Document:

Exhibit 10.5

 

Execution Copy

 

STOCK PURCHASE AGREEMENT

 

dated as of June 11, 2003

 

by and among

 

INVESTMENT TECHNOLOGY GROUP, INC.,

 

RADICAL CORPORATION

 

and

 

THE INDIVIDUALS LISTED HEREIN

 

 

TABLE OF CONTENTS

 

	
  ARTICLE ONE

  	
   

  
	
  DEFINITIONS

  	
   

  
	
  SECTION 1.1

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  
	
  PURCHASE AND SALE; OPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
  Purchase
  and Sale

  	
   

  
	
  SECTION 2.2

  	
  Purchase
  Price

  	
   

  
	
  SECTION 2.3

  	
  Payment
  of Purchase Price and Delivery of Shares

  	
   

  
	
  SECTION 2.4

  	
  Option

  	
   

  
	
  SECTION 2.5

  	
  Additional
  Option Payment Amounts

  	
   

  
	
  SECTION 2.6

  	
  Change
  of Control

  	
   

  
	
  SECTION 2.7

  	
  Certain
  Acquisitions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
  Representations
  and Warranties of the Company

  	
   

  
	
  SECTION 3.2

  	
  Representations
  and Warranties of the Selling Stockholders

  	
   

  
	
  SECTION 3.3

  	
  Representations
  and Warranties of the Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  	
   

  
	
  GOVERNANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
  Board
  Composition

  	
   

  
	
  SECTION 4.2

  	
  Board
  Action

  	
   

  
	
  SECTION 4.3

  	
  Cessation
  of Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
  Transfers

  	
   

  
	
  SECTION 5.2

  	
  Right
  of First Refusal; Tag Along Rights

  	
   

  
	
  SECTION 5.3

  	
  Validity
  of Transfer

  	
   

  
	
  SECTION 5.4

  	
  By-laws

  	
   

  
	
  SECTION 5.5

  	
  Spartan
  License Agreement

  	
   

  
	
  SECTION 5.6

  	
  Purchaser
  Reporting Obligations

  	
   

  

 

ii

 

	
  SECTION 5.7

  	
  Company
  Reporting Obligations

  	
   

  
	
  SECTION 5.8

  	
  No
  Solicitation

  	
   

  
	
  SECTION 5.9

  	
  System
  Marketing

  	
   

  
	
  SECTION 5.10

  	
  US Trading Corporation License Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  
	
  TERMINATION OF OBLIGATIONS; SURVIVAL

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
  Termination

  	
   

  
	
  SECTION 6.2

  	
  Effect
  of Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  	
   

  
	
  CONFIDENTIALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
  Confidential
  Information

  	
   

  
	
  SECTION 7.2

  	
  Confidentiality
  Obligations

  	
   

  
	
  SECTION 7.3

  	
  Notice
  Preceding Compelled Disclosure

  	
   

  
	
  SECTION 7.4

  	
  Consultation
  as to Announcements

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  	
   

  
	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  Indemnity

  	
   

  
	
  SECTION 8.2

  	
  Claims
  for Indemnification

  	
   

  
	
  SECTION 8.3

  	
  Survival
  of Representations, Warranties and Covenants

  	
   

  
	
  SECTION 8.4

  	
  Limitation
  of Liability

  	
   

  
	
  SECTION 8.5

  	
  Sole
  Remedy

  	
   

  
	
  SECTION 8.6

  	
  New
  Escrow

  	
   

  
	
  SECTION 8.7

  	
  Sellers’
  Representative

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  	
   

  
	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
  Notices

  	
   

  
	
  SECTION 9.2

  	
  Interpretation

  	
   

  
	
  SECTION 9.3

  	
  Amendment

  	
   

  
	
  SECTION 9.4

  	
  Waiver

  	
   

  
	
  SECTION 9.5

  	
  Counterparts;
  Effectiveness

  	
   

  
	
  SECTION 9.6

  	
  Entire
  Agreement; No Third Party Beneficiaries

  	
   

  
	
  SECTION 9.7

  	
  Governing
  Law; Consent to Jurisdiction

  	
   

  
	
  SECTION 9.8

  	
  Waiver
  of Jury Trial

  	
   

  
	
  SECTION 9.9

  	
  Severability

  	
   

  
	
  SECTION 9.10

  	
  Assignment

  	
   

  

 

iii

 

	
  SECTION 9.11

  	
  Specific Performance

  	
   

  
	
  SECTION 9.12

  	
  Time of Essence

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of License Agreement

  	
   

  
	
  Exhibit
  B

  	
  Selling
  Stockholder Shares

  	
   

  
	
  Exhibit C

  	
  Form of Employment Agreements

  	
   

  
	
  Exhibit D

  	
  Form of Escrow Agreement

  	
   

  
	
  Exhibit E

  	
  Budget

  	
   

  
	
  Exhibit F

  	
  Current Form of License Agreement

  	
   

  
	
  Exhibit G

  	
  Form of Amended and Restated By-Laws

  	
   

  
	
  Exhibit
  H

  	
  Form
  of Officer Certificate

  	
   

  

 

iv

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT, dated as of June 11, 2003 (this “Agreement”)
is made by and among Investment Technology Group, Inc., a Delaware corporation
(the “Purchaser”),
Radical Corporation, a Delaware corporation (the “Company”), and the
individuals listed on the signature page(s) hereto (collectively, the “Selling
Stockholders”
and each individually, a “Selling Stockholder”).

 

WHEREAS, the Selling Stockholders own an aggregate of 42,160 shares of
the Company Common Stock (as hereinafter defined), which shares prior to giving
effect to the issuance of the Purchased Shares (as hereinafter defined),
constitute 100% of the issued and outstanding shares of Company Common Stock;

 

WHEREAS, the Purchaser desires to purchase from the Company and the
Company desires to issue and sell to the Purchaser 14,053 shares of the Company
Common Stock (the “Purchased Shares”), which shares upon issuance
shall constitute 25% of the issued and outstanding shares of Company Common
Stock;

 

WHEREAS, the Selling Stockholders desire to grant to the Purchaser an
option to purchase an aggregate of 42,160 shares of Company Common Stock, which
shares after giving effect to the issuance of the Purchased Shares shall
constitute 75% of the issued and outstanding shares of Company Common Stock;
and

 

WHEREAS, the Company has entered into an amended and restated software
license and network access agreement with the Purchaser’s Affiliate (the “License
Agreement”) for use of the System (as hereinafter defined) in the
form of Exhibit A hereto.

 

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE ONE

 

DEFINITIONS

 

SECTION 1.1.  Definitions.  For all purposes in this Agreement, the
following terms shall have the respective meanings set forth in this
Section 1.1 (such definitions to be equally applicable to both the
singular and plural forms of the terms herein defined):

 

“Additional
Option Payment Amounts” shall have the meaning specified in
Section 2.5(a) of this Agreement.

 

 

“Additional
Payment Calculation Date” shall have the meaning specified in
Section 2.5(a) of this Agreement.

 

“Additional
Payment Date” shall have the meaning specified in
Section 2.5(b) of this Agreement.

 

“Affiliate”
of a Person shall mean any and all Persons that directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with such Person.

 

“Agreement”
shall have the meaning specified in the Preamble of this Agreement.

 

“Average
Daily Revenue” shall mean, for any period, the Gross Revenues for
such period divided by the number of Business Days in such period.

 

“Budget”
shall have the meaning specified in Section 4.2(i) of this Agreement.

 

“Business
Day” shall mean any day when all of the New York Stock Exchange, the
American Stock Exchange and Nasdaq are open for trading.

 

“Change
of Control” shall mean entering into a Contract with respect to any
of the following, occurring in a single transaction or as part of a series of
related transactions: (a) the direct or indirect acquisition by any Person or
group of Persons acting in concert of more than 50% of the voting power of the
Purchaser or (b) the acquisition by any Person or group of Persons acting in
concert of all or substantially all of the assets of the Purchaser and its subsidiaries,
taken as a whole; provided that, a Change of Control shall include any
subsequent Change of Control of the Purchaser or a surviving entity if the
Purchaser has merged into another entity.

 

“Change
of Control Event” shall have the meaning specified in
Section 2.6 of this Agreement.

 

“Closing”
shall have the meaning specified in Section 2.3 of this Agreement.

 

“Closing
Date” shall have the meaning specified in Section 2.3 of this
Agreement.

 

“Company”
shall have the meaning specified in the Preamble of this Agreement.

 

“Company
Common Stock” shall mean the common stock, $.001 par value, of the
Company.

 

2

 

“Company
Financial Statements” shall have the meaning specified in
Section 3.1(e) of this Agreement.

 

“Competing
Acquisition” shall mean the Purchaser or any of its Affiliates
entering into a Contract to acquire, directly or indirectly, of any title,
interest or right to use, market, distribute, license or sublicense a trading
system that competes with the System; provided that, list trading systems will
not be considered to compete with the System.

 

“Competing
Acquisition Event” shall have the meaning specified in
Section 2.7 of this Agreement.

 

“Confidential
Information” shall have the meaning specified in Section 7.1(a)
of this Agreement.

 

“Contract”
shall mean any written or oral agreement, contract, understanding, arrangement,
instrument, note, insurance policy, benefit plan, commitment, covenant,
assurance or undertaking.

 

“Disclosing
Party” shall have the meaning specified in Section 7.1(a) of
this Agreement.

 

“Employment
Agreements” shall have the meaning specified in Section 2.4(c)
of this Agreement.

 

“Encumbrance”
shall mean any mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory
or other), other charge or security interest, or any preference, priority or
other agreement or preferential arrangement of any kind or nature whatsoever.

 

“Escrow
Agent” shall mean JPMorgan Chase Bank or any other Person reasonably
acceptable to the Purchaser, Hemant Sharma and Thomas George.

 

“Escrow
Agreement” shall have the meaning specified in Section 2.4(d)
of this Agreement.

 

“Expiration
Date” shall have the meaning specified in Section 2.4(b) of
this Agreement.

 

“Final
Payment Date” shall have the meaning specified in
Section 2.5(b) of this Agreement.

 

“Fiscal
Month” shall mean, for the first fiscal month of the year, the
period beginning on the first day of January, and ending on the last Friday in
January and, for each subsequent fiscal month, the period beginning on the
day after the last day of the prior fiscal month and ending on the last Friday
of such month; provided that, the last fiscal month in any year shall end
on December 31st of such year.

 

3

 

“Fiscal
Quarter” shall mean, for the first fiscal quarter of the year, the
period beginning on the first day of January, and ending on the last Friday in
March and, for each subsequent fiscal quarter, the period beginning on the
day after the last day of the prior fiscal quarter and ending on the last
Friday of such quarter; provided that, the last fiscal quarter in
any year shall end on December 31st of such year.

 

“GAAP”
shall mean accounting principles generally accepted in the United States in
effect from time to time.

 

“Governmental
Entity” shall mean any federal, state, local or foreign court,
administrative agency or commission or other governmental authority or
instrumentality, or self-regulatory organization.

 

“Gross
Revenue” shall mean, for any period, any and all gross commissions,
fees or other remuneration accrued during such period to the ITG Group in
respect of trades executed via the System, which amount shall not include any
revenues from commissions, fees or other remuneration related to trades
executed (a) by the trading desks of the ITG Group or (b) through POSIT by
existing ITG Group customers as of the date hereof that have executed trades
through POSIT within three months prior to the date hereof or prior to using
the System, whichever is earlier, and which amount shall be determined after
deduction of volume or other discounts actually granted, soft dollar credits
and verified trade differences (including errors and accommodations, as such
term is used in the brokerage industry); provided that, any deductions with respect
to soft dollar credits shall not include any credits to the ITG Group which are
not consistent with the ITG Group’s soft dollar practices and any deductions
with respect to any discounts shall not include any discounts which are not
consistent with the ITG Group’s ordinary course of business and ITG Group’s
practices with respect to discounts.

 

“Gross
Revenue Statement” shall have the meaning specified in
Section 5.6 of this Agreement.

 

“Indemnitee”
shall have the meaning specified in Section 8.1 of this Agreement.

 

“Intellectual
Property” shall mean all of the following, in whatever form or
medium, anywhere in the world: patents, trademarks, service marks, trade names,
corporate names, domain names, copyrights, and copyrighted works; registrations
thereof and applications (including provisional applications) therefore;
derivatives, continuations, continuations-in-part, extensions, divisionals,
re-examinations, reissues and renewals thereof; trade secrets, software (in any
form, including source code and object code), firmware, mask works, programs,
flow charts, research records, documentation, inventions (whether patentable or
unpatentable), utility models, discoveries, proprietary processes, and items of
proprietary know-how, information, data (whether or not protected by copyright
or other intellectual property), proprietary prospect lists, customer lists,
projections, analyses,

 

4

 

proprietary market studies and any other intellectual property,
including any enhancements or improvements of any of the above.

 

“ITG
Group” shall mean the Purchaser and all its direct and indirect
Affiliates.

 

“Legal
Requirement” shall mean any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, constitution, treaty, or Order or
determination of any Governmental Entity.

 

“License
Agreement” shall have the meaning specified in the Recitals of this
Agreement.

 

“Losses”
shall have the meaning specified in Section 8.1 of this Agreement.

 

“Material
Adverse Effect” shall mean, with respect to any Person, a material
adverse effect on the business, assets, financial condition or results of
operation of such Person.

 

“Minimum
Interest” shall mean a 20% or more beneficial ownership interest in
the aggregate issued and outstanding Company Common Stock.

 

“New
Escrow Agreement” shall have the meaning specified in
Section 8.6 of this Agreement.

 

“Option”
shall have the meaning specified in Section 2.4(a) of this Agreement.

 

“Option
Closing Date” shall have the meaning specified in
Section 2.4(b) of this Agreement.

 

“Option
Exercise Date” shall have the meaning specified in
Section 2.4(b) of this Agreement.

 

“Option
Exercise Notice” shall have the meaning specified in Section 2.4(b)
of this Agreement.

 

“Option
Exercise Price” shall have the meaning specified in
Section 2.4(a) of this Agreement.

 

“Option
Shares” shall have the meaning specified in Section 2.4(a) of
this Agreement.

 

“Order”
shall mean any order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, arbitration, verdict,
sentence, subpoena,

 

5

 

writ or award made, entered, rendered or otherwise put into effect by
or under the authority of any Governmental Entity or any arbitrator or
arbitration panel.

 

“Patent
Infringement Losses”  shall mean any Losses incurred subsequent
to the Option Exercise Date resulting from or arising out of Intellectual
Property of the Company infringing any patents issued as of the Option Closing
Date (or continuations, continuations-in-part, extensions, divisionals,
re-examinations, reissues and renewals thereof) or any patents issued in
respect of patent applications published as of the Option Closing Date (or
continuations, continuations-in-part, extensions, divisionals, re-examinations,
reissues and renewals thereof).

 

“Payment
Instructions” shall have the meaning specified in
Section 2.4(b) of this Agreement.

 

“Permit”
shall mean any permit, license, franchise, concession, variance, exemption, or
approval of any Governmental Entity.

 

“Permitted
Investments” shall mean obligations denominated in U.S. dollars
maturing or capable of redemption by the holder not more than twelve months
after the date of acquisition which are (a) issued or guaranteed by the U.S.
Government or any agency or instrumentality thereof, (b) demand deposits, time
deposits, certificates of deposit or other obligations issued, accepted or
guaranteed by a bank having a rating at time of such investment or acquisition
of at least A2 from Moody’s Investors Service, Inc. or A from Standard &
Poor’s Ratings Services and having a combined capital, surplus and undivided
profits (less any undivided losses) of not less than $100 million, or (c) money
market funds having a rating from Moody’s Investors Service, Inc. or Standard
& Poor’s Ratings Services in the highest investment category granted
thereby at the time of acquisition.

 

“Person”
shall mean any individual, corporation, partnership, limited liability company,
incorporated or unincorporated association, joint venture, joint stock company,
estate, trust, unincorporated organization, firm or other enterprise,
association, entity or Governmental Entity.

 

“Proceeding”
shall have the meaning specified in Section 3.1(i) of this Agreement.

 

“Purchase
Price” shall have the meaning specified in Section 2.2 of this
Agreement.

 

“Purchased
Shares” shall have the meaning specified in the Recitals of this
Agreement.

 

“Purchaser”
shall have the meaning specified in the Preamble of this Agreement.

 

6

 

“Purchaser
Indemnitee” shall have the meaning specified in Section 8.1 of
this Agreement.

 

“Receiving
Party” shall have the meaning specified in Section 7.1(a) of
this Agreement.

 

“Representative”
shall mean, with respect to any party to this Agreement, any officer, director,
manager, employee, affiliate, agent, representative or advisor.

 

“Restricted
Transfer Period” shall mean the period commencing the date hereof
and ending on the earlier of (a) the Option Closing Date and (b) the Expiration
Date.

 

“Scheduled
Patents” shall mean the patents listed on Schedule 8.4 to this
Agreement.

 

“Securities
Act” shall mean the Securities Act of 1933, as amended.

 

“Sellers’
Representative” shall have the meaning specified in Section 8.7
of this Agreement.

 

“Selling
Stockholder” shall have the meaning specified in the Preamble of
this Agreement.

 

“Stockholder
Indemnitee”
shall have the meaning specified in Section 8.1 of this Agreement.

 

“Stockholders”
shall mean the Purchaser and each of the Selling Stockholders.

 

“Software”
shall mean any and all computer programs (including any and all software
implementations of algorithms, models and methodologies, whether in source code
or object code but excluding any off-the-shelf software except off-the-shelf
software that is both material and relates to the Company business) and
computer databases and computer compilations (including any and all data and
collections of data, whether machine readable or otherwise).

 

“Source
Code Escrow Agreement” shall have the meaning specified in the
License Agreement.

 

“Spartan
License Agreement” shall mean the software license agreement between
the Company and Spartan Technologies, LLC, dated March 22, 2002.

 

“System”
shall mean (i) the “Licensed Product” and/or (ii) the “Radical Network” as
defined in the License Agreement.

 

“Tag
Along Shares” shall have the meaning specified in
Section 5.2(d) of this Agreement.

 

7

 

“Taxes”
shall mean all federal, state, local and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, property, withholding, excise,
occupancy, custom, duty, capital stock, ad valorem, value added, estimated,
stamp, alternative and other taxes, governmental duties or governmental
assessments of any nature whatsoever, together with all interest, penalties and
additions imposed with respect to such amounts.

 

“Transaction
Agreements” shall mean (a) this Agreement, (b) the License
Agreement, (c) the Source Code Escrow Agreement, (d) the Employment Agreements,
(e) the Escrow Agreement, if any, (f) the Spartan Assignment Agreement between
the Company and Hemant Sharma and Thomas George, dated the date hereof and (g)
the New Escrow Agreement, if any.

 

“Transfer”
shall have the meaning specified in Section 5.1 of this Agreement.

 

“Transferee”
shall have the meaning specified in Section 5.2(a) of this Agreement.

 

“Transfer
Notice” shall have the meaning specified in Section 5.2(a) of
this Agreement.

 

“Transferring
Stockholder” shall have the meaning specified in Section 5.2(a)
of this Agreement.

 

“Transfer
Shares” shall have the meaning specified in Section 5.2(a) of
this Agreement.

 

“Violation”
shall have the meaning specified in Section 3.1(c)(i)(A) of this
Agreement.

 

“Voting
Debt” shall have the meaning specified in Section 3.1(d) of
this Agreement.

 

ARTICLE TWO

 

PURCHASE AND SALE; OPTION

 

SECTION 2.1.  Purchase and Sale.  On the date hereof, and upon the terms and
subject to the conditions hereinafter set forth, the Company shall issue and
sell to the Purchaser the Purchased Shares, and the Purchaser shall purchase
from the Company the Purchased Shares.

 

8

 

SECTION 2.2.  Purchase Price.  The purchase price for the Purchased Shares
shall be $750,000 (the “Purchase Price”), payable by the Purchaser
to the Company as provided in Section 2.3 below.

 

SECTION 2.3.  Payment of Purchase Price and Delivery of
Shares.  On the date hereof (the “Closing Date”),
the Purchaser shall pay the Purchase Price to the Company in cash by wire
transfer of immediately available funds to the Company’s account at JPMorgan
Chase Bank, Account Number 305-0671403-65, ABA Routing Number 021000021, the
Company shall deliver to the Purchaser a certificate representing the Purchased
Shares issued in the Purchaser’s name, and the Selling Stockholders shall
deliver the Option Shares, duly endorsed for transfer to the Purchaser or
accompanied by stock powers executed in blank to the Company to be held in
escrow by it.  The consummation of the
purchase and sale of the Purchased Shares shall occur at the offices of Boies,
Schiller and Flexner LLP, 570 Lexington Avenue, 16th Floor, New
York, New York 10022, or at such other place as the Purchaser and the Company
may agree (the “Closing”).

 

SECTION 2.4.  Option. (a) On the Closing Date, and
upon the terms and subject to the conditions hereinafter set forth, the Selling
Stockholders hereby grant to the Purchaser an option, exercisable in whole and
not in part in the Purchaser’s sole discretion, to purchase an aggregate of
42,160 shares of Company Common Stock (the “Option”) for the Option Exercise Price,
which shares represent, after giving effect to the issuance of the Purchased
Shares contemplated in Section 2.1 above, 75% of the issued and
outstanding shares of Company Common Stock. 
The number of shares of Company Common Stock to be sold by each Selling
Stockholder (in each case, the “Option Shares”) upon exercise of the
Option is set forth next to such Selling Stockholders’ name in Exhibit B
hereto.  The “Option Exercise Price” for
the Option shall be equal to the product of (i) the Average Daily Revenue for
the three Fiscal Months immediately prior to the Option Exercise Date and (ii)
252.  In the event that the Option
Exercise Price as calculated in accordance with the preceding sentence is (A)
less than $4,000,000, the Option Exercise Price shall be $4,000,000 or (B)
greater than $18,000,000, the Option Exercise Price shall be $18,000,000.  Notwithstanding the foregoing, if the
Exercise Price is less than $18,000,000, Additional Option Payment Amounts, as
set forth in Section 2.5 below, if any, shall be paid to the Selling
Stockholders towards the purchase of Option Shares.

 

(b)                                 In
the event that the Purchaser wishes to exercise the Option, the Purchaser shall
deliver a written notice to the Company and each of the Selling Stockholders
(the “Option
Exercise Notice”) specifying a date for the exercise of the Option
which date shall be one of February 28, 2004, March 27, 2004,
May 1, 2004 or May 29, 2004 (each, an “Option Exercise Date”).  Such notice may be delivered at any time
within the 30 day period prior to and including any such Option Exercise Date.  If an Option Exercise Notice is not delivered
on or prior to May 29, 2004 (the “Expiration Date”), the Option shall expire
and the parties hereto shall have no further rights or obligations with respect
to such Option.  Within 10 days of
delivery of the Option Exercise Notice, each of the Selling Stockholders shall
provide the Purchaser with written payment instructions for their pro rata
portion of the Option Exercise Price (the “Payment Instructions”) and each of the
Selling Stockholders

 

9

 

shall provide written notice to the Purchaser of any updates to the
representations and warranties set forth in Section 3.1 or 3.2 below, as
the case may be, to be made or confirmed on the Option Closing Date pursuant to
Section 2.4(c) below which are necessary to make such representations and
warranties true and correct on the Option Closing Date, which update may only
reflect events that occurred subsequent to, and not prior to, the Closing Date.  The closing of the purchase and sale of the
Option Shares shall take place at the offices of the Purchaser on the thirtieth
day after the Option Exercise Date (or if such date is not a Business Day, the
immediately succeeding Business Day) (the “Option Closing Date”) unless on or prior
to such date the Purchaser determines, in its sole judgment, as a result of any
updates to the representations and warranties not to exercise the Option.  Failure of one or more Selling Stockholders
to provide Payment Instructions shall not affect each such Selling
Stockholder’s obligation to deliver the Option Shares on the Option Closing
Date.  In the event one or more Selling
Stockholders (other than Hemant Sharma or Thomas George) fails to provide Payment
Instructions, payment will be made by certified check to any such Selling
Stockholder as provided in Section 9.1 hereof.

 

(c)                                  On
the Option Closing Date, unless the Purchaser shall have elected not to
exercise the Option pursuant to Section 2.4(b) above, the Purchaser shall
(i) pay the portion of the Option Exercise Price to each Selling Stockholder in
the manner set forth in Section 2.4(d) below on a pro rata basis based on the
number of Option Shares sold by each Selling Stockholder and (ii) provide
written confirmation that the representations and warranties of the Purchaser
set forth in Section 3.3 below are true and correct as if made on the
Option Closing Date.  Simultaneously, on
the Option Closing Date, unless the Purchaser shall have elected not to
exercise the Option pursuant to Section 2.4(b) above, (A) the Company
shall release from escrow to the Purchaser the Option Shares duly endorsed for
transfer to the Purchaser or accompanied by stock powers executed in blank, (B)
the Selling Stockholders shall jointly and severally make the representations
and warranties set forth in Section 3.1 below as of the Option Closing
Date, with such updates as previously disclosed in writing to the Purchaser
pursuant to Section 2.4(b) above, (C) each Selling Stockholder shall
provide written confirmation that the representations and warranties of each
Selling Stockholder set forth in Section 3.2 below are true and correct as
if made on the Option Closing Date with such updates as previously disclosed in
writing to the Purchaser pursuant to Section 2.4(b) above, and (D) each of
Hemant Sharma and Thomas George shall have entered into separate employment
agreements with the Purchaser or any of its Affiliates as designated by the
Purchaser substantially in the form of Exhibit C hereto (the “Employment
Agreements”).

 

(d)                                 The
Option Exercise Price shall be paid by the Purchaser to the Selling
Stockholders in the following manner: (i) their respective pro rata portion of the
first $1,575,000 of the Option Exercise Price shall be paid in cash by
certified check or by wire transfer of immediately available funds, and (ii)
the remainder of the Option Exercise Price shall be paid in cash by certified
check or by wire transfer of immediately available funds to the Escrow Agent to
hold in an interest bearing escrow account maintained by the Escrow Agent in
accordance with an escrow agreement substantially in the form of Exhibit D
hereto (the “Escrow Agreement”) for the benefit of each of the Selling
Stockholders and shall,

 

10

 

subject to the terms of the Escrow Agreement, be released by the Escrow
Agent to each of the Selling Stockholders in their respective pro rata
shares on the date that is one calendar year from the Option Exercise Date (or
if such date is not a Business Day, the immediately succeeding Business
Day).  Notwithstanding anything to the
contrary in this Agreement, but subject to the terms of the Escrow Agreement,
after the Option Closing Date, (A) if cumulative Gross Revenues for the period
beginning as of the date hereof exceeds (x) $100,000,000, then an amount equal
to 25% of the Escrow Fund (as defined in the Escrow Agreement) shall be
released by the Escrow Agent to the Selling Stockholders or (y) $150,000,000,
then an amount equal to 50% of such remaining Escrow Fund shall be released by
the Escrow Agent to the Selling Stockholders, and (B) if there is a Change of
Control, an amount equal to 50% of the amounts then in Escrow Fund shall be
released by the Escrow Agent to the Selling Stockholders, and in the event of
this clause (B), any subsequent Additional Option Payment Amounts, if any, to
be paid to the Escrow Agent pursuant to Section 2.5(b) in respect of any
Purchaser Claims subsequent to the Change of Control shall instead be paid
directly to the Selling Stockholders.

 

SECTION 2.5.  Additional Option Payment Amounts.  (a) Subject to Sections 2.6 and 2.7 below,
to the extent that the Purchaser has exercised the Option, each of the Selling
Stockholders shall be entitled to their pro rata share based on the number of
Option Shares sold by each Selling Stockholder of up to four additional
payments (together, the “Additional Option Payment Amounts”) to be
calculated, with respect to the first Additional Option Payment Amount, as of
the date that is the last day of the second Fiscal Month after the Fiscal Month
in which the Option Exercise Date occurs and, with respect to the second,
third, and fourth Additional Option Payment Amounts, as of the date that is the
last day of the third Fiscal Month from the previous calculation date (each, an
“Additional
Payment Calculation Date”). 
Each Additional Option Payment Amount shall be an amount, if any, equal
to (i) the product of (A) 25% and (B) the difference between (1) the Gross
Revenues during the period from and including the Option Exercise Date to and
including the relevant Additional Payment Calculation Date and (2) the Option
Exercise Price less (ii) any Additional Option Payment Amounts corresponding to
a previous Additional Payment Calculation Date; provided that, in no event
shall the aggregate Additional Option Payment Amounts be greater than the
difference between (I) $18,000,000 and (II) the Option Exercise Price.

 

(b)                                 Subject
to Sections 2.6 and 2.7 below, the Additional Option Payment Amounts shall be
payable in cash as follows: (i) 50% of each Additional Option Payment Amount,
if any, shall be payable on the fifteenth day after the corresponding
Additional Payment Calculation Date (or if such date is not a Business Day, the
immediately preceding Business Day) and (ii) 50% of each of the first, second
and third Additional Option Payment Amounts, if any, shall be payable on the
fifteenth day after the fourth Additional Payment Calculation Date (or if such
date is not a Business Day, the immediately preceding Business Day) and (iii)
50% of the fourth Additional Option Payment Amount, if any, shall be payable no
later than 90 days after the fourth Additional Payment Calculation Date (or if
such date is not a Business Day, the immediately succeeding Business Day) (the
“Final
Payment Date”, and such Final Payment Date and each such other
payment date, an “Additional Payment

 

11

 

Date”);
provided
that, the amount to be paid pursuant to clauses (ii) and (iii) above
shall be increased or decreased, as the case may be, to reflect any adjustments
to the Gross Revenues as reflected in the Purchaser’s books and records during
the applicable period; provided further that, at the time of any
payment of any Additional Option Payment Amount pursuant to clauses (i), (ii)
or (iii) above, to the extent that any Purchaser Claim Amount (as defined in
the Escrow Agreement) exceeds the amount of any related Purchaser Reserve (as
defined in the Escrow Agreement), any such Additional Payment Amounts to be
paid up to an amount equal to any such excess amounts shall be paid to the
Escrow Agent and held pursuant to the Escrow Agreement.

 

SECTION 2.6.  Change of Control.  In the event of a Change of Control (a) that
results in the ITG Group discontinuing or being unable to continue the use,
marketing and distribution of the System in a manner substantially similar to
the marketing and distribution of the System prior to the Change of Control, or
(b) in which the acquiring Person, directly or indirectly, owns a trading
system that competes with the System (provided that any list trading system
shall not be considered to compete with the System) (each such event, a “Change of
Control Event”), then:

 

(i)                                     The
Purchaser shall promptly notify the Selling Stockholders of the Change of
Control Event in writing.

 

(ii)                                  To
the extent such Change of Control Event has occurred prior to the Expiration
Date and the Option has not been exercised, then the Purchaser shall have the
right to exercise the Option pursuant to Section 2.4 hereof only within
five Business Days of the Change of Control Event, by delivery of a written
notice to the Company and each of the Selling Stockholders within five Business
Days of the Change of Control Event electing to exercise such Option, which
notice shall constitute an Option Exercise Notice.

 

(A)                              If
the Purchaser elects to exercise the Option, then, notwithstanding anything to
the contrary, (1) the Option Exercise Date shall be the date of such Option
Exercise Notice, (2) the Option Exercise Price shall be $18,000,000 which
entire amount shall be payable on the Option Closing Date directly to the
Selling Stockholders, (3) no Additional Option Payment Amounts shall be
payable, and (4) the Option Closing Date shall be fifteen days after the Option
Exercise Date (or if such date is not a Business Day, the immediately
succeeding Business Day).

 

(B)                                If
the Purchaser does not elect to exercise the Option, then, on the fifth
Business Day after the date of the Change of Control Event, notwithstanding
anything to the contrary, (1) the License Agreement shall become non-exclusive
and terminable by the Company at any time upon six months notice pursuant to
Section 2 of the License Agreement, (2) the Purchaser and the Company shall
give joint instructions to the source code escrow agent to terminate the Source
Code Escrow Agreement, (3) the Option shall terminate and the Expiration Date
shall be the last day the Purchaser may elect to exercise such Option pursuant
to clause (ii) above, and (4) the

 

12

 

Purchaser shall pay a purchase price adjustment to the Company towards
the purchase of Purchased Shares as follows:

 

if the Change of Control Event occurs within

 

	
  less than 6 months after Closing Date

  	
   

  	
  $3 million or 35% of aggregate Gross Revenues from the date hereof to
  such date, whichever is higher

  
	
   

  	
   

  	
   

  
	
  6-9 months after Closing Date

  	
   

  	
  $4 million or 35% of aggregate Gross Revenues from the date hereof to
  such date, whichever is higher

  
	
   

  	
   

  	
   

  
	
  more than 9 months after Closing Date

  	
   

  	
  $5 million or 35% of aggregate Gross Revenues from the date hereof to
  such date, whichever is higher

  

 

(iii)                               To
the extent such Change of Control Event has occurred prior to the fourth
Additional Payment Calculation Date and the Option has been exercised, then

 

(A)                              No
further Additional Option Payment Amounts shall be paid (including any
Additional Option Payment Amounts accrued but unpaid) unless the sum of such
unpaid amounts calculated in accordance with Section 2.5 is higher than
the amounts paid pursuant to (B) below in which case the difference between the
two shall be paid to the Selling Stockholders on the Final Payment Date.

 

(B)                                The
Purchaser shall pay to each of the Selling Stockholders their pro rata
share based on the number of Option Shares sold by each Selling Stockholder:

 

(1)                                  if the Option
Exercise Price was $4 million or more, but less than $6 million, $12 million,

 

(2)                                  if the Option
Exercise Price was $6 million or more, but less than $9 million, 16 million,
and

 

(3)                                  if the Option
Exercise Price was $9 million or more, $18 million.

 

In each case less (x) the Option Exercise Price and (y) any Additional
Option Payment Amounts actually paid.

 

(C)                                Subject
to the terms of the Escrow Agreement, the Escrow Fund shall be released by the
Escrow Agent to the Selling Stockholders.

 

13

 

SECTION 2.7.  Certain Acquisitions.  (a) 
In the event of a Competing Acquisition that results in the ITG Group
either (x) discontinuing or being unable to continue the use, marketing and
distribution of the System in a manner substantially similar to the marketing
and distribution of the System prior to the Competing Acquisition or (y)
replacing the use of the System with a competing system (each, a “Competing
Acquisition Event”), then:

 

(i)                                     The
Purchaser shall promptly notify the Selling Stockholders of the Competing
Acquisition Event in writing.

 

(ii)                                  To
the extent such Competing Acquisition Event has occurred prior to the
Expiration Date, the Option has not been exercised and no Change of Control
Event shall have occurred, then

 

(A)                              (1)
The License Agreement shall become non-exclusive and shall be terminable by the
Company at any time upon six months notice pursuant to Section 2 of the License
Agreement, (2) the Purchaser and the Company shall give joint instructions to
the source code escrow agent to terminate the Source Code Escrow Agreement, (3)
the Option shall terminate and the Expiration Date shall be the date of the
Competing Acquisition Event, and (4) the Purchaser shall pay a purchase price
adjustment to the Company towards the purchase of Purchased Shares equal to the
higher of (x) $1,000,000 and (y) 25% of the aggregate Gross Revenues for the
period beginning on the date hereof and ending on the date of the Competing
Acquisition Event; provided that, if Gross Revenues have not
exceeded $1,250,000 within the first six calendar months, or $2,500,000 within
the first nine calendar months, from the Closing Date, as applicable, then no
such purchase price adjustment shall be paid.

 

(B)                                The
Company shall have an option, for six months from the date of the Competing
Acquisition Event, to repurchase the Purchased Shares from the Purchaser for
$750,000.

 

(iii)                               To
the extent such Competing Acquisition Event has occurred prior to the fourth
Additional Payment Calculation Date, the Option has been exercised and no
Change of Control Event shall have occurred, then

 

(A)                              No
further Additional Option Payment Amounts shall be paid (including any Additional
Option Payment Amounts accrued but unpaid) unless the sum of such unpaid
amounts calculated in accordance with Section 2.5 is higher than the
amounts paid pursuant to (B) below in which case the difference between the two
shall be paid to the Selling Stockholders on the Final Payment Date.

 

(B)                                The
Purchaser shall pay to each of the Selling Stockholders their pro rata
share based on the number of Option Shares sold by each Selling Stockholder:

 

14

 

(1)               if the Option Exercise Price was $4
million or more, but less than $6 million, $12 million,

 

(2)               if the Option Exercise Price was $6
million or more, but less than $9 million, $16 million, and

 

(3)               if the Option Exercise Price was $9
million or more, $18 million.

 

In each case less (x) the Option Exercise Price and (y) any Additional
Option Payment Amounts actually paid.

 

(C)                                Subject
to the terms of the Escrow Agreement, the Escrow Fund shall be released by the
Escrow Agent to the Selling Stockholders.

 

(b)                                 In
the event that ITG Group enters into negotiations (but not a binding contract)
for a Competing Acquisition prior to the Expiration Date, the Option has not
been exercised and no Change of Control Event shall have occurred, then the
Purchaser shall promptly notify the Company of such fact in writing and the
License Agreement shall become non-exclusive pursuant to Section 2 of the
License Agreement.

 

ARTICLE THREE

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.1.  Representations and Warranties of the Company.  The Company hereby makes the following
representations and warranties to the Purchaser:

 

(a)                                  Organization,
Qualification and Corporate Power. 
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with the requisite
corporate power and authority to own, lease, operate and use its properties and
assets and to carry on its business as currently conducted.  The Company does not own any interest in any
other Person.

 

(b)                                 Authorization;
Enforcement.  The Company has all
requisite corporate power and authority to enter into the Transaction
Agreements to which it is a party and to consummate the transactions
contemplated thereby.  The execution and
delivery of the Transaction Agreements to which the Company is a party and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate action on the part of the Company.  The Transaction Agreements to which the
Company is a party have been duly executed and delivered by the Company and
constitute valid and binding obligations of the Company, enforceable against it
in accordance with their terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the rights

 

15

 

and remedies of creditors generally, and subject to general principles
of equity, whether applied by a court of law or equity.

 

(c)                                  No
Conflicts; No Consents.  (i) The
execution and delivery of the Transaction Agreements to which the Company is a
party do not, and the consummation of the transactions contemplated thereby and
the compliance with the terms thereof will not, (A) conflict with, or result in
any violation of, or constitute a default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation,
acceleration or increase of any obligation, liability or fee, or the loss of a
benefit under (any such conflict, violation, default, right of termination,
cancellation, acceleration or increase, or loss, including under any “change of
control” provision, a “Violation”) any provision of the
certificate of incorporation or by-laws of the Company, (B) result in any
Violation of any Contract to which the Company is a party or by which any of
its properties, assets or businesses are bound or (C) result in any Violation
of any Permit, Order or Legal Requirement applicable to the Company or its
properties, assets or business or (D) result in the creation or imposition of any
Encumbrance on any properties or assets of the Company.

 

(ii)                                  No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, or notice to, any Person is required in connection
with the execution and delivery of the Transaction Agreements by the Company,
or the consummation of the transactions contemplated thereby or the compliance
with the terms thereof.

 

(d)                                 Capitalization.  The authorized capital stock of the Company
consists solely of 10,000,000 shares of Company Common Stock.  At the close of business on June 11,
2003, 56,213 shares of Company Common Stock were issued and outstanding, no
shares of Company Common Stock were held by the Company in its treasury and,
except as set forth on Schedule 3.1(d) hereto, no shares of Company Common
Stock were authorized and reserved for issuance.  Exhibit B sets forth a true and complete list of the names of
each of the holders of the outstanding shares of Company Common Stock and the number
of shares of Company Common Stock owned by each such holder.  All of the outstanding shares of Company
Common Stock have been duly authorized and validly issued and are fully paid
and non-assessable, are not subject to any preemptive rights (and were not
issued in violation of any preemptive rights) and have been issued in full
compliance with all applicable securities laws and other applicable Legal
Requirements.  No bonds, debentures,
notes or other indebtedness having the right to vote on any matters on which
holders of the Company Common Stock may vote (“Voting Debt”) are issued or
outstanding.  Except for this Agreement,
there are no options, warrants, calls, rights, commitments or agreements of any
character to which the Company is a party or by which the Company is bound relating
to the issued or unissued capital stock or Voting Debt of the Company, or
obligating the Company to issue, transfer, deliver or sell any shares of
capital stock or other equity interest or any Voting Debt, or any securities
convertible or exchangeable for any capital stock or other equity interest or
any Voting Debt, of the Company or obligating the Company to issue, grant,
extend or enter into any such option, warrant, call, right, commitment or
agreement.  There are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or pursuant to which the

 

16

 

Company is or could be required to register shares of Company Common
Stock or other securities under the Securities Act.  The Company has, and upon delivery of the Purchased Shares by the
Company to the Purchaser pursuant to the terms of this Agreement, the Purchaser
will acquire, good and valid title to the Purchased Shares free and clear of
any Encumbrances.

 

(e)                                  Financial
Statements.  The Company has
delivered to the Purchaser true and complete copies of the balance sheet of the
Company as of May 31, 2003, November 30, 2002, and November 30,
2001, together with statements of operations and changes in stockholders’
equity for the six month period ended May 31, 2003 and for the years ended
November 30, 2002 and 2001 (the “Company Financial Statements”).  The Company Financial Statements (i) comply
with all applicable accounting requirements, and (ii) are true and correct and
fairly present the financial condition, results of operations, and changes in
stockholders’ equity of the Company as of and for the periods indicated.  Except for those liabilities that are fully
reflected or reserved for in the balance sheet of the Company as of
November 30, 2002, and liabilities incurred since November 30, 2002
in the ordinary course of business consistent with past practice, at
November 30, 2002 the Company did not have, and since such date, except as
set forth in Schedule 3.1(e) hereto, the Company has not incurred, any
liabilities or obligations of any nature whatsoever (whether accrued, absolute,
contingent or otherwise).  The Company
Financial Statements have not been audited by an independent auditor.

 

(f)                                    Compliance
with Applicable Laws.  The business
of the Company has not been and is not being conducted in violation of any
material Legal Requirement or Order of any Governmental Entity applicable to
the Company.  No Governmental Entity has
initiated any proceeding or, to the knowledge of Company, investigation into
the business or operations of Company. 
To the knowledge of the Company, there is no unresolved or uncured
violation or exception noted by any Governmental Entity in any report, comment
letter or other statement relating to or based on any examinations of the
Company or otherwise, and the Company is not a party to any written agreement,
commitment letter or other similar undertaking with or to any Governmental
Entity with respect to the conduct of its business.  The Company has filed all material regulatory reports, schedules,
forms, registrations and other documents, together with any amendments required
to be made with respect thereto, that it was required to file with any
Governmental Entity, and has paid all fees and assessments due and payable in
connection therewith.

 

(g)                                 [Intentionally
omitted.]

 

(h)                                 Certificate
of Incorporation and Bylaws; Records. 
The Company has delivered to the Purchaser true and complete copies of:
(i) the Company’s certificate of incorporation and by-laws, including all
amendments thereto, (ii) the stock records of the Company, and (iii) the
minutes and other records of the meetings and other proceedings (including any
actions taken by written consent or otherwise without a meeting) of the
stockholders of the Company, the board of directors of the Company and all
committees of the board of directors of the Company.  There have been no meetings or other proceedings of the
stockholders of the Company, the board of directors of the Company or any
committee of

 

17

 

the board of directors of the Company that are not fully reflected in
such minutes or other records.  The
accounting records, stock records, minute books and other records of the
Company are accurate, up-to-date and complete, and to the knowledge of the
Company, have been maintained in accordance with sound and prudent business
practices.

 

(i)                                     Legal
Proceedings.  Except as set forth in
Schedule 3.1(i), there is no claim, litigation, inquiry, suit, action,
investigation or proceeding (whether judicial, arbitral, administrative or
other) (“Proceeding”)
pending or, to the knowledge of the Company, threatened, against or affecting
the Company, or any of its properties, assets or businesses which if adversely
determined could reasonably be expected to have a Material Adverse Effect on
the Company, or challenging the validity or propriety of the Transaction
Agreements or any of the transactions contemplated thereby, nor is there any
Order of any Governmental Entity or arbitrator, or any settlement or
stipulation with any Person, outstanding or imminent against the Company.

 

(j)                                     Taxes.  Except as set forth in Schedule 3.1(j),
the Company has filed all tax returns required to be filed by it and has paid
all Taxes required to be paid (whether or not shown to be due on such tax
returns).  All such tax returns are true
and complete.

 

(k)                                  Contracts.  The Company has delivered to the Purchaser
true and complete copies of all material Contracts to which the Company is a
party or by which any of its properties, assets or businesses are bound and all
material Contracts or term sheets currently under negotiation with any other
Person.  Schedule 3.1(k)(i) sets
forth a true and complete list of all material Contracts to which the Company
is a party or by which any of its properties, assets or businesses are bound
and all material Contracts or term sheets currently under negotiation with any
other Person.  Attached as
Section 3.1(k)(ii) of the Disclosure Schedule are correct, accurate
and complete copies of the form agreements presently used by Company with
respect to the Company’s business.  Each
material Contract to which the Company is a party is valid and in full force
and effect, and is enforceable by the Company in accordance with its terms.

 

(l)                                     Property.  The properties and assets owned or leased by
the Company constitute all properties (whether real or personal or tangible or
intangible) and assets necessary for the Company to conduct its business as it
is presently being conducted.  The
Company has good and marketable title to all of the properties and assets owned
by the Company and has a valid leasehold interest in all properties or assets
leased by the Company, in each case, free and clear of all Encumbrances of any
nature whatsoever except statutory Encumbrances securing payments not yet due,
and Encumbrances as do not adversely affect the use of properties or assets
subject thereto or affected thereby or otherwise adversely impair business
operations at such properties.

 

(m)                               Intellectual
Property.  (i) The Company owns or
possesses licenses or rights to use all of the Intellectual Property necessary
for the conduct and operation of the Company’s business as presently conducted
and operated, free and clear of any Encumbrances.

 

18

 

(ii)                                  None
of the Intellectual Property, products, services or written material used in
the Company’s business or sold or provided by the Company contains any libelous
or obscene material.  Neither the
Intellectual Property of the Company nor the conduct of the Company’s business
as presently conducted by the Company infringes upon any Intellectual Property rights
of any other Person, provided that, no representation or
warranty is made as to the infringement or the noninfringement of any patent
rights.

 

(iii)                               Schedule 3.1(m)(iii)
contains a true and complete list of all of the currently registered United
States and foreign trademarks, service marks, trade names and domain names
(with registrar) owned by the Company and a list of the registrations or
pending applications for registration thereof. 
There is no pending or, to the Company’s knowledge, threatened opposition,
interference or cancellation proceeding before any court or registration
authority in any jurisdiction against the registrations listed in
Schedule 3.1(m)(iii).

 

(iv)                              Schedule 3.1(m)(iv)
contains a true and complete list of all of the currently issued and registered
United States and foreign patents and pending applications owned by the
Company.  The patents listed, if any, in
Schedule 3.1(m)(iv) are valid and subsisting, in full force and effect,
and have not been cancelled, expired or abandoned.  There is no pending or, to the Company’s knowledge, threatened
opposition, interference or cancellation proceeding before any court or
registration authority in any jurisdiction against the patents and patent
applications listed in Schedule 3.1(m)(iv).

 

(v)                                 Schedule 3.1(m)(v)
contains a true and complete list of all Contracts under which Intellectual
Property used in the Company’s business and (A) owned by the Company is
licensed, or rights thereunder are granted, to any Person or (B) owned by any
other Person, other than “shrink-wrap” and similar widely available commercial
end-user licenses, is licensed, or rights thereunder are granted, to the
Company.  The Company is not in default
under any such Contracts and the Company has not received notice of any default
thereunder by the Company.  All such
Contracts are valid and binding on the parties thereto and are in full force
and effect, and the Company is not, to Company’s knowledge, in breach of any
provision thereof or in default in any respect under the terms thereof.

 

(vi)                              No
claim of trade name, trade secret, trademark, copyright, patent or other
Intellectual Property infringement has been asserted or threatened against the
Company.  To the best of the Company’s
knowledge, no Person is infringing any Intellectual Property owned by the Company
and no such claims are pending or threatened against a third party by the
Company.

 

(vii)                           The
Company takes, and has taken, reasonable measures to protect the
confidentiality of its trade secrets, know-how or other confidential
information relating to the Company’s business as currently operated.  No trade secret, know-how or other
confidential information has been disclosed or authorized to be disclosed to
any Person, including any employee, agent, contractor or other entity, other
than pursuant to a non-disclosure agreement or other confidential obligation
that adequately protects Company’s proprietary interests in and to such trade
secrets.

 

19

 

(viii)                        Schedule 3.1(m)(viii)
contains a true and complete list of all Software relating to the Company’s
business which is owned, licensed, leased or otherwise used by the Company in
connection with the operation of the Company’s business.  Each item of Software listed in Schedule 3.1(m)(viii)
is (A) owned by the Company, (B) currently in the public domain or otherwise
available to the Company without the license, lease or consent of any Person,
or (C) used under rights granted to the Company pursuant to a Contract with
another Person, which Contract is disclosed in Schedule 3.1(m)(v).  With respect to the Software set forth in
Schedule 3.1(m)(viii) which the Company purports to own, such Software was
either (1) developed by employees of the Company within the scope of their
employment, (2) developed by independent contractors who have assigned their
rights to the Company pursuant to a Contract, (3) developed by independent
contractors as work made for hire, or (4) acquired or purchased from one or
more Persons pursuant to a written Contract.

 

(n)                                 Absence
of Changes.  Since the date of the
most recent Company Financial Statements provided to the Purchaser,  there
has not been any Material Adverse Effect on the Company.  Since the date of the most recent Company
Financial Statements provided to the Purchaser, the Company has conducted its
business in the ordinary course consistent with the past practices of the
Company.

 

(o)                                 Certain
Fees.  No fees or commissions will
be payable by the Company to any broker, financial advisor, consultant, finder,
placement agent, investment banker, bank or other Person, with respect to the
Transaction Agreements or any transactions contemplated thereby.

 

(p)                                 Costs.  The Company shall bear its own costs and
expenses, including attorney fees and disbursements, in preparing, negotiating,
entering or performing under any of the Transaction Agreements.

 

SECTION 3.2.  Representations and Warranties of the
Selling Stockholders.  Each Selling
Stockholder severally hereby makes the following representations and warranties
to the Purchaser and each other Selling Stockholder:

 

(a)                                  Ownership
of Option Shares.  Such Selling
Stockholder has, and, upon delivery of the Option Shares set forth opposite
such Selling Stockholder’s name on Appendix A by such Selling Stockholder to
the Purchaser pursuant to the terms of this Agreement, the Purchaser will
acquire, good and valid title to such Option Shares free and clear of any
Encumbrances.  Except for this
Agreement, there are no options, warrants, calls, rights, commitments or
agreements of any character to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound relating to the issued or unissued
capital stock or Voting Debt of the Company, or obligating such Selling
Stockholder to transfer, deliver or sell any shares of capital stock or other
equity interest or any Voting Debt, or any securities convertible or
exchangeable for any capital stock or other equity interest or any Voting Debt,
of the Company or obligating such Selling Stockholder to issue, grant, extend
or enter into any such option, warrant, call, right, commitment or
agreement.  There are no

 

20

 

outstanding contractual obligations of such Selling Stockholder to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company.

 

(b)                                 Authorization;
Enforcement.  Such Selling
Stockholder has all requisite legal capacity, power and authority to enter into
the Transaction Agreements to which such Selling Stockholder is a party and to
consummate the transactions contemplated thereby, including the sale of the
Option Shares.  The Transaction
Agreements to which such Selling Stockholder is a party have been duly executed
and delivered by such Selling Stockholder and constitute valid and binding
obligations of such Selling Stockholder, enforceable against the Selling
Stockholder in accordance with their terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the rights and remedies
of creditors generally, and subject to general principles of equity, whether
applied by a court of law or equity.

 

(c)                                  No
Conflicts; No Consents.  (i) The
execution and delivery of the Transaction Agreements to which such Selling
Stockholder is a party do not, and the consummation of the transactions contemplated
thereby and the compliance with the terms thereof will not, (A) result in any
Violation of any Contract to which such Selling Stockholder is a party or by
which any of its properties or assets are bound, (B) result in any Violation of
any Permit, Order or Legal Requirement applicable to such Selling Stockholder
or its properties or assets or (C) result in the creation or imposition of any
Encumbrance on any properties or assets of such Selling Stockholder.

 

(ii)                                  No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, or notice to, any Person is required in connection
with the execution and delivery of the Transaction Agreements by such Selling
Stockholder, or the consummation of the transactions contemplated thereby or
their compliance with the terms thereof, including the sale of the Option
Shares.

 

(d)                                 Certain
Fees.  No fees or commissions will
be payable by such Selling Stockholder to any broker, financial advisor,
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the Transactions Agreements or any transactions contemplated
thereby, including the sale of the Option Shares.

 

(e)                                  Costs.  Each Selling Stockholder shall bear its own
costs and expenses, including attorney fees and disbursements, in preparing,
negotiating, entering or performing under any of the Transaction Agreements.

 

SECTION 3.3.  Representations and Warranties of the
Purchaser.  The Purchaser hereby
makes the following representations and warranties to each of the Company and
each Selling Stockholder:

 

(a)                                  Organization;
Qualification and Corporate Power. 
The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with the requisite
corporate power and authority to own, lease, operate and use its properties and
assets and to carry on its business as currently conducted.  The Purchaser is

 

21

 

duly licensed or qualified to do business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, other than in such jurisdictions where the failure to be so licensed
or qualified would not, either individually or in the aggregate, have a
Material Adverse Effect on the Purchaser.

 

(b)                                 Authorization;
Enforcement.  The Purchaser has all
requisite corporate power and authority to enter into the Transaction
Agreements to which it is a party and to consummate the transactions
contemplated thereby.  The execution and
delivery of the Transaction Agreements to which the Purchaser is a party and
the consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the Purchaser.  The Transaction Agreements to which the
Purchaser is a party have been duly executed and delivered by the Purchaser and
constitute valid and binding obligations of the Purchaser, enforceable against
it in accordance with their terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the rights and remedies of creditors
generally, and subject to general principles of equity, whether applied by a
court of law or equity.

 

(c)                                  No
Conflicts.  The execution and
delivery of the Transaction Agreements to which the Purchaser is a party do
not, and the consummation of the transactions contemplated thereby and the
compliance with the terms thereof will not, (i) result in a Violation of any
provision of the certificate of incorporation or by-laws of the Purchaser, (ii)
result in any Violation of any Contract to which the Purchaser is a party or by
which any of its properties, assets or businesses are bound or (iii) result in
any Violation of any Permit, Order or Legal Requirement applicable to the
Purchaser or its properties, assets or business or (iv) result in the creation
or imposition of any Encumbrance on any properties or assets of the Purchaser,
except in the case of clauses (ii), (iii) and (iv), Violations which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Purchaser.

 

(d)                                 No
Consents.  No consent, waiver,
approval, order or authorization of, or registration, declaration or filing
with, or notice to, any Person is required in connection with the execution and
delivery of the Transaction Agreements by the Purchaser, or the consummation of
the transactions contemplated thereby or the compliance with the terms thereof.

 

(e)                                  Investment.  The Purchaser is an “accredited investor”
within the meaning of Rule 501 under the Securities Act, and is acquiring the
Purchased Shares (and the Option Shares assuming the exercise of the Option)
pursuant to this Agreement for its own account for investment and not with a
view to or for resale in connection with any “distribution” thereof within the
meaning of the Securities Act.

 

(f)                                    Costs.  The Purchaser shall bear its own costs and
expenses, including attorney fees and disbursements, in preparing, negotiating,
entering or performing under any of the Transaction Agreements.

 

22

 

ARTICLE FOUR

 

GOVERNANCE

 

SECTION 4.1.  Board Composition.  The business of the Company shall be managed
by the board of directors.  Each of
Hemant Sharma, Thomas George and the Purchaser shall be entitled, so long as
such Stockholder continues to hold a Minimum Interest, to nominate one of the
members of the board of directors.  If
any other Person becomes a Stockholder that holds a Minimum Interest, such
Stockholder shall also be entitled to nominate one of the members of the board
of directors.  Each of the Stockholders
agrees to vote his/her/its Company Common Stock and cause the Company to
appoint any such nominee to the board of directors.  If any Stockholder ceases to hold a Minimum Interest, such
Stockholder shall no longer be entitled to nominate a member of the board of
directors, and shall cause its nominee to resign from the board of directors; provided
that, if the Option is exercised, then subsequent to the exercise of
the Option, so long as the Company shall continue its existence as a separate
legal entity, Hemant Sharma and Thomas George shall have the right, together,
to nominate only one member to the board of directors of the Company until the
Final Payment Date.  Notwithstanding
this Section 4.1, the number of directors may be greater than the number
of Stockholders that hold a Minimum Interest.

 

SECTION 4.2.  Board Action.  Subject to the provisions of Section 4.3,
until the Option Closing Date, the following actions shall be taken by the
Company only after the unanimous approval of the board of directors of the
Company, or by the approval of Stockholders that beneficially own an aggregate
of least 90% of the issued and outstanding shares of Company Common Stock if
such issue is in the power of the Stockholders in accordance with applicable
Legal Requirements:

 

(a)                                  the
amendment of the certificate of incorporation or by-laws of the Company;

 

(b)                                 a
change in the nature of the business of the Company or the entering into a new
business by the Company;

 

(c)                                  the
issuance, redemption or repurchase of any capital stock of the Company;

 

(d)                                 the
undertaking of any merger, consolidation or joint venture, or the acquisition of
the capital stock or other equity interests of, or all or substantially all of
the assets of, another Person;

 

(e)                                  the
creation of any subsidiaries of the Company;

 

(f)                                    the
appointment or discharge of any employees of the Company and the approval of
compensation of any employees of the Company including bonuses, stock options,
profit sharing or retirement benefits; provided that, (i) approval of any
recommendations made by Hemant Sharma or Thomas George with respect to the
foregoing shall not be unreasonably withheld, and (ii) no such approval will be
required with respect to

 

23

 

a base salary of $110,000 for, and any benefits currently received by
and specified in Schedule 3.1(k)(i), each of Hemant Sharma and Thomas
George;

 

(g)                                 adjusting
the size of the board of directors of the Company;

 

(h)                                 the
dissolution, liquidation or cessation of business activities of the Company;

 

(i)                                     the
entering into, modification or termination of one or more Contracts with a term
of one year or more or involving a payment or obligation of (i) $25,000 or more
on an individual basis or (ii) $250,000 or more in respect of Contracts not
unanimously approved by the board of directors in the aggregate in any twelve
month period, except where such entering into, modification or termination is
reflected in the Company’s budget, attached hereto as Exhibit E (the “Budget”);

 

(j)                                     the
entering into any transaction with an affiliate of the Company or any
Stockholder other than the Transaction Agreements and the transactions
contemplated therein;

 

(k)                                  the
sale, purchase, transfer, hypothecation or lease of one or more assets having a
value of (i) $25,000 or more on an individual basis or (ii) $250,000 or more in
respect of sales, purchases, transfers, hypothecations or leases not
unanimously approved by the board of directors in the aggregate in any twelve
month period, except where such sale, purchase, transfer, hypothecation or
lease is reflected in the Budget;

 

(l)                                     the
incurrence of any indebtedness (which shall not include accounts payable in the
ordinary course of business) by the Company in excess of $25,000 in the
aggregate in any twelve month period, except if such amount of indebtedness is
provided for in the Budget;

 

(m)                               the
investment of funds of the Company other than in Permitted Investments;

 

(n)                                 the
making by the Company of any loan or advance to any Person that results in
total outstanding loans and advances given by the Company to exceed $25,000 at
any time;

 

(o)                                 the
guaranty of any obligation or debt of any Person;

 

(p)                                 the
making of one or more capital expenditures of (i) $25,000 or more on an
individual basis or (ii) $250,000 or more in respect of capital expenditures
not unanimously approved by the board of directors in the aggregate in any
twelve month period, or any capital expenditure not in the ordinary course of
business, except where such capital expenditure is included in the Budget;

 

(q)                                 the
declaration or payment of dividends or distributions upon the capital stock of
the Company;

 

24

 

(r)                                    the
approval or modification of any accounting policies, or the appointment or
removal of independent auditors of the Company;

 

(s)                                  any
amendments to the Budget;

 

(t)                                    the
handling or resolution of any Proceeding pending, threatened against or
affecting the Company or any of its properties, assets or businesses; provided
that, to the extent the sole relief sought pursuant to such
Proceeding is monetary, such Proceeding involves a claim of $100,000 or more;

 

(u)                                 enter
into any license agreements to license the System, other than license
agreements specified in Schedule 4.2(u), on which license agreements shall
be, except as otherwise specified in Schedule 4.2(u), on terms and
conditions consistent with the Company’s ordinary business practices and in
form and substance substantially similar to the Company’s current form of
license agreement attached hereto as Exhibit F; and

 

(v)                                 enter
into any commitment (contingent or otherwise) to do any of the foregoing;

 

provided that,
(i) any actions to be taken with respect to a breach by the Purchaser of any of
the Transaction Agreements shall not require the approval of the director
nominated by the Purchaser; (ii) only the approval of the director nominated by
the Purchaser shall be required for the appointment of independent auditors by
the Purchaser to audit the Company to the extent the costs of such independent
auditor are bourne by the Purchaser; and (iii) only the approval of the
director nominated by the Purchaser will be required to approve any accounting
policies that are consistent with GAAP or to modify any accounting policies in
order for such policies to become consistent with GAAP.

 

SECTION 4.3.  Cessation of Rights.  Notwithstanding anything herein to the
contrary, Section 4.2 other than Section 4.2(h), 4.2(r) and clauses
(ii) and (iii) of the proviso to Section 4.2 shall no longer be effective
if (a) the Purchaser is found by final judgment by a court of competent jurisdiction
(not subject to further appeal) that the Purchaser has materially breached this
Agreement or any of the Transaction Agreements; provided that, (i)
Section 4.2(b) shall continue to apply with respect to the entry by the
Company into a business that is unrelated to the Company’s business as
currently conducted, (ii) Section 4.2(c) shall continue to apply with
respect to the issuance of capital stock if such issuance is not for cash or
has not been offered to existing Stockholders, and (iii) Section 4.2(e) shall
continue to apply with respect to the creation of any subsidiary that is not
wholly owned, or (b) the Purchaser does not exercise the Option by the
Expiration Date or the Option is terminated.

 

25

 

ARTICLE FIVE

 

COVENANTS

 

SECTION 5.1.  Transfers.  During the Restricted Transfer Period, no Stockholder shall (a)
offer, sell, transfer, agree to sell or transfer, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, assign, pledge, hypothecate or create or permit to exist
any Encumbrance on, or otherwise transfer or dispose of (including the deposit
of any such shares of Company Common Stock into a voting trust or similar
arrangement), directly or indirectly, any shares of Company Common Stock or any
securities convertible into or exercisable or exchangeable therefore, or any
interest therein or (b) enter into any swap or other arrangement that transfers
to another Person, in whole or in part, any of the economic consequences of
owning such Company Common Stock (any transactions described in clause (a) or
(b) being referred to herein as a “Transfer”), except (i) in the case of
Transfers of the Option Shares in accordance with the terms and subject to the
conditions of Section 2.4 above or (ii) with the prior written consent of
each other Stockholder.  After the
Restricted Transfer Period, any Stockholder may Transfer all or part of its
Company Common Stock subject to Sections 5.2.

 

SECTION 5.2.  Right of First Refusal; Tag Along Rights.  (a) In the event that any Stockholder (a “Transferring
Stockholder”) proposes to Transfer all or part of their Company
Common Stock (the “Transfer Shares”) after the Restricted
Transfer Period, such Transferring Stockholder shall notify the Company and
each Stockholder that holds a Minimum Interest at least 60 days prior to the
date of such proposed Transfer in writing of (i) its bona fide intention to
Transfer the Transfer Shares, (ii) the number of Transfer Shares to be
Transferred, (iii) the price, which must be payable entirely in immediately
available U.S. dollars, and other terms pursuant to which such Transferring
Stockholder proposes to Transfer the Transfer Shares, (iv) the proposed date of
Transfer and (v) the identity of the proposed purchaser of the Transfer Shares
(“Transferee”)
(the “Transfer
Notice”).

 

(b)  The Company shall notify
the Transferring Stockholder and each Stockholder that holds a Minimum
Interest, within ten days after receipt of such Transfer Notice, in writing
whether it elects to purchase from the Transferring Shareholder the Transfer
Shares and the Tag Along Shares, if any. 
The Company, if it elects, shall have the right to purchase from the Transferring
Shareholder all, but not less than all, of the Transfer Shares, and from the
Purchaser all, but not less than all, of the Tag Along Shares, if the Purchaser
elects to exercise its rights pursuant to Section 5.2(d) below, at the
same price and on the same terms as provided in the Transfer Notice.

 

(c)  If the Company does not
elect to exercise its rights to purchase the Transfer Shares and Tag Along
Shares, if any, each Stockholder that holds a Minimum Interest shall notify the
Company, the Transferring Stockholder and each Stockholder that holds a Minimum
Interest, within 15 days after receipt of such Transfer Notice, in writing
whether it elects to purchase from the Transferring Stockholder its pro rata
portion of the Transfer Shares and from the Purchaser its pro rata portion of the Tag
Along Shares, if any.

 

26

 

Such Stockholder, if it elects, shall have the right to purchase from
the Transferring Shareholder its pro rata portion of the Transfer Shares,
and from the Purchaser its pro rata portion of the Tag Along Shares,
if the Purchaser elects to exercise its rights pursuant to Section 5.2(d)
below, at the same price and on the same terms as provided in the Transfer
Notice.  The number of shares to be
purchased by each such Stockholder electing to purchase shall be equal to (i)
the number of shares of Company Common Stock owned by such Stockholder electing
to purchase multiplied by (ii) the number of Transfer Shares and Tag Along
Shares, if any, to be Transferred divided by (iii) the aggregate number of
shares of Company Common Stock owned by each such Stockholder electing to
purchase.  If neither the Company nor
one or more Stockholders that holds a Minimum Interest has elected to purchase
all of the Transfer Shares and Tag Along Shares, if any, within such 15 day
period, the Transferring Stockholder shall have the right, subject to
Section 5.2(d) below, within 60 days from the expiration of such 15 day
period to Transfer the Transfer Shares on the terms and conditions specified by
the Transferring Stockholder in the Transfer Notice free of the restrictions
imposed by Sections 5.2(b) and (c).

 

(d)  In the event that the
Transferring Stockholder is either Hemant Sharma or Thomas George, the
Purchaser shall notify the Company, the Transferring Stockholder and each
Stockholder that holds a Minimum Interest, within 15 days after the receipt of
such Transfer Notice, in writing whether it elects to participate in such
Transfer by selling a portion of the Purchaser’s Company Common Stock.  The Purchaser, if it elects, shall have the
right to sell to the Transferee, or, if the Company or one or more Stockholders
that holds a Minimum Interest exercises its rights pursuant to
Section 5.2(b) or (c) above, as the case may be, to the Company or such
Stockholders, as the case may be, at the same price and on the same terms as
the Transferring Stockholder, an amount of Company Common Stock equal to the
number of shares of Company Common Stock owned by the Purchaser multiplied by
the number of Transfer Shares divided by the aggregate number of shares of
Company Common Stock owned by any Stockholder that has been granted tag along
rights by Hemant Sharma and Thomas George (the “Tag Along Shares”).  If the Purchaser does not elect to
participate in such Transfer of Company Common Stock within such 15 day period,
the Transferring Stockholder shall have the right, subject to Sections 5.2(b)
and (c) above, within 60 days from the expiration of such 15 day period, to
Transfer the Transfer Shares on the terms and conditions specified by the
Transferring Stockholder in the Transfer Notice free of the restrictions
imposed by this Section 5.2(d).  In
no event after the Purchaser has elected to exercise its right to Transfer its
Company Common Stock pursuant to this Section 5.2(d) shall the
Transferring Stockholder Transfer the Transfer Shares to any Person without the
Transfer by the Purchaser of its Company Common Stock to such Person.

 

SECTION 5.3.  Validity of Transfer.  Any Transfer by a Stockholder that does not
comply with the provisions of this Agreement shall be null and void.  The Stockholders shall cause the Company not
to, and Company shall not, Transfer on its books any shares of Company Common
Stock that have been transferred in violation of any of the provisions set
forth in this Agreement or treat as owner of such Company Common Stock, or
accord the right to vote or pay dividends to, any transferee to whom such
Company Common Stock shall have been so transferred.  The Stockholders shall cause the Company to, and the Company
shall, register on each stock certificate representing Company Common Stock
that

 

27

 

such Company Common Stock is subject to the restrictions contained in
this Agreement.  No Transfer of Company
Common Stock by a Stockholder to any Person other than any Person already a
party to this Agreement shall be effective unless the transferee of such
Company Common Stock executes a counterpart of this Agreement and thereby
becomes a party thereto.

 

SECTION 5.4.  By-laws.  The Stockholders shall cause the Company to, and the Company
shall, adopt the amended and restated by-laws of the Company in the form
attached as Exhibit G to this Agreement.

 

SECTION 5.5.  Spartan License Agreement.   The Stockholders shall cause the Company
to, and the Company shall, assign all right, title and interest that the
Company now has or that shall hereafter arise in and to any amounts due to the
Company pursuant to Sections 3.3 and 3.4 of the Spartan License Agreement, all
proceeds thereof to Hemant Sharma and Thomas George net of any tax liability to
the Company, if any.

 

SECTION 5.6.  Purchaser Reporting Obligations.   (a) So long as any payment (whether in cash
or stock) to any of the Selling Stockholders is outstanding under this
Agreement, Purchaser shall furnish to each of the Company, Hemant Sharma and
Thomas George periodic statements (the “Gross Revenue Statement”) setting forth in
reasonably sufficient detail Gross Revenue accrued during the preceding period
to ITG Group in respect of trades executed via the System.  The Gross Revenue Statement shall set forth,
by name of the entity that executed any trade, any and all of the commissions,
fees or other remuneration accrued to ITG Group in respect of the trades
executed via the System, and all of the deductions or discounts granted or
proposed to be granted, together with the following (i) with respect to any
soft dollar credits to ITG Group, the terms under which such soft dollar
services were provided, and (ii) with respect to any discounts and deductions,
the nature, applicable period and terms of such discounts and deductions.  The Gross Revenue Statement shall be
furnished as follows:

 

(A)                              From
the date hereof, within 17 Business Days after the end of each Fiscal Month, an
unaudited Gross Revenue Statement;

 

(B)                                From
the date hereof, within 30 Business Days after the end of each Fiscal Quarter,
an unaudited Gross Revenue Statement. 
The quarterly Gross Revenue Statement shall set forth, in addition to
all other details, comments as to whether any discounts or deductions were not
in the ordinary course of business;

 

(C)                                As
of the Option Exercise Date, an unaudited Gross Revenue Statement, setting
forth all of the details included in the quarterly Gross Revenue Statement; and

 

(D)                               From
the date hereof, from time to time, such further information regarding Gross
Revenue, including copies of any Contracts between any entity of the ITG Group
and its customers that could reasonably be expected to have an impact on Gross
Revenues, as the Company, Hemant Sharma or Thomas George may reasonably
request.

 

28

 

The Purchaser shall provide to each of Hemant Sharma or Thomas George
reasonable access during normal business hours, upon reasonable notice to the
Company, to the Gross Revenue Statements and all records pertaining to the
calculation of Gross Revenue; provided that, such request may only be
made two times in any calendar year.

 

(b)                                 From
the Option Exercise Date until one year after the Option Exercise Date,
Purchaser shall furnish to the Sellers’ Representative prompt notice of any
Change of Control.

 

SECTION 5.7.  Company Reporting Obligations.  The Company shall (i) use commercially
reasonable efforts to provide to the Purchaser in a reasonably timely manner on
a monthly basis, monthly financial information consisting of a balance sheet of
the Company as of the month end, together with statements of operation and
statements of cash flows as of the month end and (ii) provide on a quarterly
basis the Company officer certification in the form attached hereto as Exhibit
H.

 

SECTION 5.8.  No Solicitation.  The Purchaser agrees that from the date
hereof and until (a) if the Option is exercised, the Option Closing Date or (b)
if the Option is not exercised, two years after the Expiration Date, that the
ITG Group shall not directly or indirectly employ, solicit, induce, enter into
any agreement with, or attempt to influence any individual who is or was an
employee or software consultant of the Company to terminate his or her
employment relationship with the Company or to be employed by the ITG Group or
interfere in any other way with the employment, or other relationship of any
employee or software consultant of the Company.  Each of the Company and the Selling Stockholders agrees that if
the Option is not exercised, for two years after the Expiration Date, the
Company and each of Hemant Sharma and Thomas George shall not directly or
indirectly employ, solicit, induce, enter into any agreement with, or attempt
to influence any individual who is an employee or software consultant of the
ITG Group or interfere in any other way with the employment or other
relationship of any employee or software consultant of the ITG Group; provided
that, in the case of Hemant Sharma and Thomas George, such
restriction shall only apply to employees or software consultants that Hemant
Sharma or Thomas George had contact with in connection with the transactions
contemplated under this Agreement.

 

SECTION 5.9.  System Marketing.  In consideration of the exclusive license
granted to the Purchaser and its Affiliates under the License Agreement and
other rights and privileges granted to the Purchaser and its Affiliates under
the Transaction Agreements, the Purchaser shall at all times from the date
hereof until one year from the Option Exercise Date (or the Expiration Date if
the Option is not exercised) use all commercially reasonable efforts to market
the System including marketing the System to ITG Group customers.

 

SECTION 5.10.  US Trading Corporation License Agreement.  The Company shall terminate the Software
Site License Agreement dated as of April 8, 2001 between US Trading
Corporation and the Company within 30 days of the Closing Date.

 

29

 

ARTICLE SIX

 

TERMINATION OF OBLIGATIONS; SURVIVAL

 

SECTION 6.1.  Termination.  This Agreement may be terminated: (a) by any
Selling Stockholder that holds a Minimum Interest, in the event of a material
breach or default in the performance by the Purchaser of any representation,
warranty, covenant or agreement set forth in this Agreement, which breach or
default has not been, or cannot be, cured within 15 days of written notice of
such breach or default, describing such breach or default, by any such Selling
Stockholder to the other parties hereto, (b) by the Purchaser so long as it
holds a Minimum Interest, in the event of a material breach or default in the
performance by a Selling Stockholder that holds a Minimum Interest or the
Company of any representation, warranty, covenant or agreement set forth in
this Agreement, which breach or default has not been, or cannot be, cured
within 15 days of written notice of such breach of default, describing such
breach or default, is given by the Purchaser to the other parties hereto, or
(c) by mutual consent of the Stockholders that hold a Minimum Interest.

 

SECTION 6.2.  Effect of Termination.  In the event of termination of this
Agreement pursuant to Section 6.1, this Agreement shall thereafter have no
effect, and no party shall have any liability to the other parties in respect
hereof, except that (a) the obligations of the parties under Section 6.2,
Article Seven, Article Eight and Section 9.7, shall survive and
(b) nothing herein contained shall relieve any party from liability for any
breach of any representation, warranty or agreement hereunder that occurred
prior to such termination.

 

ARTICLE SEVEN

 

CONFIDENTIALITY

 

SECTION 7.1.  Confidential
Information.  (a)  “Confidential Information” shall mean all
information that is furnished by any party hereto (the “Disclosing Party”) to any
other party hereto (the “Receiving Party”) pursuant to this
Agreement, whether written or oral and in whatever form or medium it is
provided, and shall specifically include (i) the Transaction Agreements, (ii)
all data, records, oral discussions and information exchanged between the
parties hereto in connection with the Company, and (iii) all information
generated by each party hereto or its Representatives that analyzes,
summarizes, or reproduces the furnished information.

 

(b)  The following information
shall not be deemed to be Confidential Information, and the provisions of this
Article shall not apply to: (i) information which is or becomes generally
available to the public other than as a result of a disclosure in violation of
this Agreement, (ii) information which was already known to such Receiving
Party or its Representatives prior to being furnished pursuant to this
Agreement, (iii) information which becomes available to such Receiving Party or
its Representative on a non-confidential basis

 

30

 

from a source other
than a Disclosing Party or its Representatives if such Receiving Party or its
Representatives had no reason to believe that the source of such information
was subject to any prohibition against transmitting the information to such
Receiving Party or its Representative, and (iv) information independently
developed by such Receiving Party or its Representative.

 

SECTION 7.2.  Confidentiality
Obligations.  (a)  Each Receiving Party shall not disclose any
Confidential Information to any other Person without the consent of all of the
Stockholders holding a Minimum Interest other than to: (i) such Receiving
Party’s Representatives, the other parties hereto or their Representatives,
(ii) after the Restricted Transfer Period, a prospective transferee of all or
part of the shares of the Company Common Stock held by a Stockholder, or (iii)
a Person to which the Receiving Party is required to disclose by applicable
Legal Requirements.

 

(b)  In case of a disclosure of
Confidential Information to a Person permitted by Section 7.2(a)(ii), the
Receiving Party disclosing such information shall ensure that such third party
has signed an agreement in writing to protect the Confidential Information from
further disclosure to the same extent as the parties hereto are obligated under
this Article.

 

SECTION 7.3.  Notice
Preceding Compelled Disclosure.  If
a party hereto or its Representative reasonably believes it is required by
applicable Legal Requirements to disclose any Confidential Information, such
party shall promptly notify the other parties hereto of such requirement as
soon as it becomes aware of it.

 

SECTION 7.4.  Consultation
as to Announcements.  No public
announcement or press release concerning the Company or the Transaction
Agreements or the transactions contemplated thereby shall be made by any party
hereto without prior consultation with all Stockholders holding a Minimum
Interest; provided
that, this Section 7.4 shall not prohibit any public
announcement or press release required to be made pursuant to applicable Legal
Requirements.

 

ARTICLE EIGHT

 

INDEMNIFICATION

 

SECTION 8.1.  Indemnity. 
(a) (i) The Purchaser shall indemnify and hold harmless the
Company and each of the Selling Stockholders and their Representatives (each, a
“Stockholder
Indemnitee”, and collectively, the “Stockholder Indemnitees”)
and (ii) (A) with respect to the representations and warranties set forth in
Section 3.1 above, and given on the date hereof, the Company, and with
respect to the representations and warranties set forth in Section 3.1
above (as modified pursuant to Section 2.4(c)(B) above), and given on the
Option Closing Date, if any, the Selling Stockholders, jointly and severally,
and (B) with respect to the representations and warranties set forth in
Section 3.2 above and any covenant or agreement made by the Selling
Stockholders in this Agreement, each of the Selling

 

31

 

Stockholders, severally, shall indemnify and hold harmless the
Purchaser and its Representatives (each, a “Purchaser Indemnitee”, and collectively,
the “Purchaser
Indemnitees”, and together with the Stockholder Indemnitees, the “Indemnitees”),
in each case of (i) and (ii), against any losses, claims, damages, liabilities
or reasonable expenses (including reasonable attorneys fees) (collectively, the
“Losses”),
joint or several, to which such Indemnitee may become subject resulting from or
arising out of any inaccuracy or misrepresentation in, or breach of, any
representation, warranty, covenant or agreement made by such party pursuant to
this Agreement; provided that, for the purposes of this Section 8.1,
the representations and warranties set forth in the last sentence of
Section 3.1(k) above shall be deemed not to contain any materiality
qualifiers.

 

(b)                                 If
the Option is exercised, the Selling Stockholders, jointly and severally, shall
indemnify and hold harmless the Purchaser and its Representatives (each of
which shall also constitute a “Purchaser Indemnitee”) against any Patent
Infringement Losses.  Such
indemnification obligations shall cease one year after the date of the Option
Exercise Date other than in respect to claims for Patent Infringement Losses
made prior to such date.

 

(c)                                  If
a New Escrow Agreement is entered into pursuant to Section 8.6, the
Selling Stockholders, jointly and severally, shall indemnify and hold harmless
the Purchaser and its Representatives (each of which shall also constitute a “Purchaser
Indemnitee”) against any Patent Infringement Losses incurred on or
subsequent to the date that is one year after the Option Exercise Date and such
indemnification obligations shall survive until all escrowed funds are released
pursuant to the New Escrow Agreement.

 

SECTION 8.2.  Claims for Indemnification.  Promptly after receipt by an Indemnitee of
notice of the commencement of any Proceeding, such Indemnitee shall, if a claim
in respect thereof is to be made against an indemnifying party under
Section 8.1 above, notify the indemnifying party in writing of the
commencement thereof and with reasonable particularity; but the omission so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any Indemnitee otherwise unless, and solely to the extent, the
indemnifying party thereby is actually and materially prejudiced by such
failure to give notice.  In case any
such Proceeding shall be brought against any Indemnitee, it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
have, jointly with any other indemnifying party similarly notified, the right
to participate in the defense, compromise or settlement thereof, including the
selection of counsel.  Each of the
Indemnitee and the indemnifying party agrees to cooperate and work together in
good faith in the selection of counsel and to coordinate any defense,
compromise or settlement of any such Proceeding.  If the parties cannot agree upon the selection of counsel, each
party is entitled to, at its own expense, engage counsel of its choice in
connection with the defense, compromise or settlement of any such
Proceeding.  Notwithstanding anything to
the contrary in this Section 8.2, the Purchaser shall not settle any such
Proceeding without the consent of the Sellers’ Representative, which consent
shall not be unreasonably withheld, if and to the extent that 80% or more of
the amount of any such settlement is borne by the Selling Stockholders as an
indemnifying party.

 

32

 

SECTION 8.3.  Survival of Representations, Warranties
and Covenants.  All of the
representations and warranties of any party hereto contained in this Agreement
and the liabilities and obligations of the parties with respect thereto shall
survive until (a) if the Option is exercised, for one year after the Option
Exercise Date, and (b) if the Option is not exercised, the Expiration Date.  All of the covenants of any party hereto
contained in this Agreement shall survive until fully performed or fulfilled
unless waived in writing by the party or parties entitled to performance.  Any indemnification obligations pursuant to
Section 8.1(a) shall cease when the applicable representation, warranty or
covenant terminates other than in respect to claims for Losses made prior to
such date.

 

SECTION 8.4.  Limitation of Liability.  The indemnification obligations set forth in
this Article Eight shall apply only if a Closing occurs, and then only
after the aggregate amount of such obligations exceed $50,000, at which time
the indemnification obligations shall be effective as to all amounts exceeding
$50,000.  Notwithstanding anything contained
herein to the contrary, the indemnification obligation (a) of the Company
provided for in Section 8.1(a), shall not exceed with respect to any
claims arising before the exercise or expiration of the Option, whichever is
earlier, $750,000, (b) of the Selling Stockholders provided for in Section 8.1(a),
shall not exceed with respect to any claims arising after the Option Exercise
Date if the Option is exercised, an amount equal to the amounts held in escrow
at such time pursuant to the Escrow Agreement, (c) of the Selling Stockholders
provided for in Section 8.1(b), shall not exceed an amount equal to 50% of
the amounts held in escrow at such time pursuant to the Escrow Agreement and
(d) of the Selling Stockholders provided for in Section 8.1(c), shall not
exceed an amount equal to the amounts held in escrow at such time pursuant to
the New Escrow Agreement; provided that, in the case of clause (c)
above, (A) such amount shall not exceed an amount equal to 50% of the Patent
Infringement Losses; (B) such amounts shall not exceed 50% of the aggregate of
the Option Exercise Price and the Additional Option Payment Amounts, if any,
less $1,575,000, and (C) if the amount of Patent Infringement Losses as a
percentage of the aggregate Gross Revenues (calculated from the Closing Date to
the earlier of (i) the date on which such claim is resolved and (ii) one year
from the Option Exercise Date) is less than 3.5% of such Gross Revenues, such
amount shall not exceed $2,000,000; provided further, that in the case of
clauses (c) and (d) above, such amount shall not exceed $2,000,000 in the case
of the Patent Infringement Losses with respect to such patents set forth in
Schedule 8.4 hereto (“Scheduled Patents”).  Notwithstanding anything contained herein to
the contrary, the indemnification obligation of the Purchaser provided for in
Section 8.1(a), shall not exceed 1.5 times the Option Exercise Price plus
any Additional Option Payment Amounts previously paid or otherwise due under
this Agreement.

 

SECTION 8.5.  Sole Remedy.  The sole and exclusive remedy of an
Indemnitee for breaches of any of the representations and warranties under this
Agreement or for any Patent Infringement Losses is the indemnification in this
Article 8.  Any claims of the
Purchaser for indemnification pursuant to Section 8.1(a), 8.1(b) and
8.1(c) other than with respect to any claims arising before the exercise or the
expiration of the Option shall be

 

33

 

limited to the funds held in escrow pursuant to the Escrow Agreement
and the New Escrow Agreement, as the case may be.

 

SECTION 8.6.  New Escrow.  To the extent that any payments have been received by the
Purchaser from any indemnifying party with respect to any Patent Infringement
Losses pursuant to this Article 8 prior to the Final Payment Date and the
System continues to be used by the Purchaser, the indemnifying parties and the
Purchaser shall enter into a new escrow agreement (the “New Escrow Agreement”).  The Purchaser shall deposit 7% of the Gross
Revenues on a monthly basis beginning with the first Fiscal Month after
entering into the New Escrow Agreement until the Purchaser has deposited an
amount of funds equal to the amount received by the Purchaser from any
indemnifying party with respect to Patent Infringement Losses under this
Article 8.  The New Escrow
Agreement shall provide that an amount equal to 25% of the funds in the escrow
account, from time to time, shall be released on a semiannual basis to the
Selling Stockholders and the entire amount of funds in the escrow account shall
be released when the Purchaser shall have deposited an amount equal to the
amount received by the Purchaser by any indemnifying party with respect to
Patent Infringement Losses under this Article 8, except to the extent that
there are additional unresolved pending claims for Patent Infringement Losses.

 

SECTION 8.7.  Sellers’ Representative.  The Selling Stockholders hereby irrevocably
appoint Hemant Sharma as the sellers’ representative (the “Sellers’ Representative”) as
their agent and attorney-in-fact to take all actions on their behalf as
contemplated by this Agreement, the Escrow Agreement and the New Escrow
Agreement, including, without limitation, to receive any and all payments to be
made by Purchaser hereunder.  The
Purchaser shall be entitled to rely for all purposes on Hemant Sharma’s
authority to act as the Sellers’ Representative, as herein contemplated.  In the event of the death or resignation of
the Sellers’ Representative, the Selling Stockholders (or their heirs,
executors or successors, as the case may be) shall promptly irrevocably appoint
a successor Sellers’ Representative and give the Purchaser written notice of
such appointment within one business day following such death or
resignation.  Until such time as the
Purchaser is notified of the appointment of such successor Sellers’
Representative, Hemant Sharma shall act in that capacity on behalf of the
Selling Stockholders and the Purchaser shall be entitled to rely for all
purposes on Hemant Sharma’s authority to act as the Sellers’ Representative, as
herein contemplated.  In the event
Hemant Sharma shall be unable to act as the Sellers’ Representative, Thomas
George shall act in that capacity on behalf of Selling Stockholders and the
Purchaser shall be entitled to rely for all purposes on Thomas George’s
authority to act as the Stockholders Representative, as herein
contemplated.  Notwithstanding anything
to the contrary herein, any notices to be delivered to, or by, any Selling
Stockholder, any payments to be made to, or by, any Selling Stockholder and any
other instruments or documents to be executed or delivered to, or by, any
Selling Stockholder may be delivered or made to, or by, the Sellers’
Representative on behalf of any such Selling Stockholder.

 

34

 

ARTICLE NINE

 

GENERAL PROVISIONS

 

SECTION 9.1.  Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, or by telecopy upon confirmation of receipt, (b) on the first
business day following the date of dispatch if delivered by a nationally
recognized next-day courier service, or (c) on the third business day following
the date of mailing if delivered by registered or certified mail, return
receipt requested, postage prepaid.  All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:

 

if to Purchaser, to:

 

Investment Technology Group, Inc.

380 Madison Avenue, 4th Floor

New York, New York 10017

Attention: General Counsel

Telephone: (212) 444-6327

Facsimile: (212) 444-6494

 

with a copy to:

 

Boies, Schiller and Flexner LLP

333 Main Street

Armonk, New York 10504

Attention: Robert W. Leung, Esq.

Telephone: (914) 749-8388

Facsimile: (914) 749-8300

 

if to the Company, to:

 

Radical Corporation

100 Quentin Roosevelt Blvd., Suite 203

Garden City, NY 11530

Telephone: (516) 832-1014

Facsimile: (516) 227-1268

 

with a copy to:

 

Lehman & Eilen LLP

50 Charles Lindbergh Blvd.

Uniondale, New York 11553

Attention: Hank Gracin, Esq.

Telephone: (516) 222-0888

Facsimile: (516) 222-0948

 

35

 

if to a Selling Stockholder, to:

 

Sellers’ Representative

Hemant Sharma

76 South Bergen Place

Apt 4R

Freeport, NY 11520

Telephone: (516) 263-7784

 

with a copy to:

 

Lehman & Eilen LLP

50 Charles Lindbergh Blvd.

Uniondale, New York 11553

Attention: Hank Gracin, Esq.

Telephone: (516) 222-0888

Facsimile: (516) 222-0948

 

SECTION 9.2.  Interpretation.  When a reference is made in this Agreement
to Sections, Appendices or Schedules, such reference shall be to a
Section of, or Appendix or Schedule to, this Agreement unless
otherwise indicated.  The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.  Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.”  The phrases “the date of this Agreement,”
“the date hereof” and terms of similar import, unless the context otherwise
requires, shall be deemed to refer to June 11, 2003.  The phrases “known” or “knowledge” mean,
with respect to any party to this Agreement, the actual knowledge of any of
such Person or its current directors or current executive officers after
reasonable inquiry.  References to any
Person shall include successors and assigns of such Person.  Except as specifically set forth herein
(including actions and obligations of the Selling Stockholders in their
individual capacities) or otherwise provided by applicable law, nothing in this
Agreement shall be deemed to create or impose any personal liability of any
kind on any director or officer of the Company with respect to obligations of
the Company.

 

SECTION 9.3.  Amendment.  This Agreement may be amended, modified or supplemented only by
an agreement in writing signed by each of the parties hereto.

 

SECTION 9.4.  Waiver.  (a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of
any Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy.

 

36

 

(b)  No Person shall be deemed
to have waived any claim arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the waiver of such claim,
power, right, privilege or remedy is expressly set forth in a written
instrument duly executed and delivered on behalf of such Person; and any such
waiver shall not be applicable or have any effect except in the specific
instance in which it is given.

 

SECTION 9.5.  Counterparts; Effectiveness.  This Agreement may be executed in any number
of counterparts, each of which shall be considered an original with the same
effect as if the signatures were executed upon the same instrument.  This Agreement shall become effective when
each party hereto shall have received a counterpart hereof signed by each other
party hereto.

 

SECTION 9.6.  Entire Agreement; No Third Party
Beneficiaries.  The Transaction
Agreements constitute the entire agreement of the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among the parties hereof relating to the
subject matter hereof (including without limitation, the Agreement of
Stockholders of the Company, dated January 29, 2001, among Hemant Sharma,
Thomas George, Astor Grenfel, Inc. and the Company), and there are no
warranties, representations or other agreements between or among any of the
parties hereto in connection with the subject matter hereof except as
specifically set forth in the Transaction Agreements.  This Agreement shall inure to the benefit of, and be binding
upon, only the parties hereto and their respective successors and assigns, and
shall not confer any rights or remedies on any other Person.

 

SECTION 9.7.  Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.  Each of the parties hereto hereby
irrevocably and unconditionally agree that any legal action, suit or proceeding
arising out of or relating to this Agreement or any agreements or transactions
contemplated hereby may be brought in any federal or state court located in The
Borough of Manhattan, The City of New York, and hereby irrevocably and
unconditionally expressly submits to the personal jurisdiction and venue of
such courts for the purposes thereof and hereby irrevocably and unconditionally
waives any claim (by way of motion, as a defense or otherwise) of improper
venue, that it is not subject personally to the jurisdiction of such court,
that such courts are an inconvenient forum or that this Agreement or the
subject matter may not be enforced in or by such court.

 

SECTION 9.8.  Waiver of Jury Trial.  Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this Agreement or the transactions contemplated
hereby.

 

SECTION 9.9.  Severability.  Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability and shall not render invalid or unenforceable the remaining
terms and provisions of this Agreement or affect the validity or enforceability
of any of the terms or provisions of this Agreement in any other
jurisdiction.  If any provision

 

37

 

of this Agreement is so broad
as to be unenforceable, the provision shall be interpreted to be only so broad
as is enforceable.

 

SECTION 9.10.  Assignment.  Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties, and any attempt to make any such assignment without such consent shall
be null and void.

 

SECTION 9.11.  Specific Performance.  The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any federal or state court located in The Borough of
Manhattan, The City of New York, this being in addition to any other remedy to
which they are entitled at law or in equity.

 

SECTION 9.12.  Time of Essence.  Time is of the essence of this Agreement.

 

38

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, executed and
delivered as of June 11, 2003.

 

 

	
  INVESTMENT TECHNOLOGY GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
   

  
	
  RADICAL CORPORATION

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
   

  
	
  HEMANT SHARMA

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  THOMAS GEORGE

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  KIMBERLY CARFERO

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  RAJIV JOHN

  
	
   

  
	
   

  	
   

  
				

 

39

 

	
  TIM NICKDOW

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  ROBERT SCIARRA

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  MAHESH SINGHI

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  ANDREW KOVAL

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  HOSSEIN MAHDAVI

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  MULTI-COMMERCE USA

  
	
   

  
	
   

  	
   

  

 

40

 

Exhibit
B

 

Selling Stockholder Shares

 

	
  Selling Stockholder

  	
   

  	
  Number of
  Option Shares

  
	
   

  	
   

  	
   

  
	
  Hemant
  Sharma

  	
   

  	
  20,000

  	
   

  
	
  Thomas
  George

  	
   

  	
  20,000

  	
   

  
	
  Kimberly
  Carfero

  	
   

  	
  225

  	
   

  
	
  Rajiv John

  	
   

  	
  200

  	
   

  
	
  Tim Nickdow

  	
   

  	
  135

  	
   

  
	
  Robert
  Sciarra

  	
   

  	
  135

  	
   

  
	
  Mahesh
  Singhi

  	
   

  	
  200

  	
   

  
	
  Andrew Koval

  	
   

  	
  690

  	
   

  
	
  Hossein
  Mahdavi

  	
   

  	
  215

  	
   

  
	
  Multi-Commerce USA

  	
   

  	
  360

  	
   

  

 

B-1

 

Exhibit H

 

FORM
OF OFFICER CERTIFICATE

 

Investment
Technology Group, Inc.

Certification in Connection with CEO/CFO Certification

 

                   
Report on Form
           for the
            period ended
              ,
200  (the “Report”) of Investment Technology Group, Inc. (the “Company”).

 

Name:

Title:

 

I certify that:

 

1.                                       I
have read a draft of the Report referred to above.

 

2.                                       To
my knowledge, the information in the Report relating to Radical Corporation,
and the information relating to Radical Corporation provided in connection with
the preparation of the Report, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made in the Report regarding Radical Corporation, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by the Report.

 

3.                                       To
my knowledge, all financial information relating to Radical Corporation
provided in connection with the preparation of the Report fairly presents, in
all material respects, the financial condition, results of operations and cash
flows of Radical Corporation as of, and for, the periods presented in the
Report.

 

4.                                       Disclosure
Controls and Procedures(1)

 

(a)               The disclosure controls and procedures
(including internal controls) for Radical Corporation, as they are designed and
implemented, ensure that material information relating to Radical Corporation
is made known to me

 

(1)                                  “Disclosure controls
and procedures” are controls and other procedures designed to ensure that all
the information the Company is required to disclose in its SEC filings,
including required material non-financial information, is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms.  Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that such information is accumulated and communicated to the Company’s
management, including its principal executive officer(s) and principal
financial officer(s), in a way that allows timely decisions regarding required
disclosure.

 

H-1

 

and to senior management of the Company, particularly during the period
in which the Report is being prepared.

 

(b)              I have evaluated the effectiveness of
Radical Corporation’s disclosure controls and procedures (including internal
controls) as of a date within 90 days prior to the date of the Report.

 

(c)               Disclosure in the Report regarding the
Company’s disclosure controls and procedures (including internal controls) and
the effectiveness thereof fairly presents Radical Corporation’s disclosure
controls and procedures (including internal controls) and the effectiveness
thereof.

 

5.                                       Internal
Controls

 

(a)               I am not aware of any deficiencies in
the design or operation of internal controls of Radical Corporation which could
adversely affect the Company’s ability to record, process, summarize and report
financial data.

 

(b)              I am not aware of any fraud, whether or
not material, that involves management or other employees.

 

6.                                       Bring-Down
of Representations:

 

To my knowledge, there have been no significant changes since my
evaluation referred to in 4(b) above in Radical Corporation’s disclosure
controls and procedures or internal controls or in any other factors that have
significantly affected or could significantly affect such disclosure controls
and procedures and/or internal controls subsequent to the date of their
evaluation, including any corrective actions with regard to deficiencies and
weaknesses.

 

7.                                       If
any information comes to my attention between the date of this certification
and the date of the filing of the Report (on or about             ,
200  ) which would cause me to change my beliefs as set forth herein,
I will promptly notify each of the Chief Executive Officer and Chief Financial
Officer of the Company of such information.

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

 

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Exhibit 10.68    
    

 
  License Agreement    
    

        This License Agreement (the "Agreement") is entered into and made effective as of March 29, 2002 (the
"Effective Date"), between InterMune, Inc., ("InterMune"); Marnac, Inc., ("Marnac");  KDL, Inc. and
KDL GmBH (collectively, "KDL");  Dr. Solomon Margolin ("Margolin"); and DR. Shitotomo Yamauchi
("Yamauchi"). Each party to this
agreement may be referred to herein each as a "Party" and all parties may be referred to jointly as the "Parties." 

 
 

Recitals    
    

        Whereas, InterMune is involved in the research, development and commercialization of products potentially useful
in the prevention, mitigation and treatment of fibrotic and other diseases; 

        Whereas, Marnac and KDL hold all ownership rights in that certain U.S. Patent No. [*]; and corresponding foreign
patents, including any and all divisions, re-issues, continuations and substitutes in whole or in part of such patents in the Territory (as defined below) with respect to
[*] and directly related Information; and 

        Whereas, InterMune desires to obtain from Marnac and KDL, and Marnac and KDL desire to grant to InterMune, the exclusive,
[*] in the Territory for [*] of Licensed Product. 

        Now, therefore, in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, the Parties hereby
agree as follows: 

1.     Definitions  

        1.1    "Acceptance"    as used in this Agreement, shall mean acceptance by the appropriate governing authority as
being filed in correct form, rather than as signifying regulatory approval. 

        1.2    "Affiliate"    means any company or entity controlled by, controlling or under common control with a Party. As
used in this Section 1.1, "control" means (a) that an entity or company owns, directly or indirectly, more than fifty percent (50%) of the voting stock of another entity, or
(b) that an entity, person or group has the actual ability to control and direct the management of the entity, whether by contract or otherwise. 

        1.3    "Best Efforts"    means every necessary and prudent effort of a Party applied in a prompt, commercially
reasonable manner. 

        1.4    "Commercially Reasonable Business Practice"    means making efforts and devoting resources that a similarly
situated biopharmaceutical company would typically devote to a product of similar market potential, profit potential or strategic value, based on conditions then prevailing. 

        1.5    "Information"    means information, results and data of any type whatsoever, in any tangible or intangible
form, including without limitation inventions, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, trade secrets, test data
(including pharmacological, biological, chemical, biochemical, toxicological and clinical test data), analytical and quality control data, stability data, studies and procedures, all filings made to
Regulatory Agencies, and patent and other legal information or descriptions, and all intellectual property rights therein, all limited to the anti-fibrotic application of Pirfenidone. 

        1.6    "First Sale"    means the first commercial sale of Licensed
Product.

        1.7    "IND"    shall have the meaning given in Section 6.2. 

        1.8    "Licensed Patents"    means [*] the Territory, including any and all divisions,
re-issues, re-examinations, renewals, continuations and substitutes in whole or in part of such patents and patent applications in the Territory with respect to
[*] and all Patents (as defined in 1.13). The Licensed Patents shall specifically [*] 

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        1.9    "Licensed Product"    means a product that [*] for the therapeutic treatment of
[*] which product has [*] for the therapeutic treatment of [*] by the [*] through the
[*] 

        1.10    "Net Sales"    means, with respect to any Licensed Product, [*] 

        (a)   [*] 

        (b)   [*] 

        (c)   [*] 

        (d)   [*] 

        (e)   [*] 

        (f)    [*] 

        A
sale of a Licensed Product shall be deemed to occur upon [*] 

        1.11    "Ongoing Clinical Trials"    shall have the meaning given in Section 6.2. 

        1.12    "Orphan Drug Status"    is an exclusive approval to market a therapeutic for the treatment of a human fibrotic
disease based upon orphan drug status under the Orphan Drug Act of 1983 in the United States (Pub.L. 97-414, Jan.4, 1983, 96 Stat. 2049) or any corresponding or similar
non-U.S. statutes, granted by the U.S. Food and Drug Administration ("FDA"), the Committee on Proprietary Medicinal Products ("CPMP") or other Regulatory Agencies in the Territory to
InterMune for the anti-fibrotic uses of Pirfenidone for such disease. 

        1.13    "Patents"    means all of Marnac's, KDL's, Margolin's and Yamauchi's
(a) [*] patent applications heretofore or hereafter filed or having legal force in any country including without limitation divisionals, continuations,
continuation-in-part and provisional applications; (b) issued, unexpired [*] patents in any country, including utility, model and design patents
and certificates of invention; and (c) substitutions, extensions, reissues, renewals, and supplementary protection certificates with respect to any such issued patents. For clarity, such patent
applications and patents shall include those owned, as well as those controlled with the right to grant licenses, by any of Marnac, KDL, Margolin and Yamauchi. The Patents shall
[*] 

        1.14    "Permitted Seller"    means InterMune and its Affiliates and any permitted assignee, licensee or sublicensee
having the right to sell Product hereunder. 

        1.15    "Pirfenidone"    shall mean [*] 

        1.16    "Regulatory Agencies"    means the FDA, the CPMP, and other governmental agencies having similar jurisdiction
over the development, manufacturing, and marketing of pharmaceuticals. 

        1.17    "Territory"    means worldwide (excluding Japan, Taiwan and Korea). 

        1.18    "Third Party"    means any party other than InterMune and Marnac and their respective Affiliates, and other
than KDL, Margolin and Yamauchi. 

        1.19    "Valid Claim"    means a claim of an issued and unexpired Licensed Patent in a country which claim:
(i) but for this Agreement, would preclude the sale of [*] by InterMune or another seller, (ii) has not been revoked or held unenforceable or invalid by a
decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and (iii) has not been abandoned, disclaimed or
admitted to be invalid or unenforceable through reissue, disclaimer or otherwise. 

2.     Grant of License  

        2.1    Grant to InterMune.    Subject to Section 2.2, Marnac and KDL hereby grant to InterMune an exclusive
[*] license in the Territory under the Licensed Patents and Information for [*] Licensed Products. 

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        2.2    Research and Clinical Development.    [*] may conduct [*]
relating to the [*] but shall not, under any conditions, [*] relating to the [*] the prior written consent of
[*] 

3.     Consideration  

        3.1    Initial Payment.    Within five (5) business days after the Effective Date, InterMune shall pay to
Marnac Eighteen Million Seven Hundred and Fifty Thousand Dollars ($18,750,000) in cash. 

        3.2    Milestone Payments.    InterMune shall make the following milestone payments to Marnac, within
[*] days of achieving these milestones: 

        (a)   [*] 

        (b)   [*] 

        (c)   [*] 

        (d)   [*] and 

        (e)   [*] 

[*]

3.3   Royalties.  

        (a)   InterMune shall pay to Marnac a royalty of [*] on Net Sales of all Licensed Products in the
Territory calculated by U.S. generally accepted accounting principles ("GAAP"). 

        (b)   If InterMune [*] InterMune shall pay a royalty to Marnac at the rate of
[*] of Net Sales on such sales for the [*] in such country. 

        (c)   InterMune's obligations pursuant to this Section 3.3 to pay royalties shall expire with respect to Net Sales for
Licensed Products approved for particular indications with the expiration of this Agreement with respect thereto as set forth in Section 10.1. 

        3.4    Payments to Marnac and KDL.    With respect to any dollar amounts that InterMune is required to pay in dollars
hereunder pursuant to Section 3.1, 3.2 or 3.3, InterMune shall make such payment [*] notifies InterMune no later than [*] business days before
such payment is due in writing as to whom InterMune must pay. If [*] business days before any such payment is due hereunder, then InterMune shall [*] 

        3.5    Payment of Royalties.    Following the First Sale of a Licensed Product and during the term of the Agreement,
InterMune shall furnish to Marnac a quarterly written report for each calendar quarter showing the sales of all Licensed Products subject to royalty payments hereunder during the reporting period and
the royalties payable under this Agreement. Reports shall be due within [*] days following the close of each calendar quarter. Royalties that have accrued in a particular
calendar quarter shall be due and payable on the date such royalty report is due. InterMune shall keep complete and accurate records in sufficient detail to enable the royalties payable hereunder to
be determined. 

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INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        3.6    Records and Audit.    InterMune shall maintain the records used to calculate all royalties payable under
Section 3.3(a) and 3.3(b), including, without limitation, all records which support the calculation of each component of the equation for Net Sales. Such records shall be maintained for at
least [*] years following the end of the calendar year to which they pertain. Such records will be open for audit during such [*] period by an
independent certified public accountant selected by Marnac and KDL and reasonably acceptable to InterMune for the purpose of verifying InterMune's royalty and Net Sales calculations. Such audits may
be made no more than once each calendar year, at reasonable times mutually agreed by InterMune, Marnac and KDL. Marnac and KDL shall bear the costs and expenses of audits conducted under this
Section 3.6 unless a variation or error producing an underpayment in royalties payable exceeding [*] of the amount payable for the time period inspected is established
in
the course of any such audit, whereupon all costs relating to the audit and any unpaid amounts that are discovered will be paid by InterMune, together with interest on such unpaid amounts equal to the
lesser of [*] per year, or the maximum rate permitted by law. Should the inspection prove overpayment by InterMune, such overpayment shall be deducted from the next royalty or
other payment due from InterMune hereunder, without any interest due by Marnac and KDL. If [*] then the Parties agree that [*] 

        All
information obtained during and resulting from such audits conducted according to this Section 3.6 are hereby deemed Confidential Information as such term is defined in
Section 8.1 and shall be kept confidential pursuant to Section 8.1. 

        3.6    Income Tax Withholding.    If laws, rules or regulations require withholding of income taxes or other taxes
imposed upon payments set forth in this Section 3, InterMune shall make such withholding payments as required and subtract such withholding payments from the payments set forth in this
Section 3. InterMune shall submit appropriate proof of payment of the withholding taxes to Marnac or KDL, as appropriate, within a reasonable period of time. 

4.     Manufacturing and Supply.  

        4.1    [*].    Marnac shall [*] including but not limited to the
[*] associated with the [*] Marnac shall [*] InterMune. InterMune shall be responsible for [*] or such
other [*] 

        4.2    [*] Supply.    

        (a)   [*] of Licensed Product [*] in accordance with
[*] that as of the [*] to which InterMune [*] adequate to permit [*] conducting such
[*] for which [*] days of receipt of such [*] shall provide to [*] of Licensed Product,
[*] of Licensed Product. [*] the Effective Date. 

        (b)   [*] agrees to [*] to use to [*] and other
[*] of such quantities
[*] Licensed Product or [*] InterMune agrees to [*] 

        (c)   [*] shall provide to [*] 

5.     InterMune Development and Commercialization Obligations.  

        5.1    [*].    InterMune shall [*] 

        5.2    Development and Commercialization.    

        (a)   InterMune shall, [*] assuming that the [*] to support the
[*] In the event that [*] is sufficiently [*] and InterMune [*] InterMune will
[*] set forth in Sections [*] 

        (b)   InterMune shall also, [*] In the event that [*] InterMune will
[*] set forth in Sections [*] 

        (c)   For purposes of Sections [*] in the context of those paragraphs. 

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INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

6.     Marnac and Margolin Obligations  

        6.1    Information.    Marnac and Margolin shall deliver to InterMune, within [*] Information
in Marnac's or in Margolin's possession, including but not limited to: a list of Licensed Patents; any Information relating to the Licensed Patents, the [*] of Licensed
Product; provided that, if Marnac or Margolin [*] of the Information and shall [*] for InterMune. InterMune acknowledges that the
[*] that they have [*] With respect to such [*] the Parties agree that [*] shall not be required to
[*] shall reasonably cooperate with [*] to the extent reasonably requested by [*] in relation to any [*] 

        6.2    [*]    

        (a)   [*] Exhibit B contains [*] relating to [*]
having a similar [*] of the Territory [*] with their cooperation [*] as of the [*] and (ii) all
[*] for any [*] pursuant to the [*] as of the [*] after the [*] shall make
[*] as to any [*] having a similar [*] of the Territory for the [*] and any [*]
relating to such [*] in the Territory, and [*] During the period commencing on [*] and ending [*]
thereafter, [*] shall provide: (i) [*] to any of the [*] (which relate to [*]) as may be
reasonably [*] relating to [*] and/or to [*]; (ii) [*]; (iii) [*]
upon reasonable advance notice, to [*]; and (iv) [*] in other aspects of [*] of Licensed Product. Such
[*] shall include, without limitation, that [*] with each [*] that InterMune requests to [*] which shall
include [*] if required for [*] 

        (b)   [*] shall be entitled, to [*] in connection with
[*] (which are for [*]). [*] shall be responsible for [*] in connection with the
[*] to the extent that [*] from any such [*] from and after the [*] In the event that
[*] with any particular [*] for which [*] resulting from such [*] With respect to the
[*] from any [*] in such [*] (other than to the extent [*]) prior to [*] 

        6.3    [*].    [*] prior written consent, which consent shall not be
unreasonably withheld, for any [*] relating to the [*] The Parties recognize that for the [*] that are
[*] of the Effective Date, and certain [*] of the Effective Date (collectively, such [*] pursuant to [*]
regarding the [*] To the extent that [*] relating to any [*] the right to [*] to exercise such right in
accordance with [*] The Parties recognize the [*] of one or more of [*] regarding an [*] to this
arrangement, subject only to [*] with respect to such [*] as set forth in this Section 6.2. [*] as Exhibit C to
this Agreement is a [*] as defined above in this Section 6.3. 

        6.4    [*].    The Parties recognize that a [*] shall provide
[*] shall continue to [*] on the same basis the basis upon which [*] provided that [*] as warranted by
[*] shall have the right in its sole discretion to [*] in the future shall be [*] to InterMune. 

7.     Intellectual Property Matters; Patents.  

        7.1    Ownership.    InterMune shall solely own any Information invented or developed in connection with any Licensed
Product and all intellectual property rights therein, including without limitation any patents claiming such Information. 

        7.2    Control and Prosecution.    InterMune shall be responsible for and control all patent filings, and prosecute
and maintain any patents, divisions, continuations with respect to the Licensed Patents in the Territory; provided, however, that InterMune shall provide Marnac with prior notice and opportunity to
review and comment on any action taken by InterMune in controlling such Licensed Patents. Marnac and KDL on the one hand, and InterMune on the other hand, shall [*] Marnac and
KDL shall be [*] 

        7.3    Cooperation.    Each Party agrees to cooperate with the other and take all reasonable additional actions as may
be reasonably required to achieve the intent of this Section 7, including, without limitation, the execution of necessary and appropriate instruments and documents. 

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        7.4    Infringement of Third Party Patents.    In the event that a Third Party files an action against a Party
alleging that such Party's activities under this Agreement infringe such Third Party's patent rights, such Party shall give written notice to the other Party, and the Parties will consult and
cooperate on the best course of action. The Party that was sued shall have the right to defend itself against such action, and the other Party shall provide all reasonable assistance in such defense. 

        7.5    Infringement of Licensed Patents.    If any Party becomes aware that a Third Party is infringing any rights in
the Licensed Patents, such Party shall give written notice to the other Party describing in detail the nature of such infringement. InterMune shall have the initial right to enforce the Licensed
Patents against such Third Party infringer. Marnac and KDL agree to provide InterMune all reasonable assistance, [*] in such enforcement, including without limitation being
joined as a party to the suit where appropriate. In the event that InterMune fails to institute an infringement suit or take other reasonable action in response to such infringement within
[*] after its receipt of notice of such infringement, Marnac shall have the right, but not the obligation, to institute such suit or take other appropriate action in its own
name to enforce the Licensed Patents. Any damages or other recovery, whether by settlement or otherwise, from an action hereunder to enforce the Licensed Patents shall first be applied to pay the
costs and expenses of participating in such action, and any remaining amount shall be shared by the Parties as follows: (i) if InterMune institutes the infringement suit,
[*] shall be paid to Marnac and the remainder shall be paid to InterMune, and (ii) if Marnac or KDL institutes the infringement
suit because InterMune fails to institute an infringement suit or take other reasonable action in response to such infringement, [*] shall be paid to Marnac and the remainder
shall be paid to InterMune. 

        7.6    New Inventions.    [*] shall be subject to [*] set forth in
Section [*] without the prior written consent of [*] Nothing in this paragraph shall affect, limit, or restrict in any way [*] 

8.     Confidentiality  

        8.1   The Parties incorporate into this Agreement the Mutual Confidential Disclosure Terms, attached as Exhibit A (the
"CDA"), and "Confidential Information" has the meaning given therein. 

        8.2   InterMune will issue a press release concerning the Parties' entry into this Agreement, with the contents of such release
to be approved in writing in advance by Marnac, which approval shall not be unreasonably withheld. Except as required by law, none of the Parties shall publicly disclose the terms and conditions of
this Agreement unless expressly authorized in writing to do so by the other Party, which authorization shall not be unreasonably withheld. 

9.     Representations and Warranties  

        9.1    Mutual Representations and Warranties.    Each Party hereby represents and warrants to each other Party that: 

        (a)   it has full corporate or personal power and authority under the laws of the state or country of its incorporation to
enter into this Agreement and to carry out the provisions hereunder; 

        (b)   this Agreement is a legal and valid obligation binding upon it and is enforceable in accordance with its terms; 

        (c)   the execution, delivery and performance of this Agreement by it does not materially conflict with any agreement, oral or
written, to which it is a party or by which it may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having authority over it; and 

        (d)   [*] 

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INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        9.2    Additional Representations and Warranties.    Marnac, KDL, Margolin and Yamauchi each hereby represents and
warrants to InterMune that: 

        (a)   Marnac owns or has the right to represent all the owners of the Licensed Product; 

        (b)   None of the claims in the Licensed Patents have been misappropriated from any Third Party nor are the result of any
misuse of any Third Party's intellectual property; 

        (c)   All inventors of the Licensed Patents have irrevocably assigned all right, title and interest in the Licensed Patents to
Marnac and/or KDL; 

        (d)   InterMune's practice of the claims under the Licensed Patents will not infringe the rights of any Third Party; 

        (e)   No claim, whether or not embodied in an action past or present, of any infringement, of any conflict with, or of any
violation of any patent, trade secret or other intellectual property right or similar right of any Third Party, has been made or is pending or threatened with respect to the Licensed Patents; and 

        (f)    This Agreement does not conflict with any other agreement to which Marnac, KDL, Margolin or Yamauchi is a party, and none
of them shall enter into an agreement during the term of this Agreement that is in conflict with this Agreement. 

        9.3     Additional Representation and Warranty.    [*] further represents and warrants
that to the best of its knowledge, the [*] as well as the [*] and that to the best of their knowledge, any [*] Nothing in the
representation and warranty in the preceding sentence is intended to warrant the [*] Rather such warranty and representation is limited to a warranty and representation that,
to the best of [*] and, to the best of [*] knowledge, the [*] 

        9.4    Disclaimer.    Aside from the representations and warranties made by the Parties expressly in this Agreement,
EACH PARTY HEREBY DISCLAIMS ANY IMPLIED WARRANTY AS TO THE LEGAL EFFECT OF THE LICENSED PATENTS, THE FITNESS OF THE LICENSED PATENTS FOR THEIR INTENDED PURPOSE, THE MERCHANTABILITY OF THE LICENSED
PATENTS, AND ALL OTHER WARRANTIES WHICH MAY BE IMPLIED AT LAW. THE LICENSED PATENTS ARE LICENSED "AS IS" WITHOUT WARRANTY OTHER THAN WARRANTIES OF TITLE AND WARRANTIES EXPRESSLY SET OUT IN THIS
AGREEMENT. 

        This
disclaimer of warranty, however, shall not disclaim: (i) the implied contractual covenant of good faith and fair dealing, which the Parties hereby expressly recognize as
applicable to this Agreement; (ii) the express and implied duties of the Parties to perform as set forth herein; and (iii) any warranty which may not be disclaimed as a matter of patent
or other existing law. 

        9.5    Indemnity.    Each Party to this Agreement shall defend, indemnify and hold harmless the other Parties (and
their directors, officers, employees and agents) against any liability or damages from any claims of any Third Party to the extent that such claims arise from a material breach by the indemnifying
Party(ies) of any of his or its representations or warranties contained herein. 

10.   Term and Termination.  

        10.1    Term.    The term of this Agreement shall commence on the Effective Date and expire upon the later of
(a) the expiration of U.S. Patent [*]; and (b) on a disease-by-disease and country-by-country basis (as determined
by reference to the indications for which Pirfenidone is approved in such country), the later of (i) in the event that Orphan Drug Status is granted, the expiration of market exclusivity that
results from the Orphan Drug Status for such disease in such country, and (ii) the expiration of the last Valid Claim claiming the use of Pirfenidone to treat such disease in such country,
after which expiration of this Agreement, InterMune shall have a fully paid-up, royalty-free, perpetual, irrevocable, sublicenseable license to the Licensed Patents and
Information. 

        10.2    Termination by InterMune.    InterMune may terminate this Agreement upon [*] days'
written notice to Marnac. 

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        10.3    Termination for Material Breach.    If a Party materially breaches this Agreement, and within
[*] days of written notice of breach from the non-breaching Party, the breaching Party has not (i) cured the breach or (ii) initiated good faith
efforts to cure such breach to the reasonable satisfaction of the non-breaching Party, then the non-breaching Party may terminate this Agreement in writing promptly after
expiration of such [*] day period. 

        10.4    Effect of Termination.    

        (a)   In the event that InterMune terminates this Agreement pursuant to Section 10.2, or Marnac terminates this
Agreement pursuant to Section 10.3, the license granted to InterMune pursuant to Section 2.1 shall immediately terminate. 

        (b)   In the event that Marnac or KDL materially breach this Agreement, InterMune shall have the right to seek specific
performance of this Agreement, in lieu of termination. The Parties agree that InterMune may not have an adequate remedy at law in the event of any material breach that interferes with InterMune's
ability to commercially develop those rights licensed in this Agreement. 

        10.5    Bankruptcy Rights.    In the event that this Agreement is terminated or rejected by a Party or its receiver or
trustee under applicable bankruptcy laws due to such Party's bankruptcy, then all rights and licenses granted under or pursuant to this Agreement by such Party to the other Party are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code and any similar law or regulation in any other country, licenses of rights to "intellectual property" as defined
under Section 101(52) of the Bankruptcy Code. The Parties agree that all intellectual property rights licensed hereunder, including without limitation any patents or patent applications of a
Party in any country covered by the license grants under this Agreement, are part of the "intellectual property" as defined under Section 101(52) of the Bankruptcy Code subject to the
protections afforded the non-terminating Party under Section 365(n) of the Bankruptcy Code, and any similar law or regulation in any other country. 

11.   Miscellaneous  

        11.1    Entire Agreement; Amendment.    This Agreement and the CDA set forth the complete, final and exclusive
agreement between the Parties with respect to the subject matter hereof, and all of the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties
hereto with respect to such subject matter, and supersedes and terminates all prior agreements and understandings between the Parties with respect to such subject matter. There are no
covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties with respect to such subject matter other than as are set forth
herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the Party, if an individual, or
an authorized officer of each Party. 

        11.2    Force Majeure.    The Parties shall be excused from the performance of their obligations under this Agreement
to the extent that such performance is prevented by force majeure and the non-performing Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued
so long as the condition constituting force majeure continues and the non-performing Party takes reasonable efforts to remove the condition. For purposes of this Agreement, "force majeure"
shall include conditions beyond the control of the Parties, including without limitation, an act of God, voluntary or involuntary compliance with any regulation, law or order of any government, war,
civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm
or similar catastrophe. 

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        11.3    Notices.    Any notice required or permitted to be given under this Agreement shall be in writing, shall
specifically refer to this Agreement and shall be deemed to have been sufficiently given for all purposes if mailed by first class certified or registered mail, postage prepaid, express delivery
service or personally delivered, or if sent by facsimile and confirmed through one of the foregoing methods. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as
described below. 

	 
	 	 

	For InterMune:	 	InterMune, Inc.

3280 Bayshore Boulevard

Brisbane, CA 94005

Fax: (415) 508-0006

Attention: General Counsel
	

For Marnac:	
 	

Marnac, Inc.

9400 N. Central Expressway, Suite 305

Dallas, TX 75231

Fax: (214) 692-8510

Attention: Solomon B. Margolin
	

For Margolin:	
 	

Marnac, Inc.

9400 N. Central Expressway, Suite 305

Dallas, TX 75231

Fax: (214) 692-8510

Attention: Solomon B. Margolin
	

For KDL:	
 	

KDL GmbH

Bahnhof Strasse 11

CH-6301 Zug

Switzerland

Attention: Dr. Shitotomo Yamauchi
	

For Yamauchi:	
 	

KDL GmbH

Bahnhof Strasse 11

CH-6301 Zug

Switzerland

Attention: Dr. Shitotomo Yamauchi
	

With a copy to:	
 	

Robert H. Nunnally, Jr.

Wisener*Nunnally, LLP

620 West Main Street

Garland, Texas 75040

Facsimile: (972) 205-9421

        11.4    Independent Contractors.    The status of the Parties under this Agreement shall be that of independent
contractors. Neither Party shall have the right to enter into any agreements on behalf of
the other Party, nor shall it represent to any person that it has any such right or authority. Nothing in this Agreement shall be construed as establishing a partnership or joint venture relationship
between the Parties. 

        11.5    Maintenance of Records.    Each Party shall keep and maintain all records required by law or regulation with
respect to the Product and shall make copies of such records available to the other Party upon request. 

        11.6    United States Dollars.    References in this Agreement to "Dollars" or "$" shall mean the legal tender of the
United States of America. 

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INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        11.7    No Strict Construction.    This Agreement has been prepared jointly and shall not be strictly construed
against any Party. This Agreement shall be construed liberally to accomplish the Parties' objectives set forth in this Agreement. 

        11.8    Assignment.    Neither Party may assign or transfer this Agreement or any rights or obligations hereunder
without the prior written consent of the other; provided however, a Party may make such an assignment without the other Party's consent to a successor-in-interest to
substantially all of the business assets of such Party to which this Agreement relates, whether in a merger, sale of stock, sale of assets or other transaction. Any permitted successor or assignee of
rights and/or obligations hereunder shall, in a writing to the other Party, expressly assume performance of such rights and/or obligations. This Agreement shall be binding upon and shall inure to the
benefit of each Party's successors-in-interest and permitted assigns. Any assignment or attempted assignment by either Party in violation of the terms of this Section 10
shall be null and void and of no legal effect. 

        11.9    Counterparts.    This Agreement may be executed in two or more counterparts, and by facsimile, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument. 

        11.10    Further Actions.    Each Party agrees to execute, acknowledge and deliver such further instruments, and to do
all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. 

        11.11    Severability.    If any one or more of the provisions of this Agreement is held to be invalid or
unenforceable, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace
any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized. 

        11.12    Ambiguities.    Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective
of which Party may be deemed to have authored the ambiguous provision. 

        11.13    Headings.    The headings for each article and section in this Agreement have been inserted for convenience
of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section. 

        11.14    No Waiver.    Any delay in enforcing a Party's rights under this Agreement or any waiver as to a particular
default or other matter shall not constitute a waiver of such Party's rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as
to a particular matter for a particular period of time. 

        11.15    Choice of Law; Jurisdiction; Venue.    This Agreement will be governed and construed in accordance with the
laws of the State of Colorado as applied to transactions taking place wholly within Colorado between Colorado residents. For any legal action arising from or related to this Agreement, the Parties
hereby: (i) consent and submit solely to jurisdiction and venue of the state and federal courts located in Denver, Colorado, (ii) agree that such courts shall be the sole courts utilized
and (iii) hereby waive any jurisdictional or venue objections to such courts, including without limitation, forum non conveniens. 

        11.16    Litigation Costs.    If any dispute arises between the Parties with respect to the matters covered by this
Agreement which leads to a proceeding to resolve such dispute, the prevailing Party in such proceeding shall, upon a finding by the Court that the non-prevailing Party's position lacked
substantial merit, be entitled to receive its reasonable attorneys' fees, expert witness fees and out-of-pocket costs incurred in connection with such proceeding, in addition
to any other relief it may be awarded. 

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        11.17    Injunctive Relief.    A breach of any of the promises or agreements contained in Section 8 of this
Agreement may result in irreparable and continuing damage to a Party for which there may be no adequate remedy at law, and each Party is therefore entitled to seek injunctive relief as well as such
other and further relief as may be appropriate. The obligations provided under Section 8 of this Agreement are acknowledged as necessary and reasonable in order to protect each Party and its
business, and each Party expressly agrees that monetary damages would be inadequate to compensate the other Party for the breach thereof. Accordingly, each Party agrees and acknowledges that any such
violation or threatened violation will cause irreparable injury to the other Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, each Party shall
be entitled to obtain injunctive relief against the breach or threatened breach by the other Party of Section 8 of this Agreement, without the necessity of proving actual damages. 

        In Witness Whereof, the Parties have executed this Agreement in by their proper officers as of the date and year first above written. 

	InterMune, Inc.	 	Marnac, Inc.
	By:	/s/  JOHN J. WULF      
	 	By:	/s/  SOLOMON B. MARGOLIN      

	 
	 
	 	 
	 

	Print Name:	John J. Wulf
	 	Print Name:	Solomon B. Margolin

	 
	 
	 	 
	 

	Title:	Sr. Vice President of Corporate Development
	 	Title:	President

	 
	 
	 	 
	 

	KDL, Inc.	 	Dr. Solomon Margolin
	By:	Marnac, Inc., its attorney in fact	 	/s/  SOLOMON B. MARGOLIN      

	/s/  SOLOMON B. MARGOLIN      
 Dr. Solomon B. Margolin, President	 	 	 

	 
	 
	 	 
	 

	SHITOTOMO YAMAUCHI	 	KDL GmbH
	/s/  SOLOMON B. MARGOLIN      
	 	/s/  SOLOMON B. MARGOLIN      

	By: Marnac, Inc., his attorney in fact	 	By: Marnac, Inc., its attorney in fact
	Dr. Solomon B. Margolin, President	 	Dr. Solomon B. Margolin, President

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

 
 

Exhibit A—Mutual Confidentiality and Disclosure Agreement    
    

        The Parties to the License Agreement are bound by the following further provisions, which are set out as an exhibit for sake of clarity and convenience: 

        1.     The Parties wish to exchange information in connection with InterMune's licensing of Pirfenidone from Marnac through the
License Agreement, which will entail the exchange of certain confidential information relating to Marnac's proprietary information, products and/or business ("Marnac Confidential Information") and/or
InterMune's proprietary information, products and/or business ("InterMune Confidential Information"). (The Marnac Confidential Information and the InterMune Confidential Information are referred to
collectively as "Confidential Information.") This Agreement shall govern the disclosure of the Confidential Information. 

        2.     For purposes of this Agreement, the party that transmits Confidential Information shall be referred to as the "Discloser,"
and the party to which Confidential Information is transmitted shall be referred to as the "Recipient." [*] subject to the [*] 

        3.     InterMune hereby agrees not to use the Marnac Confidential Information except as the Parties may agree, and all data and
results from such discussions shall be protected as confidential pursuant to this Agreement. 

        4.     Marnac hereby agrees not to use the InterMune Confidential Information except as the Parties may agree, and all data and
results from such discussions shall be protected as confidential pursuant to this Agreement. 

        5.     Each Party agrees that, as a Recipient, the Party will use the same degree of care to keep all Confidential Information
confidential as the Party uses with respect to its own information of similar importance. Unless Recipient first obtains the Discloser's written consent, Recipient shall not disclose any Confidential
Information to others, except to the licensees, employees or agents of Recipient who reasonably require the Confidential Information for the purpose of this Agreement and who will use the Confidential
Information only for that purpose. 

        6.     Marnac and KDL warrant that they will not reveal any InterMune Confidential Information to any licensee, employee,
contactor or agent of Marnac without first informing that licensee, employee, contractor or agent of the confidential nature of the InterMune Confidential Information and securing the licensee's,
employee's, contractor's or agent's agreement to be bound by terms and conditions substantially equivalent to those in this Agreement as they apply to Marnac. 

        7.     InterMune warrants that it will not reveal any Marnac Confidential Information to any licensee, employee, contractor or
agent of InterMune without first informing that licensee, employee, contractor or agent of the confidential nature of the Marnac Confidential Information and securing the licensee's, employee's,
contractor's or agent's agreement to be bound by terms and conditions substantially equivalent to those in this Agreement as they apply to InterMune. 

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

        8.     Notwithstanding anything to the contrary in this Agreement, Recipient shall not be prevented from using or disclosing
Confidential Information that: 

        (a)   Recipient can demonstrate by competent proof was lawfully known to Recipient before the disclosure by the Discloser and
not obtained or derived directly or indirectly from Discloser; 

        (b)   is now, or becomes in the future, public knowledge other than by through the act or default of Recipient or its
employees; 

        (c)   Recipient obtains from a source independent of Discloser who is lawfully in possession of such Confidential Information
and is not subject to an obligation of confidentiality or non-use owed to Discloser; 

        (d)   Recipient can demonstrate or prove was independently developed by Recipient without use or knowledge of such Confidential
Information; or 

        (e)   is properly required by law, regulation, rule, act or order of any governmental authority or agency to be disclosed by
Recipient, provided that Recipient shall provide Discloser with reasonable advance notice of any such required disclosure and cooperate with Discloser
in minimizing the extent of any such disclosure and in seeking such protective order(s) or the like as may be available to protect the confidentiality of the Confidential Information; and  provided further that Recipient will make such disclosure only to the extent the disclosure is legally required. 

        Recipient
further agrees that, if any Confidential Information becomes subject to the exceptions set forth in this Section 8, Recipient will not disclose that such information was
received from and/or is used by Discloser unless such fact also becomes part of the public domain. 

        Notwithstanding
any other provision in this Agreement, InterMune may use or disclose Marnac Confidential Information in connection with the filing or publication of any patent or patent
application desired by InterMune to the extent such use or disclosure is necessary to support the patent or patent application. 

        9.     The receipt of Confidential Information shall not be deemed an admission by the Recipient of the novelty or patentability
of said subject matter. Nothing in this Agreement, or in the furnishing of Confidential Information by the Discloser, shall be construed as giving Recipient any right, title, interest in or ownership
of Confidential Information which is or becomes covered by any patents, copyrights, trademarks, trade secrets or know-how owned or held by the Discloser. 

        10.   Each Recipient's confidentiality and non-use obligations under this Agreement shall remain in effect for
[*] after the expiration or termination of the License Agreement. 

        11.   If this Agreement is terminated pursuant to Sections 10.2 or 10.3 of the License Agreement, then each Party shall return
all tangible Confidential Information (including any samples) to Discloser, except that the Recipient shall have the right to retain one (1) record copy of such tangible Confidential
Information in its legal files, from which to ascertain Recipient's continuing obligations to the Discloser under this Agreement. 

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

 
 

Exhibit B    
    

[*]

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

 
 

Exhibit C    
    

 
 

Other Trials (as defined in Section 6.3)    
    

        [*]

[*]CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. 

QuickLinks

Exhibit 10.68

License Agreement

Recitals

Exhibit A—Mutual Confidentiality and Disclosure Agreement

Exhibit B

Exhibit C

Other Trials (as defined in Section 6.3)

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