Document:

Exhibit

EXHIBIT 10.1

FORM OF
FOURTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
HAMILTON LANE ADVISORS, L.L.C.

Dated as of [ ], 2017

THE UNITS REPRESENTED BY THIS FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH UNITS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND APPLICABLE LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.

	
			
	 
	 
	Page

	ARTICLE 1.
	CONTINUATION OF THE COMPANY
	2

	1.1
	Continuation of the Company
	2

	1.2
	Name
	2

	1.3
	Business of the Company
	3

	1.4
	Location of Principal Place of Business
	3

	1.5
	Ownership of Assets
	3

	1.6
	Fiscal Year
	3

	1.7
	Term
	3

	1.8
	Governing Law
	4

	 
	 
	 

	ARTICLE 2.
	DEFINITIONS
	5

	2.1
	Definitions
	5

	2.2
	Voting of Units Owned by Management LLC
	15

	2.3
	Rules of Interpretation
	15

	 
	 
	 

	ARTICLE 3.
	CAPITALIZATION
	15

	3.1
	Units; Initial Capitalization; Schedule of Members
	15

	3.2
	Reclassifications, Issuances, Redemptions, and Adjustments of Units
	17

	3.3
	Certificates
	18

	3.4
	Adjustments
	19

	3.5
	Authorization and Issuance of Additional Units
	19

	3.6
	Repurchase or Redemption of Class A Common Stock
	21

	3.7
	Changes in Common Stock
	21

	 
	 
	 

	ARTICLE 4.
	CAPITAL; CAPITAL ACCOUNTS
	21

	4.1
	Capital Contributions
	21

	4.2
	No Interest on Capital Contributions
	21

	4.3
	Withdrawal and Return of Capital Contributions
	22

	4.4
	Capital Accounts
	22

	 
	 
	 

	ARTICLE 5.
	ALLOCATION OF NET INCOME AND NET LOSS
	22

	5.1
	Allocations of Net Income and Net Losses
	23

	5.2
	Special Allocations
	23

	5.3
	Allocations for Income Tax Purposes
	24

	5.4
	Tax Withholding and Entity-Level Taxes
	25

	5.5
	Allocations to Transferred Interests
	25

	 
	 
	 

	ARTICLE 6.
	DISTRIBUTIONS
	25

	6.1
	Distributions
	26

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	6.2
	Successors
	26

	6.3
	Distributions In-Kind
	26

	6.4
	Tax Distributions
	26

	 
	 
	 

	ARTICLE 7.
	BOOKS OF ACCOUNT, RECORDS AND REPORTS, TAXABLE YEAR, TAX MATTERS
	27

	7.1
	Books and Records
	27

	7.2
	Annual Reports
	28

	7.3
	Tax Elections
	28

	7.4
	Taxable Year
	28

	7.5
	Tax Matters Partner
	28

	 
	 
	 

	ARTICLE 8.
	POWERS, RIGHTS AND DUTIES OF THE MEMBERS
	28

	8.1
	Limitations
	29

	8.2
	Liability
	29

	8.3
	Priority
	29

	8.4
	Member Standard of Care
	29

	 
	 
	 

	ARTICLE 9.
	MANAGEMENT
	30

	9.1
	The Managing Member; Delegation of Authority and Duties
	30

	9.2
	Officers
	31

	9.3
	Indemnification of the Managing Member, Officers and Agents
	32

	9.4
	Certain Costs and Expenses
	33

	9.5
	Insurance
	33

	 
	 
	 

	ARTICLE 10.
	TRANSFERS OF INTEREST BY MEMBERS
	34

	10.1
	Restrictions on Transfers of Interests by Members
	34

	10.2
	Transfer of Interest of Members
	34

	10.3
	Further Requirements
	36

	10.4
	Exchange; Take Along, Tag-Along Rights
	37

	10.5
	Automatic Conversion
	40

	10.6
	Consequences of Transfers Generally
	40

	10.7
	Capital Account; Percentage Interest
	40

	10.8
	Additional Filings
	41

	ARTICLE 11.
	RESIGNATION OF MEMBERS; TERMINATION OF COMPANY; LIQUIDATION AND DISTRIBUTION OF ASSETS
	41

	11.1
	Resignation of Members
	41

	11.2
	Dissolution of the Company
	41

	11.3
	Distribution in Liquidation
	42

	11.4
	Final Reports
	43

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	11.5
	Rights of Members
	43

	11.6
	Deficit Restoration
	43

	11.7
	Termination
	43

	 
	 
	 

	ARTICLE 12.
	NOTICES AND CONSENT OF MEMBERS
	43

	12.1
	Notices
	43

	12.2
	Consents and Approvals
	43

	 
	 
	 

	ARTICLE 13.
	AMENDMENT OF AGREEMENT
	43

	13.1
	Amendments
	43

	13.2
	Amendment of Certificate
	43

	13.3
	Power of Attorney
	43

	 
	 
	 

	ARTICLE 14.
	MISCELLANEOUS
	44

	14.1
	Agreement for Further Execution
	44

	14.2
	Governing Law; Jurisdiction
	44

	14.3
	Severability
	44

	14.4
	Entire Agreement
	44

	14.5
	Indulgences, Etc
	44

	14.6
	Binding Nature of Agreement; Assignment
	45

	14.7
	Counterparts
	45

	14.8
	Headings
	45

	14.9
	Number of Days
	45

	14.1
	Interpretation
	45

	14.11
	No Third Party Beneficiaries
	45

	14.12
	Waiver of Partition
	45

	14.13
	Waiver of Judicial Dissolution
	45

	14.14
	Consent to Jurisdiction; Waiver of Trial by Jury
	46

	14.15
	Non-Occurrence of IPO
	46

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FOURTH AMENDED AND RESTATED 
LIMITED LIABILITY COMPANY AGREEMENT OF 
HAMILTON LANE ADVISORS, L.L.C.
This FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of HAMILTON LANE ADVISORS, L.L.C. (the “Company”), dated as of [_____________], 2017, is adopted, executed and agreed to, for good and valuable consideration, by and among the members listed on the Schedule of Members (as defined below), and shall be effective as of the Effective Time, subject to Section 14.15 below. Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in Section 2.1.
RECITALS

WHEREAS, Hamilton Lane Advisors, L.L.C. was originally formed as a Pennsylvania limited liability company on May 12, 1998 under the Act);
WHEREAS, on December 10, 2003, the Members of the Company at that time entered into a Second Amended and Restated Operating Agreement of the Company, as amended by Amendment No. 1 thereto, dated June 30, 2010;
WHEREAS, on February 28, 2012, the Members of the Company at that time entered into the Third Amended and Restated Operating Agreement of the Company (the “Third A&R Operating Agreement”); 
WHEREAS, Hamilton Lane Incorporated, a Delaware corporation (“HLI”), and the Company intend to enter into an underwriting agreement (a) to issue and sell to the several underwriters named therein shares of Class A Common Stock, par value $0.001 per share, of HLI (the “Class A Common Stock”), (b) to make a public offering of those shares of Class A Common Stock ((a) and (b), collectively, the “IPO”), and (c) to contribute the proceeds of the IPO to the Company in exchange for newly-issued Class A Interests of the Company;
WHEREAS, in connection with the IPO, the current Members of the Company desire to amend and restate the Third A&R Operating Agreement to be effective from and after the Effective Time, and to, among other things:
(i)    provide for the contribution of the proceeds of the IPO to the Company; 
(ii)    designate HLI as the sole manager of the Company (the “Managing Member”); 

(iii)    create a class of Units designated as Class A Units and issue those Units to HLI in consideration of the contribution by HLI of the net proceeds of the IPO to the Company, less amounts used to fund the purchases described in clause (vii) below;
(iv)    reclassify the Company’s existing Class A Interests and Class C Interests (each as defined in the Third A&R Operating Agreement) as Class B and Class C Units, respectively;
(v)    adjust the numbers of reclassified Class B and Class C Units by the operation of the Conversion Ratio as set forth in Section 3.2 below; 
(vi)    redeem and cancel any fractional Class B or Class C Units created by application of the Conversion Ratio, for cash using a portion of the proceeds from the IPO;
(vii)    cause the Managing Member to purchase from each of the Members whose names are set forth on Annex A the respective numbers of Class B and Class C Units set forth thereon;
(viii)    change and reclassify any Class B or Class C Units acquired by the Managing Member pursuant to the preceding clause into Class A Units; and
(ix)    cause each Member holding Class B Units to acquire one share of Class B Common Stock for each Class B Unit held for consideration of $0.001 per share.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and covenants contained herein, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I.      CONTINUATION OF THE COMPANY

1.1    Continuation of the Company.  The Company was formed as a limited liability company under the Act by the filing of the Certificate with the Department of State of Pennsylvania on May 12, 1998. The Members hereby agree to continue the Company as a limited liability company under the Act for the purposes and upon the terms and conditions hereinafter set forth to give effect to, authorize, and memorialize the transactions occurring in connection with the IPO and to be bound by the terms and conditions hereof. To the extent that the rights, powers, duties, obligations and liabilities of any Member are different by reason of any provision of this Agreement than they would be in the absence of that provision, this Agreement shall, to the extent permitted by the Act, control.

1.2    Name.  The name of the Company is “Hamilton Lane Advisors, L.L.C.,” as that name may be modified from time to time by the Managing Member as it may deem advisable.

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1.3    Business of the Company. Subject to the limitations on the activities of the Company otherwise specified in this Agreement, the purpose and business of the Company shall be the conduct of any business or activity that may be conducted by a limited liability company organized pursuant to the Act.  The Company shall have all the powers permitted by law which are necessary or desirable to carry out the purpose and business of the Company, including, but not limited to, the powers to do the following:
(a)    transact business in any state or nation in which the Company may lawfully act, for itself or as principal, agent or representative for any Person;
(b)    enter into, make, perform and carry out, or cancel and rescind, contracts and other obligations for any lawful purpose;
(c)    apply for, register, obtain, purchase or otherwise acquire trademarks, trade names, labels and designs relating to or useful in connection with any business of the Company, and to use, exercise, develop and license the use of the same;
(d)    employ on behalf of the Company legal counsel, accountants and other professional advisors with respect to any business of the Company;
(e)    compromise, submit to arbitration, sue on, and defend claims in favor of or against the Company; and
(f)    exercise all of the general rights, privileges and powers permitted by the provisions of the Act, as adopted or hereafter amended or supplemented.

1.4    Location of Principal Place of Business. The location of the principal place of business of the Company is One Presidential Boulevard, Fourth Floor, Bala Cynwyd, Pennsylvania 19004 or such other location as may be determined by the Managing Member. In addition, the Company may maintain such other offices as the Managing Member may deem advisable at any other place or places within or without the Commonwealth of Pennsylvania.

1.5    Ownership of Assets.  The Company shall hold all of its assets in the name of the Company and not in the name of any Member. No Member shall have any ownership interest in the Company’s assets.

1.6    Fiscal Year.  The Company’s fiscal year shall be set by the Managing Member from time to time. 

1.7    Term. The term of the Company commenced on the date of filing of the Certificate, and shall be perpetual unless the Company is earlier dissolved and terminated in accordance with the provisions of this Agreement.

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1.8    Governing Law.  The Company elects to be subject to the Pennsylvania Uniform Limited Liability Company Act of 2016 effective as of February 21, 2017.

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ARTICLE 2.      DEFINITIONS

2.1    Definitions. The following terms used in this Agreement shall have the following meanings.
“Act” means, with respect to a date or period of time before February 21, 2017, the Pennsylvania Limited Liability Company Law of 1994, 15 Pa. C.S. Chapter 89.  With respect to a date or period of time on or after February 21, 2017, the term means the Pennsylvania Uniform Limited Liability Company Act of 2016, 15 Pa. C.S. Chapter 88.
“Adjusted Capital Account” means, with respect to any Member, the Member’s Capital Account (x) increased by the sum of (A) the amount of the Member’s share of Company Minimum Gain, (B) the amount of the Member’s share of Member Minimum Gain and (C) any amount of the deficit balance in the Member’s Capital Account that the Member is treated as obligated to restore pursuant to Regulation section 1.704-1(b)(2)(ii)(c) and (y) decreased by reasonably expected adjustments, allocations and distributions described in Regulation sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). This definition shall be interpreted consistently with Regulation section 1.704-1(b)(2)(ii)(d).
“Affiliate” of any particular Person means any other Person directly or indirectly controlling, controlled by or under common control with such particular Person. For the purpose of this definition, the term “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, either through the ownership of a majority of such Person’s voting stock, by contract or otherwise.
“Agreement” means this Fourth Amended and Restated Limited Liability Company Agreement, as amended, modified or supplemented from time to time.
“Assignees” has the meaning set forth in Section 10.2(e).
“Assumed Tax Rate” means a rate determined by the Managing Member for the applicable Taxable Year, which shall equal the highest effective combined marginal U.S. federal, state and local income tax rate (taking into account any self-employment tax or tax imposed by Code section 1411) applicable during such Taxable Year to a natural person residing in or corporation doing business in New York, New York or in San Francisco, California (after giving effect to any differences in rates applicable to ordinary income and capital gains and any U.S. federal income tax deduction for such state and local income taxes).

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 “ Beneficial Owner ” has the meaning given to the term “beneficial owner” in Rule 13d-3 under the Exchange Act. 
“Business Day” means any day other than a Saturday, Sunday or a day on which commercial banks are authorized or required to close in New York City, New York or Philadelphia, Pennsylvania.
“Capital Account” means, with respect to any Member, the account maintained by the Company with respect to such Member in accordance with Section 4.4.
“Capital Contribution” means any contribution (whether in cash, property or a combination thereof) to the capital of the Company.
“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all ownership interests in a limited liability company, partnership or other Person (other than a corporation), and any and all securities, warrants, options or other rights to purchase or acquire, or that are convertible into, any of the foregoing.
“Cause” shall mean, in the case of a Management LLC Member that has an effective employment agreement or consulting agreement with the Company or an Affiliate of the Company at the time of termination of employment, the meaning ascribed to it in that employment or consulting agreement, and in the case of any other Management LLC Member, the following:
(a)    fraud or dishonesty in connection with the Management LLC Member’s employment or service, or theft, misappropriation or embezzlement of HLI’s, the Company’s and/or any Affiliate’s funds or other property; 
(b)    conviction or indictment of the Management LLC Member or the entering of a plea of nolo contendere by the Management LLC Member with respect to any felony, crime involving fraud or misrepresentation, or any other crime (whether or not such felony or crime is connected with his or her employment or service) the effect of which in the judgment of the board of directors of HLI is likely to affect, materially and adversely, HLI, the Company and/or any Affiliate thereof; 
(c)    abuse of alcohol or other drugs which materially interferes with the performance by the Management LLC Member of his or her duties, or the use by the Management LLC Member of any illegal drugs or narcotics; or  

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(d)    the Management LLC Member's engaging in any Competition or breaching any non-competition agreement applicable to him or her while employed by, or providing services to, the Company or an Affiliate of the Company. 
“Certificate” means the Certificate of Organization of the Company, as amended, modified or supplemented from time to time.
 “ Change in Control of HLI ” means the occurrence after the Effective Date of any of the following events: 
 (a)    any Person (excluding HLAI) or group as defined in Regulation 13D under the Exchange Act (excluding any group that includes HLAI or consists solely of persons who are parties to the Stockholders’ Agreement) becomes after the date hereof the Beneficial Owner, directly or indirectly, of securities of HLI representing 50% or more of HLI’s then outstanding voting securities other than in a Qualified Sale Transaction; 
 (b)    the consummation of a reorganization, merger or consolidation other than in a Qualified Sale Transaction, unless immediately following that reorganization, merger or consolidation, all of the Beneficial Owners of the voting securities of HLI immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities of the entity resulting from such transaction; 
 (c)    during any period of two consecutive years, not including any period prior to the execution of this Agreement, individuals who at the beginning of such period constituted the Board of Directors of HLI (including for this purpose any new directors whose election by the Board or nomination for election of HLI stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of that Board of Directors; or 
 (d)    the stockholders of HLI approve a plan of complete liquidation or dissolution of HLI or an agreement for the sale or disposition by HLI of all or substantially all of HLI’s assets and business other than in a Qualified Sale Transaction. 
“Class A Common Stock” has the meaning set forth in the Recitals.
“Class A Units” means the Class A common units of membership interest in the Company.
“Class B Common Stock” means the Class B Common Stock, par value $0.001 per share, of HLI.

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“Class B Units” means the Class B common units of membership interest in the Company.
“Class C Units” means the Class C common units of membership interest in the Company.
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Stock” means the shares of Class A Common Stock, including any shares of capital stock into which Class A Common Stock may be converted (as a result of a recapitalization, share exchange or similar event) or that are issued with respect to Class A Common Stock (including, without limitation, with respect to any stock split or stock dividend, or a successor security).
“Company” has the meaning set forth in the preamble.
“Company Minimum Gain” has the meaning set forth for the term “partnership minimum gain” in Regulations section 1.704-2(b)(2).
“Competition” shall mean any of the following activities: 
(a)    engaging in, working for, providing services to, participating in the ownership, management, or operation of, or having a financial interest in any business engaged in the same or similar activities to those now or hereinafter carried on by the Company or any Affiliate (other than as a passive owner of not more than one percent of the outstanding publicly traded stock of any company in such business); 
(b)    interfering with the relationship of the Company or Affiliate and any of its employees (including, but not limited to, causing or helping another business to hire any employee of the Company or any Affiliate); 
(c)    directly or indirectly diverting (or attempting to divert) from the Company or any Affiliate any business in which the Company or any Affiliate has been actively engaged;
(d)    interfering with the  relationship of the Company or any Affiliate with any of their respective clients or prospective clients; or 
(e)    disclosing (except in the good-faith performance of services to the Company or any Affiliate) to any Person (other than an employee of the Company or any Affiliate), or using for himself or herself, any confidential proprietary information belonging to or relating to the Company or any Affiliate. 

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“Conversion Ratio” means the ratio that is equal to the fraction of which (x) the numerator is the number that is obtained by dividing the Implied Value of the Company at the Effective Time by the aggregate number of Class A and Class C Interests (as defined in the Third A&R Operating Agreement) then outstanding and (y) the denominator is the Offering Price.
“Depreciation” has the meaning set forth in the definition of “Net Income” or “Net Loss” under paragraph (e) therein.
“Distribution” means each distribution after the Effective Date made by the Company to a Member, whether in cash, property or securities of the Company, pursuant to Article 6.
“Effective Date” has the meaning set forth in the Recitals.
“Effective Time” means the moment in time immediately preceding the closing of the IPO.
“Equity Incentive Plan” means the Hamilton Lane Incorporated 2016 Equity Incentive Plan.
 “ Exchange Act ” means the Securities Exchange Act of 1934, as amended. 
“Exchange Agreement” means the Exchange Agreement, effective on or about the Effective Date, among the Company, HLI and the Company Unitholders (as defined therein) from time to time party thereto, as the same may be amended, modified, supplemented or restated from time to time.
“Fair Market Value” means, except as otherwise provided for herein, as of any given date of determination, the cash price, as determined in good faith by the Managing Member using any reasonable method of valuation and taking into account any relevant facts and circumstances then prevailing and in accordance with this Agreement, at which a willing seller would sell, and a willing buyer would buy, each being apprised of all relevant facts and neither acting under compulsion, such assets or properties in an arm’s-length negotiated transaction with an unaffiliated third party without time constraints.
“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:
(a)    the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the Fair Market Value of such asset on the date of the contribution;
(b)    the Gross Asset Values of all Company assets shall be adjusted to equal their respective Fair Market Values as of the following times:

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(i)    (A) HLI’s acquisition of an interest in the Company in exchange for HLI’s Capital Contribution on the Effective Date and (B) the acquisition of an additional interest in the Company after the Effective Date by a new or existing Member in exchange for more than a de minimis Capital Contribution;
(ii)    the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company or any of its subsidiaries by an existing or a new Member acting in a “partner capacity,” or in anticipation of becoming a “partner” (in each case within the meaning of Regulations section 1.704-1(b)(2)(iv)(f)(5)(iii);
(iii)    the Distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company; and
(iv)    the liquidation of the Company within the meaning of Regulations section 1.704-1(b)(2)(ii)(g).
except that such adjustments at the time of any event described in (i)(B), (ii) or (iii) shall be made only if the Managing Member reasonably determines that they are necessary or appropriate to reflect the relative economic interests of the Members in the Company.
(c)    the Gross Asset Value of any Company asset distributed to a Member shall be the Fair Market Value of such asset on the date of Distribution;
(d)    the Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code section 734(b) or Code section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to the extent that the Managing Member determines that an adjustment pursuant to subparagraph (b) of this definition of Gross Asset Value is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d); and
(e)    with respect to any asset that has a Gross Asset Value that differs from its adjusted tax basis, Gross Asset Value shall be adjusted by the amount of Depreciation rather than any other depreciation, amortization or other cost recovery method.
“HLAI” means HLA Investments, LLC, a Delaware limited liability company.
“HLI” has the meaning set forth in the Recitals.

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“Implied Value” means the value of the Company that is implicit in the Offering Price, before giving effect to underwriting discounts and costs and expenses of the IPO.
“Indemnified Party” has the meaning set forth in Section 9.3(a).
“Interest” when used in reference to an interest in the Company, means the entire ownership interest of a Member in the Company at any particular time, including the Member’s interest in the capital, income, gains, losses, deductions, expenses and distributions of the Company and the Member’s governance rights.
“IPO” has the meaning set forth in the Recitals.
“Liquidator” has the meaning set forth in Section 11.2(c).
“Major Management Holder” means any Management LLC Member (together with his or her successors-in-interest) that is a party to the Stockholders Agreement, effective at the Effective Time, among the Company, the Managing Member and certain of the Management LLC Members.
“Management LLC” has the meaning set forth in Section 2.2.
“Management LLC Member” has the meaning set forth in Section 2.2. A Management LLC Member will continue to meet such definition even if Management LLC distributes Units to be held directly by such Person rather than through Management LLC.
“Managing Member” has the meaning set forth in the Recitals.
“Member” means each of the Persons listed on the Schedule of Members and each other Person who is hereafter admitted as a Member in accordance with the terms of this Agreement and the Act. The Members shall constitute the “members” (as such term is defined in the Act) of the Company. Any reference in this Agreement to any Member shall include a Substituted Member to the extent such Substituted Member was admitted to the Company in accordance with the provisions of this Agreement.
“Member Minimum Gain” means minimum gain attributable to Member Nonrecourse Debt determined in accordance with Regulations section 1.704-2(i).
“Member Nonrecourse Debt” has the meaning set forth for the term “partner nonrecourse debt” in Regulations section 1.704-2(b)(4).
“Member’s Owners” has the meaning set forth in Section 10.2(b).
“Membership Certificate” has the meaning set forth in Section 3.3(a).

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“Net Income” or “Net Loss” means, for each Taxable Year or other period, an amount equal to the Company’s taxable income or loss for such Taxable Year or other period, determined in accordance with Code section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code section 703(a)(1) shall be included in such taxable income or loss), with the following adjustments:
(a)    any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be added to such taxable income or loss;
(b)    any expenditures of the Company described in Code section 705(a)(2)(B) or treated as Code section 705(a)(2)(B) expenditures pursuant to Regulations section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be subtracted from such taxable income or loss;
(c)    in the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (b) or (c) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain (if the adjustment increases the Gross Asset Value of the asset) or loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset for purposes of computing Net Income or Net Loss;
(d)    gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;
(e)    in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, with respect to a Company asset having a Gross Asset Value that differs from its adjusted basis for tax purposes, “Depreciation” with respect to such asset shall be computed by reference to the asset’s Gross Asset Value in accordance with Regulation section 1.704-1(b)(2)(iv)(g);
(f)    to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code section 734(b) or 743(b) is required pursuant to Regulations section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and
(g)    any item of income, gain, credit, loss, deduction or expenditure allocated under Section 5.2 shall be excluded from the computation of Net Income and Net Loss.

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“Net Proceeds” means, when applied to any sale of securities by HLI, the gross proceeds to HLI from the sale less any underwriting or similar discounts or commissions and all bona fide out-of-pocket expenses of HLI, the Company and their respective subsidiaries in connection with such issuance to the extent such commissions or expenses are to be paid by HLI.
“Offering Price” means the price at which shares of Class A Common Stock are sold to the public in the IPO pursuant to the Underwriting Agreement.
“Officer” and “Officers” have the meanings set forth in Section 9.2(a).
“PAUCC” has the meaning set forth in Section 3.3(c).
“Percentage Interest” means, with respect to each Member, as of the applicable date of determination, a fraction (expressed as a percentage), the numerator of which is the number of Units held by such Member and the denominator of which is the total number of Units held by all Members.
“Person” means any individual, partnership, limited liability company, association, corporation, trust or other entity.
“Permitted Transfer” has the meaning set forth in Section 10.2(b).
“Qualified Sale Transaction” means a sale of all or substantially all of the consolidated business, operations, and assets of HLI, HLAI, the Company, and their respective Subsidiaries in one transaction or a series of related transactions that is structured (whether by way of merger, combination, reorganization or similar transaction) to include a sale or transfer to the purchaser of Units of the Company and interests in the Management LL or HLAI to any of (a) a bona fide third party, unaffiliated purchaser, (b) HLAI, or (c) a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended to date (or any successor provisions thereto) that includes HLAI or consists solely of Persons (excluding Management LLC) who were parties on the Closing Date to the Stockholders’ Agreement, effective as of the date hereof, by and among HLI, HLAI, Management LLC, and the other Persons party thereto, that, in any case, is approved by a majority of the Board of Directors of HLI.
“Quarterly Estimated Tax Periods” means the two, three, and four calendar month periods with respect to which Federal quarterly estimated tax payments are made. The first such period begins on January 1 and ends on March 31. The second such period begins on April 1 and ends on May 31. The third such period begins on June 1 and ends on August 31. The fourth such period begins on September 1 and ends on December 31.
“Regulation” means a Treasury Regulation promulgated under the Code.

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“Regulatory Allocations” has the meaning set forth in Section 5.2(g).
“Schedule of Members” has the meaning set forth in Section 3.1(c).
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Stockholders Agreement” means that certain Stockholders Agreement dated as of the Effective Date by and among HLI, the Company, HLAI, and certain other Persons party thereto.
“Substituted Member” means any Person admitted to the Company as a substituted Member pursuant to the provisions of Article 10.
 “ Take-along right ” has the meaning set forth in  Section 10.4(b) . 
“Tax Distribution” has the meaning set forth in Section 6.4.
“Tax Matters Partner” has the meaning set forth in Section 7.5.
“Tax Receivable Agreement” means the Tax Receivable Agreement, effective on or about the Effective Date, among the Company, HLI, and the HLA Members (as defined therein) from time to time party thereto, as the same may be amended, modified, supplemented or restated from time to time.
“Taxable Year” has the meaning set forth in Section 7.4.
“Third A&R Operating Agreement” has the meaning set forth in the recitals.
“Transfer,” “Transferee” and “Transferor” have the respective meanings set forth in Section 10.1.
“True-Up Amount” means, in respect of a particular U.S. federal income tax year of the Company, an amount equal to (x) the greater of (A) the product of (i) the taxable income of the Company for such tax year (determined by disregarding any adjustment to the taxable income of any Member that arises under Code section 743(b) and is attributable to the acquisition by such Member of an interest in the Company in a transaction described in Code section 743(a)) multiplied by (ii) the Assumed Tax Rate or (B) the actual total amount described in clause (2) of Section 5.4(a) minus (y) the aggregate amount of distributions made in respect of such tax year (treating any Tax Distribution made with respect to income for such tax year, regardless of when made, and any distribution other than a Tax Distribution made during such tax year, as being made in respect of such tax year).

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“Unit” has the meaning set forth in Section 3.1(a).
“Void Transfer” has the meaning set forth in Section 10.1.
“Withdrawing Member” has the meaning set forth in Section 10.2(e). 

2.2    Voting of Units Owned by Management LLC.  For purposes of calculating voting majorities hereunder, HL Management Investors, LLC (“Management LLC”) shall be entitled to divide its vote and each of the members of Management LLC listed on the Schedule of Members (each, a “Management LLC Member”) shall be entitled to vote, on behalf of Management LLC, a portion of the Units held by Management LLC equal to the percentage set forth opposite such Management LLC Member’s name on the Schedule of Members of the Units held by Management LLC (as such portion of the Schedule of Members may be amended upon notice from Management LLC).

2.3    Rules of Interpretation. Unless the context otherwise clearly requires: (a) a term has the meaning assigned to it; (b) “or” is not exclusive; (c) wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in either the masculine, feminine or neuter shall include the masculine, feminine and neuter; (d) provisions apply to successive events and transactions; (e) all references in this Agreement to “include” or “including” or similar expressions shall be deemed to mean “including without limitation”; (f) all references in this Agreement to designated “Articles,” “Sections,” “paragraphs,” “clauses” and other subdivisions are to the designated Articles, Sections, paragraphs, clauses and other subdivisions of this Agreement, and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, paragraph, clause or other subdivision; and (g) any definition of or reference to any agreement, instrument, document, statute or regulation herein shall be construed as referring to such agreement, instrument, document, statute or regulation as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein). This Agreement is among financially sophisticated and knowledgeable parties and is entered into by the parties in reliance upon the economic and legal bargains contained herein and shall be interpreted and construed in a fair and impartial manner without regard to such factors as the party who prepared, or caused the preparation of, this Agreement or the relative bargaining power of the parties.

ARTICLE 3.      CAPITALIZATION

3.1    Units; Initial Capitalization; Schedule of Members.
(a)    Each Member’s Interest in the Company shall be represented by Units of limited liability company interest (each, a “Unit”). Except as otherwise provided in this 

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Agreement, the Exchange Agreement or the Tax Receivable Agreement, all Units shall have identical rights and privileges in all respects. 
(b)    At the closing of the IPO after giving effect to the transactions described in Section 3.2 below, the Company shall have three classes of Units: Class A Units, all of which shall be held by HLI, and Class B and Class C Units, all of which shall be held by the other Members.
(c)    No Unit shall have any right to vote on any matter except as expressly provided for in Sections 12.2 and 13.1 of this Operating Agreement, required by the Act, or as expressly specified in any amendment hereto. Unless otherwise expressly provided for in this Operating Agreement or in any amendment hereto, all interests having a right to vote on any matter shall vote as a single class, and each Unit shall have one vote on each such matter.
(d)    Each Class B Unit shall be associated with and stapled to one share of HLI’s Class B Common Stock, par value $0.001 per share. Upon any acquisition of Class B Units, each Member acquiring such Units shall purchase from HLI, concurrently with the acquisition of Class B Units, one share of HLI Class B Common Stock for the consideration of $0.001 per share for each Class B Unit acquired. Upon any surrender, redemption or conversion of any such Class B Unit, the holder thereof shall concurrently surrender to HLI the associated Class B Common Share in exchange for payment by HLI of the par value thereof.
(e)    Each Member’s Interest shall be personal property for all purposes.
(f)    The aggregate number of outstanding Units and the aggregate amount of cash Capital Contributions that have been made by the Members and the Fair Market Value of Capital Contributions in the form of any property other than cash contributed by the Members with respect to the Units (including, if applicable, a description and the amount of any liability assumed by the Company in connection with a contribution of cash or property in respect of Units or to which contributed property is subject) shall be set forth on a schedule maintained by the Company. The Company shall also maintain a schedule setting forth (i) the name and address of each Member, (ii) the number and class of Units owned by that Member, and (iii) with respect to each Transfer permitted under this Agreement, the date of the Transfer, the number of Units Transferred and the identity of the Transferor and Transferee(s) of them (such schedule, the “Schedule of Members”). The Schedule of Members shall be the definitive record of ownership of each Unit or other Capital Stock of the Company and all relevant information with respect to each Member. The Company shall be entitled to recognize the exclusive right of a Person registered on its records as the owner of Units or other Capital Stock of the Company for all purposes and shall not be bound to recognize any equitable or other claim to or interest in Units or other Capital Stock of the Company on the part of any other Person, whether or not it shall have express or other notice thereof, except as otherwise provided by the Act.

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3.2    Reclassifications, Issuances, Redemptions, and Adjustments of Units.
(a)    At the Effective Time:
(i)    All Class A Interests (as defined in the Third A&R Operating Agreement) then outstanding and held by each Member shall be converted and changed into the number of Class B Units that is equal to the number obtained by multiplying (x) the number of Class A Interests held by that Member by (y) the Conversion Ratio; and
(ii)    All Class C Interests (as defined in the Third A&R Operating Agreement) then outstanding and held by each Member shall be changed and converted into the number of Class C Units that is equal to the number obtained by multiplying (x) the number of Class C Interests held by that Member by (y) the Conversion Ratio; and 
(iii)    The Members whose names are set forth on Annex A hereto shall exchange the numbers of Class C and Class B Units set forth next to their respective names on that Annex for shares of Class A Common Stock of HLI at an exchange ratio of one for one. No fractional Units shall be exchanged.
(iv)    The actions contemplated by Sections 3.2(a)(i) and 3.2(a)(ii) shall occur simultaneously and without further action on the part of any Person. For clarity, Article IX of the Third Amended and Restated Operating Agreement shall not apply to any of the transactions described in this Section 3.2.
(b)    At the Closing of the IPO:
(i)    HLI shall contribute to the Company all of the proceeds (net of underwriting discounts and amounts to be used to purchase Units as set forth in clause (iv) below) of the IPO;
(ii)    The Company shall issue to HLI in consideration of the contribution of the proceeds received by HLI from the IPO the number of Class A Units necessary to cause the total number of Class A Units held by HLI to be equal to the total number of then outstanding shares of Class A Common Stock of HLI;
(iii)    All fractional Class B and Class C Units created by the operation of the Conversion Ratio will be repurchased by the Company using a portion of the proceeds of the IPO and upon their purchase canceled and retired; 
(iv)    HLI shall purchase, using a portion of the proceeds of the IPO, from each of the Persons set forth on Annex I the number of Class B and Class C Units set forth next to their names thereon at a purchase price that is equal to the Offering Price; and

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(v)    Each Class B and Class C Unit purchased pursuant to the preceding clause (iv) shall, immediately upon its acquisition by HLI, be converted and changed, without further action by any Person, into one Class A Unit; 
(vi)    Concurrently, each Member holding Class B Units shall purchase the number of shares of Class B Common Stock that is equal to the number of Class B Units held by such Member after giving effect to all of the preceding transactions.
(c)    All of the then outstanding Units when issued and paid for as described above, shall be validly issued and the holders of such Units shall have no obligation to make any further payments for the purchase of the Units or contributions to the Company solely by reason of their ownership of Units.

3.3    Certificates.
(a)    The Company may (but shall not be required to), in the discretion of the Managing Member, issue one or more certificates to the Members to evidence the Units in the forms attached as Annex II (each, a “Membership Certificate”). Each certificate representing a Unit shall (i) be signed on behalf of the Company by the Chief Executive Officer, Chief Financial Officer or Secretary of the Company and (ii) set forth the number of such Units represented thereby. In case the Officer of the Company who has signed or whose facsimile signature has been placed on such Membership Certificate shall have ceased to be an Officer of the Company before such Membership Certificate is issued, it may be issued by the Company with the same effect as if such person were an Officer of the Company at the time of its issue. The Membership Certificate shall contain a legend with respect to applicable restrictions on transfer. 
(b)    The Company shall issue a new Membership Certificate in place of any Membership Certificate previously issued if the holder of the Units in the Company represented by such Membership Certificate, as reflected on the books and records of the Company:
(i)    makes proof by affidavit, in form and substance satisfactory to the Company, that such previously issued Membership Certificate has been lost, stolen or destroyed;
(ii)    requests the issuance of a new Membership Certificate before the Company has notice that such previously issued Membership Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;
(iii)    if requested by the Company, delivers to the Company a bond, in form and substance satisfactory to the Company, with such surety or sureties as the Company may direct, to indemnify the Company against any claim that may be made on account of the alleged loss, destruction or theft of the previously issued Membership Certificate; and

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(iv)    satisfies any other reasonable requirements imposed by the Company.
(c)    Each Unit in the Company shall constitute a “security” within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code as in effect from time to time in the Commonwealth of Pennsylvania (the “PAUCC”) (including Section 8102(a)), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. Notwithstanding any provision of this Agreement to the contrary, to the extent that any provision of this Agreement is inconsistent with any non-waivable provision of Article 8 of the PAUCC, such provision of Article 8 of the PAUCC shall be controlling. Any Membership Certificate evidencing Units shall bear the legend referencing Article 8 of the PAUCC set forth on Annex II hereto. No change to this provision or that legend shall be effective until all outstanding Membership Certificates have been surrendered for cancellation and reissuance.

3.4    Adjustments. In the event of a dividend, split, recapitalization, reorganization, merger, consolidation, interest exchange, division, combination, exchange of all or any class of Units of the Company, liquidation, spin-off, or other change in organizational structure affecting the Units (including any conversion of the Company to a corporation, whether by merger, filing of a statement of conversion or otherwise), the number and class of Units shall be appropriately adjusted for the benefit of Members by the Managing Member.

3.5    Authorization and Issuance of Additional Units.
(a)    The Company shall have the authority to issue an unlimited number of Units.
(b)    The Managing Member is authorized to (i) issue additional Units, (ii) create additional classes of Units, (iii) subdivide the Units of any such class into one or more series, (iv) fix the designations, powers, preferences and rights of the Units of each such class or series and any qualifications, limitations or restrictions thereof, and (v) subject to Article 13, amend this Agreement to reflect such actions and the resulting designations, powers, and relative preferences and rights of all the classes and series thereafter authorized under this Agreement.
(c)    The authority of the Managing Member with respect to each such class and series created in accordance with this Section 3.5 shall include establishing the following: (i) the number of Units or securities constituting that class or series and the distinctive designation thereof, (ii) whether or not the Units or securities of such class or series shall be redeemable, and if so, the terms and conditions of such redemption, including the date or dates upon or after 

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which they shall be redeemable and the amount per Unit or security payable in case of redemption, which amount may vary under different conditions and at different redemption dates, (iii) the rights and preferences of the Units or securities of that class or series in the event of voluntary or involuntary liquidation, dissolution or winding-up of the Company, (iv) the relative rights of priority, if any, of allocations of income or loss or of payment with respect to Units or securities of that class or series and (v) any other relative rights, preferences and limitation of that class or series.
(d)    Notwithstanding the foregoing, however: following the IPO and the consummation of the transactions described above in Section 3.2, no additional Class B Units or Class C Units shall be issued by the Company, except in connection with issuances permitted by Sections 3.4 and 3.7 below, and Class A Units may be issued only to HLI in accordance with Sections 3.5(e) and (f).
(e)    If, following the IPO, HLI issues shares of Class A Common Stock (other than an issuance of the type covered by Section 3.5(f) or pursuant to the Exchange Agreement), unless such net proceeds are used to purchase Units from Members, HLI shall promptly contribute to the Company all the net proceeds and property (if any) received by HLI with respect to such Class A Common Stock. Upon the contribution by HLI to the Company of all (but not less than all) of such net proceeds and property (if any) so received by HLI, the Managing Member shall cause the Company to issue a number of Class A Units equal to the number of shares of Class A Common Stock so issued, registered in the name of HLI, such that, at all times, the number of Class A Units held by HLI equals the number of outstanding shares of Class A Common Stock. 
(f)    At any time that HLI issues one or more shares of Class A Common Stock under the Equity Incentive Plan or any other equity incentive program, whether such share or shares are issued upon exercise (including cashless exercise) of an option, settlement of a restricted stock unit, as restricted stock or otherwise, the Managing Member shall cause the Company to issue to HLI an equal number of Class A Units, registered in the name of HLI; provided that HLI shall be required to contribute all (but not less than all) the net proceeds and property (if any) received by HLI from or otherwise in connection with such issuance of one or more shares of Class A Common Stock, including the exercise price of any option exercised, to the Company. If any such shares of Class A Common Stock so issued by HLI in connection with an equity incentive program are subject to vesting or forfeiture provisions, then the Class A Units that are issued by the Company to HLI in connection therewith in accordance with the preceding provisions of this Section 3.5(f) shall be subject to vesting or forfeiture on the same basis; if any of such shares of Class A Common Stock vest or are forfeited, then an equal number of Units issued by the Company in accordance with the preceding provisions of this Section 3.5(f) shall automatically vest or be forfeited. Any cash or property held by either HLI or the Company or on 

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either’s behalf in respect of dividends paid on restricted Class A Common Stock that fail to vest shall be returned to the Company upon the forfeiture of such restricted Class A Common Stock.

3.6    Repurchase of Class A Common Stock. If, at any time, any shares of Class A Common Stock are repurchased (whether by exercise of a put or call, pursuant to an open market purchase, automatically or by means of another arrangement) by HLI for cash or other consideration and subsequently cancelled or retired, then the Managing Member shall cause the Company, immediately prior to such repurchase of Class A Common Stock, to redeem an equal number of Class A Units held by HLI, at an aggregate redemption price equal to the aggregate purchase price of the Class A Common Stock being repurchased by HLI (plus any expenses related thereto) and upon such other terms as are the same for the Class A Common Stock being cancelled or retired by HLI.

3.7    Changes in Common Stock. Any subdivision (by stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of (a) Class A Common Stock shall be accompanied by an identical subdivision or combination of the Class A Units to maintain at all times a one-to-one ratio between the number of Class A Units owned by HLI and the number of outstanding shares of Class A Common Stock or (b) Class B Common Stock shall be accompanied by an identical subdivision or combination of the Class B Units to maintain at all times a one-to-one ratio between the number of Class B Units and the number of outstanding shares of Class B Common Stock. Any corrective action to maintain such ratios shall not be subject to a corresponding adjustment that would render the corrective action ineffective.

ARTICLE 4.      CAPITAL; CAPITAL ACCOUNTS

4.1    Capital Contributions. Except as expressly provided in Section 3.5(d) and Section 3.5(f) with respect to the Managing Member and in the Exchange Agreement, no Member shall be required to make any Capital Contributions without such Member’s consent.

4.2    No Interest on Capital Contributions. No Member shall be entitled to interest on or with respect to any Capital Contribution.

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4.3    Withdrawal and Return of Capital Contributions. Except as provided in this Agreement, no Member shall be entitled to withdraw any part of such Member’s Capital Contribution or to receive distributions from the Company.

4.4    Capital Accounts.
(a)    A separate Capital Account shall be maintained for each Member on the books of the Company, and adjustments to such Capital Accounts shall be made as follows:
(i)    A Member’s Capital Account shall be credited with any amounts of cash contributed by the Member to the Company, the Fair Market Value of any other property contributed to the Company (net of liabilities secured by the property that the Company is considered to assume or take subject to under Code section 752), the amount of any Company liabilities assumed by the Member (other than liabilities that are secured by any Company property distributed to such Member), and the Member’s allocable share of any Net Income and items of income or gain allocated to that Member; and
(ii)    A Member’s Capital Account shall be debited with the amount of cash distributed to the Member, the Fair Market Value of other Company property distributed to the Member (net of liabilities secured by such property that the Member is considered to assume or take subject to under Code section 752), the amount of any liabilities of the Member assumed by the Company (other than liabilities that are secured by property contributed by such Members), and the Member’s allocable share of Net Losses and items of loss, expense, or deduction allocated to that Member.
(b)    In connection with the issuance of Units to HLI in exchange for cash as of the Effective Date, the Capital Accounts of the existing Members shall be adjusted in accordance with Regulation section 1.704-1(b)(2)(iv)(f).
(c)    The foregoing provisions of this Section 4.4 and Section 5.1 through Section 5.2 are intended to comply with section 1.704-1(b)(2)(iv) of the Regulations and shall be interpreted and applied in a manner consistent with such Regulations. If the Managing Member, with the advice of the Company’s tax advisors, shall determine that it is prudent to modify the manner in which the Capital Accounts are computed in order to comply with section 1.704-1(b)(2)(iv) of the Regulations, the Managing Member may make such modification to the minimum extent necessary; provided that the Members are notified in writing of such modification prior to its effective date; provided, further, that the Managing Member shall have no liability to any Member for any exercise of or failure to exercise any such discretion to make any modifications permitted under this Section 4.4.

ARTICLE 5.      ALLOCATION OF NET INCOME AND NET LOSS

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5.1    Allocations of Net Income and Net Losses. Except as otherwise provided in Section 5.2, the Net Income or Net Loss (and items thereof) for each Taxable Year (or other applicable period) shall be allocated among the Members in a manner such that the Capital Account of each Member, immediately after giving effect to such allocation, is, as nearly as possible, equal (proportionately) to the amount of the distribution that would be made to such Member if, as of the close of business on the final day of such Taxable Year (or other applicable period), (i) the Company were dissolved and terminated, (ii) its affairs were wound-up and each asset of the Company were sold for cash equal to its Gross Asset Value, (iii) all Company liabilities are satisfied (limited with respect to each nonrecourse liability to the book value of the asset(s) securing such liability), and (iv) the net assets of the Company were distributed to the Members in accordance with Section 6.1.

5.2    Special Allocations.
(a)    Losses, deduction and expenditures attributable to Member Nonrecourse Debt shall be allocated in the manner required by Regulations section 1.704-2(i). If there is a net decrease during a Taxable Year in Member Minimum Gain, income and gain for such Taxable Year (and, if necessary, for subsequent Taxable Years) shall be allocated to the Members in the amounts and of such character as is determined according to Regulations section 1.704-2(i)(4). The preceding sentence is intended to be a “partner nonrecourse debt minimum gain chargeback” provision that complies with the requirements of Regulations section 1.704-2(i)(4), and shall be interpreted in a manner consistent therewith.
(b)    Except as otherwise provided in Section 5.2(a), if there is a net decrease in Company Minimum Gain during any Taxable Year, each Member shall be allocated income and gain for such Taxable Year (and, if necessary, for subsequent Taxable Years) in the amounts and of such character as is determined according to Regulations section 1.704-2(f). This Section 5.2(b) is intended to be a “minimum gain chargeback” provision that complies with the requirements of Regulations section 1.704-2(f), and shall be interpreted in a manner consistent therewith.
(c)    If any Member that unexpectedly receives an adjustment, allocation or distribution described in Regulations section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) has a deficit balance in its Adjusted Capital Account as of the end of any Taxable Year, computed after the application of Section 5.2(a) and Section 5.2(b) but before the application of any other provision of Section 5.1, Section 5.2 and Section 5.3, then income and gain for such Taxable Year shall be allocated to such Member in proportion to, and to the extent of, such deficit balance. This Section 5.2(c) is intended to be a “qualified income offset” provision as described in Regulations section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith.

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(d)    “Nonrecourse deductions” (as defined in Regulation sections 1.704-2(b)(1) and (c)) shall be allocated among the Members pro rata in accordance with their respective Percentage Interests.
(e)    No Net Loss (or items thereof) shall be allocated to a Member to the extent such allocation would cause or increase a deficit balance in the Adjusted Capital Account of such Member. Instead, such Net Loss (and items thereof) shall be allocated among the other Members that have positive account balances in the same ratios that such other Members are allocated Net Loss for such year under Section 5.1 until all such positive balances have been reduced to zero.
(f)    The adjustments described in clause (d) of the definition of Gross Asset Value shall be allocated in a manner consistent with the manner that the adjustments to the Capital Accounts are required to be made pursuant to Regulations section 1.704-1(b)(2)(iv)(m).
(g)    The allocations set forth in Section 5.2(a) through Section 5.2(f) inclusive (the “Regulatory Allocations”) are intended to comply with certain requirements of section 1.704-1(b) and 1.704-2 of the Regulations. The Regulatory Allocations may not be consistent with the manner in which the Members intend to allocate Net Income and Net Loss of the Company or to make Distributions. Accordingly, notwithstanding the other provisions of Section 5.1, Section 5.2 and Section 5.3, but subject to the Regulatory Allocations, items of Net Income and Net Loss of the Company shall be allocated among the Members so as to eliminate the effect of the Regulatory Allocations and thereby cause the respective Capital Account balances of the Members to be in the amounts (or as close thereto as possible) they would have been if Net Income and Net Loss had been allocated without reference to the Regulatory Allocations. In general, the Members anticipate that this shall be accomplished by specially allocating other Net Income and Net Loss among the Members so that the net amount of Regulatory Allocations and such special allocations to each such Member is zero.

5.3    Allocations for Income Tax Purposes. The income, gains, losses, deductions and credits of the Company for any Taxable Year shall be allocated to the Members in the same manner as Net Income and Net Loss were allocated to the Members for such Taxable Year pursuant to Section 5.1 and Section 5.2; provided, however, that solely for Federal, state and local income and franchise tax purposes and not for book or Capital Account purposes, income, gain, loss and deduction with respect to any Company asset with a Gross Asset Value other than the tax basis of such Company asset (other than a Company asset that is a partnership interest for Federal income tax purposes) shall be allocated for Federal, state and local income tax purposes in accordance with the “traditional method with curative allocations” described in section 1.704-3(c) of the Regulations, but with curative allocations limited to curative allocations of gain from the sale or other disposition of each such asset; and provided, further, that, with respect to each Company asset that is a partnership interest for Federal income tax purposes, the method 

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applied upon a disposition of such partnership interest shall, in the discretion of the Managing Member, be the “remedial allocation method” described in section 1.704-3(d) of the Regulations. 

5.4    Tax Withholding and Entity-Level Taxes. All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment or distribution to a Member will be treated as amounts distributed to such Member for all purposes of this Agreement.  In the event that the Company incurs any withholding tax or other liability for tax, interest or penalties with respect to income, gain, loss, deduction or credit allocated to any Member (including, but not limited to, any amount payable by the Company pursuant to an adjustment under Code section 6225), such Member shall be required promptly to reimburse the Company for such amount to the extent that the Company does not recoup the amount by offsetting it against amounts otherwise distributable to such Member; the obligations of any Person under this sentence with respect to any Taxable Year during which such Person is a Member shall survive any withdrawal of such Person from being a Member in the Company, any Transfer of such Person’s Units and any termination, dissolution, liquidation or winding up of the Company.

5.5    Allocations to Transferred Interests. 
(a)    If any Units in the Company are Transferred, increased or decreased during a Taxable Year, all items of income, gain, loss, deduction and credit recognized by the Company for such Taxable Year shall be allocated among the Members to take into account their varying interests during the Taxable Year in any manner approved by the Managing Member, as then permitted by the Code.
(b)    Solely for purposes of allocating income, gain, loss, deduction and credit recognized by the Company as set forth in Section 5.5(a) and for the purposes of accruing and making tax distributions pursuant to Section 6.4, the Company shall recognize the Transfer of such Unit as of the date on which the Transfer was legally effective, except that, if the Transferor has not advised the Company in writing of and provided all such documentation regarding the Transfer as the Company may reasonably require, then all of such items shall be allocated, and all distributions shall be made, to the Person who, according to the books and records of the Company on the last day of the accounting period during which the Transfer occurs, was the owner of the Unit. The Managing Member shall incur no liability for making allocations and distributions in accordance with the provisions of this Section 5.5(b), whether or not the Managing Member or the Company has knowledge of any Transfer of ownership of any Unit. Should the Company receive the requisite written notice and documentation after a Transfer has occurred, all such allocations and distributions shall be made as of the last day of the month in which the receipt occurred.

ARTICLE 6.      DISTRIBUTIONS

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6.1    Distributions. Distributions shall be made to the Members, as and when determined by the Managing Member, pro rata in accordance with their respective Percentage Interests. Except (i) for pro rata distributions to its Members in accordance with Section 6.1 through Section 6.3, (ii) for tax distributions in accordance with Section 6.4 or (iii) as authorized by written consent of each Member, the Company shall not make, and shall cause its subsidiaries not to make, any distributions (in cash or in kind), dividend payments or asset transfers to any Member or any direct or indirect equity holder of any Member.

6.2    Successors. For purposes of determining the amount of Distributions, each Member shall be treated as having made the Capital Contributions and as having received the Distributions made to or received by its predecessors in respect of any of such Member’s Units.

6.3    Distributions In-Kind. To the extent that the Company makes pro rata distributions of property in-kind to the Members, the Company shall be treated as making a Distribution equal to the Fair Market Value of such property for purposes of Section 6.1 and such property shall be treated as if it were sold for an amount equal to its Fair Market Value. Any resulting gain or loss shall be allocated to the Members’ Capital Accounts in accordance with Article 5.

6.4    Tax Distributions.
 (a)      Subject to the limitations set forth in any indenture or other credit, or other financing and warehousing or similar agreement governing indebtedness or other liabilities of the Company or any of its subsidiaries, as soon as practicable following the end of each Quarterly Estimated Tax Period of each Taxable Year, the Company shall, to the extent of available cash of the Company, make a distribution in cash (each, a “ Tax Distribution ”), pro rata in accordance with the Percentage Interests in effect on the date of such Tax Distribution, in an amount equal to the greater of (1) the excess of (i) the product of (x) the taxable income of the Company attributable to such period and all prior Quarterly Estimated Tax Periods in such Taxable Year, based upon (I) the information returns filed by the Company, as amended or adjusted to date, and (II) estimated amounts, in the case of periods for which the Company has not yet filed information returns (determined by disregarding any adjustment to the taxable income of any Member that arises under Code section 743(b) and is attributable to the acquisition by such Member of an interest in the Company in a transaction described in Code section 743(a)), multiplied by (y) the Assumed Tax Rate, over (ii) the aggregate amount of distributions made by the Company with respect to such Taxable Year (treating any Tax Distribution made with respect to income for such Taxable Year, regardless of when made, and any distribution other than a Tax Distribution made during such Taxable Year, as being made with respect to such Taxable Year) or (2) the amount necessary when paid to all the Members pro rata that will result in a payment to HLI sufficient to enable HLI to pay its actual tax liabilities (including estimated taxes) and all its other expenses and liabilities (including, but not limited to, its obligations under the Tax  

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 Receivable Agreement).  In the case of the second and third Quarterly Estimated Tax Periods of each Taxable Year, the amount otherwise distributable under this  Section 6.4(a)  shall be adjusted upwards to the extent necessary to take into account the applicable formula for calculating estimated tax payments required with respect thereto. 
(b)    If, at any time after the end of a U.S. federal income tax year of the Company, the Company has a positive True-Up Amount, then subject to the limitations set forth in any indenture or other credit, or other financing and warehousing or similar agreement governing indebtedness or other liabilities of the Company or any of its subsidiaries, the Company shall, to the extent of available cash of the Company, make a Tax Distribution in an amount equal to the True-Up Amount pro rata in accordance with the Percentage Interests in effect on the date of such Tax Distribution.  Any negative True-Up Amount for a Taxable Year shall be treated as a Tax Distribution for the following Taxable Year.

ARTICLE 7.      BOOKS OF ACCOUNT, RECORDS AND REPORTS, TAXABLE YEAR, TAX MATTERS

7.1    Books and Records. 
(a)    Records and books of account shall be kept by the Company in which shall be entered fully and accurately all transactions and other matters relative to the Company’s business as are customarily entered into records and books of account maintained by Persons engaged in businesses of a like character, including the Capital Account established for each Member. The Company’s books and records shall be kept in a manner determined by the Managing Member in its sole discretion. The books and records shall at all times be maintained at the principal office of the Company and shall be open to the inspection and examination of the Members or their duly authorized representatives for a proper purpose during reasonable business hours and at the sole cost and expense of the inspecting or examining Member.
(b)    In addition to and not in limitation of Section 7.1(a), the Company shall maintain at its principal place of business the following:
(i)    a current list of the full names and last known business address of each Member;
(ii)    a copy of the Company’s certificate of organization and all amendments thereto;
(iii)    a copy of this Operating Agreement and all amendments hereto;
(iv)    copies of any federal, state and local income tax returns and reports of the Company for the three most recent years; and

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(v)    copies of all financial statements of the Company for the three most recent years.
(c)    Except as otherwise set forth herein, each Member shall have the right, exercisable upon written demand, to examine the items described in Section 7.1(b) during ordinary business hours and for any purpose reasonably related to the Member’s Interest in the Company (which purpose must be stated in the written demand), and shall have the right, at its own expense, to make copies of all such items.

7.2    Annual Reports. The Company shall prepare or cause to be prepared all Federal, state and local tax returns that the Company is required to file. The Company shall use commercially reasonable efforts to send to each Person who was a Member at any time during each Taxable Year a copy of Schedule K-1 to Internal Revenue Service Form 1065 (or any successor form) indicating such Member’s share of the Company’s income, loss, gain, expense and other items relevant for Federal income tax purposes and corresponding analogous state and local tax forms as soon as reasonably practicable after the end of such Taxable Year.

7.3    Tax Elections. The Company shall make on the first U.S. federal income tax return due after the date hereof, and keep in effect, a valid election under Code section 754. The Managing Member shall have the authority to make any and all other tax elections and other decisions relating to tax matters for Federal, state and local purposes.

7.4    Taxable Year. The taxable year of the Company (the “Taxable Year”) shall be the calendar year (unless a different year-end becomes required for federal income tax purposes); provided, however, that the last Taxable Year of the Company shall end on the date on which the Company is terminated.

7.5    Tax Matters Partner. For purposes of Code section 6231(a)(7) as in effect prior to the enactment of the Bipartisan Budget Act of 2015 and Code section 6223(a) as amended by the Bipartisan Budget Act of 2015, the Company and each Member hereby designate HLI as the “tax matters partner” and the “partnership representative,” respectively (collectively, the “Tax Matters Partner”). The Managing Member may remove or replace the Tax Matters Partner at any time and from time to time. The Tax Matters Partner is specifically directed and authorized to take whatever steps may be necessary or desirable to perfect such designation, including filing any forms or documents with the Internal Revenue Service and taking such other action as may from time to time be required under the Regulations. The Company shall indemnify and reimburse, to the fullest extent permitted by law, the Tax Matters Partner for all expenses (including legal and accounting fees) incurred as Tax Matters Partner while acting in good faith pursuant to this Section 7.5.

ARTICLE 8.      POWERS, RIGHTS AND DUTIES OF THE MEMBERS

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8.1    Limitations. 
(a)    Other than as expressly set forth in this Agreement, (i) no Member (except for the Managing Member acting in his, her, or its capacity as such) shall participate in or have any control over the management, operations, or business of the Company; (ii) the ownership of Units, other Capital Stock in the Company, or the fact of a Member’s admission as a Member of the Company shall not confer any rights to participate in the management of the affairs of the Company; (iii) no Member other than the Managing Member shall have any right to approve or otherwise consent to any matter involving the Company, including with respect to any merger, consolidation, combination, division or conversion of the Company, or any other matter that a Member might otherwise have the ability to vote or consent with respect to under the Act, at law, in equity or otherwise; (iv) no Member other than the Managing Member (acting in his, her, or its capacity as such) shall have the power to transact business for the Company, any right, authority or power to act for or on behalf of or bind the Company or assume any obligation or responsibility of the Company or of any other Member; and (v) no Member other than the Managing Member (acting in his, her or its capacity as such) shall hold himself out as a general agent of the Company or the other Members in any business, activity or enterprise other than that of the Company.
(b)    The Members shall have no interest in the properties or assets of the Managing Member, or any equity therein, or in any proceeds of any sales thereof (which sales shall not be restricted in any respect), by virtue of acquiring or owning an Interest in the Company.

8.2    Liability. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise shall be solely the debts, obligations and liabilities of the Company, and no Member shall be obligated personally for any such debt, obligation or liability solely by reason of being a Member. No Member shall be: personally liable for the return of any portion of the Capital Contributions (or any return thereon) of any other Member; required to lend any funds to the Company; have any obligation to make capital contributions to the Company, except as required pursuant to Sections 3.5(d) through 3.5(f) of this Agreement, or that may be required to return the amount of any distributions under Section 8846 of the Act received by such Member, or with respect to withholding obligations of the Company. 

8.3    Priority. Except as otherwise provided in this Agreement, no Member shall have priority over any other Member as to Company allocations or distributions.

8.4    Member Standard of Care. To the fullest extent permitted by law, no Member other than the Managing Member (but solely in its capacity as Managing Member) shall, in its capacity as a Member, have any fiduciary or other duties at law or in equity to the Company or to 

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any other Member, and any such duties that a Member might otherwise have are hereby expressly eliminated and disclaimed by the Company and the Members to the fullest extent permitted by law.

ARTICLE 9.      MANAGEMENT

9.1    The Managing Member; Delegation of Authority and Duties.
(a)    Managing Member. HLI shall be and is hereby designated as the Managing Member.
(b)    Authority of Managing Member. Subject to the provisions of this Agreement, the business, property and affairs of the Company shall be managed under the sole, absolute and exclusive direction of the Managing Member, the conduct, control and management of the Company shall be vested exclusively in the Managing Member, and in all matters relating to or arising out of the conduct of the operation of the Company, the decision of the Managing Member shall be the decision of the Company. Without limiting the foregoing provisions of this Section 9.1(a) and subject to the provisions of this Agreement, the Managing Member shall have the sole power to manage or cause the management of the Company, including, without limitation, the power and authority to effectuate the sale, lease, transfer, exchange or other disposition of any, all or substantially all of the assets of the Company (including, but not limited to, the exercise or grant of any conversion, option, privilege or subscription right or any other right available in connection with any assets at any time held by the Company) or the division, conversion or domestication of the Company, or the merger, consolidation, reorganization or other combination of the Company with or into another entity.
(c)    Existence and Maintenance of Business. The Managing Member may take all action that it determines to be necessary or appropriate (i) for the continuation of the Company’s valid existence as a limited liability company under the laws of the Commonwealth of Pennsylvania (and of each other jurisdiction in which such existence is necessary to enable the Company to conduct the business in which it is engaged) and (ii) for the maintenance, preservation and operation of the business of the Company. The Managing Member may file or cause to be filed for recordation in the office of the appropriate authorities of the Commonwealth of Pennsylvania, and in the proper office or offices in each other jurisdiction in which the Company is formed or qualified, such certificates or as are required to reflect the authority of the Managing Member, the identity of the Members and the amounts of their respective capital contributions.
(d)    Investment Company Act. The Managing Member shall use its best efforts to assure that the Company shall not be subject to registration as an investment company pursuant to the Investment Company Act of 1940, as amended.
(e)    Fiduciary Obligations. Each Member acknowledges that the Company is a subsidiary of the Managing Member and that each Member holding Class B Units or Class C Units has the right pursuant to the Exchange Agreement to exchange those Units for Class A Common Stock of the Managing Member.  Therefore, it is expressly intended by the Members (i) that none of the Managing Member, its directors or officers, or the officers of the Company 

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shall have fiduciary or other duties to the Company or any of its Members that are separate and apart or different from those duties that it, she or he may have to the Managing Member and its stockholders; (ii) that any duty of care that any of them may have to the Company or its Members shall be deemed fulfilled if that duty has been fulfilled with respect to the Managing Member and its stockholders; (iii) that the Managing Member shall not be obligated to (x) present any particular business opportunity to the Company even if the opportunity is of a character that could be undertaken by the Company or is within the purposes of the Company, or (y) refrain from entering into any transaction with the Company, even if such a transaction is not on arms-length terms or otherwise fair to the Company considered in isolation; and (iv) that all actions taken or not taken by the Managing Member, any of its directors or officers, or any officer of the Company shall be presumed to have been taken in good faith unless it is shown by a preponderance of the evidence that, at the time of taking or not taking such action, the action or inaction, was not believed by the Managing Member, or the relevant director or officer, as the case may be, to be not in the best interest of the Managing Member and its stockholders.
(f)    None of the Managing Member, any of its directors or officers, any officer of the Company shall be liable to the Company or the Members for monetary damages for breach of fiduciary duty as the Managing Member, except for liability (A) under criminal laws and under federal, state, and local laws, if any, imposing liability on the Managing Member for payment of taxes or (B) for any action or inaction that constitutes fraud, willful misconduct or recklessness.
(g)    No amendment or repeal of this Section shall apply to or have any effect on the liability or alleged liability of any Person who is or was a Managing Member (or a director or officer of either the Managing Member or the Company) for or with respect to any acts or omissions occurring prior to the effective date of such amendment or repeal.  If the Act is amended to permit a Pennsylvania limited liability company to provide greater protection from personal liability for its managing member, than the express terms of this Section, this Section shall be construed to provide for such greater protection.
(h)    This Section 9.1 shall constitute an election, from and after February 21, 2017, to vary the standards of conduct otherwise applicable to the Managing Member of a Pennsylvania limited liability company, pursuant to Sections 8815 and 8849.2 of the Act.

9.2    Officers.
(a)    Delegation by Managing Member. The Managing Member shall have the power and authority to delegate to one or more other Persons the Managing Member’s rights and powers to manage and control the business and affairs of the Company, including to delegate to agents and employees of the Managing Member or the Company, and to delegate by a management agreement or another agreement with, or otherwise to, other Persons. The 

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Managing Member may authorize any Person (including any Member or Officer of the Company or the Managing Member) to enter into and perform any agreement on behalf of the Company.
(b)    Designation and Appointment. The Managing Member may, from time to time, employ and retain Persons as may be necessary or appropriate for the conduct of the Company’s business, including employees, agents and other Persons (any of whom may be a Member) who may be designated as officers of the Company (each, an “Officer” and, collectively, “Officers”), with such titles as and to the extent authorized by the Managing Member. Any number of offices may be held by the same Person. In its discretion, the Managing Member may choose not to fill any office for any period as it may deem advisable. Officers need not be residents of the Commonwealth of Pennsylvania or Members. Any Officers so designated shall have such authority and perform such duties as the Managing Member may from time to time delegate to them. The Managing Member may assign titles to particular Officers. Each Officer shall hold office until his successor shall be duly designated and shall qualify or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. The salaries or other compensation, if any, of the Officers of the Company shall be fixed from time to time by the Managing Member. Designation of an Officer shall not of itself create any contractual or employment rights.
(c)    Resignation and Removal. Any Officer may resign as such at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time is specified, at the time of its receipt by the Managing Member. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. Any Officer may be removed as such, either with or without cause at any time by the Managing Member.

9.3    Indemnification of the Managing Member, Officers and Agents.
(a)    The Company shall indemnify, defend and hold harmless the Managing Member, its Affiliates, its directors and officers, the officers of the Company, and the former and current directors, officers, agents, consultants, and employees of the Company, (each, an “Indemnified Party”), from and against any loss, claim, demand, dispute, controversy, expense, damage or injury, judgment or liability suffered or sustained by them, by reason of any acts, omissions or alleged acts or omissions arising out of their activities on behalf of the Company or in furtherance of the interests of the Company, including any judgment, award, settlement, reasonable attorneys’ fees and other costs or expenses incurred in connection with the defense of, or participation as a witness in, any actual or threatened action, proceeding, investigation or claim, including an action by or in the right of the Company, if the acts, omissions or alleged acts or omissions upon which such actual or threatened action, proceeding or claims are based were not a result of fraud, recklessness or willful misconduct by such Indemnified Party. Any 

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indemnification pursuant to this Section 9.3 shall only be from the assets of the Company and the proceeds of insurance maintained by or for the benefit of the Company.
(b)    Expenses (including reasonable attorneys’ fees) incurred by an Indemnified Party in a civil or criminal action, suit or proceeding shall be paid by the Company in advance of the final disposition of such action, suit or proceeding; provided that if an Indemnified Party is advanced such expenses and it is later determined that such Indemnified Party was not entitled to indemnification with respect to such action, suit or proceeding, then such Indemnified Party shall reimburse the Company for such advances.
(c)    No amendment, modification or deletion of this Section 9.3 shall apply to or have any effect on the right of any Indemnified Party to indemnification for or with respect to any acts or omissions of such Indemnified Party occurring prior to such amendment, modification or deletion.

9.4    Certain Costs and Expenses. The Company shall (i) pay, or cause to be paid, all costs, fees, operating expenses and other expenses of the Company (including the costs, fees and expenses of attorneys, accountants or other professionals and the compensation of all personnel providing services to the Company) incurred in pursuing and conducting, or otherwise related to, the activities of the Company and (ii) the Company shall pay or reimburse the Managing Member for (A) all costs, fees or expenses incurred by the Managing Member in connection with the IPO, other than the payment obligations of the Managing Member under the Tax Receivable Agreement and the income, franchise (except as provided in this Section 9.4) or similar tax obligations of the Managing Member, and (B) all costs, fees or expenses incurred by the Managing Member in connection with serving as the Managing Member. To the extent that the Managing Member determines in good faith that such expenses are related to the business and affairs of the Company or any of its subsidiaries (including expenses that relate to the business and affairs of the Company or any of its subsidiaries and that also relate to other activities of the Managing Member), the Managing Member may cause the Company to pay or bear all expenses of the Managing Member, including costs of securities offerings not borne directly by Members, compensation and meeting costs of the board of directors of the Managing Member, costs relating to periodic reports to stockholders of the Managing Member, litigation costs and damages arising from litigation, accounting and legal costs incurred by the Managing Member and franchise taxes arising from the existing or business activities of the Managing Member, provided that the Company shall not pay or bear any income or similar tax obligations of the Managing Member.

9.5    Insurance.  The Company may purchase and maintain insurance with such limits or coverages as the Managing Member reasonably deems appropriate, at the expense of the Company and to the extent available, for the protection of any officer, director, employee, agent, or representative of the Managing Member or the Company against any liability incurred by such 

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Person in any such capacity or arising out of his status as such, whether or not the Company has the power to indemnify such Person against such liability.  Any amounts payable by the Company to any Person indemnified pursuant to the provisions of Section 9.3 above shall be payable first from the proceeds of any insurance recovery pursuant to policies purchased by or on behalf of the Company and then from the other assets of the Company; provided that the foregoing shall not affect the Company’s obligation to advance expenses pursuant to Section 9.3(b) hereof in circumstances in which the insurance company issuing any policy purchased by the Company will not advance such expenses.  

ARTICLE 10.      TRANSFERS OF INTEREST BY MEMBERS

10.1    Restrictions on Transfers of Interests by Members. No Member may sell, assign, pledge or in any manner dispose of or create or suffer the creation of a security interest in or any encumbrance (it being agreed that no provision under the Exchange Agreement shall constitute an encumbrance for purposes hereof) on all or a portion of its Interest in the Company (the commission of any such act being referred to as a “Transfer,” any Person who effects a Transfer being referred to as a “Transferor” and any Person to whom a Transfer is effected being referred to as a “Transferee”) except in accordance with the terms and conditions set forth in this Article 10. No Transfer of an Interest in the Company shall be effective until such time as all requirements of this Article 10 in respect thereof have been satisfied and, if consents, approvals or waivers are required under this Agreement by the Managing Member, all of the same shall have been confirmed in writing by the Managing Member. Any Transfer or purported Transfer of an Interest in the Company not made in accordance with this Agreement (a “Void Transfer”) shall be null and void and of no force or effect whatsoever. Any amounts otherwise distributable under Article 6 in respect of an Interest in the Company that has been the subject of a Void Transfer may be withheld by the Company until the Void Transfer has been rescinded, whereupon the amount withheld (after reduction by any damages suffered by the Company attributable to such Void Transfer) shall be distributed without interest to the rightful holder of such Interest.

10.2    Transfer of Interest of Members.
(a)    A Member may not Transfer all or any portion of its Interest in the Company to any Person without the consent of the Managing Member (which consent shall be given or withheld on the sole discretion of the Managing Member); provided that, subject to Section 10.3, a Member may, without the consent of the Managing Member or any other Member, Transfer all or a portion of its Interest in the Company (i) in a Permitted Transfer or (ii) pursuant to the Exchange Agreement.
(b)    For purposes of this Agreement, a “Permitted Transfer” means the following:
(i)    for any Member that is a natural person, a Transfer, whether inter vivos or by will or the laws of descent and distribution, of all or any portion of his or her Interest to (A) his or her spouse, (B) his or her lineal descendants (including adopted children and the children of such spouse), (C) any trust for the benefit of the Member or any Person listed in (A) or (B), or (D) any grantor-controlled family charity, provided that, in each case (A) through (D), the Member or the Member’s personal representative provides prior written notice describing such Transfer to the Company;
(ii)    for any Member that is not a natural person, a Transfer of all or any portion of its Interest to an Affiliate of, or owner of an equity interest in, such Member (including any distribution by such Member to its members, partners or shareholders (the “Member’s 

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Owners”) or any redemption of the interests in such Member held by one or more of the Member’s Owners, and any related distributions or redemptions by the Member’s Owners to their respective members, partners or shareholders), provided that, in each case, the Member provides prior written notice describing such Transfer to the Company. For clarity, the Management LLC Members are the Member’s Owners of Management LLC; or
(iii)    a Transfer permitted under Section 10.4.
(c)    The Transferee of a Member’s Interest in the Company may be admitted to the Company as a Substituted Member upon the prior written consent of the Managing Member (which consent shall not be unreasonably withheld, conditioned or delayed). No Transferee of a Member’s Interest shall become a Substituted Member unless such Transfer shall be made in compliance with Sections 10.2(a) and 10.3. Unless a Transferee of a Member’s Interest in the Company is admitted as a Substituted Member under this Section 10.2(b), it shall have none of the powers of a Member hereunder and shall have only such rights of an assignee under the Act as are consistent with this Agreement. 
(d)    Upon the Transfer of the entire Interest in the Company of a Member and effective upon the admission of its Transferee as a Substituted Member, the Transferor shall be deemed to have withdrawn from the Company as a Member.
(e)    Upon the death, dissolution, resignation or withdrawal in contravention of Section 11.1, or the bankruptcy of a Member (the “Withdrawing Member”), the Company shall have the right to treat such Member’s successor(s)-in-interest as assignee(s) of such Member’s Interest in the Company, with none of the powers of a Member hereunder and with only such rights of an assignee under the Act as are consistent with this Agreement. 
(f)    Upon request of the Company, each Member agrees to provide to the Company information regarding its adjusted tax basis in its Interests along with documentation substantiating such amount, and any other information, documentation and certification necessary for the Company to comply with Code section 743 and the Regulations thereunder.
(g)    The Company shall reflect each Transfer and admission of a Member authorized under this Article 10 by amending the Schedule of Members maintained pursuant to Section 3.1.
(h)    To the extent that any Class B Units are Transferred in accordance with this Article 10 by any Member (other than the Managing Member), the Transferor shall Transfer to the Transferee an equal number of shares of Class B Common Stock. No Member shall make any other Transfer of Class B Common Stock.

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(i)    Notwithstanding anything in this Agreement to the contrary, no admission (or purported admission) of a Member, and no Transfer (or purported Transfer) of all or any part of a Member’s interest in the Company (or any economic interest therein) whether to another Member or to a Person who is not a Member, shall be effective, and any such admission or Transfer (or purported admission or Transfer) shall, to the extent permitted by applicable law, be void ab initio, and no Person shall otherwise become a Member if after such admission or Transfer (or purported admission or Transfer) the Company would have more than one hundred Members, unless the Managing Member determines in its sole discretion that the Company will meet the requirements set forth in Treasury Regulations Section 1.7704-1(j)(1) for the Taxable Year of such Transfer and all subsequent Taxable Years. In determining whether the Company will have more than one hundred Members for purposes of this Section 10.2, each Person indirectly owning an interest in the Company through a partnership (including any entity treated as a partnership for U.S. federal income tax purposes), a grantor trust or an S corporation (each such entity, a “flow-through entity”) shall be treated as a Member unless the Managing Member determines in its sole discretion, after consulting with qualified tax counsel, that less than substantially all of the value of the beneficial owner’s interest in the flow-through entity is attributable to the flow-through entity’s interest (direct or indirect) in the Company.

10.3    Further Requirements. In addition to the other requirements of Sections 10.2 and 10.4, and unless waived in whole or in part by the Managing Member, no Transfer of all or any portion of an Interest in the Company may be made unless the following conditions are met:
(a)    The Transferor or Transferee shall have paid all reasonable costs and expenses, including attorneys’ fees and disbursements and the cost of the preparation, filing and publishing of any joinder or amendment to this Agreement or the Certificate, incurred by the Company in connection with the Transfer;
(b)    The Transferor shall have delivered to the Company a fully executed copy of all documents relating to the Transfer, executed by both the Transferor and the Transferee, and the agreement of the Transferee in writing and otherwise in form and substance reasonably acceptable to the Managing Member to:
(i)    be bound by the terms imposed upon such Transfer by the terms of this Agreement; and
(ii)    assume all obligations of the Transferor under this Agreement and such other agreements as the Managing Member may specify relating to the Interest in the Company that is the subject of such Transfer;

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(c)    The Managing Member shall have been reasonably satisfied, including, at its option, having received an opinion of counsel to the Company reasonably acceptable to the Managing Member, that:
(i)    the Transfer will not cause the Company to be treated as an association taxable as a corporation for Federal income tax purposes;
(ii)    the Transfer will not cause the Company to be treated as a “publicly traded partnership” within the meaning of Code section 7704; and
(iii)    the Transfer does not require registration under the Securities Act or any rules or regulations thereunder or cause the Company to be required to register as an Investment Company under the Investment Company Act of 1940, as amended, or any rules or regulations thereunder.
Any waivers from the Managing Member under this Section 10.3 shall be given or denied as determined by the Managing Member.

10.4    Exchange; Take-Along, Tag-Along Rights.
(a)    The Members and the Company have entered into an Exchange Agreement contemplating the exchange of Class B Units and shares of Class B Common Stock or Class C Units, as the case may be, for shares of Class A Common Stock on the terms and conditions set forth in the Exchange Agreement.
(b)    Take-Along Rights.
(i)    If there should be a Qualified Sale Transaction, HLI may, in its capacity as Managing Member and in its sole discretion, require (“take-along right”) each Member to (A) sell all (but not less than all) of the Units (together with the associated shares of Class B Common Stock, if any) then held by that Member to the purchaser in accordance with this Section 10.4(b) or (B) require that Member to surrender those Units (together with the associated shares of Class B Common Stock, if applicable) for redemption by the Company, as the transaction may require, subject to all applicable provisions of this Section 10.4. Notwithstanding the foregoing, the Managing Member may allow any Person owning Units of record or beneficially that is employed by HLI, the Company or their Subsidiaries to retain, and exclude from a Qualified Sale Transaction, a portion of those Units in connection with any Qualified Sale Transaction.
(ii)    The Managing Member shall give notice to each other Member, not fewer than 30 days prior to the consummation of any contemplated Qualified Sale Transaction, setting forth the principal terms of the Qualified Sale Transaction (including the 

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proposed closing date) in reasonable detail and advising as to whether its take-along rights are exercised or waived.
(iii)    If the Managing Member elects to exercise its take-along rights in connection with a Qualified Sale Transaction, it shall provide to each other Member and to each beneficial owner of that Members’ Units all documents required to be executed by each of them to consummate the Qualified Sale Transaction, not fewer than ten days prior to the closing date. Each other Member shall deliver (or cause to be delivered) to the Managing Member, at least five days before the proposed closing date, all such documents. If any Member fails to deliver (or cause to be delivered) these documents and the Qualified Sale Transaction is subsequently consummated, the Company shall cause its books and records to show that the Units owned of record or beneficially by the defaulting Member or beneficial owner, as applicable, are bound by the provisions of this Section and that they may be Transferred only to the Qualified Purchaser who purchased the Units in the Qualified Sale Transaction or, in the case of a Qualified Sale Transaction that is structured as a redemption of Units, to the Company for redemption.
(c)    Tag-Along Rights.
(i)In the event of any Qualified Sale Transaction, each Member shall have the right to require the Managing Member to (x) include, or cause to be included, all or any of the Units (together with the associated shares of Class B Common Stock, if applicable) held by that Member in the Qualified Sale Transaction, (y) alternatively, at the sole discretion of the Managing Member, redeem such Units and associated shares, redeemed by the Company, or (z) further alternatively, and also in the sole discretion of the Managing Member, exchange such Units for an equal number of shares of Class A Common Stock of HLI, plus, in all applicable cases, payment of the par value of the associated shares of Class B Common Stock, subject to Section 10.4(a) and 10.4(e).
(ii)If a Member wishes to participate in the Qualified Sale Transaction pursuant to this Section 10.4(c), that Member shall give notice to the Managing Member within ten days after its receipt of notice of the transaction pursuant to Section 10.4(b)(ii).  On receipt of the Member’s notification, and in any event at least ten days prior to the contemplated closing of the Qualified Sale Transaction, the Managing Member shall provide to each Member electing to participate the documents required for execution in connection with the Qualified Sale Transaction.  To participate in the Qualified Sale Transaction, the Member shall deliver to the Managing Member, at least five days before the proposed closing date, all such documents.  If any Member fails to deliver these documents, its rights to participate in that (but not any other) Qualified Sale Transaction shall lapse.
(d)    The consideration for any Units included in a Qualified Sale Transaction shall be the same as the price per share of Class A Common Stock that is paid in that transaction; 

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provided, however, that if for any reason, Units of limited liability company interest in the Company or HLAI are included in the transaction at a higher price, that higher price shall be the price of Company Units included pursuant to these Sections 10.4(b) and 10.4(c).  The form of consideration for any transaction pursuant to an exercise by the Managing Member of its take-along rights shall be cash; the form of consideration for Units included in a Qualified Sale Transaction pursuant to an exercise by a Member of its tag-along rights shall be the same as that paid for all other Units and shares of Common Stock included in the transaction.
(e)    If the Qualified Sale Transaction is consummated, promptly after such consummation, the Managing Member shall notify the Company and each other Member to that effect and furnish such evidence of the sale and of the terms thereof as any other Member may reasonably request.  The Managing Member shall also cause to be remitted to each other Member that has complied with its obligations hereunder or who is deemed to have sold its Units pursuant hereto the proceeds of the sale attributable to the sale of such Member’s Units (subject to any agreed holdbacks or escrows in connection with such sale which will be paid to such Members as promptly as practicable after the Managing Members’ receipt of same, and net of such Member’s pro rata portion of all costs and expenses incurred by the Managing Member on behalf of the Company and the Members in connection therewith. Likewise, upon its receipt of any deferred consideration (such as pursuant to the release of an escrow or holdback, the payment of an earnout, or the receipt of a tax refund, for example), the Managing Member or the Company, as applicable, shall cause to be remitted to each other Member its pro rata portion of that amount. For the purposes of this Section 3.04, each Member’s “pro rata” portion of any amount shall be the amount that is equal to the percentage obtained by dividing the number of Company Units held by that Member and included, redeemed, or exchanged in the Qualified Sale Transaction by the aggregate number of Company Units of all Members that are included in or redeemed in the transaction. If a Qualified Sale Transaction is not consummated by the Managing Member, it shall return to each other Member all documents previously delivered by them to it in connection with the Qualified Sale Transaction.
(f)    In connection with any Qualified Sale Transaction, each Member shall use its or his commercially reasonable best efforts to aid the Company and HLI in the consummation of the transaction and shall take all actions necessary, proper or advisable in connection therewith as are requested by the Managing Member, including casting votes or providing written consents in favor of the transaction if required by applicable law or requested by the Managing Member. As part of this cooperation, each Member shall: execute and deliver the definitive transaction documents and all related documentation and take such other action in support of the sale as shall be reasonably requested by the Managing Member, and make such representations and warranties and provide such indemnification as may be reasonably requested by the Purchaser, provided that the liability for indemnification, if any, of such Member shall not exceed the amount of consideration actually paid to such Member. No Member shall have any 

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liability for any representation or warranty made by another Member, and the terms and conditions of any Member’s participation in a Qualified Sale Transaction shall be substantially identical to the terms applicable to all other Persons selling securities in that transaction.
 (g)     Change in Control of HLI .  Should there occur a Change in Control of HLI, each of the Members other than the Managing Member shall have the right to require the Managing Member to effect an Exchange of any or all of the Units (together with the associated shares of Class B Common Stock, if applicable) then held by that Member effective immediately prior to the consummation of the Change in Control of HLI and notwithstanding any restrictions or limitations on the timing of Exchanges that may be in effect under the Exchange Agreement or HLI policies at the time. In the event of a Change in Control of HLI, the Managing Member shall give to each Member the lesser of 30 days advance notice of the occurrence of that Change in Control of HLI, or, the longest notice that is reasonably practicable in light of the circumstances attending the Change in Control of HLI. A Member wishing to exercise its rights pursuant to this  Section 10.4(g)  shall give notice to the Managing Member of the exercise of those rights as promptly as practicable, and in any event within five business days after the date of the Managing Member’s notice. Thereafter, the Managing Member, the Company, and the Member exercising Exchange rights pursuant to this   Section 10.4(g)  shall each use their reasonable best efforts to cause the requested Exchanges to be effected as and when provided herein. 
 (h)    Notwithstanding anything in this  Section 10.4  to the contrary, (i) there shall be no liability on the part of the Managing Member or any other Person to any Member if any sale, redemption or Exchange of Units pursuant to this  Section 10.4  is not consummated due to a failure of a Qualified Sale Transaction or Change in Control of HLI to occur. 
 (i)     Expenses .  All expenses of the Company and of the Members occasioned by a Transfer of a Member’s Units permitted under  Section 10.4(b) ,  10.4(c)  and  10.4(d)  shall be borne by the Member effecting such Transfer. Shared costs and expenses shall be borne by the Members and beneficial owners transferring or exchanging in the transaction pro rata or in such other proportion as the Managing Member may in good faith determine to be equitable. 

10.5    Automatic Conversion.  Upon the termination of employment with the Company (and HLI, if applicable) of any Management LLC Member (a) who is a Major Management Holder (for Cause) or (b) who is not a Major Management Holder (for any reason, with or without Cause), then in either case (a) or (b), the Company shall automatically effect a conversion of all Class B Units beneficially owned by such Management LLC Member and his or her successors-in-interest (whether or not held through Management LLC) to an equal number of Class C Units. In connection with such conversion, the Managing Member shall redeem all shares of Class B Common Stock held by such Management LLC Member for a cash payment of the aggregate par value of such Class B Common Stock.  This provision will cease to have effect after a Sunset (as defined in the Amended and Restated Certificate of Incorporation of HLI). Notwithstanding anything in this Agreement to the contrary, the termination of employment of a Major Management Holder without Cause shall not result in an automatic conversion hereunder.

10.6    Consequences of Transfers Generally.
(a)    In the event of any Transfer or Transfers permitted under this Article 10, the Transferor and the Interest in the Company that is the subject of such Transfer shall remain subject to this Agreement, and the Transferee shall hold such Interest in the Company subject to all unperformed obligations of the Transferor. Any successor or Transferee hereunder shall be subject to and bound by this Agreement as if originally a party to this Agreement.
(b)    Unless a Transferee of a Member’s Interest becomes a Substituted Member, such Transferee shall have no right to obtain or require any information or account of Company transactions, or to inspect the Company’s books or to exercise any rights of approval reserved only to admitted Members of the Company with respect to Company matters. Such a Transfer shall, subject to the last sentence of Section 10.1, merely entitle the Transferee to receive the share of distributions, Net Income, Net Loss and items of income, gain, deduction and loss to which the Transferor otherwise would have been entitled. Each Member agrees that such Member will, upon request of the Managing Member, execute such certificates or other documents and perform such acts as the Managing Member deems appropriate after a Transfer of such Member’s Interest in the Company (whether or not the Transferee becomes a Substituted Member) to preserve the limited liability of the Members under the laws of the jurisdictions in which the Company is doing business.
(c)    The Transfer of a Member’s Interest in the Company and the admission of a Substituted Member shall not be cause for dissolution of the Company.

10.7    Capital Account; Percentage Interest. Any Transferee of a Member under this Article 10 shall, subject to the last sentence of Section 10.1, succeed to the portion of the Capital Account and Percentage Interest so Transferred to such Transferee.

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10.8    Additional Filings. Upon the admission of a Substituted Member under Section 10.2, the Company shall cause to be executed, filed and recorded with the appropriate governmental agencies such documents (including amendments to this Agreement) as are required to accomplish such substitution.

ARTICLE 11.      RESIGNATION OF MEMBERS; TERMINATION OF COMPANY; LIQUIDATION AND DISTRIBUTION OF ASSETS

11.1    Resignation of Members. Except as otherwise specifically permitted in this Agreement, a Member may not resign or withdraw from the Company unless unanimously agreed to in writing by all other Members or in connection with the Transfer of all of such Member’s Units in accordance with the provisions of Article 10. The Managing Member shall reflect any such resignation or withdrawal by amending the Schedule of Members maintained pursuant to Section 3.1(c), dated as of the date of such resignation or withdrawal, and the resigning or withdrawing Member (or such Member’s successors-in-interest) shall have none of the powers of a Member hereunder and shall only have such rights of an assignee of a limited liability company interest under the Act as are consistent with the other terms and provisions of this Agreement and with no other rights under this Agreement. The remaining Members may, in their sole discretion, cause the Company to distribute to the resigning or withdrawing Member the balance in its Capital Account on the date of such resignation or withdrawal. Upon the distribution to the resigning or withdrawing Member of the balance in his Capital Account, the resigning or withdrawing Member shall have no further rights with respect to the Company. Any Member resigning or withdrawing in contravention of this Section 11.1 shall indemnify, defend and hold harmless the Company, the Managing Member and all other Members from and against any losses, expenses, judgments, fines, settlements or damages suffered or incurred by the Company or any such other Member arising out of or resulting from such resignation or withdrawal.

11.2    Dissolution of the Company. 
(a)    The Company shall be dissolved upon the first to occur of any of the following events:
(i)    the determination of the Managing Member to dissolve the Company;
(ii)    an order by a court of competent jurisdiction that the Company be dissolved; or
(iii)    the sale or disposition of all or substantially all of the assets of the Company.

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(b)    Except as expressly provided herein or as otherwise required by the Act, the Members shall have no power to dissolve the Company. Absent any of the events set out in Section 11.2(a) above, the Company shall not be dissolved upon any Member becoming bankrupt or executing an assignment for the benefit of creditors, or the death, retirement, insanity, resignation, expulsion or dissolution of any Member, or any other event that terminates the continued membership of a Member in the Company. 
(c)    In the event of the dissolution of the Company for any reason, the Managing Member or a liquidating agent or committee appointed by the Managing Member shall act as a liquidating agent (the Managing Member or such liquidating agent or committee, in such capacity, is hereinafter referred to as the “Liquidator”) and shall commence to wind up the affairs of the Company and to liquidate the Company assets. The Members shall continue to share all income, losses and distributions during the period of liquidation in accordance with Article 5 and Article 6. The Liquidator shall have full right and unlimited discretion to determine the time, manner and terms of any sale or sales of Company assets pursuant to such liquidation, giving due regard to the activity and condition of the relevant market and general financial and economic conditions.
(d)    The Liquidator shall have all of the rights and powers with respect to the assets and liabilities of the Company in connection with the liquidation and termination of the Company that the Managing Member would have with respect to the assets and liabilities of the Company during the term of the Company, and the Liquidator is hereby expressly authorized and empowered to execute any and all documents necessary or desirable to effectuate the liquidation and termination of the Company and the transfer of any Company assets.
(e)    Notwithstanding the foregoing, a Liquidator which is not a Member shall not be deemed a Member and shall not have any of the economic interests in the Company of a Member; and such Liquidator shall be compensated for its services to the Company at normal, customary and competitive rates for its services to the Company, as reasonably determined by the Managing Member.

11.3    Distribution in Liquidation. The Company’s assets shall be applied in the following order of priority:
(a)    first, to pay the costs and expenses of the winding-up, liquidation and termination of the Company;
(b)    second, to creditors of the Company, in the order of priority provided by law, including fees, indemnification payments and reimbursements payable to the Members or their Affiliates, but not including those liabilities (other than liabilities to the Members for any 

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expenses of the Company paid by the Members or their Affiliates, to the extent the Members are entitled to reimbursement hereunder) to the Members in their capacity as Members;
(c)    third, to establish reserves reasonably adequate to meet any and all contingent or unforeseen liabilities or obligations of the Company; provided, however, that at the expiration of such period of time as the Liquidator may deem advisable, the balance of such reserves remaining after the payment of such contingencies or liabilities shall be distributed as hereinafter provided; and
(d)    fourth, the remainder to the Members in accordance with Section 6.1.
If the Liquidator, in its sole discretion, determines that Company assets other than cash are to be distributed, then the Liquidator shall cause the Fair Market Value of the assets not so liquidated to be determined (with any such determination normally made by the Managing Member in accordance with the definition of “Fair Market Value” being made instead by the Liquidator). Such assets shall be retained or distributed by the Liquidator as follows:
(i)    the Liquidator shall retain assets having a value, net of any liability related thereto, equal to the amount by which the cash net proceeds of liquidated assets are insufficient to satisfy the requirements of clauses (a), (b), and (c) of this Section 11.3; and
(ii)    the remaining assets shall be distributed to the Members in the manner specified in clause (d) of this Section 11.3.
(e)    If the Liquidator, in its sole discretion, deems it not feasible or desirable to distribute to each Member its allocable share of each asset, the Liquidator may allocate and distribute specific assets to one or more Members as the Liquidator shall reasonably determine to be fair and equitable, taking into consideration, inter alia, the Fair Market Value of such assets and the tax consequences of the proposed distribution upon each of the Members (including both distributees and others, if any). Any distributions in-kind shall be subject to such conditions relating to the disposition and management thereof as the Liquidator deems reasonable and equitable.

11.4    Final Reports. Within a reasonable time following the completion of the liquidation of the Company’s assets, the Liquidator shall deliver to each of the Members a statement which shall set forth the assets and liabilities of the Company as of the date of complete liquidation and each Member’s portion of distributions pursuant to Section 11.3.

11.5    Rights of Members. Each Member shall look solely to the Company’s assets for all distributions with respect to the Company and such Member’s Capital Contribution (including return thereof), and such Member’s share of profits or losses thereon, and shall have no recourse therefor (upon dissolution or otherwise) against any other Member or the Managing Member.

11.6    Deficit Restoration. Notwithstanding any other provision of this Agreement to the contrary, upon liquidation of a Member’s Interest in the Company (whether or not in connection with a liquidation of the Company), no Member shall have any liability to restore any deficit in its Capital Account. In addition, no allocation to any Member of any loss, whether attributable to depreciation or otherwise, shall create any asset of or obligation to the Company, even if such allocation reduces the Capital Account of any Member or creates or increases a deficit in such Capital Account; it is also the intent of the Members that no Member shall be obligated to pay any such amount to or for the account of the Company or any creditor of the Company. No creditor of the Company is intended as a third-party beneficiary of this Agreement nor shall any such creditor have any rights hereunder.

11.7    Termination. The Company shall terminate when all property owned by the Company shall have been disposed of and the assets shall have been distributed as provided in Section 11.3. The Liquidator shall then execute and cause to be filed a Certificate of Cancellation of the Company.

ARTICLE 12.      NOTICES AND CONSENT OF MEMBERS

12.1    Notices. All notices, demands or requests required or permitted under this Agreement must be in writing or electronic form, and shall be made by hand delivery, certified mail, overnight courier service, electronic mail or facsimile to the address, electronic mail address or facsimile number set forth in the Schedule of Members, but any party may designate a different address, electronic mail address or facsimile number by a notice similarly given to the Company. Any such notice or communication shall be deemed given when delivered by hand, if delivered on a Business Day, the next Business Day after delivery by hand if delivered by hand on a day that is not a Business Day; four Business Days after being deposited in the United States mail, postage prepaid, return receipt requested, if mailed; on the next Business Day after being deposited for next day delivery with Federal Express or a similar overnight courier; when receipt is acknowledged, whether by facsimile confirmation or return electronic mail, if sent by facsimile or electronic mail on a Business Day; and the next Business Day following the day on which receipt is acknowledged whether by facsimile confirmation or return electronic mail, if sent by facsimile or electronic mail on a day that is not a Business Day.

12.2    Consents and Approvals. Any action requiring the consent or approval of Members under this Agreement, unless otherwise specified herein, may be taken at a meeting of Members or, in lieu thereof, by written or electronic consent of Members holding the requisite Percentage Interest or, where expressly required by this Agreement or by applicable law, by all of the Members.

ARTICLE 13.      AMENDMENT OF AGREEMENT

 13.1      Amendments . This Agreement may be amended, supplemented, waived or modified by the written consent of the Managing Member in its sole discretion without the approval of any other Member or other Person;  provided , that to the extent that any such amendment, supplement, waiver or modification would adversely affect the legal rights (including, without limitation, those under  Section 10.4 ) of the holders of any given class of Units (other than Units held by the Managing Member), such amendment shall require the consent of the holders of a majority of the then outstanding Units of each such class held by Members (other than, and, for purposes of determining whether holders of a majority of the then outstanding Units have consented, any Units that are held by the Managing Member). 

13.2    Amendment of Certificate. In the event that this Agreement shall be amended, supplemented or modified pursuant to this Article 13, the Managing Member shall amend, supplement or modify the Certificate to reflect such change if the Managing Member deems such amendment, supplement or modification of the Certificate to be necessary or appropriate.

13.3    Power of Attorney. Each Member hereby irrevocably constitutes and appoints the Managing Member as its true and lawful attorney-in-fact, with full power of substitution, in its name, place and stead to make, execute, sign, acknowledge (including swearing to), verify, deliver, record and file, on its behalf, the following: (i) any amendment, supplement or modification to this Agreement which complies with the provisions of Section 13.1 of this Agreement; and (ii) the Certificate and any amendment, supplement or modification thereof required because this Agreement is amended, including an amendment, supplement or modification to effectuate any change in the membership of the Company or in the Capital Contributions of the Members. This power-of-attorney is a special power-of-attorney and is coupled with an interest in favor of the Managing Member and, as such: (A) shall be irrevocable and continue in full force and effect notwithstanding the subsequent death or incapacity of any party granting this power-of-attorney, regardless of whether the Company or the Managing Member shall have had notice thereof; (B) may be exercised for a Member by facsimile signature of the Managing Member or, after listing all of the Members, including such Member, by a single signature of the Managing Member acting as attorney-in-fact for all of them; and (C) shall survive the delivery of an assignment by a Member of the whole or any portion of its Interest in the Company, except that where the assignee thereof has been approved by the 

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Managing Member for admission to the Company as a Substituted Member, this power-of-attorney given by the assignor shall survive the delivery of such assignment for the sole purpose of enabling the Managing Member to execute, acknowledge and file any instrument necessary to effect such substitution.

ARTICLE 14.      MISCELLANEOUS

14.1    Agreement for Further Execution.  The Members agree to sign, swear or acknowledge any certificates or filings required by the laws of the Commonwealth of Pennsylvania or any other state, to sign, swear or acknowledge any amendment or cancellation of such certificate or filings, whether or not such amendment or cancellation is required by law, to sign, swear or acknowledge such other certificates, filings, documents or affidavits of assumed name, trade name or the like (and any amendments or cancellations thereof) that may be required for conduct of the Company’s business and to cause the filing of any of the same for record wherever such filing shall be required by law. This Section 14.1 shall not prejudice or affect the rights of the Members to approve certain amendments to this Operating Agreement as herein provided.

14.2    Governing Law; Jurisdiction.  This Agreement shall be governed by, and construed in accordance with the laws of the Commonwealth of Pennsylvania, excluding (to the greatest extent permitted by law) any rule of law that would cause the application of laws of any jurisdiction other than the Commonwealth of Pennsylvania. Any action or proceeding against any Member or the Company relating in any way to this Agreement may be brought and enforced in the courts of the Commonwealth of Pennsylvania, City and County of Philadelphia, or the U.S. District Court for the Eastern District of Pennsylvania, and each of the parties to this Agreement irrevocably submits to the jurisdiction of both such courts in respect of any such action or proceeding.

14.3    Severability.  If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Member or the Company. Upon determination that any term or other provision is invalid, illegal or incapable of being enforced, the Members shall negotiate in good faith to modify this Agreement so as to effect the intent of the Members (as of the date of the this Agreement) as closely as possible in an acceptable manner and in order that the transactions contemplated hereby are consummated as contemplated (as of the date of this Agreement) to the greatest extent possible.

14.4    Entire Agreement.  This Agreement, together with the Exchange Agreement, the Tax Receivable Agreement and the Registration Rights Agreement, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior agreement or understandings among them with respect to the subject matter hereof (including the Third A&R Operating Agreement), and it may not be modified or amended in any manner other than as set forth herein.

14.5    Indulgences, Etc.  Neither the failure nor any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver 

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thereof; nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same; nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and signed by the party asserted to have granted such waiver.

14.6    Binding Nature of Agreement; Assignment.  This  Agreement shall be binding upon and inure to the benefit of the Members and their heirs, personal representatives, successors and permitted assigns. Neither this Agreement nor any rights hereunder may be assigned by operation of law or otherwise, except in accordance with Article 10. All references in this Agreement to any Member shall be deemed to include its, his or her heirs, personal representatives, successors and assigns.

14.7    Counterparts.  This Agreement may be executed in any number of counterparts, each of which when executed shall be deemed to be an original but all of which when taken together shall constitute one and the same agreement.

14.8    Headings.  All headings, titles or captions contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

14.9    Number of Days.  Any reference in this Agreement to a “day” or number of “days” (without the explicit qualification of “Business”) shall be interpreted as a reference to a calendar day or number of calendar days. If any action or notice is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action or notice shall be deferred until, or may be taken or given on, the next Business Day.

14.10    Interpretation.  No provision of this Agreement is to be interpreted for or against any party because that party or that party’s representative drafted such provision.

14.11    No Third Party Beneficiaries.  Notwithstanding anything herein to the contrary, no provision of this Agreement is intended to or shall confer upon any Person (including, without limitation, any creditor of the Company or of any subsidiary) other than the Members any legal or equitable right, benefit or remedy of any nature whatsoever.

14.12    Waiver of Partition.  The Members hereby agree that the Company assets are not and will not be suitable for partition. Accordingly, each of the Members hereby irrevocably waives any and all rights (if any) that such Member may have to maintain any action for partition of any of such assets.

14.13    Waiver of Judicial Dissolution.  Each Member agrees that irreparable damage would occur if any Member should bring or have brought on its behalf an action for judicial 

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dissolution of the Company. Accordingly, each Member accepts the provisions under this Agreement as such Member’s sole entitlement on dissolution of the Company and waives and renounces all rights to seek or have sought for such Member a court decree of dissolution or to seek the appointment by a court of a liquidator for the Company.

14.14    Consent to Jurisdiction; Waiver of Trial by Jury.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.

14.15    Non-Occurrence of IPO.  Notwithstanding any other provision of this Agreement (including Section 13.1), in the event that the IPO is not consummated prior to the date that is 15 Business Days after the date of this Agreement, then this Agreement shall automatically, with no action required by any Member, on such date be amended and restated in its entirety back to the Third A&R Operating Agreement and, upon such automatic amendment and restatement of this Agreement, this Agreement shall be of no force and effect.
*    *    *

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above.

	
		
	HAMILTON LANE INCORPORATED

	 
	 

	By:
	 

	Name:

	Title:

	 
	 

	 

	Mario Giannini

	 
	 

	MARIO GIANNINI 2008 ANNUITY TRUST

	 
	 

	By:
	 

	Name:

	Title:

	 
	 

	HAMILTON LANE ADVISORS, INC.

	 
	 

	By:
	 

	Name: Mario L. Giannini 

	Title:   President

	 
	 

	HLA INVESTMENTS, LLC

	By: HRHLA, LLC, its managing member

	 
	 

	By:
	 

	Name: Hartley Rogers 

	Title:   Manager

	 
	 

	HL MANAGEMENT INVESTORS, LLC.

	 
	 

	By:
	 

	Name: Robert W. Cleveland 

	Title:   Secretary

	 
	 

	 

	Paul Waller

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Annex I

Members as of the Effective Date

- 48 -

ANNEX II

Form of Certificate

THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT.
THE UNITS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS AND OTHER TERMS CONTAINED IN THE FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT DATED [______________] (AS AMENDED FROM TIME TO TIME), AMONG THE COMPANY AND ITS MEMBERS. A COPY OF SUCH AGREEMENT IS ON FILE AT THE COMPANY’S PRINCIPAL EXECUTIVE OFFICES.
	
		
	Number of Units:
	Certificate Number:

CERTIFICATE OF LIMITED LIABILITY COMPANY INTEREST
Hamilton Lane Advisors, L.L.C., a Pennsylvania limited liability company (the “Company”), hereby certifies that (the “Holder”) is the registered owner of [ ] [Class A/B/C] Units representing limited liability company interests in the Company (the “Interests”). The rights, powers, preferences, restrictions and limitations of the Interests are set forth in, and this Certificate and the Interests represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Fourth Amended and Restated Limited Liability Company Agreement of the Company dated as of     , 2016, as the same may be amended or modified from time to time (the “LLC Agreement”). By acceptance of this Certificate, and as a condition to being entitled to any rights and/or benefits with respect to the Interests evidenced hereby, the Holder is deemed to have agreed to comply with and be bound by all the terms and conditions of the LLC Agreement. The Company will furnish a copy of the LLC Agreement to the Holder without charge upon written request to the Company at its principal place of business.
The member’s interests represented by this Certificate are transferable only on the books of the Company by the holder hereof in person or by power of attorney upon surrender of this Certificate properly endorsed.
This Certificate shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to principles of conflicts of laws.

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IN WITNESS WHEREOF, the Company has caused this Certificate to be duly executed and signed this day of     , 20  .
Hamilton Lane Advisors, L.L.C.
	
				
	By:
	 
	 

	 
	Name:
	 
	 

	 
	Title:
	 
	 

	 
	 
	 

THIS CERTIFICATE EVIDENCES A MEMBER’S INTEREST IN HAMILTON LANE ADVISORS, L.L.C. AND SHALL CONSTITUTE A “SECURITY” WITHIN THE MEANING OF, AND GOVERNED BY, (I) ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT FROM TIME TO TIME IN THE COMMONWEALTH OF PENNSYLVANIA (INCLUDING SECTION 8102(A)), AND (II) ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE OF ANY OTHER APPLICABLE JURISDICTION THAT NOW OR HEREAFTER SUBSTANTIALLY INCLUDES THE 1994 REVISIONS TO ARTICLE 8 THEREOF AS ADOPTED BY THE AMERICAN LAW INSTITUTE AND THE NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS AND APPROVED BY THE AMERICAN BAR ASSOCIATION ON FEBRUARY 14, 1995.

- 50 -Exhibit

EXHIBIT 10.4

 
FORM OF

REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
HAMILTON LANE INCORPORATED 
AND 
CERTAIN STOCKHOLDERS 
DATED AS OF [ ], 2017 

This REGISTRATION RIGHTS AGREEMENT (as it may be amended from time to time in accordance with the terms hereof, the “Agreement”), dated as of [ ], 2017, is made by and among:
i.    Hamilton Lane Incorporated, a Delaware corporation (the “Company”).
iii.    Each Person executing this Agreement on the signature pages hereto (collectively, together with their Permitted Transferees that become party hereto, the “Holders”).
RECITALS
WHEREAS, the Company has effected a series of Recapitalization Transactions (as defined below);
WHEREAS, after giving effect to the Recapitalization Transactions, a the Holders beneficially own limited liability company interests (“HLA Units”) in Hamilton Lane Advisors, L.L.C., a Pennsylvania limited liability company (“HLA”) which, subject to certain restrictions, are exchangeable from time to time at the option of the holder thereof for shares of the Company’s Class A common stock, par value $0.001 per share (the “Class A Common Stock”) pursuant to an Exchange Agreement dated the date hereof among the Company, HLA and certain holders (the “Exchange Agreement”) and (b) certain of the Investors directly own shares of Class A Common Stock;
WHEREAS, on the date hereof, the Company is closing its initial public offering of shares of its Class A Common Stock (the “IPO”); and
WHEREAS, the parties believe that it is in the best interests of the Company and the other parties hereto to set forth their agreements regarding registration rights following the IPO;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
 
EFFECTIVENESS
1.1    Effectiveness. This Agreement shall become effective upon the closing of the IPO.
ARTICLE 2
 
DEFINITIONS
2.1    Definitions. As used in this Agreement, the following terms shall have the following meanings:
“Adverse Disclosure” means public disclosure of material non-public information that, in the good faith judgment of the board of directors of the Company: (i) would be required to be made in any Registration Statement filed with the SEC by the Company so that such Registration 

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Statement, from and after its effective date, does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) would reasonably be expected to materially adversely affect or interfere with any material financing or other material transaction under consideration by the Company; or (iii) would not be required to be made at such time but for the filing, effectiveness or continued use of such Registration Statement.
“Affiliate” means, with respect to any specified Person, (a) any Person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person, (b) a Member of the Immediate Family of such Person, and (c) any investment fund advised or managed by, or under common control or management with, such specified Person; provided that the Company and each of its subsidiaries shall be deemed not to be Affiliates of any Holder. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“Agreement” shall have the meaning set forth in the preamble.
“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.
“Class A Common Stock” means the Company’s Class B common stock, par value $0.001 per share.
“Class B Common Stock” means, collectively, the Class A Common Stock and the Class B Common Stock.
“Common Stock” shall have the meaning set forth in the Recitals.
“Class B Unit” means the HLA Units classified as Class B Units.
“Class C Unit” the HLA Units classified as Class C Units.
“Demand Notice” shall have the meaning set forth in Section 3.1(c).
“Demand Registration Request” shall have the meaning set forth in Section 3.1(a)(i).
“Exchange” means the exchange of (i) Class B Units together with an equal number of shares of Class B Common Stock or (ii) Class C Units, as applicable, for shares of Class A Common Stock pursuant to the Exchange Agreement.
“Exchange Agreement” shall have the meaning set forth in the Recitals.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

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“FINRA” means the Financial Industry Regulatory Authority.
“HLA” shall have the meaning set forth in the Recitals.
“HLAI” means HLA Investments, LLC, a Delaware limited liability company and an Investor.
“Holder” means any of (i) HLAI, (ii) Mario Giannini, (iii) any Person beneficially owning Registrable Securities aggregating     % of the total number of Registrable Securities as of the closing of the IPO (subject to adjustment for recapitalizations or similar transactions), and (iv) any Managing Director of the Company (whether holding that title now or hereafter) beneficially owning     % or more of the total number of Registrable Securities as of the closing of the IPO who, in the good faith determination of the Board of Directors, either is (a) an Affiliate of the Company or (b) holds a sufficient number of Registrable Securities that their sale could adversely affect the trading market for the Company’s Common Stock and who has executed or executes a joinder to this Agreement.
“IPO” shall have the meaning set forth in the Recitals.
“Issuer Free Writing Prospectus” means an issuer free writing prospectus, as defined in Rule 433 under the Securities Act, relating to an offer of the Registrable Securities.
“Loss” shall have the meaning set forth in Section 3.9(a).
“Member of the Immediate Family” means, with respect to any Person who is an individual, (a) each parent, spouse (but not including a former spouse or a spouse from whom such Person is legally separated) or child (including those adopted) of such individual and (b) each trust naming only one or more of the Persons listed in sub-clause (a) as beneficiaries.
“Participation Conditions” shall have the meaning set forth in Section 3.2(ii).
“Permitted Transferee” means (i) any Affiliate of a Holder and (ii) such other Persons designated by the Holders of a majority of the Registrable Securities under this Agreement.
“Person” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.
“Piggyback Notice” shall have the meaning set forth in Section 3.3(a).
“Piggyback Registration” shall have the meaning set forth in Section 3.3(a).
“Potential Takedown Participant” shall have the meaning set forth in Section 3.2(ii).
“Pro Rata Portion” means, with respect to each Holder requesting that its shares be registered or sold, a number of such shares equal to the aggregate number of Registrable Securities requested to be registered (excluding any shares to be registered or sold for the 

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account of the Company) multiplied by a fraction, the numerator of which is the aggregate number of Registrable Securities then held by such Holder, and the denominator of which is the aggregate number of Registrable Securities then held by all Holders requesting that their Registrable Securities be registered or sold.
“Prospectus” means (i) the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including post-effective amendments and supplements, and all other material incorporated by reference in such prospectus, and (ii) any Issuer Free Writing Prospectus.
“Public Offering” means the offer and sale of Registrable Securities for cash pursuant to an effective Registration Statement under the Securities Act (other than a Registration Statement on Form S-4 or Form S-8 or any successor form).
“Recapitalization Transactions” means the recapitalization transactions described in the Registration Statement for, and being implemented in connection with the closing of, the IPO.
“Registrable Securities” means (i) all shares of Class A Common Stock that are not then subject to forfeiture to the Company, (ii) all shares of Class A Common Stock issued or issuable upon exercise, conversion or exchange of any option, warrant or convertible security (including shares of Class A Common Stock issuable upon an Exchange) not then subject to vesting or forfeiture to the Company and (iii) all shares of Class A Common Stock directly or indirectly issued or then issuable with respect to the securities referred to in clauses (i) or (ii) above by way of unit or stock dividend or unit or stock split, or in connection with a combination of units or shares, recapitalization, merger, consolidation or other reorganization. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (w) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such Registration Statement, (x) such securities shall have been Transferred pursuant to Rule 144, (y) such holder is able to immediately sell such securities (including all shares of Class A Common Stock issuable upon Exchange, subject to the limitations on Exchange set forth in the Exchange Agreement) under Rule 144 without any restrictions on transfer (including without application of paragraphs (c), (d), (e), (f) and (h) of Rule 144), as determined in the reasonable opinion of the holder (it being understood that a written opinion of the Company’s outside legal counsel to the effect that such securities may be so offered and sold and that any restrictive legends on the securities may be removed shall be conclusive evidence this clause has been satisfied), or (z) such securities shall have ceased to be outstanding.
“Registration” means registration under the Securities Act of the offer and sale of shares of Class A Common Stock under a Registration Statement. The terms “register,” “registered” and “registering” shall have correlative meanings.
“Registration Expenses” shall have the meaning set forth in Section 3.8.
“Registration Statement” means any registration statement of the Company filed with, or to be filed with, the SEC under the Securities Act, including the related Prospectus, amendments 

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and supplements to such registration statement, including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement other than a registration statement (and related Prospectus) filed on Form S-4 or Form S-8 or any successor form thereto.
“Representatives” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants, equity financing partners or financial advisors or other Person associated with, or acting on behalf of, such Person.
“Rule 144” means Rule 144 under the Securities Act (or any successor rule).
“SEC” means the Securities and Exchange Commission or any successor agency having jurisdiction under the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.
“Selling Stockholder Information” shall have the meaning set forth in Section 3.9(a).
“Shelf Registration” means any Registration pursuant to Rule 415 under the Securities Act.
“Shelf Registration Statement” means a Registration Statement filed with the SEC pursuant to Rule 415 under the Securities Act.
“Shelf Takedown Notice” shall have the meaning set forth in Section 3.2(ii).
“Shelf Takedown Request” shall have the meaning set forth in Section 3.2(i).
“Suspension” shall have the meaning set forth in Section 3.1.
“Transfer” means, with respect to any Registrable Security, any interest therein, or any other securities or equity interests relating thereto, a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition thereof, including the grant of an option or other right, whether directly or indirectly, whether voluntarily, involuntarily, by operation of law, pursuant to judicial process or otherwise. “Transferred” shall have a correlative meaning.
“Underwritten Offering” means an Underwritten Offering, including any bought deal or block sale to a financial institution conducted as an Underwritten Offering.
“Underwritten Shelf Takedown” means an Underwritten Offering pursuant to an effective Shelf Registration Statement.

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“WKSI” means any Securities Act registrant that is a well-known seasoned issuer as defined in Rule 405 under the Securities Act at the most recent eligibility determination date specified in paragraph (2) of that definition.
2.2    Other Interpretive Provisions. 
(i)    The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
(ii)    The words “hereof”, “herein”, “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and any subsection and Section references are to this Agreement unless otherwise specified.
(iii)    The term “including” is not limiting and means “including without limitation.”
(iv)    The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.
(v)    Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms.
ARTICLE 3 
 
REGISTRATION RIGHTS
The Company will perform and comply, and cause each of its subsidiaries to perform and comply, with such of the following provisions as are applicable to it. Each Holder will perform and comply with such of the following provisions as are applicable to such Holder.
3.1    Demand Registration. 
(a)    Request for Demand Registration. 
(i)    Following the first annual anniversary of the closing date of the IPO, any Holder shall have the right to make a written request from time to time (a “Demand Registration Request”) to the Company for Registration of all or part of the Registrable Securities held by that Holder; provided that any Person who is a Holder solely by virtue of clause (iv) of the definition of Holder may not make demand for an Underwritten Offering pursuant to this Section 3.1(a) or Section 3.2 below.
(ii)    Each Demand Registration Request shall specify (x) the aggregate amount of Registrable Securities proposed to be registered, (y) the intended method or methods of disposition thereof, and (z) whether the Demand Registration Request is for an Underwritten Offering or a Shelf Registration.

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(iii)    If a Demand Registration Request is for a Shelf Registration, and the Company is eligible to file a Registration Statement on Form S-3, the Company shall promptly file with the SEC a shelf Registration Statement on Form S-3 pursuant to Rule 415 under the Securities Act relating to the offer and sale of Registrable Securities by Holders thereof from time to time in accordance with the methods of distribution elected by such Holders, subject to all applicable provisions of this Agreement.
(iv)    If the Demand Registration Request is for a Shelf Registration and the Company is not eligible to file a Registration Statement on Form S-3, the Company shall promptly file with the SEC a Shelf Registration Statement on Form S-1 or any other form that the Company is then permitted to use pursuant to Rule 415 under the Securities Act (or such other Registration Statement as the Board of Directors may determine to be appropriate) relating to the offer and sale of Registrable Securities by Holders thereof from time to time in accordance with the methods of distribution elected by such Holders.
(v)    If on the date of the Shelf Registration Request the Company is a WKSI, then any Shelf Registration Statement may (if the Board of Directors determines it to be appropriate to do so) include an unspecified amount of Registrable Securities to be sold by unspecified Holders, if on the date of the Shelf Registration Request the Company is not a WKSI, then the Shelf Registration Request shall specify the aggregate amount of Registrable Securities to be registered.
(b)    Limitation on Registrations. The Company shall not be obligated to take any action to effect any Demand Registration if (i) a Demand Registration or Piggyback Registration was declared effective or an Underwritten Offering was consummated by either the Company or the Holders within the preceding 90 days; (ii) the Company has filed another Registration Statement (other than on Form S-8 or Form S-4 or any successor thereto) that has not yet become effective; (iii) the value of the Registrable Securities proposed to be sold by the initiating Holders is not reasonably expected (in the good faith reasonable judgment of the Board of Directors) to yield net proceeds of at least $25 million, or in the case of an Underwritten Offering, of at least $50 million. No Demand Registration Request may cover Registrable Securities that are issuable upon exchange under and pursuant to the terms of the Exchange Agreement if the Exchange Agreement would not, on the date of the Demand Registration Request, then permit such Exchange, except in Shelf Registration with the approval of the Company’s Board of Directors.
(c)    Demand Notice. Promptly upon receipt of a Demand Registration Request pursuant to Section (a) (but in no event more than ten Business Days thereafter), the Company shall deliver a written notice of the Demand Registration Request to all other Holders offering each such Holder the opportunity to include in the Demand Registration that number of Registrable Securities as the Holder may request in writing. Subject to 

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Sections 3.1(g) and 3.1(h), the Company shall include in the Demand Registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within five Business Days after the date that the Demand Notice was delivered.
(d)    Demand Withdrawal. Each Holder that has requested the inclusion of Registrable Securities in a Registration (other than a Registration in connection with a Public Offering) pursuant to Section (c) may withdraw all or any portion of its Registrable Securities from a Demand Registration at any time prior to the effectiveness of the applicable Registration Statement. Upon receipt of a notice to such effect with respect to all of the Registrable Securities included in such Demand Registration by such Holders or a number of such Registrable Securities so as to cause the expected net proceeds to fall below the applicable threshold set forth in Section 3.1(b), the Company shall cease all efforts to secure effectiveness of the applicable Registration Statement.
(e)    Effectiveness. 
(i)The Company shall use commercially reasonable efforts to cause any Registration Statement filed by it pursuant to this Agreement to become effective as promptly as practicable, subject to all applicable provisions of this Agreement.
(ii)The Company shall use commercially reasonable efforts to keep any Shelf Registration Statement filed on Form S-3 continuously effective under the Securities Act to permit the Prospectus forming a part of it to be usable by Holders until the earlier of: (A) the date as of which all Registrable Securities have been sold pursuant to that Shelf Registration Statement or another Registration Statement filed under the Securities Act (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder); (B) the date as of which no Holder holds Registrable Securities; and (C) any date reasonably determined by the Board of Directors of the Company to be appropriate, excluding any date that is less than 180 days after the effectiveness of the Registration Statement and any date that is after the third anniversary of the effectiveness of such Shelf Registration Statement.
(iii)If the Registration Statement filed is a Shelf Registration Statement on any form other than Form S-3, or if the Registration Statement is filed in connection with an Underwritten Offering, the Company shall use commercially reasonable efforts to keep the Registration Statement effective for a period of at least 180 days after the effective date thereof, such other period as the underwriters for any Underwritten Offering may determine to be appropriate, or such shorter period during which all Registrable Securities included in the Registration Statement have actually been sold; provided that such period shall be extended for a period of time equal to the period the Holders of Registrable Securities may be required to refrain from selling any securities included in the 

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Registration Statement at either the request of the Company or an underwriter of the Company pursuant to the provisions of this Agreement.
(f)    Delay in Filing; Suspension of Registration. If the filing, initial effectiveness or continued use of a Registration Statement at any time would require the Company to make an Adverse Disclosure, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, the Registration Statement (a “Suspension”); provided, however, that the Company shall not be permitted to exercise a Suspension (i) for a period exceeding 60 days on any one occasion or (ii) for an aggregate of more than 120 days in any 12-month period. In the case of a Suspension, the Holders agree to suspend use of the applicable Prospectus in connection with any sale or purchase, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the Holders in writing upon the termination of any Demand Suspension, amend or supplement the Prospectus, if necessary, so it does not contain any untrue statement or omission and furnish to the Holders such numbers of copies of the Prospectus as so amended or supplemented as the Holders may reasonably request. The Company shall, if necessary, supplement or amend the Registration Statement, if required by the registration form used by the Company for the Registration Statement or by the instructions applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by the Holders of a majority of Registrable Securities that are included in such Registration Statement.
(g)    Priority of Securities Registered Pursuant to Shelf Registrations. If the Board of Directors of the Company concludes in good faith that the number of securities requested to be included in a Shelf Registration exceeds the number that can be sold without being likely to have an adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the securities to be included in such Registration shall be (x) first, allocated to each Holder that has requested to participate in such Registration an amount equal to the lesser of (i) the number of such Registrable Securities requested to be registered or sold by such Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata Portion, and (y) second, and only if all the securities referred to in clause (x) have been included, the number of other securities that, in the opinion of such managing underwriter or underwriters can be sold without having such adverse effect. If a cutback pursuant to this Section 3.1(g) or (h) would causes an applicable dollar threshold set forth in Section 3.1(b)(iii) not to be met with respect to the Demand Registration, Section 3.1(b)(iii) shall not apply to that Demand Registration.
(h)    Priority of Securities in Underwritten Offerings. If the managing underwriter or underwriters of any proposed Underwritten Offering advise the Company in writing that, in its or their opinion, the number of securities requested to be included in the proposed offering exceeds the number that can be sold in that offering without being likely to have an adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the number of Registrable Securities to be included shall be (x) first, allocated to each Holder that has requested to participate in 

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such Underwritten Offering an amount equal to the lesser of (i) the number of such Registrable Securities requested to be registered or sold by such Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata Portion, and (y) second, and only if all securities referred to in clause (x) have been included, the number of other securities that, in the opinion of such managing underwriter or underwriters, can be sold without having such adverse effect.
(i)    No Person may participate in any Underwritten Offering hereunder unless that Person agrees to sell the Registrable Securities it desires to have covered by the applicable Registration Statement on the basis provided in any underwriting arrangements in customary form and completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, and other documents required under the terms of the underwriting arrangements; provided that no Person shall be required to make representations and warranties other than those related to title and ownership of their shares and as to the accuracy and completeness of statements made in a Registration Statement, prospectus, offering circular, or other document in reliance upon and conformity with written information furnished to the Company or the managing underwriter by such Person.
(j)    Resale Rights. In the event that Holder requests to participate in a Registration pursuant to this Section 3.1 in connection with a distribution of Registrable Securities to its members, the Registration shall provide for resale by such members, if requested by the Holder.
3.2    Shelf Takedowns. 
(a)    At any time the Company has an effective Shelf Registration Statement with respect to Registrable Securities, a Holder by notice to the Company specifying the intended method or methods of disposition thereof, may make a written request (a “Shelf Takedown Request”) that the Company effect an Underwritten Shelf Takedown, of all or a portion of such Holder’s Registrable Securities that are registered on such Shelf Registration Statement, and as soon as practicable the Company shall amend or supplement the Shelf Registration Statement as necessary for such purpose, subject to all applicable provisions of this Agreement.
(b)    Promptly upon receipt of a Shelf Takedown Request (but in no event more than two Business Days thereafter (or such shorter period as may be reasonably requested in connection with an underwritten “block trade”) for any Underwritten Shelf Takedown, the Company shall deliver a notice (a “Shelf Takedown Notice”) to each other Holder with Registrable Securities covered by the applicable Registration Statement, or to all other Holders if such Registration Statement is undesignated (each a “Potential Takedown Participant”). The Shelf Takedown Notice shall offer each such Potential Takedown Participant the opportunity to include in any Underwritten Shelf Takedown such number of Registrable Securities as each such Potential Takedown Participant may request in writing. The Company shall include in the Underwritten Shelf Takedown all such Registrable Securities with respect to which the Company has received written requests 

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for inclusion therein within three Business Days (or such shorter period as may be reasonably requested in connection with an underwritten “block trade”) after the date that the Shelf Takedown Notice has been delivered. Any Potential Takedown Participant’s request to participate in an Underwritten Shelf Takedown shall be binding on the Potential Takedown Participant; provided that each such Potential Takedown Participant that elects to participate may condition its participation on the Underwritten Shelf Takedown being completed within 10 Business Days of its acceptance at a price per share (after giving effect to any underwriters’ discounts or commissions) to such Potential Takedown Participant of not less than ninety percent (90%) (or such lesser percentage specified by such Potential Takedown Participant) of the closing price for the shares on their principal trading market on the Business Day immediately prior to such Potential Takedown Participant’s election to participate (the “Participation Conditions”). Notwithstanding the delivery of any Shelf Takedown Notice, but subject to the Participation Conditions (to the extent applicable), all determinations as to whether to complete any Underwritten Shelf Takedown and as to the timing, manner, price and other terms of any Underwritten Shelf Takedown contemplated by this Section 3.2 shall be determined by the initiating Holders.
3.3    Piggyback Registration. 
(a)    Participation. If the Company at any time proposes to file a Registration Statement under the Securities Act or to conduct a Public Offering with respect to any offering of its equity securities for its own account or for the account of any other Persons (other than (i) a Registration under Sections 3.1 or 3.2, (ii) a Registration on Form S-4 or Form S-8 or any successor form to such forms or (iii) a Registration of securities solely relating to an offering and sale to employees or directors of the Company or its subsidiaries pursuant to any employee stock plan, employee stock purchase plan, dividend reinvestment program or other employee benefit plan arrangement), then, as soon as practicable (but in no event less than 10 Business Days prior to the proposed date of filing of such Registration Statement or, in the case of a Public Offering under a Shelf Registration Statement, the anticipated pricing or trade date), the Company shall give written notice (a “Piggyback Notice”) of such proposed filing or Public Offering to all Holders, and such Piggyback Notice shall offer the Holders the opportunity to register under such Registration Statement, or to sell in such Public Offering, such number of Registrable Securities as each such Holder may request in writing (a “Piggyback Registration”). Subject to Section (b), the Company shall include in such Registration Statement or in such Public Offering as applicable, all such Registrable Securities that are requested to be included therein within five (5) Business Days after the receipt by such Holder of any such notice; provided, however, that if at any time after giving written notice of its intention to register or sell any securities and prior to the effective date of the Registration Statement filed in connection with such Registration, or the pricing or trade date of a Public Offering under a Shelf Registration Statement, the Company determines for any reason not to register or sell or to delay Registration or the sale of such securities, the Company shall give written notice of such determination to each Holder and, thereupon, (i) in the case of a determination not to register or sell, shall be relieved of its 

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obligation to register or sell any Registrable Securities in connection with such Registration or Public Offering (but not from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of any Holders entitled to request that such Registration or sale be effected as a Demand Registration under Section 3.1 or an Underwritten Shelf Takedown, as the case may be, and (ii) in the case of a determination to delay Registration or sale, in the absence of a request for a Demand Registration or an Underwritten Shelf Takedown, as the case may be, shall also be permitted to delay registering or selling any Registrable Securities. Any Holder shall have the right to withdraw all or part of its request for inclusion of its Registrable Securities in a Piggyback Registration by giving written notice to the Company of its request to withdraw.
(b)    Priority of Piggyback Registration. If the managing underwriter or underwriters of any proposed offering of Registrable Securities included in a Piggyback Registration informs the Company and the participating Holders in writing that, in its or their opinion, the number of securities that such Holders and any other Persons intend to include in such offering exceeds the number that can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the securities to be included in such Registration shall be (i) first, one hundred percent (100%) of the securities that the Company proposes to sell, and (ii) second, and only if all the securities referred to in clause (i) have been included, the number of Registrable Securities that, in the opinion of such managing underwriter or underwriters, can be sold without having such adverse effect, with such number to be allocated among the Holders that have requested to participate in such Registration based on an amount equal to the lesser of (i) the number of such Registrable Securities requested to be sold by such Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata Portion and (iii) third, and only if all of the Registrable Securities referred to in clause (ii) have been included in such Registration, any other securities eligible for inclusion in such Registration.
(c)    No Effect on Other Registrations. No Registration of Registrable Securities effected pursuant to a request under this Section 3.3 shall be deemed to have been effected pursuant to Section 3.1 or shall relieve the Company of its obligations under Sections 3.1.
3.4    Lock-Up Agreements. In connection with each Registration or sale of Registrable Securities pursuant to Section 3.1 or 3.3 conducted as an Underwritten Offering, each Holder agrees, if requested, to become bound by and to execute and deliver a lock-up agreement with the underwriter(s) of such Public Offering restricting such Holder’s right to (a) Transfer, directly or indirectly, any equity securities of the Company held by such Holder or (b) enter into any swap or other arrangement that transfers to another any of the economic consequences of ownership of such securities during the period commencing on the date of the final Prospectus relating to such Offering and ending on the date specified by the underwriters (such period not to exceed 90 days plus such additional period as may be requested by the Company or an underwriter due to regulatory restrictions on the publication or other distribution of research 

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reports and analyst recommendations and opinions, if applicable). The terms of such lock-up agreements shall be negotiated among the Holders, the Company and the underwriters and shall include customary carve-outs from the restrictions on Transfer set forth therein.
3.5    Registration Procedures. 
(a)    Requirements. In connection with the Company’s obligations under Sections 3.1 and 3.3, the Company shall use its commercially reasonable efforts to effect such Registration and to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith the Company shall:
(i)    as promptly as practicable, prepare the required Registration Statement, including all exhibits and financial statements required under the Securities Act to be filed therewith and Prospectus, and, before filing a Registration Statement or Prospectus or any amendments or supplements thereto, (x) furnish to the underwriters, if any, and to the Holders of the Registrable Securities covered by such Registration Statement, copies of all documents prepared to be filed, which documents shall be subject to the review of such underwriters and such Holders and their respective counsel, (y) make such changes in such documents concerning the Holders prior to the filing thereof as such Holders, or their counsel, may reasonably request and (z) except in the case of a Registration under Section 3.3, not file any Registration Statement or Prospectus or amendments or supplements thereto to which the participating Holders, in such capacity, or the underwriters, if any, shall reasonably object;
(ii)    prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and supplements to the Prospectus as may be (x) reasonably requested by any participating Holder with Registrable Securities covered by such Registration Statement, (y) reasonably requested by any participating Holder (to the extent such request relates to information relating to such Holder), or (z) necessary to keep such Registration Statement effective for the period of time required by this Agreement, and comply with provisions of the applicable securities laws with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement;
(iii)    notify the participating Holders and the managing underwriter or underwriters, if any, and (if requested) confirm such notice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (a) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable Prospectus or any amendment or supplement thereto has been filed, (b) of any written comments by the SEC, or any request by the SEC or other federal or state governmental authority for amendments or supplements to such 

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Registration Statement or such Prospectus, or for additional information (whether before or after the effective date of the Registration Statement) or any other correspondence with the SEC relating to, or which may affect, the Registration, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final Prospectus or the initiation or threatening of any proceedings for such purposes, (d) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in all material respects and (e) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;
(iv)    promptly notify each selling Holder and the managing underwriter or underwriters, if any, when the Company becomes aware of the happening of any event as a result of which the applicable Registration Statement or the Prospectus included in such Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such Prospectus or any preliminary Prospectus, in light of the circumstances under which they were made) not misleading, when any Issuer Free Writing Prospectus includes information that may conflict with the information contained in the Registration Statement, or, if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement or Prospectus in order to comply with the Securities Act and, as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the selling Holders and the managing underwriter or underwriters, if any, an amendment or supplement to such Registration Statement or Prospectus, which shall correct such misstatement or omission or effect such compliance;
(v)    to the extent the Company is eligible under the relevant provisions of Rule 430B under the Securities Act, if the Company files any Shelf Registration Statement, the Company shall include in such Shelf Registration Statement such disclosures as may be required by Rule 430B under the Securities Act (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Holders may be added to such Shelf Registration Statement at a later time through the filing of a Prospectus supplement rather than a post-effective amendment;
(vi)    to prevent, or obtain the withdrawal of, any stop order or other order or notice preventing or suspending the use of any preliminary or final Prospectus;

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(vii)    promptly incorporate in a Prospectus supplement, Issuer Free Writing Prospectus or post-effective amendment such information as the managing underwriter or underwriters and the participating Requisite Investors agree should be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all required filings of such Prospectus supplement, Issuer Free Writing Prospectus or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement, Issuer Free Writing Prospectus or post-effective amendment;
(viii)    furnish to each selling Holder and each underwriter, if any, without charge, as many conformed copies as such Holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment or supplement thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);
(ix)    deliver to each selling Holder and each underwriter, if any, without charge, as many copies of the applicable Prospectus (including each preliminary Prospectus) and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder or underwriter (it being understood that the Company shall consent to the use of such Prospectus or any amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto);
(x)    on or prior to the date on which the applicable Registration Statement becomes effective, use its commercially reasonable efforts to register or qualify, and cooperate with the selling Holders, the managing underwriter or underwriters, if any, and their respective counsel, in connection with the Registration or qualification of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of each state and other jurisdiction as any such selling Holder or managing underwriter or underwriters, if any, or their respective counsel reasonably request in writing and do any and all other acts or things reasonably necessary or advisable to keep such Registration or qualification in effect for such period as required by Section 3.1, as applicable, provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject;
(xi)    cooperate with the selling Holders and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any 

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restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request prior to any sale of Registrable Securities to the underwriters;
(xii)    to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities;
(xiii)    make such representations and warranties to the Holders being registered, and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in public offerings similar to the offering then being undertaken;
(xiv)    enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as the participating Requisite Investors or the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the Registration and disposition of such Registrable Securities;
(xv)    obtain for delivery to the Holders being registered and to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company dated the most recent effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such Holders or underwriters, as the case may be, and their respective counsel;
(xvi)    in the case of an Underwritten Offering, obtain for delivery to the Company and the managing underwriter or underwriters, with copies to the Holders included in such Registration or sale, a comfort letter from the Company’s independent certified public accountants or independent auditors (and, if necessary, any other independent certified public accountants or independent auditors of any subsidiary of the Company or any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) in customary form and covering such matters of the type customarily covered by comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;
(xvii)    cooperate with each seller of Registrable Securities and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

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(xviii)    comply with all applicable securities laws and, if a Registration Statement was filed, make available to its security holders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;
(xix)    provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement;
(xx)    to cause all Registrable Securities covered by the applicable Registration Statement to be listed on each securities exchange on which any of the Company’s equity securities are then listed or quoted and on each inter-dealer quotation system on which any of the Company’s equity securities are then quoted.
(xxi)    make available upon reasonable notice at reasonable times and for reasonable periods for inspection by a representative appointed by the participating Requisite Investors, by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by such Holders or any such underwriter, all pertinent financial and other records and pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Person in connection with such Registration Statement;
(xxii)    in the case of an Underwritten Offering, cause the senior executive officers of the Company to participate in the customary “road show” presentations that may be reasonably requested by the managing underwriter or underwriters in any such offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;
(xxiii)    take no direct or indirect action prohibited by Regulation M under the Exchange Act;
(xxiv)    take all reasonable action to ensure that any Issuer Free Writing Prospectus utilized in connection with any Registration complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related Prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and

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(xxv)    take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities in accordance with the terms of this Agreement.
(b)    Company Information Requests. The Company may require each seller of Registrable Securities as to which any Registration or sale is being effected to furnish to the Company such information regarding the distribution of such securities and such other information relating to such Holder and its ownership of Registrable Securities as the Company may from time to time reasonably request in writing and the Company may exclude from such Registration or sale the Registrable Securities of any such Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. Each Holder agrees to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.
(c)    Discontinuing Registration. Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.5(a)(iv), such Holder will discontinue disposition of Registrable Securities pursuant to such Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3.5(a)(iv), or until such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus, or any amendments or supplements thereto, and if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended Prospectus contemplated by Section 3.5(a)(iv) or is advised in writing by the Company that the use of the Prospectus may be resumed.
3.6    Underwritten Offerings. 
(a)    Shelf and Demand Registrations. If requested by the underwriters for any Underwritten Offering, pursuant to a Registration or sale under Section 3.1, the Company shall enter into an underwriting agreement with such underwriters, such agreement to be reasonably satisfactory in substance and form to each of the Company, the participating Holders and the underwriters, and to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of that type, including indemnities no less favorable to the recipient thereof than those provided in Section 3.9. The Holders of the Registrable Securities proposed to be distributed by such underwriters shall cooperate with the Company in the negotiation of the underwriting 

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agreement and shall give consideration to the reasonable suggestions of the Company regarding the form thereof, and such Holders shall complete and execute all questionnaires, powers of attorney and other documents reasonably requested by the underwriters and required under the terms of such underwriting arrangements. Any such Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder, such Holder’s title to the Registrable Securities, such Holder’s intended method of distribution and any other representations to be made by the Holder as are generally prevailing in agreements of that type, and the aggregate amount of the liability of such Holder under such agreement shall not exceed such Holder’s proceeds from the sale of its Registrable Securities in the offering, net of underwriting discounts and commissions but before expenses.
(b)    Piggyback Registrations. If the Company proposes to register or sell any of its securities under the Securities Act as contemplated by Section 3.3 and such securities are to be distributed through one or more underwriters, the Company shall, if requested by any Holder pursuant to Section 3.3 and, subject to the provisions of Section 3.3(b), use its commercially reasonable efforts to arrange for such underwriters to include on the same terms and conditions that apply to the other sellers in such Registration or sale all the Registrable Securities to be offered and sold by such Holder among the securities of the Company to be distributed by such underwriters in such Registration or sale. The Holders of Registrable Securities to be distributed by such underwriters shall be parties to the underwriting agreement between the Company and such underwriters and shall complete and execute all questionnaires, powers of attorney and other documents reasonably requested by the underwriters and required under the terms of such underwriting arrangements. Any such Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder, such Holder’s title to the Registrable Securities, such Holder’s intended method of distribution and any other representations to be made by the Holder as are generally prevailing in agreements of that type, and the aggregate amount of the liability of such Holder shall not exceed such Holder’s proceeds from the sale of its Registrable Securities in the offering, net of underwriting discounts and commissions but before expenses.
(c)    Selection of Underwriters; Selection of Counsel. In the case of an Underwritten Offering under Section 3.1, the managing underwriter or underwriters to administer the offering shall be determined by the Holders; provided that such underwriter or underwriters shall be reasonably acceptable to the Company. In the case of an Underwritten Offering under Section 3.2, the managing underwriter or underwriters to administer the offering shall be determined by the Company; provided that such underwriter or underwriters shall be reasonably acceptable to the Holders of a majority of the Registrable Securities being sold. In the case of an Underwritten Offering under Section 3.1 or 3.2, legal counsel for the Holders shall be selected by the Holders and legal counsel for the other Holders shall be selected by participating Holders holding a majority of the Registrable Securities proposed to be included in the Public offering.

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3.7    No Inconsistent Agreements; Additional Rights. Neither the Company nor any of its subsidiaries shall hereafter enter into, and neither the Company nor any of its subsidiaries is currently a party to, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders by this Agreement. Neither the Company nor any of its subsidiaries shall enter into any agreement granting registration or similar rights to any Person, and the Company hereby represents and warrants that, as of the date hereof, no registration or similar rights have been granted to any other Person other than pursuant to this Agreement.
3.8    Registration Expenses. All expenses incident to the Company’s performance of or compliance with this Agreement shall be paid by the Company, including (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) all fees and expenses in connection with compliance with any securities or “Blue Sky” laws (including reasonable fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities), (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses), (iv) all fees and disbursements of counsel for the Company and of all independent certified public accountants or independent auditors of the Company and any subsidiaries of the Company (including the expenses of any special audit and comfort letters required by or incident to such performance), (v) Securities Act liability insurance or similar insurance if the Company so desires or the underwriters so require in accordance with then-customary underwriting practice, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or quotation of the Registrable Securities on any inter-dealer quotation system, (vii) all reasonable fees (up to $100,000) and disbursements of legal counsel for the Holders, (vii) all fees and expenses of any special experts or other Persons retained by the Company in connection with any Registration or sale, (ix) all of the Company’s internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties) and (x) all expenses related to the “road show” for any Underwritten Offering (including the reasonable out-of-pocket expenses of the Holders and underwriters, if so requested. All such expenses are referred to herein as “Registration Expenses.” The Company shall not be required to pay any fees and disbursements to underwriters not customarily paid by the issuers of securities in an offering similar to the applicable offering, including underwriting discounts and commissions and transfer taxes, if any, attributable to the sale of Registrable Securities.
3.9    Indemnification. 
(a)    Indemnification by the Company. The Company shall indemnify and hold harmless, to the full extent permitted by law, each Holder, each shareholder, member, limited or general partner of such Holder, each shareholder, member, limited or general partner of each such shareholder, member, limited or general partner, each of their respective Affiliates, officers, directors, shareholders, employees, advisors, and agents and each Person who controls (within the meaning of the Securities Act or the Exchange Act) such Persons and each of their respective Representatives from and against any and all losses, penalties, judgments, suits, costs, claims, damages, liabilities and expenses, 

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joint or several (including reasonable costs of investigation and legal expenses) (each, a “Loss” and collectively “Losses”) arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which such Registrable Securities are registered or sold under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or any other disclosure document produced by or on behalf of the Company or any of its subsidiaries including any report and other document filed under the Exchange Act, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading or (iii) any violation or alleged violation by the Company or any of its subsidiaries of any federal, state, foreign or common law rule or regulation applicable to the Company or any of its subsidiaries and relating to action or inaction in connection with any such registration, disclosure document or other document or report; provided, that no selling Holder shall be entitled to indemnification pursuant to this Section (a) in respect of any untrue statement or omission contained in any information relating to such selling Holder furnished in writing by such selling Holder to the Company specifically for inclusion in a Registration Statement and used by the Company in conformity therewith (such information, “Selling Stockholder Information”). This indemnity shall be in addition to any liability the Company may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder or any indemnified party and shall survive the Transfer of such securities by such Holder and regardless of any indemnity agreed to in the underwriting agreement that is less favorable to the Holders. The Company shall also indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above (with appropriate modification) with respect to the indemnification of the indemnified parties.
(b)    Indemnification by the Selling Holders. Each selling Holder agrees (severally and not jointly) to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act or the Exchange Act) from and against any Losses resulting from (i) any untrue statement of a material fact in any Registration Statement under which such Registrable Securities were registered or sold under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or (ii) any omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading, in each case to the extent, but only to the extent, that such untrue statement or omission is contained in such selling Holder’s Selling Stockholder Information. In no event shall the liability of any selling Holder hereunder be greater in 

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amount than the dollar amount of the proceeds from the sale of its Registrable Securities in the offering giving rise to such indemnification obligation, net of underwriting discounts and commissions but before expenses, less any amounts paid by such Holder pursuant to Section (d) and any amounts paid by such Holder as a result of liabilities incurred under the underwriting agreement, if any, related to such sale.
(c)    Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that it is actually and materially prejudiced by reason of such delay or failure) and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (i) the indemnifying party has agreed in writing to pay such fees or expenses, (ii) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person, (iii) the indemnified party has reasonably concluded (based upon advice of its counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, or (iv) in the reasonable judgment of any such Person (based upon advice of its counsel) a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If the indemnifying party assumes the defense, the indemnifying party shall not have the right to settle such action without the consent of the indemnified party. No indemnifying party shall consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of an unconditional release from all liability in respect to such claim or litigation without the prior written consent of such indemnified party. If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its prior written consent, but such consent may not be unreasonably withheld. It is understood that the indemnifying party or parties shall not, except as specifically set forth in this Section (c), in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements or other charges of more than one separate firm admitted to practice in such jurisdiction at any one time unless (x) the employment of more than one counsel has been authorized in writing by the indemnifying party or parties, (y) an indemnified party has reasonably concluded (based on the advice of counsel) that there may be legal defenses available to it that are different from or in addition to those available to the other indemnified parties or (z) a conflict or potential conflict exists or 

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may exist (based upon advice of counsel to an indemnified party) between such indemnified party and the other indemnified parties, in each of which cases the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels.
(d)    Contribution. If for any reason the indemnification provided for in Sections (a) and (b) is unavailable to an indemnified party or insufficient in respect of any Losses referred to therein (other than as a result of exceptions or limitations on indemnification contained in Sections (a) and (b)), then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party or parties on the other hand in connection with the acts, statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. In connection with any Registration Statement filed with the SEC by the Company, the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section (d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section (d). No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The amount paid or payable by an indemnified party as a result of the Losses referred to in Sections (a) and (b) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section (d), in connection with any Registration Statement filed by the Company, a selling Holder shall not be required to contribute any amount in excess of the dollar amount of the proceeds from the sale of its Registrable Securities in the offering giving rise to such contribution obligation, net of underwriting discounts and commissions but before expenses, less any amounts paid by such Holder pursuant to Section (b) and any amounts paid by such Holder as a result of liabilities incurred under the underwriting agreement, if any, related to such sale. If indemnification is available under this Section 3.9, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections (a) and (b) hereof without regard to the provisions of this Section (d). The remedies provided for in this Section 3.9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.
3.10    Rules 144 and 144A and Regulation S. The Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such 

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reports, it will, upon the request of any Holder, make publicly available such necessary information for so long as necessary to permit sales that would otherwise be permitted by this Agreement pursuant to Rule 144, Rule 144A or Regulation S under the Securities Act, as such rules may be amended from time to time or any similar rule or regulation hereafter adopted by the SEC), and it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without Registration under the Securities Act in transactions that would otherwise be permitted by this Agreement and within the limitation of the exemptions provided by (i) Rule 144, Rule 144A or Regulation S under the Securities Act, as such rules may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements and, if not, the specifics thereof.
3.11    Existing Registration Statements. Notwithstanding anything herein to the contrary and subject to applicable law and regulation, the Company may satisfy any obligation hereunder to file a Registration Statement or to have a Registration Statement become effective by a specified date by designating, by notice to the Holders, a Registration Statement that previously has been filed with the SEC or become effective, as the case may be, as the relevant Registration Statement for purposes of satisfying such obligation, and all references to any such obligation shall be construed accordingly; provided that such previously filed Registration Statement may be, and is, amended or, subject to applicable securities laws, supplemented to add the number of Registrable Securities, and, to the extent necessary, to identify as selling stockholders those Holders demanding the filing of a Registration Statement pursuant to the terms of this Agreement. To the extent this Agreement refers to the filing or effectiveness of other Registration Statements, by or at a specified time and the Company has, in lieu of then filing such Registration Statements or having such Registration Statements become effective, designated a previously filed or effective Registration Statement as the relevant Registration Statement for such purposes, in accordance with the preceding sentence, such references shall be construed to refer to such designated Registration Statement, as amended or supplemented in the manner contemplated by the immediately preceding sentence.
ARTICLE 4 
 
MISCELLANEOUS
4.1    Authority: Effect. Each party hereto represents and warrants to and agrees with each other party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such party and do not violate any agreement or other instrument applicable to such party or by which its assets are bound. This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of such parties members of a joint venture or other association. The Company and its subsidiaries shall be jointly and severally liable for all obligations of each such party pursuant to this Agreement.

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4.2    Notices. Any notices, requests, demands and other communications required or permitted in this Agreement shall be effective if in writing and (i) delivered personally, (ii) sent by facsimile or e-mail, or (iii) sent by overnight courier, in each case, addressed as follows:
If to the Company to:
Hamilton Lane Incorporated 
One Presidential Boulevard, 4th Floor 
Bala Cynwyd, Pennsylvania 19004  
Telephone: (610) 617-6076 
Facsimile: (610) 617-9854 
Attention: General Counsel
with a copy (which shall not constitute notice to the Company) to:
Drinker Biddle & Reath LLP 
One Logan Square, Suite 2000 
Philadelphia, Pennsylvania 19103-6996 
Telephone: (215) 988-2515 
Facsimile: (215) 988-2757 
Attention: H. John Michel, Jr.
If to an Investor or a Manager, to the address on file in the Company’s records.
Notice to the holder of record of any Registrable Securities shall be deemed to be notice to the holder of such securities for all purposes hereof.
Unless otherwise specified herein, such notices or other communications shall be deemed effective (i) on the date received, if personally delivered, (ii) on the date received if delivered by facsimile or e-mail on a Business Day, or if not delivered on a Business Day, on the first Business Day thereafter and (iii) two Business Days after being sent by overnight courier. Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.
4.3    Termination and Effect of Termination. This Agreement shall terminate upon the date on which no Holder holds any Registrable Securities, except for the provisions of Sections 3.9 and 3.10, which shall survive any such termination. No termination under this Agreement shall relieve any Person of liability for breach or Registration Expenses incurred prior to termination. In the event this Agreement is terminated, each Person entitled to indemnification rights pursuant to Section 3.9 hereof shall retain such indemnification rights with respect to any matter that (i) may be an indemnified liability thereunder and (ii) occurred prior to such termination.
4.4    Permitted Transferees. The rights of a Holder hereunder may be assigned (but only with all related obligations as set forth below) in connection with a Transfer of Registrable 

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Securities to a Permitted Transferee of that Holder. Without prejudice to any other or similar conditions imposed hereunder with respect to any such Transfer, no assignment permitted under the terms of this Section 4.4 will be effective unless the Permitted Transferee to which the assignment is being made, if not a Holder, has delivered to the Company a written acknowledgment and agreement in form and substance reasonably satisfactory to the Company that the Permitted Transferee will be bound by, and will be a party to, this Agreement. A Permitted Transferee to whom rights are transferred pursuant to this Section 4.4 may not again transfer those rights to any other Permitted Transferee, other than as provided in this Section 4.4.
4.5    Remedies. The parties to this Agreement shall have all remedies available at law, in equity or otherwise in the event of any breach or violation of this Agreement or any default hereunder. The parties acknowledge and agree that in the event of any breach of this Agreement, in addition to any other remedies that may be available, each of the parties hereto shall be entitled to specific performance of the obligations of the other parties hereto and, in addition, to such other equitable remedies (including preliminary or temporary relief) as may be appropriate in the circumstances. No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.
4.6    Amendments. This Agreement may not be orally amended, modified, extended or terminated, nor shall any oral waiver of any of its terms be effective. This Agreement may be amended, modified, extended or terminated, and the provisions hereof may be waived, only by an agreement in writing signed by the Company and the Holders of a majority of the Registrable Securities under this Agreement; provided, however, that any amendment, modification, extension or termination that disproportionately and adversely affects any Holder shall require the prior written consent of such Holder; provided, further, that the consent of a Manager may be provided on behalf of such Manager by the chief executive officer of the Company. Each such amendment, modification, extension or termination shall be binding upon each party hereto. In addition, each party hereto may waive any right hereunder by an instrument in writing signed by such party.
4.7    Governing Law. This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of New York without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.
4.8    Consent to Jurisdiction. Each party to this Agreement, by its execution hereof, (i) hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of New York for the purpose of any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof, (ii) hereby waives to the extent not prohibited 

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by applicable law, and agrees not to assert, and agrees not to allow any of its subsidiaries to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such proceeding brought in one of the above-named courts is improper, or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court and (iii) hereby agrees not to commence or maintain any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof or thereof other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation to any court other than one of the above-named courts whether on the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing, to the extent that any party hereto is or becomes a party in any litigation in connection with which it may assert indemnification rights set forth in this Agreement, the court in which such litigation is being heard shall be deemed to be included in clause (i) above. Notwithstanding the foregoing, any party to this Agreement may commence and maintain an action to enforce a judgment of any of the above-named courts in any court of competent jurisdiction. Each party hereto hereby consents to service of process in any such proceeding in any manner permitted by New York law, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 4.2 hereof is reasonably calculated to give actual notice.
4.9    WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 4.9 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.9 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
4.10    Merger; Binding Effect, Etc. This Agreement (along with the Exchange Agreement) constitutes the entire agreement of the parties with respect to its subject matter, supersedes all prior or contemporaneous oral or written agreements or discussions with respect to such subject matter, and shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective heirs, representatives, successors and permitted assigns. Except as otherwise expressly provided herein, no Holder or other party hereto may assign any of its 

- 27 -

respective rights or delegate any of its respective obligations under this Agreement without the prior written consent of the other parties hereto, and any attempted assignment or delegation in violation of the foregoing shall be null and void.
4.11    Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one instrument.
4.12    Severability. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. The provisions hereof are severable, and in the event any provision hereof should be held invalid or unenforceable in any respect, it shall not invalidate, render unenforceable or otherwise affect any other provision hereof.
4.13    No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, the Company and each Holder covenant, agree and acknowledge that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, general or limited partner or member of any Holder or of any Affiliate or assignee thereof, as such, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of any Holder or any current or future member of any Holder or any current or future director, officer, employee, partner or member of any Holder or of any Affiliate or assignee thereof, as such, for any obligation of any Holder under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.
[Signature pages follow]

- 28 -

EXHIBIT 10.4

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

	
			
	Company:
	HAMILTON LANE INCORPORATED 

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name:   

	 
	Title:     

	 
	 
	 

	 
	 
	 

	Investors:
	 

	 
	Mario L. Giannini

	 
	 
	 

	 
	 
	 

	 
	MARIO GIANNINI 2008 ANNUITY TRUST

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name:   

	 
	Title:    

	 
	 
	 

	 
	 
	 

	 
	HAMILTON LANE ADVISORS, INC

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name: Mario L. Giannini

	 
	Title: President

	 
	 
	 

	 
	 
	 

	 
	 
	 

- 29 -

EXHIBIT 10.4

	
			
	 
	HLA INVESTMENTS, LLC

	 
	By:
	HRHLA, LLC, its managing member

	 
	 
	 

	 
	By:
	 

	 
	Name: Hartley Rogers

	 
	Title: Manager

	 
	 
	 

	 
	 
	 

	 
	HRHLA, LLC

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name: Hartley Rogers

	 
	Title: Manager

	 
	 
	 

	 
	 
	 

	 
	OAKVILLE NUMBER TWO TRUST

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name: 

	 
	Title: 

	 
	 
	 

- 30 -

EXHIBIT 10.4

	
			
	 
	THE 2008 SEXTON DES. TRUST FBO LAURA SEXTON

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name: O. Griffith Sexton

	 
	Title: Trustee

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name: Barbara Sexton

	 
	Title: Trustee

	 
	 
	 

	 
	 
	 

	 
	THE 2008 SEXTON DES. TRUST FBO MATTHEW SEXTON

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name: O. Griffith Sexton

	 
	Title: Trustee

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name: Barbara Sexton

	 
	Title: Trustee

	 
	 
	 

	 
	 
	 

	 
	THE INITIAL TRUST UNDER THE FREDERICK B. WHITTEMORE 2008 CHILDREN’S TRUST AGREEMENT DATED NOVEMBER 25, 2008

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name: Edward B. Whitemore

	 
	Title: Trustee

	 
	 
	 

	 
	 
	 

	 
	Michael Schmertzler

	 
	 

- 31 -

EXHIBIT 10.4

	
			
	Managers: [To be confirmed]
	 
	 

	 
	Erik R. Hirsch

	 
	 
	 

	 
	 
	 

	 
	Kevin J. Lucey

	 
	 
	 

	 
	 
	 

	 
	Juan Delgado-Moreira

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	Randy Stilman

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	Paul Yett

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	Tara Blackburn

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	Andrea Kramer

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	Mike Kelly

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	Steve Brennan

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	Jeffrey Meeker

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

- 32 -

EXHIBIT 10.4

	
			
	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	Thomas Kerr

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	David Helgerson

- 33 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}]]