Common use of Observers' Rights Clause in Contracts

Observers' Rights. ADP Atlantic, Inc. or its successors or permitted assigns (collectively, “ADP”) and PaineWebber Capital Inc. or its successors or permitted assigns (collectively, “PW”) shall each have the right to designate one individual as an observer member of the Board (an “Observer”). An Observer shall have all the rights of the members of the Board except that an Observer shall not have the right to vote on any matter presented to the Board. The Company shall give to each Observer notice of each meeting of the Board of Directors of the Company at the same time and in the same manner as notice is given to directors, and each Observer shall be entitled to attend in person all meetings held in person and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current information with respect to the affairs of the Company. The Company shall provide to each Observer, in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, at the same time such materials and information are given to directors of the Company (except that materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting). If the Board of Directors proposes to take any action by written consent in lieu of a meeting, the Company shall give written notice thereof to each Observer in the same manner provided to the Board, describing in reasonable detail the nature and substance of such action. The reasonable out-of-pocket expenses incurred by each Observer in connection with attending any meeting of the Board shall be reimbursable to the extent that the Company reimburses the members of the Board for the reasonable out-of-pocket expenses incurred by them in connection with attending any meeting of the Board. An Observer does not owe to the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, as the case may be.

Observers' Rights. ADP Atlantic, Inc. So long as 399 Venture or its successors or permitted assigns (collectivelyAffiliates own at least 5% of the Common Stock outstanding, “ADP”) and PaineWebber Capital Inc. if no employee of 399 Venture or its successors Affiliates is a member of the Company's Board of Directors, 399 Venture shall have the right to designate two observers (the "Observers") to attend meetings of the Company's Board of Directors and committees thereof. If at least one employee of 399 Venture or permitted assigns (collectivelyits Affiliates is a member of the Company's Board of Directors, “PW”) 399 Venture shall each have the right to designate one individual as an observer member Observer to attend meetings of the Company's Board (an “Observer”)of Directors and committees thereof. An Observer shall have all the rights of the members of the Board except that an Observer The Observers shall not have the right to vote on any matter presented to the BoardBoard of Directors or any committee thereof. The Company shall give to each Observer written notice of each meeting of the Board of Directors of the Company and committees thereof at the same time and in the same manner as the members of the Board of Directors or such committee receive notice is given to directorsof such meetings, and the Company shall permit each Observer to attend as an observer all meetings of its Board of Directors and committees thereof. Each Observer shall be entitled to attend in person receive all meetings held in person written materials and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that directors, and each Observer shall keep confidential such materials and information provided to directors and any other confidential information discussed at any meeting of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)Board of Directors. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of its Board of Directors or a committee thereof, the Company shall give written notice thereof to each Observer in the same manner provided prior to the Board, describing in reasonable detail the nature and substance effective date of such actionconsent. The reasonable out-of-pocket expenses incurred by Company shall provide to each Observer all written materials and other information given to the directors in connection with attending any meeting of such action by written consent at the Board shall be reimbursable same time such materials and information are given to the extent that the directors, and each Observer shall keep such materials and information confidential. The Company reimburses the members of the Board for shall pay the reasonable out-of-pocket expenses of each Observer incurred by them in connection with attending any meeting of the Board. An Observer does not owe to the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, as the case may bemeetings.

Observers' Rights. ADP AtlanticSo long as the BRS Entities and their Controlled Affiliates (considered as a single Investor) remain a Major Shareholder (as defined herein), Inc. or its successors or permitted assigns if no employee of the BRS Entities is a member of the Company's Board of Directors, BRS shall have the right to designate two observers (collectivelythe "Observers") to attend meetings of the Company's Board of Directors and committees thereof. If at least one employee of BRS is a member of the Company's Board of Directors, “ADP”) and PaineWebber Capital Inc. or its successors or permitted assigns (collectively, “PW”) BRS shall each have the right to designate one individual Observer to attend meetings of the Company's Board of Directors and committees thereof. So long as an observer the HCCP Entities and their Controlled Affiliates (considered as a single Investor) remain a Major Shareholder, if no employee of the HCCP Entities is a member of the Company's Board (an “Observer”). An Observer of Directors, the HCCP Entities shall have all the rights right to designate one Observer to attend meetings of the members Company's Board of Directors and committees thereof. So long as the Xxxxx Entities and their Controlled Affiliates (considered as a single Investor) remain a Major Shareholder, if no employee of the Xxxxx Entities is a member of the Company's Board except that an of Directors, the Xxxxx Entities shall have the right to designate one Observer to attend meetings of the Company's Board of Directors and committees thereof. So long as the Xxxxx Investors and their Controlled Affiliates (considered as a single Investor) remain a Major Shareholder, if the Xxxxx Trust (as defined herein) has not designated a director pursuant to Section 6.3 hereof, the Xxxxx Trust shall have the right to designate one Observer to attend meetings of the Company's Board of Directors and committees thereof. The Observers shall not have the right to vote on any matter presented to the BoardBoard of Directors or any committee thereof. The Company shall give to each Observer written notice of each meeting of the Board of Directors of the Company and committees thereof at the same time and in the same manner as the members of the Board of Directors or such committee receive notice is given to directorsof such meetings, and the Company shall permit each Observer to attend as an observer all meetings of its Board of Directors and committees thereof. Each Observer shall be entitled to attend in person receive all meetings held in person written materials and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that directors, and each Observer shall keep such materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)confidential. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of its Board of Directors or a committee thereof, the Company shall give written notice thereof to each Observer in the same manner provided prior to the Board, describing in reasonable detail the nature and substance effective date of such actionconsent. The reasonable out-of-pocket expenses incurred by Company shall provide to each Observer all written materials and other information given to the directors in connection with attending any meeting of such action by written consent at the Board shall be reimbursable same time such materials and information are given to the extent that the Company reimburses the members of the Board for the reasonable out-of-pocket expenses incurred by them in connection with attending any meeting of the Board. An Observer does not owe to the Company or its shareholders any fiduciary dutydirectors, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, and each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to the foregoing rights keep such materials and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, as the case may beconfidential.

Observers' Rights. ADP Atlantic, Inc. So long as CVC or its successors or permitted assigns (collectivelyAffiliates own at ----------------- least 5% of the Common Stock outstanding, “ADP”) and PaineWebber Capital Inc. if no employee of CVC or its successors or permitted assigns Affiliates is a member of the Company's Board of Directors, CVC shall have the right to designate two observers (collectivelythe "Observers") to attend meetings of the Company's Board of Directors and committees thereof. If at least one employee of CVC is a member of the Company's Board of Directors, “PW”) CVC shall each have the right to designate one individual as an observer member Observer to attend meetings of the Company's Board (an “Observer”)of Directors and committees thereof. An Observer shall have all the rights of the members of the Board except that an Observer The Observers shall not have the right to vote on any matter presented to the BoardBoard of Directors or any committee thereof. The Company shall give to each Observer written notice of each meeting of the Board of Directors of the Company and committees thereof at the same time and in the same manner as the members of the Board of Directors or such committee receive notice is given to directorsof such meetings, and the Company shall permit each Observer to attend as an observer all meetings of its Board of Directors and committees thereof. Each Observer shall be entitled to attend in person receive all meetings held in person written materials and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that directors, and each Observer shall keep such materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)confidential. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of its Board of Directors or a committee thereof, the Company shall give written notice thereof to each Observer in the same manner provided prior to the Board, describing in reasonable detail the nature and substance effective date of such actionconsent. The reasonable out-of-pocket expenses incurred by Company shall provide to each Observer all written materials and other information given to the directors in connection with attending any meeting of such action by written consent at the Board shall be reimbursable same time such materials and information are given to the extent that the directors, and each Observer shall keep such materials and information confidential. The Company reimburses the members of the Board for shall pay the reasonable out-of-pocket expenses of each Observer incurred by them in connection with attending any meeting of the Board. An Observer does not owe to the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, as the case may bemeetings.

Observers' Rights. ADP Atlantic, Inc. So long as Sterling or its successors or permitted assigns (collectivelyAffiliates own at least 5% of the Common Stock outstanding, “ADP”) and PaineWebber Capital Inc. if no employee of Sterling or its successors Affiliates is a member of the Company's Board of Directors, Sterling shall have the right to designate two observers (the "Observers") to attend meetings of the Company's Board of Directors and committees thereof. If at least one employee of Sterling or permitted assigns (collectivelyits Affiliates is a member of the Company's Board of Directors, “PW”) Sterling shall each have the right to designate one individual Observer to attend meetings of the Company's Board of Directors and committees thereof. So long as an observer Xxxxxx or its Affiliates own at least 5% of the Common Stock outstanding, if no officer of Xxxxxx is a member of the Company's Board (an “Observer”). An Observer of Directors, Xxxxxx shall have all the rights right to designate one Observer to attend meetings of the members Company's Board of the Board except that an Observer Directors and committees thereof. The Observers shall not have the right to vote on any matter presented to the BoardBoard of Directors or any committee thereof. The Company shall give to each Observer written notice of each meeting of the Board of Directors of the Company and committees thereof at the same time and in the same manner as the members of the Board of Directors or such committee receive notice is given to directorsof such meetings, and the Company shall permit each Observer to attend as an observer all meetings of its Board of Directors and committees thereof. Each Observer shall be entitled to attend in person receive all meetings held in person written materials and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that directors, and each Observer shall keep such materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)confidential. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of its Board of Directors or a committee thereof, the Company shall give written notice thereof to each Observer in the same manner provided prior to the Board, describing in reasonable detail the nature and substance effective date of such actionconsent. The reasonable out-of-pocket expenses incurred by Company shall provide to each Observer all written materials and other information given to the directors in connection with attending any meeting of such action by written consent at the Board shall be reimbursable same time such materials and information are given to the extent that the directors, and each Observer shall keep such materials and information confidential. The Company reimburses the members of the Board for shall pay the reasonable out-of-pocket expenses of each Observer incurred by them in connection with attending any meeting of the Board. An Observer does not owe to the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, as the case may bemeetings.

Observers' Rights. ADP AtlanticSo long as the MBL Investors own in the ----------------- aggregate at least seven and one half percent (7.5%) of the Common Stock outstanding, Inc. or its successors or permitted assigns (collectively, “ADP”) and PaineWebber Capital Inc. or its successors or permitted assigns (collectively, “PW”) the MBL Investors shall each have the right to designate one individual as an (1) observer member (other than any of the Board (an “Observer”). An Observer shall have all the rights MBL Individuals or any person related by blood or marriage to any of the members MBL Individuals) (the "Observer") to attend meetings of the Company's Board except that an Observer shall not have the right to vote on any matter presented to the Boardof Directors and committees thereof. The Company shall give to each the Observer written notice of each meeting of the Board of Directors of the Company and committees thereof at the same time and in the same manner as the members of the Board of Directors or such committee receive notice is given to directorsof such meetings, and each the Company shall permit the Observer to attend as an observer all meetings of its Board of Directors and committees thereof. The Observer shall be entitled to attend in person receive all meetings held in person written materials and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that directors, and the Observer shall keep such materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)confidential. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of its Board of Directors or a committee thereof, the Company shall give written notice thereof to each the Observer in the same manner provided prior to the Board, describing in reasonable detail the nature and substance effective date of such actionconsent. The reasonable out-of-pocket expenses incurred by each Company shall provide to the Observer all written materials and other information given to the directors in connection with attending any meeting of such action by written consent at the Board shall be reimbursable same time such materials and information are given to the extent that directors, and the Observer shall keep such materials and information confidential. The Company reimburses the members of the Board for shall pay the reasonable out-of-pocket expenses of the Observer incurred by them in connection with attending any meeting such meetings to the same extent that the Company pays for such expenses incurred by the directors of the BoardCompany. An The MBL Investors shall cause any Observer does not owe to the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, each Observer shall be required to execute a confidentiality and nondisclosure agreement prior to any exercise of or entitlement to the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of with the Company, or in form and substance reasonably satisfactory to the Company, whereby the Observer covenants to keep confidential and not to disclose any and all information Concerning the Company learned as a director, officer, manager, partner, agent or control person result of such shareholder person's status as the Observer to the same extent that the directors of the Company; provided, however, that Company are obligated to do so under the terms of the confidentiality agreement shall be reasonably acceptable to ADP Pennsylvania Business Corporation Law or PW, as the case may beany successor statute.

Observers' Rights. ADP AtlanticTo the extent permitted by applicable law, Inc. each of Xxxx Capital and Battery Ventures, for so long as such Investor, together with its Affiliates, owns at least thirty percent (30%) of the shares of Series B Preferred Stock purchased by them (or its successors or permitted assigns Common Stock issued on conversion thereof) at the Closing (collectivelyas defined in the Purchase Agreement), “ADP”) and PaineWebber Capital Inc. or its successors or permitted assigns (collectively, “PW”) shall each have the right to designate have one (1) individual as an observer member of the Board (each an “Observer”). An Observer shall have all the rights of the members ) attend any meeting of the Board except that or any committee thereof at any time during which such Investor does not have an executive thereof serving on the Board of Directors of the Company. Petters, for so long as such Investor, together with its Affiliates, owns at least thirty percent (30%) of the shares of preferred stock purchased by Petters or his Affiliates (or Common Stock issued on conversion thereof) in connection with the Series A Purchase Agreement), shall have the right to have one (1) individual (each an “Observer”) attend any meeting of the Board or any committee thereof at any time during which such Investor does not have an executive thereof serving on the Board of Directors of the Company. No Observer shall not have the right to vote on any matter presented to the BoardBoard or any committee thereof. The To the extent permitted by applicable law, the Company shall give to each Observer written notice of each meeting thereof at the same time and in the same manner as the members of the Board or such committee receive notice of Directors of such meetings, and the Company shall permit each Observer to attend as an observer at all meetings thereof; provided, that in the case of telephonic meetings, each Observer need receive only actual notice thereof at the same time and in the same manner as notice is given to the directors; and provided further, that such Observer may be excluded from that portion of any meeting reasonably required in order to preserve attorney-client privilege for communications with the Company’s counsel, and each the Company shall not be required to provide the Observer shall be entitled with access to any information or materials or provide the Observer the right to attend in person all meetings held in person and to participate in telephone meetings any meeting of the Board of Directors or any committee thereof if a majority of the independent members of the Board of Directors of the CompanyCompany determine, as an observerin good faith and in consultation with counsel, solely for that providing such information, access or attendance would conflict with the purpose fiduciary duties or obligations of allowing each such the Board of Directors under the Delaware General Corporation Law. Each Observer shall be entitled to have current receive all written materials and other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)directors. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of the Board, the Company shall give written notice thereof to each Observer in the same manner provided prior to the Board, effective date of such consent describing in reasonable detail the nature and substance of such action. The Company shall pay all reasonable out-of-pocket expenses incurred by each Observer including, without limitation, airfare and hotel expenses in accordance with the Company’s then applicable travel policies, but shall not pay any other compensation to an Observer, in connection with attending any meeting such Observer’s attendance at meetings of the Board shall be reimbursable to the extent that the Company reimburses the members of the Board for the reasonable out-of-pocket expenses incurred by them in connection with attending any meeting of the Board. An Observer does not owe to the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, as the case may beDirectors.

Observers' Rights. ADP Atlantic, Inc. So long as CVC or its successors or permitted assigns Affiliates own at least 5% (collectivelyin the aggregate) of the Common Stock outstanding, “ADP”) and PaineWebber Capital Inc. if no employee of CVC or its successors or permitted assigns Affiliates is a member of the Company's Board of Directors, CVC shall have the right to designate two observers (collectivelythe "Observers") to attend meetings of the Company's Board of Directors and committees thereof. If at least one employee of CVC is a member of the Company's Board of Directors, “PW”) CVC shall each have the right to designate one individual Observer to attend meetings of the Company's Board of Directors and committees thereof. So long as an observer the Xxxxxxx Group (as hereinafter defined) own at least 1.9% of the Common Stock outstanding, if no member or designee of the Xxxxxxx Group is a member of the Company's Board (an “Observer”). An Observer of Directors, the Xxxxxxx Group shall have all the rights right to designate one Observer to attend meetings of the members Company's Board of Directors and committees thereof. So long as the Im'Oberstag Group (as hereinafter defined) own at least 5% of the Common Stock outstanding, if no member or designee of the Im' Oberstag Group is a member of the Company's Board except that an of Directors, the Im'Oberstag Group shall have the right to designate one Observer to attend meetings of the Company's Board of Directors and committees thereof. The Observers shall not have the right to vote on any matter presented to the BoardBoard of Directors or any committee thereof. The Company shall give to each Observer written notice of each meeting of the Board of Directors of the Company and committees thereof at the same time and in the same manner as the members of the Board of Directors or such committee receive notice is given to directorsof such meetings, and the Company shall permit each Observer to attend as an observer all meetings of its Board of Directors and committees thereof. Each Observer shall be entitled to attend in person receive all meetings held in person written materials and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that directors, and each Observer shall keep such materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)confidential. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of its Board of Directors or a committee thereof, the Company shall give written notice thereof to each Observer in the same manner provided prior to the Board, describing in reasonable detail the nature and substance effective date of such actionconsent. The reasonable out-of-pocket expenses incurred by Company shall provide to each Observer all written materials and other information given to the directors in connection with attending any meeting of such action by written consent at the Board shall be reimbursable same time such materials and information are given to the extent that the directors, and each Observer shall keep such materials and information confidential. The Company reimburses the members of the Board for shall pay the reasonable out-of-pocket expenses of each Observer incurred by them in connection with attending any meeting of such meetings. As used herein, the Board. An Observer does not owe to "Xxxxxxx Group" means the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to individuals designated on Schedule VI hereto as "Xxxxxxx Group" members and the contrary in this Agreement, each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to "Im'Oberstag Group" means the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, individuals designated on Schedule VI hereto as the case may be"Im'Oberstag Group" members.

Observers' Rights. ADP Atlantic, Inc. So long as Vectura or its successors or permitted assigns (collectivelyAffiliates own at ----------------- least 5% of the Common Stock outstanding, “ADP”) and PaineWebber Capital Inc. if no employee of Vectura or its successors Affiliates is a member of the Company's Board of Directors, Vectura shall have the right to designate two observers (the "Observers") to attend meetings of the --------- Company's Board of Directors and committees thereof. If at least one employee of Vectura or permitted assigns (collectivelyits Affiliates is a member of the Company's Board of Directors, “PW”) Vectura shall each have the right to designate one individual as an observer member Observer to attend meetings of the Company's Board (an “Observer”)of Directors and committees thereof. An Observer shall have all the rights of the members of the Board except that an Observer The Observers shall not have the right to vote on any matter presented to the BoardBoard of Directors or any committee thereof. The Company shall give to each Observer written notice of each meeting of the Board of Directors of the Company and committees thereof at the same time and in the same manner as the members of the Board of Directors or such committee receive notice is given to directorsof such meetings, and the Company shall permit each Observer to attend as an observer all meetings of its Board of Directors and committees thereof. Each Observer shall be entitled to attend in person receive all meetings held in person written materials and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that directors, and each Observer shall keep such materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)confidential. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of its Board of Directors or a committee thereof, the Company shall give written notice thereof to each Observer in the same manner provided prior to the Board, describing in reasonable detail the nature and substance effective date of such actionconsent. The reasonable out-of-pocket expenses incurred by Company shall provide to each Observer all written materials and other information given to the directors in connection with attending any meeting of such action by written consent at the Board shall be reimbursable same time such materials and information are given to the extent that the directors, and each Observer shall keep such materials and information confidential. The Company reimburses the members of the Board for shall pay the reasonable out-of-pocket expenses of each Observer incurred by them in connection with attending any meeting of the Board. An Observer does not owe to the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, as the case may bemeetings.

Observers' Rights. ADP AtlanticAfter consummation of the Merger, Inc. so long as ----------------- Court Square or its successors or permitted assigns (collectivelyPermitted Transferees own at least 5% of the Common Stock outstanding, “ADP”) and PaineWebber Capital Inc. if no employee of Court Square or its successors Permitted Transferees is a member of the Company's Board of Directors, Court Square or permitted assigns such Permitted Transferee shall have the right to designate two observers (collectivelythe "Observers") to attend meetings of the Company's Board of Directors and committees thereof. If only one employee of Court Square or its Permitted Transferees is a member of the Company's Board of Directors, “PW”) Court Square or its Permitted Transferees shall each have the right to designate one individual as an observer member to attend meetings of the Company's Board (an “Observer”)of Directors and committees thereof. An Observer shall have all Notwithstanding the foregoing, if at any time each of Court Square and any of its Permitted Transferee(s) own greater than 5% of the Common Stock outstanding, the rights granted in this Section 4.1 shall only apply with respect to the entity, among Court Square and its Permitted Transferee(s), which owns the most shares of the members of the Board except that an Observer Common Stock. The Observers shall not have the right to vote on any matter presented to the BoardBoard of Directors or any committee thereof. The Company shall give to each Observer written notice of each meeting of the Board of Directors of the Company and committees thereof at the same time and in the same manner as the members of the Board of Directors or such committee receive notice is given to directorsof such meetings, and the Company shall permit each Observer to attend as an observer all meetings of its Board of Directors and committees thereof. Each Observer shall be entitled to attend in person receive all meetings held in person written materials and to participate in telephone meetings of the Board of Directors of the Company, as an observer, solely for the purpose of allowing each such Observer to have current other information with respect given to the affairs of the Company. The Company shall provide to each Observer, directors in connection with each meeting he or she is entitled to attend, whether or not present at such meeting, copies of all notices, minutes, consents and all other materials or information that the Company provides to the directors of the Company with respect to such meeting, meetings at the same time such materials and information are given to directors of the Company (except that directors, and each Observer shall keep such materials and information provided to directors of the Company at a meeting at which the relevant Observer is not present shall be provided to such Observer promptly after the meeting)confidential. If the Board of Directors Company proposes to take any action by written consent in lieu of a meetingmeeting of its Board of Directors or a committee thereof, the Company shall give written notice thereof to each Observer in the same manner provided as soon as practicable prior to the Board, describing in reasonable detail the nature and substance effective date of such actionconsent. The reasonable out-of-pocket expenses incurred by Company shall provide to each Observer all written materials and other information given to the directors in connection with attending any meeting of such action by written consent at the Board shall be reimbursable same time such materials and information are given to the extent that the directors, and each Observer shall keep such materials and information confidential. The Company reimburses the members of the Board for shall pay the reasonable out-of-pocket expenses of each Observer incurred by them in connection with attending any meeting of the Board. An Observer does not owe to the Company or its shareholders any fiduciary duty, duty of loyalty or duty of care. Notwithstanding anything to the contrary in this Agreement, each Observer shall be required to execute a confidentiality agreement prior to any exercise of or entitlement to the foregoing rights and powers, which such agreement shall prohibit such Observer from disclosing any of the Company’s confidential or proprietary information to any person or entity who or which is not a shareholder (or any employee or affiliate of such shareholder) of the Company, or a director, officer, manager, partner, agent or control person of such shareholder of the Company; provided, however, that the terms of the confidentiality agreement shall be reasonably acceptable to ADP or PW, as the case may bemeetings.