Exhibit 10.5

 

 

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

STEPSTONE GROUP INC.

AND

CERTAIN STOCKHOLDERS

DATED AS OF SEPTEMBER 18, 2020

 

 

 

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This REGISTRATION RIGHTS AGREEMENT (as it may be amended from time to time in
accordance with the terms hereof, the “Agreement”), dated as of September 18,
2020, is made by and among:

i.    StepStone Group Inc., a Delaware corporation (the “Company”);

ii.    Each Person executing this Agreement on the signature pages hereto
(collectively, together with their Permitted Transferees that become party
hereto, the “Holders”).

RECITALS

WHEREAS, the Company, StepStone Group LP, a Delaware limited partnership (the
“Partnership”), and the Holders have effected, or will effect in connection with
the closing of the initial public offering (the “IPO”) of the Company’s Class A
common stock, par value $0.001 per share (the “Class A Common Stock”), a series
of reorganization transactions (collectively, the “Reorganization
Transactions”);

WHEREAS, after giving effect to the Reorganization Transactions, the Holders
Beneficially Own or will Beneficially Own (x) shares of Class A Common Stock
and/or (y) shares of the Company’s Class B common stock, par value $0.001 per
share (the “Class B Common Stock” and, together with the Class A Common Stock,
the “Common Stock”) and Class B partnership units in the Partnership (“Class B
Units”), which Class B Units, subject to certain restrictions, are exchangeable
from time to time for shares of Class A Common Stock pursuant to the terms of an
Exchange Agreement between the Company, the Partnership and its unitholders (the
“Exchange Agreement”) and the Eighth Amended and Restated Limited Partnership
Agreement of the Partnership (as may be amended from time to time, the
“Partnership Agreement”); and

WHEREAS, the parties believe that it is in each of their best interests to set
forth their agreements regarding registration rights following the IPO;

 

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NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and agreements of the parties hereto, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

ARTICLE I

EFFECTIVENESS

1.1    Effectiveness. This Agreement shall become effective upon the Closing.

ARTICLE II

DEFINITIONS

2.1    Definitions. As used in this Agreement, the following terms shall have
the following meanings:

“Adverse Disclosure” means public disclosure of material non-public information
that, in the good faith judgment of the Board of Directors: (i) would be
required to be made in any Registration Statement filed with the SEC by the
Company so that such Registration Statement, from and after its effective date,
does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) would reasonably be expected to adversely affect or
interfere with any material financing or other material transaction under
consideration by the Company; or (iii) would not be required to be made at such
time but for the filing, effectiveness or continued use of such Registration
Statement.

“Affiliate” means, with respect to any specified Person, (a) any Person that
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person or (b) a
Permitted Transferee of such Person; provided that the Company, the Partnership
and their respective subsidiaries shall not be deemed to be Affiliates of the
Class B Holders. As used in this definition, the term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

“Agreement” shall have the meaning set forth in the preamble.

“Beneficial Ownership” has the same meaning given to it in Section 13(d) under
the Exchange Act and the rules thereunder, except that, for purposes of this
Agreement, (i) Beneficial Ownership shall not be attributed to any Person as a
result of any “group” deemed to form as a result of the Stockholders’ Agreement,
(ii) no Person shall Beneficially Own any Company Shares to be issued upon the
exercise of options, warrants, restricted stock units or similar rights granted
pursuant to the Company’s equity compensation plans, unless and until such
shares are actually issued and (iii) no Person shall be deemed to Beneficially
Own any Company Shares issuable with respect to Class B2 Units of the
Partnership unless and until the Full Vesting Date (as such term is defined in
the Partnership Agreement) for such Class B2 Units has occurred. The terms
“Beneficially Own” and “Beneficial Owner” shall have correlative meanings.

 

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

“Business Day” means any calendar day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required to
close.

“Class A Common Stock” shall have the meaning set forth in the recitals.

“Class B Committee” means the Class B Committee selected pursuant to the
Stockholders Agreement.

“Class B Common Stock” shall have the meaning set forth in the recitals.

“Class B Units” shall have the meaning set forth in the recitals.

“Closing” means the closing of the IPO.

“Closing Registrable Securities” means the total number of Registrable
Securities as of the Closing, as adjusted for stock splits, recapitalizations
and similar transactions.

“Common Stock” shall have the meaning set forth in the recitals.

“Demand Notice” shall have the meaning set forth in Section 3.1(c).

“Demand Registration” shall have the meaning set forth in Section 3.1(a)(i).

“Demand Registration Request” shall have the meaning set forth in
Section 3.1(a)(i).

“Exchange” means the exchange of (i) Class B Units together, with an equal
number of shares of Class B Common Stock, for shares of Class A Common Stock or
cash consideration, as applicable, pursuant to the terms of the Exchange
Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Agreement” shall have the meaning set forth in the Recitals.

“FINRA” means the Financial Industry Regulatory Authority.

“IPO” shall have the meaning set forth in the Recitals.

“Issuer Free Writing Prospectus” means an issuer free writing prospectus, as
defined in Rule 433 under the Securities Act, relating to an offer of the
Registrable Securities.

“Loss” shall have the meaning set forth in Section 3.9(a).

“Participation Conditions” shall have the meaning set forth in Section 3.2(b).

“Partnership Class B Unit” means (i) each Class B Unit (as such term is defined
in the Partnership Agreement) issued as of the date of the Exchange Agreement
after giving effect to all transactions contemplated to occur by Section 3.2 of
the Partnership Agreement and (ii) each

 

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Class B Unit or other interest in the Partnership that may be issued by the
Partnership in the future that is designated by the Partnership as a
“Partnership Class B Unit,” including any interest converted into or exchanged
for a Partnership Class B Unit.

“Permitted Transferee” means any Person to whom a Class B Holder has validly
transferred Class B Units in accordance with, and not in contravention of, the
Partnership Agreement.

“Person” means and includes an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated organization, a government
or any department or agency thereof, or any entity similar to any of the
foregoing.

“Piggyback Notice” shall have the meaning set forth in Section 3.3(a).

“Piggyback Registration” shall have the meaning set forth in Section 3.3(a).

“Potential Takedown Participant” shall have the meaning set forth in
Section 3.2(b).

“Pro Rata Portion” means, with respect to each Holder requesting that its shares
be registered or sold, a number of such shares equal to the aggregate number of
Registrable Securities requested to be registered (excluding any shares to be
registered or sold for the account of the Company) multiplied by a fraction, the
numerator of which is the aggregate number of Registrable Securities then held
by such Holder, and the denominator of which is the aggregate number of
Registrable Securities then held by all Holders requesting that their
Registrable Securities be registered or sold.

“Prospectus” means (i) the prospectus included in any Registration Statement,
all amendments and supplements to such prospectus, including post-effective
amendments and supplements, and all other material incorporated by reference in
such prospectus, and (ii) any Issuer Free Writing Prospectus.

“Public Offering” means the offer and sale of Registrable Securities for cash
pursuant to an effective Registration Statement under the Securities Act (other
than a Registration Statement on Form S-4 or Form S-8 or any successor form).

“Qualified Holder” means any of (a) the Sunset Individuals (as such term is
defined in the Company’s Amended and Restated Certificate of Incorporation), (b)
any Person party to this Agreement beneficially owning Registrable Securities
aggregating 4% of the Closing Registrable Securities, (c) Davis Investment
Holdings, LLC or ALD 2020 GST Trust, or (d) any other Holder if and for so long
as the Board of Directors has determined in its sole discretion to name such
person a Qualified Holder.

“Registrable Securities” means (i) all shares of Class A Common Stock that are
not then subject to forfeiture to the Company, (ii) all shares of Class A Common
Stock issued or issuable upon exercise, conversion or exchange of any option,
warrant or convertible security (including shares of Class A Common Stock
issuable upon an Exchange) not then subject to vesting or forfeiture to the
Company and (iii) all shares of Class A Common Stock directly or indirectly
issued or then issuable with respect to the securities referred to in clauses
(i) or (ii) above by way

 

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of unit or stock dividend or unit or stock split, or in connection with a
combination of units or shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (w) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement, (x) such securities shall have been
transferred pursuant to Rule 144, (y) such Holder is able to immediately sell
such securities (including all shares of Class A Common Stock issuable upon
Exchange, subject to the limitations on Exchange set forth in the Exchange
Agreement) under Rule 144 without any volume or manner of sale restrictions
thereunder, as determined in the reasonable opinion of the Company (it being
understood that a written opinion of the Company’s outside legal counsel to the
effect that such securities may be so offered and sold, and that any restrictive
legends on the securities may be removed, shall be conclusive evidence this
clause has been satisfied), or (z) such securities shall have ceased to be
outstanding.

“Registration” means registration under the Securities Act of the offer and sale
of shares of Class A Common Stock under a Registration Statement. The terms
“register,” “registered” and “registering” shall have correlative meanings.

“Registration Expenses” shall have the meaning set forth in Section 3.8.

“Registration Statement” means any registration statement of the Company filed
with, or to be filed with, the SEC under the Securities Act, including the
related Prospectus, amendments and supplements to such registration statement,
including pre- and post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement other than a
registration statement (and related Prospectus) filed on Form S-4 or Form S-8 or
any successor forms thereto.

“Reorganization Transactions” shall have the meaning set forth in the recitals.

“Representatives” means, with respect to any Person, any of such Person’s
officers, directors, employees, agents, attorneys, accountants, actuaries,
consultants, equity financing partners or financial advisors or other Person
associated with, or acting on behalf of, such Person.

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

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and any successor
thereto, and any rules or regulations promulgated thereunder, all as the same
shall be in effect from time to time.

“Selling Stockholder Information” shall have the meaning set forth in
Section 3.9(a).

“Shelf Registration” means any Registration pursuant to Rule 415 under the
Securities Act.

 

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“Shelf Registration Request” shall have the meaning set forth in
Section 3.1(a)(ii).

“Shelf Registration Statement” means a Registration Statement filed with the SEC
pursuant to Rule 415 under the Securities Act.

“Shelf Takedown Notice” shall have the meaning set forth in Section 3.2(b).

“Shelf Takedown Request” shall have the meaning set forth in Section 3.2(a).

“Stockholders Agreement” means the Stockholders Agreement, dated as of
September 18, 2020, by and among (i) the Company, (ii) the Partnership and
(iii) the persons and entities listed on the signature pages thereto, as such
may be amended from time to time.

“Suspension” shall have the meaning set forth in Section 3.1(f).

“Trading Day” means a day on which the principal U.S. securities exchange on
which the Class A Common Stock is listed or admitted to trading is open for the
transaction of business (unless such trading shall have been suspended for the
entire day) or, if the Class A Common Stock is not listed or admitted to trading
on such an exchange, Trading Day shall mean a Business Day.

“Transfer” means, with respect to any Registrable Security, any interest
therein, or any other securities or equity interests relating thereto, a direct
or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other
encumbrance or other disposition thereof, including the grant of an option or
other right, whether directly or indirectly, whether voluntarily, involuntarily,
by operation of law, pursuant to judicial process or otherwise. “Transferred”
shall have a correlative meaning.

“Underwritten Offering” means an underwritten offering, including any bought
deal or block sale to a financial institution conducted as an Underwritten
Offering.

“Underwritten Shelf Takedown” means an Underwritten Offering pursuant to an
effective Shelf Registration Statement.

“WKSI” means any Securities Act registrant that is a well-known seasoned issuer
as defined in Rule 405 under the Securities Act at the most recent eligibility
determination date specified in paragraph (2) of that definition.

2.2    Other Interpretive Provisions.

(i)    The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

(ii)    The words “hereof”, “herein”, “hereunder” and similar words refer to
this Agreement as a whole and not to any particular provision of this Agreement;
and any subsection and Section references are to this Agreement unless otherwise
specified.

 

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(iii)    The term “including” is not limiting and means “including without
limitation.”

(iv)    The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.

(v)    Whenever the context requires, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms.

ARTICLE III

REGISTRATION RIGHTS

The Company will perform and comply, and cause each of its subsidiaries to
perform and comply, with such of the following provisions as are applicable to
them. Each Holder will perform and comply with such of the following provisions
as are applicable to such Holder.

3.1    Demand Registration.

(a)    Request for Demand Registration.

(i)    Following the first anniversary of the closing date of the IPO, any
Qualified Holder shall have the right, for itself or together with one or more
other Holders, to make a written request from time to time (a “Demand
Registration Request”) to the Company for Registration of all or part of the
Registrable Securities held by that Qualified Holder (a “Demand Registration”);
provided that, unless approved by the Board of Directors in its sole discretion,
any Person who is a Qualified Holder solely by virtue of clause (d) of the
definition of Qualified Holder may not make demand for an Underwritten Offering
pursuant to either this Section 3.1(a) or Section 3.2 below.

(ii)    Each Demand Registration Request shall specify (x) the aggregate amount
of Registrable Securities proposed to be registered, (y) the intended method or
methods of disposition thereof, and (z) whether the Demand Registration Request
is for an Underwritten Offering or a Shelf Registration (a “Shelf Registration
Request”).

(iii)    If a Demand Registration Request is for a Shelf Registration, and the
Company is eligible to file a Registration Statement on Form S-3, the Company
shall promptly file with the SEC a shelf Registration Statement on Form S-3
pursuant to Rule 415 under the Securities Act relating to the offer and sale of
Registrable Securities by the initiating Qualified Holders from time to time in
accordance with the methods of distribution elected by such Qualified Holders,
subject to all applicable provisions of this Agreement.

(iv)    If the Demand Registration Request is for a Shelf Registration and the
Company is not eligible to file a Registration Statement on Form S-3, the
Company shall promptly file with the SEC a Shelf Registration Statement on Form
S-1 or any other form that the Company is then permitted to use pursuant to Rule
415 under the Securities Act (or such other Registration Statement as the Board
of Directors may determine to be

 

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appropriate) relating to the offer and sale of Registrable Securities by the
initiating Qualified Holders from time to time in accordance with the methods of
distribution elected by such Qualified Holders.

(v)    If on the date of the Shelf Registration Request the Company is a WKSI,
then any Shelf Registration Statement may (if the Board of Directors determines
it to be appropriate to do so) include an unspecified amount of Registrable
Securities to be sold by unspecified Holders; if on the date of the Shelf
Registration Request the Company is not a WKSI, then the Shelf Registration
Request shall specify the aggregate amount of Registrable Securities to be
registered.

(b)    Limitation on Registrations. The Company shall not be obligated to take
any action to effect any Demand Registration if (i) a Demand Registration or
Piggyback Registration was declared effective or an Underwritten Offering was
consummated by either the Company or the Qualified Holders within the preceding
90 days; (ii) the Company has filed another Registration Statement (other than
on Form S-8 or Form S-4 or any successor thereto) that has not yet become
effective; (iii) the value of the Registrable Securities proposed to be sold by
the initiating Qualified Holders is not reasonably expected (in the good faith
judgment of the Board of Directors) to yield net proceeds of at least
$25 million, or in the case of an Underwritten Offering, of at least
$50 million. No Demand Registration Request may cover Registrable Securities
that are issuable upon exchange under and pursuant to the terms of the Exchange
Agreement if the Exchange Agreement would not, on the date of the Demand
Registration Request, then permit such Exchange, except with the approval of the
Company’s Board of Directors.

(c)    Demand Notice. Promptly upon receipt of a Demand Registration Request
pursuant to Section (a) (but in no event more than ten Business Days
thereafter), the Company shall deliver a written notice of the Demand
Registration Request to all other Qualified Holders offering each such Qualified
Holder the opportunity to include in the Demand Registration that number of
Registrable Securities as the Qualified Holder may request in writing. Subject
to Sections 3.1(g) and 3.1(h), the Company shall include in the Demand
Registration all such Registrable Securities with respect to which the Company
has received written requests for inclusion therein within five Business Days
after the date that the Demand Notice was delivered.

(d)    Demand Withdrawal. Each Qualified Holder that has requested the inclusion
of Registrable Securities in a Registration (other than a Registration in
connection with a Public Offering) pursuant to Section 3.1(c) may withdraw all
or any portion of its Registrable Securities from that registration at any time
prior to the effectiveness of the applicable Registration Statement by
delivering written notice to the Company. Upon receipt of a notice or notices
withdrawing (i) all of the Registrable Securities included in that Registration
Statement by the initiating Qualified Holder(s) or (ii) a number of such
Registrable Securities so as to cause the expected net proceeds to fall below
the applicable threshold set forth in Section 3.1(b), the Company shall cease
all efforts to secure effectiveness of the applicable Registration Statement.

 

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(e)    Effectiveness.

(i)    The Company shall use commercially reasonable efforts to cause any
Registration Statement filed by it pursuant to this Agreement to become
effective as promptly as practicable, subject to all applicable provisions of
this Agreement.

(ii)    The Company shall use commercially reasonable efforts to keep any Shelf
Registration Statement filed on Form S-3 continuously effective under the
Securities Act to permit the Prospectus forming a part of it to be usable by
Holders until the earlier of: (A) the date as of which all Registrable
Securities have been sold pursuant to that Shelf Registration Statement or
another Registration Statement filed under the Securities Act (but in no event
prior to the applicable period referred to in Section 4(a)(3) of the Securities
Act and Rule 174 thereunder); (B) the date as of which no Holder whose
Registrable Securities are registered on such Form S-3 holds Registrable
Securities; (C) any date reasonably determined by the Board of Directors of the
Company to be appropriate, excluding any date that is fewer than 180 days after
the effectiveness of the Registration Statement; and (D) the third anniversary
of the effectiveness of the Registration Statement.

(iii)    If the Registration Statement filed is a Shelf Registration Statement
on any form other than Form S-3, or if the Registration Statement is filed in
connection with an Underwritten Offering, the Company shall use commercially
reasonable efforts to keep the Registration Statement effective for a period of
at least 180 days after the effective date thereof, such other period as the
underwriters for any Underwritten Offering may determine to be appropriate, or
such shorter period during which all Registrable Securities included in the
Registration Statement have actually been sold; provided that such period shall
be extended for a period of time equal to the period the Holders of Registrable
Securities may be required to refrain from selling any securities included in
the Registration Statement at either the request of the Company or an
underwriter of the Company pursuant to the provisions of this Agreement.

(f)    Delay in Filing; Suspension of Registration. If the filing, initial
effectiveness or continued use of a Registration Statement at any time would
require the Company to make an Adverse Disclosure, the Company may, upon giving
prompt written notice of such action to the Holders, delay the filing or initial
effectiveness of, or suspend use of, the Registration Statement (a
“Suspension”); provided, however, that the Company shall use all commercially
reasonable efforts to avoid exercising a Suspension (i) for a period exceeding
60 days on any one occasion or (ii) for an aggregate of more than 120 days in
any 12-month period. In the case of a Suspension, the Holders agree to suspend
use of the applicable Prospectus in connection with any sale or purchase, or
offer to sell or purchase, Registrable Securities, upon receipt of the notice
referred to above. The Company shall immediately notify the Holders in writing
upon the termination of any Suspension. The Company shall, if necessary, amend
or supplement the Prospectus so it does not contain any untrue statement or
omission and furnish to the Holders such numbers of copies of the Prospectus as
so amended or supplemented as the Holders may reasonably request. The Company
shall, if necessary, supplement or amend the Registration Statement, if required
by the registration form used by the Company for the Registration Statement or
by the instructions applicable to such registration form or by the Securities
Act or the rules or regulations promulgated thereunder or as may reasonably be
requested by the Holders of a majority of Registrable Securities that are
included in such Registration Statement.

 

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(g)    Priority of Securities Registered Pursuant to Shelf Registrations. If the
Board of Directors of the Company concludes in good faith that the number of
securities requested to be included in a Shelf Registration exceeds the number
that can be sold without being likely to have an adverse effect on the price,
timing or distribution of the securities offered or the market for the
securities offered, then the securities to be included in such Registration
shall be (x) first, allocated to each Holder that has requested to participate
in such Registration an amount equal to the lesser of (i) the number of such
Registrable Securities requested to be registered or sold by such Holder, and
(ii) a number of such shares equal to such Holder’s Pro Rata Portion, and
(y) second, and only if all the securities referred to in clause (x) have been
included, the number of other securities that, in the opinion of such managing
underwriter or underwriters can be sold without having such adverse effect. If a
cutback pursuant to this Section 3.1(g) or (h) would causes an applicable dollar
threshold set forth in Section 3.1(b)(iii) not to be met with respect to the
Demand Registration, Section 3.1(b)(iii) shall not apply to that Demand
Registration.

(h)    Priority of Securities in Underwritten Offerings. If the managing
underwriter or underwriters of any proposed Underwritten Offering advise the
Company in writing that, in its or their opinion, the number of securities
requested to be included in the proposed offering exceeds the number that can be
sold in that offering without being likely to have an adverse effect on the
price, timing or distribution of the securities offered or the market for the
securities offered, the number of Registrable Securities to be included shall be
(x) first, allocated to each Holder that has requested to participate in such
Underwritten Offering an amount equal to the lesser of (i) the number of such
Registrable Securities requested to be registered or sold by such Holder, and
(ii) a number of such shares equal to such Holder’s Pro Rata Portion, and
(y) second, and only if all securities referred to in clause (x) have been
included, the number of other securities that, in the opinion of such managing
underwriter or underwriters, can be sold without having such adverse effect.

(i)    No Person may participate in any Underwritten Offering hereunder unless
that Person agrees to sell the Registrable Securities it desires to have covered
by the applicable Registration Statement on the basis provided in any
underwriting arrangements in customary form and completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements, and
other documents required under the terms of the underwriting arrangements;
provided that no Person shall be required to make representations and warranties
other than those related to title and ownership of their shares and as to the
accuracy and completeness of statements made in a Registration Statement,
prospectus, offering circular, or other document in reliance upon and conformity
with written information furnished to the Company or the managing underwriter by
such Person.

(j)    Resale Rights. In the event that a Holder that is a partnership, limited
liability company, trust or similar entity requests to participate in a
Registration pursuant to this Section 3.1 in connection with a distribution of
Registrable Securities to its partners, members or beneficiaries, the
Registration shall provide for resale by such partners, members or
beneficiaries, if approved by the Board of Directors.

 

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3.2    Shelf Takedowns.

(a)    At any time the Company has an effective Shelf Registration Statement
with respect to Registrable Securities, a Qualified Holder, by notice to the
Company specifying the intended method or methods of disposition thereof, may
make a written request (a “Shelf Takedown Request”) that the Company effect an
Underwritten Shelf Takedown of all or a portion of such Qualified Holder’s
Registrable Securities that are registered on such Shelf Registration Statement,
and as soon as practicable thereafter, the Company shall amend or supplement the
Shelf Registration Statement as necessary for such purpose, subject to all
applicable provisions of this Agreement.

(b)    Promptly upon receipt of a Shelf Takedown Request (but in no event more
than two Business Days thereafter (or such shorter period as may be reasonably
requested in connection with an underwritten “block trade”) for any Underwritten
Shelf Takedown, the Company shall deliver a notice (a “Shelf Takedown Notice”)
to each other Holder with Registrable Securities covered by the applicable
Registration Statement, or to all other Holders if such Registration Statement
is undesignated (each a “Potential Takedown Participant”). The Shelf Takedown
Notice shall offer each such Potential Takedown Participant the opportunity to
include in any Underwritten Shelf Takedown such number of Registrable Securities
as each such Potential Takedown Participant may request in writing. The Company
shall include in the Underwritten Shelf Takedown all such Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within three Business Days (or such shorter period as may be reasonably
requested in connection with an underwritten “block trade”) after the date that
the Shelf Takedown Notice has been delivered. Any Potential Takedown
Participant’s request to participate in an Underwritten Shelf Takedown shall be
binding on the Potential Takedown Participant; provided that each such Potential
Takedown Participant that elects to participate may condition its participation
on the Underwritten Shelf Takedown being completed within 10 Business Days of
its acceptance at a price per share (after giving effect to any underwriters’
discounts or commissions) to such Potential Takedown Participant of not less
than ninety percent (90%) (or such lesser percentage specified by such Potential
Takedown Participant) of the closing price for the shares on their principal
trading market on the Business Day immediately prior to such Potential Takedown
Participant’s election to participate (the “Participation Conditions”).
Notwithstanding the delivery of any Shelf Takedown Notice, but subject to the
Participation Conditions (to the extent applicable), all determinations as to
whether to complete any Underwritten Shelf Takedown and as to the timing,
manner, price and other terms of any Underwritten Shelf Takedown contemplated by
this Section 3.2 shall be determined by the initiating Qualified Holders.

3.3    Piggyback Registration.

(a)    Participation. If the Company at any time proposes to file a Registration
Statement under the Securities Act or to conduct a Public Offering with respect
to any offering of its equity securities for its own account or for the account
of any other Persons (other than (i) a Registration under Sections 3.1 or 3.2,
(ii) a Registration on Form S-4 or Form S-8 or any successor form to such forms,
(iii) a Registration of securities solely relating to an offering and sale to
employees or directors of the Company or its subsidiaries pursuant to any
employee stock plan, employee stock purchase plan, or other employee benefit
plan arrangement, (iv) a

 

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Registration solely for the registration of securities issuable upon the
conversion, exchange or exercise of any then outstanding security of the Company
or (v) a Registration relating to a dividend reinvestment plan), then as soon as
practicable (but in no event less than 10 Business Days prior to the proposed
date of filing of such Registration Statement or, in the case of a Public
Offering under a Shelf Registration Statement, the anticipated pricing or trade
date), the Company shall give written notice (a “Piggyback Notice”) of such
proposed filing or Public Offering to all Qualified Holders, and such Piggyback
Notice shall offer the Qualified Holders the opportunity to register under such
Registration Statement, or to sell in such Public Offering, such number of
Registrable Securities as each such Qualified Holder may request in writing (a
“Piggyback Registration”). The Company shall not be required to provide a
Piggyback Notice to Holders of any Registrable Securities that are already
registered pursuant to an effective registration statement. Subject to Section
(b), the Company shall include in such Registration Statement or in such Public
Offering as applicable, all such Registrable Securities that are requested to be
included therein within five Business Days after the receipt by such Qualified
Holder of any such notice; provided, however, that if at any time after giving
written notice of its intention to register or sell any securities and prior to
the effective date of the Registration Statement filed in connection with such
Registration, or the pricing or trade date of a Public Offering under a Shelf
Registration Statement, the Company determines for any reason not to register or
sell or to delay Registration or the sale of such securities, the Company shall
give written notice of such determination to each Qualified Holder and,
thereupon, (i) in the case of a determination not to register or sell, shall be
relieved of its obligation to register or sell any Registrable Securities in
connection with such Registration or Public Offering (but not from its
obligation to pay the Registration Expenses in connection therewith), without
prejudice, however, to the rights of any Holders entitled to request that such
Registration or sale be effected as a Demand Registration under Section 3.1 or
an Underwritten Shelf Takedown, as the case may be, and (ii) in the case of a
determination to delay Registration or sale, in the absence of a request for a
Demand Registration or an Underwritten Shelf Takedown, as the case may be, shall
also be permitted to delay registering or selling any Registrable Securities.
Any Holder shall have the right to withdraw all or part of its request for
inclusion of its Registrable Securities in a Piggyback Registration by giving
written notice to the Company of its request to withdraw prior to such
Registration the securities being registered in such Piggyback Registration.

(b)    Priority of Piggyback Registration. If the managing underwriter or
underwriters of any proposed offering of Registrable Securities included in a
Piggyback Registration informs the Company and the participating Holders in
writing that, in its or their opinion, the number of securities that such
Holders and any other Persons intend to include in such offering exceeds the
number that can be sold in such offering without being likely to have a
significant adverse effect on the price, timing or distribution of the
securities offered or the market for the securities offered, then the securities
to be included in such Registration shall be (i) first, one hundred percent
(100%) of the securities that the Company proposes to sell, and (ii) second, and
only if all the securities referred to in clause (i) have been included, the
number of Registrable Securities that, in the opinion of such managing
underwriter or underwriters, can be sold without having such adverse effect,
with such number to be allocated among the Holders that have requested to
participate in such Registration based on an amount equal to the lesser of
(i) the number of such Registrable Securities requested to be sold by such
Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata Portion
and (iii) third, and only if all of the Registrable Securities referred to in
clause (ii) have been included in such Registration, any other securities
eligible for inclusion in such Registration.

 

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(c)    No Effect on Other Registrations. No Registration of Registrable
Securities effected pursuant to a request under this Section 3.3 shall be deemed
to have been effected pursuant to Section 3.1 or shall relieve the Company of
its obligations under Section 3.1.

3.4    Lock-Up Agreements. In connection with each Registration or sale of
Registrable Securities pursuant to Section 3.1 or 3.3 conducted as an
Underwritten Offering, each Holder agrees hereby not to, and agrees to execute
and deliver a lock-up agreement with the underwriter(s) of such Public Offering
restricting such Holder’s right to, (a) Transfer, directly or indirectly, any
equity securities of the Company held by such Holder or (b) enter into any swap
or other arrangement that transfers to another any of the economic consequences
of ownership of such securities during the period commencing on the date of the
final Prospectus relating to such Public Offering and ending on the date
specified by the underwriters (such period not to exceed 90 days plus such
additional period as may be requested by the Company or an underwriter due to
regulatory restrictions on the publication or other distribution of research
reports and analyst recommendations and opinions, if applicable). The terms of
such lock-up agreements shall be negotiated among the Holders, the Company and
the underwriters and shall include customary carve-outs from the restrictions on
Transfer set forth therein.

3.5    Registration Procedures.

(a)    Requirements. In connection with the Company’s obligations under Sections
3.1 and 3.3, the Company shall use its commercially reasonable efforts to effect
such Registration and to permit the sale of such Registrable Securities in
accordance with the intended method or methods of distribution thereof as
expeditiously as reasonably practicable, and in connection therewith the Company
shall use its commercially reasonable efforts to:

(i)    as promptly as practicable, prepare the required Registration Statement,
including all exhibits and financial statements required under the Securities
Act to be filed therewith and Prospectus, and, before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, (x) furnish to
the underwriters, if any, and to the Holders of the Registrable Securities
covered by such Registration Statement, copies of all documents prepared to be
filed, which documents shall be subject to the review of such underwriters and
such Holders and their respective counsel, (y) make such changes in such
documents concerning the Holders prior to the filing thereof as such Holders, or
their counsel, may reasonably request and (z) except in the case of a
Registration under Section 3.3, not file any Registration Statement or
Prospectus or amendments or supplements thereto to which participating Qualified
Holders, in such capacity, or the underwriters, if any, shall reasonably object;

(ii)    prepare and file with the SEC such amendments and post-effective
amendments to such Registration Statement and supplements to the Prospectus as
may be (x) reasonably requested by any participating Qualified Holder with
Registrable Securities covered by such Registration Statement, (y) reasonably
requested by any participating Holder (to the extent such request relates to
information relating to such

 

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Holder), or (z) necessary to keep such Registration Statement effective for the
period of time required by this Agreement, and comply with provisions of the
applicable securities laws with respect to the sale or other disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended method or methods of disposition by the sellers
thereof set forth in such Registration Statement;

(iii)    notify the participating Holders and the managing underwriter or
underwriters, if any, and (if requested) confirm such notice in writing and
provide copies of the relevant documents, as soon as reasonably practicable
after notice thereof is received by the Company (a) when the applicable
Registration Statement or any amendment thereto has been filed or becomes
effective, and when the applicable Prospectus or any amendment or supplement
thereto has been filed, (b) of any written comments by the SEC, or any request
by the SEC or other federal or state governmental authority for amendments or
supplements to such Registration Statement or such Prospectus, or for additional
information (whether before or after the effective date of the Registration
Statement) or any other correspondence with the SEC relating to, or which may
affect, the Registration, (c) of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement or any order by the
SEC or any other regulatory authority preventing or suspending the use of any
preliminary or final Prospectus or the initiation or threatening of any
proceedings for such purposes, (d) if, at any time, the representations and
warranties of the Company in any applicable underwriting agreement cease to be
true and correct in all material respects and (e) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;

(iv)    promptly notify each selling Holder and the managing underwriter or
underwriters, if any, when the Company becomes aware of the happening of any
event as a result of which the applicable Registration Statement or the
Prospectus included in such Registration Statement (as then in effect) contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein (in the case of such Prospectus or any
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading, when any Issuer Free Writing Prospectus includes
information that may conflict with the information contained in the Registration
Statement, or, if for any other reason it shall be necessary during such time
period to amend or supplement such Registration Statement or Prospectus in order
to comply with the Securities Act and, as promptly as reasonably practicable
thereafter, prepare and file with the SEC, and furnish without charge to the
selling Holders and the managing underwriter or underwriters, if any, an
amendment or supplement to such Registration Statement or Prospectus, which
shall correct such misstatement or omission or effect such compliance;

(v)    to the extent the Company is eligible under the relevant provisions of
Rule 430B under the Securities Act, if the Company files any Shelf Registration
Statement, the Company shall include in such Shelf Registration Statement such
disclosures as may be required by Rule 430B under the Securities Act (referring
to the unnamed selling security holders in a generic manner by identifying the
initial offering of

 

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the securities to the Holders) in order to ensure that the Holders may be added
to such Shelf Registration Statement at a later time through the filing of a
Prospectus supplement rather than a post-effective amendment;

(vi)    prevent, or obtain the withdrawal of, any stop order or other order or
notice preventing or suspending the use of any preliminary or final Prospectus;

(vii)    promptly incorporate in a Prospectus supplement, Issuer Free Writing
Prospectus or post-effective amendment such information as the managing
underwriter or underwriters and the participating Holders agree should be
included therein relating to the plan of distribution with respect to such
Registrable Securities; and make all required filings of such Prospectus
supplement, Issuer Free Writing Prospectus or post-effective amendment as soon
as reasonably practicable after being notified of the matters to be incorporated
in such Prospectus supplement, Issuer Free Writing Prospectus or post-effective
amendment;

(viii)    furnish to each selling Holder and each underwriter, if any, without
charge, as many conformed copies as such Holder or underwriter may reasonably
request of the applicable Registration Statement and any amendment or
post-effective amendment or supplement thereto, including financial statements
and schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);

(ix)    deliver to each selling Holder and each underwriter, if any, without
charge, as many copies of the applicable Prospectus (including each preliminary
Prospectus) and any amendment or supplement thereto and such other documents as
such Holder or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities by such Holder or underwriter (it
being understood that the Company shall consent to the use of such Prospectus or
any amendment or supplement thereto by each of the selling Holders and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto);

(x)    on or prior to the date on which the applicable Registration Statement
becomes effective, use its commercially reasonable efforts to register or
qualify, and cooperate with the selling Holders, the managing underwriter or
underwriters, if any, and their respective counsel, in connection with the
Registration or qualification of such Registrable Securities for offer and sale
under the securities or “Blue Sky” laws of each state and other jurisdiction as
any such selling Holder or managing underwriter or underwriters, if any, or
their respective counsel reasonably request in writing and do any and all other
acts or things reasonably necessary or advisable to keep such Registration or
qualification in effect for such period as required by Section 3.1, as
applicable, provided that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to taxation or general service of process in
any such jurisdiction where it is not then so subject;

 

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(xi)    cooperate with the selling Holders and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request prior to any sale of Registrable Securities to the underwriters;

(xii)    cause the Registrable Securities covered by the applicable Registration
Statement to be registered with or approved by such other U.S. governmental
agencies or authorities as may be necessary to enable the seller or sellers
thereof or the underwriter or underwriters, if any, to consummate the
disposition of such Registrable Securities;

(xiii)    make such representations and warranties to the Holders being
registered, and the underwriters or agents, if any, in form, substance and scope
as are customarily made by issuers in public offerings similar to the offering
then being undertaken;

(xiv)    enter into such customary agreements (including underwriting and
indemnification agreements) and take all such other actions as the participating
Holders or the managing underwriter or underwriters, if any, reasonably request
in order to expedite or facilitate the Registration and disposition of such
Registrable Securities;

(xv)    in the case of an Underwritten Offering, obtain for delivery to the
underwriter or underwriters, if any, an opinion or opinions from counsel for the
Company dated the date of the closing under the underwriting agreement, in
customary form, scope and substance, which opinions shall be reasonably
satisfactory to such underwriters and their counsel;

(xvi)    in the case of an Underwritten Offering, obtain for delivery to the
Company and the managing underwriter or underwriters, with copies to the Holders
included in such Registration or sale, a comfort letter from the Company’s
independent certified public accountants or independent auditors (and, if
necessary, any other independent certified public accountants or independent
auditors of any subsidiary of the Company or any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement) in customary form and covering
such matters of the type customarily covered by comfort letters as the managing
underwriter or underwriters reasonably request, dated the date of execution of
the underwriting agreement and brought down to the closing under the
underwriting agreement;

(xvii)    cooperate with each seller of Registrable Securities and each
underwriter, if any, participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with FINRA;

(xviii)    comply with all applicable securities laws and, if a Registration
Statement was filed, make available to its security holders, as soon as
reasonably practicable, an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act and the rules and regulations promulgated
thereunder;

 

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(xix)    provide and cause to be maintained a transfer agent and registrar for
all Registrable Securities covered by the applicable Registration Statement;

(xx)    to cause all Registrable Securities covered by the applicable
Registration Statement to be listed on each securities exchange on which any of
the Company’s equity securities are then listed or quoted and on each
inter-dealer quotation system on which any of the Company’s equity securities
are then quoted.

(xxi)    make available upon reasonable notice at reasonable times and for
reasonable periods for inspection by any underwriter participating in any
disposition to be effected pursuant to such Registration Statement and by any
attorney, accountant or other agent retained by any such underwriter, all
pertinent financial and other records and pertinent corporate documents and
properties of the Company, and cause all of the Company’s officers, directors
and employees and the independent public accountants who have certified its
financial statements to make themselves available to discuss the business of the
Company and to supply all information reasonably requested by any such Person in
connection with such Registration Statement;

(xxii)    in the case of an Underwritten Offering, cause the senior executive
officers of the Company to participate in the customary “road show”
presentations that may be reasonably requested by the managing underwriter or
underwriters in any such offering and otherwise to facilitate, cooperate with,
and participate in each proposed offering contemplated herein and customary
selling efforts related thereto;

(xxiii)    take no direct or indirect action prohibited by Regulation M under
the Exchange Act; and

(xxiv)     take all such other commercially reasonable actions as are necessary
or advisable in order to expedite or facilitate the disposition of such
Registrable Securities in accordance with the terms of this Agreement.

(b)    Company Information Requests. The Company may require each seller of
Registrable Securities as to which any Registration or sale is being effected to
furnish to the Company such information regarding the distribution of such
securities and such other information relating to such Holder and its ownership
of Registrable Securities as the Company may from time to time reasonably
request in writing and the Company may exclude from such Registration or sale
the Registrable Securities of any such Holder who unreasonably fails to furnish
such information within a reasonable time after receiving such request. Each
Holder agrees to furnish such information to the Company and to cooperate with
the Company as reasonably necessary to enable the Company to comply with the
provisions of this Agreement.

(c)    Discontinuing Registration. Each Holder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3.5(a)(iv), such Holder will discontinue disposition of Registrable
Securities pursuant to such Registration Statement until such Holder’s receipt
of the copies of the supplemented or amended

 

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Prospectus contemplated by Section 3.5(a)(iv), or until such Holder is advised
in writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus, or any amendments or supplements thereto, and if
so directed by the Company, such Holder shall deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period during which the applicable Registration
Statement is required to be maintained effective shall be extended by the number
of days during the period from and including the date of the giving of such
notice to and including the date when each seller of Registrable Securities
covered by such Registration Statement either receives the copies of the
supplemented or amended Prospectus contemplated by Section 3.5(a)(iv) or is
advised in writing by the Company that the use of the Prospectus may be resumed.

3.6    Underwritten Offerings.

(a)    Shelf and Demand Registrations. If requested by the underwriters for any
Underwritten Offering, pursuant to a Registration or sale under Section 3.1, the
Company shall enter into an underwriting agreement with such underwriters, such
agreement to be reasonably satisfactory in substance and form to each of the
Company, the participating Holders and the underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including indemnities no less
favorable to the recipient thereof than those provided in Section 3.9. The
Holders of the Registrable Securities proposed to be distributed by such
underwriters shall cooperate with the Company in the negotiation of the
underwriting agreement and shall give consideration to the reasonable
suggestions of the Company regarding the form thereof, and such Holders shall
complete and execute all questionnaires, powers of attorney and other documents
reasonably requested by the underwriters and required under the terms of such
underwriting arrangements. Any such Holder shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Holder, such Holder’s title to the Registrable Securities, such Holder’s
intended method of distribution and any other representations to be made by the
Holder as are generally prevailing in agreements of that type, and the aggregate
amount of the liability of such Holder under such agreement shall not exceed
such Holder’s proceeds from the sale of its Registrable Securities in the
offering, net of underwriting discounts and commissions but before expenses.

(b)    Piggyback Registrations. If the Company proposes to register or sell any
of its securities under the Securities Act as contemplated by Section 3.3 and
such securities are to be distributed through one or more underwriters, the
Company shall, if requested by any Qualified Holder pursuant to Section 3.3, and
subject to the provisions of Section 3.3(b), use its commercially reasonable
efforts to arrange for such underwriters to include on the same terms and
conditions that apply to the other sellers in such Registration or sale all the
Registrable Securities to be offered and sold by such Qualified Holder among the
securities of the Company to be distributed by such underwriters in such
Registration or sale. The Holders of Registrable Securities to be distributed by
such underwriters shall be parties to the underwriting agreement between the
Company and such underwriters and shall complete and execute all questionnaires,

 

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powers of attorney and other documents reasonably requested by the underwriters
and required under the terms of such underwriting arrangements. Any such Holder
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such Holder, such Holder’s title to the Registrable
Securities, such Holder’s intended method of distribution and any other
representations to be made by the Holder as are generally prevailing in
agreements of that type, and the aggregate amount of the liability of such
Holder shall not exceed such Holder’s proceeds from the sale of its Registrable
Securities in the offering, net of underwriting discounts and commissions but
before expenses.

(c)    Selection of Underwriters; Selection of Counsel. In the case of an
Underwritten Offering under Section 3.1 or Section 3.2, the managing underwriter
or underwriters to administer the offering shall be determined by the Company;
provided that such underwriter or underwriters shall be reasonably acceptable to
the Qualified Holders holding a majority of the Registrable Securities being
sold.

3.7    No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries shall hereafter enter into, and neither the Company nor any of its
subsidiaries is currently a party to, any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders by this
Agreement.

3.8    Registration Expenses. All expenses incident to the Company’s performance
of or compliance with this Agreement shall be paid by the Company, including
(i) all registration and filing fees, and any other fees and expenses associated
with filings required to be made with the SEC or FINRA, (ii) all fees and
expenses in connection with compliance with any securities or “Blue Sky” laws
(including reasonable fees and disbursements of counsel for the underwriters in
connection with blue sky qualifications of the Registrable Securities), (iii)
all printing, duplicating, word processing, messenger, telephone, facsimile and
delivery expenses (including expenses of printing certificates for the
Registrable Securities in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses), (iv) all fees and disbursements of
counsel for the Company and of all independent certified public accountants or
independent auditors of the Company and any subsidiaries of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance), (v) all fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange or
quotation of the Registrable Securities on any inter-dealer quotation system,
(vi) all fees and expenses of any special experts or other Persons retained by
the Company in connection with any Registration or sale, (vii) all of the
Company’s internal expenses (including all salaries and expenses of its officers
and employees performing legal or accounting duties) and (viii) all expenses
related to the “road show” for any Underwritten Offering (including the
reasonable out-of-pocket expenses of the Holders and underwriters, if so
requested). All such expenses are referred to herein as “Registration Expenses.”
The Company shall not be required to pay any fees and disbursements to
underwriters not customarily paid by the issuers of securities in an offering
similar to the applicable offering, including underwriting discounts and
commissions and transfer taxes, if any, attributable to the sale of Registrable
Securities.

 

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3.9    Indemnification.

(a)    Indemnification by the Company. The Company shall indemnify and hold
harmless, to the full extent permitted by law, each Holder, each shareholder,
member, limited or general partner of such Holder, each shareholder, member,
limited or general partner of each such shareholder, member, limited or general
partner, each of their respective Affiliates, officers, directors, shareholders,
employees, advisors, and agents and each Person who controls (within the meaning
of the Securities Act or the Exchange Act) such Persons and each of their
respective Representatives from and against any and all losses, penalties,
judgments, suits, costs, claims, damages, liabilities and expenses, joint or
several (including reasonable costs of investigation and legal expenses) (each,
a “Loss” and collectively “Losses”) arising out of or based upon (i) any untrue
or alleged untrue statement of a material fact contained in any Registration
Statement under which such Registrable Securities are registered or sold under
the Securities Act (including any final, preliminary or summary Prospectus
contained therein or any amendment thereof or supplement thereto or any
documents incorporated by reference therein), or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a Prospectus or
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading; provided, that no selling Holder shall be entitled to
indemnification pursuant to this Section 3.9(a) in respect of any untrue
statement or omission contained in any information relating to such selling
Holder furnished in writing by such selling Holder to the Company specifically
for inclusion in a Registration Statement and used by the Company in conformity
therewith (such information, “Selling Stockholder Information”). This indemnity
shall be in addition to any liability the Company may otherwise have. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Holder or any indemnified party and shall survive
the Transfer of such securities by such Holder and regardless of any indemnity
agreed to in the underwriting agreement that is less favorable to the Holders.
The Company shall also indemnify underwriters, selling brokers, dealer managers
and similar securities industry professionals participating in the distribution,
their officers and directors and each Person who controls such Persons (within
the meaning of the Securities Act and the Exchange Act) to the same extent as
provided above (with appropriate modification) with respect to the
indemnification of the indemnified parties.

(b)    Indemnification by the Selling Holders. Each selling Holder agrees
(severally and not jointly) to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, its directors and officers and each Person
who controls the Company (within the meaning of the Securities Act or the
Exchange Act) from and against any Losses resulting from (i) any untrue
statement of a material fact in any Registration Statement under which such
Registrable Securities were registered or sold under the Securities Act
(including any final, preliminary or summary Prospectus contained therein or any
amendment thereof or supplement thereto or any documents incorporated by
reference therein) or (ii) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a Prospectus or preliminary Prospectus, in light of the
circumstances under which they were made) not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission is
contained in such selling Holder’s Selling Stockholder Information. In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the proceeds from the sale of its Registrable Securities in
the offering giving rise to such indemnification obligation, net of underwriting
discounts and commissions but before expenses, less any amounts paid by such
Holder pursuant to Section 3.9(d) and any amounts paid by such Holder as a
result of liabilities incurred under the underwriting agreement, if any, related
to such sale.

 

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(c)    Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
provided, however, that any Person entitled to indemnification hereunder shall
have the right to select and employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such Person unless (i) the indemnifying party has agreed in writing
to pay such fees or expenses, (ii) the indemnifying party shall have failed to
assume the defense of such claim within a reasonable time after receipt of
notice of such claim from the Person entitled to indemnification hereunder and
employ counsel reasonably satisfactory to such Person, (iii) the indemnified
party has reasonably concluded (based upon advice of its counsel) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, or
(iv) in the reasonable judgment of any such Person (based upon advice of its
counsel) a conflict of interest may exist between such Person and the
indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person). If the indemnifying party assumes the defense, then no
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party. If
such defense is not assumed by the indemnifying party, the indemnifying party
will not be subject to any liability for any settlement made without its prior
written consent, but such consent may not be unreasonably withheld. It is
understood that the indemnifying party or parties shall not, except as
specifically set forth in this Section 3.9(c), in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements or other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time unless (x) the employment of more
than one counsel has been authorized in writing by the indemnifying party or
parties, (y) an indemnified party has reasonably concluded (based on the advice
of counsel) that there may be legal defenses available to it that are different
from or in addition to those available to the other indemnified parties or (z) a
conflict or potential conflict exists or may exist (based upon advice of counsel
to an indemnified party) between such indemnified party and the other
indemnified parties, in each of which cases the indemnifying party shall be
obligated to pay the reasonable fees and expenses of such additional counsel or
counsels.

 

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(d)    Contribution. If for any reason the indemnification provided for in
Sections 3.9(a) and (b) is unavailable to an indemnified party or insufficient
in respect of any Losses referred to therein (other than as a result of
exceptions or limitations on indemnification contained in Sections 3.9(a) and
(b)), then the indemnifying party shall contribute to the amount paid or payable
by the indemnified party as a result of such Loss in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party or parties on the other hand in connection with
the acts, statements or omissions that resulted in such Losses, as well as any
other relevant equitable considerations. In connection with any Registration
Statement filed with the SEC by the Company, the relative fault of the
indemnifying party on the one hand and the indemnified party on the other hand
shall be determined by reference to, among other things, whether any untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 3.9(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in this Section 3.9(d). No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. The amount paid or payable by
an indemnified party as a result of the Losses referred to in Sections 3.9(a)
and (b) shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 3.9(d), in connection with any
Registration Statement filed by the Company, a selling Holder shall not be
required to contribute any amount in excess of the dollar amount of the proceeds
from the sale of its Registrable Securities in the offering giving rise to such
contribution obligation, net of underwriting discounts and commissions but
before expenses, less any amounts paid by such Holder pursuant to Section 3.9(b)
and any amounts paid by such Holder as a result of liabilities incurred under
the underwriting agreement, if any, related to such sale. If indemnification is
available under this Section 3.9, the indemnifying parties shall indemnify each
indemnified party to the full extent provided in Sections 3.9(a) and (b) hereof
without regard to the provisions of this Section 3.9(d). The remedies provided
for in this Section 3.9 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.

3.10    Rules 144 and 144A and Regulation S. The Company shall file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Holder, make
publicly available such necessary information for so long as necessary to permit
sales that would otherwise be permitted by this Agreement pursuant to Rule 144,
Rule 144A or Regulation S under the Securities Act, as such rules may be amended
from time to time or any similar rule or regulation hereafter adopted by the
SEC), and it will take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Registrable Securities without Registration under the Securities Act in
transactions that would otherwise be permitted by this Agreement and within the
limitation of the exemptions provided by (i) Rule 144, Rule 144A or Regulation S
under the Securities Act, as such rules may be amended from time to time, or
(ii)

 

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any similar rule or regulation hereafter adopted by the SEC. Upon the request of
any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements and, if not, the specifics
thereof.

3.11    Existing Registration Statements. Notwithstanding anything herein to the
contrary and subject to applicable law and regulation, the Company may satisfy
any obligation hereunder to file a Registration Statement or to have a
Registration Statement become effective by a specified date by designating, by
notice to the Qualified Holders, a Registration Statement that previously has
been filed with the SEC or become effective, as the case may be, as the relevant
Registration Statement for purposes of satisfying such obligation, and all
references to any such obligation shall be construed accordingly; provided that
such previously filed Registration Statement may be, and is, amended or, subject
to applicable securities laws, supplemented to add the number of Registrable
Securities, and, to the extent necessary, to identify as selling stockholders
those Qualified Holders demanding the filing of a Registration Statement
pursuant to the terms of this Agreement. To the extent this Agreement refers to
the filing or effectiveness of other Registration Statements, by or at a
specified time and the Company has, in lieu of then filing such Registration
Statements or having such Registration Statements become effective, designated a
previously filed or effective Registration Statement as the relevant
Registration Statement for such purposes, in accordance with the preceding
sentence, such references shall be construed to refer to such designated
Registration Statement, as amended or supplemented in the manner contemplated by
the immediately preceding sentence.

ARTICLE IV

MISCELLANEOUS

4.1    Authority: Effect. Each party hereto represents and warrants to and
agrees with each other party that the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized on behalf of such party and do not violate any agreement or other
instrument applicable to such party or by which its assets are bound. This
Agreement does not, and shall not be construed to, give rise to the creation of
a partnership among any of the parties hereto, or to constitute any of such
parties members of a joint venture or other association. The Company and its
subsidiaries shall be jointly and severally liable for all obligations of each
such party pursuant to this Agreement.

4.2    Notices. Any notices, requests, demands and other communications required
or permitted in this Agreement shall be effective if in writing and
(i) delivered personally, (ii) sent by facsimile or e-mail, or (iii) sent by
overnight courier, in each case, addressed as follows:

If to the Company to:

StepStone Group Inc.

450 Lexington Avenue, 31st Floor

New York, NY 10017

Telephone: (212) 351-6100

Attention: Chief Legal Officer

 

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with a copy (which shall not constitute notice to the Company) to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, NY 10166

Telephone: (212) 351-4000

Facsimile: (212) 351-4035

Attention: Andrew Fabens

If to a Holder, to the address on file in the Company’s records.

Notice to the holder of record of any Registrable Securities shall be deemed to
be notice to the holder of such securities for all purposes hereof.

Unless otherwise specified herein, such notices or other communications shall be
deemed effective (i) on the date received, if personally delivered, (ii) on the
date received if delivered by facsimile or e-mail on a Business Day, or if not
delivered on a Business Day, on the first Business Day thereafter and (iii) two
Business Days after being sent by overnight courier. Each of the parties hereto
shall be entitled to specify a different address by giving notice as aforesaid
to each of the other parties hereto.

4.3    Termination and Effect of Termination. This Agreement shall terminate
upon the date on which no Holder holds any Registrable Securities, except for
the provisions of Sections 3.9 and 3.10, which shall survive any such
termination. No termination under this Agreement shall relieve any Person of
liability for breach or Registration Expenses incurred prior to termination. In
the event this Agreement is terminated, each Person entitled to indemnification
rights pursuant to Section 3.9 hereof shall retain such indemnification rights
with respect to any matter that (i) may be an indemnified liability thereunder
and (ii) occurred prior to such termination.

4.4    Permitted Transferees. The rights of a Holder hereunder may be assigned
(but only with all related obligations as set forth below) in connection with a
Transfer of Registrable Securities to a Permitted Transferee of that Holder.
Without prejudice to any other or similar conditions imposed hereunder with
respect to any such Transfer, no assignment permitted under the terms of this
Section 4.4 will be effective unless the Permitted Transferee to which the
assignment is being made, if not a Holder, has delivered to the Company a
written acknowledgment and agreement in form and substance reasonably
satisfactory to the Company that the Permitted Transferee will be bound by, and
will be a party to, this Agreement. A Permitted Transferee to whom rights are
transferred pursuant to this Section 4.4 may not again transfer those rights to
any other Permitted Transferee, other than as provided in this Section 4.4.

4.5    Remedies. The parties to this Agreement shall have all remedies available
at law, in equity or otherwise in the event of any breach or violation of this
Agreement or any default hereunder. The parties acknowledge and agree that in
the event of any breach of this Agreement, in addition to any other remedies
that may be available, each of the parties hereto shall be entitled to specific
performance of the obligations of the other parties hereto and, in addition, to
such other equitable remedies (including preliminary or temporary relief) as may
be appropriate

 

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in the circumstances. No delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or default by
any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any such delay, omission nor waiver of any single breach or default be
deemed a waiver of any other breach or default occurring before or after that
waiver.

4.6    Amendments. This Agreement may not be orally amended, modified, extended
or terminated, nor shall any oral waiver of any of its terms be effective. This
Agreement may be amended, modified, extended or terminated, and the provisions
hereof may be waived, only by an agreement in writing signed by the Company and
the Holders of a majority of the Registrable Securities under this Agreement;
provided, however, that any amendment, modification, extension or termination
that disproportionately and adversely affects any Holder shall require the prior
written consent of such Holder. Each such amendment, modification, extension or
termination shall be binding upon each party hereto. In addition, each party
hereto may waive any right hereunder by an instrument in writing signed by such
party.

4.7    Governing Law. This Agreement and all claims arising out of or based upon
this Agreement or relating to the subject matter hereof shall be governed by and
construed in accordance with the domestic substantive laws of the State of
Delaware without giving effect to any choice or conflict of laws provision or
rule that would cause the application of the domestic substantive laws of any
other jurisdiction.

4.8    Consent to Jurisdiction. Each party to this Agreement, by its execution
hereof, (i) hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the State of Delaware and the County of New
Castle for the purpose of any action, claim, cause of action or suit (in
contract, tort or otherwise), inquiry, proceeding or investigation arising out
of or based upon this Agreement or relating to the subject matter hereof,
(ii) hereby waives to the extent not prohibited by applicable law, and agrees
not to assert, and agrees not to allow any of its subsidiaries to assert, by way
of motion, as a defense or otherwise, in any such action, any claim that it is
not subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that any such
proceeding brought in one of the above-named courts is improper, or that this
Agreement or the subject matter hereof or thereof may not be enforced in or by
such court and (iii) hereby agrees not to commence or maintain any action,
claim, cause of action or suit (in contract, tort or otherwise), inquiry,
proceeding or investigation arising out of or based upon this Agreement or
relating to the subject matter hereof or thereof other than before one of the
above-named courts nor to make any motion or take any other action seeking or
intending to cause the transfer or removal of any such action, claim, cause of
action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation to any court other than one of the above-named courts whether on
the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing,
to the extent that any party hereto is or becomes a party in any litigation in
connection with which it may assert indemnification rights set forth in this
Agreement, the court in which such litigation is being heard shall be deemed to
be included in clause (i) above. Notwithstanding the foregoing, any party to
this Agreement may commence and maintain an action to enforce a judgment of any
of the above-named courts in any court of competent jurisdiction. Each party
hereto hereby consents to service of process in any such proceeding in any
manner permitted by Delaware law, and agrees that service of

 

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process by registered or certified mail, return receipt requested, at its
address specified pursuant to Section 4.2 hereof is reasonably calculated to
give actual notice.

4.9    WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT
WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF
ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING.
EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES
HERETO THAT THIS SECTION 4.9 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY
ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.9 WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO
TRIAL BY JURY.

4.10    Merger; Binding Effect, Etc. This Agreement (along with the Exchange
Agreement) constitutes the entire agreement of the parties with respect to its
subject matter, supersedes all prior or contemporaneous oral or written
agreements or discussions with respect to such subject matter, and shall be
binding upon and inure to the benefit of the parties hereto and thereto and
their respective heirs, representatives, successors and permitted assigns.
Except as otherwise expressly provided herein, no Holder or other party hereto
may assign any of its respective rights or delegate any of its respective
obligations under this Agreement without the prior written consent of the other
parties hereto, and any attempted assignment or delegation in violation of the
foregoing shall be null and void.

4.11    Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier, facsimile or other electronic transmission shall
be effective as delivery of a manually executed counterpart thereof. The words
“execution,” “signed,” “signature,” “delivery,” and words of like import in or
relating to this Agreement or any document to be signed in connection with this
Agreement shall be deemed to include electronic signatures, deliveries or the
keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature, physical
delivery thereof or the use of a paper-based recordkeeping system, as the case
may be, and the parties hereto consent to conduct the transactions contemplated
hereunder by electronic means.

 

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4.12    Severability. In the event that any provision hereof would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
be construed by modifying or limiting it so as to be valid and enforceable to
the maximum extent compatible with, and possible under, applicable law. The
provisions hereof are severable, and in the event any provision hereof should be
held invalid or unenforceable in any respect, it shall not invalidate, render
unenforceable or otherwise affect any other provision hereof.

[Signature pages follow]

 

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IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement as
of the date first above written.

 

StepStone Group Inc. By:  

/s/ Scott Hart

Name:   Scott Hart Title:   Co-Chief Executive Officer Holders: All limited
partners of StepStone Group LP By:   StepStone Group Holdings LLC, as
attorney-in-fact By:  

/s/ Scott Hart

Name:   Scott Hart Title:   Authorized Signatory

[Registration Rights Agreement – Signature Page]