Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT, dated as of September 13, 2016 (this
“Agreement”), by and among Great Elm Capital Group, Inc., a Delaware corporation
(the “Company”), and each person who is named as an Investor in the Backstop
Investment Agreement, dated as of the date of this Agreement (the “Backstop
Agreement”), by and among the Company and such Investors (each such party as
identified on Annex 1, together with any person or entity who hereafter becomes
a party to this Agreement per Section 7.11, a “Holder” and collectively, the
“Holders”). The Company and the Holders are referred to collectively as the
“Parties.”  Certain capitalized terms are defined in Section 7.18.

 

RECITALS

 

The Company has offered to sell and the Investors agreed to purchase shares of
common stock, par value $0.001 per share, of the Company (the “Common Stock”),
per the Backstop Agreement in a transaction exempt from registration under the
Securities Act of 1933 (the “Securities Act”).

 

This Agreement being in full force and effect is a condition to the Investors’
obligations under the Backstop Agreement.

 

AGREEMENT

 

In consideration of the foregoing and mutual covenants herein, the Parties,
intending to be legally bound, agree as follows:

 

1.            REGISTRATION

 

1.1          Shelf Registration.

 

(a)          As soon as reasonably practicable after the consummation of the
transactions contemplated by the Backstop Agreement (the “Closing Date”) and in
any event not later than seventy five days after the Closing Date, the Company
shall file a registration statement with the Securities and Exchange Commission
(the “SEC”) under the Securities Act and other applicable law, and including any
Prospectus, amendments and supplements to each such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement (a “Registration Statement”) for
covering the resale of all of the Registrable Securities on a delayed or
continuous basis (the “Shelf Registration”). The Company shall use reasonable
best efforts to cause such Registration Statement to become effective as
promptly as practicable. If the Company becomes eligible to use Form S-3, the
Company shall use reasonable best efforts to convert any Shelf Registration on
Form S-1 to Form S-3 (the “Form S-3 Shelf”) as soon as practicable after the
Company becomes so eligible. The Company shall use its reasonable best efforts
to keep the Shelf Registration continuously effective under the Securities Act
until there are no longer any Registrable Securities, including, to the extent a
Form S-1 was converted to a Form S-3 Shelf and

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the Company thereafter became ineligible to use Form S-3, by filing a Shelf
Registration on Form S-1 not later than forty five days after the date of such
ineligibility and using its reasonable best efforts to have such Registration
Statement declared effective as promptly as practicable (but in no event more
than sixty days after the date of such filing, unless it is not practicable to
do so due to circumstances directly relating to the review of Registration
Statement by the SEC); provided, however, and with respect to Registrable
Securities held by any Holder, who together with its Affiliates, beneficially
owns less than five percent of the outstanding shares of Common Stock, the
Company shall not be obligated to use its reasonable best efforts to keep the
Shelf Registration continuously effective under the Securities Act at any time
after the second anniversary of the Closing Date;  provided that no Holder owns
five percent or more of the then outstanding shares of Common Stock, and before
the date the Company becomes a WKSI (the “WKSI Date”). The period during which
the Company shall use its reasonable best efforts to keep the Shelf continuously
effective under the Securities Act in accordance with this Section, the “Shelf
Period”.

 

(b)         At any time during which the Registration Statement for a Shelf
Registration (a “Shelf Registration Statement”) or an automatic shelf
registration statement as defined in Rule 405 under the Securities Act (an
“Automatic Shelf Registration Statement”) is effective (or in connection with
its initial effectiveness), any one or more of the eligible Holders of
Registrable Securities may request to sell all or any portion of their
Registrable Securities in an underwritten offering that is registered pursuant
to the Shelf Registration (each, an “Underwritten Shelf Takedown”); provided
that in the case of each such Underwritten Shelf Takedown such Holder or Holders
will be entitled to make such demand only if the total offering price of the
shares to be sold in such offering (including piggyback shares and before
deduction of underwriting discounts) is reasonably expected to exceed, in the
aggregate, $5 million.

 

(c)          All requests for Underwritten Shelf Takedowns shall be made by
giving written notice to the Company (the “Shelf Takedown Notice”). Each Shelf
Takedown Notice shall specify the approximate number of Registrable Securities
to be sold in the Underwritten Shelf Takedown and the expected price range (net
of underwriting discounts and commissions) of such Underwritten Shelf Takedown.
Subject to Section 1.5, within three days after receipt of any Shelf Takedown
Notice, the Company shall give written notice of such requested Underwritten
Shelf Takedown to all other Holders of Registrable Securities (the “Company
Notice”) and, subject to the provisions of Section 1.1(d) and Section 1.31.5,
shall include in such Underwritten Shelf Takedown all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within five Business Days after giving the Company Notice.

 

(d)         If the managing underwriters for such Underwritten Shelf Takedown
advise the Company that in their reasonable view, or, if such managing
underwriters are unwilling to so advise the Company, if the Company concludes
after consultation with such managing underwriters and the Holders of
Registrable Securities proposed to be included in such Underwritten Shelf
Takedown that in the Company’s reasonable view, the number of shares of Common
Stock proposed to be included in such Underwritten Shelf Takedown exceeds the
number of shares of Common Stock which can be sold in an orderly manner in such
offering within a price range acceptable to the Holders of a

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majority of the Registrable Securities requested to be included in the
Underwritten Shelf Takedown, then the Company shall so advise all Holders of
Registrable Securities proposed to be included in such Underwritten Shelf
Takedown, and shall include in such Underwritten Shelf Takedown the number of
shares of Common Stock which can be so sold in the following order of priority:
(i) first, the Registrable Securities requested to be included in such
Underwritten Shelf Takedown, which in the view of such underwriters or the
Company, as applicable, can be sold in an orderly manner within the price range
of such offering, pro rata among the respective Holders of such Registrable
Securities on the basis of the number of Registrable Securities requested to be
included therein by each such Holder, and (ii) second, Other Registrable
Securities requested to be included in such Underwritten Shelf Takedown to the
extent permitted hereunder, pro rata among the respective holders of such Other
Registrable Securities on the basis of the number of securities requested to be
included therein by each such holder.

 

(e)         Other than Block Sales, which shall not be classified as an
Underwritten Shelf Takedown solely for the purposes of the limitations under
this Section 1.1(e), the Company shall not be obligated to effect an
Underwritten Shelf Takedown within ninety days (or such shorter period specified
in any applicable lockup agreement entered into with underwriters) after the
consummation of a previous Underwritten Shelf Takedown or Demand Registration.

 

(f)         The Holders of a majority of the Registrable Securities requested to
be included in an Underwritten Shelf Takedown shall have the right to select the
investment banker(s) and manager(s) to administer the offering (which shall
consist of one or more reputable nationally recognized investment banks, subject
to the Company’s approval (which shall not be unreasonably withheld, conditioned
or delayed)) and one firm of counsel to represent all of the Holders (along with
any reasonably necessary local counsel), in connection with such Underwritten
Shelf Takedown; provided, that the Company shall select such investment
banker(s), manager(s) and counsel (including local counsel) if such Holders of
such majority cannot so agree on the same within a reasonable time period.

 

(g)         Any Holder whose Registrable Securities were to be included in any
such registration pursuant to Section 1.1(b) may elect to withdraw any or all of
its Registrable Securities therefrom, without prejudice to the rights of any
such Holder or Holders to include Registrable Securities in any future
registration (or registrations), by written notice to the Company delivered on
or prior to the effective date of the relevant Underwritten Shelf Takedown.

 

(h)         Upon the WKSI Date, (i) the Company shall give written notice to all
of the Holders who hold Registrable Securities as promptly as practicable but in
no event later than ten Business Days thereafter, and such notice shall
describe, in reasonable detail, the basis on which the Company has become a
WKSI, and (ii) if requested by Holders beneficially owning not less than ten
percent of the Registrable Securities held by all Holders, the Company shall, in
accordance with the following sentence, register, under an Automatic Shelf
Registration Statement, the sale of all outstanding shares of Common Stock in
accordance with the terms of this Agreement. Following any such request, the
Company shall use its reasonable best efforts to file such Automatic Shelf
Registration

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Statement as promptly as practicable, but in no event later than thirty days
after such request, and the Company shall use its reasonable best efforts to
cause such Automatic Shelf Registration Statement to remain effective thereafter
until there are no longer any Registrable Securities; provided, that, the
failure of the Company to remain a WKSI after the filing of such Automatic Shelf
Registration Statement shall not be deemed to be a breach of its obligations
hereunder. The Company shall give written notice of filing such Registration
Statement to all of the Holders who hold Registrable Securities as promptly as
practicable thereafter.

 

(i)          As of the date hereof, the Company represents and warrants that it
is not a party to, or otherwise subject to, any agreement other than this
Agreement granting registration rights to any other Person with respect to any
securities of the Company.

 

1.2          Demand Registration.

 

(a)          Subject to the terms and conditions of this Agreement (including
Section 1.2(c)), at any time on or after the second anniversary of the Closing
Date, upon written notice to the Company (a “Demand Notice”) delivered by (i)
Holders beneficially owning not less than ten percent of the then outstanding
shares of Common Stock in the aggregate or (ii) a Holder that, together with its
Affiliates, is both a Ten Percent Holder as of the date of this Agreement and
could reasonably be considered an “Affiliate” (disregarding the proviso in the
first sentence of the definition thereof) of the Company as of the date of such
Demand Notice (an “Affiliated Holder”), which for the avoidance of doubt shall
include any Holder with respect to which there is a director serving on the
board of directors of the Company (the “Board”) who was appointed by, or is
otherwise employed by or affiliated with, such Holder or its Affiliates (each of
the foregoing being referred to as the “Initiating Holders”) at any time
requesting that the Company effect the registration (a “Demand Registration”)
under the Securities Act of any or all of the Registrable Securities held by
such Holders, the Company shall promptly (but in any event, not later than five
Business Days following the Company’s receipt of such Demand Notice) give
written notice of the receipt of such Demand Notice to all other Holders that,
to its knowledge, hold Registrable Securities (each, a “Demand Eligible
Holder”). The Company shall promptly file the appropriate registration statement
(the “Demand Registration Statement”) and use reasonable best efforts to effect,
at the earliest practicable date, the registration under the Securities Act and
under the applicable state securities laws of (A) the Registrable Securities
which the Company has been so requested to register by the Initiating Holders in
the Demand Notice, and (B) all other Registrable Securities which the Company
has been requested to register by the Demand Eligible Holders by written request
(the “Demand Eligible Holder Request”) given to the Company within ten Business
Days after the giving of such written notice by the Company, in each case
subject to Section 1.2(e), all to the extent required to permit the disposition
(in accordance with the intended methods of disposition) of the Registrable
Securities to be so registered.

 

(b)         The Company may effect any requested Demand Registration using Form
S-3 whenever the Company is eligible to register for resale the Registrable
Securities on Form S-3 (unless the Initiating Holder(s) or the managing
underwriter(s) of such offering requests the Company to use

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a Form S-1 in order to sell all of the Registrable Securities requested to be
sold). Subject to the terms and conditions of this Agreement (including Section
1.2(c)), for so long as the Company is eligible to register for resale the
Registrable Securities on Form S-3, each Ten Percent Holder shall have the right
to request an unlimited number of Demand Registrations using Form S-3, which
shall not constitute a Demand Registration for purposes of determining the
number of Demand Registrations limited by Section 1.2(c).

 

(c)          Notwithstanding anything herein to the contrary, the Company shall
only be required to (i) effect one Demand Registrations in any 6 month period,
(ii) effect a total of not more than four Demand Registrations by (A) Holders
beneficially owning not less than 10% of the outstanding shares of the Common
Stock in the aggregate and (B) Affiliated Holders, and an additional three
Demand Registrations by each Ten Percent Holder throughout the term of this
Agreement, and (iii) comply with a request for a Demand Registration (other than
a request that the Company conduct an Initial Public Offering) if the Initiating
Holders, together with all other Demand Eligible Holders that request
Registrable Securities be included in the Demand Registration pursuant to
Section 1.2(a), are requesting the registration of Registrable Securities, which
is reasonably expected to result in aggregate gross proceeds in excess of $18.3
million.

 

(d)         The Company shall use reasonable best efforts to keep the Demand
Registration Statement continuously effective under the Securities Act for the
period of time necessary for the underwriters or Holders to sell all the
Registrable Securities covered by such Demand Registration Statement or such
shorter period which will terminate when all Registrable Securities covered by
such Demand Registration Statement have been sold pursuant thereto (including,
if necessary, by filing with the SEC a post-effective amendment or a supplement
to the Demand Registration Statement or the related Prospectus or any document
incorporated therein by reference or by filing any other required document or
otherwise supplementing or amending the Demand Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Demand Registration Statement or
by the Securities Act, any state securities or “blue sky” laws, or any other
rules and regulations thereunder) (the “Effectiveness Period”). A Demand
Registration requested pursuant to this Section shall not be deemed to have been
effected (i) if the Registration Statement is withdrawn without becoming
effective, (ii) if the Registration Statement does not remain effective in
compliance with the provisions of the Securities Act and the laws of any state
or other jurisdiction applicable to the disposition of the Registrable
Securities covered by such Registration Statement for the Effectiveness Period,
(iii) if, after it has become effective, such Registration Statement is subject
to any stop order, injunction or other order or requirement of the SEC or other
governmental or regulatory agency or court for any reason other than a violation
of applicable law solely by any selling Holder and has not thereafter become
effective, (iv) in the event of an underwritten offering, if the conditions to
closing specified in the underwriting agreement entered into in connection with
such registration are not satisfied or waived other than by reason of some
wrongful act or omission by an Initiating Holder, (v) if the Company does not
include in the applicable Registration Statement any Registrable Securities held
by a Holder that is required by the terms hereof to be included in such
Registration Statement, and (vi) if the Initiating Holders and Demand Eligible
Holders have not been able to sell at least seventy

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five percent of the Registrable Securities that they have requested to sell in
the Demand Notice or Demand Eligible Holder Request.

 

(e)         Notwithstanding any other provision of this Section, if (i) the
Initiating Holders intend to distribute the Registrable Securities covered by a
Demand Registration by means of an underwritten offering and (ii) the managing
underwriters advise the Company and the Initiating Holders that in their
reasonable view, or, if such managing underwriters are unwilling to so advise
the Company and the Initiating Holders, if the Company concludes after
consultation with such managing underwriters and the Holders of Registrable
Securities proposed to be included in such offering that in the Company’s
reasonable view, the number of shares of Common Stock proposed to be included in
such offering (including Registrable Securities requested by Holders to be
included in such offering and any securities that the Company or any other
Person proposes to be included that are not Registrable Securities) exceeds the
number of shares of Common Stock which can be sold in an orderly manner in such
offering within a price range acceptable to the Holders of a majority of the
Registrable Securities requested to be included in such Demand Registration,
then the Company shall so advise all Initiating Holders and Demand Eligible
Holders with Registrable Securities proposed to be included in such underwritten
offering, and shall include in such offering the number of shares of Common
Stock which can be so sold in the following order of priority: (A) first, the
Registrable Securities requested to be included in such underwritten offering by
the Initiating Holders and the Demand Eligible Holders, which in the view of
such underwriters or the Company, as applicable, can be sold in an orderly
manner within the price range of such offering, pro rata among such Initiating
Holders and Demand Eligible Holders on the basis of the number of Registrable
Securities requested to be included therein by each such Initiating Holder and
Demand Eligible Holder, and (B) second, Other Registrable Securities requested
to be included in such underwritten offering to the extent permitted hereunder
pro rata among the respective holders of such Other Registrable Securities on
the basis of the number of securities requested to be included therein by each
such holder.

 

(f)          The determination of whether any offering of Registrable Securities
pursuant to a Demand Registration will be an underwritten offering shall be made
in the sole discretion of the Holders of a majority of the Registrable
Securities included in such underwritten offering, and such Holders of a
majority of the Registrable Securities shall have the right to (i) determine the
plan of distribution, including the price at which the Registrable Securities
are to be sold and the underwriting commissions, discounts and fees, and (ii)
select the investment banker(s) and manager(s) to administer the offering (which
shall consist of one or more reputable nationally recognized investment banks,
subject to the Company’s approval (which shall not be unreasonably withheld,
conditioned or delayed)) and one firm of counsel to represent all of the Holders
(along with any reasonably necessary local counsel), in connection with such
Demand Registration; provided, that the Company shall select such investment
banker(s), manager(s) and counsel (including local counsel) if such Holders of
such majority cannot so agree on the same within a reasonable time period.

 

(g)         Any Holder whose Registrable Securities were to be included in any
such registration pursuant to

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Section 1.2 may elect to withdraw any or all of its Registrable Securities
therefrom, without prejudice to the rights of any such Holder or Holders to
include Registrable Securities in any future registration (or registrations), by
written notice to the Company delivered on or prior to the effective date of the
relevant Demand Registration Statement.

 

1.3         Piggyback Registration.

 

(a)         If at any time the Company proposes to file a Registration Statement
(a “Piggyback Registration Statement”), other than pursuant to a Shelf
Registration under Section 1.1 or any Demand Registration under Section 1.2, for
an offering of Common Stock for cash (whether in connection with a public
offering of Common Stock by the Company, a public offering of Common Stock by
stockholders other than Holders, or both, but excluding an offering relating
solely to an employee benefit plan, an offering relating to a transaction on
Form S-4 or an offering on any Registration Statement form that does not permit
secondary sales), including an Initial Public Offering, the Company shall give
written notice (the “Piggyback Notice”) to all Holders that, to its knowledge,
hold Registrable Securities (collectively, the “Piggyback Eligible Holders”) of
the Company’s intention to file a Piggyback Registration Statement reasonably in
advance of (and in any event at least ten Business Days before) the anticipated
filing date of such Piggyback Registration Statement. The Piggyback Notice shall
offer the Piggyback Eligible Holders the opportunity to include for registration
in such Piggyback Registration Statement the number of Registrable Securities as
they may request, subject to Section 1.3(b) (a “Piggyback Registration”).
Subject to Section 1.3(b), the Company shall use reasonable best efforts to
include in each such Piggyback Registration such Registrable Securities for
which the Company has received written requests (each, a “Piggyback Request”)
from Piggyback Eligible Holders within five Business Days after giving the
Piggyback Notice. If a Piggyback Eligible Holder decides not to include all of
its Registrable Securities in any Piggyback Registration Statement thereafter
filed by the Company, such Piggyback Eligible Holder shall nevertheless continue
to have the right to include any Registrable Securities in any subsequent
Piggyback Registration Statements or registration statements as may be filed by
the Company with respect to offerings of Common Stock, all upon the terms and
conditions set forth herein. The Company shall use reasonable best efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register pursuant to the Piggyback
Requests, to the extent required to permit the disposition of the Registrable
Securities so requested to be registered.

 

(b)         If the Piggyback Registration under which the Company gives notice
pursuant to Section 1.3(a) is an underwritten offering, and the managing
underwriter or managing underwriters of such offering advise the Company and the
Piggyback Eligible Holders that, in their reasonable view, or, if such managing
underwriters are unwilling to so advise the Company and the Piggyback Eligible
Holders, if the Company concludes after consultation with such managing
underwriters and the Holders of Registrable Securities proposed to be included
in such registration that in the Company’s reasonable view, the amount of
securities requested to be included in such registration (including Registrable
Securities requested by the Piggyback Eligible Holders to be included in such
offering and any securities that the Company or any other Person proposes to be
included that are not

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Registrable Securities) exceeds the number of shares of Common Stock which can
be sold in an orderly manner in such offering within a price range acceptable to
the Company, then the Company shall so advise all Piggyback Eligible Holders
with Registrable Securities proposed to be included in such Piggyback
Registration, and shall include in such offering the number which can be so sold
in the following order of priority: (i) in the case of a Company initiated
registration, (A) first, the securities that the Company proposes to sell, (B)
second, the Registrable Securities requested to be included in such Piggyback
Registration pro rata among the Piggyback Eligible Holders on the basis of the
number of Registrable Securities requested to be included therein by each
Piggyback Eligible Holder and (C), third, Other Registrable Securities requested
to be included in such Piggyback Registration, pro rata among the holders
thereof on the basis of the number of securities requested to be included
therein by each such holder and (ii) in the case of a non-Company initiated
registration, (A) first, the securities requested to be included in such
offering by the holders of the Company’s securities initiating such registration
and the Piggyback Eligible Holders, pro rata among such holders on the basis of
the number of securities requested to be included therein by each such holder,
and (B) second, Other Registrable Securities requested to be included in such
offering to the extent permitted hereunder pro rata among the respective holders
of such Other Registrable Securities on the basis of the number of securities
requested to be included therein by each such holder. Promptly (and in any event
within one Business Day) following receipt of notification by the Company from
the managing underwriter of a range of prices at which such Registrable
Securities are likely to be sold, the Company shall so advise each Piggyback
Eligible Holder requesting registration in such offering of such price. If any
Piggyback Eligible Holder disapproves of the terms of any such underwriting
(including the price offered by the underwriter(s) in such offering), such
Piggyback Eligible Holder may elect to withdraw any or all of its Registrable
Securities therefrom, without prejudice to the rights of any such Holder or
Holders to include Registrable Securities in any future Piggyback Registration
or other registration statement, by written notice to the Company and the
managing underwriters delivered on or prior to the effective date of such
Piggyback Registration Statement. Any Registrable Securities withdrawn from such
underwriting shall be excluded and withdrawn from the registration. For any
Piggyback Eligible Holder that is a partnership, limited liability company,
corporation or other entity, the partners, members, stockholders, subsidiaries,
parents and Affiliates of such Piggyback Eligible Holder, or the estates and
Family Members of any such partners/members and retired partners/members and any
trusts for the benefit of any of the foregoing Persons, shall be deemed to be a
single “Piggyback Eligible Holder,” and any pro rata reduction with respect to
such “Piggyback Eligible Holder” shall be based upon the aggregate amount of
securities carrying registration rights owned by all entities and individuals
included in such “Piggyback Eligible Holder,” as defined in this sentence.

 

(c)         The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 1.3 prior to the effective date
of such Registration Statement, whether or not any Piggyback Eligible Holder has
elected to include Registrable Securities in such Registration Statement,
without prejudice, however, to the right of the Holders immediately to request
that such registration be effected as a registration under Section 1.2 to the
extent permitted thereunder and subject to the terms set forth therein.

 

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(d)         If a Piggyback Registration pursuant to this Section 1.3 involves an
underwritten offering, the Company shall have the right, in consultation with
the Holders of a majority of the Registrable Securities included in such
underwritten offering, to (i) determine the plan of distribution, including the
price at which the Registrable Securities are to be sold and the underwriting
commissions, discounts and fees and (ii) select the investment banker or bankers
and managers to administer the offering, including the lead managing
underwriter.

 

(e)         No registration effected under this Section 1.3 shall relieve the
Company of its obligations to effect any registration of the sale of Registrable
Securities upon request under Section 1.1 or Section 1.2 hereof and no
registration effected pursuant to this Section shall be deemed to have been
effected pursuant to Section 1.2 or Section 1.2.  

 

1.4         Notice Requirements. Any Demand Notice, Demand Eligible Holder
Request, Piggyback Request or Shelf Takedown Notice shall (a) specify the number
or class of Registrable Securities and, if applicable, other shares of Common
Stock, intended to be offered and sold by the Holder making the request, (b)
express such Holder’s bona fide intent to offer such Registrable Securities for
distribution, (c) describe the nature or method of the proposed offer and sale
of Registrable Securities (to the extent applicable), and (d) contain the
undertaking of such Holder to provide all such information and materials and
take all action as may reasonably be required in order to permit the Company to
comply with all applicable requirements in connection with the registration of
such Registrable Securities.

 

1.5         Suspension Right. Notwithstanding any other provision of this
Article 1, the Company shall have the right but not the obligation to defer the
filing of, or suspend the use by the Holders of, any Demand Registration or
Shelf Registration for a period of up to sixty days if (a) the Board determines,
in its good faith judgment, that the disclosure that would otherwise be required
to file or update such Registration Statement would cause the disclosure of
material non-public information in a manner that would materially and adversely
interfere with any pending material financing or material acquisition, merger,
recapitalization, consolidation or reorganization or similar transaction
involving the Company; (b) if the Company is subject to any of its customary
suspension or blackout periods, for all or part of such period; (c) upon
issuance by the SEC of a stop order suspending the effectiveness of any
registration statement with respect to Registrable Securities or the initiation
of proceedings with respect to such registration statement under Section 8(d) or
8(e) of the Securities Act; (d) if the Company believes that any such
registration or offering (i) should not be undertaken because it would
reasonably be expected to materially interfere with any material corporate
development or plan or (ii) would require the Company, under applicable
securities laws and other laws, to make disclosure of material nonpublic
information that would not otherwise be required to be disclosed at that time
and the Company believes in good faith that such disclosures at that time would
not be in the Company’s best interests; provided that this exception (ii) shall
continue to apply only during the time that such material nonpublic information
has not been disclosed and remains material; (e) if the Company elects at such
time to offer Common Stock or other equity securities of the Company to (i) fund
a merger, third-party tender

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offer or other business combination, acquisition of assets or similar
transaction or (ii) meet rating agency and other capital funding requirements;
(f) if the Company is pursuing a primary underwritten offering of Common Stock
pursuant to a registration statement; provided that the Investor shall have
Piggyback Registration rights with respect to such primary underwritten offering
in accordance with and subject to the restrictions in Section 1.3; or (g) if any
other material development would materially and adversely interfere with any
such Demand Registration or Shelf Registration (any such period, a “Suspension
Period”); provided, however, that in such event, the Initiating Holders will be
entitled to withdraw any request for a Demand Registration and, if such request
is withdrawn, such Demand Registration will not count as a Demand Registration. 

 

1.6         Selling Stockholder Information. The Company may require each Holder
of Registrable Securities as to which any Registration Statement is being filed
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 (provided that such information shall be
used only in connection with such registration) and the Company may exclude from
such registration or sale the Registrable Securities of any such Holder who
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. The Company, in connection with
any action taken under this Agreement, may, in good faith, reasonably request in
writing from any Holder the number of Registrable Securities held by such
Holder, and any Holder receiving such a written request shall provide the duly
requested information to the Company as promptly as is reasonably practicable.

 

1.7         No Conflicting Agreements. The Company has not entered into and,
unless agreed in writing by Holders of at least 50.1% of the Registrable
Securities will not enter into, any agreement that (i) is inconsistent with the
rights granted to the Holders with respect to Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof in any material
respect or (ii) other than as set forth in this Agreement, would allow any
holder of Common Stock to include Common Stock in any Registration Statement
filed by the Company on a basis that is more favorable in any material respect
to the rights granted to the Holders hereunder. 

 

1.8         Duration of Registration Rights. All registration rights granted
under this Article 1 shall continue to be applicable with respect to any
Holder until such Holder no longer holds any Registrable
Securities. Notwithstanding anything to the contrary contained herein, (a) no
Holder shall be entitled to any piggyback right or to participate as a Demand
Eligible Holder under this Article 1 in the event of a Block Sale
(including Block Sales off of a Shelf or an Automatic Shelf Registration
Statement, or in connection with the registration of Registrable Securities
under an Automatic Shelf Registration Statement for purposes of effectuating a
Block Sale; provided, that, any registration with respect to a Block Sale shall
not constitute a Demand Registration for purposes of determining the number of
Demand Registrations effected by the Company under Section 1.2) except as set
forth in the following clause (b),  (b) no Holder, other than an Affiliated
Holder, shall be permitted

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to request or participate in an underwritten offering (including an Underwritten
Shelf Takedown) that is a Block Sale and (c) an Affiliated Holder effecting an
underwritten offering (including an Underwritten Shelf Takedown) that is a Block
Sale shall provide prompt notice (but in no event later than twenty-four
hours prior to such Block Sale) to the Company and any other Affiliated Holder
setting forth the proposed timeline for such offering to permit participation by
such other Affiliated Holder in such offering, and such other Affiliated Holder
shall be entitled to participate in such offering so long as such participation
of such other Affiliated Holder does not materially delay the proposed timeline
of such Block Sale specified in the notice.

 

2.           REGISTRATION PROCEDURES.  The procedures to be followed by the
Company and each participating Holder to register the sale of Registrable
Securities pursuant to a Registration Statement in accordance with this
Agreement, and the respective rights and obligations of the Company and such
Holders with respect to the preparation, filing and effectiveness of such
Registration Statement, are as follows:

 

2.1         Registration Statement. The Company will (a) prepare and file a
Registration Statement or a prospectus supplement, as applicable, with the SEC
(within the time period specified in Section 1.1 or Section 1.2), as applicable,
in the case of a Shelf Registration, an Underwritten Shelf Takedown or a Demand
Registration) which Registration Statement (i) shall be on a form selected by
the Company for which the Company qualifies, (ii) shall be available for the
sale or exchange of the Registrable Securities in accordance with the intended
method or methods of distribution, in the case of a Demand Registration
Statement, a Shelf or an Underwritten Shelf Takedown, and (iii) shall comply as
to form in all material respects with the requirements of the applicable form
and include and/or incorporate by reference all financial statements required by
the SEC to be filed therewith, (b) use its reasonable best efforts to cause such
Registration Statement to become effective and remain effective for the periods
provided under Section 1.1 or Section 1.2, as applicable, in the case of a Shelf
Registration Statement or a Demand Registration Statement, (c) use its
reasonable best efforts to prevent the occurrence of any event that would cause
a Registration Statement to contain a material misstatement or omission or to be
not effective and usable for resale of the Registrable Securities registered
pursuant thereto (during the period that such Registration Statement is required
to be effective as provided under Section 1.1 or Section 1.2), and (d) cause
each Registration Statement and the related Prospectus and any amendment or
supplement thereto, as of the effective date of such Registration Statement,
amendment or supplement (i) to comply in all material respects with any
requirements of the Securities Act and the rules and regulations of the SEC and
(ii) not to contain any 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. The Company will:  (A) at least five Business Days prior
to the anticipated filing of a Registration Statement or any related Prospectus
or any amendment or supplement thereto furnish to such Holders and the managing
underwriter or underwriters of an underwritten offering of Registrable
Securities, if applicable, copies of all such documents proposed to be filed,
(B) use its reasonable best efforts to address in each such document prior to
being so filed with the SEC such comments as such Holder or underwriter
reasonably shall propose within three Business Days of receipt of such copies by
the Holders and (C) not file any Registration Statement or any related
Prospectus or

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any amendment or supplement thereto to which a participating Holder reasonably
objects.

 

2.2         Amendments.  The Company will use its reasonable best efforts to as
promptly as reasonably practicable (a) prepare and file with the SEC such
amendments, including post-effective amendments, and supplements to each
Registration Statement and the Prospectus used in connection therewith as (i)
may be reasonably requested by any Holder of Registrable Securities covered by
such Registration Statement necessary to permit such Holder to sell in
accordance with its intended method of distribution or (ii) may be necessary
under applicable law to keep such Registration Statement continuously effective
with respect to the disposition of all Registrable Securities covered thereby
for the periods provided under Section 1.1 or Section 1.2, as applicable, in
accordance with the intended method of distribution and, subject to the
limitations contained in this Agreement, prepare and file with the SEC such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities held by the Holders, (ii) cause
the related Prospectus to be amended or supplemented by any required prospectus
supplement, and as so supplemented or amended, to be filed pursuant to Rule 424,
(c) respond to any comments received from the SEC with respect to each
Registration Statement or Prospectus or any amendment thereto, and (d) as
promptly as reasonably practicable, provide such Holders true and complete
copies of all correspondence from and to the SEC relating to such Registration
Statement or Prospectus other than any comments that the Company determines in
good faith would result in the disclosure to such Holders of material and
non-public information concerning the Company that is not already in the
possession of such Holder.

 

2.3         Compliance With Law. The Company will comply in all material
respects with the provisions of the Securities Act and the Exchange Act
(including Regulation M under the Exchange Act) with respect to each
Registration Statement and the disposition of all Registrable Securities covered
by each Registration Statement.

 

2.4         Required Communication. The Company will notify such Holders that,
to its knowledge, hold Registrable Securities and the managing underwriter or
underwriters of an underwritten offering of Registrable Securities, if
applicable, as promptly as reasonably practicable: (a)(i) when a Registration
Statement, any pre-effective amendment, any Prospectus or any prospectus
supplement or post-effective amendment to a Registration Statement or any free
writing prospectus is proposed to be filed; (ii) when the SEC notifies the
Company whether there will be a “review” of such Registration Statement and
whenever the SEC comments on such Registration Statement (in which case the
Company shall provide true and complete copies thereof and all written responses
thereto to each Holder and underwriter, if applicable, other than information
which the Company determines in good faith would constitute material and
non-public information that is not already in the possession of such Holder);
and (iii) with respect to each Registration Statement or any post-effective
amendment thereto, when the same has been declared effective; (b) of any request
by the SEC or any other federal or state governmental or regulatory authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information (whether before or after the effective date of the
Registration Statement) or any other correspondence with the SEC or any such
authority relating to, or which may affect, the Registration Statement; (c) of

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the issuance by the SEC or any other governmental or regulatory authority of any
stop order, injunction or other order or requirement suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (d) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; (e) if, at any time, the representations and
warranties of the Company in any applicable underwriting agreement or similar
agreement cease to be true and correct in all material respects; or (f) of the
occurrence of any event that makes any statement made in such Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or if, as a
result of such event or the passage of time, such Registration Statement,
Prospectus or other documents requires revisions so that, in the case of such
Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
(in the case of the Prospectus, in light of the circumstances under which they
were made) not misleading, or when any Issuer Free Writing Prospectus includes
information that may conflict with the information contained in the Registration
Statement or Prospectus, 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, which shall correct such
misstatement or omission or effect such compliance.

 

2.5         Government Consents. The Company will use its reasonable best
efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (a)
any stop order or other order suspending the effectiveness of a Registration
Statement or the use of any Prospectus, or (b) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment, or
if any such order or suspension is made effective during any Suspension Period,
at the earliest practicable moment after the Suspension Period is over.

 

2.6         Documents. During the Effectiveness Period or the Shelf Period, as
applicable, the Company will furnish to each Holder and the managing underwriter
or underwriters of an underwritten offering of Registrable Securities, if
applicable, upon their request, without charge, at least one conformed copy of
each Registration Statement and each amendment thereto and all exhibits to the
extent requested by such Holder or underwriter (including those incorporated by
reference) promptly after the filing of such documents with the SEC.

 

2.7         Documents to Underwriters. The Company will promptly deliver to each
Holder and the managing underwriter or underwriters of an underwritten offering
of Registrable Securities, if applicable, without charge, as many copies of each
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Holder or underwriter may reasonably
request in order to facilitate the disposition of the Registrable Securities by
such Holder or underwriter. The Company consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Holders and any
applicable underwriter in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any

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amendment or supplement thereto.

 

2.8         Blue Sky. The Company will use its reasonable best efforts to (a)
register or qualify the Registrable Securities covered by a Registration
Statement, no later than the time such Registration Statement is declared
effective by the SEC, under all applicable securities laws (including the “blue
sky” laws) of such jurisdictions each underwriter, if any, or any Holder shall
reasonably request; (b) keep each such registration or qualification effective
during the period such Registration Statement is required to be kept effective
under the terms of this Agreement and (c) do any and all other acts and things
which may be reasonably necessary or advisable to enable such underwriter, if
any, and each Holder to consummate the disposition in each such jurisdictions of
the Registrable Securities covered by such Registration Statement; provided,
however, that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process (other than service
of process in connection with such registration or qualification or any sale of
Registrable Securities in connection therewith) in any such jurisdiction.

 

2.9         Certificates. If the use of uncertificated shares of Common Stock is
not permitted by applicable law or listing rule, the Company will cooperate with
each Holder and the underwriter or managing underwriter of an underwritten
offering of Registrable Securities, if applicable, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free of all restrictive legends indicating that the
Registrable Securities are unregistered or unqualified for resale under the
Securities Act, Exchange Act or other applicable securities laws, and to enable
such Registrable Securities to be in such denominations and registered in such
names as each Holder or the underwriter or managing underwriter of an
underwritten offering of Registrable Securities, if any, may request in writing.
In connection therewith, if required by the Company’s transfer agent, the
Company will promptly, after the effective date of the Registration Statement,
cause an opinion of counsel as to the effectiveness of the Registration
Statement to be delivered to and maintained with such transfer agent, together
with any other authorizations, certificates and directions required by the
transfer agent which authorize and direct the transfer agent to issue such
Registrable Securities without book-entry restriction or any such legend upon
sale by the Holder or the underwriter or managing underwriter of an underwritten
offering of Registrable Securities, if any, of such Registrable Securities under
the Registration Statement.

 

2.10       Subsequent Events. Upon the occurrence of any event contemplated by
clause (d) of Section 2.4, as promptly as reasonably practicable, the Company
will prepare a supplement or amendment, including a post-effective amendment, if
required by applicable law, to the affected Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference or to the applicable Issuer Free Writing
Prospectus, and file any other required document so that, as thereafter
delivered, no Registration Statement nor any Prospectus will 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 (in the case of a
Prospectus, in light of the circumstances under which they were made) not
misleading and no

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Issuer Free Writing Prospectus will include information that conflicts with
information contained in the Registration Statement or Prospectus and such that
each selling Holder can resume disposition of such Registrable Securities
covered by such Registration Statement or Prospectus.

 

2.11       Distribution. Such Holders may distribute the Registrable Securities
by means of an underwritten offering;  provided that (a) such Holders provide to
the Company a Shelf Takedown Notice or Demand Notice of their intention to
distribute Registrable Securities by means of an underwritten offering, (b) the
right of any Holder to include such Holder’s Registrable Securities in such
registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein, (c) each Holder participating in
such underwritten offering agrees to enter into an underwriting agreement in
customary form and sell such Holder’s Registrable Securities on the basis
provided in any underwriting arrangements approved by the Holders entitled to
select the managing underwriter or managing underwriters hereunder (provided
that 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, agreements and indemnities regarding such Holder,
such Holder’s title to the Registrable Securities, such Holder’s intended method
of distribution, the accuracy of information concerning such Holder as provided
by or on behalf of such Holder, and any other representations required to be
made by the Holder under applicable law, and the aggregate amount of the
liability of such Holder in connection with such offering shall not exceed such
Holder’s net proceeds from the disposition of such Holder’s Registrable
Securities in such offering) and (d) each Holder participating in such
underwritten offering completes and executes all questionnaires, powers of
attorney, custody agreements and other documents reasonably required under the
terms of such underwriting arrangements. The Company agrees with each Holder
that, in connection with any underwritten offering in accordance with the terms
hereof, it will negotiate in good faith and execute all indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements, and will procure auditor “comfort” letters
addressed to the underwriters in the offering 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 underwriters reasonably
request, dated the date of execution of the underwriting agreement and brought
down to the closing under the underwriting agreement.

 

2.12       Opinion of Counsel. The Company will obtain for delivery to the
underwriter or underwriters of an underwritten offering of Registrable
Securities, an opinion or opinions from counsel for the Company (including any
local counsel reasonably requested by the underwriters) dated the most recent
effective date of the Registration Statement or, in the event of an underwritten
offering, the date of the closing under the underwriting agreement, in customary
form, scope and substance, covering the matters customarily covered in opinions
requested in sales of securities or underwritten offerings, which opinions shall
be reasonably satisfactory to such underwriters and

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its counsel.

 

2.13       Due Diligence. For a reasonable period prior to the filing of any
Registration Statement and throughout the Effectiveness Period or the Shelf
Period, as applicable, the Company will make available upon reasonable notice at
the Company’s principal place of business or such other reasonable place for
inspection by a representative appointed by a majority of the Holders covered by
the applicable Registration Statement, by any managing underwriter or managing
underwriters selected in accordance with this Agreement and by any attorney,
accountant or other agent retained by such Holders or underwriter, such
financial and other information and books and records of the Company, and cause
the officers, employees, counsel and independent certified public accountants of
the Company to respond to such inquiries, as shall be reasonably necessary (and
in the case of counsel, not violate an attorney-client privilege in such
counsel’s reasonable belief) to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act.

 

2.14       Share Transfer. The Company will (a) provide and cause to be
maintained a transfer agent and registrar for all Registrable Securities covered
by the applicable Registration Statement from and after a date not later than
the effective date of such Registration Statement and provide and enter into any
reasonable agreements with a custodian for the Registrable Securities and (b)
not later than the effective date of the applicable Registration Statement,
provide a CUSIP number for all Registrable Securities.

 

2.15       FINRA. The Company will cooperate with each Holder of Registrable
Securities and each underwriter or agent participating in the disposition of
Registrable Securities and their respective counsel in connection with any
filings required to be made with FINRA and in performance of any due diligence
investigations by any underwriter.

 

2.16       Post-Offering. The Company will use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC, any securities
exchange on which the Company’s securities are listed, FINRA and any state
securities authority, and make available to each Holder, as soon as reasonably
practicable after the effective date of the Registration Statement, an earnings
statement covering at least twelve months which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158.

 

2.17       Free Writing Prospectus. The Company will use its reasonable best
efforts to ensure that any Issuer Free Writing Prospectus utilized in connection
with any Prospectus complies in all material respects with the Securities Act,
is filed in accordance with the Securities Act to the extent required thereby,
is retained in accordance with the Securities Act to the extent required thereby
and, when taken together with the related Prospectus, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.

 

2.18       Road Show. In connection with any registration of Registrable
Securities pursuant to this

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Agreement, the Company will use its reasonable best efforts to expedite or
facilitate the disposition of Registrable Securities by such Holders, including
using reasonable best efforts to cause appropriate officers and employees to be
available, on a customary basis and upon reasonable advance notice, to meet with
prospective investors in presentations, meetings and road shows but not in
connection with more than two offerings in any twelve months.

 

2.19       Listing.  The Company will use its reasonable best efforts to
maintain listing of the Common Stock on the Trading Market until each Holder has
sold all of its Registrable Securities.

 

3.           REGISTRATION EXPENSES.  The Company shall bear all reasonable
Registration Expenses in connection with any Demand Registration, Shelf
Registration, Shelf Takedown Notice or Piggyback Registration (excluding any
Selling Expenses), whether or not any Registrable Securities are sold pursuant
to a Registration Statement. “Registration Expenses” shall include:    (a) all
registration, qualification and filing fees and expenses (including fees and
expenses (i) of the SEC or FINRA, (ii) incurred in connection with the listing
of the Registrable Securities on the Trading Market, and (iii) in compliance
with applicable state securities or “Blue Sky” laws (including reasonable
documented fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities)); (b) printing
expenses (including expenses of printing certificates for the Company’s shares
and of printing prospectuses); (c) road show expenses of the Company and the
underwriters, if any; (d) messenger, telephone and delivery expenses; (e)
reasonable documented fees and disbursements of counsel (including any local
counsel), auditors and accountants for the Company (including the expenses
incurred in connection with “comfort letters” required by or incident to such
performance and compliance); (f) the reasonable documented fees and
disbursements of underwriters to the extent customarily paid by issuers or
sellers of securities (including, if applicable, the fees and expenses of any
“qualified independent underwriter” (and its counsel) that is required to be
retained in accordance with the rules and regulations of FINRA; (h) fees and
expenses of any special experts retained by the Company; (g) Securities Act
liability insurance, if the Company so desires such insurance and (i) reasonable
documented fees and disbursements of one counsel (along with any reasonably
necessary local counsel) representing all Holders mutually agreed by Holders of
a majority of the Registrable Securities participating in the related
registration. In addition, the Company shall be responsible for all of its
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including expenses payable to third parties and
including all salaries and expenses of the Company’s officers and employees
performing legal or accounting duties), the expense of any annual audit, the
expense of any liability insurance it determines to obtain and any underwriting
fees, discounts, selling commissions and stock transfer taxes and related legal
and other fees applicable to securities sold by the Company and in respect of
which proceeds are received by the Company. Each Holder shall pay any Selling
Expenses applicable to the sale or disposition of such Holder’s Registrable
Securities pursuant to any Demand Registration Statement or Piggyback
Registration Statement, or pursuant to any Shelf under which such selling
Holder’s Registrable Shares were sold, in proportion to the amount of such
selling Holder’s shares of Registrable Securities sold in any offering under
such Demand Registration Statement, Piggyback Registration Statement or Shelf.
Notwithstanding anything to the contrary contained herein, the

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Company shall have no obligation to pay any underwriting discounts or selling
commissions attributable to the Registrable Securities being sold by the
Holders, which underwriting discounts or selling commissions shall be borne by
the selling Holders, pro rata in proportion to the respective amount of
Registrable Securities each is selling in such offering.

 

4.           INDEMNIFICATION.

 

4.1         Company Obligations. If requested by a participating Holder, the
Company shall indemnify and hold harmless each underwriter, if any, engaged in
connection with any registration referred to in Article 1 and provide
representations, covenants, opinions and other assurances to such underwriter in
form and substance reasonably satisfactory to such underwriter and the Company.
Further, the Company shall indemnify and hold harmless each Holder, its
Affiliates and each of their respective officers and directors and any Person
who controls any such Holder (within the meaning of the Securities Act) and any
agent thereof (collectively, “Indemnified Persons”), to the fullest extent
permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, joint or several, costs (including reasonable costs of
preparation and reasonable attorneys’ fees) and expenses, judgments, fines,
penalties, interest, settlements or other amounts, in each case to the extent,
but only to the extent, arising from any and all claims, demands, actions, suits
or proceedings, whether civil, criminal, administrative or investigative, in
which any Indemnified Person may be involved, or is threatened to be involved,
as a party or otherwise, under the Securities Act or otherwise (collectively,
“Losses”), as incurred, arising out of, based upon, resulting from or relating
to (a) any untrue or alleged untrue statement of a material fact contained in
any Registration Statement under which any Registrable Securities were
registered, Prospectus (including in any preliminary prospectus (if used prior
to the effective date of such Registration Statement)), or in any summary or
final prospectus or free writing prospectus or in any amendment or supplement
thereto or in any documents incorporated by reference in any of the foregoing,
(b) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements made therein (in the
case of a Prospectus or preliminary Prospectus, in light of the circumstances
under which they were made), not misleading or (c) any violation or alleged
violation by the Company or any of its subsidiaries of any federal, state or
common law rule or regulation relating to action or inaction in connection with
any such registration, disclosure document or related document or report, and
the Company will reimburse such Indemnified Person for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided, however, that
the Company shall not be liable to any Indemnified Person to the extent that any
such Losses arise out of, are based upon or results from an untrue or alleged
untrue statement or omission or alleged omission made in such Registration
Statement, such preliminary, summary or final prospectus or free writing
prospectus or such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Indemnified Person specifically for use in the preparation thereof.

 

4.2         Holders’ Obligations. In connection with any Registration Statement
filed by the Company pursuant to Section 2 hereof in which a Holder has
registered for sale its Registrable Securities, each

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such 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
(a) 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 (b) 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 any
information furnished in writing by or on behalf of such selling Holder to the
Company specifically for inclusion in such Registration Statement or Prospectus.
In no event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net proceeds received by such Holder under
the sale of Registrable Securities giving rise to such indemnification
obligation less any amounts paid by such Holder pursuant to Section 4.4 and any
amounts paid by such Holder as a result of liabilities incurred under the
underwriting agreement, if any, related to such sale.

 

4.3         Indemnification Procedures. Any indemnified person shall (a) 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 not relieve the indemnifying party of its
obligations hereunder except to the extent, if at all, that it is actually and
materially prejudiced by reason of such delay or failure) and (b) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however, that any indemnified
person 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 indemnified 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 indemnified
person and employ counsel reasonably satisfactory to such indemnified 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
persons that are different from or in addition to those available to the
indemnifying party, or (iv) in the reasonable judgment of any such indemnified
person (based upon advice of its counsel) a conflict of interest may exist
between such indemnified person and the indemnifying party with respect to such
claims (in which case, if the indemnified person notifies the indemnifying party
in writing that such indemnified 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 indemnified person).
If the indemnifying party assumes the defense, the indemnifying party shall not
have the right to settle such action without the consent of the indemnified
person. 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
delayed, withheld or conditioned. It is understood that the indemnifying party
or parties shall not, except as specifically set forth in this

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Section 4.3, 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.

 

4.4         Contribution. If for any reason the indemnification provided for in
Section 4.1 and Section 4.2 is unavailable to an indemnified person (other than
as a result of exceptions contained in Section 4.1 and Section 4.2) or
insufficient in respect of any Losses referred to therein, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified person
as a result of such Losses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
person or Persons 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 person 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 person 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 5(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 4.4. 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 person as a
result of the Losses referred to in Section 4.1 and Section 4.2 shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4.4, 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 net proceeds received by such
Holder from the sale of Registrable Securities giving rise to such contribution
obligation less any amounts paid by such Holder pursuant to Section 4.2 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 Article 4, the indemnifying parties shall indemnify each
indemnified person to the full extent provided in Section 4.1 and Section 4.2
without regard to the provisions of this Section 4.4. The remedies provided for
in this Article 4 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.

 

5.           FACILITATION OF RULE 144 SALES. The Company shall (a) to the extent
it shall be required to do so under the Exchange Act, use its reasonable best
efforts to timely file the reports required to be filed by it under the Exchange
Act or the Securities Act and the rules adopted by the SEC thereunder (including
the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144), and (b) take such further action as any Holder
may reasonably request and make available information necessary to comply with
Rule 144 and Rule 144A, all to the extent

20

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required from time to time to enable the Holders to sell Registrable Securities
without registration under the Securities Act within the limitations of the
exemption provided by Rule 144 and 144A. Upon the written request of any Holder
in connection with that Holder’s sale pursuant to Rule 144 or Rule 144A, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements.

 

6.           COMPANY UNDERTAKINGS. In furtherance of the registration provisions
set forth herein intended to facilitate the sale of shares of Common Stock by
the Holders, the Company shall furnish to each Holder (a) within ninety days of
the end of each fiscal year (or such longer period as may be permitted by Rule
12b-25 of the Exchange Act), annual audited financial statements for such fiscal
year and (b) within forty five days of the end of each of the first three fiscal
quarters of every fiscal year (or such longer period as may be permitted by Rule
12b-25 of the Exchange Act), unaudited financial statements for the interim
period as of, and for the period ending on, the end of such fiscal quarter, in
each case to be prepared on a basis substantially consistent with then
applicable SEC requirements. Notwithstanding the foregoing, the Company will be
deemed to have furnished such reports referred to above to the Holders if the
Company has filed such reports with the SEC via the EDGAR filing system and such
reports are publicly available

 

7.            MISCELLANEOUS

 

7.1         Discontinued Disposition. Each Holder agrees by its acquisition of
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in clauses (ii) through (iv) and
(vi) of Section 2.4 or the occurrence of a Suspension Period, such Holder will
forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the copies of the
supplemental Prospectus or amended Registration Statement or until it is advised
in writing by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this Section 7.1. If 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 or is advised in writing by the Company
that the use of the Prospectus may be resumed.

 

7.2         Market Stand-Off Agreement.

 

(a)         In connection with an underwritten offering of Common Stock, if
requested by the managing underwriter for such offering, each Holder of ten
percent or more (or such lower threshold requested by any underwriter, placement
agent, dealer manager or other counterparty) of the Common Stock then
outstanding (the “Lock-Up Party”), hereby agrees to enter into a lock-up
agreement (a “Stand-Off Agreement”) containing customary restrictions on
transfers of equity

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securities of the Company held by such Holder (other than those included in such
offering) for a period specified by the managing underwriter beginning ten days
prior to the execution of the related underwriting agreement and not to exceed
one hundred eighty days following the closing date of the offering of equity
securities of the Company (the “Stand-Off Period”) including such additional
days as may then be market custom to allow the publication of research; provided
that all executive officers and directors of the Company and holders holding
Company’s voting securities in an amount equal to or greater than the amount
held by the Lock-Up Parties shall enter into agreements containing substantially
similar or no more favorable terms and only if such Persons remain subject
thereto (and are not released from such agreement) for such Stand-Off Period.

 

(b)         Notwithstanding anything to the contrary in Section 7.2(a), in
connection with an underwritten offering (including an Underwritten Shelf
Takedown) that is a Block Sale, (i) no Holder shall be a Lock-Up Party other
than, if requested by the managing underwriter for such offering, an Affiliated
Holder that is (A) participating in such Block Sale or (B) a Holder of five
percent or more of the Common Stock then outstanding and (ii) the Stand-Off
Period shall not exceed sixty days in connection with any Block Sale.

 

(c)         Notwithstanding anything to the contrary set forth in Section
7.2(a), no Affiliated Holder shall be required to be a Lock-Up Party in
connection with an underwritten offering (including an Underwritten Shelf
Takedown) that is a Block Sale in which such Affiliated Holder does not
participate (a “Skipped Block Sale”) if, during the preceding twelve month
period, such Affiliated Holder has been a Lock-Up Party in connection with
Skipped Block Sales either (A) twice or (B) for at least an aggregate of ninety
days.

 

(d)         Any discretionary waiver or termination of the Stand-Off Period by
the Company or the managing underwriter shall apply to all persons subject to
the Stand-Off Agreement on a pro rata basis. Each Holder agrees to execute and
deliver such other agreements as may be reasonably requested by the Company or
the underwriter that are consistent with the foregoing or which are necessary to
give further effect thereto. The obligations described in this Section 7.2(d)
shall not apply to a registration relating solely to employee benefit plans on
Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or
a registration relating solely to a transaction on Form S-4 or similar forms
that may be promulgated in the future. The Company may impose stop-transfer
instructions with respect to Common Stock (or other securities) subject to the
foregoing restriction until the end of the Stand-Off Period. Notwithstanding
anything to the contrary set forth in this Agreement, nothing herein shall
prevent: (i) any Holder from participating in such offering, if otherwise
permitted pursuant to this Agreement; (ii) any Holder that is a partnership,
limited liability company or corporation from (A) making a distribution of
shares of Common Stock to the partners, members or stockholders thereof or (B)
transferring shares of Common Stock to an Affiliate of such Holder; (iii) any
Holder who is an individual from transferring shares of Common Stock to a Family
Member; or (iv) any Holder from transferring shares to a nominee or custodian of
an entity or individual to whom a transfer would be permitted under this
paragraph; provided that, in the case of clauses (ii) and (iii), such transfer
is otherwise in compliance with applicable

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securities laws and; provided, further, that, (x) in the case of clause (iii)
and subclause (B) of clause (ii), each such transferee agrees in writing to
become subject to the terms of this Agreement and agrees to be bound by the
applicable underwriter lock-up and (y) in the case of subclause (A) of clause
(ii), each such transferee who receives one percent or more of the Common Stock
in such distribution agrees in writing to become subject to the terms of this
Agreement and agrees to be bound by the applicable underwriter lock-up.

 

7.3         Confidentiality. All notices received by an Initiating Holder,
Demand Eligible Holder and a Piggyback Eligible Holder pursuant to this
Agreement regarding any proposed sale of Registered Securities shall be kept
confidential by such Holder for six months after receipt of such notice unless
required to be disclosed by any law, rule, regulation, order, decree or subpoena
of any governmental agency or authority or court or unless otherwise agreed to
by the Company. Each Holder shall maintain the confidentiality of any
confidential information received from or otherwise made available by the
Company to such Holder; provided that disclosure of such confidential
information may be made (a) to any Person who is an Affiliate, member, partner,
officer, director, investor or, potential investor or employee of such Holder or
counsel to or accountants of such Holder or such Affiliate, or any rating agency
engaged by such Holder, provided that such Persons are notified of the Holders’
confidentiality obligations hereunder and agree for the benefit of the Company
to be bound by such obligations and (b) to representatives of any bank regulator
or similar regulatory authority with regulatory jurisdiction over a Holder in
connection with their examination of the records of such Holder or any Affiliate
thereof. Information that (i) is or becomes available to a Holder from a public
source other than as a result of a disclosure by such Holder or any of its
Affiliates, (ii) is disclosed to a Holder by a third-party source who the Holder
reasonably believes is not bound by an obligation of confidentiality to the
Company, (iii) is or becomes required to be disclosed by a Holder by law,
including by court order, or to a prospective transferee, or (iv) is
independently developed by a Holder, shall not be deemed to be “confidential
information” for purposes of this Agreement. The Holder shall not grant access,
and the Company shall not be required to grant access, to information to any
person who does not agree for the benefit of the Company to maintain the
confidentiality (to the same extent a Holder is required to maintain
confidentiality) of any confidential information received from or otherwise made
available to it by the Company or the Holder under this Agreement.

 

7.4         Determination of Ownership. In determining ownership of Common Stock
hereunder for any purpose, the Company may rely solely on the records of the
transfer agent for the Common Stock from time to time, or, if no such transfer
agent exists, the Company’s stock ledger.

 

7.5         No Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, and notwithstanding the fact that certain of the
Holders may be partnerships or limited liability companies, each Holder
covenants, agrees and acknowledges that no recourse under this Agreement or any
documents or instruments delivered in connection with this Agreement shall be
had against any of the Company’s or the Holder’s former, current or future
direct or indirect equity holders, controlling persons, stockholders, directors,
officers, employees, agents, Affiliates, members, financing sources, managers,
general or limited partners or assignees (each, a “Related

23

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Party” and collectively, the “Related Parties”), in each case other than the
Company, the Holders or any of their respective assignees under this Agreement,
whether by the enforcement of any assessment or by any legal or equitable
proceeding, or by virtue of any applicable law, it being expressly agreed and
acknowledged that no personal liability whatsoever shall attach to, be imposed
on or otherwise be incurred by any of the Related Parties, as such, for any
obligation or liability of the Company or the Holders under this Agreement or
any documents or instruments delivered in connection herewith for any claim
based on, in respect of or by reason of such obligations or liabilities or their
creation; provided, however, nothing in this Section 7.5 shall relieve or
otherwise limit the liability of the Company or any Holder, as such, for any
breach or violation of its obligations under this Agreement or such agreements,
documents or instruments.

 

7.6         Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
(a) given by personal delivery or delivery by internationally recognized
overnight courier (e.g. Federal Express) and (b) deemed given and effective on
receipt. The address for such notices and communications shall be as follows (or
such other address as may be designated in writing hereafter, in the same
manner, by such Person):

 

If to the Company:

    

Great Elm Capital Group, Inc.

 

 

200 Clarendon Street, 51st Floor

 

 

Boston, MA 02116

 

 

Attention: General Counsel

 

 

 

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

 

Skadden, Arps, Slate, Meagher & Flom

 

 

525 University Avenue, 14th Floor

 

 

Palo Alto, CA 94301

 

 

Attention: Michael J. Mies

 

If to any other Person who is then the registered Holder, to the address of such
Holder as it appears in the applicable register for the Registrable Securities;

 

7.7         Survival. Each of the representations and warranties in this
Agreement (or any certificate delivered pursuant hereto) shall survive the
applicable sale of Registrable Securities indefinitely (or, in each case, until
final resolution of any claim or actions arising from the breach of any such
representation and warranty, if written notice of such breach was provided prior
to the end of such survival period).

 

7.8         Choice of Law.  This Agreement and the transactions contemplated
hereby will be governed by the laws of the State of Delaware that are applicable
to contracts made in and performed solely in Delaware.

 

7.9         Enforcement.

 

(a)         Any dispute arising under, related to or otherwise involving this
Agreement or the transactions

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contemplated hereby will be litigated in the Court of Chancery of the State of
Delaware.  The parties agree to submit to the jurisdiction of the Court of
Chancery of the State of Delaware and waive trial by jury.  The parties do not
consent to mediate any disputes before the Court of Chancery.

 

(b)         Notwithstanding the foregoing, if there is a determination that the
Court of Chancery of the State of Delaware does not have subject matter
jurisdiction over any dispute arising under this Agreement, the parties agree
that: (i) such dispute will be adjudicated only by, and will be subject to the
exclusive jurisdiction and venue of, the Superior Court of Delaware of and for
the County of New Castle; (ii) if the Superior Court of Delaware does not have
subject matter jurisdiction over such dispute, then such dispute will be
adjudicated only by, and will be subject to the exclusive jurisdiction and venue
of, the Complex Commercial Litigation Division of the Superior Court of the
State of Delaware of and for the County of Newcastle; and (iii) if the Complex
Commercial Litigation Division of the Superior Court of the State of Delaware
does not have subject matter jurisdiction over such dispute, then such dispute
will be adjudicated only by, and will be subject to the exclusive jurisdiction
and venue of, the United States District Court for the State of Delaware.

 

(c)         Each of the parties irrevocably (i) consents to submit itself to the
personal jurisdiction of the Delaware courts in connection with any dispute
arising under this Agreement, (ii) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for relief from the
Delaware courts or any other court or governmental body and (iii) agrees that it
will not bring any action arising under this Agreement in any court other than
the Delaware courts.  EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF THIS AGREEMENT,
THE NEGOTIATION OR ENFORCEMENT HEREOF OR THE TRANSACTIONS.

 

(d)         Process may be served in the manner specified in Section ‎‎‎8.7,
such service will deemed effective on the date of such notice, and each party
irrevocably waives any defenses or objections it may have to service in such
manner.

 

(e)         The court shall award attorneys’ fees and expenses and costs to the
substantially prevailing party in any action (including appeals) for the
enforcement or interpretation of this Agreement.  If there are cross claims in
such action (including appeals), the court will determine which party is the
substantially prevailing party as to the action as a whole and award fees,
expenses and costs to such party.

 

(f)         The transactions contemplated by this Agreement are unique.
Accordingly, each of the Company and each Investor acknowledges and agrees that,
in addition to all other remedies to which it may be entitled, each of the
parties hereto is entitled to seek a decree of specific performance; provided
that the party seeking specific performance is not in material default
hereunder. The Company and the Investors agree that, if for any reason a party
shall have failed to perform its obligations under this Agreement, then the
party seeking to enforce this Agreement against such nonperforming party shall
be entitled to specific performance and injunctive and other equitable relief,
and the

25

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parties further agree to waive any requirement for the securing or posting of
any bond in connection with the obtaining of any such injunctive or other
equitable relief. This provision is without prejudice to any other rights that
any party may have against another party for any failure to perform its
obligations under this Agreement, including the right to seek damages for a
breach of any provision of this Agreement, and all rights, powers and remedies
available (at law or in equity) to a party in respect hereof by the other party
shall be cumulative and not alternative or exclusive, and the exercise or
beginning of the exercise of any thereof by a party shall not preclude the
simultaneous or later exercise of any other rights, powers or remedies by such
party.

 

7.10       No Third Party Beneficiaries.  Except as provided in Article ‎4, this
Agreement is solely for the benefit of the parties.  Except as provided in
Article ‎4, no other Person will be entitled to rely on this Agreement or to
anticipate the benefits of this Agreement as a third party beneficiary hereof.

 

7.11       Assignment.  No party may assign, delegate or otherwise transfer this
Agreement or any rights or obligations under this Agreement in whole or in part
(whether by operation of law or otherwise), without the prior written content of
the other parties.  Subject to the foregoing, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and permitted assigns.  Any assignment in violation of
this Section ‎‎‎7.11 will be null and void. No such prior written consent shall
be required for an assignment to an Affiliate of such Holder. The Company may
not assign its respective rights or obligations hereunder without the prior
written consent of each Holder.

 

7.12       No Waiver.  No failure or delay in the exercise or assertion of any
right hereunder will impair such right or be construed to be a waiver of, or
acquiescence in, or create an estoppel with respect to any breach of any
representation, warranty or covenant herein, nor will any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right.  All rights and remedies under this Agreement are cumulative to,
and not exclusive of, any rights or remedies otherwise available.

 

7.13       Severability.  Any term or provision hereof that is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable in any situation in any jurisdiction will not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the invalid, void or unenforceable term or provision in any
other situation or in any other jurisdiction.  If the final judgment of a court
of competent jurisdiction or other authority declares any term or provision
hereof invalid, void or unenforceable, the court or other authority making such
determination will have the power to and will, subject to the discretion of such
body, reduce the scope, duration, area or applicability of the term or
provision, to delete specific words or phrases, or to replace any invalid, void
or unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.

 

7.14       Amendment.  Subject to applicable Law, the parties may (a) extend the
time for the performance

26

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of obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party herein, (c) waive
compliance by the other party with any of the agreements or conditions herein or
(d) amend, modify or supplement this Agreement.  Any agreement on the part of a
party to any such extension, waiver, amendment, modification or supplement will
be valid only if in an instrument in writing signed by an authorized
representative of such party. This Agreement may be amended with the consent of
the Company and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act
of Holders owning at least 66 2/3% of the Registrable Securities then held by
all Holders; provided that no such amendment, action or omission that adversely
affects, alters or changes the interests of any Holder in a manner
disproportionate to the other Holders shall be effective against such Holder
without the prior written consent of such Holder.

 

7.15       Entire Agreement.  This Agreement contains the entire agreement of
the parties and supersedes all prior and contemporaneous agreements,
negotiations, arrangements, representations and understandings, written, oral or
otherwise, between the parties with respect to the subject matter hereof.

 

7.16       Counterparts.  This Agreement may be executed in one or more
counterparts (whether delivered by electronic copy or otherwise), each of which
will be considered one and the same agreement and will become effective when
counterparts have been signed by each of the parties and delivered to the other
party.  Each party need not sign the same counterpart.

 

7.17       Construction and Interpretation.  When a reference is made in this
Agreement to a section or article, such reference will be to a section or
article of this Agreement, unless otherwise clearly indicated to the
contrary.  Whenever the words “include,” “includes” or “including” are used in
this Agreement they will be deemed to be followed by the words “without
limitation”.  The words “hereof,” “herein” and “herewith” and words of similar
import will, unless otherwise stated, be construed to refer to this Agreement as
a whole and not to any particular provision of this Agreement, and article and
section references are references to the articles and sections of this
Agreement, unless otherwise specified.  The plural of any defined term will have
a meaning correlative to such defined term and words denoting any gender will
include all genders and the neuter.  Where a word or phrase is defined herein,
each of its other grammatical forms will have a corresponding meaning.  A
reference to any legislation or to any provision of any legislation will include
any modification, amendment, re-enactment thereof, any legislative provision
substituted therefore and all rules, regulations and statutory instruments
issued or related to such legislation.  If any ambiguity or question of intent
or interpretation arises, this Agreement will be construed as if drafted jointly
by the parties, and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.  No prior draft of this Agreement will be used in the interpretation
or construction of this Agreement.  The parties intend that each provision of
this Agreement will be given full separate and independent effect.  Although the
same or similar subject matters may be addressed in different provisions of this
Agreement, the parties intend that, except as expressly provided herein, each
such provision will be

27

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read separately, be given independent significance and not be construed as
limiting any other provision of this Agreement (whether or not more general or
more specific in scope, substance or content).  Headings are used for
convenience only and will not in any way affect the construction or
interpretation of this Agreement.  References to documents includes electronic
communications.

 

7.18       Definitions. Unless the context otherwise requires, the following
terms shall have the following respective meanings.

 

(a)         “Affiliate” means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person as of the date on which, or at any time during the period for which,
the determination of affiliation is being made (including any investment fund
the primary investment advisor to which is such Person or an Affiliate thereof);
provided, that for purposes of this Agreement, no Holder shall be deemed an
Affiliate of the Company or any of its Subsidiaries. For purposes of this
definition, the term “control” (including the correlative meanings of the terms
“controlled by” and “under common control with”), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.

 

(b)         “beneficially owned”, “beneficial ownership” and similar phrases
have the same meanings as such terms have under Rule 13d-3 (or any successor
rule then in effect) under the Exchange Act, except that in calculating the
beneficial ownership of any Holder, such Holder shall be deemed to have
beneficial ownership of all securities that such Holder has the right to
acquire, whether such right is currently exercisable or is exercisable upon the
occurrence of a subsequent event. For the avoidance of doubt, each Holder shall
be deemed to beneficially own all of the shares of Common Stock held by any of
its Affiliates.

 

(c)        “Block Sale” means the sale of shares of Common Stock constituting
more than 1% of Common Stock then outstanding to one or more purchasers in a
registered transaction without a prior marketing process by means of (i) a
bought deal, (ii) a block trade or (iii) a direct sale.

 

(d)         “Business Day” means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in New
York, New York.

 

(e)         “Exchange Act” means the Securities Exchange Act of 1934

 

(f)         “Family Member” shall mean, with respect to any natural Person, such
Person’s parents, spouse (but not including a former spouse or a spouse from
whom such Person is legally separated) and descendants (whether or not adopted)
and any trust, family limited partnership or limited liability company that is
and remains solely for the benefit of such Person’s spouse (but not including a
former spouse or a spouse from whom such Person is legally separated) and/or
descendants.

 

(g)         “Issuer Free Writing Prospectus” means an issuer free writing
prospectus, as defined in Rule 433

28

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under the Securities Act, relating to an offer of the Registrable Securities.

 

(h)         “Other Registrable Securities” means Common Stock and any other
securities issued or issuable with respect to, on account of or in exchange for
Other Registrable Securities, whether by stock split, stock dividend,
recapitalization, merger, charter amendment or otherwise held by any other
Person who has rights to participate in any offering of securities by the
Company pursuant to a registration rights agreement or other similar arrangement
with the Company.

 

(i)         “Person” means any individual, partnership, corporation, company,
association, trust, joint venture, limited liability company, unincorporated
organization, entity or division, or any government, governmental department or
agency or political subdivision thereof.

 

(j)         “Proceeding” means any action, claim, suit, proceeding or
investigation (including a preliminary investigation or partial proceeding, such
as a deposition) pending or known to the Company to be threatened.

 

(k)         “Prospectus” means the prospectus included in a Registration
Statement (including a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective Registration Statement
in reliance upon Rule 430A promulgated under the Securities Act), all amendments
and supplements to the Prospectus, including post-effective amendments, all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus and any Issuer Free Writing Prospectus.

 

(l)         “Registrable Securities” means any Common Stock and any other
securities issued or issuable with respect to, on account of or in exchange for
Registrable Securities, whether by stock split, stock dividend,
recapitalization, merger, charter amendment or otherwise that are held by the
Holders or that are held by any Affiliate, transferee or assignee of any Holder
after giving effect to a transfer made in compliance with Section 8(f), all of
which Common Stock are subject to the rights provided herein until such rights
terminate pursuant to the provisions of this Agreement. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a registration statement registering such Registrable Securities under
the Securities Act has been declared effective and such Registrable Securities
have been sold, transferred or otherwise disposed of by the Holder thereof
pursuant to such effective registration statement, (ii) such Registrable
Securities are sold, transferred or otherwise disposed of pursuant to Rule 144,
(iii) such securities cease to be outstanding, or (iv) after the Common Stock
has been listed for trading on a national securities exchange for at least 90
days, such Registrable Securities as are held by any Holder who, together with
its Affiliates, at the time of determination, holds in the aggregate less than
1% of the then outstanding shares of Common Stock, provided that such shares may
be sold pursuant to Rule 144(b)(1) under the Securities Act without limitations
on volume.

 

(m)         “Rule 144” means Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.

 

29

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(n)         “Rule 158” means Rule 158 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.

 

(o)         “Rule 174” means Rule 174 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.

 

(p)         “Rule 405” means Rule 405 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.

 

(q)         “Rule 424” means Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.

 

(r)         “SEC” means the Securities and Exchange Commission or any other
federal agency then administering the Securities Act or Exchange Act.

 

(s)         “Selling Expenses” means all underwriting fees, discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities and related legal and other fees not included within the definition
of Registration Expenses.

 

(t)         “Ten Percent Holder” means a Holder, who together with its
Affiliates, beneficially owns 10% or more of the outstanding shares of Common
Stock as of the date of determination. Any rights provided to a Ten Percent
Holder under this Agreement shall apply and be available to a Ten Percent Holder
only for so long as such Holder is a Ten Percent Holder as of the date of
determination.

 

(u)         “Trading Market” means the principal national securities exchange in
the United States on which Registrable Securities are (or are to be) listed.

 

(v)         “Transaction Documents” means, collectively, this Agreement and any
and all other agreements or instruments provided for in this Agreement to be
executed and delivered by the Parties in connection with the transactions
contemplated hereby.

 

(w)         “WKSI” means a “well known seasoned issuer” as defined under Rule
405.

 

 

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The Company and the Holders have executed this Registration Rights Agreement on
the day and year first written above.

 

GREAT ELM CAPITAL GROUP, INC.

    

/s/ Chirstopher B. Madison

 

 

 

 

Christopher B. Madison

 

 

 

 

 

By:

 

/s/ Richard S. Chernicoff

 

/s/ Peter A. Reed

Name:

 

Richard S. Chernicoff

 

Peter A. Reed

Title:

 

Chief Executive Officer

 

 

 

 

 

 

/s/ David J. Steinberg

GRACIE INVESTING, LLC

 

David J. Steinberg

 

 

 

 

 

 

 

 

 

/s/ John S. Ehlinger

By:

 

/s/ David Cohen

 

John S. Ehlinger

Name:

 

David Cohen

 

 

Title:

 

CEO of the Manager

 

/s/ Rodney D. Kent

 

 

 

 

Rodney D. Kent

LIBRA SECURITIES, LLC

 

 

 

 

 

 

/s/ Richard S. Chernicoff

 

 

 

 

Richard S. Chernicoff

By:

 

/s/ Jess M. Ravich

 

 

Name:

 

Jess M. Ravich

 

/s/ Hugh Steven Wilson

Title:

 

Chief Executive Officer

 

Hugh Steven Wilson

 

 

 

 

 

BENMARK INVESTMENTS LLC

 

/s/ Adam M. Kleinman

 

 

 

 

Adam M. Kleinman

 

 

 

 

 

By:

 

/s/ Mark Kuperschmid

 

/s/ Justin J. Bonner

Name:

 

Mark Kuperschmid

 

Justin J. Bonner

Title:

 

Managing Member

 

 

 

 

 

 

/s/ Adam W. Yates

/s/ Daniel M. Cubell

 

Adam W. Yates

Daniel M. Cubell

 

 

 

 

 

 

/s/ Boris Teksler

/s/ David Reed

 

Boris Teklser

David Reed

 

 

 

 

 

 

 

/s/ Donald F. DeKay

 

/s/ Clifton Back

Donald F. DeKay

 

Clifton Back

 

 

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