Document:

EX-10.2 Registration Rights Agreement

 

EXHIBIT 10.2

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of
May 11, 2007, among Terremark Worldwide, Inc., a Delaware corporation (the “Company”) and
each of the Holders (as defined herein).

     WHEREAS, the Company and the Holders are entering into an Interest Purchase Agreement (the
“Interest Purchase Agreement”), of even date herewith, pursuant to the terms of which, the
Company will purchase from the Holders all of the issued and outstanding membership units of Data
Return LLC (“Data Return”); and

     WHEREAS, the Holders will receive in the transaction contemplated by the Interest Purchase
Agreement shares of the common stock, par value $0.001 of the Company (the “TWW Stock”);
and

     WHEREAS, the resale of the Shares (as defined herein) may require registration under the
Securities Act (as defined herein); and

     WHEREAS, the Company desires to provide certain registration rights to the Holders in order to
induce the Holders to sell their membership units in Data Return to the Company pursuant to the
terms of the Interest Purchase Agreement.

     NOW, THEREFORE, in consideration of the premises and covenants set forth in the Interest
Purchase Agreement and this Agreement, the parties agree as follows:

     1. Definitions. Terms defined in the Interest Purchase Agreement are used as therein
defined unless otherwise defined in this Agreement. In addition, the following terms shall have
the meanings indicated:

     “Affiliate” has the meaning given to that term pursuant to Rule 12b-2 under the
Exchange Act.

     “Commission” means the Securities and Exchange Commission, or any other federal
agency then administering the Securities Act.

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

     “Holder” or “Holders” means (i) the persons set forth in Exhibit
A attached hereto and (ii) any subsequent holder or holders of any of the Shares that
remain as “restricted securities” within the meaning of Rule 144 of the Commission under the
Securities Act.

     “Prospectus” means the prospectus relating to the Shares included in the
applicable Registration Statement, and any such prospectus as supplemented by any and all
prospectus supplements and as amended by any and all amendments (including post-effective
amendments) and including all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

 

 

     “Required Period” means the period lasting until the earlier of (i) date that
all of the Shares have been sold or (ii) the date that all of the Shares may be freely
traded without registration under Rule 144 promulgated under the Securities Act.

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

     “Selling Holder” means, with respect to a specified registration pursuant to
this Agreement, Holders whose Shares are included in such Registration Statement.

     “Shares” mean (i) the shares of the TWW Stock acquired by the Holders pursuant
to the Interest Purchase Agreement at the Closing, (ii) any additional shares of capital
stock of the Company received as a result of a stock dividend, stock split or other
distribution with respect to any Shares, or (iii) any other shares of capital stock of the
Company or any successor thereof received with respect to any Shares as a result of any
merger, reorganization or recapitalization.

     2. Registration. The Company shall file a registration statement (the
“Registration Statement”) with the Commission within 75 days after the date hereof in order
to register the resale of all of the Shares under the Securities Act (the “Registration
Statement”). Once effective, subject to Section 3(c) and (d) hereof, the Company shall
continuously maintain the effectiveness of the Registration Statement during the Required Period.
The Company shall use its reasonable best efforts to cause such Registration Statement to become
effective under the Securities Act within 180 days of the date hereof.

     3. Registration Procedures.

     (a) Registration Procedures. In connection with the Company’s registration
obligations under Section 2, the Company shall use its commercially reasonable efforts to effect
such registrations to permit the sale of Shares by Selling Holders in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company shall as promptly as
reasonably practicable:

     (i) prepare and file with the Commission a Registration Statement on an appropriate
form under the Securities Act available for the sale of the Shares by the Selling Holders in
accordance with the intended method or methods of distribution thereof; provided, however,
that the Company shall (a) before filing, furnish to one firm of counsel for the Selling
Holders (selected by the Selling Holders) within a reasonable period of time (but in any
event at least three Business Days) prior to the filing thereof with the Commission to
afford to such counsel and the Selling Holders a reasonable opportunity for review, copies
of the Registration Statement or Prospectus proposed to be filed, and (b) reflect in each
such document, when so filed with the Commission, such written comments as such counsel to
the Selling Holders may reasonably propose;

     (ii) furnish, at its expense, to the Selling Holders such number of conformed copies of
the Registration Statement and each amendment thereto, of the Prospectus and each supplement
thereto, and of such other documents as the Selling Holders reasonably may request in
writing from time to time;

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     (iii) prepare and file with the Commission any amendments and post-effective amendments
to the Registration Statement as may be necessary and any supplements to the Prospectus as
may be required or appropriate, in the view of the Company and its counsel, by the rules,
regulations or instructions applicable to the registration form used by the Company or by
the Securities Act to keep the Registration Statement effective during the Required Period;

     (iv) promptly following its actual knowledge thereof (but in any event within two
Business Days), notify the Selling Holders in writing:

     (a) when a Registration Statement, Prospectus, Issuer Free Writing Prospectus
(as defined in Rule 433 under the Securities Act) or any supplement or amendment has
been filed and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective;

     (b) of any comments or inquiries by the Commission or any request by the
Commission or any other governmental authority for amendments or supplements to a
Registration Statement, Prospectus or Issuer Free Writing Prospectus or for
additional information (and to furnish the Selling Holders with copies of any
correspondence related thereto);

     (c) of the issuance by the Commission or any other governmental authority of
any stop order or order preventing or suspending the effectiveness of a Registration
Statement or the use of any Prospectus or the initiation or threatening of any
proceedings for that purpose;

     (d) of the receipt by the Company of any written notification with respect to
the suspension of the qualification or exemption from qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose;

     (e) of the occurrence of any event during the period a Registration Statement
is effective which makes any statement made in the Registration Statement or the
Prospectus or any Issuer Free Writing Prospectus untrue in any material respect or
which requires the making of any changes in such Registration Statement, Prospectus
or Issuer Free Writing Prospectus so that such Registration Statement, Prospectus or
Issuer Free Writing Prospectus shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which
they were made, not misleading (provided, however, that no notice by the Company
shall be required pursuant to this Section 3(a)(iv)(e) in the event that the Company
either promptly files a Prospectus supplement to update the Prospectus or an
appropriate Exchange Act report that is incorporated by reference into the
Registration Statement, which, in either case, contains the requisite information
that results in such Registration Statement no longer containing any untrue
statement of a material fact or omitting to state a material

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fact necessary to make the statements therein or in light of the
circumstances under which they were made, not misleading); and

     (f) of the Company’s reasonable determination that a post-effective amendment
to a Registration Statement would be required by applicable law (in which case the
Company shall file the same as soon as practicable after such determination and use
its commercially reasonable efforts to cause the same to become effective as soon as
practicable following filing);

     (v) use its commercially reasonable efforts to prevent the issuance of or obtain the
withdrawal of any order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction, at the earliest practicable date;

     (vi) prior to any public offering of Shares, use commercially reasonable efforts to
register or qualify, or cooperate with the Selling Holders and counsel retained by the
Selling Holders in connection with the registration or qualification (or exemption from such
registration or qualification) of such Shares for offer and sale under the securities or
blue sky laws of such jurisdictions within the United States as such counsel for the Selling
Holders covered by a shelf Registration Statement reasonably requests in writing and do such
other acts and things as may be reasonably necessary to maintain each such registration or
qualification (or exemption therefrom) effective during the Required Period for such
Registration Statement; provided, however, that the Company shall not be required to qualify
generally to do business or as a dealer in securities in any jurisdiction in which it is not
then so qualified or take any action which would subject it to general service of process or
taxation in any jurisdiction in which it is not then so subject;

     (vii) as promptly as reasonably practicable after the occurrence of any event
contemplated by Section 3(a)(iv)(e) or 4(a)(iv)(f) hereof, use its commercially reasonable
efforts to prepare (and furnish at its expense, subject to any notice by the Company in
accordance with Section 3(a)(iv), to the Selling Holders a reasonable number of copies of) a
supplement or post-effective amendment to the applicable Registration Statement or a
supplement to the related Prospectus (including by means of an Issuer Free Writing
Prospectus), or file any other required document so that, as thereafter delivered to the
purchasers of the Shares being sold thereunder, such Prospectus or Issuer Free Writing
Prospectus shall not contain an 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
light of the circumstances under which they were made, not misleading;

     (viii) Upon reasonable notice and at reasonable times during normal business hours,
make reasonably available for inspection by a representative of each Selling Holder, one
firm of counsel for the Selling Holders participating in any disposition of Shares and any
single accountant retained by the Selling Holders, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the appropriate
officers, directors and employees of the Company to make reasonably available for such
inspection all such relevant information reasonably requested in writing by them in
connection with the Registration Statement as is customary for

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“due diligence” investigations; provided that such Persons shall first agree in writing with the
Company that any information that is reasonably designated by the Company as confidential at
the time of delivery shall be kept confidential by such Persons and shall be used solely for
the purposes of exercising rights under this Agreement and such Person shall not engage in
trading any securities of the Company until such material non-public information becomes
publicly available, except nothing in such writing shall restrict (a) disclosure of such
information if it is required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (b) disclosure of such information if it is required by
law (including any disclosure requirements pursuant to federal or state securities laws in
connection with any disposition of Shares), (c) sharing information with other underwriters,
agents or dealers participating in the disposition of any Shares, subject to the execution
by such other underwriters, agents or dealers of reasonable non-disclosure agreements with
the Company, (d) using any such documents or other information in investigating or defending
itself against claims made or threatened by purchasers, regulatory authorities or others in
connection with the disposition of any Shares, (e) disclosure of such information if it
becomes generally available to the public other than as a result of a disclosure or failure
to safeguard by any such Person or (f) disclosure of such information if it becomes
available to any such Person from a source other than the Company and such source is not
bound by a confidentiality agreement or confidentiality obligations
or duties; and provided, further, that the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of all the Selling Holders and the other parties
entitled thereto by the counsel to the Selling Holders;

     (ix) use its commercially reasonable efforts to (a) obtain all other approvals,
consents, exemptions or authorizations from such governmental authorities as may be
necessary to enable the selling Holders to consummate the disposition of such Shares and (b)
comply with all applicable rules and regulations of the Commission relating to such
registration and make generally available to its securityholders earning statements
satisfying the provisions of Section 11(a) of the Securities Act, provided that the
Company shall be deemed to have complied with this Section if it has satisfied the
provisions of Rule 158 under the Securities Act (or any similar rule promulgated under the
Securities Act);

     (x) use its commercially reasonable efforts to (a) ensure a CUSIP number has been
assigned to all Shares and provide or cause to be maintained a transfer agent and registrar
for all such Shares not later than the effectiveness of such Registration Statement, and (b)
cause all Shares covered by the applicable Registration Statement quoted on the NASDAQ
Global Market or such other principal national securities exchange on which the TWW Stock is
then listed, to continue to be so listed or quoted for a reasonable period of time after the
offering;

     (xi) use its commercially reasonable efforts to (a) procure the cooperation of the
Company’s transfer agent in settling any offering or sale of Shares and (b) cooperate with
the selling Holders of Shares to facilitate the timely preparation and delivery of
certificates not bearing any restrictive legends representing the Shares to be sold, and
cause such Shares to be issued in such denominations and registered in such

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 names in accordance with the instructions of the selling Holders of Shares at least three business
days prior to any sale of Shares;

     (xii) use its commercially reasonable efforts to provide such information as may be
reasonably required for any filings required to be made by the Selling Holders with the
National Association of Securities Dealers, Inc. (the “NASD”) in connection with the
offering under any Registration Statement of the Shares (including, without limitation, such
as may be required by NASD Rule 2710 or 2720), and, upon the written request of the Selling
Holders, shall use its commercially reasonable efforts to cooperate in connection with any
filings required to be made with the NASD in that regard on or prior to the filing of any
Registration Statement; and

     (xiii) use its commercially reasonable efforts to assist Holders in the marketing of
such Shares to the extent permitted by applicable law, including participating in management
telephone calls and obtaining customary accountants’ letters to support underwritten block
trades; provided, however, that the foregoing shall not obligate the Company to facilitate
an underwritten offering of such Shares or conduct or attend any form of “road shows”,
analyst or investor presentations and rating agency presentations or engage in any similar
selling or informational activities; and

     (xiv) hold in confidence and not make any disclosure of information concerning a Holder
provided to the Company unless (a) disclosure of such information is necessary to comply
with federal or state securities laws, (b) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (c) the
release of such information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (d) such information
has been made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement; and, upon learning that disclosure of such
information concerning a Holder is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt written notice to such Holder and allow
such Holder, at the Holder’s expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information.

     (b) The Company may require each Holder of Shares as to which any registration is being
effected to (i) furnish the Company such information regarding such Holder and the distribution of
such securities as the Company may from time to time reasonably request in writing and (ii)
otherwise agree to comply with the Securities Act and the Exchange Act in connection with the
registration and distribution of the Shares.

     (c) Upon receipt of any notice from the Company of the happening of any event of the kind
described in clause (iv)(e) of Section 3(a) hereof or to the extent the Board of Directors of the
Company otherwise reasonably determines in good faith that the continued effectiveness of the
filing of such Registration Statement at such time would be materially detrimental to the Company
and it is therefore necessary to suspend the filing of such Registration Statement, the Company
may suspend the effectiveness of such Registration Statement for a period of time not to exceed 90
days in any 12 month period (the “Noneffective Period”) without incurring any liquidated damages
pursuant to Section 5 for such Noneffective Period and, such

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Holder will forthwith discontinue such Holder’s disposition of Shares pursuant to the
registration statement relating to such Shares until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by clause (iv)(e) of Section 3(a) hereof, or until
it is advised in writing by the Company that the use of the applicable prospectus may be resumed,
and, if so directed by the Company, such Holder will promptly deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies, then in such Holder’s possession
of the prospectus relating to such Shares current at the time of receipt of such notice.

     (d) If the Company suspends a registration statement or requires Holders to cease sales of
Shares pursuant to this Section 3, the Company shall, as promptly as practicable following the
termination of the circumstances that entitled the Company to do so, take such actions as may be
necessary to reinstate the effectiveness of such registration statement and/or give written notice
to all Holders of Shares authorizing them to resume sales pursuant to such registration statement.

     4. Registration Expenses. The costs and expenses (other than underwriting discount or
commission, and other fees, expenses or costs payable to any underwriter, broker or dealer and such
fees and expenses as state securities officials may require that the Holders pay) of all
registrations and qualifications under the Securities Act, and all other actions that the Company
is required to take or effect pursuant to this Agreement, shall be paid by the Company (including,
without limitation, all registration and filing fees, printing, duplication, mailing and delivery
expenses, costs of special audits incident to or required by any such registration, expenses
relating to blue-sky compliance and listing of the Shares on any applicable exchange pursuant to
the terms of this agreement and fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel chosen by the Holders to represent all of the
Holders.

     5. Penalties for Company’s Failure to Comply. In the event that the Company fails to
(i) file the Registration Statement with the Commission within 75 days after the date hereof or
(ii) cause the Commission to declare the Registration Statement effective within 180 days of the
date of this Agreement or, subject to Sections 3(c) and (d), to maintain the effectiveness of the
Registration Statement until the earlier of (x) the date that all of the Shares have been sold or
(y) the date that all of the Shares may be freely traded without registration under Rule 144
promulgated under the Securities Act (provided in each that such failure is not caused by the
Holders), then the Company shall pay to the Holders liquidated damages for each month that such
default remains uncured of: (a) $50,000 for the first month that such default remains uncured; (b)
$75,000 for the second month that such default remains uncured; and (c) $100,000 per month for each
month that such default remains uncured thereafter, in each such case calculated on a pro rata
basis to the date on which such default is cured. Any amounts to be paid as liquidated damages
shall be paid in cash monthly in arrears on or before the 30th day following the end of the month
or partial month to which they relate.

     6. Indemnification.

     (a) Indemnification by the Company. The Company agrees to indemnify and hold harmless
each Holder owning Shares registered pursuant to this Agreement, such Holder’s Affiliates, and
their respective officers, directors, employees and agents, and each Person, if any,

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who controls any such Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively referred to for purposes of Sections 6 through 8 of
this Agreement as a “Holder”), from and against any and all losses, claims, damages and
liabilities (including without limitation, subject to Section 7, the reasonable legal fees and
other reasonable out-of-pocket expenses incurred in investigating, responding to or defending
against any claim, challenge, litigation, investigation or proceeding, including without
limitation, all costs of appearing as a witness in any claim, challenge, litigation, investigation
or proceeding) caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement pursuant to which any Shares were registered under the
Securities Act, Prospectus or preliminary prospectus or Issuer Free Writing Prospectus, or any
amendment thereof or supplement thereto, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary, in the case of any Prospectus
or Issuer Free Writing Prospectus, in light of the circumstances under which they were made, to
make the statements therein not misleading; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in such Registration
Statement, Prospectus, amendment, supplement or Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by such participating Holder or any
other Person who participates as an underwriter in the offering or sale of such securities, in
either case specifically stating that it is for use in the preparation thereof or that is corrected
in any subsequent prospectus that was delivered to Holders at least two Business Days prior to the
relevant sale date. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any participating Holder or any such underwriter or
controlling Person and shall survive the transfer of such securities by the Holder.

     (b) Indemnification by Holders. Each Holder agrees, severally and not jointly, to
indemnify and hold harmless, the Company, the directors, and officers of the Company and each
Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity contained in Section
6(a) from the Company to the Holders, as incurred, but only with respect to information relating to
such Holder furnished to the Company in writing by such Holder expressly for use in any
Registration Statement, Prospectus or preliminary prospectus or Issuer Free Writing Prospectus, or
any amendment or supplement thereto.

     7. Conduct of Indemnification Proceedings. If any claim, challenge, litigation,
investigation or proceeding (including any governmental or regulatory investigation) shall be
brought or asserted against any Person in respect of which indemnity may be sought pursuant to
either of Section 6(a) or Section 6(b), such Person (the “Indemnified Person”) shall
promptly notify the Person against whom such indemnity may be sought (the “Indemnifying
Person”) in writing; provided that (i) the omission to so notify the Indemnifying Party
shall not relieve it from any liability that it may have hereunder except to the extent it has been
materially prejudiced by such failure and (ii) the omission to so notify the Indemnifying Person
shall not relieve it from any liability that it may have to an Indemnified Person otherwise than on
account of Sections 6 through 8 of this Agreement. In case any such claim, challenge, litigation,
investigation or proceeding is brought against any Indemnified Person and it notifies the
Indemnifying Person

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of the commencement thereof, the Indemnifying Person shall be entitled to participate therein
and, to the extent that it may elect by written notice delivered to such Indemnified Person, to
assume the defense thereof and retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may designate in such
proceeding and shall pay the reasonable fees and expenses of such counsel related to such
proceeding. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Person shall have failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person as contemplated by the preceding
sentence or (iii) the named parties in any such proceeding (including any impleaded parties)
include both the Indemnifying Person and the Indemnified Person and representation of both parties
by the same counsel would be inappropriate due to actual or potential conflicts of interests
between them. It is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and
that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm
for the Holders and such control Persons of the Holders shall be designated in writing by such
Holders and any such separate firm for the Company, the directors and officers of the Company and
such control Persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any pending or threatened proceeding
effected without its prior written consent (which consent shall not be unreasonably withheld), but
if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify in accordance with, and subject to the limitations of, Section 6(a) and
Section 6(b) above, as the case may be, any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding anything in this Section 7 to
the contrary, if at any time an Indemnified Person shall have requested the Indemnifying Party to
reimburse such Indemnified Person for legal or other expenses in connection with investigating,
responding to or defending any Proceedings as contemplated by Sections 6 through 8 of this
Agreement, the Indemnifying Party shall be liable for any settlement of any Proceedings effected
without its written consent if (i) such settlement is entered into more than (x) 60 days after
receipt by the Indemnifying Party of such request for reimbursement and (y) 30 days after receipt
by the Indemnified Party of the material terms of such settlement and (ii) the Indemnifying Party
shall not have reimbursed such Indemnified Person in accordance with such request prior to the date
of such settlement. No Indemnifying Person shall, without the prior written consent of the
Indemnified Persons (which consent shall not be unreasonably withheld), effect any settlement of
any pending proceeding in respect of which any Indemnified Person is a party or of any threatened
proceeding in respect of which any Indemnified Person could have been a party and indemnity could
have been sought hereunder by such Indemnified Person, unless such settlement (i) includes an
unconditional release of such Indemnified Person from all liability on claims that are the subject
matter of such proceeding and (ii) does not include any statement as to or any admission of fault,
culpability or a failure to act by or on behalf of any Indemnified Person.

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     8. Contribution, etc.

     (a) If the indemnification provided for in Sections 6 through 8 of this Agreement is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Holder on the other hand with respect to the sale by such Holder of Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of such Holder on the other in
connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and such Holder on the other shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by the Company or by
such Holder and the parties’ relevant intent, knowledge, information and opportunity to correct or
prevent such statement or omission.

     (b) The Company and the Holders agree that it would not be just and equitable if contribution
pursuant to Sections 6 through 8 of this Agreement were determined by pro rata allocation (even if
the Holders were treated as one entity for such purpose) or any other method of allocation that
does not take account of the equitable considerations referred to in this Section 8. The amount
paid or payable by an Indemnified Person as a result of losses, claims, damages and liabilities
referred to in this Section 8 shall be deemed to include, subject to the limitations set forth in
Sections 6 and 7 above, any reasonable legal or other reasonable out-of-pocket expenses incurred by
such Indemnified Person not otherwise reimbursed in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of Sections 6 through 8 of this Agreement, in
no event shall any Holder be required to contribute any amount in excess of the amount by which the
total amount received by such Holder with respect to its sale of Shares pursuant to any
Registration Statement exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. 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.

     (c) The remedies provided for in Sections 6 through 8 of this Agreement 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.

     (d) The indemnity and contribution agreements contained in Sections 6 through 8 of this
Agreement shall remain operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Holder or any Person controlling
any Holder or by or on behalf of the Company, the officers or directors of each of the Company or
any other Person controlling the Company and (iii) the sale by a Holder of Shares covered by any
Registration Statement.

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     9. Priority. The indemnification provisions contained in this Agreement shall
supersede the general indemnification provisions in the Interest Purchase Agreement.

     10. Rule 144. With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of Shares to the public without
registration, the Company agrees to (a) use its reasonable best efforts to file with the Commission
in a timely manner all reports and other documents required of the Company under the Securities Act
and the Exchange Act; (b) upon written request of any Holder of Shares, furnish to such Holder
promptly a written statement by the Company as to its compliance with the reporting requirements of
Rule 144 and of the Securities Act and the Exchange Act, and such other reports and documents as
any Holder reasonably may request in availing itself of any rule or regulation of the Commission
allowing such Holder to sell any Shares without registration; and (c) take such other actions as
may be reasonably required to consummate any distribution of Shares that may be permitted in
accordance with the terms and conditions of Rule 144.

     11. Private Placement. The Company agrees that nothing in this Agreement shall
prohibit the Holders, at any time and from time to time, from selling or otherwise transferring
Shares pursuant to a private placement or other transaction which is not registered pursuant to the
Securities Act. To the extent requested by a Holder, the Company shall take all reasonable steps
necessary to assist and cooperate with such Holder to facilitate such sale or transfer.

     12. Interpretation; Construal.

     (a) In this Agreement, unless otherwise indicated, (i) references to articles, sections (or
subdivisions of sections), recitals, preambles, schedules or exhibits are to those of this
Agreement, (ii) uses of the singular of a term defined collectively are references to such singular
item and uses of the plural of a term defined singularly are references to the collection of such
items, (iii) references to any governmental rules shall be construed to include any and all
amendments, modifications, supplements thereto or restatements or replacements thereof enacted or
implemented subsequent to the date hereof, (iv) references to a number of securities or Shares,
such numbers shall be appropriately adjusted to reflect any recapitalization, (v) references to
agreements and other contractual instruments shall be deemed to include all appendices, schedules,
exhibits, annexes and attachments attached thereto and all subsequent amendments, restatements and
other modifications to such agreements, (vi) references to any Person include such Person’s
permitted successors and assigns, (vii) the words “herein,” “hereof,” and “hereunder” or other
words of similar import refer to this Agreement as a whole, including the exhibits hereto, as the
same may from time to time be amended, modified or supplemented, and not to any particular article,
section, subsection or clause contained in this Agreement, (viii) the term “including” shall not be
limiting or exclusive, unless specifically indicated to the contrary and (ix) references to
“dollars” or “$” are to U.S. dollars.

     (b) The preamble and recitals of this Agreement are hereby incorporated by reference and shall
be construed for all purposes as being part of this Agreement, and each applicable party represents
to their accuracy.

11

 

     (c) This Agreement has been negotiated and drafted jointly by the respective parties hereto
and their attorneys, and the language hereof will not be construed for or against either party.

     13. Notices. All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given (i) when delivered
personally, (ii) three Business Days after being mailed by certified or registered mail, return
receipt requested and postage prepaid, (iii) when received, if sent by overnight delivery service
or international courier or (iv) when sent, if sent by email or fax. Either party may change its
address, email address or fax number for the purposes hereof upon notice to the other party. Such
notices or other communications shall be sent to each Party as follows:

     (a) If to the Company:

			
	                         	 	Terremark Worldwide, Inc.

2601 S. Bayshore Drive, 9th Floor

Miami, Florida 33133

Attention: Chief Legal Officer

Facsimile: (305) 856-8190

                    with a copy to:

			
	                         	 	Greenberg Traurig, P.A.

1221 Brickell Avenue

Miami, Florida 33131

Attention: Jaret L. Davis, Esq.

Facsimile: (305) 961-5676

               (b) If to the Holders:

			
	                         	 	Saratoga Partners IV, L.P.

Saratoga Management Company LLC

Saratoga Coinvestment IV LLC

Saratoga Partners IV LLC

535 Madison Avenue

New York, NY 10022

Attention: Richard Petrocelli

Facsimile: (212) 750-3343

                    with a copy to:

			
	                         	 	Cahill Gordon & Reindel llp

80 Pine Street

New York, New York 10005

Attention: Richard Farley, Esq.

Fax: (212) 269-5420

12

 

     14. Governing Law; Jurisdiction; Waiver of Jury Trial; Service of Process. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT-OF-LAW PROVISIONS. IN CONNECTION WITH THE ADJUDICATION OF ANY DISPUTES
RELATING TO THIS AGREEMENT, EACH PARTY HEREBY IRREVOCABLY (A) SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE STATE AND FEDERAL COURTS SITTING IN NEW YORK, NEW YORK, (B) WAIVES, AND AGREES NOT TO
ASSERT, (1) ANY CLAIM THAT IT IS NOT SUBJECT TO THE JURISDICTION OF ANY SUCH COURT OR THAT SUCH
PROCEEDING HAS BEEN COMMENCED IN AN IMPROPER OR INCONVENIENT FORUM AND (2) ANY RIGHT IT MAY HAVE TO
TRIAL BY JURY AND (C) AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S.
REGISTERED MAIL TO SUCH PARTY’S ADDRESS AS PROVIDED HEREIN SHALL BE EFFECTIVE FOR ANY ACTION, SUIT
OR PROCEEDING WITH RESPECT TO ANY MATTER FOR WHICH IT HAS SUBMITTED TO JURISDICTION HEREBY.

     15. Remedies. The parties acknowledge and agree that the remedy at law for any breach
hereunder would be inadequate and that each of them shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such breach. The rights and
remedies provided herein shall be cumulative and not exclusive of any other rights or remedies
available to a party and the failure by a party to exercise a right hereunder shall not operate as
a waiver of a breach nor shall it prevent such party from doing so later with respect to such
breach or any subsequent breach. If a party obtains a judgment against another party by reason of
such other party’s breach of this Agreement or the failure to comply with the terms hereof,
reasonable attorneys’ fees and expenses shall be included in such judgment.

     16. Amendments, Waivers. This Agreement may be amended and the terms and conditions
of this Agreement may be waived, only by a written instrument, (x) signed by the Company and the
holders of a majority of the Shares; provided that without the consent of the applicable Holder, no
provision of this Agreement relating to the rights of such Holder with respect to registration of
its Shares hereunder shall be modified or amended or (y) in the case of a waiver, by the party
waiving compliance.

     17. Registration Rights to Others. Except for the registration rights granted to
Credit Suisse, the company has not granted registration rights to any other person. If the Company
shall at any time hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act, (i) such rights shall not
be in conflict with or adversely affect any of the rights provided in this Agreement to the Holders
and (ii) if such rights are provided on terms or conditions more favorable to such holder than the
terms and conditions provided in this Agreement, the Company shall provide (by way of amendment to
this Agreement or otherwise) such more favorable terms or conditions to the Holders.

13

 

     18. Covenants Regarding Commission Filings. The Company agrees that each Terremark
Document (as defined in the Interest Purchase Agreement) filed subsequent to the date hereof will
comply, as to form in all material respects with the applicable requirements of the Securities Act
and the Exchange Act, as the case may be and will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.

     19. Assignment; Certain Specified Third Party Beneficiaries. This Agreement shall be
binding upon, inure to the benefit of and be enforceable by each of the parties and their
respective successors and assigns; provided, however,, that neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned or delegated by a Holder to any third
party who purchases or is otherwise a permitted transferee of such Shares from the Holder, unless
(i) such transferee of the Shares that is not a party to this Agreement shall have executed and
delivered to the Secretary of the Company a properly completed joinder agreement (a “Joinder
Agreement”) substantially in the form of Exhibit B, and (ii) the Holder selling the
Shares shall have delivered to the Secretary of the Company written notice of such transfer setting
forth the name of such Holder, the name and address of the transferee and the number of Shares that
shall have been so transferred; and provided, further, that this Agreement and the
rights, interests and obligations hereunder may be assigned, transferred or delegated by a Holder
to any Affiliate of such Holder upon the execution of a Joinder Agreement by such Affiliate. This
Agreement (including the documents and instruments referred to in this Agreement) is not intended
to and does not confer upon any Person any rights or remedies under this Agreement other than the
parties hereto, their permitted successors and assigns and any Indemnified Person.

     20. Entire Agreement. This Agreement constitutes the entire understanding among the
parties hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, express or implied, oral or written.

     21. Severability. Any term or provision hereof that is held by a tribunal of
competent authority to be invalid, void or unenforceable shall not affect the validity or
enforceability of the remaining terms and provisions hereof and the scope, duration, or
applicability of the invalid, void or unenforceable term or provision shall be amended to delete
the necessary words or phrases, or to replace such term or provision with a term or provision that
is valid and enforceable, so as to come as close as possible to achieving the economic, legal, or
other purposes of such unenforceable term or provision.

     22. Further Assurances. Each Party shall do and perform or cause to be done and
performed all such further acts and shall execute, amend and deliver all such other agreements,
certificates, instruments and documents and give such further written assurances as the other party
may reasonably request in order to evidence and give effectiveness to the transactions contemplated
hereby and carry out the intent of this Agreement.

     23. Termination. This Agreement may be terminated at any time by a written instrument
signed by the parties hereto. Unless sooner terminated in writing by the Parties, this Agreement
(other than Section 3(a)(xiv), Section 4, Sections 6 through 8 and Sections 13 through 23 hereof,
which shall survive) shall terminate when there are no Shares outstanding.

14

 

     24. Counterparts. This Agreement may be executed in counterparts and such
counterparts may be delivered in electronic format (including by fax and email). Such delivery of
counterparts shall be conclusive evidence of the intent to be bound hereby and each such
counterpart and copies produced therefrom shall have the same effect as an original. To the extent
applicable, the foregoing constitutes the election of the parties to invoke any federal or state
law authorizing electronic signatures.

[signature pages follow]

15

 

     IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized
representatives as of the date set forth in the first paragraph.

	 	 	 	 	 
	 	SARATOGA SELLERS:

SARATOGA PARTNERS IV LP

 	 
	 	By:  	SARATOGA ASSOCIATES IV, LLC,
 	 
	 	 	its General Partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                               SARATOGA MANAGEMENT  COMPANY, LLC,
 	 
	 	 	its Investment Advisor 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                  /s/ Richard Petrocelli
 	 
	 	 	Name:  	Richard Petrocelli 	 
	 	 	Title:  	Treasurer 	 
	 
	 	SARATOGA MANAGEMENT COMPANY LLC

 	 
	 	By:  	/s/ Richard Petrocelli
 	 
	 	 	Name:  	Richard Petrocelli 	 
	 	 	Title:  	Treasurer 	 
	 
	 	SARATOGA COINVESTMENT IV LLC

 	 
	 	By:  	SARATOGA MANAGEMENT COMPANY,

its Managing Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                  /s/ Richard Petrocelli
 	 
	 	 	Name:  	Richard Petrocelli 	 
	 	 	Title:  	Treasurer 	 

S-1 

 

	 	 	 	 	 

	 	 	 	 	 
	 	MANAGEMENT SELLERS:

 	 
	 	/s/ John D. Beletic
 	 
	 	John D. Beletic 	 
	 	 	 
	 
	 	 	 
	 	                                               /s/ Sunny Vanderbeck
 	 
	 	Sunny Vanderbeck 	 
	 	 	 
	 
	 	 	 
	 	                                               /s/ Steve Armond
 	 
	 	Steve Armond 	 
	 	 	 
	 
	 	 	 
	 	                                               /s/ Todd Steitle
 	 
	 	Todd Steitle 	 
	 	 	 
	 
	 	 	 
	 	                                               /s/ Thomas Steven Blair
 	 
	 	Thomas Steven Blair 	 
	 	 	 
	 
	 	 	 
	 	                                             /s/ Mark Warren
 	 
	 	Mark Warren 	 
	 	 	 
	 
	 	J&A PARTNERSHIP LTD.

 	 
	 	By:  	/s/ John D. Beletic
 	 
	 	 	Name:  	John D. Beletic 	 
	 	 	Title:  	General Partner 	 

S-2 

 

	 	 	 	 	 

	 	 	 	 	 
	 	TERREMARK WORLDWIDE, INC.

 	 
	 	By:  	/s/ Jose A. Segrera
 	 
	 	 	Name:  	Jose A. Segrera 	 
	 	 	Its:            Chief Financial Officer 	 

S-3 

 

	 	 	 	 	 

EXHIBIT A

Holders

Saratoga Partners IV, L.P.

Saratoga Management Company LLC

Saratoga Coinvestment IV, LLC

John D. Beletic

J&A Partnership Ltd.

Sunny Vanderbeck

Steve Armond

Todd Steitle

Thomas Steven Blair

 

 

EXHIBIT B

FORM OF JOINDER AGREEMENT

     THIS JOINDER AGREEMENT is made and entered into by the undersigned with reference to the
following facts:

     Reference is made to the Registration Rights Agreement, dated as of May 11, 2007, as amended
(the “Agreement”), by and among Terremark Worldwide, Inc., a Delaware corporation (the
“Company”), the Holders. (as defined therein) and any other parties identified on the
signature pages of any joinder agreements substantially similar to this Joinder Agreement executed
and delivered pursuant to Section 20 of the Registration Rights Agreement. Capitalized terms used
but not defined in this Joinder Agreement shall have the meanings ascribed thereto in the
Registration Rights Agreement.

     The undersigned hereby acknowledges that matters pertaining to the registration of such Shares
is governed by the Agreement, and the undersigned hereby (1) acknowledges receipt of a copy of the
Agreement, and (2) agrees to be bound as a Holder by the terms of the Agreement, as the same has
been or may be amended from time to time.

     This Joinder Agreement shall bind, and inure to the benefit of, the parties hereto and their
respective devisees, heirs, personal and legal representatives, executors, administrators,
successors and assigns. This Joinder Agreement shall be construed and enforced in accordance with
the laws of the State of New York without regard or giving effect to its principles of conflicts of
law.

[Remainder of Page Intentionally Left Blank]

 

 

     IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of
                                        .

	 	 	 	 	 
	 	(Print Name of Additional Party)

 	 
	 	By:  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Address and Facsimile Number for Notices:

I.R.S. I.D. #:

	 	 	 	 	 
	Acknowledged and Agreed by:

TERREMARK WORLDWIDE, INC.

 	 
	By:  	/s/
 	 
	 	Name:  	 	 
	 	Title:EX-10.2 Non-Qualified Stock Option Agreement

 

Exhibit 10.2

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

The Ultimate Software Group, Inc.

Amended and Restated 2005 Equity and Incentive Plan

     This
Award Agreement (the “Agreement”) made as of this ___ day of __________________, 20___,
between The Ultimate Software Group, Inc., a Delaware corporation (the “Company”), and
__________________
(the “Optionee”), is made pursuant to the terms of The Ultimate Software
Group, Inc. Amended and Restated 2005 Equity and Incentive Plan (the “Plan”). Capitalized terms
used herein but not defined shall have the meanings set forth in the Plan.

     Section 1. Grant of Option. The Company has granted to the Optionee a
non-qualified stock option for the purchase of the number of shares of common stock of the Company,
par value $.01 per share (the “Common Stock”), specified in Appendix A hereto (the “Option
Shares”). Appendix A may be amended by the Company from time to time to reflect additional
grants, or the exercise of an option, following the date hereof. Each option identified in
Appendix A shall be subject to the conditions hereinafter provided and subject to the terms
and conditions set forth in the Plan, a copy of which the Optionee acknowledges having received.
(Each option identified in Appendix A is hereinafter referred to as an “Option.”)

     Section 2. Exercise Price. The exercise price per share of each Option shall
be the Fair Market Value of a share of the Common Stock on the Date of Grant (as defined in the
Plan) (the “Option Price”) as set forth on Appendix A hereto.

     Section 3. Vesting of Options.

     (a) Vesting Schedule. Each Option shall vest and become exercisable in equal annual
installments, each of which shall relate to 25% of the number of shares of Common Stock subject to
such Option, on the respective Dates of Grant thereof set forth in Appendix A and each of
the first three anniversaries thereof, subject to the Optionee’s continued employment with the
Company or any Subsidiary on each such vesting date.

     (b) Acceleration Events. Notwithstanding the foregoing, each Option shall become
fully and immediately vested and exercisable upon (i) the Optionee’s termination of employment as a
result of death or Disability, or (ii) the occurrence of a Change in Control of the Company,
provided that the respective Option remains outstanding immediately prior to the effective date of
the Change in Control.

     Section 4. Option Term. Option Shares that become vested pursuant to Section
3 hereof may be purchased at any time on or after the date of such vesting and prior to the
expiration of the term of the Option to which they relate (each, an “Option Term”). An Option Term
shall expire on the day prior to the tenth anniversary of the applicable Date of Grant, unless
earlier

 

 

terminated in accordance with the terms of the Plan or upon termination of the Optionee’s
employment with the Company or any Subsidiary (“Termination of Employment”) in accordance with
Section 5 hereof. Upon the expiration of an Option Term, any unexercised Option Shares underlying
such expiring Option shall be cancelled and shall be of no further force or effect.

     Section 5. Termination of Employment.

     (a) General. Subject to the provisions of Sections 5(b) and 5(c) hereof, in the event
of a Termination of Employment for any reason prior to the date that all Option Shares become
vested in accordance with Section 3 hereof, the Optionee shall forfeit the Optionee’s interest in
any Option Shares that have not yet become vested, which shall be cancelled and be of no further
force or effect. In the event of a Termination of Employment for any reason following vesting, the
Optionee shall retain the right to purchase any Option Shares that have previously become vested
until the expiration of 90 days following the effective date of such Termination of Employment (or
the expiration of the applicable Option Term, if earlier); provided, however, that
such 90-day period may be extended (but not beyond the applicable Option Term) upon determination
of the Committee.

     (b) Cause. Notwithstanding the provisions of Section 5(a) hereof, in the event of a
Termination of Employment for “Cause” (as defined below), the Optionee’s right to purchase any
Option Shares, whether or not vested, shall immediately terminate and all rights thereunder shall
cease. For purposes hereof, termination for “Cause” shall mean a Termination of Employment due to
(i) embezzlement or misappropriation of corporate funds, (ii) any acts of dishonesty resulting in
conviction for a felony, (iii) misconduct resulting in material injury to the Company, (iv) a
significant violation of Company policy, (v) willful refusal to perform, or substantial disregard
of, the duties properly assigned to the Optionee, or (vi) a significant violation of any
contractual, statutory or common law duty of loyalty to the Company. Notwithstanding the
foregoing, if the Optionee is a party to an employment or similar agreement with the Company or any
Subsidiary, the term “Cause” shall, for the purposes of this Agreement, have the same meaning set
forth in such employment or similar agreement if and to the extent such term is defined therein.

     (c) Death or Disability. Notwithstanding the provisions of Section 5(a) hereof, in
the event of a Termination of Employment as a result of death or Disability, all unvested Options
hereunder shall become fully and immediately vested and exercisable in accordance with Section 3(b)
hereof, and the Optionee, or the Optionee’s legal representative, shall retain the right to
purchase the Option Shares in accordance with the terms hereof until the expiration of 12 months
following the date of such Termination of Employment (or the expiration of the applicable Option
Term, if earlier); provided, however, that such 12-month period may be extended
(but not beyond the applicable Option Term) upon determination of the Committee.

     Section 6. Procedure for Exercise.

     (a) Notice of Exercise. An Option may be exercised, in whole or in part, and whole
Option Shares may be purchased, at any time during the term thereof by notice to the

2

 

Company in the form required by the Committee, together with payment of the aggregate Option Price
therefor and any applicable withholding taxes.

     (b) Payment of Option Price. Payment of the Option Price shall be made: (i) in cash
or by cash equivalent acceptable to the Committee, (ii) by payment in shares of Common Stock that
have been held by the Optionee for at least six months (or such other period as the Committee may
deem appropriate for purposes of applicable accounting rules), valued at the Fair Market Value of
such shares on the date of exercise, (iii) through an open-market, broker-assisted transaction, or
(iv) by a combination of the foregoing methods. In addition and at the time of exercise, if and to
the extent required by applicable law, the Optionee shall remit to the Company under procedures
specified by the Company all required Federal, state and local withholding tax amounts in any
manner as permitted above for payment of the Option Price.

     (c) Delivery of Stock Certificates Upon Exercise. Upon each exercise of an Option,
the Company shall mail or deliver to the Optionee (or beneficiary in the case of exercise by a
beneficiary), as promptly as practicable, a stock certificate or certificates representing the
shares of Common Stock then purchased, and will pay all stamp taxes payable in connection
therewith. Notwithstanding the foregoing, the Company shall not be obligated to deliver any such
certificate or certificates upon exercise of an Option until the Company shall have received such
assurances from its counsel as the Company may reasonably request that the exercise of the Option
and the issuance of shares of Common Stock pursuant to such exercise will not violate the
Securities Act of 1933 (the “Act”), as amended (as then in effect or any similar statute then in
effect), or the securities laws of any state applicable to such exercise, issuance or transfer.
Such assurances may include (but need not be limited to) opinions of counsel to the Company,
covenants by the holder or transferee to observe such Act and laws and the placement of a legend on
such certificate or certificates restricting subsequent transfers or sales except in compliance
with such Act and laws.

     Section 7. Investment Representation. Upon the exercise of an Option at a
time when there is not in effect a registration statement under the Act relating to the shares of
Common Stock, by virtue of such exercise, the Optionee shall be deemed to represent and warrant to
the Company that the shares of Common Stock shall be acquired for investment and not with a view to
the distribution thereof, and not with any present intention of distributing the same, and the
Optionee shall provide the Company with such further representations and warranties as the Company
may require in order to ensure compliance with applicable Federal and state securities, blue sky
and other laws. No shares of Common Stock shall be acquired unless and until the Company and/or
the Optionee shall have complied with all applicable Federal or state registration, listing and/or
qualification requirements and all other requirements of law or of any regulatory agencies having
jurisdiction, unless the Committee has received evidence satisfactory to it that the Optionee may
acquire such shares pursuant to an exemption from registration under the applicable securities
laws. Any determination in this connection by the Committee shall be final, binding and
conclusive. The Company reserves the right to legend any certificate for shares of Common Stock,
conditioning sales of such shares upon compliance with applicable federal and state securities laws
and regulations.

     Section 8. Limitation of Rights. The Optionee shall not have any privileges
of a stockholder of the Company with respect to any Option Shares, including without limitation any

3

 

right to vote such Option Shares or to receive dividends or other distributions in respect thereof,
until the date of the issuance to the Optionee of a stock certificate evidencing the Common Stock.
Nothing in this Agreement or an Option shall confer upon the Optionee any right to continued
employment with the Company or to interfere in any way with the right of the Company to terminate
the Optionee’s employment at any time.

     Section 9. Adjustments. All Options granted hereunder shall be subject to the
provisions of Section 4.2 of the Plan relating to adjustments for recapitalizations,
reclassifications and other changes in the Company’s corporate structure.

     Section 10. Transfer Restrictions. No Option may be transferred, pledged,
assigned, hypothecated or otherwise disposed of in any way by the Optionee, except by will or by
the laws of descent and distribution; provided, however, that the Optionee may,
during the Optionee’s lifetime and subject to the prior approval of the Committee at the time of
proposed transfer, transfer all or part of an Option to or for the benefit of the Optionee’s
“family members” (as defined in a manner consistent with the rules applicable to registration
statements on Form S-8 promulgated under the Securities Act of 1933), which include certain trusts
and other entities established for the benefit of the Optionee and/or the Optionee’s family
members. Subsequent transfers of an Option shall be prohibited other than by will or the laws of
descent and distribution upon the death of the transferee. In the event that an Optionee becomes
legally incapacitated, an Option shall be exercisable by the Optionee’s legal guardian, committee
or legal representative. If the Optionee dies, an Option shall thereafter be exercisable by the
legatee of such Option under the Optionee’s will or by the Optionee’s estate in accordance with the
Optionee’s will or the laws of descent and distribution, in each case in the same manner and to the
same extent that such Option was exercisable by the Optionee on the date of the Optionee’s death.
An Option shall not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of an Option contrary to the
provisions hereof, and the levy of any execution, attachment or similar process upon an Option,
shall be null and void and without effect.

     Section 11. Notices. Any notice hereunder by the Optionee shall be given to
the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the
Secretary of the Company. Any notice hereunder by the Company shall be given to the Optionee in
writing and such notice shall be deemed duly given only upon receipt thereof at such address as the
Optionee may have on file with the Company.

     Section 12. Construction. All Options hereunder are granted pursuant to the
Plan and are in all respects subject to the terms and conditions of the Plan. The Optionee hereby
acknowledges that a copy of the Plan has been delivered to the Optionee and accepts the Options
hereunder subject to all terms and provisions of the Plan, which is incorporated herein by
reference. In the event of a conflict or ambiguity between any term or provision contained herein
and a term or provision of the Plan, the Plan will govern and prevail. The construction of and
decisions under the Plan are vested in the Committee, whose determinations shall be final,
conclusive and binding upon the Optionee.

4

 

     Section 13. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without giving effect to the choice of law
principles thereof.

     Section 14. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall constitute one and
the same instrument.

     Section 15. Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

     Section 16. Entire Agreement. This Agreement and the Plan constitute the
entire agreement between the parties with respect to the subject matter hereof and thereof, merging
any and all prior agreements.

[SIGNATURES ON FOLLOWING PAGE]

5

 

     IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement effective as of
the date first above written.

	 	 	 	 	 
	 	THE ULTIMATE SOFTWARE GROUP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	 
	 	OPTIONEE

 	 
	 	 	 
	 	Signature of Optionee  	 
	 
	 	 	 
	 	Print Name:  	 
	 

6

 

Appendix A

	 	 	 	 	 
	 	 	Number of Shares	 	 
	Date of Grant	 	Subject to Option	 	Option Price
	 
	 	 	 	 
	 
	 	 	 	 

A-1

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