to designate a director

to the Board of Directors shall not be assignable to any Person.

 

                  (c)      The parties hereto agree to cause the Board of

Directors to appoint the CSFB Director to each decision making committee of the

Board and to cause such CSFB Director to be nominated to the Board of each

subsidiary of the Company to the extent the composition of such boards is

substantially identical to the composition of the Board.

 

                  (d)      The Company agrees to provide customary directors'

liability insurance.

 

                  SECTION 4.07 Right to Observer. In the case of a Qualified

Investor (other than CSFB), for so long as such Qualified Investor retains a

number of shares of Common Stock equal to at least a majority of, or, in the

case of the CSFB Plan Partner, for so long as it retains a number of shares of

Common Stock equal to at least twenty-five percent (25%) of, the shares of

Common Stock owned by such Person immediately following the Transactions (as

adjusted for the Adjustments), such Person will have right to send one

Representative on its behalf (the "Observer") to attend all meetings of the

Board, including all committees thereof, solely in a non-voting observer

capacity. The Company will furnish to the Observer copies of all notices,

minutes, consents and other materials that it generally makes available to its

directors. The Observer may participate in discussions of matters under

consideration by the Board of the Company and any matters brought before any

committee thereof but will not be entitled to vote on any matter presented to

the Board of Directors. Any Qualified Investor and the CSFB Plan Partner will

have the right to remove and replace its Observer in its sole discretion and to

designate a substitute representative if its Observer is unable or unwilling to

attend any of the Board's meetings, including any committees thereof. The right

of Qualified Investors (other than CSFB) to appoint an Observer as set forth in

this Section 4.07 will terminate upon the occurrence of a Qualifying Public

Equity Offering.

<PAGE>   28

                                      -25-

 

 

                  SECTION 4.08. Consultation Right. (a) The Company hereby

agrees to consult (a "Consultation") with the Representatives of the CSFB Plan

Partner set forth on Exhibit B hereto with respect (x) to any issues, events or

transactions pertaining to the Company which in the good faith judgment of the

Board of Directors of the Company are material to the consolidated business,

operations and financial condition of the Company and (y) to the preparation of

the annual business plan of the Company. In connection with any Consultation,

the Company will provide such Representatives with all material information

regarding any action under consideration and reasonable notice so that the

consultation period shall constitute sufficient time for the CSFB Plan Partner

to participate meaningfully in any decision-making process regarding the action

to be taken.

 

                  (b)      The provision of Section 4.08(a) shall terminate upon

a Qualifying Public Equity Offering.

 

                  SECTION 4.09. Approval Rights. (a) The Company hereby agrees

not to enter into or adopt any Material Event (as defined below) without the

prior written approval of the majority of the Representatives of the CSFB Plan

Partner set forth on Exhibit B hereto, which approval with respect to clauses

(i) and (ii) of the definition of "Material Event" will not be unreasonably

withheld. For the purpose of this Section 4.09, "Material Event" means (i) any

agreement to acquire a business with a total enterprise value of $250.0 million

or more individually or any agreement to acquire a business if there have been

one or more agreements during the immediately preceding twelve (12) month period

for acquisitions(s) with a total enterprise value of $500.0 million or more (it

being hereby agreed by the parties that the acquisition of Global Metal

Technologies, Inc. shall be counted toward such $500.0 million threshold and

that the acquisition of Simpson Industries, Inc. shall not be counted toward

such threshold); (ii) the selection of a chief executive officer of the Company;

(iii) any restructuring of debt or other similar transaction pursuant to which

debt holders of the Company would hold twenty-five percent (25%) or more of the

outstanding Capital Stock of the Company; and (iv) any liquidation, dissolution,

winding-up of the affairs of the Company, whether voluntary or involuntary, or

the filing of a voluntary petition in bankruptcy or the filing of a plan of

reorganization. The Company hereby agrees to promptly give notice to the CSFB

Plan Partner if the Company is contemplating any Material Event. The CSFB Plan

Partner hereby agrees to notify the Company within ten (10) business days of the

receipt of such notice as to whether it approves of the Material Event. Failure

of the CSFB Plan Partner to notify the Company in writing within such ten (10)

business day period of its approval or disapproval of the Material Event shall

be deemed an approval by the CSFB Plan Partner of such Material Event.

 

                  (b)      The provisions of Section 4.09(a) shall terminate

upon a Qualifying Public Equity Offering.

<PAGE>   29

                                      -26-

 

 

                  SECTION 4.10. Transactions with Affiliates. Without the

consent of the Requisite Investors, for so long as Sponsor directly or

indirectly beneficially owns twenty percent (20%) or more of the outstanding

shares of Common Stock of the Company, the Company and its subsidiaries will not

enter into, or suffer to exist, any transaction with Sponsor or any of its

Affiliates involving payments or other consideration in excess of $1.0 million.

The foregoing restrictions will not apply to: (a) the payment of annual

monitoring fees to Sponsor in an amount not to exceed (x) $4.0 million plus

reimbursement of out-of-pocket expenses incurred by Sponsor in connection with

the advisory services provided to the Company for the first year after the date

hereof and (y) not to exceed 0.25% of the consolidated assets of the Company in

subsequent years; provided that such amount will not be less than $4.0 million

plus reimbursement of out-of-pocket expenses incurred by Sponsor in connection

with the advisory services provided to the Company; (b) the payment to Sponsor

of advisory fees and out-of-pocket expense reimbursement in connection with an

acquisition, divestiture or financing by the Company or any of its subsidiaries

(but excluding sales and purchases of personal property in the ordinary course

of business) provided that such fees shall be in an amount equal to 1% of the

aggregate value of such transaction; (c) fees payable to Sponsor in connection

with the Transactions and reimbursement of out-of-pocket expenses incurred by

Sponsor in connection with the Transactions; (d) transactions involving the

sale, purchase or lease of goods or services in the ordinary course of business

and on an arm's-length basis between or among the Company or any of its

subsidiaries and portfolio companies of Sponsor; (e) transactions between or

among the Company or any of its subsidiaries; (f) issuances of Capital Stock to

Sponsor and its Affiliates pursuant to, and in compliance with, Section 4.05;

and (g) issuances of Common Stock to Sponsor and other Shareholders, as

applicable (valued at $16.90 or more per share of Common Stock, unless otherwise

determined by the Board of Directors of the Company) for cash, or in exchange

for common stock, to provide for the acquisition by the Company or one of its

subsidiaries of all of the outstanding Capital Stock of Simpson Industries, Inc.

or Global Metal Technologies, Inc. (or any parent company thereof) either

initially or within one (1) year after the acquisition thereof by Sponsor or one

of its Affiliates (based on the cash equity provided by Sponsor and its

Affiliates at the closing of any such acquisition). Notwithstanding the

foregoing, the benefits of this Section 4.10 in favor of a class of Requisite

Investors (other than Company Shareholder) shall terminate as to it individually

when such class (including their respective Direct Permitted Transferees) ceases

to own a number of shares of Common Stock that would equal at least a majority

of the number of shares of Common Stock (appropriately adjusted for Adjustments)

owned by such class immediately following the Transactions. The benefits of this

Section 4.10 in favor of Company Shareholder will terminate as to Company

Shareholder when Company Shareholder (i) ceases to have outstanding commitments

or loans under the Subordinated Loan Agreement, (ii) owns, together with its

Direct Permitted Transferees, less than $10.0 million of liquidation preference

of Class A Preferred Stock and (iii) ceases to own, together with its Direct

Permitted Transferees, at least 1,571,569 shares of Common Stock.

<PAGE>   30

                                      -27-

 

 

                                    ARTICLE V

 

                               REGISTRATION RIGHTS

 

                  SECTION 5.01.  Company Registration.

 

                  (a)      Right to Piggyback on Registration of Stock. Subject

to Section 5.01(c), if at any time or from time to time the Company proposes to

register the Common Stock under the 1933 Act in connection with a public

offering (other than an Initial Public Offering consisting solely of primary

Common Stock or in connection with the registration of shares of Common Stock

issued to former shareholders of K-Tech Mfg., Inc. arising out of, or in lieu

of, obligations existing prior to the Transactions) of such Common Stock on any

form other than Form S-4 or Form S-8 or any similar successor forms or another

form used for a purpose similar to the intended use for such forms (a "Piggyback

Registration"), whether for its own account or for the account of one or more

shareholders of the Company, the Company shall each such time promptly give each

Shareholder written notice of such determination (in any event within 10

business days after its receipt of notice of any exercise of demand registration

rights); provided, however, that such notice of a Piggyback Registration shall

be given at least thirty (30) days prior to the anticipated filing date of such

Piggyback Registration. Upon the written request of any Shareholder (the

"Piggyback Holder") given within ten (10) business days after the providing of

any such notice by the Company, the Company shall use its best efforts to cause

to be registered under the 1933 Act all of the Registrable Securities held by

such Shareholder that the Shareholder has requested to be registered; provided,

however, that if, at any time after giving written notice of its intention to

register any securities and prior to the effective date of the registration

statement filed in connection with such registration, the Company shall

determine for any reason not to register or to delay registration of such

securities, the Company may, at its election, give written notice of such

determination to each Piggyback Holder and (i) in the case of a determination

not to register, shall be relieved of its obligation to register any Registrable

Securities in connection with such registration (but not from any obligation of

the Company to pay the registration expenses in connection therewith); and (ii)

in the case of a determination to delay registering, shall be permitted to delay

registering any Registrable Securities for the same period as the delay in

registering such other securities. No registration effected under this Section

5.01 shall relieve the Company of its obligation to effect any registration upon

demand under Section 5.02. The registration rights contained in Section 5.01 may

be assigned to any Transferee or Permitted Transferee.

 

                  (b)      Selection of Underwriters. If any Piggyback

Registration involves an underwritten primary offering, the Company shall have

sole discretion in the selection of any underwriter or underwriters to manage

such Piggyback Registration.

 

                  (c)      Priority on Piggyback Registrations. In the event

that the Piggyback Registration includes an underwritten offering, the Company

shall so advise the Shareholders

<PAGE>   31

                                      -28-

 

 

as part of the written notice given pursuant to Section 5.01(a) and the

registration rights provided in Section 5.01(a) shall be subject to the

condition that if the managing underwriter or underwriters of a Piggyback

Registration advise the Company in writing (a copy of which shall be provided to

the applicable Shareholders) that in its opinion the number of Registrable

Securities proposed to be sold in such Piggyback Registration exceeds the number

which can be sold, and would materially adversely affect the price at which the

Registrable Securities are to be sold, in such offering, the Company (or the

Shareholders, as the case may be) will include in such registration only the

number of Registrable Securities which, in the opinion of such underwriter or

underwriters can be sold in such offering without such material adverse effect.

The Registrable Securities so included in such Piggyback Registration shall be

apportioned (i) first, either (x) in the case of a primary registration on

behalf of the Company, to any shares of Common Stock that the Company proposes

to sell, or (y) in the case of a secondary registration on behalf of a

Shareholder, pro rata among the Holders on the basis of the number of

Registrable Securities requested to be registered pursuant to such Demand

Registration, (ii) second, pro rata among the Company Shareholder, RM and the

HIP Co-Investors (and their respective Permitted Transferees), but only to the

extent of shares of Common Stock of the Company held by them as of the date

hereof (as adjusted by the Adjustments), and (iii) third, pro rata among other

shares included in such Piggyback Registration, in each case according to the

total number of shares of the Common Stock requested for inclusion by said

selling stockholders, or in such other proportions as shall mutually be agreed

to among such selling stockholders.

 

                  SECTION 5.02.  Demand Registration Rights.

 

                  (a)      Right to Demand. At any time after a Triggering

Event, the Demand Holders may (subject in the case of Sponsor to Section 6.01),

individually or collectively, make a written request, which request will specify

the aggregate number of Registrable Securities to be registered and will also

specify the intended methods of disposition thereof (the "Request Notice") to

the Company for registration with the Commission under and in accordance with

the provisions of the 1933 Act of all or part of the Registrable Securities then

owned by Demand Holders (a "Demand Registration"); provided that the Company

may, if the Board of Directors so determines in the exercise of its reasonable,

good faith judgment that due to a pending or contemplated acquisition or

disposition or public offering or other material event involving the Company it

would be inadvisable to effect such Demand Registration at such time (but in no

event after such registration statement has become effective), the Company may,

upon providing the Demand Holders written notice (the "Delay Notice"), defer

such Demand Registration for a single period with respect to such Demand

Registration not to exceed one hundred thirty five (135) days. Upon receipt by

the Company of a request (a "Demand Request") to effect a Demand Registration

the Company will within 10 business days after the receipt of such notice,

notify each other Demand Holder of such request and such other Demand Holder

shall have the option to include its Registrable Securities in such Demand

Registration pursuant to this Section 5.02. Subject to Section 5.02(f), the

Company

<PAGE>   32

                                      -29-

 

 

will register all other Registrable Securities which the Company has been

requested to register by such other Demand Holders (each an "Incidental Demand

Holder") pursuant to this Section 5.02 by written request given to the Company

by such holders within 10 business days after the giving of such written notice

by the Company to such other Demand Holders. The Company shall not be obligated

to maintain a registration statement pursuant to a Demand Registration effective

for more than (x) ninety (90) days or (y) such shorter period when all of the

Registrable Securities covered by such registration statement have been sold

pursuant thereto (the "Effectiveness Period"). Notwithstanding the foregoing,

the Company shall not be obligated to effect more than one Demand Registration

in any 90-day period or such longer period not to exceed 180 days as requested

by an underwriter pursuant to Section 5.07. Upon any such request for a Demand

Registration, the Company will deliver any notices required by Section 5.01 and

5.02 and thereupon the Company will, subject to Section 5.01(c) and 5.02(f)

hereof use its best efforts to effect the prompt registration under the 1933 Act

of:

 

                  (i) the Registrable Securities which the Company has been so

         requested to register by Demand Holders as contained in the Request

         Notice, and

 

                  (ii) all other Registrable Securities which the Company has

         been requested to register by the Piggyback Holders and Incidental

         Demand Holders,

 

all to the extent required to permit the disposition of the Registrable

Securities so to be registered in accordance with the intended method or methods

of disposition of each seller of such Registrable Securities.

 

                  (b)      Number of Demand Registrations. The Company shall not

be required to prepare and file a registration statement pursuant to this

Section 5.02 if (i) a Rollover Demand Holder and its Direct Permitted

Transferees cease to own at the time of making the Request Notice twenty-five

percent (25%) or more of the shares of Common Stock of the Company owned as of

the date hereof (as adjusted for Adjustments) and (ii) the Request Notice

relates to less than twenty-five percent (25%) of the shares of Common Stock

held by such Demand Holder. In addition, the Company will not be required to

effect more than (i) two registrations pursuant to this Section 5.02 on behalf

of Company Shareholder, (ii) one registration on behalf of RM pursuant to this

Section 5.02, (iii) two registrations on behalf of CSFB pursuant to this Section

5.02; provided that CSFB will be afforded one additional Demand Registration in

the event that CSFB has not been able to dispose of all of the Registrable

Securities requested to be registered by CSFB with its initial two Demand

Registrations; provided that the Company shall not be obligated to attend or

participate in any "road shows" if such third and final Demand Registration is

for less than 10% of the shares of Common Stock of the Company owned by CSFB

immediately following the Transactions (as adjusted for Adjustments and (iv) one

demand on behalf of the QI Demand Holders as a group (other than CSFB) pursuant

to this Section 5.02. Sponsor and its Affiliates will be entitled to an

unlimited number of Demand Registrations. It being understood that if two or

more Demand

<PAGE>   33

                                      -30-

 

 

Holders make a collective Demand Registration, such Demand ( ) Registration

will count pursuant to this Section 5.02(b) as a Demand Registration for each

such Demand Holder. It is hereby acknowledged and agreed by the parties that any

Registrable Securities included in a registration statement on behalf of an

Incidental Demand Holder will not count as a Demand Registration for such

Incidental Demand Holder. In connection with a Demand Registration by more than

one Demand Holder or by a Demand Holder and Incidental Demand Holders, such

Demand Holders and Incidental Demand Holders shall elect one such Holder to act

as representative (the "DH Representative") in connection with such Demand

Registration and the Company shall only be obligated to communicate with such DH

Representative in connection with such Demand Registration. The Holders shall

give the Representative any and all necessary powers of attorneys needed for the

DH Representative to act on their behalf.

 

                  (c)      Revocation. Holders of a majority in number of the

Registrable Securities to be included in a registration statement pursuant to

this Section 5.02 may, at any time prior to the effective date of the

registration statement relating to such Demand Registration, acting through

their DH Representative revoke such request by providing a written notice

thereof to the Company. The Holders of Registrable Securities who revoke such

request shall reimburse the Company for all its expenses incurred in the

preparation, filing and processing of the Registration Statement. If pursuant to

the terms of this Section 5.02(c), the Holders reimburse the Company for its

reasonable expenses incurred in the preparation, filing and processing of any

registration statement requested and subsequently revoked by such Holders, the

attempted registration by such requested and subsequently revoked registration

statement shall not be deemed to be a Demand Registration. Notwithstanding the

foregoing, the Holders of a majority in number of the Registrable Securities to

be included in a registration statement pursuant to this Section 5.02 may, at

any time within five days after receipt of any Delay Notice acting through their

DH Representative revoke such request by providing written notice thereof to the

Company and the attempted Demand Registration shall not be deemed to be a Demand

Registration, notwithstanding that such Holders shall not reimburse the Company

for any expenses incurred in the preparation, filing and processing of any

Registration Statement.

 

                  (d)      Effective Registration. A registration will not count

as a Demand Registration: (i) if a Holder determines in its good faith judgment

to withdraw the proposed registration of any Registrable Securities requested to

be registered by a Demand Holder (x) due to marketing or regulatory reasons

subject to such Holder reimbursing the Company for its expenses in accordance

with Section 5.02(c) above, or (y) due to a material adverse change in the

Company (other than as a result of any action by the Holder); (ii) if such

registration is interfered with by any stop order, injunction or other order or

requirement of the Commission or other governmental agency or court for any

reason (other than as a result of any action by the Holder) and the Company

fails to promptly have such stop order, injunction or other order or requirement

removed, withdrawn or resolved to the Holder's satisfaction; or (iii) the

conditions to closing specified in the underwriting agreement or purchase

agreement entered into in

<PAGE>   34

                                      -31-

 

 

connection with the registration relating to any such demand are not satisfied

(other than as a result of a default or breach thereunder by the relevant

Holder).

 

                  (e)      Selection of Underwriters. If any of the Registrable

Securities covered by a Demand Registration are to be sold in an underwritten

offering, the relevant Holder, or Holders, will have the right to select the

managing underwriter(s) to administer the offering subject to the approval of

the Company, which will not be unreasonably withheld.

 

                  (f)      Priority on Demand Registrations. If the managing

underwriter or underwriters of a Demand Registration advise the Company in

writing that in its or their opinion the number of Registrable Securities

proposed to be sold in such Demand Registration exceeds the number which can be

sold, or adversely affects the price at which the Registrable Securities are to

be sold, in such offering, the Company will include in such registration only

the number of Registrable Securities which, in the opinion of such underwriter

or underwriters, can be sold in such offering without such material adverse

effect. To the extent such Demand Registration includes Registrable Securities

of more than one Holder, the Registrable Securities so included in such Demand

Registration shall be apportioned (i) first, pro rata among such Holders based

upon the number of shares of Common Stock owned by each Holder at the date of

determination and (ii) second, pro rata among other shares of Common Stock

included in such Demand Registration; provided that if such Demand Registration

is effected pursuant to a Demand Request by either Company Shareholder or RM

such number of Registrable Securities (as adjusted for Adjustments) of either

Company Shareholder or RM that are owned by Company Shareholder and RM

immediately following the Transactions will be included first without regard to

the pro rata treatment described in clause (i) of this sentence.

 

                  (g)      Assignability of Demand Registration Rights. The

rights offered a Shareholder pursuant to Section 5.02 are only assignable to a

Direct Permitted Transferee. Notwithstanding the foregoing, CSFB will be able to

assign its rights under this Article V to a Transferee that acquires from CSFB

at least 25% of the shares of Common Stock owned by CSFB as of the date hereof

(as adjusted for Adjustments). Any such assignment permitted hereunder shall be

effected hereunder only by giving written notice thereof from both the

transferee and the transferee to the Company.

 

                  SECTION 5.03. Registration Procedures. It shall be a condition

precedent to the obligations of the Company and any underwriter or underwriters

to take any action pursuant to this Article V that the Shareholders requesting

inclusion in any Piggyback Registration or Demand Registration (a

"Registration") shall furnish to the Company such information regarding them,

the Registrable Securities held by them, the intended method of disposition of

such Registrable Securities, and such agreements regarding indemnification,

disposition of such securities and other matters referred to in this Article V

as the Company shall reasonably request and as shall be required in connection

with the action to be taken by the Company.

<PAGE>   35

                                      -32-

 

 

With respect to any Registration which includes Registrable Securities held by a

Shareholder, the Company will, subject to Sections 5.01 and 5.02 promptly:

 

                  (a) Prepare and file with the Commission a registration

         statement on the appropriate form prescribed by the Commission and use

         its best efforts to cause such registration statement to become

         effective as soon as practicable thereafter; provided that the Company

         shall not be obligated to maintain such registration effective for a

         period longer than the Effectiveness Period; provided further that

         before filing a registration statement or prospectus or any amendments

         or supplements thereto, including documents incorporated by reference

         after the initial filing of the registration statement, the Company

         will furnish to the holders of the Registrable Securities covered by

         such registration statement and the underwriter or underwriters, if

         any, copies of or drafts of all such documents proposed to be filed,

         including documents incorporated by reference in the Prospectus and, if

         required by such holders, the exhibits incorporated by reference, at

         least three (3) business days prior thereto, which documents will be

         subject to the reasonable review of such holders and underwriters.

         Holders will have the opportunity to object to any information

         pertaining to such holders that is contained therein and the Company

         will make the corrections reasonably requested by such holders with

         respect to such information prior to filing any registration statement

         or amendment thereto or any prospectus or any supplement thereto;

         provided, however, that the Company will not file any registration

         statement or amendment thereto or any prospectus or any supplement

         thereto or any documents required to be incorporated by reference

         therein to which holders of a majority of the Registrable Securities

         covered by such registration statement or the underwriters, if any,

         shall reasonably object;

 

                  (b) Prepare and file with the Commission such amendments and

         post-effective amendments to such registration statement and any

         documents required to be incorporated by reference therein as may be

         necessary to keep the registration statement effective for a period of

         not less than the Effectiveness Period (but not prior to the expiration

         of the time period referred to in Section 4(3) of the 1933 Act and Rule

         174 thereunder, if applicable); cause the prospectus to be supplemented

         by any required prospectus supplement, and as so supplemented to be

         filed pursuant to Rule 424 under the 1933 Act; and comply with the

         provisions of the 1933 Act applicable to it with respect to the

         disposition of all Registrable Securities covered by such registration

         statement during the applicable period in accordance with the intended

         methods of disposition by the sellers thereof set forth in such

         registration statement or supplement to the prospectus;

 

                  (c) Furnish to such Shareholder, without charge, such number

         of conformed copies of the registration statement and any

         post-effective amendment thereto, as such Shareholder may reasonably

         request, and such number of copies of the

<PAGE>   36

                                      -33-

 

 

         prospectus (including each preliminary prospectus) and any amendments

         or supplements thereto, and any documents incorporated by reference

         therein as the Shareholder or underwriter or underwriters, if any, may

         request in order to facilitate the disposition of the securities being

         sold by the Shareholder (it being understood that the Company consents

         to the use of the prospectus and any amendment or supplement thereto by

         the Shareholder covered by the registration statement and the

         underwriter or underwriters, if any, in connection with the offering

         and sale of the securities covered by the prospectus or any amendments

         or supplements thereto);

 

                  (d) Notify such Shareholder, at any time when a prospectus

         relating thereto is required to be delivered under the 1933 Act, when

         the Company becomes aware of the happening of any event as a result of

         which the prospectus included in such registration statement (as then

         in effect) contains any untrue statement of material fact or omits to

         state a material fact necessary to make the statements therein (in the

         case of the prospectus or any preliminary prospectus, in light of the

         circumstances under which they were made) not misleading and, as

         promptly as practicable thereafter, prepare and file with the

         Commission and furnish a supplement or amendment to such prospectus so

         that, as thereafter delivered to the investors of such securities, such

         prospectus will not contain any untrue statement of a material fact or

         omit to state a material fact necessary to make the statements therein,

         in light of the circumstances under which they were made, not

         misleading;

 

                  (e) In the case of an underwritten offering, enter into such

         customary agreements (including underwriting agreements in customary

         form) and make members of senior management of the Company available on

         a basis reasonably requested by the underwriters to participate in,

         "road show" and other customary marketing activities (including

         one-on-one meetings with prospective purchasers of the Registrable

         Securities) and cause to be delivered to the underwriters reasonable

         opinions of counsel to the Company in customary form, covering such

         matters as are customarily covered by opinions for an underwritten

         public offering as the underwriters may reasonably request and

         addressed to the underwriters;

 

                  (f) Make available, for inspection by any seller of

         Registrable Securities, any underwriter participating in any

         disposition pursuant to a registration statement, and any attorney,

         accountant or other agent retained by any such seller or underwriter,

         all financial and other records, pertinent corporate documents and

         properties of the Company, and cause the Company's officers, directors,

         employees and independent accountants to supply all information

         reasonably requested by any such seller, underwriter, attorney,

         accountant or agent that are necessary to be reviewed by such person in

         connection with the preparation of such registration statement;

<PAGE>   37

                                      -34-

 

 

                  (g) If requested, cause to be delivered, immediately prior to

         the effectiveness of the registration statement (and, in the case of an

         underwritten offering, at the time of delivery of any Registrable

         Securities sold pursuant thereto), letters from the Company's

         independent certified public accountants addressed to each selling

         Shareholder (unless such selling Shareholder does not provide to such

         accountants the appropriate representation letter required by rules

         governing the accounting profession) and each underwriter, if any,

         stating that such accountants are independent public accountants within

         the meaning of the 1933 Act and the applicable rules and regulations

         adopted by the Commission thereunder, and otherwise in customary form

         and covering such financial and accounting matters as are customarily

         covered by letters of the independent certified public accountants

         delivered in connection with primary or secondary underwritten public

         offerings, as the case may be;

 

                  (h) Provide a transfer agent and registrar for all such

         Registrable Securities not later than the effective date of the

         registration statement;

 

                  (i) Use its best efforts to cause all securities included in

         such registration statement to be listed, by the date of the first sale

         of securities pursuant to such registration statement, on any national

         securities exchange, quotation system or other market on which the

         Common Stock is then listed or proposed to be listed by the Company, if

         any;

 

                  (j) Make generally available to its security holders an

         earnings statement, which need not be audited, satisfying the

         provisions of Section 11(a) of the 1933 Act as soon as reasonably

         practicable after the end of the twelve (12)-month period beginning

         with the first month of the Company's first fiscal quarter commencing

         after the effective date of the registration statement, which statement

         shall cover said twelve (12)-month period;

 

                  (k) After the filing of a registration statement, (i) promptly

         notify each Shareholder holding Registrable Securities covered by such

         registration statement of any stop order issued or, to the Company's

         knowledge, threatened by the Commission and of the receipt by the

         Company of any notification with respect to the suspension of the

         qualification of any Registrable Securities for sale under the

         applicable securities or blue sky laws of any jurisdiction and (ii)

         take all reasonable actions to obtain the withdrawal of any order

         suspending the effectiveness of the registration statement or the

         qualification of any Registrable Securities at the earliest possible

         moment;

 

                  (l) Subject to the time limitations specified in paragraph (b)

         above, if requested by the managing underwriter or underwriters or such

         Shareholder, promptly incorporate in a prospectus supplement or

         post-effective amendment such information as the managing underwriter

         or underwriters or the Shareholder reasonably requests to be included

         therein, including, without limitation, with respect to the number of

         shares

<PAGE>   38

                                      -35-

 

 

         being sold by the Shareholder to such underwriter or underwriters, the

         purchase price being paid therefor by such underwriter or underwriters

         and with respect to any term of the underwritten offering of the

         securities to be sold in such offering; and make all required filings

         of such prospectus supplement or post-effective amendment as soon as

         practicable after being notified of the matters to be incorporated in

         such prospectus supplement or post-effective amendment;

 

                  (m) As promptly as practicable after filing with the

         Commission of any document which is incorporated by reference into a

         registration statement, deliver a copy of such document to such

         Shareholder;

 

                  (n) On or prior to the date on which the registration

         statement is declared effective, use its best efforts to register or

         qualify, and cooperate with such Shareholder, the underwriter or

         underwriters, if any, and their counsel in connection with the

         registration or qualification of, the securities covered by the

         registration statement for offer and sale under the securities or blue

         sky laws of each state and other jurisdiction of the United States as

         the Shareholder or managing underwriter or underwriters, if any,

         requests in writing, to use its best efforts to keep each such

         registration or qualification effective, including through new filings,

         or amendments or renewals, during the Effectiveness Period do any and

         all other acts or things necessary or advisable to enable the

         disposition in all such jurisdictions of the Registrable Securities

         covered by the applicable registration statement; provided that the

         Company will not be required to qualify generally to do business in any

         jurisdiction where it is not then so qualified or to take any action

         which would subject it to general service of process in any such

         jurisdiction where it is not then so subject;

 

                  (o) Cooperate with such Shareholder and the managing

         underwriter or underwriters, if any, to facilitate the timely

         preparation and delivery of certificates (not bearing any restrictive

         legends) representing securities to be sold under the registration

         statement, and enable such securities to be in such denominations and

         registered in such names as the managing underwriter or underwriters,

         if any, may request; and

 

                  (p) Use its best efforts to cause the securities covered by

         the registration statement to be registered with or approved by such

         other governmental agencies, authorities or self-regulatory bodies

         within the United States as may be necessary to enable the seller or

         sellers thereof or the underwriter or underwriters, if any, to

         consummate the disposition of such Registrable Securities.

 

                  At all times after an Initial Public Offering, the Company

shall file all reports required to be filed by it under the 1933 Act and the

1934 Act and the rules and regulations adopted by the Commission thereunder, and

take such further action as any Shareholders may reasonably request, all to the

extent required to enable such Shareholders to be eligible to sell Registrable

Securities pursuant to Rule 144 (or any similar rule then in effect).

<PAGE>   39

                                      -36-

 

 

                  The Shareholders, upon receipt of any notice from the Company

of the happening of any event of the kind described in subsection (d) of this

Section 5.03, will forthwith discontinue disposition of the securities until the

Shareholders' receipt of the copies of the supplemented or amended prospectus

contemplated by subsection (d) of this Section 5.03 or until it is advised in

writing (the "Advice") by the Company that the use of the prospectus may be

resumed, and has received copies of any additional or supplemental filings which

are incorporated by reference in the prospectus, and, if so directed by the

Company, each Shareholder will, or will request the managing underwriter or

underwriters, if any, to, deliver, to the Company (at the Company's expense) all

copies, other than permanent file copies then in such Shareholder's possession,

of the prospectus covering such securities current at the time of receipt of

such notice. In the event the Company shall give any such notice, the time

periods mentioned in subsections (a), (b) and (n) of this Section 5.03 shall be

extended by the number of days during the period from and including any date of

the giving of such notice to and including the date when each seller of

securities covered by such registration statement shall have received the copies

of the supplemented or amended prospectus contemplated by subsection (d) of this

Section 5.03 hereof or the Advice.

 

                  SECTION 5.04. Registration Expenses. (a) Subject to Section

5.02(c), in the case of any Registration, the Company shall bear all expenses

incident to the Company's performance of or compliance with Sections 5.01, 5.02

and 5.03 of this Agreement, including, without limitation, all Commission and

stock exchange or National Association of Securities Dealers, Inc. registration

and filing fees and expenses, fees and expenses of compliance with securities or

blue sky laws (including, without limitation, reasonable fees and disbursements

of counsel in connection with blue sky qualifications of the Registrable

Securities), rating agency fees, printing expenses, messenger, telephone and

delivery expenses, fees and disbursements of counsel for the Company and all

independent certified public accountants and any fees and disbursements of

underwriters customarily paid by issuers or sellers of securities (but not

including any underwriting discounts or commissions, or transfer taxes, if any,

attributable to the sale of Registrable Securities by a Piggyback Holder or

Holder or fees and expenses of more than one counsel representing the

Shareholders selling Registrable Securities under such Registration).

 

                  (b)      In connection with each registration initiated

hereunder (whether a Demand Registration or a Piggyback Registration), the

Company shall reimburse the holders covered by such registration or sale for the

reasonable fees and disbursements of one law firm chosen by the holders of a

majority of the number of shares of Registrable Securities included in such

registration.

 

                  (c)      The obligation of the Company to bear the expenses

described in Section 5.04(b) and to reimburse the holders for the expenses

described in Section 5.04(b) shall apply irrespective of whether a registration,

once properly demanded, if applicable, becomes effective, is withdrawn or

suspended, or is converted to another form of registration and

<PAGE>   40

                                      -37-

 

 

irrespective of when any of the foregoing shall occur; provided, however, that

the expenses for any registration statement withdrawn pursuant to 5.02(c) prior

to its effectiveness at the request of a Holder (unless withdrawn following and

due to a Delay Notice), any registration statement withdrawn solely at the

request of a Holder, or any supplements or amendments to a registration

statement or prospectus resulting from a misstatement furnished to the Company

by a Holder, shall be borne by such Holder.

 

                  SECTION 5.05.  Indemnification.

 

                  (a)      Indemnification by the Company. The Company agrees to

indemnify and hold harmless each Shareholder, its officers, directors,

Affiliates and agents and each Person who controls (within the meaning of the

1933 Act or the 1934 Act) the Shareholder, including, without limitation any

general partner or manager of any thereof, against all losses, claims, damages,

liabilities and expenses (including reasonable counsel fees and disbursements)

arising out of or based upon any untrue or alleged untrue statement of a

material fact contained in any registration statement, prospectus or preliminary

prospectus, or any amendment thereof or supplement thereto, in which such

Shareholder participates in an offering of Registrable Securities or in any

document incorporated by reference therein or any omission or alleged omission

to state therein a material fact required to be stated therein or necessary to

make the statements therein (in the case of the prospectus or any preliminary

prospectus, in light of the circumstances under which they were made) not

misleading, except insofar as the same are made in reliance on and in conformity

with any information with respect to such Shareholder furnished in writing to

the Company by such Shareholder expressly for use therein; provided, however,

that the foregoing indemnity agreement with respect to any preliminary

prospectus shall not inure to the benefit of any Shareholder from whom the

Person asserting such loss, claim, damage or liability purchased the securities

if it is determined that such loss, claim, damage or liability was caused by

such Shareholder's failure to deliver to such Shareholder's immediate purchaser

a current copy of the prospectus (if the current copy of the prospectus was

required by applicable law to be so delivered) after the Company has furnished

such Shareholder with a sufficient number of copies of such prospectus. The

Company will also indemnify underwriters (as such term is defined in the 1933

Act), their officers and directors and each Person who controls such

underwriters (within the meaning of the 1933 Act) to the same extent as provided

above with respect to the indemnification of the Shareholders.

 

                  (b)      Indemnification by the Shareholders. In connection

with any registration statement in which a Shareholder is participating, each

such Shareholder will furnish to the Company in writing such information and

affidavits with respect to such Shareholder as the Company reasonably requests

for use in connection with any registration statement or prospectus covering the

Registrable Securities of such Shareholder and to the extent permitted by law

agrees to indemnify and hold harmless the Company, its directors, officers and

agents and each Person who controls (within the meaning of the 1933 Act or the

1934 Act) the Company,

<PAGE>   41

                                      -38-

 

 

against any losses, claims, damages, liabilities and expenses arising out of or

based upon any untrue statement of a material fact or any omission to state a

material fact required to be stated therein or necessary to make the statements

in the registration statement or prospectus or preliminary prospectus (in the

case of the prospectus or preliminary prospectus, in light of the circumstances

under which they were made) not misleading, to the extent, but only to the

extent, that such untrue statement or omission is made in reliance on and in

conformity with the information or affidavit with respect to such Shareholder so

furnished in writing by such Shareholder expressly for use in the registration

statement or prospectus; provided, however, that the obligation to indemnify

shall be several, not joint and several, among such Shareholders and the

liability of each such Shareholder shall be in proportion to and limited to the

net amount received by such Shareholder from the sale of Registrable Securities

pursuant to a registration statement in accordance with the terms of this

Agreement. The indemnity agreement contained in this Section 5.05 shall not

apply to amounts paid in settlement of any such loss, claim, damage, liability,

action or proceeding if such settlement is effected without the consent of such

seller (which consent shall not be unreasonably withheld or delayed). The

Company and the holders of the Registrable Securities hereby acknowledge and

agree that, unless otherwise expressly agreed to in writing by such holders, the

only information furnished or to be furnished to the Company for use in any

registration statement or prospectus relating to the Registrable Securities or

in any amendment, supplement or preliminary materials associated therewith are

statements specifically relating to (a) transactions or the relationship between

such holder and its Affiliates, on the one hand, and the Company, on the other

hand, (b) the beneficial ownership of shares of Common Stock by such holder and

its Affiliates, (c) the name and address of such holder and (d) any additional

information about such holder or the plan of distribution (other than for an

underwritten offering) required by law or regulation to be disclosed in any such

document.

 

                  (c)      Conduct of Indemnification Proceedings. Any Person

entitled to indemnification hereunder will (i) give prompt written notice to the

indemnifying party of any claim with respect to which it seeks indemnification

and (ii) unless in such indemnified party's reasonable judgment a conflict of

interest may exist between such indemnified and indemnifying parties with

respect to such claim, permit such indemnifying party to assume the defense of

such claim with counsel reasonably satisfactory to the indemnified party. The

failure to so notify the indemnifying party shall not relieve the indemnifying

party from any liability hereunder with respect to the action, except to the

extent that such indemnifying party is materially prejudiced by the failure to

give such notice; provided, however, that any such failure shall not relieve the

indemnifying party from any other liability which it may have to any other

party. No indemnifying party in the defense of any such claim or litigation,

shall, except with the consent of such indemnified party, which consent shall

not be unreasonably withheld, consent to entry of any judgment or enter into any

settlement which does not include as an unconditional term thereof the giving by

the claimant or plaintiff to such indemnified party of a release from all

liability in respect of such claim or litigation. An indemnifying party who is

not entitled to, or elects not to, assume the defense of a claim will not be

 

<PAGE>   42

                                      -39-

 

 

obligated to pay the fees and expenses of more than one counsel for all parties

indemnified by such indemnifying party with respect to such claim, unless in the

reasonable judgment of any indemnified party there may be one or more legal or

equitable defenses available to such indemnified party which are in addition to

or may conflict with those available to any other of such indemnified parties

with respect to such claim, in which event the indemnifying party shall be

obligated to pay the reasonable fees and expenses of such additional counsel or

counsels; provided, however, that such number of additional counsel must be

reasonably acceptable to the indemnifying party.

 

                  (d)      Contribution. If for any reason the indemnification

provided for in the preceding paragraphs (a) and (b) of this Section 5.05 is

unavailable to an indemnified party as contemplated by the preceding paragraphs

(a) and (b) of this Section 5.05, then the indemnifying party shall contribute

to the amount paid or payable by the indemnified party as a result of such loss,

claim, damage or liability in such proportion as is appropriate to reflect not

only the relative benefits received by the indemnified party and the

indemnifying party, but also the relative fault of the indemnified party and the

indemnifying party, as well as any other relevant equitable considerations. In

no event shall the liability of any selling Shareholder be greater in amount

than the amount of net proceeds received by such Shareholder upon such sale or

the amount for which such indemnifying party would have been obligated to pay by

way of indemnification if the indemnification provided in paragraph (b) of this

Section 5.05 had been available.

 

                  SECTION 5.06. 1934 Act Reports. The Company agrees that at all

times after it has filed a registration statement pursuant to the requirements

of the 1933 Act relating to any class of equity securities of the Company, it

will use its best efforts to file in a timely manner all reports required to be

filed by it pursuant to the 1934 Act to the extent the Company is required to

file such reports. Notwithstanding the foregoing, the Company may deregister any

class of its equity securities under Section 12 of the 1934 Act or suspend its

duty to file reports with respect to any class of its securities pursuant to

Section 15(d) of the 1934 Act if it is then permitted to do so pursuant to the

1934 Act and rules and regulations thereunder.

 

                  SECTION 5.07. Holdback Agreements. (a) Whenever the Company

proposes to register any of its equity securities under the 1933 Act for its own

account (other than on Form S-4 or S-8 or any similar successor form or another

form used for a purpose similar to the intended use of such forms) or is

required to use its best efforts to effect the registration of any Registrable

Securities under the 1933 Act pursuant to Section 5.01 or 5.02, each holder of

Registrable Securities agrees by acquisition of such Registrable Securities not

to effect any sale or distribution, including any sale pursuant to Rule 144

under the 1933 Act, or to request registration under Section 5.02 of any

Registrable Securities within 10 days prior to and 90 days (unless advised by

the managing underwriter that a longer period, not to exceed 180 days, is

required, or such shorter period as the managing underwriter for any

underwritten

<PAGE>   43

                                      -40-

 

 

offering may agree) after the effective date of the registration statement

relating to such registration, except as part of such registration or unless in

the case of a private sale or distribution, the transferee agrees in writing to

be subject to this Section 5.07. If requested by such managing underwriter, each

holder of Registrable Securities agrees to execute a holdback agreement, in

customary form, consistent with the terms of this Section 5.07(a).

Notwithstanding the foregoing, no Shareholder will be restricted from selling

any Registrable Securities if such Shareholder was not able to sell all of its

Registrable Securities pursuant to such registration statement or such

Shareholder and its Affiliates beneficially own a number of shares of Common

Stock as of such date of determination equal to less than three percent (3%) of

the outstanding Common Stock of the Company.

 

                  (b)      The Company agrees not to effect any sale or

distribution of any of its equity securities or securities convertible into or

exchangeable or exercisable for any of such securities within the 10 days prior

to and during the 90 days (unless advised by the managing underwriter that a

longer period, not to exceed 180 days, is required, or such shorter period as

the managing underwriter for any underwritten offering may agree) beginning on

the effective date of any underwritten Demand Registration or any underwritten

Piggyback Registration (except as part of such underwritten registration or

pursuant to registrations on Form S-8 or S-4 or any successor forms thereto),

except that such restriction shall not prohibit (i) grants of employee stock

options or other issuances of Capital Stock pursuant to the terms of a Company

employee benefit plan, issuances by the Company of Capital Stock pursuant to the

exercise of such options or the exercise of any other employee stock options

outstanding on the date hereof, (ii) the Company from issuing shares of Capital

Stock in private placements pursuant to Section 4(2) of the 1933 Act or in

connection with a strategic alliance, or (iii) the Company from publicly

announcing its intention to issue, or actually issuing, shares of Capital Stock

to shareholders of another entity as consideration for the Company's acquisition

of, or merger with, such entity. In addition, upon the request of the managing

underwriter, the Company shall use its best efforts to cause each holder of its

equity securities or any securities convertible into or exchangeable or

exercisable for any of such securities whether outstanding on the date of this

Agreement or issued at any time after the date of this Agreement (other than any

such securities acquired in a public offering), to agree not to effect any such

public sale or distribution of such securities during such period, except as

part of any such registration if permitted, and to cause each such holder to

enter into a similar agreement to such effect with the Company.

 

                  SECTION 5.08. Participation in Registrations. No Shareholder

may participate in any Registration hereunder which is underwritten unless such

Shareholder (a) agrees to sell its securities on the basis provided in any

underwriting arrangements approved by the persons entitled hereunder to approve

such arrangements, and (b) completes and executes all questionnaires, powers of

attorney, underwriting agreements and other documents customarily required under

the terms of such underwriting arrangements.

<PAGE>   44

                                      -41-

 

 

                  SECTION 5.09. Remedies. Each Shareholder shall have the right

and remedy to have the provisions of Sections 5.01 and 5.02 specifically

enforced by any court having jurisdiction in the event that the Company

materially breaches such provisions, and the Company shall reimburse such

Shareholder for the reasonable costs of and expenses for counsel for such

Shareholder incurred in connection with such proceeding.

 

                  SECTION 5.10. Other Registration Rights. The Company will not

grant any Person any demand or piggyback registration rights with respect to the

Capital Stock of the Company other than registration rights that would not be in

conflict or inconsistent with the rights of the Shareholders as set forth in

this Article V.

 

                  SECTION 5.11. Rule 144. The Company shall file any reports

required to be filed by it under the 1933 Act and the 1934 Act and the rules and

regulations adopted by the Commission thereunder, and it will take such further

action as any holder may reasonably request to make available adequate current

public information with respect to the Company meeting the current public

information requirements of Rule 144(c) under the 1933 Act, to the extent

required to enable such holder to sell Registrable Securities without

registration under the 1933 Act within the limitation of the exemptions provided

by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to

time, or (ii) any similar rule or regulation hereafter adopted by the

Commission. Notwithstanding the foregoing, nothing in this Section 5.11 shall be

deemed to require the Company to register any of its securities pursuant to the

1934 Act.

 

                                   ARTICLE VI

 

                  RIGHTS OF HOLDERS OF CLASS A pREFERRED STOCK

 

                  SECTION 6.01. Series A Preferred Stock. For so long as Company

Shareholder or one of its Affiliates is the direct or indirect beneficial owner

of at least $10.0 million in liquidation preference of Class A Preferred Stock,

the Company will not (1) register for sale in any underwritten public offering

any shares of Common Stock beneficially owned by Sponsor and its Affiliates or

(2) redeem or repurchase any shares of Common Stock beneficially owned by

Sponsor and its Affiliates out of the proceeds of any underwritten public

offering by the Company, in any such case, without optionally redeeming or

repurchasing all of the shares of Class A Preferred Stock owned by Company

Shareholder and its Affiliates; provided, however, that if the Company has no

such right to optionally redeem or repurchase all of the shares of Class A

Preferred Stock, then the Company, at its option, may offer to purchase for cash

all of the Class A Preferred Stock held by Company Shareholder and its

Affiliates at a price equal to the liquidation preference of the Class A

Preferred Stock, together with cumulated and unpaid dividends. The provisions of

this Section 6.01 will no longer be operative once the Company has made such

offer regardless of whether or not the Company Shareholder sells any shares of

Class A Preferred Stock pursuant to such offer unless such offer is

<PAGE>   45

                                      -42-

 

 

not effected because the Company does not purchase the shares of Class A Common

Stock which Company Shareholder has requested be purchased.

 

                  SECTION 6.02. Management Fee. For so long as Company

Shareholder or any of its Affiliates is the direct or indirect beneficial owner

of any Class A Preferred Stock, Sponsor agrees that any management fee due and

owning to Sponsor by the Company will accrue but not be payable if at any time

there are cumulated and unpaid dividends in respect of the Class A Preferred

Stock.

 

                                   ARTICLE VII

 

                                  MISCELLANEOUS

 

                  SECTION 7.01. Notices. All notices, requests and other

communications to any party, hereunder shall be in writing (including bank wire,

telex, facsimile or similar writing) and shall be given to such party at its

address or telex or facsimile number set forth on the signature pages hereof or

in the relevant Joinder Agreement or such other address or telex or facsimile

number as such party may hereafter specify in writing to the Secretary of the

Company for the purpose by notice to the party sending such communication. Each

such notice, request or other communication shall be effective (i) if given by

telex or facsimile, when such message is transmitted to the number specified on

the signature pages to this Agreement or any Joinder Agreement, (ii) if given by

mail, three (3) business days after such communication is deposited in the mails

registered or certified, return receipt requested, with postage prepaid,

addressed as aforesaid, or (iii) if given by any other means, when delivered at

the address specified on the signature pages to this Agreement or any Joinder

Agreement.

 

                  SECTION 7.02. Binding Effect; Benefits; Entire Agreement. This

Agreement shall be binding upon and inure to the benefit of the parties to this

Agreement and their respective successors and permitted assigns. Nothing in this

Agreement, express or implied, is intended or shall be construed to give any

person other than the parties to this Agreement or their respective successors

or assigns any legal or equitable right, remedy or claim under or in respect of

any agreement or any provision contained herein. This Agreement constitutes the

entire agreement and understanding, and supersedes all prior agreements and

understandings, both oral and written, between the parties hereto relating to

the subject matter hereof.

 

                  SECTION 7.03. Waiver. Any party hereto may by written notice

to the other (a) extend the time for the performance of any of the obligations

or other actions of any other party under this Agreement; (b) waive compliance

with any of the conditions or covenants of any other party contained in this

Agreement; and (c) waive or modify performance of any of the obligations of any

other party under this Agreement. Except as provided in the preceding sentence,

no action taken pursuant to this Agreement, including, without limitation, any

investigation by or on behalf of any party, shall be deemed to constitute a

waiver by the party taking such action of compliance with any representations,

warranties, covenants or

<PAGE>   46

                                      -43-

 

 

agreements contained herein. The waiver by any party hereto of a breach of any

provision of this Agreement shall not operate or be construed as a waiver of any

preceding or succeeding breach and no failure by any party to exercise any right

or privilege hereunder shall be deemed a waiver of such party's rights or

privileges hereunder or shall be deemed a waiver of such party's rights to

exercise the same at any subsequent time or times hereunder.

 

                  SECTION 7.04. Amendment. Other than as a result of the

execution and delivery of a Joinder Agreement, this Agreement may not be

amended, modified or supplemented in any respect except by a written instrument

executed by each Shareholder and the Company; provided that this Agreement may

be amended and restated or amended without consent of Shareholders for the

addition of new shareholders after the date hereof if such addition does not

adversely affect the rights of the Shareholders (it being agreed that the

provision of demand registration rights and piggyback registration rights and

tag-along rights on an equal basis with HIP Co-Investors will not constitute an

adverse affect).

 

                  SECTION 7.05. Assignability. Neither this Agreement nor any

right, remedy, obligation or liability arising hereunder or by reason hereof

shall be assignable by either the Company or any Shareholder except as otherwise

expressly stated hereunder or with the prior written consent of each other

party. A Direct Permitted Transferee who executes a Joinder Agreement in

accordance with the provisions hereof may be assigned any rights available

hereunder (other than Section 4.06). All of the rights offered a Shareholder

under this Agreement who executes a Joinder Agreement are assignable to a

Transferee, except for the rights set forth in Sections 4.05, 4.06, 4.07, 4.08,

4.09, 4.10 and 5.02 (other than certain rights granted to CSFB pursuant to

Section 5.02). The rights set forth in Sections 4.04 and 5.02 are assignable to

a Transferee who executes a Joinder Agreement to the extent provided in Section

4.04 and 5.02(g), respectively.

 

                  SECTION 7.06. Applicable Law. This Agreement shall be governed

by and construed in accordance with the laws of the State of New York,

regardless of the laws that might otherwise govern under applicable principles

of conflicts of law that would require the application of the laws of another

jurisdiction, and the parties irrevocably submit to (and waive immunity from)

the jurisdiction of the federal and state courts located in the County of New

York in the State of New York.

 

                  SECTION 7.07. Specific Performance. The parties hereto agree

that irreparable damage would occur in the event that any of the provisions of

this Agreement were not performed in accordance with their specific terms or

were otherwise breached. It is accordingly agreed that the parties shall be

entitled to an injunction or injunctions to prevent breaches of the provisions

of this Agreement and to enforce specifically the terms and provisions hereof in

any state or federal court of New York (this being in addition to any other

remedy to which they are entitled at law or in equity), and each party hereto

agrees to waive in any action for such enforcement the defense that a remedy at

law would be adequate.

<PAGE>   47

                                      -44-

 

 

                  SECTION 7.08. Severability. If any provision of this Agreement

is declared by any court of competent jurisdiction to be illegal, void or

unenforceable, all other provisions of the Agreement will not be affected and

will remain in full force and effect.

 

                  SECTION 7.09. Additional Securities Subject to Agreement. Each

Shareholder agrees that any other shares of Common Stock of the Company which it

hereafter acquires by means of a stock split, stock dividend, distribution,

exercise of options or warrants or otherwise (other than pursuant to a public

offering) whether by merger, consolidation or otherwise (including shares of a

surviving corporation into which the shares of Common Stock of the Company are

exchanged in such transaction) will be subject to the provisions of this

Agreement to the same extent as if held on the date hereof, including for

purposes of constituting Registrable Securities hereunder.

 

                  SECTION 7.10. Name Change. For the benefit of Company

Shareholder, the Company agrees to change its corporate name (but not the trade

names used by its businesses) to exclude "Masco" or a derivation thereof from

its corporate name prior to consummating an Initial Public Offering of its

Common Stock.

 

                  SECTION 7.11. Section and Other Headings. The section and

other headings contained in this Agreement are for reference purposes only and

shall not affect the meaning or interpretation of this Agreement.

 

                  SECTION 7.12. Counterparts. This Agreement may be executed in

any number of counterparts, each of which shall be deemed to be an original and

all of which together shall be deemed to be one and the same instrument. A

facsimile, telecopy or other reproduction of this Agreement may be executed by

one or more parties hereto, and an executed copy of this Agreement may be

delivered by one or more parties hereto by facsimile or similar instantaneous

electronic transmission device pursuant to which the signature of or on behalf

of such party can be seen, and such execution and delivery shall be considered

valid, binding and effective for all purposes. At the request of any party

hereto, all parties hereto agree to execute an original of this Agreement as

well as any facsimile, telecopy or other reproduction hereof.

 

                  SECTION 7.13. Termination of Certain Provisions. The

provisions of this Agreement set forth in Sections 3.01, 3.02, 4.01, 4.02, 4.03,

4.04(b) (except as it relates to CSFB and Company Shareholder), 4.04(d) (except

as it relates to CSFB and Company Shareholder) and 4.09 will terminate and be of

no force and effect upon the occurrence of a Qualifying Public Equity Offering.

The provisions of this Agreement set forth in Sections 4.04(a) (except as it

relates to CSFB and Company Shareholder) and 4.05 will terminate and be of no

force and effect upon the occurrence of an Initial Public Offering. The

provisions of this Agreement set forth in Sections 4.04 (insofar as it relates

to CSFB and Company Shareholder), 4.06, 4.07, 4.08 and 4.10 will terminate as to

a particular Shareholder as set forth in such section.

<PAGE>   48

                                      -45-

 

 

                  SECTION 7.14. ERISA Matters. The Company agrees to give

Sponsor the rights set forth in Sections 4.07 and 4.08 to the extent Sponsor

does not have the ability to designate a Person to the Board of Directors of the

Company and failure to have the rights set forth in Section 4.07 or 4.08 would

cause Sponsor to have an ERISA Problem. For purposes of this Section 7.14,

"ERISA Problem" means that the assets of Sponsor and its Affiliates would be

considered "Plan Assets" within the meaning of 29 CFR 2510.3-101 due to the fact

that Sponsor and its Affiliates do not have the rights specified in Section 4.07

or 4.08.

 

                  SECTION 7.15. Regulatory Cooperation. If any Shareholder

reasonably determines that, by reason of any existing or future federal or state

rule, regulation, guideline, order, request or directive (whether or not having

the force of law and whether or not failure to comply therewith would be

unlawful) (collectively, a "Regulatory Requirement"), it is effectively

restricted or prohibited from holding any of the shares of Common Stock

(including any shares of Capital Stock or other securities distributable in any

merger, reorganization, readjustment or other reclassification of such shares),

the Company and the other Shareholders shall take such action as may be

reasonably necessary to permit such Shareholder to comply with such Regulatory

Requirement; provided, that no such action pursuant to this Section 7.15 shall

adversely affect the Company, the rights of the other Shareholders hereunder or

the rights, preferences, qualifications and limitations of any Capital Stock of

the Company held by the other Shareholders; provided, further that neither the

Company nor any Shareholder shall be required to purchase any of such shares of

Common Stock as a result of such Regulatory Requirement. Such reasonable action

to be taken may include the Company's authorization of one or more new classes

of non-voting common stock that is otherwise substantially identical to the

Common Stock then owned by such Shareholder and the amendment of the Company's

certificate of incorporation or any other documents or instruments executed in

connection with the shares held by such Shareholder. Such Shareholder shall give

written notice to the Company and the other Shareholders of any such

determination and the actions necessary to comply with such Regulatory

Requirement, and the Company and such other Shareholders shall take all

reasonably necessary steps to comply with such determination as expeditiously as

possible.

 

                  SECTION 7.16. Publicity. None of the parties hereto shall

issue any press release or make any public disclosure regarding the transactions

contemplated hereby unless such press release or public disclosure shall be

approved by those parties mentioned in such press release or public disclosure

in advance. Notwithstanding the foregoing, each of the parties hereto may, in

documents required to be filed by it with the Commission or other regulatory

bodies, make such statements with respect to the transactions contemplated

hereby as each may be advised by counsel is legally necessary or advisable, and

may make such disclosure as it is advised by its counsel is required by law.

 

                  SECTION 7.17. Expenses. The Company agrees, if the

Transactions are consummated, to reimburse each Qualified Investor for all

reasonable out-of-pocket expenses

<PAGE>   49

                                      -46-

 

 

arising in connection with the Transactions promptly (including, without

limitation, and, in any event, within 30 days after any invoice or other

statement or notice), including all reasonable documented fees and expenses of

counsel to such Qualified Investor incurred in connection with this Agreement

and the transactions contemplated hereby and all reasonable out-of-pocket

expenses incurred by such Qualified Investor for so long as such Person is a

Qualified Investor in connection with the monitoring of its equity investment in

the Company.

 

                            [Signature Pages Follow]

 

 

 

<PAGE>   50

 

                  IN WITNESS WHEREOF, the Company and each Shareholder have

executed this Agreement as of the day and year first above written.

 

                                MASCOTECH, INC.

 

 

 

                                By:    /s/ David B. Liner

                                       ---------------------------

                                       Name:  David B. Liner

                                       Title:    Vice President

 

 

                                Notices:

 

                                21001 Van Born Road

                                Taylor, Michigan  48140

                                Attention: Chairman of the Board and

                                           General Counsel

                                Facsimile: (313) 792-4107

 

 

                                With a copy to:

 

                                Cahill Gordon & Reindel

                                80 Pine Street

                                New York, New York  10005

                                Attention: Jonathan A. Schaffzin, Esq.

                                Facsimile: (212) 269-5420

<PAGE>   51

                                MASCO CORPORATION

 

 

 

                                By:    John R. Leekley

                                       ---------------------------

                                       Name:  John R. Leekley

                                       Title: Senior Vice President

 

 

                                Notices:

 

 

 

                                21001 Van Born Road

                                Taylor, Michigan  48140

                                Attention: Chairman of the Board and

                                           General Counsel

                                Facsimile: (313) 792-4107

 

 

                                With a copy to:

 

                                Honigman Miller Schwartz and Cohn

                                2290 First National Building

                                Detroit, Michigan  48226

                                Attention: Alan Stuart Schwartz, Esq.

                                Facsimile: (313) 465-7575

<PAGE>   52

                                RICHARD A. MANOOGIAN

 

 

 

                                By:    /s/ Richard A. Manoogian

                                       ---------------------------

 

                                Notices:

                                Richard A. Manoogian

                                c/o Masco Corporation

                                21001 Van Born Road

                                Taylor, Michigan  48140

                                Attention: Richard A. Manoogian

                                Facsimile: (313) 792-6134

 

                                with a copy to:

 

                                Bodman Longley & Dahling LLP

                                100 Renaissance Center

                                Detroit, Michigan  48243

                                Attention: David M. Hempstead, Esq.

                                Facsimile: (313) 393-7579

<PAGE>   53

                                RICHARD AND JANE MANOOGIAN

                                    FOUNDATION

 

 

                                By:    /s/ Richard A. Manoogian

                                       ---------------------------

                                       Name:  Richard A. Manoogian

                                       Title: President

 

                                Notices:

 

                                Richard and Jane Manoogian Foundation

                                c/o Masco Corporation

                                21001 Van Born Road

                                Taylor, Michigan  48140

                                Attention: Richard A. Manoogian

                                Facsimile: (313) 792-6134

 

                                with a copy to:

 

                                Eugene A. Gargaro, Jr., Esq.

                                c/o Masco Corp.

                                21001 Van Born Road

                                Taylor, Michigan  48140

                                Facsimile: (313) 792-6289

<PAGE>   54

HEARTLAND ENTITY:

 

 

                                HEARTLAND INDUSTRIAL PARTNERS, L.P.

 

 

                                By:  Heartland Industrial Associates L.L.C.,

                                        its General Partner

 

                                By:    /s/ David A. Stockman

                                       ---------------------------

                                       Name:  David A. Stockman

                                       Title: Managing Member

 

                                Notices:

 

                                Heartland Industrial Partners, L.P.

                                320 Park Avenue, 33rd Floor

                                New York, New York  10022

                                Attention: David A. Stockman

                                Facsimile: (212) 981-3535

 

                                and

 

                                55 Railroad Avenue

                                Greenwich, Connecticut  06830

                                Attention: David A. Stockman

                                Facsimile: (203) 861-2722

 

                                With a copy to:

 

                                Cahill Gordon & Reindel

                                80 Pine Street

                                New York, New York  10005

                                Attention: Jonathan A. Schaffzin, Esq.

                                Facsimile: (212) 269-5420

<PAGE>   55

HEARTLAND ENTITY:

 

 

                                HEARTLAND INDUSTRIAL PARTNERS (FF), L.P.

 

 

                                By:  Heartland Industrial Associates L.L.C.,

                                        its General Partner

 

 

 

                                By:    /s/ David A. Stockman

                                       ---------------------------

                                       Name:  David A. Stockman

                                       Title: Managing Member

 

                                Notices:

 

                                Heartland Industrial Partners, L.P.

                                320 Park Avenue, 33rd Floor

                                New York, New York  10022

                                Attention: David A. Stockman

                                Facsimile: (212) 981-3535

 

                                and

 

                                55 Railroad Avenue

                                Greenwich, Connecticut  06830

                                Attention: David A. Stockman

                                Facsimile: (203) 861-2722

 

                                With a copy to:

 

                                Cahill Gordon & Reindel

                                80 Pine Street

                                New York, New York  10005

                                Attention: Jonathan A. Schaffzin, Esq.

                                Facsimile: (212) 269-5420

<PAGE>   56

HEARTLAND ENTITY:

 

 

                                HEARTLAND INDUSTRIAL PARTNERS (E1), L.P.

 

 

                                By:  Heartland Industrial Associates L.L.C.,

                                        its General Partner

 

 

                                By:    /s/ David A. Stockman

                                       ---------------------------

                                       Name:  David A. Stockman

                                       Title: Managing Member:

 

                                Notices:

 

                                Heartland Industrial Partners, L.P.

                                320 Park Avenue, 33rd Floor

                                New York, New York  10022

                                Attention: David A. Stockman

                                Facsimile: (212) 981-3535

 

                                and

 

                                55 Railroad Avenue

                                Greenwich, Connecticut  06830

                                Attention: David A. Stockman

                                Facsimile: (203) 861-2722

 

                                With a copy to:

 

                                Cahill Gordon & Reindel

                                80 Pine Street

                                New York, New York  10005

                                Attention: Jonathan A. Schaffzin, Esq.

                                Facsimile: (212) 269-5420

<PAGE>   57

HEARTLAND ENTITY:

 

 

                                HEARTLAND INDUSTRIAL PARTNERS (K1), L.P.

 

 

                                By:  Heartland Industrial Associates L.L.C.,

                                        its General Partner

 

 

                                By:    /s/ David A. Stockman

                                       ---------------------

                                       Name:  David A. Stockman

                                       Title: Managing Member

 

                                Notices:

 

                                Heartland Industrial Partners, L.P.

                                320 Park Avenue, 33rd Floor

                                New York, New York  10022

                                Attention: David A. Stockman

                                Facsimile: (212) 981-3535

 

                                and

 

                                55 Railroad Avenue

                                Greenwich, Connecticut  06830

                                Attention: David A. Stockman

                                Facsimile: (203) 861-2722

 

                                With a copy to:

 

                                Cahill Gordon & Reindel

                                80 Pine Street

                                New York, New York  10005

                                Attention: Jonathan A. Schaffzin, Esq.

                                Facsimile: (212) 269-5420

<PAGE>   58

HEARTLAND ENTITY:

 

 

                                HEARTLAND INDUSTRIAL PARTNERS (C1), L.P.

 

 

                                By:  Heartland Industrial Associates L.L.C.,

                                        its General Partner

 

 

                                By:    /s/ David A. Stockman

                                       ---------------------

                                       Name:  David A. Stockman

                                       Title: Managing Member:

 

 

                                Notices:

 

                                Heartland Industrial Partners, L.P.

                                320 Park Avenue, 33rd Floor

                                New York, New York  10022

                                Attention: David A. Stockman

                                Facsimile: (212) 981-3535

 

                                and

 

                                55 Railroad Avenue

                                Greenwich, Connecticut  06830

                                Attention: David A. Stockman

                                Facsimile: (203) 861-2722

 

                                With a copy to:

 

                                Cahill Gordon & Reindel

                                80 Pine Street

                                New York, New York  10005

                                Attention: Jonathan A. Schaffzin, Esq.

                                Facsimile: (212) 269-5420

<PAGE>   59

                                LONG POINT CAPITAL PARTNERS, L.L.C.

 

 

 

                                By:    /s/ Ira Starr

                                       ---------------------------

                                       Name:  Ira Starr

                                       Title: Managing Director

 

 

                                Notices:

 

                                767 Fifth Avenue

                                New York, New York  10153

                                Attention: Ira Starr

                                Facsimile: (212) 593-1888

 

                                With a copy to:

                                Proskauer Rose LLP

                                1585 Broadway

                                New York, NY  10036-8299

                                Attention: Peter Samuels, Esq.

                                Facsimile: (212) 969-2900

<PAGE>   60

                                CRM 1999  ENTERPRISE FUND, LLC

 

 

 

                                By:    /s/ Jay Abramson

                                       ----------------------------------

                                       Name:  Jay Abramson

                                       Title: Exec. VP of Managing Member

 

 

                                Notices:

 

                                520 Madison Avenue

                                32nd Floor

                                New York, NY  10022

                                Attention: Edward Azimi

                                Facsimile: (212) 371-3562

<PAGE>   61

HIP CO-INVESTOR:

 

                                KLEINWORT BENSON HOLDINGS, INC.

 

 

 

                                By:    /s/ Iain Leigh

                                       ----------------------------------

                                       Name:  Iain Leigh

                                       Title: Authorized Person

 

 

                                By:    /s/ John Walker

                                       ----------------------------------

                                       Name:  John Walker

                                       Title: Authorized Person

 

                                Notices:

 

                                75 Wall Street

                                34th Floor

                                New York, NY  10005

                                Attention: Alexander P. Coleman

                                           Adam Lichtenstein

                                Facsimile: (212) 429-3139

 

                                With a copy to

 

                                Kirkland & Ellis

                                153 East 53rd Street

                                39th Floor

                                New York, NY  10022

                                Attention: Eunu Chun

                                Facsimile: (212) 446-4900

<PAGE>   62

HIP CO-INVESTOR:

 

                                75 WALL STREET ASSOCIATES, LLC

 

 

                                By:  Kleinwort Benson (USA), Inc.

                                Its:  Attorney-in-Fact

 

 

                                By:    /s/ Iain Leigh

                                       ----------------------------------

                                       Name:  Iain Leigh

                                       Title: Authorized Person

 

                                By:    /s/ John Walker

                                       ----------------------------------

                                       Name:  John Walker

                                       Title: Authorized Person

 

                                Notices:

 

                                75 Wall Street

                                34th Floor

                                New York, NY  10005

                                Attention: Alexander P. Coleman

                                           Adam Lichtenstein

                                Facsimile: (212) 429-3139

 

                                With a copy to

 

                                Kirkland & Ellis

                                153 East 53rd Street

                                39th Floor

                                New York, NY  10022

                                Attention: Eunu Chun

                                Facsimile: (212) 446-4900

<PAGE>   63

HIP CO-INVESTOR:

 

                                METROPOLITAN LIFE INSURANCE

                                   COMPANY

 

 

 

                                By:    /s/ James A. Wiviott

                                       ----------------------------------

                                       Name:  James A. Wiviott

                                       Title: Director

 

                                Notices:

 

                                Metropolitan Life Insurance Company

                                Corporate Equities

                                334 Madison Avenue

                                Convent Station, NJ  07961

                                Attention: Susan M. Garret

                                Facsimile: (973) 254-3055

 

                                With a copy to:

 

                                Metropolitan Life Insurance Company

                                One Madison Avenue

                                New York, NY  10010

                                Attention: Todd S. Shenkin, Esq. (Law, Area 6H)

                                Facsimile: (212) 251-1673

 

                                and

 

                                Metropolitan Life Insurance Company

                                4100 Boy Scout Boulevard

                                Tampa, FL  33607

                                Attention: Desiree DiSalvo - Securities

                                           Accounting

                                Facsimile: (813) 801-2506

<PAGE>   64

HIP CO-INVESTOR:

 

                                FIRST UNION CAPITAL PARTNERS, LLC

 

 

                                By:    /s/ A. Wellford Tabor

                                       ----------------------------------

                                       Name:  A. Wellford Tabor

                                       Title: Principal

 

                                Notices:

 

                                First Union Capital Partners

                                One First Union Center, 12th Floor

                                301 South College Street

                                Charlotte, NC  28288-0732

                                Attention: A. Wellford Tabor

                                Facsimile: (704) 374-6711

 

                                With a copy to:

 

                                Kennedy Covington Lobdell & Hickman, L.L.P.

                                100 North Tryon Street, Suite 4200

                                Charlotte, NC  28202-4006

                                Attention: Kevin P. Stichter

                                Facsimile: (704) 331-7598

<PAGE>   65

HIP CO-INVESTOR:

 

                                GE CAPITAL EQUITY INVESTMENTS, INC.

 

 

                                By:    /s/ William R. Kraus

                                       ----------------------------------

                                       Name:  William R. Kraus

                                       Title: SVP

 

 

                                Notices:

 

                                GE Capital Equity Investments, Inc.

                                120 Long Ridge Road

                                Stamford, CT  06927

                                Attention: Barbara J. Gould, Esq.

                                Facsimile: (203) 357-3047

                                Attention: William R. Kraus

                                Facsimile: (203) 357-6426

 

                                With a copy to:

 

                                Winston & Strawn

                                200 Park Avenue

                                New York, NY  10166

                                Attention: David B. Hertzog, Esq.

                                Facsimile: (212) 294-4700

<PAGE>   66

HIP CO-INVESTOR:

 

                                CREDIT SUISSE FIRST BOSTON

                                   U.S. EXECUTIVE ADVISORS, L.P.

 

                                By:    /s/ Hartley R. Rogers

                                       ----------------------------------

                                       Name:  Hartley R. Rogers

                                       Title: Attorney-in-Fact

 

 

                                Notices:

 

                                Credit Suisse First Boston

                                U.S. Executive Advisors, L.P.

                                c/o Credit Suisse First Boston Advisory

                                Partners, LLC

                                Eleven Madison Avenue

                                New York, New York  10010

                                Attention: Hartley R. Rogers

                                Facsimile: (212) 325-2291

 

                                With a copy to:

 

                                Skadden, Arps, Slate, Meagher & Flom LLP

                                Four Times Square

                                New York, New York  10036

                                Attention: Eileen T. Nugent

                                Facsimile: (212) 735-2000

<PAGE>   67

HIP CO-INVESTOR:

 

                                CREDIT SUISSE FIRST BOSTON EQUITY

                                   PARTNERS (BERMUDA), L.P.

 

                                By:    /s/ Hartley R. Rogers

                                       ----------------------------------

                                       Name:  Hartley R. Rogers

                                       Title: Attorney-in-Fact

 

 

                                Notices:

 

                                Credit Suisse First Boston Equity Partners

                                (Bermuda), L.P.

                                c/o Credit Suisse First Boston Advisory

                                Partners, LLC

                                Eleven Madison Avenue

                                New York, New York  10010

                                Attention: Hartley R. Rogers

                                Facsimile: (212) 325-2291

 

                                With a copy to:

 

                                Skadden, Arps, Slate, Meagher & Flom LLP

                                Four Times Square

                                New York, New York  10036

                                Attention: Eileen T. Nugent

                                Facsimile: (212) 735-2000

<PAGE>   68

HIP CO-INVESTOR:

 

                                CREDIT SUISSE FIRST BOSTON

                                   EQUITY PARTNERS, L.P.

 

                                By:    /s/ Hartley R. Rogers

                                       ----------------------------------

                                       Name:  Hartley R. Rogers

                                       Title: Attorney-in-Fact

 

 

                                Notices:

 

                                Credit Suisse First Boston Equity Partners, L.P.

                                c/o Credit Suisse First Boston Advisory

                                Partners, LLC

                                Eleven Madison Avenue

                                New York, New York  10010

                                Attention: Hartley R. Rogers

                                Facsimile: (212) 325-2291

 

                                With a copy to:

 

                                Skadden, Arps, Slate, Meagher & Flom LLP

                                Four Times Square

                                New York, New York  10036

                                Attention: Eileen T. Nugent

                                Facsimile: (212) 735-2000

<PAGE>   69

HIP CO-INVESTOR:

 

                                EMA PARTNERS FUND 2000, L.P.

 

 

 

                                By:    /s/ Hartley R. Rogers

                                       ----------------------------------

                                       Name:  Hartley R. Rogers

                                       Title: Attorney-in-Fact

 

 

                                Notices:

 

                                EMA Partners Fund 2000, L.P.

                                c/o Credit Suisse First Boston Advisory

                                Partners, LLC

                                Eleven Madison Avenue

                                New York, New York  10010

                                Attention: Hartley R. Rogers

                                Facsimile: (212) 325-2291

 

                                With a copy to:

 

                                Skadden, Arps, Slate, Meagher & Flom LLP

                                Four Times Square

                                New York, New York  10036

                                Attention: Eileen T. Nugent

                                Facsimile: (212) 735-2000

<PAGE>   70

                                EMA PRIVATE EQUITY FUND 2000, L.P.

 

 

 

                                By:    /s/ Hartley R. Rogers

                                       ----------------------------------

                                       Name:  Hartley R. Rogers

                                       Title: Attorney-in-Fact

 

 

                                EMA Private Equity Fund 2000, L.P.

                                c/o Credit Suisse First Boston Advisory

                                Partners, LLC

                                Eleven Madison Avenue

                                New York, New York  10010

                                Attention: Hartley R. Rogers

                                Facsimile: (212) 325-2291

 

                                With a copy to:

 

                                Skadden, Arps, Slate, Meagher & Flom LLP

                                Four Times Square

                                New York, New York  10036

                                Attention: Eileen T. Nugent

                                Facsimile: (212) 735-2000

<PAGE>   71

                                MERCHANT CAPITAL, INC.

 

 

 

                                By:    /s/ Edward Nadel

                                       ----------------------------------

                                       Name:  Edward Nadel

                                       Title: Vice President

 

                                Merchant Capital, Inc.

                                Eleven Madison Avenue

                                New York, New York  10010

                                Attention: Edward Nadel

                                Facsimile: (212) 325-1659

<PAGE>   72

HIP CO-INVESTOR:

 

                                BANCBOSTON CAPITAL INC.

 

 

 

                                By:    /s/ Mark H. DeBlois

                                       ----------------------------------

                                       Name:  Mark H. DeBlois

                                       Title: Managing Director

 

 

                                Notices:

 

                                BancBoston Capital Inc.

                                175 Federal Street, 10th Floor

                                Boston, MA  02210

                                Attention: Daniel C. Reese

                                Facsimile: (617) 434-1153

 

 

                                With a copy to:

 

                                Bingham Dana LLP

                                150 Federal Street

                                Boston, MA  02110-1726

                                Attention: Robert M. Wolf

                                Facsimile: (617) 951-8736

<PAGE>   73

                                PRIVATE EQUITY PORTFOLIO FUND II, LLC

 

 

                                By:  Fleet Bank, NA, its Manager

 

 

                                By:    /s/ Glen Holland

                                       ----------------------------------

                                       Name:  Glen Holland

                                       Title: Director

 

 

                                Notices:

 

                                BancBoston Capital Inc.

                                175 Federal Street, 10th Floor

                                Boston, MA  02210

                                Attention: Daniel C. Reese

                                Facsimile: (617) 434-1153

 

                                With a copy to:

 

                                Bingham Dana LLP

                                150 Federal Street

                                Boston, MA  02110-1726

                                Attention: Robert M. Wolf

                                Facsimile: (617) 951-8736

<PAGE>   74

                                                                       EXHIBIT A

 

                                JOINDER AGREEMENT

 

 

                  WHEREAS, the undersigned is acquiring simultaneously with the

execution of this Agreement common stock (the "Common Stock"), par value $1.00

per share of MascoTech, Inc. (the "Company"); and

 

                  WHEREAS, as a condition to the acquisition of the Common

Stock, the undersigned has agreed to join in a certain Stockholders Agreement

(the "Stockholders Agreement") dated as of November 28, 2000 among MascoTech,

Inc. and the Shareholders (as such term is defined in the Stockholders

Agreement); and

 

                  WHEREAS, the undersigned understands that execution of this

Agreement is a condition precedent to the acquisition of the Common Stock;

 

                  NOW, THEREFORE, as an inducement to both the transferor of the

Common Stock and the other Shareholders (as such term is defined in the

Stockholders Agreement), to Transfer (as such term is defined in the

Stockholders Agreement) and to allow the Transfer of the Common Stock to the

undersigned, the undersigned agrees as follows:

 

                  1. The undersigned hereby joins in the Stockholders Agreement

and agrees to be bound by the terms and provisions of the Stockholders Agreement

as provided by the Stockholders Agreement.

 

                  2. The undersigned hereby consents that the certificate or

certificates to be issued to the undersigned representing the Common Stock shall

be legended as follows:

 

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR

         SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER

         THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR (ii) AN

         APPLICABLE EXEMPTION FROM REGISTRATION THEREUNDER. ANY SALE PURSUANT TO

         CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION

         OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT

         SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH

         SALE.

 

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE

         TERMS AND CONDITIONS, INCLUDING WITH RESPECT TO THE DIRECT OR INDIRECT

         TRANSFER THEREOF, OF A SHAREHOLDERS AGREEMENT DATED AS OF NOVEMBER 28,

         2000. THE SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER

<PAGE>   75

                                      -2-

 

 

         THINGS, SIGNIFICANT RESTRICTIONS ON TRANSFER OF THE SECURITIES OF THE

         COMPANY. A COPY OF THE SHAREHOLDERS AGREEMENT IS AVAILABLE UPON REQUEST

         FROM THE COMPANY."

 

                  IN WITNESS WHEREOF, the undersigned has executed this

Agreement this ____ day of _______________, 20__.

 

                                            ___________________________________

                                            Name:

                                            Title:

                                            Address:

<PAGE>   76

                                                                       EXHIBIT B

 

                             Representatives of CSFB

 

 

 

Hartley R. Rogers                          Phone: (212) 325-4618

                                           Fax: (212) 325-2291

 

Jay Finney                                 Phone: (212) 325-4622

                                           Fax: (212) 325-5553

 

Lee Wright                                 Phone: (212) 325-2762

                                           Fax: (212) 325-5553

<PAGE>   77

                                  SCHEDULE 2.04

 

 

 

<TABLE>

<CAPTION>

                               SHAREHOLDER                            COMMON SHARES

<S>                                                                   <C>

Heartland Entities                                                      12,261,251

 

Richard Manoogian                                                          621,170(a)

 

Richard and Jane Manoogian Foundation                                      661,260

 

Masco Corporation                                                        2,492,248

 

Kleinwort Benson Holdings, Inc.                                            591,716

 

75 Wall Street Associates LLC                                              295,858

 

Metropolitan Life Insurance Company                                        591,716

 

First Union Capital Partners LLC                                         1,479,290

 

GE Capital Equity Investments Inc.                                         591,716

 

Credit Suisse First Boston Equity Partners, L.P.                         6,247,530

 

Credit Suisse First Boston Equity Partners (Bermuda), L.P.               1,746,345

 

Credit Suisse First Boston U.S. Executive Advisors, L.P.                     5,558

 

EMA Partners Fund 2000, L.P.                                               533,168

 

EMA Private Equity Fund 2000, L.P.                                         343,139

 

Merchant Capital, Inc.                                                     177,515

 

BancBoston Capital Inc.                                                    769,231

 

Private Equity Portfolio Fund II, LLC                                      118,343

</TABLE>

 

 

--------------------------

(a)      Exclusive of 49,215 shares of restricted stock that will vest on the

         closing date of the Transactions (assuming no cash elections) and

         147,645 shares of unvested restricted stock.

 

 

<PAGE>   78

                                     - 2 -

 

<TABLE>

<CAPTION>

                               SHAREHOLDER                            COMMON SHARES

<S>                                                                   <C>

Long Point Capital Fund L.P.                                               581,025

 

Long Point Capital Partners LLC                                             10,692

 

CRM 1999 Enterprise Fund, LLC                                               59,172

</TABLE>