Exhibit 10.2


 


 


 


LIQUIDNET HOLDINGS, INC.


 


REGISTRATION RIGHTS


 


1.          Definitions.
Capitalized terms used in this Exhibit and not otherwise defined shall
have the meanings ascribed to such terms in the Stock Purchase Agreement; provided,
however, that the following terms shall have the following meanings:


 


(a)        “Common Stock” means the Common Stock, par value
$0.0001 per share, of Seller.


 


(b)        “Seller” means
Liquidnet  Holdings, Inc., a Delaware corporation, and any successor(s) thereto.


 


(c)        “Form S-3” means such form under the Securities
Act as in effect on the date hereof or any successor form under the Securities
Act.


 


(d)        “Holders” means (i) the Buyers and all Affiliates
of Buyers who are transferees of Registrable Securities (as defined herein) who
agree in writing to be bound by the restrictions contained in this Exhibit and
to act through Buyer as its representative (and such writing is in a form
reasonably acceptable to Seller and delivered to Seller) and (ii)(x) transferees
of any person identified in clause (i) who acquire at least 50,000
Registrable Securities (as adjusted for stock splits, stock dividends,
combinations, reclassifications, reorganizations, recapitalizations and the
like) from such person or (y) limited partners of any person identified in
clause (i), in each case provided that such transferees agree in writing to be
bound by the restrictions contained in this Exhibit (and such writing is
in a form reasonably acceptable to Seller and delivered to Seller).


 


(e)       “Registrable
Securities” means: (i) the shares of Common Stock issued or issuable
upon conversion of shares of Series A-1 Preferred Stock; (ii) the
shares of Common Stock issued or issuable upon conversion of shares of Series A-2
Preferred Stock; (iii) any other shares of Common Stock acquired by the
Holders pursuant to Sections 7.5 or 7.7 of the Stock Purchase Agreement; and (iv) any
other shares of Common Stock acquired by the Holders as a result of stock
splits, stock dividends, reclassifications, recapitalizations, or similar
events relating to the shares specified in the foregoing clauses; provided,
however, that Registrable Securities shall not include any shares
previously registered under the Securities Act or which have been sold to the
public either pursuant to a Registration Statement or Rule 144, or which
have been sold in a private transaction in which the transferor’s rights under
this Exhibit are not assigned or which do not satisfy clause (ii) of
the definition of Holder. Wherever reference is made in this Agreement to a
request or consent of holders of a certain percentage of, or a majority of,
Registrable Securities, the determination of such percentage shall include
shares of Common Stock issuable upon conversion of issued shares of Series A-1
Preferred Stock and


 

















 


Series
A-2 Preferred Stock, even if such conversion has not yet been effected (but
assuming no application of Section 6(m) of the Certificate of
Designation).


 


(f)              “Registration Statement” means a
registration statement as contemplated by the Securities Act.


 


(g)             “Securities Act” means the Securities Act of
1933, as amended.


 


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


 


(i)              “SEC” means the Securities and Exchange
Commission.


 


(j)              “Series A-1 Preferred Stock” means the Series A-1
Convertible Preferred Stock, par value $0.0001, of Seller.


 


(k)             “Series A-2 Preferred Stock” means the Series A-2
Convertible Preferred Stock, par value $0.0001, of Seller.


 


(l)              “Stock Purchase Agreement” means the
Stock Purchase Agreement relating to the Series A-1 Preferred Stock to
which this Exhibit is
attached.


 


2.              Demand Registration.


 


(a)             Notice. If at any time following
the expiration of six months after the later of (i) Seller’s initial
underwritten public offering and (ii) Seller’s most recent subsequent
registration, a Holder or Holders (collectively, the “Initiating
Holders”) of 50% or more in interest of the outstanding
Registrable Securities then owned by all the Holders propose that Seller file a
Registration Statement with respect to all or some of the Registrable
Securities held by the Initiating Holder by giving written notice (a “Demand
Notice”) of such proposal to Seller, then Seller shall promptly
deliver to each other Holder a copy of such Demand Notice and shall, subject to
the limitations of this Section 2, use reasonable efforts to effect, as
soon as is practicable, the registration under the Securities Act of all
Registrable Securities proposed to be registered in such Demand Notice and all
other Registrable Securities requested to be registered in any written request
received by any other Holder within 20 days following Seller’s delivery of the
Demand Notice. Notwithstanding anything to the contrary contained herein,
Seller’s obligation under this Section 2 shall in the aggregate be limited
to two (2) registrations that are declared effective by the SEC in
accordance with Section 2(d) below (one of which shall have been
initiated by one or more of the TCV Entities and their Affiliates and one of
which shall have been initiated by one or more of the Summit Entities and their
Affiliates) (each, a “Demand Registration”). The Demand
Notice shall describe the number of shares intended to be disposed of and the
intended method of disposition. If the Initiating Holders intend to distribute
the Registrable Securities by means of an underwriting, they shall so advise
Seller in their Demand Notice. In such event, the Seller, in consultation with
the Initiating Holders, shall have the right to select the investment banker or
bankers and managers to underwrite and administer the offering. Notwithstanding
the foregoing, if Seller shall furnish to the Holders requesting a


 


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Registration
Statement pursuant to this Section 2(a) a certificate signed by an
officer of Seller stating that the Board of Directors of Seller has concluded
that the filing of such Registration Statement at such time would be detrimental
to Seller because such filing (x) would interfere with an acquisition,
corporate reorganization, securities offering or other similar transaction
involving Seller, (y) would require premature disclosure of material
information that Seller has a bona fide business purpose for preserving as
confidential, or (z) would render Seller unable to comply with
requirements under the Securities Act or Exchange Act, then Seller shall have
the right to defer such filing for a period of not more than ninety (90) days; provided, however, that Seller
may not exercise this right more than once during any period of twelve (12)
consecutive months, and provided  further that Seller
shall not register any securities primarily for the account of any other
stockholder, excluding Seller, during such ninety (90) day period.
Notwithstanding anything to the contrary contained herein, Seller shall not be
obligated to proceed with any registration under this Section 2 unless
Registrable Securities to be included therein have an anticipated aggregate
offering price of not less than fifty million dollars ($50,000,000).


 


(b)           Registration Statement Form.  Registrations under this Section 2 shall
be on such appropriate form of Registration Statement (i) as shall be
selected by Seller and as shall be reasonably acceptable to the Initiating
Holders and (ii) as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified in the Demand Notice.


 


(c)           Underwritten Registrations.  In a registration pursuant to this Section 2
involving an underwritten offering:


 


(i)           No securities other than Registrable Securities shall be
included among the securities covered by such registration unless the managing
underwriter of such offering shall have advised the Initiating Holders in
writing that the inclusion of such other securities would not adversely affect
such offering.


 


(ii)          If the managing underwriter advises the Initiating Holders
in writing that the inclusion of all the Registrable Securities which the
Holders have requested to be registered exceeds the number which can be sold in
such offering within a price range acceptable to the Initiating Holders, the
Initiating Holders may either (A) terminate the registration or (B) effect
such registration, in which case there shall be included
only that number of the Registrable Securities which the Initiating Holders are
advised can be sold in such offering drawn pro rata from the Holders based on
the number of Registrable Securities then held by each such Holder (including
the Initiating Holders); provided that in connection with any
offering effected pursuant to clause (B) of the previous sentence, no
securities other than Registrable Securities shall be covered by such
registration.


 


(iii)        All Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriters selected for the underwriting (provided that the
Holders shall not be bound to agree to indemnify the underwriters for any breach
or violation by Seller of such agreement or by Seller of any applicable law or
SEC rule or regulation).


 


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(d)           Effective Registration Statement. A Registration
Statement requested pursuant to this Section 2 shall not be considered a
Demand Registration for purposes of the limit of Demand Registrations which may
be requested pursuant to paragraph (a) above, unless a Registration
Statement with respect thereto has been declared by the SEC to be, and remains,
effective for a period of at least one hundred twenty (120)
consecutive days (or such shorter period if the Registrable Securities
registered thereunder have been sold or disposed of prior to the expiration of
such one hundred twenty (120) day period) and is not interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court.


 


3.              Piggyback
Registration.


 


(a)           Notice. If Seller proposes to file a Registration
Statement under the Securities Act (other than a registration relating to (i) any
compensation or benefit plan,
agreement or arrangement (including those on Form S-8), (ii) any
corporate reorganization or business combination transaction (including those
on Form S-4), and (iii) Rule 145 transactions, with respect to
an offering for its own account or for the account of others of any class of
securities of Seller (including the Seller’s initial registered public
offering, but only if such offering includes securities for the account of any
Person other than Seller), then each such time, Seller shall promptly give written
notice of such intention to file a Registration Statement (a “Piggyback
Notice”) to each Holder. The Piggyback Notice shall describe the intended
method of distribution and offer each Holder the opportunity to register
pursuant to such Registration Statement such Registrable Securities as the
Holder may request in writing to Seller within thirty (30) days after the date
the Holder first received the Piggyback Notice (a “Piggyback Registration”).
Seller shall use reasonable efforts to include in the Registration Statement
all Registrable Securities which Seller has been so requested to register by
the Holders (subject to the provisions of paragraph (b) below). Seller
shall have no obligation under this Section 3 to complete any offering of
its securities that it proposes to make; provided that, for the
avoidance of doubt, the expenses of any such incomplete registration shall be
borne by Seller.


 


(b)           Underwritten Registrations. In a registration
pursuant to this Section 3 involving an underwritten offering, whether or
not for sale for the account of Seller, Seller shall notify the Holders
thereof. If the managing underwriter with respect to such an offering advises
Seller in writing that the inclusion of all the Registrable Securities which
the Holders have requested to be included in the Registration Statement would
jeopardize the success of the offering, then Seller shall be required to
include in the underwriting only that number, if any, of Registrable Securities
which the underwriter advises Seller in writing may be sold without
jeopardizing the offering, in which case the Holders who have requested
registration and any other stockholders requesting registration shall
participate in the underwriting pro rata based on their total ownership of
securities to be included in such offering; provided that (i) in no
event shall any Registrable Securities of a Holder be excluded from such
offering, to the extent that, as a result of such exclusion, any other
stockholders who is not a Holder and is participating in such offering would be
selling, as a percentage of such other stockholder’s aggregate shares of Seller
capital stock, a greater percentage of such other stockholders aggregate shares
of Seller capital stock, than such Holder and (ii) for purposes of this Section 3(b),
for any selling Holder that is a fund, partnership or corporation, the
affiliated


 


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funds,
partners, retired partners, and stockholders of such Holder, all entities under
common investment management of such Holder, and the estates and family members
of any such partners and retired partners and any trusts for the benefit of any
of the foregoing persons shall be deemed to be a single “selling Holder,” and
any pro rata reduction made with respect to such “selling Holder” shall be based upon the
aggregate amount of Registrable Securities owned by all such related entities
and individuals. All Holders proposing to distribute their securities through
such underwriting shall severally and not jointly enter into an underwriting
agreement in customary form with the underwriter so selected for such
underwriting (provided that the Holders shall not
be bound to agree to indemnify the underwriters for any breach or violation by
Seller of such underwriting agreement or by Seller of any applicable law or  SEC rule or
regulation). Any Holder disapproving of the terms of any such underwriting may
elect to withdraw from it by written notice to Seller and the underwriter.


 


4.                Form S-3
Registration.


 


(a)          In case Seller shall at any time be permitted to effect a
registration on Form S-3 with respect to all or a part of the Registrable
Securities owned by such Holder or Holders, following a written request from
any Holder or Holders of the Registrable Securities then outstanding, Seller
shall:


 


(i)         promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and


 


(ii)        use reasonable efforts to effect such registration as
promptly as is reasonably practicable and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Holder’s or Holders’
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request delivered to
Seller within fifteen (15) days after provision by Seller of written notice of
such registration request. Notwithstanding the foregoing, if Seller shall
furnish to Holders requesting a Registration Statement pursuant to this Section 4
a certificate signed by an officer of Seller stating that the Board of
Directors of Seller has concluded that the filing of such Registration
Statement at such time would be detrimental to Seller because such filing (x) would
interfere with an acquisition, corporate reorganization, securities offering or
other similar transaction involving Seller, (y) would require premature
disclosure of material information that Seller has a bona fide business purpose
for preserving as confidential, or (z) would render Seller unable to
comply with requirements under the Securities Act or Exchange Act, then Seller
shall have the right to defer such filing for a period of not more than ninety
(90) days; provided, however, that Seller
may not utilize this right more than once during any period of twelve (12)
consecutive months, and provided  further that Seller
shall not register any securities primarily for the account of any other
stockholder, excluding Seller, during such ninety (90) day period.
Notwithstanding anything to the contrary contained herein, Seller shall not be
obligated to proceed with any such registration (1) unless Registrable
Securities to be included therein have an anticipated aggregate offering price
of not less than five million dollars ($5,000,000) or (2) if Seller has
already effected two registrations on Form S-3 for one or more Holders
during the twelve-month period preceding the date of such request, and


 


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such
registrations have been declared effective. Registrations effected pursuant to
this Section 4 shall not be counted as registrations effected pursuant to
Sections 2 or 3.


 


(c)          If the registration under this Section 4 is for an
underwritten offering, the provisions of Section 2(c) shall apply
thereto (with the substitution of Section 4 for references to Section 2).


 


(d)         Seller may include in any registration pursuant to this Section 4
securities being sold for its own account or, subject to the other provisions
of this Section 4, for the account of other persons.


 


5.             Registration Expenses. All expenses incident to a
Piggyback Registration or a Demand Registration or a registration pursuant to Section 4,
including, without limitation, all registration and filing fees, including fees
with respect to filings required to be made with the SEC and the National
Association of Securities Dealers, Inc., fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger, telephone and
delivery expenses, fees and disbursements of counsel of Seller and of all
independent public accountants of Seller (including the expenses of any special
audit and “comfort” letters required by or incident to such performance),
reasonable fees and disbursements of one counsel for the selling Holders (not
to exceed twenty five thousand dollars ($25,000)), underwriters’ fees
(excluding discounts and commissions of underwriters), and fees and expenses of
other persons or entities retained by Seller will be borne by Seller whether or
not any of the Registration Statements become effective.


 


6.             Holdback Agreements. In connection with Seller’s
initial underwritten public offering, each Holder agrees not to effect any sale
or distribution of any Seller preferred stock or Common Stock, including a sale
pursuant to Rule 144 or in reliance on any other exemption from
registration under the Securities Act, for a period of time specified by the
managing underwriter of such initial public offering (not to exceed one hundred
eighty (180) days from the effective date of the Registration Statement for
Seller’s initial public offering), except as part of such registration, and
shall execute such agreements as may be reasonably requested by the
underwriters of Seller’s initial public offering that are consistent with the
foregoing provisions of this Section 6; provided that (i) directors
and executive officers of Seller and holders of Seller securities representing
3% or more of the Common Stock of the Seller (calculated on an as converted
basis (but assuming no application of Section 6(m) of the Certificate
of Designation)) agree to similar or more restrictive arrangements or
agreements and (ii) all such agreements with the Holders provide that any
discretionary waiver or termination of the restrictions of such arrangements by
Seller or representatives of the underwriters shall apply to all persons
subject to such agreements pro rata based on the number of shares subject to
such agreements. In order to effect the foregoing, Seller shall have the right
to place a legend on the shares subject to this Section 6 providing notice
of the obligations of the selling Holders contained in this Section 6 and
to impose stop transfer restrictions with respect to such shares until the end
of such period.


 


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7.             Registration Procedures.


 


(a)           In connection with any registration under Section 2,
3 or 4, and without limiting any covenants of Seller contained in such Sections
2, 3 and 4, Seller covenants and agrees that it shall, as expeditiously as
reasonably practicable;


 


(i)           prepare and file with the SEC a Registration Statement
with respect to the Registrable Securities and use reasonable efforts to cause
such Registration Statement to become and remain effective;


 


(ii)          notify each Holder, promptly after it shall receive notice
thereof, of the time such Registration Statement has become effective or any
supplement to any prospectus forming a part of such Registration Statement has
been filed;


 


(iii)         notify each Holder promptly of any request by the SEC for
the amendment or supplement of such Registration Statement or prospectus or of
a request for additional information;


 


(iv)        prepare and file with the SEC such amendments and supplements
to such Registration Statement and the prospectus used in connection therewith
and such other documents necessary to comply with the Securities Act, the
Exchange Act, and the rules and regulations promulgated under the
Securities Act and the Exchange Act, as may be necessary to keep such
Registration Statement effective for a period of not less than one hundred
twenty (120) consecutive days (or such shorter period if the Registrable
Securities registered thereunder have been sold or disposed of prior to the
expiration of such one hundred twenty (120) day
period) and comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;


 


(v)         furnish to each Holder such number of copies of such Registration
Statement, each amendment and supplement thereto, the prospectus included in
such Registration Statement (including each preliminary prospectus) and such
other documents, including correspondence with the SEC, as such Holder may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Holder;


 


(vi)        concurrently with the effectiveness of the Registration Statement
under the Securities Act, qualify the Registrable Securities under such other
securities or “blue sky” laws of such jurisdictions as a majority in interest
of the selling Holders reasonably may request, and do any and all other acts
and things necessary or desirable to enable each such Holder to consummate the sale of the Registrable
Securities owned by such Holder;


 


(vii)       notify each Holder, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event of which it has knowledge and as a result of which the prospectus
included in such Registration Statement, as then in effect,
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statement therein not misleading, and (without
limiting Seller’s other obligations hereunder) prepare and furnish to
such Holder a reasonable number of copies of a supplement to or amendment of
such prospectus so that, as thereafter delivered to the


 


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purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading in light of the circumstances under which
they were made;


 


(viii)     advise each Holder promptly after it shall
receive notice of the issuance of any stop order by the SEC suspending the
effectiveness of any such Registration Statement or the initiation or threat of
any proceeding for that purpose and promptly use its reasonable efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such stop
order should be issued;


 


(ix)       use reasonable efforts to cause all Registrable Securities so registered
to be listed on a national exchange or trading system and on each securities
exchange and trading system on which similar securities issued by Seller are
then listed;


 


(x)        provide a transfer agent and registrar for all such
Registrable Securities, and a CUSIP number for all such Registrable Securities,
not later than the effective date of such Registration Statement;


 


(xi)       allow a representative designated by a majority in interest of
the Holders participating in such registration to participate in the
preparation of the Registration Statement, each prospectus included therein or
filed with the Commission and each amendment or supplement thereto;


 


(xii)      in
the event of any underwritten public offering, enter into an underwriting
agreement, in usual and customary form with the managing underwriter of such
offering; and


 


(xiii)     furnish,
at the request of any Holder or Holders requesting registration of Registrable
Securities pursuant to Section 2, on the date that such Registrable
Securities are delivered to the underwriters for the sale pursuant to such
registration or, if such Registrable Securities are not being sold
through underwriters, on the date that the Registration Statement with respect
to such Registrable Securities becomes effective, an opinion, dated such date, of
the independent counsel representing Seller for the purposes of such
registration, addressed to the underwriters, if any, and to the Holder or
Holders making such request, covering such legal matters with respect to the
registration in respect of which such opinion is being given as is customary,
and a letter dated such date, from the independent certified public
accountants of Seller, addressed to the underwriters, if any, and to the Holder
or Holders making such request, stating that they are independent certified
public accountants within the meaning of the Securities Act and that in
the opinion of such accountants, the financial statements and other financial
data of Seller included in the Registration Statement or prospectus, or any
amendment or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act.


 


(b)           It shall be a condition precedent to Seller’s obligations
under this Agreement that the selling Holders furnish to Seller such
information regarding themselves, the Registrable Securities held by them, and
the intended method of disposition of such securities as shall be required to
timely effect the registration of the Registrable Securities.


 


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(c)           The Holder or Holders who include Registrable Securities
in any registration under Section 2, 3 or 4 shall distribute those
Registrable Securities in a manner consistent with the distribution described
in the relevant Registration Statement.


 


(d)           Notwithstanding anything to the contrary contained herein,
Seller shall not be required to effect, or take any action to effect, any
registration (i) in any jurisdiction in which Seller would be required to
execute a general consent to service of process or (ii) which would
subject Seller or its subsidiaries to taxation in any jurisdiction in which
Seller or its subsidiaries would not otherwise be subject to taxation.


 


8.              Indemnification.


 


(a)          Indemnification by Seller. In the event of
any registration of any of the Registrable Securities under the Securities Act
pursuant to this Agreement, Seller will indemnify and hold harmless each Holder
participating in the registration, as well as its directors, stockholders,
officers, members and partners, its legal counsel and accountants, and each
underwriter involved in such registration and each other person, if any, who
controls each selling Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, or any state securities laws (or any rule or
regulation promulgated under the Securities Act or Exchange Act, or any state
securities laws), from and against any losses, claims, damages or liabilities,
joint or several, to which each of the aforementioned Persons may become
subject, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in
such Registration Statement, or any amendment or supplement to such
Registration Statement, (ii) the omission or alleged omission to state in
any such prospectus or Registration Statement a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (iii) any other violation or alleged violation by Seller
of the Securities Act, the Exchange Act, any state securities laws, or any rule or
regulation promulgated under the Securities Act, Exchange Act or state
securities laws, and Seller will further reimburse each of the
aforementioned Persons for any legal or any other expenses reasonably incurred
by any of them as they are incurred in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided,  however, that Seller will not be
liable to any selling Holder or any of the other aforementioned Persons in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or final prospectus, or any such
amendment or supplement thereto, in reliance upon and in conformity with
information furnished to Seller, in writing, by or on behalf of such selling
Holder or its officers, directors, stockholders or partners, or controlling
persons, for use in the preparation of such Registration Statement,
preliminary prospectus or final prospectus or amendment or supplement thereto.


 


(b)         Indemnification by the Holder. In the event
of any registration of any of the Registrable Securities under the Securities
Act pursuant to this Agreement, each selling Holder, severally and not jointly,
will indemnify and hold harmless Seller, each of its directors, each of its
officers who has signed such Registration Statement, legal counsel and


 


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accountants
for the Seller, each underwriter involved in such registration, each other
selling Holder and their respective officers, members, directors, stockholders
and partners and each person, if any, who controls Seller or any such
underwriter or selling Holder within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities, to which any
of the aforementioned Persons may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement under which such Registrable
Securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained in such Registration Statement, or any amendment
or supplement to such Registration Statement, or arise out of or are based upon
any omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse Seller and each of the other aforementioned Persons for any legal or
any other expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action,
in each case to the extent (and only to the extent) the statement or omission
was made in reliance upon and in conformity with information furnished in
writing to Seller by or on behalf of such selling Holder or its officers,
directors, stockholders or partners or controlling persons, for use in
connection with the preparation of such Registration Statement, preliminary
prospectus or final prospectus or amendment or supplement thereto; provided,
however, that the maximum obligation of each selling Holder for indemnification
shall be limited to the proceeds received by it (which, for the avoidance of
doubt, shall not include any underwriter discounts and commissions) from the sale
of Registrable Securities pursuant to such Registration Statement.


 


(c)             Required Notices. Each party
entitled to indemnification under this Section 8 (the “Indemnified
Party”) shall give notice to the party required to provide indemnification
(the “Indemnifying Party”) promptly after the
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought and, with respect to third party claims, shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting from it, provided that counsel for the Indemnifying Party who shall
conduct the defense of such claim or litigation must be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld or
delayed), and provided further that the failure of any Indemnified Party to
give notice as provided in this Section 8(c) shall only relieve the
Indemnifying Party of its obligations under Section 8(a) or (b), as
the case may be, to the extent that such failure actually adversely affects the
Indemnifying Party’s ability to defend against such claim or litigation. The
Indemnified Party shall have the right to employ its own counsel in any claim
or litigation, but, with respect to third party claims or litigation, the fees
and expenses of counsel shall be at the expense of such Indemnified Party, when
and as incurred, except that such fees and expenses shall be paid by the
Indemnifying Party if (i) the Indemnified Party shall have reasonably
concluded that there may be a conflict of interest between the Indemnifying
Party and the Indemnified Party in the conduct of the defense of such claim or
litigation (in which case the Indemnifying Party shall not have the right to
direct the defense of such claim or litigation on behalf of the Indemnified
Party), (ii) the Indemnifying Party shall fail, within a reasonable time
after notice of the claim, to have given written notice of its intention to
assume such defense, and to have employed counsel to assume the defense of such
claim or litigation, or (iii) the Indemnifying Party fails timely and
actively to assume or to continue to assume the defense of such claim. No
Indemnifying Party, in the defense of any claim or litigation, shall,


 


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without
the consent of the Indemnified Party, consent to entry of any judgment or enter
into any settlement that does not include, as an unconditional term, the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such third party claim or litigation. In no event shall
an Indemnified Party consent to any entry of any judgment in a third party
claim or litigation, or settle a third party claim or litigation without the
prior written consent of the Indemnifying Party (which shall not be
unreasonably withheld or delayed) unless the Indemnifying Party fails to timely
give notice of its intention to assume defense or timely and actively to assume
and continue such defense.


 


(d)            If the indemnification provided for in Section 8(b) is
held by a

court of competent jurisdiction to be unavailable to an Indemnified Party (and
the indemnification provided for in Section 8(b) is otherwise
applicable) with respect to any loss, liability, claim, damage or expense
referred to herein, then (in order to provide just and equitable contribution
under the 1933 Act) the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and the Indemnified Party on the other
hand, in connection with the statements or omissions that resulted in such
loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations; provided, however that no
contribution by any Holder, when combined with any amounts paid by such Holder
pursuant to Section 8(b) hereof, shall exceed the proceeds received
by such Holder (which, for the avoidance of doubt, shall not include any
underwriter discounts and commissions) from the sale of Registrable Securities
under the Registration Statement to which such loss, liability, claim, damage
or expense pertains. The relative fault of the Indemnifying Party and the Indemnified
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Indemnifying Party or by the Indemnified Party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.


 


(e)             The foregoing indemnity (and contribution) agreements of
Seller

and the Holders are subject to the condition that, insofar as they relate to
any of the aforementioned indemnifiable (or contributable matters) with respect
to a preliminary prospectus but eliminated or remedied in an amended prospectus
on file with the SEC at the time the registration statement becomes effective
or at the time it is filed following effectiveness with the SEC in accordance
with the Securities Act, such indemnity (and contribution) agreement shall not
inure to the benefit of any indemnified party if a copy of the final prospectus
was furnished to the indemnified party, was required by the Securities Act
and/or regulations thereunder to be furnished to the person alleging the loss,
claim, damage or liability and was not so furnished by such indemnified person
to the person alleging the loss, claim, damage or liability at or prior to the
time required by the Securities Act and/or regulations thereunder.


 


(f)             Notwithstanding anything to the contrary contained
herein, each Holder agrees that it shall not (and shall not agree to
arrangements that would) impair any of Seller’s indemnification rights
hereunder in any underwriting agreement or related arrangement it may enter
into in connection with the registration rights in this Exhibit.


 


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9.             Termination. Seller shall not have
obligations under Sections 2, 3 and 4 (i) with respect to any request for
registration made by any Holder on a date more than five (5) years after
the closing of Seller’s initial underwritten public offering of its equity
securities pursuant to the Securities Act or (ii) as to any Holder, except
with respect to any registration already commenced under such Section 2, 3
or 4 and obligations of Seller under Sections 5, 7 and 8 with respect to any
such registration(s), at such time after such initial underwritten public
offering when all Registrable Securities held by such Holder (together with any
affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144
promulgated under the Securities Act) may be sold in a three month period
without registration under Rule 144 and such Holder holds one percent (1%) or less of
Seller’s outstanding Common Stock.


 


10.           Future Registration Rights. Until such
time as Seller’s obligations under Sections 2, 3 and 4 are terminated in
accordance with Section 9 (and without regard to any registration then
already commenced under such Section 2, 3 or 4), the Company shall not
grant any registration rights which are superior in priority to, or otherwise
greater than, in any respect, those contained in this Agreement to any person
without the consent of a majority of the then outstanding Registrable
Securities.


 


11.           Delay of Registration. No Holder shall have any
right to obtain or seek an injunction or take any other action otherwise
restraining or delaying any registration as a result of any controversy that
might arise with respect to the interpretation or implementation of the matters
set forth on this Exhibit.


 


12.           Assigns. Notwithstanding anything to
the contrary contained in the Stock Purchase Agreement, no Holder may assign
its rights under this Exhibit to any other person or entity (except as
provided in the definition of Holder in this Exhibit).


 


13.           Integration. Except as provided in Section 12
above, this Exhibit shall be deemed to be part of the Stock Purchase
Agreement for all purposes thereunder.


 


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