STOCKHOLDERS AGREEMENT

1.    Definitions . As used in this Agreement:  

1.1    “ Affiliate ” of a specified Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such specified Person.

1.2    “ Capital Stock ” means (i) shares of Common Stock (whether now outstanding or hereafter issued in any context), (ii) any preferred stock or shares of any other class of capital stock of the Company that hereafter may be authorized or (iii) any right to receive any such Common Stock or other capital stock of the Company other than options issued under the Company’s stock option plan(s) in effect from time to time (but any Common Stock or other capital stock issuable upon exercise of such options shall be Capital Stock).

1.3    “ Person ” means an individual, organization or entity.

1.4    “ Transfer ” means a pledge, mortgage, sale, assignment, gift, bequest, transfer by operation of law, transfer in connection with any proceeding under any Federal or state law relating to bankruptcy, insolvency or the rights of creditors generally and any other means by which personal property or any legal or beneficial interest therein may be transferred, whether such transaction is effected voluntarily or involuntarily.

1.5    “ Voting Power ” means the power to cast votes in a vote of the stockholders of the Company (or, if expressly provided, a specified group of the stockholders) in which the outstanding Common Stock and all outstanding preferred stock of the Company vote together as a single class and which shall be measured as follows: (a) each outstanding share of Common Stock shall have the right to cast one vote, (b) each outstanding share of a class or series of the Company’s preferred stock, if any, that is not granted voting rights under the Company’s certificate of incorporation or the certificate of designations (together the “ Charter ”) for such preferred stock shall not have the right to cast a vote, (c) each outstanding share of a class or series of the Company’s preferred stock, if any, that is granted voting rights (for the election of directors or otherwise) under the Charter for such preferred stock, but for which voting together with the Common Stock as a single class is not provided in the Charter for such preferred stock, shall have the right to cast one vote and (iv) each outstanding share of a class or series of preferred stock, if any, that is granted voting rights under the Charter for such preferred stock, and for which voting together with the Common Stock as a single class is provided in the Charter for such preferred stock, shall have the right to cast the number of votes provided in the Charter for such preferred stock.

2.    Election and Removal of Directors . 

2.1    Board Size . Each Stockholder agrees to vote all of such Stockholder’s Capital Stock, whether now owned or hereafter acquired or which such Stockholder may be empowered to vote, from time to time and at all times, in whatever manner shall be necessary to ensure that:

(a)    The number of directors who comprise the Board of Directors of the Company (the “ Board ”) shall be five (5) or such other number as the Board may fix in accordance with the Company’s by-laws;

(b)    Unless otherwise waived by the Investor, the composition of the board of directors of each subsidiary of the Company shall be the same as that of the Board;

(c)    Unless otherwise waived by the Investor, the composition of any committee of the Board and of the board of directors of each subsidiary of the Company shall include all of the directors designated by the Investor pursuant to Section 2.2; and

(d)    Except as otherwise provided by law and unless otherwise waived by the Investor, no quorum shall exist at any meeting of the Board or of the board of directors of any subsidiary of the Company unless such meeting (including a telephonic meeting): (i) is called in accordance with the governing document of such entity and (ii) at least two-thirds (⅔) of the directors designated by the Investor pursuant to Section 2.2(c) participate in such meeting.

2.2    Board Members . Each Stockholder agrees to vote all of such Stockholder’s Capital Stock, whether now owned or hereafter acquired or which such Stockholder may be empowered to vote, from time to time and at all times, in whatever manner shall be necessary to ensure that at each annual or special meeting of stockholders at which an election of directors is held or pursuant to any written consent of the stockholders, the following persons shall be elected to the Board:

(a)    The Company’s Chief Executive Officer, who shall initially be Mr. David Howgill (the “ CEO Director ”), provided that if for any reason the CEO Director shall cease to serve as the chief executive officer of the Company, each of the Stockholders shall promptly vote their respective shares of Capital Stock (i) to remove him from the Board if he has not resigned from such position and (ii) to elect the person who replaces him as Chief Executive Officer of the Company as the new CEO Director;

(b)    The Investor shall have the right to designate the individual to serve as the Chairman of the Board;

(c)    Two individuals designated in writing by the Holder; and

(d)    Individuals designated in writing by the Investor who, in number, shall be equal to the number of individuals designated pursuant to Section 2.2(c) plus one (1) in the case of a total number of five (5) directors. Should the number of directors on the Board be adjusted, then the proportion of individuals designated by the Holder be approximately 40% and the balance 60% of individuals be designated by the Investor.

2.3    Removal of Board Members . Each Stockholder agrees to vote all of such Stockholder’s Capital Stock from time to time and at all times in whatever manner as shall be necessary to ensure that (a) no director elected pursuant to Section 2.2 may be removed from office unless such removal is directed or approved in writing by the Investor or contemplated by Section 2.2(a), and (c) any vacancies created by the resignation, removal or death of a director elected pursuant to Section 2.2 shall be filled pursuant to the provisions of Section 2.2. All Stockholders agree to execute any written consents required to effectuate the obligations of this Agreement, and the Company agrees at the request of the Investor to cause a special meeting of stockholders to be called for the purpose of electing directors.

2.4      Termination of Obligation . The provisions of this Section 2 will terminate on the later to occur of the date (a) the Investors own in the aggregate less than twenty-five percent (25%) of the Voting Power of the outstanding shares of Capital Stock or (b) another Stockholder owns shares of Capital Stock with an aggregate Voting Power greater than the Voting Power of the shares of Capital Stock owned by the Investors in the aggregate.

3.    Restriction on Transfer; Exempt Transfers . 

3.1    Restrictions on Transfer . No Stockholder shall Transfer any Capital Stock other than in accordance with this Agreement. The Company shall not permit the Transfer of any Capital Stock to be made on its books, and the Company shall not recognize the Transfer of any Capital Stock, unless such Transfer is made in accordance with the preceding sentence of this Section 3.

3.2    Exempt Transfers . Notwithstanding the foregoing or anything to the contrary in this Agreement, the provisions of Sections 4 and 6 shall not apply:

(a)    in the case of the Investor, to any Transfer (i) to an Affiliate of such Investor, (ii) to a designated person or (iii) made prior to the first anniversary of this Agreement provided such Transfer pursuant to this clause (iii) is not a Take-Along Sale (as defined in Section 5.1);

(b)    to any merger, consolidation or other business combination effected pursuant to a vote of the Stockholders and involving the Company;

(c)    to a repurchase of Capital Stock from a Holder by the Company pursuant to an agreement approved by the Board;

(d)    in the case of a Stockholder that is a natural person, to a Transfer of Capital Stock by such Stockholder, either during his or her lifetime or on death by will or intestacy to his or her siblings, children, grandchildren, spouse or any other relatives approved by the Board, or any custodian or trustee for the account of such Stockholder or such Stockholder’s siblings, children, grandchildren, spouse or other such relatives, provided, however, that such Transfer is made pursuant to a transaction in which there is no consideration actually paid for such Transfer;

(e)    to Transfers of Capital Stock solely among the Stockholders; or

(f)    to the sale of any Capital Stock to the public in an offering pursuant to an effective registration statement under the Securities Act of 1933, as amended;

4.    Right of First Refusal .

4.1    Right of First Refusal to the Company . Each Holder hereby unconditionally and irrevocably grants to the Company a right of first refusal to purchase all or any portion of the Capital Stock that such Holder may propose to Transfer (the “ Transfer Shares ”), at the same price and on the same terms and conditions as those offered to the prospective transferee (the “ Prospective Transferee ”). Each Holder proposing to make a Transfer (the “ Transferring Holder ”) must deliver a notice (the “ Proposed Transfer Notice ”) to the Company and the Investor prior to the consummation of such Transfer. The Proposed Transfer Notice shall state all of the material terms and conditions of the proposed Transfer, including the name of the Prospective Transferee, the number of Transfer Shares proposed to be Transferred and the proposed purchase price, if any, and describe in reasonable detail the background, character, experience and financial condition of the Prospective Transferee. The Company must exercise its right of first refusal under this Section 4.1 by giving notice of such exercise to the Transferring Holder within thirty (30) days after delivery of the Proposed Transfer Notice to the Company (the “ Company Option Period ”) stating the number of Transfer Shares the Company elects to purchase, provided, however , that an election by the Company to purchase fewer than all of the Transfer Shares so offered shall be ineffective unless the Investor elects to purchase the balance of the Transfer Shares so offered.

4.2    Secondary Right of Refusal to the Investor .

(a)    Each Holder hereby unconditionally and irrevocably grants to the Investor a secondary right of refusal to purchase all or any portion of the Transfer Shares not purchased by the Company pursuant to Section 4.1, at the same price and on the same terms and conditions as those offered to the Prospective Transferee. If the Company elects not to exercise or fails to exercise its right of first refusal pursuant to Section 4.1 with respect to all Transfer Shares prior to the expiration of the Company Option Period, the Company shall deliver a notice (the “ Secondary Notice ”) to each Investor no later than five (5) days after the expiration of the Company Option Period. The Secondary Notice shall (i) set forth the number of Transfer Shares the Company has not elected to purchase, (ii) the number of shares each Investor may elect to purchase pursuant to this Section 4.2 and (iii) be accompanied by the related Proposed Transfer Notice given to the Company pursuant to Section 4.1. Each Investor shall have the secondary right of refusal to purchase up to that portion of such Transfer Shares which bears the same ratio to such shares as the number of outstanding shares of Capital Stock owned by such Investor bears to the aggregate number of shares of Capital Stock owned by all Investors. The ratio in the immediately preceding sentence shall be calculated as of the date the Proposed Transfer Notice was first delivered to the Company. Each Investor must exercise its secondary right of refusal under this Section 4.2 by giving notice of such exercise to the Transferring Holder within thirty (30) days after delivery of the Secondary Notice to the Investors (the “ Investor Option Period ”) stating the number of Transfer Shares such Investor elects to purchase.

(b)    If options to purchase have been exercised by the Company and the Investors with respect to some but not all of the Transfer Shares by the end of the Investor Option Period, then the Company shall, immediately after the expiration of the Investor Option Period, send written notice to those Investors who fully exercised their options within the Investor Option Period (the “ Exercising Investors ”). Each Exercising Investor shall have an additional option to purchase all or any part of the balance of any such remaining Transfer Shares on the terms and conditions set forth in the Proposed Transfer Notice. To exercise such option, an Exercising Investor must deliver notice of such additional exercise to the Transferring Holder and the Company within ten (10) days after the expiration of the Investor Option Period stating the number of Transfer Shares such Exercising Investor elects to purchase. In the event there are two or more such Exercising Investors that choose to exercise such additional option for a total number of remaining shares in excess of the number available, the remaining shares available for purchase pursuant to this Section 4.2(b) shall be allocated to such Exercising Investors pro rata based on the number of such Transfer Shares such Exercising Investors have elected to purchase. If the options to purchase the remaining Transfer Shares are exercised in full by the Exercising Investors, the Company shall immediately notify all of the Exercising Investors of that fact.

4.3    Forfeiture of Rights . If the total number of Transfer Shares that the Company and the Investor have elected to purchase pursuant to Sections 4.1 and 4.2 is less than the total number of Transfer Shares, then the Company and the Investor shall be deemed to have forfeited any right to purchase the Transfer Shares, and during the forty-five (45) day period after the expiration of the last option pursuant to Section 4.2 the Transferring Holder shall be free to Transfer all, but not less than all, of the Transfer Shares to the Prospective Transferee at the price and on the terms and conditions set forth in the Proposed Transfer Notice (subject to the other terms and restrictions of this Agreement). If the Transfer Shares are not Transferred during such forty-five (45) day period, the Transferring Holder may not Transfer any Capital Stock unless such Transferring Holder first again complies in full with each applicable provision of this Section 4. If the Transfer Shares are Transferred to the Proposed Transferee pursuant to this Section 4, thereafter they will be subject to all of the provisions of this Agreement.

4.4    Consideration; Closing . If the consideration proposed to be paid for the Transfer Shares is in property, services or other non-cash consideration, the fair market value of the consideration shall be determined in good faith by the Board. If the Company or the Investor cannot for any reason pay for the Transfer Shares in the same form of non-cash consideration, the Company or the Investor may pay the cash value equivalent thereof, as determined by the Board. The closing of the purchase of Transfer Shares by the Company and the Investor shall take place at the principal executive office of the Company or such other place as the Company may designate and at such time as the Company may designate, provided such time must be before the later of (i) the date specified in the Proposed Transfer Notice as the intended date of the proposed Holder Transfer and (ii) thirty (30) days after the date options to purchase all of the Transfer Shares have been exercised pursuant to Section 4.1 or 4.2, as the case may be. At such closing, certificates representing the Transfer Shares shall be delivered by the Transferring Holder against payment of the purchase price for the Transfer Shares as provided in this Section 4.

5.    Take-Along Right .

5.1    Terms of Take-Along Right . In the event that the Investor (the “ Take-Along Investor ”) approve a transaction or series of related transactions in which a Person, or a group of Persons (as the term “group” is defined under the Securities Exchange Act of 1934, as amended), other than the Investor (i) will acquire shares of Capital Stock representing a majority of the Voting Power of the outstanding Capital Stock in a transaction or series of related transactions requiring the approval of the stockholders of the Company or (ii) will acquire from the Take-Along Investor shares of Capital Stock representing a majority of the Voting Power of the outstanding Capital Stock held by the Investors (either of clause (i) or (ii), a “ Take-Along Sale ”), then each Holder hereby agrees with respect to all shares of Capital Stock that such Holder owns and any other shares of Capital Stock over which such Holder otherwise exercises voting or dispositive power:

(a)    in the event such transaction requires the approval of the stockholders of the Company, (i) if the matter is to be brought to a vote at a stockholder meeting, after receiving proper notice of any meeting of stockholders of the Company to vote on the approval of the Take-Along Sale, to be present, in person or by proxy, as a holder of Capital Stock, at all such meetings and be counted for the purposes of determining the presence of a quorum at such meetings; and (ii) to vote (in person, by proxy or by action by written consent, as applicable) all such Capital Stock in favor of such Take-Along Sale and in opposition of any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such Take-Along Sale;

(b)    in the event that the Take-Along Sale is to be effected by the sale of Capital Stock held by the Take-Along Investor, and in the event the Take-Along Investor so request, to sell all shares of Capital Stock beneficially held by such Holder (or in the event that the Take-Along Investor are selling fewer than all of their shares of Capital Stock, shares in the same proportion as the Take-Along Investor are selling) to the Person or group of Persons to whom the Take-Along Investor propose to sell their shares of Capital Stock, for the same per-share consideration (including for this purpose as part of the per-share consideration the amount of any and all compensation to be received by the Investor or other Stockholder from the acquiring Persons in connection with or related to such transaction, net of expenses) and on the same other terms and conditions relating thereto as the Take-Along Investor, except that Holders will not be required to sell their Capital Stock unless the liability for indemnification, if any, of each Holder in such Take-Along Sale is several, not joint, and is pro rata in accordance with such Holder’s relative ownership of Capital Stock, and will not exceed the consideration payable to such Holder, if any, in such transaction (except in the case of potential liability for fraud or willful misconduct by such Holder);

(c)    to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Take-Along Sale; and

(d)    subject to the provisions of Section 5.1(b), to execute and deliver all related documentation and take such other actions in support of the Take-Along Sale as shall reasonably be requested by the Company or the Take-Along Investor.

5.2    Expiration of Take-Along Right . The take-along right in favor of the Investor provided in this Section 5 will expire and be of no further effect from and after the later to occur of the date (a) the Investor owns in the aggregate less than twenty-five percent (25%) of the Voting Power of the outstanding shares of Capital Stock or (b) another Stockholder owns shares of Capital Stock with an aggregate Voting Power greater than the Voting Power of the shares of Capital Stock owned by the Investor in the aggregate.

6.    Right of Co-Sale .  

6.1    Co-Sale Right . In the event that the Investor proposes to Transfer shares of Capital Stock to a prospective transferee (the “ Prospective Co-Sale Transferee ”) in a single transaction or series of related transactions, which shares represent more than five percent (5%) of the Voting Power of the then outstanding shares of Capital Stock, then the Investor (the “ Transferring Investor ”) must first give notice (a “ Proposed Co-Sale Notice ”) to the Company and each Holder prior to the consummation of the Transfer. The Proposed Co-Sale Notice shall state all of the material terms and conditions of the proposed Transfer, including the name of the Prospective Co-Sale Transferee, the number of shares proposed to be Transferred, the maximum number of shares each Holder can elect to sell and the proposed purchase price. Each Holder shall have the right to sell the amount of such Holder’s Capital Stock provided for in Section 6.2 to such Prospective Co-Sale Transferee at the same price and on the same terms and conditions as those offered by the Prospective Co-Sale Transferee to such Transferring Investor(s). Each Holder must exercise its co-sale right under this Section 6 by giving a notice to the Transferring Investor within fifteen (15) days after delivery of the Proposed Co-Sale Notice identifying the number of shares of Capital Stock such Holder elects to sell, and upon giving such notice such Holder shall be deemed to have effectively exercised the right of co-sale.

6.2    Shares Included . Each Holder who timely exercises such Holder’s right of co-sale by delivering the written notice provided for in Section 6.1 may include in the proposed Transfer up to the amount of Capital Stock equal to the product obtained by multiplying (a) the aggregate number of shares of Capital Stock proposed to be Transferred by the Transferring Investor by (b) a fraction, the numerator of which is the number of shares of Capital Stock owned by such Holder immediately before consummation of the proposed Transfer and the denominator of which is the total number of shares of Capital Stock owned, in the aggregate, by all Holders who have timely exercised such Holders’ right of co-sale immediately prior to the consummation of the proposed Transfer plus the number of shares of Capital Stock held by the Transferring Investor. If the Transferring Investor proposes to Transfer only outstanding shares of Common stock or preferred stock of the Company, the co-sale right provided in this Section 6 shall only apply to outstanding shares of Common Stock or preferred stock owned by the Holders. If the Transferring Investor proposes to Transfer any rights to acquire Common Stock or preferred stock of the Company, the right of co-sale provided in this Section 6 shall apply to all forms of Capital Stock held by the Holders. For purposes of this Section 6.2, if the class of Capital Stock being Transferred by the Transferring Investor is different from a class of Capital Stock held by a Holder, the phrase “same per share consideration,” as applied to each such other class of Capital Stock, shall mean (i) with respect to Common Stock or any class of preferred stock of the Company, the value per share implied by the methodology of the Company’s most recent appraisal pursuant to Section 7 based upon the price per share consideration being paid to the Transferring Investor in such Transfer and (ii) with respect to any right to acquire Common Stock or preferred stock of the Company, the consideration per share being paid to the Transferring Investor or the value per share calculated pursuant to the preceding clause (i), as the case may be, for the class of Capital Stock such right is exercisable for, less the amount of any consideration that has to be paid to exercise such right.

6.3    Delivery of Stock Certificates . Each Holder shall effect its participation in the proposed