Common use of Shareholders Meeting Clause in Contracts

Shareholders Meeting. The Company shall call a meeting of its shareholders, as promptly as practicable following the Original Signing Date, but in no event later than October 31, 2011, to vote on proposals (the “Shareholder Proposals”) to approve (i) the issuance of Common Stock and conversion of the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposals. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtained.

Shareholders Meeting. (a) The Company shall call a meeting of its shareholdersshareholders (the “Initial Shareholders Meeting”), as promptly as practicable following the Original Signing DateClosing, but in no event later than October 31November 30, 20112010, for holders of Common Stock, the Series B Preferred Shares and the Series C Preferred Shares to vote (each voting as a separate class) on proposals (the “Shareholder Proposals”) to approve (i) the issuance of Common Stock and upon conversion of the Non-Voting Common Stock Series B Preferred Shares and the Series C Preferred Shares for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities Rules (such approval approvals of the Shareholder Proposals, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of approve the Shareholder ProposalsProposals (the “Board Recommendation”), and shall not modify or withdraw such Board Recommendation. In connection with such meetingthe Initial Shareholders Meeting, the Company shall promptly prepare (and the Purchasers will reasonably cooperate with the Company to prepare) and file (but in no event more than thirty (30) days after following the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting the Initial Shareholders Meeting to be mailed to the Company’s shareholders no later not more than September 16, 2011ten (10) calendar days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such in favor of the Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm firm, as necessary, to assist in obtaining the Shareholder Approval. The Company shall notify Purchaser the Purchasers promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting the Initial Shareholders Meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In addition, each Purchaser and the event Company agrees to promptly correct any information provided by it or on its behalf for use in the proxy statement if and to the extent that Shareholder Approval is not obtained at such shareholder meetinginformation shall have knowingly become false or misleading in any material respect, and the Company shall include a proposal as promptly as practicable prepare and mail to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders an amendment or supplement to be held no less than once in each subsequent six-month period beginning correct such information to the extent required by applicable laws and regulations. The Company shall consult with the Purchasers prior to mailing any proxy statement, or any amendment or supplement thereto, and provide the Purchasers with reasonable opportunity to comment thereon (it being acknowledged and agreed that if a Purchaser does not object to or comment on the date aforementioned documents within three (3) Business Days, then the Purchaser shall be deemed to have consented to and approved the use of such shareholder meeting until such approval is obtaineddocuments).

Shareholders Meeting. The (a) As promptly as practicable following (and in any event within ten (10) business days of) the date hereof, the Company shall call prepare a meeting proxy statement relating to the Special Meeting (together with any amendments thereof or supplements thereto and any other required proxy materials, the “Proxy Statement”) relating to the Merger and this Agreement. As promptly as practicable following the consummation of its shareholdersthe Offer, or if requested by Parent, as promptly as practicable following (and in any event within ten (10) business days of) the Original Signing Datecommencement of the Offer, but in no event later than October 31the Company shall file the Proxy Statement with the SEC; provided, 2011that Purchaser and its counsel shall be given a reasonable opportunity to review the Proxy Statement before it is filed with the SEC and the Company shall give due consideration to all reasonable additions, deletions or changes suggested thereto by Parent, Purchaser and their counsel with the intention, to vote on proposals (the “Shareholder Proposals”) extent practicable, that the Proxy Statement be in a form ready to approve (i) print and mail to the issuance of Common Stock and conversion shareholders of the Non-Voting Common Stock Company immediately following the acceptance for purposes payment and purchase of Rule 5635 Shares by Purchaser pursuant to the Offer. Except as may otherwise be required by the fiduciary duties of the NASDAQ Stock Market Rules, (ii) authorizing a new class Company Board of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject to the exercise of its fiduciary duties Directors under North Carolina applicable law, the Company shall include in the Proxy Statement the recommendation of the Company Board of Directors that shareholders of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposals. In connection with approval of the Merger and this Agreement; provided, that if such meetingrecommendation is not included therein, the Company shall promptly prepare and file (but Board of Directors shall, in accordance with Section 14-2-1103 of the GBCC, make no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, recommendation. The Company shall use its reasonable best efforts to obtain and furnish the information required to be included by the SEC in the Proxy Statement and, after consultation with Purchaser, respond promptly to any comments made by the SEC and its staff with respect to the Proxy Statement. The Company shall provide Purchaser and its counsel with copies of any written comments, and shall inform them of any oral comments, that the Commission Company or its counsel may receive from time to time from the SEC or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to Proxy Statement promptly after the Company’s shareholders no later than September 16, 2011receipt of such comments, and any written or oral responses thereto. Purchaser and its counsel shall use its be given a reasonable best efforts opportunity to solicit proxies for review any such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement written responses and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any materialgive due consideration to all reasonable additions, non-public information, unless requested deletions or changes suggested thereto by such Purchaser and pursuant its counsel. The Company, on the one hand, and Purchaser, on the other hand, agree to a written agreement regarding promptly correct any information provided by it for use in the confidentiality Proxy Statement if and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statementextent that it shall have become false or misleading in any material respect or as otherwise required by law and, the Company shall further agrees to take all steps necessary to cause the Proxy Statement, as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meetingso corrected (if applicable), the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once filed with the SEC and, if any such correction is made following the mailing of the Proxy Statement as provided in Section 1.9(b)(ii), mailed to holders of Shares, in each subsequent six-month period beginning on case as and to the date of such shareholder meeting until such approval is obtainedextent required by applicable federal securities laws.

Shareholders Meeting. (a) The Company, acting through the Company shall call Board, shall, in accordance with applicable Law and its Certificate of Incorporation and bylaws, duly call, establish a record date for, give notice of, convene and hold a special meeting of its shareholders, shareholders (the “Shareholders Meeting”) as promptly soon as practicable following the Original Signing Date, clearance by the SEC of the Proxy Statement (but in no event later than October 31forty-five (45) Business Days after such clearance by the SEC) for the purpose of considering and voting upon the approval and adoption of this Agreement, 2011the Merger and such other matters as may be necessary to effectuate the Transactions. The Company Board, to vote on proposals (based upon the “Shareholder Proposals”) to approve recommendation of the Special Committee, shall (i) recommend to the issuance of Common Stock and conversion shareholders of the Non-Voting Common Stock for purposes Company the approval and adoption of Rule 5635 of this Agreement and the NASDAQ Stock Market RulesMerger, (ii) authorizing a new class of Non-Voting Common Stock to allow for include in the exercise Proxy Statement such favorable recommendation of the Warrants Company Board that the shareholders of the Company vote in favor of the approval and adoption of this Agreement and the Merger, (iii) an increase take all lawful actions to solicit such approval from the shareholders of the Company and (iv) not withdraw or modify such favorable recommendation, in each case, unless the number Company Board based upon the recommendation of authorized shares of Common Stock the Special Committee, after consultation with independent outside legal counsel, determines in good faith that failing to allow take such action is necessary for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject Company Board to the exercise of comply with its fiduciary duties under North Carolina law, the Board of Directors of the Company shall recommend to the Company’s shareholders that under applicable law. Notwithstanding anything to the contrary herein, the Parent shall have the option (in its sole discretion) to cause the Company Board to submit this Agreement to the shareholders of the Company, whether or not the Company at any time changes, withdraws or modifies such favorable recommendation. In connection with any such submission of this Agreement to the Company’s shareholders, the Company shall solicit from the shareholders vote of the Company proxies in favor of the Shareholder Proposals. In connection with such meeting, Merger and shall take all other action necessary or advisable to secure the vote or consent of the shareholders of the Company shall promptly prepare required by the DGCL and file (but in no event more than thirty (30) days after the Closing Date) with Company’s Certificate of Incorporation and Bylaws to authorize and adopt this Agreement and the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments Merger. Without limiting the generality of the Commission or its staff with respect to foregoing, if the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed Parent notifies the Company Board that the Company Board must submit this Agreement to the Company’s shareholders no later than September 16for approval and adoption, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but A) the Company shall not provide any Purchaser with any materialagrees that its obligation to duly call, non-public informationgive notice of, unless requested by such Purchaser convene and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at hold a meeting of the holders of Common Shares, as required by this Section 5.2, shall not be affected by the withdrawal, amendment or modification of the favorable recommendation and (B) the Company agrees that its obligations pursuant to this Section 5.2 shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Acquisition Proposal or Superior Proposal. In such event, nothing contained in this Agreement shall preclude the Company Board or the Special Committee from informing shareholders to be held that it no less than once in each subsequent six-month period beginning on longer believes that the date Merger is advisable and no longer recommends approval of such shareholder meeting until such approval is obtainedthe Merger.

Shareholders Meeting. The (a) If a vote of the Company's shareholders is required by law, the Company shall call a meeting of its shareholderswill, as promptly as practicable following the Original Signing Dateacceptance for payment of shares of Company Common Stock by Acquisition pursuant to the Offer, but take, in no event later than October 31accordance with applicable law and its articles of incorporation and by-laws, 2011, all action necessary to vote on proposals convene a meeting of holders of shares of Company Common Stock (the “Shareholder Proposals”"Shareholders Meeting") to approve (i) consider and vote upon the issuance approval of this Agreement. The Company shall, promptly following the acceptance for payment of shares of Company Common Stock by Parent pursuant to the Offer, prepare and conversion file with the SEC a proxy statement for the solicitation of the Non-Voting a vote of holders of shares of Company Common Stock for purposes of Rule 5635 of approving the NASDAQ Stock Market RulesMerger (the "Proxy Statement"), (ii) authorizing a new class of Non-Voting Common Stock to allow for which shall include the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the Board of Directors recommendation of the Company shall recommend to Board that shareholders of the Company’s shareholders that such shareholders Company vote in favor of the Shareholder Proposals. In connection with such meeting, approval and adoption of this Agreement and the written opinion of the Financial Advisor that the cash consideration to be received by the shareholders of the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect pursuant to the preliminary proxy statement and to cause a definitive proxy statement related Merger is fair to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging from a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approvalfinancial point of view. The Company shall notify Purchaser promptly of use all reasonable efforts to have the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request Proxy Statement cleared by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall SEC as promptly as practicable prepare after such filing, and promptly thereafter mail the Proxy Statement to the shareholders of the Company. The Company shall also use its shareholders such an amendment best efforts to obtain all necessary state securities law or supplement"blue sky" permits and approvals required in connection with the Merger and to consummate the other transactions contemplated by this Agreement and will pay all expenses incident thereto. In Notwithstanding the event that Shareholder Approval is not obtained foregoing, if Parent, Acquisition and/or any other subsidiary of Parent shall acquire at such shareholder meetingleast 90% of the outstanding shares of Company Common Stock, the Company parties shall include take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the expiration of the Offer without a proposal to approve (and Shareholders Meeting in accordance with Section 1110 of the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtainedCGCL.

Shareholders Meeting. The Company shall call a special meeting of its shareholders, to be held as promptly as practicable following the Original Signing DateClosing, but in no event later than October 31, 201175 days after the Closing, to vote on proposals (the “Shareholder Proposals”) to approve (i) approve the issuance of the Underlying Shares upon conversion of the Preferred Shares into Common Stock, the issuance of the Common Stock and Non-Voting Common Stock upon the exchange of the Series T Preferred Stock and Series T-ACB Preferred Stock in the TARP Exchange and the issuance of the Common Stock upon conversion of the Non-Voting Common Stock issued in the TARP Exchange for purposes of NASDAQ Listing Rule 5635 of the NASDAQ Stock Market Rules5635, (ii) authorizing a new amend the Articles of Incorporation to authorize the class of Non-Voting Common Stock to allow for in accordance with the exercise Common Stock Articles of the Warrants Amendment, and (iii) an if necessary, amend the Articles of Incorporation to increase in the number of authorized shares of Common Stock to allow for at least such number as shall be sufficient to permit the issuance full conversion of the Securities Preferred Shares, the TARP Exchange, and the full conversion of the Non-Voting Common Stock (such approval of the Shareholder Proposals, “Shareholder ApprovalApprovals”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposals. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days 15 Business Days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later not more than September 16, 201110 Business Days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information)Approvals. If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is Approvals are not obtained at such shareholder special shareholders’ meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder special shareholders’ meeting until such approval is obtained.

Shareholders Meeting. The Company shall call will take, in accordance with applicable Law, the rules and policies of NASDAQ and its articles of incorporation and by-laws , all reasonable action necessary to convene and hold a meeting of its shareholdersholders of Class A Shares and Class B Shares (the “Shareholders Meeting”, provided, that the Shareholders Meeting may consist of separate meetings of the holders of Class A Shares and the holders of Class B Shares held on the same date) as promptly as practicable following after the Original Signing Dateexecution of this Agreement to consider and vote upon the approval of this Agreement. Unless the Company Board has made a Change of Recommendation as specifically permitted by Section 6.2(e) hereof, but the Company Board shall recommend and continue to recommend such approval and shall take all lawful action to solicit from its shareholders proxies and votes in no event later than October 31favor of approval of this Agreement, 2011and use commercially reasonable efforts to take all other actions necessary or advisable to secure the Requisite Company Vote. Notwithstanding anything to the contrary contained in this Agreement, to vote on proposals the Company may postpone or adjourn the Shareholders Meeting solely (a) with the “Shareholder Proposals”written consent of Parent, (b) in the absence of a quorum, (c) to approve (i) allow the issuance minimum amount of Common Stock and conversion of the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow additional time reasonably practicable for the exercise filing or mailing of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject any supplement or amendment to the exercise of its fiduciary duties under North Carolina law, the Board of Directors of Proxy Statement that the Company shall recommend Board has determined in good faith (after consultation with outside counsel) is necessary under applicable Law and for such supplement or amendment to be disseminated and reviewed by the Company’s shareholders that such shareholders vote in favor prior to the Shareholders Meeting, (d) for a single period not to exceed ten (10) business days, to solicit additional proxies for the adoption of this Agreement if necessary to obtain the Shareholder Proposals. In connection with such meetingRequisite Company Vote or (e) without limiting clause (c), for a single period not to exceed five (5) business days, if the Company shall promptly prepare has provided notice to Parent and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts Merger Sub that it intends to respond take action pursuant to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder ApprovalSection 8.3(a). The Company shall notify Purchaser promptly advise Parent, at such times as Parent may reasonably request as to the aggregate tally of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request proxies received by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but Company in respect of the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use approval of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtainedthis Agreement.

Shareholders Meeting. The Pursuant to the Merger Agreement, the Company shall call will, if required by applicable law or the Company's Articles of Incorporation, in order to consummate the Merger, and following (i) acceptance for payment of Shares by the Purchaser pursuant to the Offer or (ii) the expiration of the Offer without the Purchaser purchasing any Shares hereunder, in the case of either clause (i) or (ii), without the termination of the Merger Agreement by Parent or the Company, duly call, give notice of, convene and hold a special meeting of its shareholders, shareholders as promptly as practicable following the Original Signing Date, but in no event later than October 31, 2011, acceptance for payment and purchase of Shares by the Purchaser pursuant to vote on proposals (the “Shareholder Proposals”) to approve (i) the issuance of Common Stock and conversion of the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow Offer for the exercise purpose of considering and taking action upon the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject to Merger and the exercise of its fiduciary duties under North Carolina law, the Board of Directors adoption of the Company shall recommend to the Company’s shareholders Merger Agreement. The Merger Agreement provides that such shareholders vote in favor of the Shareholder Proposals. In connection with such meeting, the Company shall promptly will, if required by applicable law in order to consummate the Merger, prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall or information statement relating to the Merger and the Merger Agreement and use its reasonable best efforts (i) to obtain and furnish the information required to be included by the 25 28 Commission in the Proxy Statement (as hereinafter defined) and, after consultation with Parent, to respond promptly to any comments of made by the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy or information statement related to such shareholders’ meeting (the "Proxy Statement") to be mailed to the Company’s shareholders its shareholders, provided that no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statementProxy Statement will be made by the Company without consultation with Parent and its counsel and (ii) to obtain the necessary approvals of the Merger and the Merger Agreement by its shareholders. Subject to the terms of the Merger Agreement, the Company shall as promptly as practicable prepare has agreed to include in the Proxy Statement the recommendation of the Company's Board of Directors that shareholders of the Company vote in favor of the approval of the Merger and mail to its shareholders such an amendment or supplementthe adoption of the Merger Agreement. In The Merger Agreement provides that in the event that Shareholder Approval is not obtained Parent or the Purchaser acquires at such shareholder meetingleast 90% of outstanding Shares, pursuant to the Offer or otherwise (including as a result of the exercise of the Option Agreement), Parent, the Company shall include a proposal to approve (Purchaser and the Board Company will, at the request of Directors shall recommend approval of) Parent and subject to the terms of the Merger Agreement, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such proposal at acquisition, without a meeting of its shareholders to be held no less than once of the Company, in each subsequent sixaccordance with Section 13.1-month period beginning on 719 of the date of such shareholder meeting until such approval is obtainedVSCA.

Shareholders Meeting. The Company shall call a meeting Management and Supervisory Boards of its shareholdersRoyal Numico will, as promptly as practicable following the Original Signing Datedate hereof, but in (a) duly call, give notice of, and convene one or more meetings of its shareholders for the purpose of approving the terms of this Agreement and the transactions contemplated hereby (individually and collectively, the "Shareholders Meeting") which Shareholder Meeting shall be held no event later than October 31, 2011, to vote on proposals twenty-five (25) days after the date hereof (the “"Shareholder Proposals”Determination Date"), and (b) to approve (i) include in its explanatory notes to the issuance of Common Stock and conversion agenda of the Non-Voting Common Stock for purposes of Rule 5635 Shareholders Meeting the unanimous recommendation of the NASDAQ Stock Market Rules, (ii) authorizing a new class Management Board and the Supervisory Board that the shareholders of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders Royal Numico vote in favor of the Shareholder Proposals. In connection with such meeting, approval of the Company shall promptly prepare terms of this Agreement and file the transactions contemplated hereby and (but in no event more than thirty (30ii) days after each of the Closing Date) with the Commission a preliminary proxy statement, Management Board and Supervisory Board of Royal Numico shall use its reasonable best efforts to respond to any comments obtain the necessary approval of the Commission terms of this Agreement and the transactions contemplated hereby by its shareholders. Neither the Management Board or the Supervisory Board shall withdraw, amend or modify in a manner adverse to Purchaser its staff with respect recommendation referred to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly clause (b)(i) of the receipt of preceding sentence (or announce publicly or communicate in any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail manner to its shareholders its intention to do so). Notwithstanding any provision in this Agreement to the contrary, Royal Numico and its Management Board and Supervisory Board shall have the right to (A) publicly disclose the existence and terms of a Superior Proposal to the extent required by applicable law or corporate governance principles, and (B) inform Royal Numico's shareholders of a Superior Proposal at or prior to the Stockholder's Meeting if the failure to take such an amendment action would, in the good faith judgment of the Management Board or supplementthe Supervisory Board of Royal Numico, taking into consideration the advice of corporate counsel of Royal Numico, violate the fiduciary duties of the Management Board or the Supervisory Board of Royal Numico to Royal Numico's shareholders under applicable law. In If the event that Requisite Shareholder Approval is not obtained at such shareholder meeting, by the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtained.Shareholder

Shareholders Meeting. The Company shall call a meeting of its shareholders, as promptly as practicable following the Original Signing DateClosing, but in no event later than October 31September 30, 20112010, to vote on proposals a proposal (the “Shareholder ProposalsProposal”) to approve (i) the issuance of Common Stock and conversion of the Non-Voting Preferred Shares and the Series C Preferred Shares into Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance conversion of the Securities Preferred Shares and Series C Preferred Shares into Common Stock, and (iii) an amendment to the Company’s bylaws increasing the range of the board of directors by at least one member (such approval of the Shareholder ProposalsProposal, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder ProposalsProposal. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later not more than September 16, 2011fifteen (15) business days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission SEC or its staff with respect to the proxy statement and of any request by the Commission SEC or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtained.

Shareholders Meeting. The Subject to the other provisions of this Agreement and unless there has been a Company shall call Adverse Recommendation, the Company shall, as promptly as reasonably practicable after the date the Registration Statement is declared effective, take all action necessary, including as required by and in accordance with the IBCA, Company Articles of Incorporation and Company Bylaws to duly call, give notice of, convene and hold a meeting of its shareholders, as promptly as practicable following the Original Signing Date, but in no event later than October 31, 2011, to vote on proposals shareholders (the “Shareholder ProposalsCompany Shareholders’ Meeting”) for the purpose of obtaining the Company Shareholder Approval. The Company and Company Board will use their reasonable best efforts to approve obtain from its shareholders the votes in favor of the adoption of this Agreement required by the IBCA, including by recommending that its shareholders vote in favor of this Agreement and the Contemplated Transactions, and the Company and Company Board will not (ia) withhold, withdraw, qualify or modify in a manner adverse to Acquiror or the ability of either party to consummate the Merger (or authorize or publicly propose or resolve to withhold, withdraw, qualify or modify in a manner adverse to Acquiror or the ability of either party to consummate the Merger) the issuance of Common Stock and conversion of the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the Board of Directors of the Company shall recommend Board’s recommendation to the Company’s shareholders that such the Company’s shareholders vote in favor of the adoption and approval of this Agreement and the Contemplated Transactions, including the Merger; (b) adopt, approve or recommend to shareholders of the Company, or resolve to or publicly propose or announce its intention to adopt, approve or recommend, an Acquisition Proposal; or (c) fail to publicly, finally and without qualification (i) recommend against any Acquisition Proposal; or (ii) reaffirm the Company Board’s recommendation set forth in clause (a) above, in each case, within ten (10) Business Days after such Acquisition Proposal is made public or any request by Acquiror to do so (which request may be made once per Acquisition Proposal (and any material change thereto)) (any such action, a “Company Adverse Recommendation”). Notwithstanding the foregoing, prior to the receipt of the Company Shareholder Proposals. In connection with such meetingApproval, the Company shall promptly prepare and file (but Board is permitted to make a Company Adverse Recommendation in no event more than thirty (30) days after the Closing Date) accordance with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtainedSection 5.7.

Shareholders Meeting. (a) The Company shall call a meeting of its shareholdersshareholders (the “Initial Shareholders Meeting”), as promptly as practicable following the Original Signing DateClosing, but in no event later than October 31July 30, 20112010, to vote on proposals (the “Shareholder Proposals”) to approve (i) an amendment of the issuance Company’s Articles of Incorporation, as amended, to increase the number of authorized shares of Common Stock to sixty million (60,000,000) and to approve the conversion of the Non-Voting Preferred Shares into Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities Rules (such approval approvals of the Shareholder Proposals, “Shareholder ApprovalApprovals”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall unanimously recommend to the Company’s shareholders that such shareholders vote in favor of approve the Shareholder ProposalsProposals (the “Board Recommendation”), and shall not modify or withdraw such Board Recommendation. In connection with such meetingthe Initial Shareholders Meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days after Business Days following the Closing Date) with the Commission a preliminary proxy statementstatement containing the Board Recommendation, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting the Initial Shareholders Meeting to be mailed to the Company’s shareholders no later not more than September 16, 2011ten (10) calendar days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such in favor of the Shareholder ApprovalApprovals, including, without limitation, engaging a nationally recognized proxy solicitation firm firm, as necessary, to assist in obtaining the Shareholder ApprovalApprovals. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting the Initial Shareholders Meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In addition, each Purchaser and the event Company agrees to promptly correct any information provided by it or on its behalf for use in the proxy statement if and to the extent that Shareholder Approval is not obtained at such shareholder meetinginformation shall have become false or misleading in any material respect, and the Company shall include a proposal as promptly as practicable prepare and mail to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders an amendment or supplement to be held no less than once in each subsequent six-month period beginning on correct such information to the date of such shareholder meeting until such approval is obtainedextent required by applicable laws and regulations. The Company shall consult with the Purchasers prior to mailing any proxy statement, or any amendment or supplement thereto, and provide the Purchasers with reasonable opportunity to comment thereon.

Shareholders Meeting. The Company shall call a special meeting of its shareholders, as promptly as practicable following the Original Signing DateClosing, but in no event later than October March 31, 20112010, to vote on proposals a proposal (the “Shareholder ProposalsProposal”) to approve (i) the issuance of Common Stock and conversion of the Non-Voting Preferred Shares into Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities Rules (such approval of the Shareholder ProposalsProposal, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder ProposalsProposal. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty fifteen (3015) business days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later not more than September 16, 2011seven (7) business days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission SEC or its staff with respect to the proxy statement and of any request by the Commission SEC or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder special shareholders meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder special shareholders meeting until such approval is obtained.

Shareholders Meeting. (i) The Company shall call a meeting of its shareholdersduly call, convene and hold the Shareholders’ Meeting as promptly as reasonably practicable after the Proxy Date and in any event before the earlier of (i) fifty (50) days following the Original Signing Date, but in no event later than October 31, 2011, to vote on proposals Proxy Date and (ii) the expiration of any grace period granted by the Nasdaq Listings Qualifications Panel (the “Shareholder ProposalsLatest Meeting Date”). The Company shall be permitted to postpone or adjourn the Shareholders’ Meeting (but not beyond the Latest Meeting Date), if such postponement is required to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure (x) which the SEC or its staff (or the NASDAQ or its staff) has instructed the Company is necessary under Law or stock exchange rules or (y) in consultation with the Buyer, as required under Law or stock exchange rules for any supplemental or amended disclosure to approve (i) be disseminated and reviewed by the issuance holders of Common Stock and conversion prior to the Shareholders’ Meeting. Buyer agrees to vote its shares in accordance with the recommendation of the Non-Voting Common Stock for purposes Company’s Board of Rule 5635 Directors. The Company shall take all necessary actions in connection with the calling and holding of the NASDAQ Stock Market Rulessuch Shareholders’ Meeting, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject including with respect to the exercise preparation, filing and mailing of its fiduciary duties under North Carolina lawproxy materials in accordance with the Exchange Act, with respect to which the Board Buyer shall have the rights of Directors approval and review set forth in Sections 4(p)-(q) hereof. Provided that the shareholders approve the Reverse Split at the Shareholders’ Meeting, then immediately following the adoption by the shareholders of the Company of the Amendment at the Shareholders’ Meeting (the “Reverse Split Date”), the Company shall recommend issue take all corporate actions necessary to effectuate the Reverse Split, including the filing of an Amendment to the Company’s shareholders that such shareholders vote in favor Certificate of Incorporation and all documents necessary to maintain compliance with the listing standards of the Shareholder Proposals. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtainedPrincipal Market.

Shareholders Meeting. The Company shall call a meeting of its shareholders, as promptly as practicable following the Original Signing Datedate hereof, but in no event later than October 31, 2011, to vote on proposals (the “Shareholder Proposals”) to approve (i) the issuance of Common Stock and conversion of the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposals. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later not more than September 16, 2011fifteen (15) business days after clearance of the preliminary proxy statement by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtained.

Shareholders Meeting. The Company Farnell shall call cause a meeting of its shareholders, as promptly as practicable following the Original Signing Date, but in no event later than October 31, 2011, to vote on proposals shareholders (the “Shareholder Proposals”"FARNELL SHAREHOLDER MEETING") to approve (i) be duly called and held as soon as reasonably practicable for the purpose of approving the issuance of Common Stock Farnell Shares in connection with the Merger, the Rights Offering, the amendments to the articles of association of Farnell included in Exhibit 1.4, changing the name of Farnell as provided in Section 6.13 and conversion of any other matters requiring the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina lawshareholders in connection with this Agreement, the Board Rights Offering, the Merger and the other transactions contemplated hereby. The directors of Directors Farnell shall, subject to their fiduciary duties, recommend approval of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposalsissuance and all such other matters. In connection with such meeting, the Company shall (a) Farnell will promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statementLSE, shall and will use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request have cleared by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser LSE and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and will thereafter mail to its shareholders an information circular for such an amendment or supplement. In meeting which will also serve as the event that Shareholder Approval is not obtained at solicitation document for the Rights Offering and as listing particulars for Farnell Shares (the "UK DISCLOSURE DOCUMENT") for such shareholder meeting and will otherwise comply with all legal requirements applicable to such meeting, (b) if necessary, after the Company shall include a proposal UK Disclosure Document has been so posted, promptly circulate amended, supplemental or supplemented materials and, if required in connection therewith, resolicit votes and (c) will use its best efforts (subject to approve (the fiduciary duties, as advised by counsel, of its Board of Directors) to obtain the necessary approvals by its shareholders in connection with this Agreement, the Rights Offering, the Merger and the Board of Directors other transactions contemplated hereby, it being understood that Farnell shall recommend approval of) such proposal at a not be obligated to hold more than one meeting of shareholders. Without limiting the generality of the foregoing, Farnell agrees that its shareholders obligations pursuant to this Section 6.7 (other than pursuant to clause (c)) shall not be held no less than once in each subsequent six-month period beginning on altered by the date commencement, public disclosure or communication to Farnell of such shareholder meeting until such approval is obtainedany Farnell Acquisition Proposal.

Shareholders Meeting. The Pursuant to the Merger Agreement, the Company shall call will, if required by applicable law in order to consummate the Merger, duly call, give notice of, convene and hold a special meeting of its shareholders, shareholders (the "Special Meeting") as promptly soon as practicable following the Original Signing Dateacceptance for payment and purchase of Shares by the Purchaser pursuant to the Offer for the purpose of considering and taking action upon the approval of the Merger Agreement. The Merger Agreement provides that the Company will, but if required by applicable law in no event later than October 31order to consummate the Merger, 2011, prepare and file with the SEC a preliminary proxy or information statement relating to vote on proposals (the “Shareholder Proposals”) to approve Merger and the Merger Agreement and use its reasonable efforts (i) to obtain and furnish the issuance of Common Stock and conversion of information required to be included by the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase SEC in the number of authorized shares of Common Stock to allow for the issuance of the Securities Proxy Statement (such approval of the Shareholder Proposalsas defined herein) and, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposals. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) consultation with the Commission a preliminary proxy statementParent, shall use its reasonable best efforts to respond promptly to any comments of made by the Commission or its staff SEC with respect to the preliminary proxy or information statement and to cause a definitive proxy or information statement related to such shareholders’ meeting (the "Proxy Statement") to be mailed to its shareholders and (ii) to obtain the Company’s shareholders necessary approvals of the Merger and the Merger Agreement by its shareholders. If the Purchaser acquires at least two-thirds of the outstanding Shares, the Purchaser will have sufficient voting power to approve the Merger, even if no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist other shareholder votes in obtaining Shareholder Approvalfavor of the Merger. The Company shall notify Purchaser promptly has agreed, subject to the fiduciary obligations of the receipt Company Board under applicable law as advised by independent counsel, to include in the Proxy Statement the recommendation of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any materialBoard that shareholders of the Company vote in favor of the approval of the Merger and the adoption of the Merger Agreement. The Parent has agreed that it will vote, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required or cause to be set forth in an amendment or supplement to voted, all of the proxy statementShares then owned by it, the Company shall as promptly as practicable prepare Purchaser or any of its other subsidiaries and mail to its shareholders such an amendment or supplementaffiliates in favor of the approval of the Merger and the adoption of the Merger Agreement. In The Merger Agreement provides that in the event that Shareholder Approval is not obtained at such shareholder meetingthe Parent, the Company shall include a proposal Purchaser or any other subsidiary of the Parent acquires at least 90% of the outstanding Shares, pursuant to approve (the Offer or otherwise, the Parent, the Purchaser and the Board Company will, at the request of Directors shall recommend approval of) the Parent and subject to the terms of the Merger Agreement, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such proposal at acquisition, without a meeting of its shareholders to be held no less than once of the Company, in each subsequent six-month period beginning on accordance with Section 905 of the date of such shareholder meeting until such approval is obtainedNYBCL.

Shareholders Meeting. The Company shall call Parent, acting through the Parent Board (or a meeting of its shareholderscommittee thereof), shall, as promptly as practicable following confirmation by the Original Signing DateSEC that the SEC has no further comments on the Proxy Statement or that Parent may commence mailing the Proxy Statement, but in no event later than October 31take all action required under the applicable Law and Parent’s Organizational Documents and the applicable requirements of NASDAQ necessary to promptly and duly call, 2011give notice of, to vote on proposals convene and hold as promptly as practicable a meeting of its shareholders for the purpose of obtaining the Requisite Shareholder Approval (the “Shareholder ProposalsShareholders Meeting”); provided, that Parent may postpone or adjourn such meeting solely (a) to approve (i) the issuance of Common Stock and conversion of the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rulesextent required by applicable Law, (iib) authorizing a new class with the written consent of Non-Voting Common Stock Buyers (which consent shall not be unreasonably withheld, conditioned or delayed), (c) to allow for reasonable additional time to solicit additional proxies to the exercise of extent Parent reasonably believes necessary in order to obtain the Warrants and Requisite Shareholder Approval or (iiid) an increase in the number absence of authorized shares a quorum. Parent’s receipt of Common Stock an Acquisition Proposal or a change of recommendation will not alter the obligation of Parent to allow for submit the issuance adoption of this Agreement and the Securities (such approval of the Shareholder ProposalsTransactions to Parent’s shareholders at the Shareholders Meeting, “Shareholder Approval”)unless this Agreement has been terminated in accordance with its terms prior to the Shareholders Meeting. Subject to Section 4.2, and notwithstanding anything herein to the exercise of its fiduciary duties under North Carolina lawcontrary, the Parent Board of Directors of the Company shall recommend to the Companythat Parent’s shareholders that such shareholders vote in favor of approve the Shareholder Proposals. In connection with such meeting, Transactions (the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011“Parent Board Recommendation”), and shall Parent shall, unless there has been a Change of Parent Board Recommendation, use its reasonable best efforts to solicit from its shareholders proxies for such in favor of the approval of the Transactions and obtain the Requisite Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtained.

Shareholders Meeting. The Company shall call a special meeting of its shareholders, to be held as promptly as practicable following the Original Signing Datedate of this Agreement, but in no event later than October 31, 201175 days after the date of this Agreement, to vote on proposals (the “Shareholder Proposals”) to approve (i) approve the issuance of the Common Shares (voting and non-voting) upon exchange of the Preferred Shares, the issuance of the Voting Common Stock upon conversion of the Series A Preferred Stock issued in the PIPE Offering, and the issuance of Voting Common Stock upon conversion of the Non-Voting Common Stock for purposes of NASDAQ Listing Rule 5635 of the NASDAQ Stock Market Rules, 5635; (ii) authorizing a new class approve the Articles of Non-Voting Common Stock to allow for Amendment in the exercise of the Warrants form attached hereto as Exhibit H; and (iii) an if necessary, amend the Articles of Incorporation to increase in the number of authorized shares of Common Stock (voting and non-voting) to allow at least such number as shall be sufficient to permit the exchange of the Preferred Shares for the issuance Common Shares, the full conversion of the Securities Series A Preferred Stock and the full conversion of the Non-Voting Common Stock (such approval of the Shareholder Proposals, “Shareholder ApprovalApprovals”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposals. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days 15 Business Days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later not more than September 16, 201110 Business Days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information)Approvals. If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is Approvals are not obtained at such shareholder special shareholders’ meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder special shareholders’ meeting until such approval is obtained.

Shareholders Meeting. The Company shall call a special meeting of its shareholders, as promptly as practicable following the Original Signing DateClosing, but in no event later than October December 31, 20112016, to vote on proposals a proposal (the “Shareholder ProposalsProposal”) to approve (i) the issuance of the total number of Common Stock and issuable upon conversion of all of the Non-Voting Common Stock for purposes of Preferred Shares, all in accordance with Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities Rules (such approval of the Shareholder ProposalsProposal, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall unanimously recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder ProposalsProposal. In addition, all of the members of the Board of Directors will vote their shares in favor of the Shareholder Proposal. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) business days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later not more than September 16, 2011seven (7) business days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission SEC or its staff with respect to the proxy statement and of any request by the Commission SEC or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder special shareholders meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent sixthree-month period beginning on the date of such shareholder special shareholders meeting until such approval is obtained.

Shareholders Meeting. The Subject to fiduciary obligations under applicable Law, the Company shall call will take, in accordance with applicable Law and its articles of incorporation and bylaws, all reasonable action necessary to convene a meeting of its shareholders, holders of Shares (the “Shareholders Meeting”) as promptly as practicable following after the Original Signing Datedate on which the SEC staff advises that it has no further comments thereon or that the Company may commence mailing the Proxy Statement to consider and vote upon the adoption of this Agreement; provided, however, for the avoidance of doubt, the Company may postpone or adjourn the Shareholders Meeting, but in no event later longer than October 31reasonably necessary, 2011, to vote on proposals (a) with the “Shareholder Proposals”consent of Parent; (b) for the absence of a quorum; (c) to approve (i) allow reasonable additional time for the issuance filing and/or mailing of Common Stock and conversion any supplemental or amended disclosure that the Board of Directors of the Non-Voting Common Stock Company or any committee thereof has determined in good faith after consultation with outside counsel is necessary under applicable Law and for purposes such supplemental or amended disclosure to be disseminated and reviewed by the Company’s shareholders prior to the Shareholders Meeting; (d) if required by Law or any court of Rule 5635 competent jurisdiction; or (e) if the Company has provided a written notice to Parent and Merger Sub pursuant to Section 6.2(c)(ii) that it intends to make a Change of Recommendation in connection with a Superior Proposal or take action pursuant to Section 8.3(a) with respect to a Superior Proposal, until a date that is three Business Days after the NASDAQ Stock Market Rules, (iideadline contemplated by Section 6.2(c)(ii) authorizing a new class of Non-Voting Common Stock with respect to allow for such notice or subsequent notice(s) if the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (Acquisition Proposal is modified during such approval of the Shareholder Proposals, “Shareholder Approval”)notice period. Subject to the exercise of its fiduciary duties under North Carolina lawSection 6.2, the Board of Directors of the Company and any committee thereof shall recommend such adoption, shall include the Company Recommendation in the Proxy Statement and shall take all reasonable lawful action to solicit such adoption of this Agreement. Notwithstanding any Change of Recommendation, unless this Agreement is terminated pursuant to, and in accordance with, Article VIII, this Agreement shall be submitted to the Company’s shareholders that such shareholders vote in favor holders of Shares at the Shareholder Proposals. In connection with such meeting, Shareholders Meeting for the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments purpose of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtainedadopting this Agreement.

Shareholders Meeting. The Company shall call a meeting of its shareholdersshall, as promptly as reasonably practicable after the date hereof, duly set a record date for, call, give notice of, convene and hold a special meeting of shareholders of the Company (the “Shareholders’ Meeting”) for the purpose of obtaining the Shareholder Approval as promptly as reasonably practicable following the Original Signing Date, but in no event later than October 31, 2011, date upon which the Proxy Statement is cleared by the SEC (with the record date and meeting date to vote on proposals (be set by the “Shareholder Proposals”) to approve (i) the issuance of Common Stock and conversion of the Non-Voting Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder Proposals, “Shareholder Approval”Company Board after consultation with Parent). Subject to the exercise terms of its fiduciary duties under North Carolina lawthis Agreement, the Company Board of Directors shall recommend that the shareholders of the Company vote in favor of approval of the Merger and the adoption of this Agreement. The Company shall recommend comply with the MBCA, the Company Articles of Incorporation, the Company Bylaws, the Exchange Act and the rules and regulations of Nasdaq in connection with the Shareholders’ Meeting, including preparing and delivering the Proxy Statement to the Company’s shareholders that such shareholders vote in favor as required pursuant to the Exchange Act and Section 6.01(b) below. Subject to the terms of the Shareholder Proposals. In connection with such meetingthis Agreement, the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its commercially reasonable best efforts to respond to any comments solicit from its shareholders proxies in favor of approval of the Commission Merger and the adoption of this Agreement in compliance in all material respects with all applicable Laws and all rules of Nasdaq, and secure any other approval of shareholders of the Company that is required by applicable Law to effect the Merger. The Company shall (i) not change the date of (or the record date for), postpone or adjourn the Shareholders’ Meeting without the consent of Parent and (ii) postpone or adjourn the Shareholders’ Meeting if so requested by Parent by prior written notice to the Company. Unless this Agreement is validly terminated in accordance with Section 8.01, the Company shall submit this Agreement to its staff shareholders at the Shareholders’ Meeting even if the Company Board shall have effected an Adverse Recommendation Change or proposed or announced any intention to do so. The Company shall, upon the reasonable request of Parent, advise Parent at least on a daily basis on each of the last seven Business Days prior to the date of the Shareholders’ Meeting as to the aggregate tally of proxies received by the Company with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later than September 16, 2011, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company Without the prior written consent of Parent, the adoption of this Agreement and the transactions contemplated hereby (including the Merger) shall notify Purchaser promptly of be the receipt of any comments from the Commission or its staff with respect to the proxy statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional information only matter (but other than procedural matters) that the Company shall not provide any Purchaser with any material, non-public information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required propose to be set forth in an amendment or supplement to acted on by the proxy statement, shareholders of the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In at the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtainedShareholders’ Meeting.

Shareholders Meeting. The Company shall call a special meeting of its shareholders, as promptly as practicable following the Original Signing DateClosing, but in no event later than October May 31, 20112013, to vote on proposals a proposal (the “Shareholder ProposalsProposal”) to approve (i) the issuance of Common Stock and conversion of the Non-Voting Preferred Shares into Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities Rules (such approval of the Shareholder ProposalsProposal, “Shareholder Approval”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall unanimously recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder ProposalsProposal. In addition, all of the members of the Board of Directors, plus one Director Emeritus, have agreed to vote their shares in favor of the Shareholder Proposal. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) business days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later not more than September 16, 2011seven (7) business days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the Commission SEC or its staff with respect to the proxy statement and of any request by the Commission SEC or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder special shareholders meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent sixthree-month period beginning on the date of such shareholder special shareholders meeting until such approval is obtained.

Shareholders Meeting. The Company shall call a meeting of its shareholders, as promptly as practicable following the Original Signing DateClosing, but in no event shall the meeting be later than October 31December 30, 20112010, to vote on proposals a proposal (the “Shareholder ProposalsProposal”) to approve (i) the issuance of Common Stock and conversion of the Preferred Shares and the Non-Voting Preferred Shares into Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules, and (ii) authorizing a new class of Non-Voting Common Stock to allow for the exercise of the Warrants and (iii) an increase in the number of authorized shares of Common Stock to allow for the issuance of the Securities (such approval of the Shareholder ProposalsProposal, “Shareholder ApprovalApprovals”). Subject to the exercise of its fiduciary duties under North Carolina law, the The Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder ProposalsProposal. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders no later not more than September 16, 2011fifteen (15) business days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval, including, without limitation, engaging a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approval. The Company shall notify each Purchaser promptly of the receipt of any comments from the Commission SEC or its staff with respect to the proxy statement and of any request by the Commission SEC or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, non-public nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such shareholder meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such shareholder meeting until such approval is obtained.