Document:

Exhibit
10.12

 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

This AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT (this “Agreement”) is
made and entered into as of January 11, 2007, by and among RiskMetrics Group,
Inc., a Delaware corporation (the “Company”), the
stockholders listed on Schedule A attached hereto who have executed this
Agreement as of the date hereof, and any Person who becomes a holder of Common
Stock after the date hereof and who becomes a party to this Agreement by
executing and delivering to the Company an Instrument of Accession in
substantially the form of Annex I attached hereto (each a “Stockholder” and, collectively, the “Stockholders”).

 

RECITALS

 

WHEREAS,
RiskMetrics Solutions, Inc. (f/k/a RiskMetrics Group, Inc.), a Delaware corporation
(“RMG”), and certain stockholders of RMG
have previously entered into an Investor Rights Agreement, dated as of June 14,
2004 (the “Original Agreement”);

 

WHEREAS, the Company
(f/k/a RMG Holdco, Inc. and which, as of the date of the Merger Agreement, was
a direct, wholly-owned Subsidiary of RMG), RMG, RMG Merger Sub, Inc., a
Delaware corporation and, as of such date, a wholly-owned Subsidiary of RMG LLC
(as defined below) (“RMG Merger Sub”),
ISS Merger Sub, Inc., a Delaware corporation and, as of such date, a
wholly-owned Subsidiary of RMG LLC (“ISS Merger Sub”),
Institutional Shareholder Services Holdings, Inc., a Delaware corporation (“ISS”), and RiskMetrics Group Holdings, LLC, a Delaware
limited liability company and a direct, wholly-owned Subsidiary of the Company
(“RMG LLC”), have entered into an
Agreement and Plan of Merger, dated as of October 31, 2006, as amended (as
amended, the “Merger Agreement”);

 

WHEREAS,
pursuant to the Merger Agreement, on even date herewith, RMG Merger Sub has
merged with and into RMG, with RMG continuing as the surviving corporation and
an indirect, wholly-owned Subsidiary of the Company, and ISS Merger Sub has
merged with and into ISS, with ISS continuing as the surviving corporation and
an indirect, wholly-owned Subsidiary of the Company (collectively, the “Mergers”);

 

WHEREAS,
pursuant to the Merger Agreement, in connection with the Mergers, the Company
is issuing shares of the Company’s common stock, par value $0.01 per share (the
“Common Stock”), to certain former
holders of the common stock and the Series
A Convertible Preferred Stock of ISS (collectively, the “Former ISS Stockholders”), as more
particularly described in the Merger Agreement;

 

WHEREAS, pursuant to the Merger Agreement, (a) each
Former ISS Stockholder that will own two percent (2%) or more of the issued and
outstanding shares of Common Stock, on a fully diluted basis, immediately
following the effective time of the Mergers (collectively (if any), the “ISS Investors”) is required to execute
this Agreement, and (b) each share of the common stock of RMG outstanding
immediately prior to the Effective Time (as defined in the Merger Agreement)
will automatically be converted into a share of Common Stock on a one-for-one
basis;

 

WHEREAS,
the parties hereto intend for the Company to execute and become a party to 

 

 

 

this
Agreement in place of RMG through substitution and novation, and all of the
parties to the Original Agreement intend to execute and become parties to this
Agreement;

 

WHEREAS, immediately following the effective time of
the Mergers, the Company is filing with the Secretary of State of the State of Delaware an
Amended and Restated Certificate of Incorporation;

 

WHEREAS, in connection
with the Mergers and the other transactions contemplated by the Merger
Agreement, among other things, on even date herewith, the Company and the
holders of Common Stock (including, without limitation, the Former ISS Stockholders) are executing a Second Amended and Restated Stockholders Agreement
(as the same may be amended and/or restated from time to time after the date
hereof, the “Stockholders Agreement”),
pursuant to which the parties thereto shall be subject to the provisions
thereof, including, without limitation, the co-sale and drag-along provisions
set forth therein; and

 

WHEREAS, in connection
with the Mergers and the other transactions contemplated by the Merger
Agreement, among other things, the Company and the Stockholders (including,
without limitation, the ISS Investors) desire to amend and restate the Original
Agreement as set forth herein.

 

NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the Company and the Stockholders, intending to be
legally bound, hereby agree as follows:

 

SECTION  1

 

DEFINITIONS

 

1.1           Certain Defined Terms. As used
herein, the following terms shall have the following meanings:

 

“ABS Ventures Observer” shall have the meaning set forth in Section 2.7(a) hereof.

 

“ABS
Ventures Stockholders” shall mean ABS Ventures VIII L.P., any
Affiliate thereof that, after the date hereof, acquires Capital Stock and any
transferee thereof to whom shares of Capital Stock are transferred in
accordance with the provisions of this Agreement, and the term “ABS Ventures Stockholder” shall mean any such Person.

 

“Additional
Unpurchased Common Stock” shall have the meaning set forth in Section
3.3(d) hereof.

 

“Affiliate” shall mean,
with respect to any Person, any other Person, directly or indirectly,
controlling, controlled by, under common control with
or under common investment management with, such Person. For the
purposes of this definition, “control” when used with respect to any Person,
means common investment management and/or the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

 

 

2

 

“Agreement” shall have the
meaning set forth in the Introduction.

 

“Annual
Budget” shall have the meaning set forth in Section 6.1(f) hereof.

 

“Available Undersubscription Amount” shall have the meaning set forth in Section
4.3(a) hereof.

 

“Basic Amount”
shall have the meaning set forth in Section 4.2(a) hereof.

 

“Berman” shall have the
meaning set forth in the Section 2.1(b)(ii) hereof.

 

“Board” shall
mean the board of directors of the Company.

 

“Bylaws”
shall mean the Amended and Restated Bylaws of the Company, as the same may be
amended and/or restated from time to time.

 

“Capital Stock”
shall mean any and all shares of capital stock of the Company however
designated and whether voting and/or nonvoting, including, without limitation,
Common Stock, whether outstanding on the date hereof or issued after the date
hereof.

 

“Change of Control” shall mean (i) any merger, consolidation or reorganization of the
Company into or with any other Person or Persons (except a merger,
consolidation or reorganization with or into a wholly-owned Subsidiary of the
Company or a merger, consolidation or reorganization in which either (A) the
Company’s voting stock outstanding immediately prior to such transaction
continues to represent a majority by voting power of the voting stock
outstanding immediately following such transaction on a fully diluted basis or
(B) the shares of capital stock issued in exchange for the Company’s voting
stock outstanding immediately prior to such transaction represent a majority by
voting power of the voting stock of the continuing or resulting entity
immediately following such transaction on a fully diluted basis); (ii) any
issuance, sale or other disposition (or series of related sales or
dispositions) of the capital stock of the Company by the Company and/or
stockholders in which the stockholders immediately prior to such event do not
hold a majority by voting power of the outstanding stock of the Company
immediately after such event (on a fully diluted basis) (other than in a public
offering); or (iii) any sale, license, lease or disposition of all or
substantially all of the assets of the Company.

 

“Committee”
and “Committees” shall have the respective
meanings set forth in Section 2.5 hereof.

 

“Common Designee” and “Common Designees” shall have the
meanings set forth in Section 2.1(b)(ii) hereof.

 

“Common Independent Designee” shall have the meaning set forth in Section 2.1(b)(v) hereof.

 

“Commission”
shall mean the Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act.

 

3

 

“Common Stock”
shall have the meaning set forth in the Recitals.

 

“Company”
shall have the meaning set forth in the Introduction.

 

“Director”
shall mean a director of the Company.

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

 

“Family Member”
shall mean, with respect to a Stockholder who is a natural person,  all the lineal descendants and ascendants in
direct line of such Stockholder and the siblings of such Stockholder and their
lineal descendants and a husband or wife or widower or widow of any of the
above Persons and for the purposes aforesaid a step child or adopted child or
illegitimate child of any Person shall be deemed to be a lineal descendant.

 

“Family Trusts”
shall mean, with respect to any Stockholder who is a natural person who holds
Capital Stock, trusts under which no beneficial interest in any of the shares
of Capital Stock held by such trust is vested in any Person other than such
Stockholder and/or such Stockholder’s Family Members. For purposes of this definition,
a Person shall be considered “beneficially interested” in a share of Capital
Stock if such share or any income related thereto is transferred or paid or
applied or appointed to or for the benefit of such Person, or any voting or
other rights attaching thereto are exercisable by or as directed by such Person
pursuant to the terms of such trust or as the result of an exercise of a power
or discretion conferred by such terms on any Person or Persons.

 

“Fiscal Year”
shall initially mean the calendar year, or such other 12 month period approved
by the Board.

 

“Former ISS Stockholders”  shall have the
meaning set forth in the Recitals.

 

“fully diluted basis” shall be calculated, as of any date of determination, on the basis of
all outstanding shares of Capital Stock; provided, that for this
purpose, all options, warrants or other rights of any kind to acquire shares of
Capital Stock and all securities exercisable, convertible or exchangeable
(directly or indirectly) into shares of Capital Stock outstanding at such time
and exercisable, convertible or exchangeable at such time shall, to the extent
that they are “in the money” only, be deemed to have been fully exercised,
converted or exchanged, as the case may be, and the Capital Stock issuable as a
result thereof shall be deemed to have been fully issued and to form part of
the holdings of the Person(s) entitled to receive such Capital Stock; provided,
further, that, for purposes hereof, Capital Stock underlying options or
other rights to acquire shares of Capital Stock shall be deemed to be
outstanding in accordance with the foregoing only to the extent that such
options or other rights are vested as of such date of determination.

 

“GA Designee”
shall have the meaning set forth in Section 2.1(b)(i) hereof.

 

4

 

“GA Observer”
shall have the meaning set forth in Section 2.7(a) hereof.

 

“GA Stockholders” shall mean General Atlantic Partners 78, L.P., GapStar, LLC, GAP
Coinvestments III, LLC, GAP Coinvestments IV, LLC, GAPCO GmbH & Co. KG, any
Affiliate thereof that, after the date hereof, acquires Capital Stock and any
transferee thereof to whom shares of Capital Stock are transferred in
accordance with the provisions of this Agreement, and the term “GA Stockholder” shall mean any such Person.

 

“Governmental
Entity” shall mean any federal or national, state or provincial, municipal or
local government, governmental authority, regulatory or administrative agency,
governmental commission, department, board, bureau, agency or instrumentality,
political subdivision, court, tribunal, official arbitrator or arbitral body,
in each case whether domestic or foreign.

 

“Governmental
Order” shall mean any order, writ, rule, judgment, injunction, decree,
stipulation, determination, decision, consent, agreement or award of, or
entered into by or with, any Governmental Entity.

 

“Group” shall
mean:

 

(i)            in the case of any Stockholder who is a natural person, such
Stockholder or any Family Trust or Family Member of such Stockholder;

 

(ii)           in the case of any
Stockholder which is a partnership, (i) such partnership and any of
its general partners or limited partners, (ii) any corporation or other
business organization to which such partnership shall sell all or substantially
all of its assets or with which it shall be merged or consolidated and (iii)
any Affiliate of such partnership;

 

(iii)          in the case of any
Stockholder which is a corporation, (i) any such corporation, its
parent and any of such corporation’s or parent’s subsidiaries, (ii) any
corporation or other business organization to which such corporation shall sell
all or substantially all of its assets or with which it shall be merged or
consolidated, and (iii) any Affiliate of such corporation;

 

(iv)          in the case of any
Stockholder which is a limited liability company, (i) such limited
liability company and any of its members, (ii) any corporation or other
business organization to which such limited liability company shall sell all or
substantially all of its assets or with which it shall be merged or
consolidated and (iii) any Affiliate of such limited liability company;

 

(v)           in the case of any
Stockholder which is a trust, the trustee of such trust, the
beneficiary or beneficiaries of such trust or any Affiliate of such trust; and

 

(vi)          in the case of any
Stockholder who is not a natural person, partnership, corporation, limited
liability company or trust, any Affiliate of such Person.

 

“Indebtedness” shall mean,
without duplication, (i) all indebtedness for borrowed money; (ii) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in the ordinary
course of business on 

 

5

 

ordinary
terms); (iii) all non-contingent reimbursement or payment obligations with
respect to surety instruments; (iv) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses;
(v) all indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either case with
respect to property acquired by the Person (even though the rights and remedies
of the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property); (vi) all obligations with
respect to capital leases; (vii) all indebtedness referred to in clauses
(i) through (vi) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness; and (viii) any guaranty of any obligation of another Person
of the type contemplated in clauses (i) through (vii).

 

“Independent”
shall mean, as of any date of determination, an individual who: (i) has not
within the last two (2) years been employed by the Company in an executive
capacity, and has not been a director after ceasing to hold any such
employment; (ii) has not within the last three (3) years been a principal or
employee of a material professional adviser or material consultant to the
Company; (iii) is not a material supplier and/or customer of the Company (or an
executive or associate of a material supplier and/or customer); and (iv) does
not have a material contractual relationship with the Company.

 

“Independent Designee” and “Independent Designees” shall have
the meanings set forth in Section 2.1(b)(v) hereof.

 

“Investor Designee” and “Investor Designees”
shall have the meanings set forth in Section 2.1(b)(i) hereof.

 

“Investor Independent Designee” shall have the meaning set forth in Section
2.1(b)(iii) hereof.

 

“Investors”
shall mean the Spectrum Stockholders, the GA Stockholders the TCV Stockholders,
the ABS Ventures Stockholders and the W Capital Stockholders, and the term “Investor” shall mean any Person that is a Spectrum
Stockholder, GA Stockholder, TCV Stockholder, ABS Ventures Stockholder or W
Capital Stockholder.

 

“ISS” shall have the
meaning set forth in the Recitals.

 

“ISS
Merger Sub” shall have the meaning set forth in the Recitals.

 

“ISS Investors”  shall have the
meaning set forth in the Recitals.

 

“Knowledge” shall mean the
actual knowledge of the Company’s executive officers and directors.

 

“Material
Adverse Effect” shall mean a material adverse effect on the
business, assets, liabilities, properties, income, operations, results of
operations or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.

 

6

 

“Merger
Agreement” shall have the meaning set forth in the Recitals.

 

“Mergers” shall have the
meaning set forth in the Recitals.

 

“Nominating Party” shall have the meaning set forth in Section 2.3(a) hereof.

 

“Notice of Acceptance” shall have the meaning set forth in Section 4.3(a) hereof.

 

“Observer”
and “Observers” shall have the meanings set
forth in Section 2.7(a) hereof.

 

“Offer” shall
have the meaning set forth in Section 4.2(a) hereof.

 

“Offer Period”
shall have the meaning set forth in Section 3.3(a) hereof.

 

“Offered Common Stock” shall have the meaning set forth in Section 3.3(a) hereof.

 

“Offered Securities” shall have the meaning set forth in Section 4.1 hereof.

 

“Option Plans”
shall mean the Company’s 2007 Omnibus Incentive Compensation Plan and any other
stock option or incentive compensation plan adopted and approved by the Board
in accordance with the provisions of this Agreement.

 

“Original
Agreement” shall have the meaning set forth in the Recitals.

 

“Participating Stockholder” and “Participating Stockholders” shall
have the meanings set forth in Section 4.1 hereof.

 

“Permits” shall mean all
permits, licenses, authorizations, certificates, consents, certificates of
occupancy and approvals of Governmental Entities relating to the business of
the Company as currently conducted.

 

“Person” shall
mean an individual, corporation, limited liability company, partnership,
association, trust or other legal entity.

 

“Pro Rata Share”
shall mean, with respect to any Investor, the aggregate number of shares of
Common Stock held by such Investor, divided by the total number of shares of
Common Stock then held by all Investors, expressed as a percentage.

 

“Proposed Transferee” shall have the meaning set forth in Section 3.3(a) hereof.

 

“Qualified IPO”
shall mean a sale by the Company of shares of Common Stock in a firm commitment
underwritten public offering pursuant to a registration statement under the
Securities Act that (1) is at a per share public offering price (before
underwriters’ discounts and expenses) of at least $18.75 (as adjusted for any
stock splits, stock dividends, combinations or other similar recapitalizations
affecting such shares); (2) has aggregate gross proceeds to Company of at least
$75,000,000 and (3) will result in the registration and trading of the Common
Stock on the NASDAQ National Market or the New York Stock Exchange.

 

“Refused Securities” shall have the meaning set forth in Section 4.3(b) hereof.

 

7

 

“Registrable Securities” shall mean, from time to time, so long as such security is a
Restricted Security:

 

(i)                                     the Shares;

 

(ii)                                  any other shares of Common Stock or Capital
Stock acquired or owned by any Stockholder prior to the consummation of the
Company’s initial public offering; and

 

(iii)                               any shares of Capital Stock of the Company issued in respect of the
exchange or reclassification of the securities described in clauses (i) and
(ii) above.

 

The
terms “register,”
“registered” and “registration”
shall refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the effectiveness of such registration statement.

 

“Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections
5.1, 5.2 and 5.3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including counsel fees) incurred in connection with complying with state
securities laws or “blue sky” laws, fees of the National Association of
Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars, costs of insurance, expenses of any special audits incident to or
required by any such registration and the reasonable fees and disbursements of
one counsel for all of the sellers of Restricted Securities (as a group), but
excluding Selling Expenses.

 

“Representatives” shall have the meaning set forth in Section 6.5(b) hereof.

 

“Requisite
Parties” shall have the meaning set forth in Section 3.5
hereof.

 

“Restricted Securities” shall mean any Registrable Securities, excluding any Registrable
Securities that, with respect to any Stockholder, (i) have been registered
under the Securities Act pursuant to an effective registration statement filed
thereunder and disposed of in accordance with the registration statement
covering them, (ii) have been publicly sold pursuant to Rule 144 under the
Securities Act or (iii) may be sold in a single sale, in the opinion
of counsel satisfactory to the Company and such Stockholder, each in their
reasonable judgment, without any limitation as to volume pursuant to Rule
144(k) (or any successor provision then in effect) under the Securities Act.

 

“RMG” shall have the
meaning set forth in the Recitals.

 

“RMG
Merger Sub” shall have the meaning set forth in the Recitals.

 

“Sale” or “Sell” (or any derivative thereof), as to any Capital Stock,
shall mean to sell, transfer, assign, distribute, encumber, grant a participation,
lien or other security interest in, hypothecate, pledge, exchange or otherwise
dispose of such Capital Stock, whether voluntarily, 

 

8

 

involuntarily or by
operation of law or otherwise.

 

“Sale Notice”
shall have the meaning set forth in Section 3.3(a) hereof.

 

“Securities Act”
shall mean the Securities Act of l933, as amended, and any successor statute
thereto.

 

“Selling Expenses” shall mean all underwriting discounts and selling commissions
applicable to the sale of Restricted Securities.

 

“Selling Stockholder” shall have the meaning set forth in Section 3.3(a) hereof.

 

“Shares” shall mean the
shares of Common Stock owned by the Investors as of the date hereof.

 

“specified amount” shall have the meaning set forth in Section 3.4(a) hereof.

 

“Spectrum Designee” shall have the meaning set forth in Section 2.1(b)(i) hereof.

 

“Spectrum Observer” shall have the meaning set forth in Section 2.7(a) hereof.

 

“Spectrum Stockholders” means Spectrum Equity Investors IV, L.P., Spectrum Equity Investors
Parallel IV, L.P., Spectrum Investment Managers’ Fund, L.P., any Affiliate
thereof that, after the date hereof, acquires Capital Stock and any transferee
thereof to whom shares of Capital Stock are transferred in accordance with the
provisions of this Agreement, and the term “Spectrum
Stockholder” shall mean any such Person.

 

“Stockholder”
and “Stockholders” shall have the meaning
set forth in the Introduction.

 

“Stockholders Agreement” shall have the meaning set forth in the Recitals.

 

“Subsidiary”
means any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other Persons performing similar functions are at the time directly
or indirectly owned by the Company.

 

“TCV Designee”
shall have the meaning set forth in Section 2.1(b)(i) hereof.

 

“TCV Stockholders” means TCV V, L.P. and TCV Member Fund, L.P., any Affiliate thereof
that, after the date hereof, acquires Capital Stock and any transferee thereof
to whom shares of Capital Stock are transferred in accordance with the
provisions of this Agreement, and the term “TCV
Stockholder” shall mean any such Person.

 

“Threshold Percentage” shall mean, as of any date of determination, shares of Capital Stock
entitled to cast at least ten percent (10%) of the votes attributable to all
then outstanding shares of Capital Stock (on a fully diluted basis); provided,
that with respect to the TCV Stockholders only, “Threshold Percentage” shall
mean the lesser of: (a) as of any date of determination, shares of Capital
Stock entitled to cast at least ten percent (10%) of the votes 

 

9

 

attributable
to all then outstanding shares of Capital Stock (on a fully diluted basis) and
(b) one hundred percent (100%) of the Shares purchased by the TCV Stockholders;
provided, further, that if at any time in connection with an
issuance of Offered Securities the Investors and/or their Affiliates (other
than the TCV Stockholders, ABS Ventures Stockholders and W Capital
Stockholders) purchase their respective Basic Amounts of Offered Securities
(whether pursuant to Section 4 or otherwise) and the TCV Stockholders and/or
their Affiliates fail to so purchase their respective Basic Amounts (whether
pursuant to Section 4 or otherwise; provided, that, if such issuance is
not pursuant to Section 4, so long as the TCV Stockholders and/or their
Affiliates have been afforded the opportunity to purchase such Basic Amount at the
same price per share and on substantially the same terms as those offered to
the Spectrum Stockholders and the GA Stockholders), then from and after such
time “Threshold Percentage” shall mean with
respect to the TCV Stockholders shares of Capital Stock entitled to cast at
least ten percent (10%) of the votes attributable to all then outstanding
shares of Capital Stock (on a fully diluted basis).

 

“Two
Percent Stockholder” or “Two Percent Stockholders”
means any holder or holders of shares of Capital Stock who at any time of
determination owns two percent (2%) or more of the outstanding shares of
Capital Stock on a fully diluted basis and who is a party to this Agreement and
the Stockholders Agreement as of the date hereof, or who hereafter becomes a party
to this Agreement and the Stockholders Agreement by executing and delivering an
Instrument of Adherence, other than an Investor. The Two Percent Stockholders
are listed on Schedule A hereto.

 

“Undersubscription Amount” shall have the meaning set forth in Section 4.2(a) hereof.

 

“Unpurchased
Common Stock” shall have the meaning set forth in Section 3.3(c)
hereof.

 

“W Capital Observer” shall have the meaning set forth in Section 2.7(a) hereof.

 

“W Capital Stockholders” means W Capital Partners, L.P. and W Capital Partners 2003, L.P., any
Affiliate thereof that, after the date hereof, acquires Capital Stock and any
transferee thereof to whom shares of Capital Stock are transferred in
accordance with the provisions of this Agreement, and the term “W Capital Stockholder” shall mean any such Person.

 

SECTION  2

 

ELECTION OF
DIRECTORS AND OTHER MATTERS

 

2.1           Board. At any time at which the
stockholders of the Company will have the right to, or will vote for or consent
in writing to, the election or removal of Directors, then, and in each such
event, each Stockholder shall vote (or shall cause to be voted) all shares of
Capital Stock (or, if applicable, consent or shall cause to be executed a
written consent with respect to such shares) then owned by such Stockholder
(whether owned of record or over which such Stockholder exercises voting
rights) and shall take all other actions necessary, to ensure:

 

(a)           that the number of Directors
constituting the entire Board shall be fixed at eight (8); and

 

10

 

(b)           that there shall be elected as
members of the Board:

 

(i)            (A)
one (1) individual designated by the Spectrum Stockholders (such individual so
designated by the Spectrum Stockholders at any time is referred to as the “Spectrum Designee”), provided that the Spectrum
Stockholders own in the aggregate on a combined basis at least the Threshold
Percentage; (B) one (1) individual designated by the GA Stockholders (such
individual so designated by the GA Stockholders at any time is referred to as
the “GA Designee”), provided that
the GA Stockholders own in the aggregate on a combined basis at least the
Threshold Percentage; and (C) one (1) individual designated by the TCV
Stockholders (such individual so designated by the TCV Stockholders at any time
is referred to as the “TCV Designee”;
the Spectrum Designee, the GA Designee and the TCV Designee are each referred
to as a “Investor Designee” and collectively,
the “Investor Designees”), provided
that the TCV Stockholders own in the aggregate on a combined basis at least the
Threshold Percentage; provided, that if any of the Spectrum
Stockholders, the GA Stockholders or the TCV Stockholders, with respect to each
such group, owns in the aggregate on a combined basis, less than the Threshold
Percentage, the Director that would have been designated pursuant to this
clause (i) by such group shall instead be nominated by Investors (other than
the ABS Ventures Stockholders and the W Capital Stockholders) holding a
majority of the outstanding shares of Common Stock then held by all Investors
(other than the ABS Ventures Stockholders and the W Capital Stockholders) who
then hold the applicable Threshold Percentage, or if none of the Investors
(other than the ABS Ventures Stockholders and the W Capital Stockholders) so
hold the applicable Threshold Percentage, then such directors shall be
nominated instead by the holders of a majority of the then outstanding shares
of Common Stock;

 

(ii)           two
(2) individuals designated by the holders of a majority of the then outstanding
shares of Common Stock (excluding for this purpose all shares of Common Stock
held by the Investors), one of whom shall be at all times the Chief Executive
Officer of the Company (each a “Common Designee”
and collectively, the “Common Designees”);
provided that if Marc Ethan Berman (“Berman”) is
not the Chief Executive Officer of the Company, then, notwithstanding the
provisions of this clause (ii), for so long as Berman owns at least the
Threshold Percentage, Berman shall have the right to designate one (1)
individual to serve as the non-Chief Executive Officer Common Designee;

 

(iii)          one
(1) individual designated by the Spectrum Stockholders; provided  that such individual is (A) Independent and (B) approved by
either the GA Stockholders or the TCV Stockholders, which approval shall not be
unreasonably withheld, delayed or conditioned (such individual so designated
and approved is referred to as the “Investor Independent
Designee”);

 

(iv)          one (1) individual designated by Berman; provided
that (A) such individual is approved by the Investors, and (B) in the event
that John M. Connolly ceases to be the ISS Director, as provided in Section 2.2(a)
hereof, such individual shall be Independent (such individual referred to in
the foregoing clause (A) or (B) is referred to as the “ISS Director”);
and

 

11

 

(v)           one (1) individual designated by the
unanimous vote of the Common Designees; provided  that such individual is (A) Independent and (B) approved by
any one of the Investor Designees, which approval shall not be unreasonably
withheld, delayed or conditioned (such individual so designated and approved is
referred to as the “Common Independent
Designee”; the Investor Independent Designee and the Common
Independent Designee are individually referred to as an “Independent
Designee” and collectively referred to as the “Independent
Designees”).

 

2.2           Initial Directors; Obligations of Company.

 

(a)           The initial Spectrum Designee designated and
elected pursuant to Section 2.1(b)(i)(A) hereof shall be Chris Mitchell.
The initial GA Designee designated and elected pursuant to Section 2.1(b)(i)(B)
hereof shall be Rene M. Kern. The initial TCV Designee designated and elected
pursuant to Section 2.1(b)(i)(C) hereof shall be Robert Trudeau. The
initial Common Designees designated and elected pursuant to Section 2.1(b)(ii)
hereof shall be (1) Berman, the Chief Executive Officer of the Company as of
the date hereof, and (2) Peter Bernard. The initial Investor Independent
Designee designated and elected pursuant to Section 2.1(b)(iii) hereof
shall be Arthur Levitt. The initial ISS Director elected pursuant to Section
2.1(b)(iv) hereof shall be John M. Connolly. The initial Common Independent
Designee designated and elected pursuant to Section 2.1(b)(v) hereof
shall be Philip Duff.

 

(b)           Subject to the terms and conditions
set forth herein, the Company shall cause the nominees designated in accordance
with Section 2.1 hereof to be included as part of the slate of directors
and to be recommended to, and elected by stockholders of the Company, at each
annual meeting of stockholders of the Company, and at any special meeting of
stockholders of the Company called for the election of directors.

 

2.3           Successor Directors.

 

(a)           A Director shall serve until his or
her successor is elected and qualified or until his or her earlier resignation
or removal. If an individual who has been elected as a Director shall cease to
serve as a Director for any reason, the Persons with the right to designate
such individual under Section 2.1(b) hereof, including, in the case of
the Independent Designees, the consent rights of the individuals and groups
specified in Sections 2.1(b)(iii) and 2.1(b)(v) with respect to
the Independent Designees (a “Nominating Party”),
shall have the right to designate a successor designee, and each of the other
parties hereto shall vote or cause to be voted, or execute or cause to be
executed a written consent with respect to, all shares of Capital Stock
beneficially owned by such party as to which such party is entitled to vote or
direct the vote in favor of such election. If a Nominating Party notifies the
other parties hereto that it desires to remove its designee as a Director, each
of the other parties hereto shall vote or cause to be voted, or execute or
cause to be executed a written consent with respect to, all shares of Capital
Stock beneficially owned by such party in favor of such removal. If a
Nominating Party notifies the Company that it desires to remove the individual
Director serving as its designee on the Board and/or designate an individual to
succeed such individual by means of stockholder vote, the Company shall, at the
request of such Nominating Party, use its best efforts to ensure that a meeting
of stockholders of the Company is promptly called for such purpose.

 

12

 

(b)           In the event a designation is not
made pursuant to Section 2.1(b) hereof, as applicable, the Stockholders
will use their best efforts to ensure that such position on the Board shall be
left vacant until a nominee is so designated as provided herein.

 

2.4           Proxy. If any Stockholder shall
refuse to vote the Capital Stock held by it as provided in any of the foregoing
provisions of this Section 2 at any meeting of stockholders of the
Company, or shall refuse to give its written consent in lieu of a meeting,
thereupon, without further action by such Stockholder, the Chief Executive
Officer of the Company shall be, and hereby is, irrevocably constituted the
attorney-in-fact and proxy of such Stockholder (such proxy coupled with an
interest in the shares of Capital Stock being voted), for the term of this
Agreement, for the purpose of voting, and shall vote such shares of Capital
Stock at such meeting as provided in the foregoing provisions of this Section
2 or give such consent, as the case may be.

 

2.5           Committees. The Company shall
maintain an Audit Committee and a Compensation Committee of the Board
(collectively, the “Committees,”
and each individually, a “Committee”) as
follows:

 

(a)           The Compensation Committee shall
consist of at least three (3) Directors appointed by the Board, the members of
which shall be as follows: (1) the Spectrum Designee, provided that the
Spectrum Stockholders hold more Shares than the TCV Stockholders, provided,
further, that if the TCV Stockholders hold more Shares than the Spectrum
Stockholders, then the TCV Designee shall serve on such Committee; (2) the GA
Designee, provided that the GA Stockholders hold more Shares than the
TCV Stockholders, provided, further, that if the TCV Stockholders
hold more Shares than the GA Stockholders, then the TCV Designee shall serve on
such Committee; and (3) the non-Chief Executive Officer Common Designee, provided
that if no person is serving as the non-Chief Executive Officer Common
Designee, then the Common Independent Designee. The Compensation Committee
shall be governed by a charter, which shall be prepared by such Committee
within 45 days of the date hereof and which shall be subject to  the approval of the Board, which charter
shall provide, among other things, that the Compensation Committee shall be
responsible for: (i) reviewing and approving the granting of options to
purchase shares of Common Stock of the Company under the Option Plans including a framework for issuing options to
purchase shares of Common Stock to newly hired employees that shall not be
subject to the approval of the Board or the Compensation Committee; and
(ii) establishing, reviewing and approving the salary, bonuses, employee
benefits and other employee compensation of any nature for management of the
Company.

 

(b)           The Audit Committee shall consist of at
least three (3) Directors appointed by the Board, the members of which shall be
as follows:  (1) the Spectrum Designee, provided
that the Spectrum Stockholders hold more Shares than the TCV Stockholders, provided
further that if the TCV Stockholders hold more Shares than the Spectrum
Stockholders, then the TCV Designee shall serve on such Committee; (2) the GA
Designee, provided that the GA Stockholders hold more Shares than the
TCV Stockholders, provided  further that if the TCV Stockholders
hold more Shares than the GA Stockholders, then the TCV Designee shall serve on
such Committee; and (3) the non-Chief Executive Officer Common Designee provided
that if no person is serving as the non-Chief Executive Officer Common
Designee, then the Common Independent 

 

13

 

Designee. The Audit Committee shall be governed by a charter, which
shall be prepared by such Committee within ninety (90) days of the date hereof and
which shall be subject to  the approval
of the Board, which charter shall provide, among other things, that the Audit
Committee shall be responsible for: (i) making recommendations to the Board as
a whole on the selection of outside auditors, (ii) reviewing audit procedures
and results with the Company’s auditors, (iii) considering any matters arising
from an audit to be brought to the attention of the Board, and (iv) addressing
such other matters as are set forth in the Company’s Bylaws, as amended, or as
normally within the purview of a corporation’s audit committee.

 

2.6           Approval of Certain Transactions.

 

(a)           Without the approval of at least a
majority of the Board (which approval shall include the affirmative vote or
consent of at least one (1) Investor Designee), the Company and its
Subsidiaries will not take any of the following actions:  (i) enter into any Contract (other than
Contracts relating to options to purchase shares of Common Stock that are
approved pursuant to Section 2.5(a) hereof) pursuant to which the
Company or any Subsidiary is to make or receive payments in excess of $2
million, provided  that no such approval shall be required if the
Directors are given (x) sufficient information and detail regarding such
Contract and (y) adequate time to review and consider such information, in each
case, before the Company or such Subsidiary enters into, or otherwise becomes
bound by, any such Contract and no Director has raised any objections thereto
on or before the third day prior to the proposed date of execution of any such
Contract or the date on which the Company or any Subsidiary will become bound
thereby; (ii) incur or authorize the incurrence of Indebtedness if the
incurrence of such Indebtedness, together with existing Indebtedness of the
Company and its Subsidiaries, exceeds in the aggregate 110% of the total
Indebtedness set forth in the Annual Budget that was approved in accordance
with Section 2.6(b)(i) hereof with respect to the Fiscal Year in which
such additional Indebtedness is authorized; or (iii) incur or authorize capital
expenditures in any Fiscal Year if the incurrence of such capital expenditures,
together with any other capital expenditures incurred or authorized during such
Fiscal Year by the Company and its Subsidiaries exceeds in the aggregate 110% of  the total capital expenditures set forth in
the Annual Budget that was approved in accordance with Section 2.6(b)(i)
below with respect to such Fiscal Year in which such additional capital expenditure
is authorized.

 

(b)           Without the approval of at least six
(6) Directors, the Company and its Subsidiaries will not take any of the
following actions:  (i) approve the
Annual Budget; (ii) enter into any Contract (other than Contracts relating to
options to purchase shares of Common Stock that are approved pursuant to Section
2.5(a) hereof) pursuant to which the Company or any Subsidiary is to make
or receive payments in excess of $5 million, provided that no such
approval shall be required if the Directors are given (x) sufficient
information and detail regarding such Contract and (y) adequate time to review
and consider such information, in each case, before the Company or such Subsidiary
enters into, or otherwise becomes bound by, any such Contract and no Director
has raised any objections thereto on or before the third day prior to the
proposed date of execution of any such Contract or the date on which the
Company or any Subsidiary will become bound thereby; (iii) issue or sell
Offered Securities; (iv) enter into, or agree to enter into, a Change of
Control transaction (including any transaction pursuant to Section 3.5
hereof); (v) amend, alter or repeal any provision of the Company’s certificate
of incorporation or Bylaws; (vi) amend, modify or change the Company’s or
any Subsidiary’s 

 

14

 

accounting procedures and internal control procedures; (vii) dismiss or
replace the Company’s independent accountants; (viii) materially change the
nature of the Company’s or any Subsidiary’s business; (ix) amend, alter or
repeal any provision of any Option Plan or adopt a new Option Plan; (x)
authorize the Company or any Subsidiary to acquire all or any interest in any
Person or establish or invest in any joint venture, in each case, where the
value of such transaction is greater than $5 million; (xi) amend, modify or
waive any provision of the Stockholders Agreement; or (xii) amend, modify or
waive any provision of this Agreement; provided, however, the
provisions of this Section 2.6(b)(xii) shall not apply to the waiver of
the applicability of Sections 3.3 and 3.4 hereof in connection
with a Sale by the Investors, and such waiver need only be approved by at least
four (4) Directors.

 

2.7           Observer Rights.

 

(a)           For so long as any of the Spectrum
Stockholders, the ABS Ventures Stockholders, the W Capital Stockholders or the
GA Stockholders, hold shares of Common Stock, the Company shall permit, as the
case may be, one representative of the Spectrum Stockholders (the “Spectrum Observer”), one representative of the ABS Ventures
Stockholders (the “ABS Ventures Observer”),
one representative of the W Capital Stockholders (the “W Capital
Observer”) and one representative of the GA Stockholders (the “GA Observer”; the Spectrum Observer, the ABS Ventures
Observer, the W Capital Observer and the GA Observer are each an “Observer”, and collectively the “Observers”)
to attend, in a non-voting observer capacity, each meeting of the Board. Each
of the Spectrum Stockholders, the ABS Ventures Stockholders, the W Capital
Stockholders and the GA Stockholders may remove its Observer or appoint an
Observer if a vacancy in such position occurs for any reason by delivery of a written
notice to the Secretary of the Company.

 

(b)           The Secretary of the Company and/or
the Board will give each Observer oral or written notice of each meeting of the
Board (whether annual or special) at the same time and in the same manner as
oral or written notice is given to the Directors (which notice may be waived by
each Observer). Notwithstanding the foregoing, if an Observer attends (or, in
the case of a telephonic meeting, listens by telephone to) any such meeting of
the Board, then such Observer shall be deemed to have had proper notice of such
meeting. The Company will permit the Observers to attend (or, in the case of a
telephonic meeting, to listen by telephone to) each meeting of the Board as
non-voting observers. The Company shall provide each Observer all written
materials and other information (including copies of meeting minutes) given to
the members of the Board in connection with any such meeting at the same time
as such information is delivered to the members of the Board and, if an Observer
does not attend (or, in the case of a telephonic meeting, does not listen by
telephone to) a meeting of the Board, such Observer will be entitled, upon
request, to receive the written minutes or an oral summary of the meeting from
the Secretary of the Company. If the Company takes any action by written
consent of the Board in lieu of a meeting of the Board, then the Company shall
give prompt written notice of such action to the Observers. In all cases where
notice, meeting materials or minutes would otherwise be required to be
delivered to an Observer or where an Observer would be permitted to attend a
meeting under this Section 2.7(b), the Company reserves the right not to
provide notice, meeting materials or minutes relating to and to exclude
Observers from any meeting or portion thereof if the Board determines in good
faith that the delivery of such information or attendance at such meeting by
such Observer would result in disclosure of trade secrets to such Observer or
would 

 

15

 

adversely affect the attorney-client privilege between the Company and
its counsel. Notwithstanding anything to the contrary set forth in this
Agreement, at any meeting of the Board, the Board shall have the right, in its
sole discretion, to convene an executive session, and no Observer shall have
the right to attend or otherwise participate in such session.

 

(c)           The initial Spectrum Observer
shall be William P. Collatos, the initial ABS Ventures Observer shall be Pierre
Suhrcke, the initial W Capital Observer shall be Stephen Wertheimer and the
initial GA Observer shall be Alex
Chulack.

 

(d)           Notwithstanding anything to the
contrary set forth in this Agreement, the ABS Ventures Stockholders and the W
Capital Stockholders shall automatically and permanently lose their respective
rights to have an Observer under this Section 2.7 if at any time the ABS
Ventures Stockholders or the W Capital Stockholders, as the case may be, fail
to hold at least the number (as adjusted for any stock splits, reverse stock
splits, consolidations, recapitalizations or the like) of shares of Common
Stock that each such group owns as of the date hereof.

 

SECTION  3

 

RESTRICTIONS ON TRANSFER OF
CAPITAL STOCK

 

3.1           Limitations. Each Stockholder
hereby agrees that it shall not at any time during the term of this Section
3, Sell any Capital Stock except:

 

(a)           by Sale in accordance with this Section
3;

 

(b)           by Sale to a member of such
Stockholder’s Group or, to the extent such Stockholder is a natural person or a
Family Trust, solely for financial planning; provided, that (i) such
transferee becomes a party to this Agreement by executing and delivering to the
Company an Instrument of Accession in substantially the form of Annex I
hereto; and (ii) such a Sale shall not be permitted when such Sale (by itself
or when viewed as one of a series of related transactions) would result in the
circumvention of any of the provisions of this Section 3;

 

(c)           by Sale to the public pursuant to Section
5 hereof;

 

(d)           GapStar, LLC may pledge or otherwise
grant a security interest in all or a portion of its Shares of Capital Stock
owned by it in favor of any financial institution to secure certain obligations
of GapStar, LLC to such institution; or

 

(e)           by Sale in accordance with the put
right, if any, set forth in the Amended and Restated Services Agreement by and
between the Company and Berman.

 

3.2           Securities Laws. Notwithstanding
any other provisions of this Section 3, any Sale of all or part of the
Capital Stock held by any Stockholder may only be made if:

 

(a)           such Sale would not result in a
violation of applicable law, including the Securities Act and any state
securities or “Blue Sky” laws applicable to the Company or the Capital Stock to
be Sold;

 

16

 

(b)           such Sale would not result in the
Company being required to register under section 12(g) of the Exchange Act,
except in the case of a Qualified IPO or exercise by any Stockholder of any
registration rights to which it is entitled; and

 

(c)           if requested by the Board, the
Stockholder shall have provided an opinion of counsel satisfactory to the Board
as to the matters set forth in this Section 3.2 and such other matters
as the Board may reasonably request.

 

3.3           Sales by Stockholders. Except as
otherwise expressly provided herein, each Stockholder hereby agrees that it
shall not Sell any Common Stock except in accordance with the following
procedures:

 

(a)           If a Stockholder (the “Selling Stockholder”) desires to Sell such holder’s Common
Stock, in whole or in part, to a third party (a “Proposed
Transferee”), the Selling Stockholder shall first deliver to the
Company and to each Investor a written offer (the “Sale Notice”)
to sell such shares of Common Stock (the “Offered Common Stock”)
to the Company and the Investors on the terms and conditions, including price,
not less favorable to the Company and the Investors than those on which the
Selling Stockholder proposes to sell such Offered Common Stock to the Proposed
Transferee. The Sale Notice shall disclose (i) the identity of the Proposed
Transferee; (ii) the number of shares of Offered Common Stock proposed to be
sold; (iii) the total number of shares of Capital Stock owned by the Selling
Stockholder; and (iv) the terms and conditions, including the proposed cash
purchase price, of the proposed Sale, and any other material facts relating to
the proposed Sale, and shall be accompanied by a copy of the offer from the
Proposed Transferee, if such offer is in writing. The Sale Notice shall be
irrevocable for a period of thirty (30) days after delivery thereof to the
Company and the Investors (the “Offer Period”).

 

(b)           During the first fifteen (15) days of
the Offer Period, the Company shall have the exclusive option to purchase all
or any part of the Offered Common Stock so offered at the purchase price and on
the terms set forth in the Sale Notice. Such acceptance shall be made by
delivering a written Notice of Acceptance to the Selling Stockholder and the
Investors as to the number of Offered Common Stock that the Company is electing
to purchase within the aforesaid 15-day period. The decision of the Company to
purchase all or any part of such Offered Common Stock shall be made by the vote
of a majority of the Board (excluding any Director who is a designee of the
Selling Stockholder).

 

(c)           During the next ten (10) days of the
Offer Period, if the Company has not elected to purchase all of the Offered
Common Stock as set forth in Section 3.3(b) above (such unpurchased
shares, the “Unpurchased Common Stock”), each
Investor shall have the option to purchase all or any part of its Pro Rata
Share (as among all Investors excluding the Selling Stockholder, if applicable)
of the Unpurchased Common Stock at the purchase price and on the terms set
forth in the Sale Notice. Such acceptance shall be made by delivering a written
Notice of Acceptance to the Selling Stockholder, the Company and each other
Investor as to the number of shares of Unpurchased Common Stock that such
Investor is electing to purchase within the aforesaid 10-day period. Each
Investor shall have the right to assign its rights under this Section 3.3
to any of its Affiliates; provided, that, if any such Affiliate acquires
any Offered Common Stock pursuant to this Section 3.3, then such assignee
shall become a party to this Agreement by 

 

17

 

executing and delivering to the Company an Instrument of Accession in
substantially the form of Annex I attached hereto.

 

(d)           During the next five (5) days of the
Offer Period, if any Investor shall fail to accept, or shall reject in writing,
up to the maximum amount of its Pro Rata Share of the Unpurchased Common Stock
pursuant to Section 3.3(c) above, then, upon the earlier of the
expiration of such 5-day period, or the receipt of Notices of Acceptance or
written rejections of such offer from all Investors, the then remaining
Unpurchased Common Stock (the “Additional Unpurchased
Common Stock”) shall be reoffered to all other Investors, if any,
which shall have accepted their Pro Rata Share of such original offer pursuant
to Section 3.3(c) above. Such subsequent offer shall be on the terms and
subject to acceptance in the manner provided in Section 3.3(c) above,
except that the Investors receiving such subsequent offer shall have:  (A) the right and option to accept such offer
with respect to up to all of the Additional Unpurchased Common Stock in
accordance with their respective Pro Rata Share (as among all Investors
eligible under this subclause (A) to purchase Additional Unpurchased Common
Stock) for a period of five (5) days; and (B) the further right and option to
offer, in any Notice of Acceptance, to purchase any of such Additional
Unpurchased Common Stock, in which case, such Additional Unpurchased Common
Stock shall be deemed to have been offered to and accepted by the Investors
which have exercised their option under this Section 3.3(d) in
accordance with their respective Pro Rata Share (as among all Investors
exercising their option under this subclause (B)), and on the above-described
terms and conditions.

 

(e)           The closing of purchases of Offered
Common Stock by the Company and the Investors, to the extent applicable,
pursuant to this Section 3.3 shall take place no later than sixty
(60) days from the expiration of the Offer Period, at 10:00 A.M. local
time at the principal offices of the Company, or at such other date, time or
place as the parties to the Sale may agree. At the closing, the Selling
Stockholder shall Sell to the purchasers full right, title and interest in and
to the Offered Common Stock purchased by those purchasers, free and clear of
all liens, security interests, adverse claims or restrictions of any kind and
nature (except as otherwise set forth in this Agreement). Simultaneously with
such transfer of title, each purchaser of the Offered Common Stock shall
deliver to the Selling Stockholder, by check or wire transfer of immediately
available funds to such bank account as the Selling Stockholder shall
designate, a cash amount equal to the product of the price per share specified
in the Sale Notice and the number of Offered Common Stock being acquired by
such purchaser, in full payment of the purchase price of the Offered Common
Stock purchased.

 

(f)            If, in the aggregate, the Company and
the Investors have not elected to purchase all of the Offered Common Stock
within the Offer Period, the Selling Stockholder:  (i) shall be under no obligation to sell
any of the Offered Common Stock to the Company or any Investor, unless the
Selling Stockholder so elects; and (ii) may, within ninety (90) days from the
expiration of the Offer Period, and subject to the provisions of Section 3.4
hereof, Sell the then-remaining Offered Common Stock to the Proposed Transferee
pursuant to the terms of the Sale Notice (or, at the Selling Stockholder’s
option, at a price that is higher than the price set forth in the Sale Notice
but otherwise on the terms set forth therein). Upon any such Sale, the Proposed
Transferee to whom Offered Common Stock is transferred shall become a party to
this Agreement by executing and delivering to the Company an Instrument of
Accession in substantially the form of Annex I hereto, shall be a “Stockholder”
under this Agreement and 

 

18

 

shall otherwise be subject to the provisions of this Agreement. Subject
to the other provisions of this Agreement, any Proposed Transferee to whom
Offered Common Stock is transferred pursuant to and in compliance with this Section
3.3 shall succeed to the rights and obligations of the Selling Stockholder
under this Agreement. If the Selling Stockholder does not complete the Sale of
the Offered Common Stock within such 90-day period, the provisions of this Section
3.3 shall again apply, and no Sale of such Offered Common Stock by the
Selling Stockholder shall be made otherwise than in accordance with the terms
of this Agreement.

 

3.4           Co-Sale Rights.

 

(a)           If (i) the aggregate number of shares
of Offered Common Stock has not been purchased pursuant to Section 3.3,
and (ii) the Selling Stockholder still proposes to Sell such unpurchased shares
of Offered Common Stock to the Proposed Transferee, each Investor shall have
the right to sell to the Proposed Transferee, as a condition to such sale by
the Selling Stockholder, at the same price per share and on the same terms and
conditions as applicable to the Selling Stockholder and the shares of Offered
Common Stock to be sold by the Selling Stockholder, its “specified amount” of
the shares proposed to be sold to the Proposed Transferee. The “specified amount” of shares which an Investor shall be
entitled to sell to the Proposed Transferee shall be that number of shares as
shall equal the number of shares of Common Stock proposed to be sold to the
Proposed Transferee, multiplied by a fraction, the numerator of which is the
aggregate of all shares of Common Stock which are then held by such Investor,
and the denominator of which is the aggregate of all shares of Common Stock which
are then held by the Selling Stockholder and all Investors which have elected
to participate in any sale in accordance with this Section 3.4.

 

(b)           Each Selling Stockholder who wishes
to make a Sale to a Proposed Transferee which is subject to this Section 3.4
shall, after complying with the provisions of Section 3.3, give to each
Investor written notice of such proposed Sale, and, if applicable, stating that
all Offered Common Stock were not purchased pursuant to the offer described in Section
3.3. Such written notice shall be given at least fifteen (15) days prior to
the date of the proposed Sale to the Proposed Transferee. Each Investor wishing
to so participate in any Sale under this Section 3.4 shall notify the
Selling Stockholder in writing of such intention within fifteen (15) days after
delivery of the notice described in the preceding sentence.

 

(c)           The Selling Stockholder and each
participating Investor shall sell to the Proposed Transferee all, or at the
option of the Proposed Transferee, any part of the shares proposed to be sold
by them at not less than the price and upon other terms and conditions, if any,
not more favorable to the Proposed Transferee than those specified in the Sale
Notice; provided, however, that any purchase of less than all of
such shares by the Proposed Transferee shall be made from the Selling
Stockholder and each participating Investor pro  rata based upon
the relative number of the shares that the Selling Stockholder and each
participating Investor is otherwise entitled to sell pursuant to Section 3.4(a).

 

(d)           If any shares of Common Stock are
sold pursuant to this Section 3.4 to any purchaser who is not a party to
this Agreement, as a precondition of such Sale, the purchaser of such shares
shall become a party to this Agreement by executing and delivering to the
Company an Instrument of Accession in substantially the form of Annex I
hereto, shall be a “Stockholder” 

 

19

 

under this Agreement, shall be subject to the provisions of this
Agreement and such shares shall continue to be subject to the provisions of
this Agreement.

 

(e)           The parties hereto acknowledge the
provisions of Section 5.1(d) of the Stockholders Agreement.

 

3.5           Drag-Along Rights.

 

(a)           In
the event that holders of at least 50% of the then issued and outstanding
shares of Common Stock (the “Requisite Parties”)
approve a bona fide written offer that proposes a Change of Control transaction
that is approved by the Board pursuant to Section 2.6(b) hereof, then
each Stockholder shall take all action necessary or expedient to approve and
consummate such transaction (including the replacement of any Director, if
necessary) and shall consent to and vote its shares of Capital Stock for such
Change of Control transaction, and if such Change of Control transaction is
structured as (i) a merger, consolidation, reorganization or similar
business transaction involving the Company
or a sale, license, lease or disposition of all or substantially all of the Company’s assets, each Stockholder shall
waive any dissenters’ rights, appraisal rights or similar rights in connection
with such merger, consolidation or sale, license, lease or disposition, or (ii)
a sale of the stock of the Company, each Stockholder shall agree to sell its
shares of Capital Stock on the terms and conditions approved by the Requisite
Parties.

 

(b)           If
a Stockholder fails or refuses to vote or sell its shares of Capital Stock as
required by this Section 3.5, then such party hereby irrevocably
constitutes and appoints the Requisite Parties and any representative or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority (such power and
authority coupled with an interest in the shares of Capital Stock) in the place
and stead of such Stockholder and in the name of such party or in its own name,
for the purpose of carrying out the terms of this Section 3.5, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Section 3.5. Such Stockholder hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof.

 

(c)           At the closing of the Change of
Control transaction, (i) if required by the definitive agreements governing
such Change of Control transaction, the Stockholders shall deliver certificates
representing the Capital Stock being sold, duly endorsed for transfer, and such
Capital Stock shall be free and clear of any liens, encumbrances and adverse claims
(other than those arising hereunder and those attributable to actions by the
purchasers thereof) and the Stockholders shall so represent and warrant, and
shall further represent and warrant that they are the sole beneficial and
record owner of such Capital Stock; (ii) the purchaser in such Change of
Control transaction or a paying agent (if so provided in the definitive
agreements governing such Change of Control transaction) shall deliver to the
Stockholders payment in full in immediately available funds for the shares of
Capital Stock purchased by it; and (iii) the parties to such Change of Control
transaction shall execute such additional documents as are otherwise necessary
or appropriate to effectuate the Change of Control transaction; provided,
however, that, notwithstanding anything to the contrary in this
Agreement, none of the Stockholders shall be obligated to make any
representations, warranties, covenants (other than reasonable covenants
regarding confidentiality, publicity and similar matters) or indemnities with
respect to the 

 

20

 

business of the Company or any Subsidiary in any document delivered in
connection with such Change of Control transaction, except that to the extent
that the purchaser in such Change of Control transaction requires, as a
condition to such Change of Control transaction, that a portion of the purchase
price paid in such Change of Control transaction be placed in escrow to secure
the Company’s obligations arising from a breach of its representations,
warranties and/or covenants in the definitive agreement governing such Change
of Control transaction, the Stockholders shall participate in such escrow on a
pro rata basis calculated based upon the amount of the purchase price paid to
each such Stockholder, provided that in no event shall any Stockholder’s
indemnification obligations under a Change of Control transaction exceed the
proceeds payable to such Stockholder. Each Stockholder shall receive the same
form and amount of consideration as the Requisite Parties receive in connection
with such Change of Control transaction, except to the extent necessary to
comply with applicable securities laws, in which case, such Stockholder shall
instead receive a cash payment of equal value.

 

(d)           The parties hereto acknowledge the
provisions of Section 5.1(e) of the Stockholders Agreement.

 

SECTION  4

 

SALE OF SECURITIES BY THE COMPANY

 

4.1           Restriction on Sale or Issuance of Offered
Securities. The Company shall not issue, Sell or exchange, agree
or obligate itself to issue, Sell or exchange, or reserve or set aside for
issuance, Sale or exchange, any (a) shares of Common Stock; (b) any
other equity security of the Company; (c) any debt security of the Company
(other than debt with no equity feature), including, without limitation, any
debt security which by its terms is convertible into or exchangeable for any
equity security of the Company; (d) any security of the Company that is a
combination of debt and equity; or (e) any option, warrant or other right
to subscribe for, purchase or otherwise acquire any such equity security or any
such debt security of the Company, unless, in each case, the Company shall have
first offered to sell such securities (the “Offered Securities”)
to the Investors, the Two Percent Stockholders and Berman (the Investors, the
Two Percent Stockholders and Berman are sometimes hereinafter referred to as a “Participating Stockholder” and collectively the “Participating Stockholders”) in accordance with the
provisions set forth in this Section 4.

 

4.2           Rights Generally; Exclusions.

 

(a)           Each Participating Stockholder shall
have the right to purchase: (i) a number of Offered Securities equal to,
immediately prior to the issuance of such Offered Securities, a percentage which
expresses the ratio between (x) the number of shares of Capital Stock (on a
fully diluted basis) owned at such time by such Participating Stockholder, and
(y) the aggregate number of shares of Capital Stock (on a fully diluted basis)
then owned by all Participating Stockholders at such time (the “Basic Amount”), and (ii) such additional portion of
the Offered Securities as such Participating Stockholder shall indicate it will
purchase should the other Participating Stockholders subscribe for less than
their Basic Amounts (the “Undersubscription Amount”),
at a price and on such other terms as shall have been specified by the Company
in a writing delivered to such Participating Stockholder (the “Offer”), which Offer by its terms shall 

 

21

 

remain open and irrevocable for a period of fifteen (15) days from
receipt of the Offer.

 

(b)           Notwithstanding anything set forth in
this Section 4, the Participating Stockholders shall not have the right
to participate in any offering of the following securities:  (i) any shares of Capital Stock issued to a
strategic partner as an equity incentive where (A) the primary purpose is not
financing and (B) such issuance has been approved by a majority of the Board;
(ii) any shares of Capital Stock or options to purchase Capital Stock
(including any shares of Capital Stock issued or issuable upon exercise of any
such options) issued pursuant to the Option Plans provided that the issuance of
such shares of Capital Stock or the granting of such options to purchase shares
of Capital Stock has been approved pursuant to Section 2.5(a) hereof and
adoption of such Option Plan has been approved pursuant to Section 2.6(b)(ix)
hereof; (iii) any shares of Capital Stock issued upon stock splits, subdivisions, combinations, stock dividends, or similar
recapitalizations; (iv) any shares of Capital Stock issued pursuant to
public offerings registered under the Securities Act; (v) Capital Stock issued to banks, landlords, lenders or equipment
lessors in connection with debt financing approved by a majority of the Board;
and (vi) any shares of Capital Stock the issuance of which is approved by the
Board pursuant to Section 2.6(b)(x) hereof.

 

4.3           Procedures.

 

(a)           Notice of each Participating
Stockholder’s intention to accept, in whole or in part, any Offer made pursuant
to Section 4.2(a) shall be evidenced by a writing signed by such
Participating Stockholder and delivered to the Company prior to the end of the
15-day period of such Offer, setting forth such of the Participating
Stockholder’s Basic Amount as such Participating Stockholder elects to purchase
and, if such Participating Stockholder shall elect to purchase all of its Basic
Amount, such Undersubscription Amount as such Participating Stockholder wishes
to purchase (the “Notice of Acceptance”). If the
Basic Amounts subscribed for by all Participating Stockholders are less than
the total Offered Securities, then each Participating Stockholder who has set
forth Undersubscription Amounts in its Notice of Acceptance shall be entitled
to purchase, in addition to the Basic Amounts subscribed for, all
Undersubscription Amounts it has subscribed for; provided, however,
that should the Undersubscription Amounts subscribed for exceed the difference
between the Offered Securities and the Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Participating
Stockholder who has subscribed for any Undersubscription Amount shall be
entitled to purchase only that portion of the Available Undersubscription
Amount as the Undersubscription Amount subscribed for by such Participating
Stockholder bears to the total Undersubscription Amounts subscribed for by all
Participating Stockholders, subject to rounding by the Board to the extent it
reasonably deems necessary.

 

(b)           (i) In the event that Notices of
Acceptance are not given by the Participating Stockholders in respect of all
the Offered Securities, the Company shall have ninety (90) days from the
expiration of the period set forth in Section 4.2(a) to close the sale
of all or any part of such Offered Securities as to which a Notice of
Acceptance has not been given by the Participating Stockholders (the “Refused Securities”) to the Person or Persons specified in
the Offer, but only for cash and otherwise in all respects upon terms and
conditions, including, without limitation, unit price and interest rates, which
are no more favorable to such other Person or Persons or less favorable to the
Company than those set forth in the Offer.

 

22

 

(ii)           In
the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in Section
4.3(b)(i) above), then each Participating Stockholder may, at its sole
option and in its sole discretion, reduce the number of, or other units of the
Offered Securities specified in its Notice of Acceptance to an amount which
shall be not less than the amount of the Offered Securities which the
Participating Stockholder elected to purchase pursuant to Section 4.3(a)
multiplied by a fraction, (A) the numerator of which shall be the amount
of Offered Securities which the Company actually proposes to sell, and (B) the
denominator of which shall be the amount of all Offered Securities initially
proposed to be sold by the Company. In the event that any Participating
Stockholder so elects to reduce the number or amount of Offered Securities
specified in its Notice of Acceptance, the Company may not sell or otherwise
dispose of more than the reduced amount of the Offered Securities until such
securities have again been offered to the Participating Stockholders in
accordance with this Section 4.

 

(iii)          Upon
the closing, which shall include full payment to the Company, of the sale to
such other Person or Persons of all or less than all the Refused Securities,
the Participating Stockholders shall purchase from the Company, and the Company
shall sell to the Participating Stockholders, the number of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to Section 4.3(b)(ii)
if the Participating Stockholders have so elected, upon the terms and
conditions specified in the Offer. The purchase by the Participating
Stockholders of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Participating
Stockholders of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Company and the
Participating Stockholders and their respective counsels.

 

(c)           In each case, any Offered Securities
not purchased by the Participating Stockholders or other Person or Persons in
accordance with this Section 4 may not be sold or otherwise disposed of
until they are again offered to the Participating Stockholders  under the procedures specified in this Section
4.

 

(d)           Each Participating Stockholder shall
have the right to assign its rights under this Article 4 to any of its
Affiliates; provided that, if any such Affiliate acquires any Offered
Securities pursuant to this Article 4, then such assignee shall become a party
to this Agreement by executing and delivering to the Company an Instrument of
Accession in substantially the form of Annex I hereto.

 

SECTION  5

 

REGISTRATION RIGHTS

 

5.1           Required
Registration.

 

(a)           At any time after 180 days after the
closing of the Company’s initial public offering of securities, Investors
(other than the ABS Ventures Stockholders and the W Capital Stockholders) that
hold at least 50% of the Restricted Securities then held by all Investors
(other 

 

23

 

than the ABS Ventures Stockholders and the W Capital Stockholders) may
by written notice to the Company request the Company to register under the
Securities Act all or any portion of the shares of Restricted Securities held
by such requesting holder or holders for sale in the manner specified in such
notice, provided that the shares of Restricted Securities for which
registration has been requested have a reasonably anticipated aggregate price
to the public in excess of $15,000,000. The only securities which the Company
shall be required to register pursuant to Sections 5.1, 5.2 and 5.3
shall be shares of Common Stock.

 

(b)           Within five (5) business days after
the Company’s receipt of a notice under Section 5.1(a), the Company
shall notify all holders of Restricted Securities from whom notice has not been
received. The Company shall use its best efforts to register under the
Securities Act, for public sale in accordance with the method of disposition
specified in any notice from requesting holders, the number of shares of
Restricted Securities specified in such notice (and in all notices received by
the Company from other holders of Restricted Securities within thirty (30) days
after the giving of such notice by the Company in accordance with Section 8.6
hereof). If such method of disposition shall be an underwritten public
offering, the Company shall designate the managing underwriter of such
offering, subject to the approval of the holders of a majority of the shares of
Restricted Securities held by the holders of Restricted Securities to be sold
in such offering, which shall not be unreasonably withheld, conditioned or
delayed. In the event that any registration pursuant to this Section 5.1
shall be, in whole or in part, an underwritten public offering of Common Stock,
the number of shares of Restricted Securities to be included in such an
underwriting may be reduced (pro  rata among all holders of
Restricted Securities participating in such registration based upon the number
of shares of Restricted Securities owned by such holders) if and to the extent
that the managing underwriter shall in good faith determine that such reduction
is necessary; provided, however, that the number of shares of
Restricted Securities held by such holders to be included in such underwriting
shall not be reduced unless (i) first all other securities of the
Company (other than the securities being registered by the Company) and
(ii) second all Restricted Securities held by all Stockholders (other
than the Investors (other than the ABS Ventures Stockholders and the W Capital
Stockholders)) are, in each case, first entirely excluded from such
underwriting. The Company shall be obligated to register, pursuant to this Section 5.1,
Restricted Securities on three (3) occasions only; provided, however,
that, except as provided for herein, in each case, such obligation shall be
deemed satisfied only when a registration statement covering all shares of
Restricted Securities specified in notices received as aforesaid, for sale in
accordance with the method of disposition specified by the requesting holders,
shall have become effective and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall have been sold
pursuant thereto.

 

(c)           In any registration statement
requested pursuant to this Section 5.1, the Company shall be entitled to
include, for sale in accordance with the method of disposition specified by the
requesting holders, shares of Common Stock to be sold by the Company for its
own account. If such method of disposition shall be an underwritten public
offering and in the opinion of the managing underwriter such inclusion would
adversely affect the marketing of the Restricted Securities to be sold, then
the Company shall reduce the number of shares of Common Stock to be sold by the
Company for its own account to that number which, in the opinion of the
managing underwriter, would not adversely affect the marketing of the
Restricted Securities requested to be sold. Except for registration statements
on Form S-4 or Form S-8, or any successor thereto, the Company shall not file
with the Commission any other registration 

 

24

 

statement with respect to its Common Stock, whether for its own account
or that of other stockholders, from the date of receipt of a notice from
requesting holders pursuant to this Section 5.1 until the completion of
the period of distribution contemplated thereby.

 

5.2           Incidental Registration. If the
Company at any time (other than pursuant to Section 5.1 or 5.3)
proposes to register any of its securities under the Securities Act for sale to
the public, whether for its own account or for the account of other security
holders or both (except with respect to registration statements on
Form S-4 or S-8 or another form not available for registering the
Restricted Securities for sale to the public or in connection with a Rule 145
transaction), each such time it will give written notice to all holders of
Restricted Securities of its intention so to do (which request shall state the
intended method of disposition of such securities). Upon the written request of
any such holder, received by the Company within thirty (30) days after the
giving of any such notice by the Company in accordance with Section 8.6 hereof,
to register any of its shares of Restricted Securities, the Company will use
its best efforts to cause the Restricted Securities as to which registration
shall have been so requested to be included in the securities to be covered by
the registration statement proposed to be filed by the Company, all to the
extent requisite to permit the sale or other disposition by the holder of such
Restricted Securities so registered. In the event that any registration pursuant
to this Section 5.2 shall be, in whole or in part, an underwritten
public offering of Common Stock, and the managing underwriter determines in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, the number of shares that may be included in the
underwriting shall be allocated first, to the Company if the
registration is for the Company’s account or to the security holders for whose
account the registration is made, and for the account of both, the Company and
such security holders, on a pro  rata basis; second, to the
holders of Restricted Securities requesting to register shares in such
underwritten public offering on a pro  rata basis based on the
total number of shares of Restricted Securities held by such holders requesting
to register shares in such underwritten public offering provided that the ABS
Ventures Stockholders and the W Capital Stockholders shall be entitled to
participate in such registration pursuant to this clause only if all other
holders of Restricted Securities are allowed to register the entire amount of
shares of Restricted Securities sought to be registered by such holders; and third,
to any stockholder of the Company (other than a holder of Restricted
Securities) on a pro  rata basis. Notwithstanding the foregoing
provisions, the Company shall have the right to postpone or withdraw any
registration statement referred to in this Section 5.2 without
thereby incurring any liability to the holders of Restricted Securities.

 

5.3           Registration on Form S-3. If
at any time (i) any Stockholder requests that the Company file a
registration statement on Form S-3 or any successor thereto for a public
offering of all or any portion of the shares of Restricted Securities held by
such requesting holder or holders, the reasonable anticipated aggregate price
to the public which would exceed  $5,000,000 (based
on the then current public market price) and (ii) the Company is a
registrant entitled to use Form S-3 or any successor thereto to register
such shares, then the Company shall use its best efforts to register under the
Securities Act on Form S-3 or any successor thereto, for public sale in
accordance with the method of disposition specified in such notice, the number
of shares of Restricted Securities specified in such notice. Whenever the
Company is required by this Section 5.3 to use its best efforts to
effect the registration of Restricted Securities, each of the procedures and
requirements of Section 5.1 (including, but not limited to, the
requirement that the Company notify all holders of Restricted Securities from
whom notice has not been received 

 

25

 

and provide them with the opportunity to participate in the offering)
shall apply to such registration; provided,
however, that there shall be no limitation on the number of
registrations on Form S-3 or any successor thereto which may be requested and
obtained pursuant to this Section 5.3; provided, further,
that the Company shall not be required to effect more than two registrations
pursuant to this Section 5.3 within any 12 month period; and provided,
further, that the requirements contained in the first sentence of Section 5.1(a)
shall not apply to any registration on Form S-3 which may be requested and
obtained under this Section 5.3.

 

5.4           Limitations. The Company shall not
be required to effect any registration within 180 days after the effective date
of any other registration statement covering a firm commitment underwritten
public offering in which the holders of Restricted Securities shall have been
entitled to join pursuant to Section 5.2 or 5.3 and in which
there shall have been effectively registered all shares of Restricted
Securities as to which registration shall have been requested. If at the time
of any request to register Restricted Securities by Investors pursuant to Section
5.1 or 5.3, the Company is engaged or has plans to engage in a
registered public offering or is engaged in any other activity which, in the
good faith determination of the Board, would be adversely affected by the
requested registration, then the Company may at its option direct that such
request be delayed for a period not in excess of 120 days from the date of such
request, such right to delay a request to be exercised by the Company not more
than once in any 12-month period.

 

5.5           Registration Procedures. If and
whenever the Company is required by the provisions of Section 5.1, 5.2
or 5.3 to use its best efforts to effect the registration of any shares
of Restricted Securities under the Securities Act, the Company will, as
expeditiously as possible:

 

(a)           prepare and file with the Commission
a registration statement (which, in the case of an underwritten public offering
pursuant to Section 5.1, shall be on Form S-1 or other form of
general applicability satisfactory to the managing underwriter selected as
therein provided) with respect to such securities and use its best efforts to
cause such registration statement to become and remain effective for the period
of the distribution contemplated thereby (determined as hereinafter provided);

 

(b)           prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and
comply with the provisions of the Securities Act with respect to the
disposition of all Restricted Securities covered by such registration statement
in accordance with the sellers’ intended method of disposition set forth in
such registration statement for such period;

 

(c)           furnish to each seller of Restricted
Securities and to each underwriter such number of copies of the registration
statement and the prospectus included therein (including each preliminary
prospectus), and any amendments or supplements to any of the foregoing, as such
seller reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Securities covered by such registration
statement;

 

(d)           use its best efforts to register or
qualify the Restricted Securities covered by such registration statement under
the securities or “blue sky” laws of such jurisdictions in the United States as
the sellers of Restricted Securities or, in the case of an underwritten public
offering, the 

 

26

 

managing underwriter reasonably shall request; provided, however,
that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;

 

(e)           use its best efforts to list the
Restricted Securities covered by such registration statement with any
securities exchange or over-the-counter market on which the Common Stock is
then listed or quoted, as the case may be;

 

(f)            provide a transfer agent and
registrar for all such shares of Restricted Securities, not later than the
effective date of such registration statement;

 

(g)           as promptly as practicable notify
each seller of Restricted Securities and each underwriter under such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event of which the Company has knowledge as a result of which the prospectus
contained in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;

 

(h)           if the offering is underwritten and
at the request of any seller of Restricted Securities, use its best efforts to
furnish on the date that Restricted Securities is delivered to the underwriters
for sale pursuant to such registration: 
(i) an opinion dated such date of counsel representing the Company
for the purposes of such registration, addressed to the underwriters, stating
that such registration statement has become effective under the Securities Act
and substantially to the effect that (A) to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (B) the registration statement, the
related prospectus and each amendment or supplement thereof comply as to form
in all material respects with the requirements of the Securities Act (except
that such counsel need not express any opinion as to financial statements
contained therein), (C) nothing has come to the attention of such counsel
during the course of their representation of the Company that leads them to believe
that the registration statement, the related prospectus or any amendment or
supplement thereof (except as to the financial statements (including the notes
thereto) and schedules and other financial and statistical data contained or
incorporated by reference therein as to which such counsel need not express any
opinion or belief) at the time the registration statement became effective
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the prospectus as of its date or the date on
which the shares being offered are sold to the underwriters, or any later date
on which the underwriters purchase shares subject to an over allotment option,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that such counsel
expresses no comment, opinion or belief as to any financial statements
(including the notes thereto) and schedules and other financial or statistical
data contained in the registration statement, the related prospectus or any
amendment or supplement thereof), and (D) to such other effects as are
customary and reasonably may be 

 

27

 

requested by counsel to the underwriters or by such seller or its
counsel (it being understood that if a change in the laws of the United States
has occurred, such opinion shall be in a form then customary for an
underwritten public offering); and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion
of such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to
the period ending no more than five (5) business days prior to the date of such
letter) with respect to such registration as such underwriters reasonably may
request;

 

(i)            make available, upon reasonable
notice, for inspection by each seller of Restricted Securities, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by such seller or underwriter,
all financial and other records, pertinent corporate documents and properties
of the Company, and cause the Company’s officers, directors and employees to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent for purposes of verifying the information in such
registration statement (including the absence of any omission therein) in
connection with such registration statement;

 

(j)            advise each seller of Restricted
Securities, promptly after it shall receive notice or obtain knowledge thereof,
of the issuance of any stop order by the Commission suspending the
effectiveness of such registration statement or the initiation or threatening
of any proceeding for such purpose and promptly use all reasonable efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such stop
order should be issued;

 

(k)           cooperate with the selling holders of
Restricted Securities and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Restricted
Securities to be sold, such certificates to be in such denominations and
registered in such names as such holders or the managing underwriters may
request at least two (2) business days prior to any sale of Restricted
Securities; and

 

(l)            permit any holder of Restricted
Securities which holder, in the reasonable judgment, exercised in good faith,
of such holder, could reasonably be expected to be deemed to be a controlling
person of the Company, to participate in good faith in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder should be included, subject to review and the reasonable
approval by the Company and its counsel after consultation with such holder.

 

For purposes of Sections 5.5(a),
5.5(b) and 5.1(c), the period of distribution of Restricted
Securities in a firm commitment underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Restricted Securities in any
other registration shall be deemed to extend until the earlier of the sale of
all Restricted Securities covered thereby and 180 days after the effective

 

28

 

date thereof.

 

In connection with each
registration hereunder, the sellers of Restricted Securities will furnish to
the Company in writing such information with respect to themselves and the
proposed distribution by them as reasonably shall be necessary in order to
assure compliance with federal and applicable state securities laws.

 

In connection with each
registration pursuant to Section 5.1, 5.2 or 5.3
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company’s size and investment stature and as
are consistent with the terms of this Agreement.

 

5.6           Expenses. Except as specifically
provided for herein, the Company will pay all Registration Expenses in
connection with each registration statement under Section 5.1, 5.2
or 5.3. All Selling Expenses in connection with each registration
statement under Section 5.1, 5.2 or 5.3 shall be
borne by the participating sellers in proportion to the number of shares sold
by each, or by such participating sellers other than the Company (except to the
extent the Company shall be a seller) as they may agree.

 

5.7           Indemnification and Contribution.

 

(a)           In the event of a registration of any
of the Restricted Securities under the Securities Act pursuant to Section 5.1,
5.2 or 5.3, the Company will indemnify and hold harmless each
seller of such Restricted Securities thereunder, each underwriter of such
Restricted Securities thereunder and each other Person, if any, who controls
such seller or underwriter within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
seller, underwriter or controlling Person may become subject under the
Securities Act, the Exchange Act, state securities laws or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
Restricted Securities was registered under the Securities Act pursuant to Section 5.1,
5.2 or 5.3, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and the Company will reimburse each such seller, each such
underwriter and each such controlling Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, preliminary prospectus or final prospectus,
or any such amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of such seller,
underwriter or controlling Person specifically for use in the preparation
thereof; provided, further, however, that the Company will
not be liable, in the case of any registration of any Restricted Securities
under the Securities Act pursuant to Section 5.3  

 

29

 

hereof, to the extent that that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus or final prospectus, or any such amendment or supplement
if (1) the Company satisfied its obligations under Section 5.5(c)
hereof; (2) such holder failed to send or deliver a copy of the final
prospectus or prospectus supplement with or prior to the delivery of written
confirmation of the sale of the Restricted Securities; and (3) such final
prospectus or prospectus supplement would have corrected such untrue statement
or omission.

 

(b)           In the event of a registration of any
of the Restricted Securities under the Securities Act pursuant to Section 5.1,
5.2 or 5.3, each seller of such Restricted Securities thereunder,
severally and not jointly, will indemnify and hold harmless the Company, each
Person, if any, who controls the Company within the meaning of the Securities
Act, each officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each Person who controls any
underwriter within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
officer, director, underwriter or controlling Person may become subject under
the Securities Act, the Exchange Act, state securities law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Restricted Securities were registered under the Securities Act
pursuant to Section 5.1, 5.2 or 5.3, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and such seller will
reimburse the Company and each such officer, director, underwriter and
controlling Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, preliminary prospectus or final prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by or
on behalf of such seller specifically for use in the preparation thereof; and provided,
further, however, that the liability of each seller hereunder
shall not in any event exceed the net proceeds received by such seller from the
sale of Restricted Securities covered by such registration statement.

 

(c)           Promptly after receipt by an
indemnified party hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party hereunder, notify the indemnifying party in writing
thereof, but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to such indemnified party other than
under this Section 5.7 and shall only relieve it from any liability
which it may have to such indemnified party under this Section 5.7
if and to the extent the indemnifying party is prejudiced by such omission. In
case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably

 

30

 

satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 5.7 for any legal
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of liaison
with counsel so selected; provided, however, that, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded,
upon the advice of legal counsel, that (i) there may be reasonable defenses
available to it which are different from or additional to those available to
the indemnifying party or (ii) the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, then the indemnified party shall have the right to select one (1)
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by
the indemnifying party as incurred.

 

(d)           If for any reason the indemnification
provided for in Section 5.7(a) or 5.7(b) hereof is unavailable to
an indemnified party, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by the indemnifying party and the indemnified party, but also the relative
fault of the indemnifying party and the indemnified party in connection with
the actions that resulted in such loss, claim, damage or liability, as well as
any other relevant equitable considerations, provided that no holder of
Restricted Securities shall be required to contribute an amount greater than
the dollar amount of the net proceeds actually received by such holder with
respect to the sale of the Restricted Securities giving rise to such contribution
obligation. The relative fault of such indemnifying party and indemnified party
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such indemnifying party or indemnified
party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages or liabilities referred to
above shall be deemed to include, subject to the limitations set forth herein,
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this Section 5.7(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. 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.

 

5.8           Changes in Common Stock. If, and as
often as, there is any change in the Common Stock by way of a stock split,
stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock as so changed.

 

5.9           Rule 144 Reporting. With a view to
making available the benefits of certain 

 

31

 

rules and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, at
all times after ninety (90) days after any registration statement covering
a public offering of securities of the Company under the Securities Act shall
have become effective, the Company agrees to:

 

(a)           make and keep public information
available, as those terms are understood and defined in Rule 144 under the
Securities Act;

 

(b)           use its best efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and

 

(c)           furnish to each holder of Restricted
Securities forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of such Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as such holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing such holder to sell any Restricted
Securities without registration.

 

5.10         No Third Party Registration Rights.
The Company represents and warrants that there are no holders of its capital
stock entitled to registration rights immediately prior to the date hereof, and
agrees that it shall not grant to any third party any registration rights
without the prior written consent of the Investors (other than the ABS Ventures
Stockholders and the W Capital Stockholders) that hold a majority of the
Restricted Securities then held by all Investors (other than the ABS Ventures
Stockholders and the W Capital Stockholders), so long as any of the
registration rights under this Agreement remains in effect.

 

5.11         Lock-Up. Each Stockholder agrees
not to sell publicly any shares of Capital Stock owned (beneficially or of
record) by such Stockholder or any other shares of Common Stock (other than
shares of Restricted Securities or other shares of Common Stock being
registered in a public offering of the Company’s securities contemplated under
this Section 5.11), without the consent of the managing underwriters of
such offering, for a period of not more than: (x) 180 days following the
effective date of the registration statement relating to an initial public
offering of the Company’s securities or for such shorter period requested by
the underwriters and (y) ninety (90) days following the effective date of the
registration statement relating to any underwritten offering of the Company’s
securities (other than its initial public offering) or for such shorter period
requested by the underwriters; provided, however, that (a) all
Persons entitled to registration rights with respect to shares of Common Stock
who are not parties to this Agreement, all other persons selling shares of
Common Stock in such offering, all persons holding in excess of one percent (1%)
of the capital stock of the Company on a fully diluted basis and all executive
officers and directors of the Company shall also have agreed not  to sell publicly their Common Stock under the circumstances
and pursuant to the terms set forth in this Section 5.11; (b) such
agreement only applies to a registration statement of the Company including
securities to be sold on its behalf to the public in an underwritten offering;
(c) any discretionary waiver or termination of the restrictions of such
agreements by the Company or the managing underwriter of such offering shall
apply to all Persons subject to such agreements pro  rata based on
the number of shares of Common Stock subject to such agreements; and (d) shares
of Common Stock purchased in the open market or from the several underwriters
on or after the 

 

32

 

date of the effectiveness of the registration statement shall not be
restricted from transfer under such agreements.

 

5.12         Compliance. Subject to the
compliance by the Company with the provisions hereof, each seller of Restricted
Securities covenants and agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection
with sales of Restricted Securities pursuant to a registration statement
hereunder (excluding any underwritten public offering).

 

5.13         Discontinued Disposition. Each
seller of Restricted Securities agrees by its acquisition of such Restricted
Securities that, upon receipt of a written notice from the Company of the
occurrence of any event of the kind described in Section 5.5(g) or 5.5(j),
such seller of Restricted Securities will forthwith discontinue disposition of
such Restricted Securities under the registration statement until such seller
of Restricted Securities has received copies of the supplemented prospectus
and/or amended registration statement or until it is advised in writing by the
Company that the use of the applicable prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such prospectus or
registration statement. The Company may provide appropriate stop orders to
enforce the provisions of this

Section 5.13.

 

SECTION  6

 

COVENANTS

 

6.1           Financial Statements, Reports, Etc.
The Company shall furnish to each Investor:

 

(a)           as soon as available, and in any
event within 120 days after the end of each Fiscal Year, an audited
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such Fiscal Year and the related audited consolidated statements of income,
stockholders’ equity and cash flows for the Fiscal Year then ended, prepared in
accordance with generally accepted accounting principles in effect in the
United States and certified by a firm of independent public accountants of
recognized national standing selected by the Board;

 

(b)           as soon as available, and in any
event within thirty (30) days after the end of each calendar quarter in each
Fiscal Year, a consolidated balance sheet of the Company and its
Subsidiaries and the related consolidated statements of income, stockholders’
equity and cash flows, unaudited but prepared in accordance with generally
accepted accounting principles in effect in the United States and certified by
the chief financial officer or chief accounting officer of the Company, such
consolidated balance sheet to be as of the end of such calendar quarter and
such consolidated statements of income, stockholders’ equity and cash flows to
be for such calendar quarter and for the period from the beginning of the
Fiscal Year to the end of such calendar quarter, in each case, with comparison
to budget and comparative statements for the prior Fiscal Year;

 

(c)           as soon as available, and in any
event within thirty (30) days after the end of each month in each Fiscal Year,
a consolidated balance sheet of the Company and its Subsidiaries and the
related consolidated statements of income, stockholders’ equity and cash
flows, unaudited 

 

33

 

but prepared in accordance with generally accepted accounting
principles in effect in the United States and certified by the chief financial
officer or chief accounting officer of the Company, such consolidated balance
sheet to be as of the end of such month and such consolidated statements of
income, stockholders’ equity and cash flows to be for such month and for the
period from the beginning of the Fiscal Year to the end of such month, in each
case, with comparison to budget and comparative statements for the prior Fiscal
Year;

 

(d)           at the time of delivery of the
financial statements pursuant to Sections 6.1(a), 6.1(b) and 6.1(c),
a certificate executed by the chief financial officer or chief accounting
officer of the Company stating that such officer has caused this Agreement to
be reviewed and has no knowledge of any default by the Company or any of its
Subsidiaries in the performance or observance of any of the provisions of this
Agreement or, if such officer has such knowledge, specifying such default and
the nature thereof;

 

(e)           at the time of delivery of each of
the statement pursuant to Sections 6.1(b) and 6.1(c), a
management narrative report explaining all significant variances from forecasts
and all significant current developments in staffing, marketing, sales and
operations;

 

(f)            no later than thirty (30) days prior
to the start of each Fiscal Year, a detailed business plan for the next Fiscal
Year for the review and approval of the Board, and no later than thirty (30)
days prior to the start of each Fiscal Year, consolidated capital and operating
expense budgets, cash flow projections and income and loss projections for the
Company and its Subsidiaries in respect of such Fiscal Year for review and
approval of the Board (the “Annual Budget”),
all itemized in reasonable detail and prepared on a monthly basis, and,
promptly after preparation, any revisions to any of the foregoing;

 

(g)           promptly following receipt by the
Company, but in any event within ten (10) days of receipt thereof, each audit
response letter, accountant’s management letter and other written report
submitted to the Company by its independent public accountants in connection
with an annual or interim audit of the books of the Company or any of its
Subsidiaries;

 

(h)           promptly after the commencement
thereof, but in any event within ten (10) days of receipt of notice thereof,
notice of any and all of the following:

 

(i)            any
(A) action, suit, claim, proceeding or investigation pending, or to the Company’s
Knowledge, threatened against or affecting the Company, at law or in equity, or
before any Governmental Entity; (B) arbitration proceeding relating to the
Company pending under collective bargaining agreements or otherwise; or
(C) inquiry by any Governmental Entity pending or, to the Company’s
Knowledge, threatened against or affecting the Company (including without
limitation any inquiry as to the qualification of the Company to hold or
receive any Permit);

 

(ii)           any
action, suit, claim, proceeding or investigation by the Company pending,
threatened or contemplated against others;

 

(iii)          receipt
of any opinion or memorandum or written legal advice from legal counsel to the
effect that the Company is exposed, from a legal standpoint, to any liability
or disadvantage which could reasonably be expected to have a Material Adverse
Effect;

 

34

 

(iv)          any
default with respect to any Governmental Order.

 

(i)            promptly upon sending, making
available or filing the same, all press releases, reports, financial
statements, or other correspondence or information that the Company sends or
makes available to its stockholders; and

 

(j)            promptly, from time to time, such
other information regarding the business, prospects, financial condition,
operations, property or affairs of the Company and its Subsidiaries as such Investor
reasonably may request.

 

6.2           Corporate Existence. The Company
shall preserve and maintain and, except as otherwise permitted by Section 6.12
hereof, cause each of its Subsidiaries to preserve and maintain, their
respective corporate existence, rights and franchises in full force and effect.
The Company shall qualify and remain qualified, and cause each Subsidiary to
qualify and remain qualified, as a foreign corporation in each jurisdiction in
which such qualification is necessary or desirable in view of its business and
operations or the ownership or lease of its properties. The Company shall
secure, preserve and maintain, and cause each Subsidiary to secure, preserve
and maintain, all licenses and other rights to use Intellectual Property Rights
and deemed by the Company to be necessary to the conduct of its business and
the businesses of its Subsidiaries, taken as a whole.

 

6.3           Maintenance of Properties. The
Company shall maintain and preserve, and cause each of its Subsidiaries to
maintain and preserve, all of their respective properties and assets, necessary
for the proper conduct of respective businesses, in good repair, working order
and condition, ordinary wear and tear excepted.

 

6.4           Maintenance of Insurance. The
Company shall obtain and maintain from responsible and reputable insurance
companies or associations a term life insurance policy on the life of Berman (so
long as he remains an employee of the Company) and in the amount of $3,000,000,
which proceeds will be payable to the order of the Company. The Company shall
maintain, and cause each Subsidiary to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is customarily carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Company or
such Subsidiary operates, but in any event in amounts sufficient to prevent the
Company or Subsidiary from becoming a co-insurer including, for greater
certainty, at least $3 million worth of directors and officers insurance. The
Company will not cause or permit any assignment of the proceeds of the life
insurance policy specified in the first sentence of this Section 6.4 and
will not borrow against such policies. The Company will add the designees of
each of the Spectrum Stockholders, the GA Stockholders and the TCV Stockholders
as a notice party to such policy and will request that the issuer(s) of such
policy provide such designee with at least ten (10) days’ notice before such
policy is terminated (for failure to pay premiums or otherwise) or assigned, or
before any change is made in the designation of the beneficiary thereof.

 

6.5           Inspection, Consultation and Advice;
Confidentiality.

 

(a)           So long as an Investor holds at least
ten percent (10%) of the then outstanding 

 

35

 

shares of Capital Stock of the Company (on a fully diluted basis), the
Company shall permit and cause each of its Subsidiaries to permit such Investor
and such Persons as it may designate, at such Investor’s expense, to visit and
inspect any of the properties of the Company and its Subsidiaries, examine
their books and take copies and extracts therefrom, discuss the affairs,
finances and accounts of the Company and its Subsidiaries with their officers,
employees and public accountants (and the Company hereby authorizes said accountants
to discuss with such Investor and such designees such affairs, finances and
accounts), and consult with and advise the management of the Company and its
Subsidiaries as to their affairs, finances and accounts, all at reasonable
times and upon reasonable notice.

 

(b)           Subject to the disclosure of
information of a non-technical nature (including financial information) which a
Stockholder may disclose to its partners, members, shareholders and capital
investors in accordance with its customary reporting obligations generally,
each Stockholder agrees to keep confidential, and to use its commercially
reasonable efforts to cause its directors, officers, managing members,
managers, general partners, employees and advisors (collectively, “Representatives”) to keep confidential, any “confidential
or proprietary information” concerning the Company or its Subsidiaries that is
obtained pursuant to this Agreement. The term “confidential or proprietary
information” shall mean information of the Company or its Subsidiaries
identified as such at the time of disclosure to the Stockholder and other
information, if not so identified, which is clearly intended to be
confidential, and shall not include any information which (i) is or
becomes generally available to the public other than as a result of a breach of
this Section 6.5 by the
Stockholder or its Representatives, (ii) was within the Stockholder’s
possession prior to its being furnished to the Stockholder by or on behalf of
the Company, provided that the source of such information was not known by the
Stockholder to be bound by a confidentiality agreement with the Company or any
other party with respect to such information or other non-disclosure
obligation, (iii) is or becomes available to the Stockholder on a non-confidential
basis from a source other than the Company, provided that such source was not
known by the Stockholder to be bound by a confidentiality agreement with the
Company or any other party with respect to such information or other
non-disclosure obligation, (iv) is independently developed by the Stockholder
or its Representatives without use of or reference to such information, or (v)
is disclosed by the Stockholder or its Representatives with the Company’s prior
written approval, except that no such written approval shall be required (and
the Stockholder shall be free to release such information to such recipient)
with respect to the provision of such information to the Stockholder’s counsel
or accountants, or to an officer, director, partner, member, shareholder,
capital investor or employee of such Stockholder. Each Stockholder and its
Representatives shall be permitted to disclose any “confidential or proprietary
information” required to be disclosed in a legal proceeding or as otherwise
required by law (including fiduciary obligations under common law or otherwise)
after notice of such requirement has been given to the Company and the Company
has had a reasonable opportunity to oppose such disclosure.

 

(c)           Nothing contained in this Section 6.5
shall prevent any Stockholder (or any of its respective partners, members,
shareholders and capital investors) from entering into any business, entering
into any agreement with a third party, or investing in or engaging in
investment discussions with any other company (whether or not competitive with
the Company), provided that such Stockholder (or associated person) does not,
except as permitted in accordance with Section 6.5(b) hereof, disclose
any confidential or proprietary information of the 

 

36

 

Company in connection with such activities.

 

6.6           Restrictive Agreements Prohibited. Neither
the Company nor any of its Subsidiaries shall become a party to any agreement
which by its terms restricts the Company’s ability to perform under this
Agreement or its certificate of incorporation.

 

6.7           Transactions with Affiliates. Except
for transactions contemplated by this Agreement or as otherwise approved in
advance by a majority of the Board, neither the Company nor any of its
Subsidiaries shall enter into any transaction including, without limitation,
any loans or extensions of credit (other than advances in the ordinary course)
or royalty agreements, with any officer, director or Affiliate of the Company
or any Subsidiary or any of their immediate Family Members or any Person
directly or indirectly affiliated with one or more of such officers, directors
or immediate Family Members.

 

6.8           Meetings of the Board. The Company
shall use its best efforts to ensure that meetings of the Board are held at
least six (6) times each year and at least once each quarter.

 

6.9           Expenses of Directors. The Company
shall promptly reimburse in full each Director who is not an employee of the
Company for all of his or her reasonable and documented out-of-pocket expenses
incurred in attending each meeting of the Board of the Company or any committee
thereof.

 

6.10         Bylaws. The Company shall at all
times cause the Bylaws to provide that, unless otherwise required by the laws
of the State of Delaware, (a) any Director may call a meeting of the Board
and (b) any holder or holders of at least 25% of the outstanding shares of
Common Stock shall have the right to call a meeting of the Board or of the stockholders.
The Company shall at all times maintain provisions in its Bylaws and/or its
certificate of incorporation absolving all Directors from liability to the
Company and its stockholders and provisions in its Bylaws and/or certificate of
incorporation indemnifying all Directors against liability to the maximum
extent permitted under the laws of the State of Delaware.

 

6.11         New Developments. The Company shall
cause all technological developments, patentable or unpatentable inventions,
discoveries or improvements by the Company’s or any Subsidiary’s officers,
employees or independent contractors to be documented in accordance with the
appropriate professional standards consistent with the Company’s past practices.
The Company shall cause all employees and, to the best of the Company’s or any
Subsidiary’s ability, independent contractors of the Company or any Subsidiary,
to execute confidentiality and nondisclosure agreements in customary form and
substance, or as otherwise approved by a majority of the Board and, where
possible and deemed by management to be commercially appropriate based on the
advice of legal counsel and other considerations, to file and prosecute U.S.
and foreign patent or copyright applications relating to and protecting such
developments on behalf of the Company or any Subsidiary.

 

6.12         Activities of Subsidiaries.

 

(a)           Unless approved by a majority of the
Board pursuant to Section 2.6(b) hereof, the Company will not organize
or acquire any Person that is a Subsidiary unless such Subsidiary is wholly-owned
(directly or indirectly) by the Company. Unless approved by a majority of the 

 

37

 

Board pursuant to Section 2.6(b) hereof, the Company shall not
permit any Subsidiary to consolidate or merge into or with or sell or transfer
all or substantially all its assets, except that any Subsidiary may
(i) consolidate or merge into or with or sell or transfer assets to any
other Subsidiary, or (ii) merge into or sell or transfer assets to the
Company. Unless approved by a majority of the Board pursuant to Section 2.6(b)
hereof, the Company shall not sell or otherwise transfer any shares of capital
stock of any Subsidiary, except to the Company or another Subsidiary, or permit
any Subsidiary to issue, sell or otherwise transfer any shares of its capital stock
or the capital stock of any Subsidiary, except to the Company or another
Subsidiary. Unless approved by a majority of the Board pursuant to Section 2.6(b)
hereof, the Company shall not permit any Subsidiary to purchase or set aside
any sums for the purchase of, or pay any dividend or make any distribution on,
any shares of its stock, except for dividends or other distributions payable to
the Company or another Subsidiary.

 

(b)           None of the Subsidiaries shall (i)
take any action which is material to the business of the Company and that
requires consent of the board of directors or the stockholders of such
Subsidiary, or (ii) enter into any Contract with any of its officers or
directors, unless, in each case, such action or arrangement or agreement has been
approved by a majority of the Board.

 

6.13         Compliance with Laws. The Company
shall comply, and cause each Subsidiary to comply, with all applicable laws of
any Governmental Entity, where noncompliance could reasonably be expected to
have a Material Adverse Effect.

 

6.14         Keeping of Records and Books of Account.
The Company shall keep, and cause each Subsidiary to keep, adequate records and
books of account, in which complete entries will be made in accordance with
generally accepted accounting principles in effect in the United States
consistently applied, reflecting all financial transactions of the Company and
such Subsidiary, and in which, for each Fiscal Year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

 

6.15         Continued Business Operations. The
Company shall use, and cause each Subsidiary to use, commercially reasonable
efforts to cause their respective officers and employees to refrain from
carrying on any for-profit business activity outside of the Company and the
Subsidiaries.

 

6.16         Financings. The Company shall
promptly inform the Board of any negotiations, offers or contracts relating to
possible financings of any nature for the Company or any Subsidiary, whether
initiated by the Company, any of its Subsidiaries or any other Person, except
for (a) arrangements with trade creditors in the ordinary course of
business, and (b) utilization by the Company or any Subsidiary of
commercial lending arrangements with financial institutions.

 

6.17         Payment of Taxes and Trade Debt. The
Company shall pay and discharge, and cause each Subsidiary to pay and
discharge, all taxes, assessments and governmental charges or levies imposed
upon it or upon its income, profits or business, or upon any properties
belonging to it, prior to the date on which penalties attach thereto, and all
lawful claims which, if unpaid, might become a lien or charge upon any
properties of the Company or any Subsidiary; provided, however,
that neither the Company nor any Subsidiary shall be required to pay any such
tax, 

 

38

 

assessment, charge, levy or claim which is being contested in good
faith and by appropriate proceedings if the Company or any Subsidiary shall
have set aside on its books sufficient reserves, if any, with respect thereto. The
Company shall pay, and cause each Subsidiary to pay, when due, or in conformity
with customary trade terms, all lease obligations, all trade debt, and all
other Indebtedness incident to the operations of the Company or its
Subsidiaries, except such as are being contested in good faith and by proper
proceedings if the Company or Subsidiary concerned shall have set aside on its
books sufficient reserves, if any, with respect thereto.

 

6.18         U.S. Real Property Interest Statement.
The Company shall provide prompt written notice to each Investor following any “determination
date” (as defined in Treasury Regulation Section 1.897-2(c)(i)) on which the
Company becomes a United States real property holding corporation. In addition,
upon a written request by any Investor, the Company shall provide such Investor
with a written statement informing the Investor whether such Investor’s
interest in the Company constitutes a U.S. real property interest. The Company’s
determination shall comply with the requirements of Treasury Regulation Section
1.897-2(h)(1) or any successor regulation, and the Company shall provide timely
notice to the Internal Revenue Service, in accordance with and to the extent
required by Treasury Regulation Section 1.897-2(h)(2) or any successor
regulation, that such statement has been made. The Company’s written statement
to any Investor shall be delivered to such Investor within ten (10) days of
such Investor’s written request therefor. The Company’s obligation to furnish a
written statement pursuant to this Section 6.18 shall continue
notwithstanding the fact that a class of the Company’s stock may be regularly
traded on an established securities market.

 

6.19         Compliance with ERISA. The Company
shall comply, and cause each Subsidiary to comply, with all minimum funding
requirements applicable to any pension, employee benefit plans or employee
contribution plans which are subject to ERISA or to the Code or any similar
foreign laws, and comply, and cause each Subsidiary to comply, in all other
material respects with the provisions of ERISA and the Code and any similar
foreign laws, and the rules and regulations thereunder, which are applicable to
any such plan. The Company shall not permit any event or condition to exist
which could reasonably be expected to permit any such plan to be terminated
under circumstances which would cause the lien provided for in Section 4068 of
ERISA or any similar foreign laws to attach to the assets of the Company or any
Subsidiary.

 

SECTION  7

 

LEGENDS; REGISTRATION OF
TRANSFERS

 

7.1           Legend. Each certificate evidencing
shares of Common Stock, and certificates evidencing other shares of Capital
Stock of the Company, held by a Stockholder, shall be stamped or otherwise have
endorsed or imprinted thereon a legend in substantially the following form:

 

THE TRANSFER OF
THE SHARES REPRESENTED BY THIS CERTIFICATE, AND THE RIGHTS OF THE HOLDER
HEREOF, ARE SUBJECT TO THE TERMS AND CONDITIONS OF AN AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT, DATED AS OF JANUARY 

 

39

 

11, 2007 (COPIES
OF WHICH ARE ON FILE WITH THE COMPANY), AS THE SAME MAY BE AMENDED FROM TIME TO
TIME, AND NO TRANSFER OF THE SHARES REPRESENTED HEREBY OR OF SHARES ISSUED IN
EXCHANGE THEREFOR SHALL BE VALID OR EFFECTIVE UNLESS THE APPLICABLE TERMS AND
CONDITIONS OF SUCH AGREEMENT HAVE BEEN FULFILLED.

 

THE SECURITIES
EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE AND IN COMPLIANCE WITH ALL OTHER APPLICABLE LAWS.

 

7.2           Registration of Transfer. The
Company shall permit registration of transfer of Capital Stock held by a
Stockholder only in accordance with the terms of this Agreement. Any Sale of
Capital Stock which is made in any manner contrary to the provisions of this
Agreement shall be void and shall not be effective to constitute the transferee
as a stockholder of the Company entitled to any rights, benefits and privileges
as such.

 

SECTION  8

 

MISCELLANEOUS
PROVISIONS

 

8.1           Assignment of Rights; Binding Effect.

 

(a)           The rights and obligations of the
parties under this Agreement may not be assigned or otherwise transferred
(whether voluntarily or involuntarily, by operation of law or otherwise) to any
other Person, except in connection with a Sale of Capital Stock made in
compliance with the provisions of this Agreement or, in the case of the
Company, to its successor or assign. Notwithstanding the foregoing, the
required and Form S-3 registration rights contained in Sections 5.1 and 5.3
and the related rights attendant thereto shall be, subject to compliance with
the provisions set forth in Section 3 hereof but only to the extent that
Section 3 hereof remains in effect and has not been terminated (i) with
respect to any Restricted Security that is transferred to an Affiliate of a
Spectrum Stockholder, GA Stockholder or TCV Stockholder, automatically
transferred to such Affiliate and (ii) with respect to any Restricted Security that is transferred in all cases to
a non-Affiliate or other than pursuant to the foregoing clause (i), transferred
only with the approval of a majority of the Board. The incidental registration
rights contained in Section 5.2 and the related rights attendant thereto
shall be, with respect to any Restricted Security, automatically transferred to
any Person who is the transferee of such Restricted Security.

 

(b)           This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
heirs, personal representatives, executors, successors and permitted assigns. Neither
this Agreement nor any provision hereof is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.

 

40

 

8.2           Duration of Agreement.

 

(a)           The obligations of each party
hereunder shall remain binding upon such party until such time as: (i) this
Agreement has been terminated pursuant to subsection (b) below; or (ii) as to a
Stockholder, when such Stockholder has transferred all Capital Stock owned by
such Stockholder in accordance with this Agreement.

 

(b)           Except as otherwise expressly
provided herein, this Agreement shall terminate, and all rights and obligations
hereunder shall cease, upon the first to occur of: (i) the closing of the
Qualified IPO (but not with respect to Section 5 hereof (and Sections
1 and 8 hereof, but only to the extent that such Sections relate to Section
5 hereof); (ii) the written agreement of each of the parties hereto who
still owns Capital Stock to such termination; and (iii) if all holders of
Capital Stock Sell to a third party pursuant to Section 3.5 hereof.

 

8.3           Enforcement. Each party
acknowledges that irreparable damage would occur to the other parties hereto in
the event that any of the provisions of this Agreement were not performed by
such party in accordance with their specific terms or were otherwise breached
by such party and that money damages would not provide an adequate remedy to
the non-breaching parties. It is accordingly agreed that the non-breaching
parties hereto shall be entitled to seek an injunction and other equitable
remedies to prevent breaches by the breaching party of this Agreement and to
enforce specifically the terms and provisions hereof in any court specified
pursuant to Section 8.7 hereof, this being in addition to any other
remedy to which such non-breaching parties may be entitled at law or in equity
or otherwise.

 

8.4           Severability of Provisions. If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future law, rule or regulation, such provision shall be
fully severable and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision has never comprised a part hereof. The
remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.

 

8.5           Amendment and Waiver. No provision of this Agreement may be amended,
modified or waived except by an instrument in writing executed by the Company
(as approved by the Board pursuant to Section 2.6(b)(xii) hereof); provided,
however, that: (A) for so long as Berman owns the Threshold Percentage,
none of the definition of Threshold Percentage, Section 2.1(a), 2.1(b)(ii),
2.1(b)(iii)(A), 2.1(b)(iv),  2.1(b)(v), 2.3, 2.5
or 2.6 hereof or this Section 8.5 shall be amended, waived or
modified without the prior written consent of Berman; (B) for so long as the
Spectrum Stockholders own the Threshold Percentage, none of the definition of
Threshold Percentage, Section 2.1(a), 2.1(b)(i)(A), 2.1(b)(iii),
2.1(b)(iv), 2.1(b)(v), 2.3, 2.5 or 2.6 hereof
or this Section 8.5 shall be amended, waived or modified without the
prior written consent of the Spectrum Stockholders; (C) for so long as the GA
Stockholders own the Threshold Percentage, none of the definition of Threshold
Percentage, Section 2.1(a), 2.1(b)(i)(B), 2.1(b)(iii), 2.1(b)(iv),
2.1(b)(v), 2.3, 2.5 or 2.6 hereof or this Section
8.5 shall be amended, waived or modified without the prior written consent
of the GA Stockholders; (D) for so long as 

 

41

 

the TCV Stockholders own the Threshold
Percentage, none of the definition of Threshold Percentage, Section 2.1(a),
2.1(b)(i)(C), 2.1(b)(iii), 2.1(b)(iv),  2.1(b)(v), 2.3,
2.5 or 2.6  hereof or this Section
8.5 shall be amended, waived or modified without the prior written consent
of the TCV Stockholders; (E) any amendment, modification or waiver which, by
its express terms, (v) adversely affects Berman’s rights or obligations
hereunder to Sell his Capital Stock under Sections 3.1, 3.2, 3.3
and 3.4 hereof, (w) for so long as Berman owns shares of Capital Stock
entitled to cast at least seven and one-half percent (7.5%) of the votes
attributable to all then outstanding shares of Capital Stock (on a fully
diluted basis), reduces the requisite percentage of issued and outstanding
shares of Common Stock that is required to approve a Change of Control
transaction pursuant to Section 3.5(a) hereof, changes the requirement
in Section 3.5(a) hereof that a Change of Control transaction must be
approved by the Board pursuant to Section 2.6(b) hereof, or changes the
last sentence of Section 3.5(c) such that Berman receives a different
form or amount of consideration than the Requisite Parties in a Change of
Control transaction, (x) changes Section 3.5(c) hereof such that Berman’s
indemnification obligations under a Change of Control transaction exceed the
proceeds payable to him in that transaction, (y) adversely affects Berman’s
rights or obligations under Section 8.1, 8.2 or 8.5, or
(z) imposes increased financial liabilities on Berman, shall not be permitted
without the prior written consent of Berman; and/or (F) no amendment,
modification or waiver which, by its express terms, affects the rights or
obligations hereunder of a particular Stockholder in a materially adverse
manner and which does not, by its express terms, affect the rights or
obligations hereunder of all Stockholders with similar rights in a similarly
materially adverse manner shall be binding as to such particularly affected
Stockholder without the prior written consent of such Stockholder; provided,
further, that any party may waive its rights under any provision of this
Agreement by delivering to the Company an instrument in writing executed by
such party. Notwithstanding the foregoing, the Company may amend the Schedules
hereto from time to time without the consent of any other party to this
Agreement solely for the purpose of adding additional parties to this Agreement
pursuant to Section 8.15 hereof and otherwise reflecting permitted Sales
of Capital Stock under this Agreement. No
waiver hereunder shall be deemed a waiver of any subsequent breach or default
of the same or similar nature.

 

8.6           Notices.

 

(a)           All notices, requests, consents and
other communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class-registered or certified
mail, return receipt requested, postage prepaid, addressed (i) if to a
Stockholder, as indicated on Schedule A, or at such other address as
such Stockholder shall have furnished in writing to the party initiating the notice or communication, or (ii) if
to the Company, to One Chase Manhattan Plaza, 44th Floor, New York,
New York 10005, Attention: Head of Legal, or at such other address as
the Company shall have furnished in writing to the party initiating the notice
or communication.

 

(b)           All notices required or permitted
hereunder shall be deemed effectively given: (i) upon personal delivery to
the party to be notified, (ii) when sent by facsimile if sent during
normal business hours of the recipient, if not, then on the next business day;
(iii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying next 

 

42

 

day delivery, with written verification of receipt. Any party may
change the address to which notice should be given to such party by providing
written notice to the other parties hereto of such change.

 

8.7           Governing Law; Jurisdiction. This
Agreement shall be governed by, construed, applied and enforced in accordance
with the laws of the State of New York, except that no doctrine of choice of
law shall be used to apply any law other than that of New York, and no defense,
counterclaim or right of set-off given or allowed by the laws of any other
state or jurisdiction, or arising out of the enactment, modification or repeal
of any law, regulation, ordinance or decree of any foreign jurisdiction, shall
be interposed in any action hereon or thereon; provided, however, that to
the extent that this Agreement relates to the internal affairs of the Company,
such internal affairs shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware. The parties hereto
agree that any suit, action or proceeding to enforce any right arising out of
this Agreement shall be exclusively commenced in the Supreme Court of New York
situated in New York City or in the United States District Court for the
Southern District of New York, and the parties hereto consent to such exclusive
jurisdiction, agree that venue will be proper in such courts in any such
matter, agree that New York is the most convenient forum for litigation in any
such suit, action or proceeding, and agree that a summons and complaint
commencing a suit, action or proceeding in any such court shall be properly
served and shall confer personal jurisdiction upon a Person if served by
registered or certified mail to the address specified with respect to such
Person pursuant to Section 8.6 hereof, or as otherwise provided by the
laws of the State of New York or the United States. The parties hereto agree
that a final judgment in any such suit, action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

 

8.8           Delays or Omissions. Neither the
failure nor delay on the part of any party hereto to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, 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.

 

8.9           Entire Agreement. Except for the Merger
Agreement, the Stockholders Agreement and the agreements related thereto, all
prior understandings and agreements between or among the parties hereto with
respect to the transactions contemplated hereby are merged into this Agreement,
including, but not limited to, the Original Agreement and this Agreement
(including the Schedules attached hereto which form a part of this Agreement),
and such other agreements reflect all the understandings with respect to such
transactions. Nothing herein contained shall be construed to obligate the
Stockholders to make any additional investment in the Company or to constitute
the Stockholders as partners.

 

8.10         Counterparts. This Agreement may be
executed in counterparts, each of which when so executed and delivered shall
constitute a complete and original instrument but all of which together shall
constitute one and the same agreement, and it shall not be necessary when
making proof of this Agreement or any counterpart thereof to account for any
other counterpart.

 

43

 

8.11         Interpretation and Construction. This
Agreement has been negotiated by the respective parties hereto and their legal
counsel and the language hereof will not be construed for or against any party.
The Section headings herein are for convenience of reference only, do not
constitute part of this Agreement and shall not affect the construction of this
Agreement. Where a reference in this Agreement is made to a Section or Schedule
such reference shall be to a Section of or Schedule to this Agreement unless
otherwise indicated. Where the reference “hereof,” “hereby” or “herein” appears
in this Agreement, such reference shall be deemed to be a reference to this
Agreement as a whole. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without
limitation.”  Words denoting the singular
include the plural, and vice versa, and references to it or its or words
denoting any gender shall include all genders. References to “$” or “dollars”
mean U.S. dollars unless otherwise specified.  

 

8.12         WAIVER OF TRIAL BY JURY. TO THE
EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO EXPRESSLY WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION OR PROCEEDING
ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT OR IN ANY WAY CONNECTED WITH,
OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH
RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE. TO THE EXTENT THEY MAY LEGALLY DO SO, THE
PARTIES HERETO AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 8.12
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES
HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.

 

8.13         Publicity. No party may, nor may it
permit its Affiliates to, issue or cause the publication of any press release
or other public announcement with respect to this Agreement or the transactions
contemplated hereby without the prior written consent of the parties hereto,
except that any such party shall be permitted to comply with all applicable
law.

 

8.14         Aggregation of Stock. For purposes
of determining the availability of any rights under this Agreement, all shares
of Capital Stock owned of record by any Affiliate of a Stockholder shall be
deemed to be owned by such Stockholder.

 

8.15         Additional Parties. The Company shall take all necessary action to
ensure that each Person who shall after the date hereof acquires in excess of
two percent (2%) of the issued and outstanding shares of Common Stock or
securities of the Company exchangeable or exercisable for or convertible into
such number of shares of Common Stock on a fully diluted basis shall become a
party to this Agreement by executing and delivering to the Company an
Instrument of Adherence in substantially the form of Annex I
hereto, and such additional party shall
thereafter be added to the Schedules hereto, without the consent of the other
parties hereto. The foregoing notwithstanding, each of the Two Percent
Stockholders hereby covenants and agrees that, if and to the extent such Two
Percent Stockholder shall thereafter cease to be a Two 

 

44

 

Percent Stockholder by reason of such Person’s
percentage ownership interest in the Company on a fully diluted basis falling
below two percent (2%), such Person shall automatically, without any further
action on the part of the Company, such Two Percent Stockholder or the other
parties hereto or to the Stockholders Agreement, become and be deemed to be a
Stockholder under the Stockholders Agreement, as provided therein (and shall
cease to be a Two Percent Stockholder hereunder and thereunder). The Company
shall update the Schedules attached to this Agreement to reflect the changes
contemplated by this Section 8.15 which updates shall not be considered
amendments under this Agreement.

 

8.16         Stockholders Agreement. Notwithstanding anything contained in this
Agreement to the contrary, each transferee of Capital Stock, as a condition to
any Sale, shall be required, in addition to executing and delivering to the
Company an Instrument of Adherence in substantially the form of Annex
I hereto, to execute and deliver to the
Company an Instrument of Adherence in substantially the form of Annex I
to the Stockholders Agreement for the purposes of being bound only by the
provisions set forth therein applicable to an Investor or Two Percent
Stockholder, as the case may be.

 

[SIGNATURE PAGES
FOLLOW]

 

45

 

COUNTERPART SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager,
as the case may be, as of the date and year first above written.

 

	
   

  	
  RISKMETRICS GROUP, INC.

  
	
   

  	
  (f/k/a RMG Holdco, Inc.)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc Ethan
  Berman

  
	
   

  	
  Name:

  	
  Marc Ethan Berman

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RISKMETRICS SOLUTIONS, INC.

  
	
   

  	
  (f/k/a RiskMetrics Group, Inc.)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc Ethan
  Berman

  
	
   

  	
  Name:

  	
  Marc Ethan Berman

  
	
   

  	
  Title:

  	
  President

  

 

Signature page to Amended
and Restated Investor Rights Agreement

 

 

COUNTERPART SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager, as
the case may be, as of the date and year first above written.

 

	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPECTRUM EQUITY INVESTORS IV,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Spectrum Equity
  Associates IV, L.P.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Collatos

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William P. Collatos

  	
   

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECTRUM EQUITY INVESTORS

  PARALLEL IV, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Spectrum Equity
  Associates IV, L.P.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Collatos

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William P. Collatos

  	
   

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECTRUM IV INVESTMENT
  MANAGERS’

  FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William P.
  Collatos

  	
   

  
	
   

  	
  Name:

  	
  William P. Collatos

  	
   

  
	
   

  	
  Its:

  	
  General Partner

  	
   

  
							

 

Signature page to Amended
and Restated Investor Rights Agreement

 

 

COUNTERPART
SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager,
as the case may be, as of the date and year first above written.

 

	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TCV V, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Technology Crossover
  Management V, L.L.C.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert C.
  Bensky

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert C. Bensky

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Attorney in Fact

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TCV
  MEMBER FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Technology Crossover
  Management V, L.L.C.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert C.
  Bensky

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert C. Bensky

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Attorney in Fact

  	
   

  

 

Signature page to Amended
and Restated Investor Rights Agreement

 

 

COUNTERPART SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager,
as the case may be, as of the date and year first above written.

 

	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
  GENERAL ATLANTIC PARTNERS 78, L.P.

  
	
   

  	
  By:

  	
  General Atlantic Partners, LLC,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven A.
  Denning

  
	
   

  	
   

  	
  Name:

  	
  Steven A. Denning

  
	
   

  	
   

  	
  Its:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
  GAPSTAR, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  General Atlantic Partners, LLC,

  
	
   

  	
   

  	
  Its Sole Member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven A.
  Denning

  
	
   

  	
   

  	
  Name:

  	
  Steven A. Denning

  
	
   

  	
   

  	
  Its:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
  GAP COINVESTMENTS III, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven A.
  Denning

  
	
   

  	
  Name:

  	
  Steven A. Denning

  
	
   

  	
  Its:

  	
  A Managing Member

  
	
   

  	
   

  
	
   

  	
  GAP COINVESTMENTS IV, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven A.
  Denning

  
	
   

  	
  Name:

  	
  Steven A. Denning

  
	
   

  	
  Its:

  	
  A Managing Member

  
	
   

  	
   

  
	
   

  	
  GAPCO GMBH & CO. KG

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GAPCO Management GmbH,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven A.
  Denning

  
	
   

  	
   

  	
  Name:

  	
  Steven A. Denning

  
	
   

  	
   

  	
  Its:

  	
  Managing Director

  

 

Signature page to Amended
and Restated Investor Rights Agreement

 

 

COUNTERPART SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager,
as the case may be, as of the date and year first above written.

 

	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ABS VENTURES VIII L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Zolo LLC,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ R. William Burgess
  Jr.

  
	
   

  	
   

  	
  Name:

  	
  R. William Burgess Jr.

  
	
   

  	
   

  	
  Its:

  	
  Senior Manager

  

 

 

COUNTERPART SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager,
as the case may be, as of the date and year first above written.

 

	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  W CAPITAL PARTNERS,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WCP 2003, LLC,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen
  Wertheimer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen Wertheimer

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  W CAPITAL PARTNERS 2003, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WCP-I, LLC,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen
  Wertheimer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen Wertheimer

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Managing Member

  	
   

  
						

 

Signature page to Amended
and Restated Investor Rights Agreement

 

 

COUNTERPART SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager,
as the case may be, as of the date and year first above written.

 

	
   

  	
  TWO PERCENT STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc Ethan
  Berman

  
	
   

  	
  Name:

  	
  Marc Ethan Berman

  

 

Signature page to Amended
and Restated Investor Rights Agreement

 

 

COUNTERPART SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager,
as the case may be, as of the date and year first above written.

 

	
   

  	
  HOLDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRITEL FUND NOMINEES LIMITED.

  
	
   

  	
  c/o Hermes USA
  Investors Venture, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Burrowes

  
	
   

  	
  Name:

  	
  David Burrowes

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

 

 

 

 

SCHEDULE A

Schedule of Two Percent
Stockholders

 

	
  Name and Address

  	
   

  	
  No. of Shares of Common Stock

  	
   

  
	
  Marc Ethan
  Berman

  	
   

  	
  2,400,000 

  	
  *

  
	
  c/o RiskMetrics
  Group, Inc.

  	
   

  	
   

  	
   

  
	
  One Chase
  Manhattan Plaza, 44th Floor

  	
   

  	
   

  	
   

  
	
  New York, NY
  10005

  	
   

  	
   

  	
   

  
	
  (212) 981-7416

  	
   

  	
   

  	
   

  

 

* Shares held by Ethan
Berman as trustee for the Trust under agreement dated August 18, 2000 between
Ethan Berman, as Grantor and Ethan Berman, as Trustee.

 

	
  Britel Fund Nominees
  Limited

  	
   

  	
  464,470

  	
   

  
	
  c/o Hermes USA
  Investors Venture, L.L.C.

  	
   

  	
   

  	
   

  
	
  Attn: Corinna Arnold 

  	
   

  	
   

  	
   

  
	
  Lloyds Chambers

  	
   

  	
   

  	
   

  
	
  1 Portsoken Street

  	
   

  	
   

  	
   

  
	
  London, England E18HZ

  	
   

  	
   

  	
   

  

 

 

Schedule of Investors

 

	
  Name and Address

  	
   

  	
  No. of Shares of Common Stock

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Spectrum Equity
  Investors IV, L.P.

  	
   

  	
  5,240,000

  	
   

  
	
  Spectrum Equity
  Investors Parallel IV, L.P.

  	
   

  	
  30,933

  	
   

  
	
  Spectrum
  Investment Managers’ Fund, L.P.

  	
   

  	
  62,400

  	
   

  
	
  c/o Spectrum
  Equity Investors

  	
   

  	
  5,333,333

  	
   

  
	
  One
  International Place, 29th Floor

  	
   

  	
   

  	
   

  
	
  Boston, MA 02110

  	
   

  	
   

  	
   

  
	
  Main: (617)
  464-4600

  	
   

  	
   

  	
   

  
	
  Fax: (617)
  464-4601

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  General Atlantic
  Partners 78, L.P.

  	
   

  	
  4,920,556

  	
   

  
	
  Gapstar, LLC

  	
   

  	
  66,667

  	
   

  
	
  GAP
  Coinvestments III, LLC

  	
   

  	
  268,334

  	
   

  
	
  GAP
  Coinvestments IV, LLC

  	
   

  	
  72,233

  	
   

  
	
  c/o General
  Atlantic Service Corporation

  	
   

  	
  5,333,333

  	
   

  
	
  Three Pickwick
  Plaza, Suite 200

  	
   

  	
   

  	
   

  
	
  Greenwich, CT
  06830

  	
   

  	
   

  	
   

  
	
  Main:
  (203)-629-8600

  	
   

  	
   

  	
   

  
	
  Fax: (203)
  632-8818

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TCV V, L.P.

  	
   

  	
  2,302,431

  	
   

  
	
  TCV V Member
  Fund, L.P.

  	
   

  	
  43,490

  	
   

  
	
  Technology
  Crossover Ventures

  	
   

  	
  2,345,921

  	
   

  
	
  528 Ramona
  Street

  	
   

  	
   

  	
   

  
	
  Palo Alto, CA
  94301

  	
   

  	
   

  	
   

  
	
  Attention: Rick
  Kimball

  	
   

  	
   

  	
   

  
	
  Phone:

  	
  (650) 614-8200

  	
   

  	
   

  	
   

  
	
  Fax:

  	
  (650) 614-8222

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ABS Ventures
  VIII, L.P.

  	
   

  	
  400,000

  	
   

  
	
  890 Winter
  Street, Suite 225

  	
   

  	
   

  	
   

  
	
  Waltham, MA
  02451

  	
   

  	
   

  	
   

  
	
  Attention:
  Pierre Suhrke

  	
   

  	
   

  	
   

  
	
  Phone:

  	
  (781) 250-0408

  	
   

  	
   

  	
   

  
	
  Fax:

  	
  (781) 250-0345

  	
   

  	
   

  	
   

  

 

 

	
  W Capital
  Partners, L.P.

  	
   

  	
  160,000

  	
   

  
	
  W Capital
  Partners 2003, L.P.

  	
   

  	
  160,000

  	
   

  
	
  245 Park Avenue

  	
   

  	
  320,000

  	
   

  
	
  New York, NY
  10167

  	
   

  	
   

  	
   

  
	
  Attention:
  Stephen Wertheimer

  	
   

  	
   

  	
   

  
	
  Phone:

  	
  (212) 355-0770

  	
   

  	
   

  	
   

  
	
  Fax:

  	
  (212) 202-3979

  	
   

  	
   

  	
   

  

 

 

ANNEX I

 

RISKMETRICS
GROUP, INC.

 

Instrument
of Adherence

 

The undersigned,                                                ,
in order to become the owner or holder of                 
shares of the Common Stock of RiskMetrics Group, Inc., a Delaware corporation
(the “Company”), hereby agrees to become a
party to that certain Amended and Restated Investor Rights Agreement, dated as
of January 11, 2007 (as the same may be amended from time to time in accordance
with its terms) (the “Agreement”),
among the Company and the other parties thereto, and to be bound by all
provisions thereof. The undersigned agrees to become a “Stockholder” (as
defined in the Agreement) under the terms of the Agreement. This Instrument of
Adherence shall take effect and shall become a part of said Agreement
immediately upon execution by the undersigned hereto and acceptance thereof by
the Company.

 

Executed as of the date set
forth below:

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ACCEPTED:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RISKMETRICS GROUP, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
							

 

 

COUNTERPART SIGNATURE PAGE

 

IN
WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by it or its duly authorized officer, partner, member or manager,
as the case may be, as of the date and year first above written.

 

	
   

  	
  HOLDER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Stockholder Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title (if applicable):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

Signature page to Amended
and Restated Investor Rights AgreementExhibit 10.13

 

Datafeed License Agreement

 

October 27, 2003

 

 

CONFIDENTIAL TREATMENT REQUESTED

 

CONFIDENTIAL TREATMENT
REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS
OMITTED AND IS NOTED WITH THREE ASTERICKS AS FOLLOWS ***. AN UNREDACTED VERSION
OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

 

Table
of Contents

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  2.

  	
   

  	
  Implementation and Operation of the
  Consolidated Datafeed

  	
   

  	
  3

  
	
  2.1.

  	
   

  	
  Deadline

  	
   

  	
  3

  
	
  2.2.

  	
   

  	
  Expenses;
  Availability

  	
   

  	
  4

  
	
  2.3.

  	
   

  	
  Access

  	
   

  	
  4

  
	
  2.4.

  	
   

  	
  Distribution Guidelines

  	
   

  	
  4

  
	
  .5.

  	
   

  	
  Updates

  	
   

  	
  4

  
	
  2.6.

  	
   

  	
  New
  Components

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  3.

  	
   

  	
  License

  	
   

  	
  5

  
	
  3.1.

  	
   

  	
  License Grant of Consolidated Datafeed

  	
   

  	
  5

  
	
  3.2.

  	
   

  	
  Sublicenses

  	
   

  	
  5

  
	
  3.3.

  	
   

  	
  License Grant of Enhanced Components

  	
   

  	
  5

  
	
  3.4.

  	
   

  	
  Scope
  of License

  	
   

  	
  5

  
	
  3.5.

  	
   

  	
  Creation
  of Reports

  	
   

  	
  5

  
	
  3.6.

  	
   

  	
  Termination
  of Existing License

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  4.

  	
   

  	
  Support
  Services

  	
   

  	
  6

  
	
  4.1.

  	
   

  	
  Service
  Agreement

  	
   

  	
  6

  
	
  4.2.

  	
   

  	
  Additional Support Services

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  5.

  	
   

  	
  Ownership
  of Intellectual Property

  	
   

  	
  6

  
	
  5.1.

  	
   

  	
  Ownership
  of Consolidated Datafeed

  	
   

  	
  6

  
	
  5.2.

  	
   

  	
  Ownership
  of Enhanced Components

  	
   

  	
  7

  
	
  5.3.

  	
   

  	
  ISS
  Proprietary Information

  	
   

  	
  7

  
	
  5.4.

  	
   

  	
  ADP
  Proprietary Information

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  Fees

  	
   

  	
  8

  
	
  6.1.

  	
   

  	
  Vote Instruction Fee

  	
   

  	
  8

  
	
  6.2.

  	
   

  	
  Services
  Fee

  	
   

  	
  8

  
	
  6.3.

  	
   

  	
  Minimum Monthly Ballot Requests Fee

  	
   

  	
  8

  
	
  6.4.

  	
   

  	
  Failure to Pay and Overdue Payments

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  7.

  	
   

  	
  Representations, Warranties and Covenants

  	
   

  	
  9

  
	
  7 .1.

  	
   

  	
  ISS Representations

  	
   

  	
  9

  
	
  7.2.

  	
   

  	
  ADP Representations

  	
   

  	
  9

  
	
  7.3

  	
   

  	
  ADP
  Covenants

  	
   

  	
  10

  
	
  7.4.

  	
   

  	
  ISS Covenants

  	
   

  	
  11

  
	
  7.5.

  	
   

  	
  Disclaimer
  of Warranties

  	
   

  	
  12

  

 

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  8.

  	
   

  	
  Pricing Adjustment

  	
   

  	
  12

  
	
  8.1.

  	
   

  	
  ***

  	
   

  	
  12

  
	
  8.2.

  	
   

  	
  ***

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  9.

  	
   

  	
  Limitation
  of Liability

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  10.

  	
   

  	
  Indemnification

  	
   

  	
  13

  
	
  10.1.

  	
   

  	
  ISS
  Indemnity

  	
   

  	
  13

  
	
  10.2.

  	
   

  	
  ADP
  Indemnity

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  11.

  	
   

  	
  Confidentiality

  	
   

  	
  14

  
	
  11.1

  	
   

  	
  Confidential Information

  	
   

  	
  14

  
	
  11.2

  	
   

  	
  Use
  of Confidential Information

  	
   

  	
  14

  
	
  11.3

  	
   

  	
  Unauthorized Use

  	
   

  	
  15

  
	
  11.4

  	
   

  	
  Return
  of Information

  	
   

  	
  15

  
	
  11.5

  	
   

  	
  Tax
  Treatment

  	
   

  	
  15

  
	
  11.6

  	
   

  	
  Injunctions

  	
   

  	
  15

  
	
  11.7

  	
   

  	
  Existing
  Non Disclosure Agreement

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  12.

  	
   

  	
  Term
  and Termination

  	
   

  	
  15

  
	
  12.1.

  	
   

  	
  Term

  	
   

  	
  15

  
	
  12.2.

  	
   

  	
  Termination

  	
   

  	
  16

  
	
  12.3.

  	
   

  	
  Effect
  of Termination

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  13.

  	
   

  	
  Publicity; Notice

  	
   

  	
  17

  
	
  13.1.

  	
   

  	
  Notice
  of ADP System

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  14.

  	
   

  	
  Miscellaneous

  	
   

  	
  17

  
	
  14.1.

  	
   

  	
  Governing Law

  	
   

  	
  17

  
	
  14.2.

  	
   

  	
  Consent to Jurisdiction

  	
   

  	
  18

  
	
  14.3.

  	
   

  	
  Waiver
  of a Jury Trial

  	
   

  	
  18

  
	
  14.4.

  	
   

  	
  Relationship

  	
   

  	
  18

  
	
  14.5.

  	
   

  	
  No
  Promotion

  	
   

  	
  18

  
	
  14.6.

  	
   

  	
  Notices

  	
   

  	
  18

  
	
  14.7.

  	
   

  	
  Entire
  Agreement

  	
   

  	
  19

  
	
  14.8.

  	
   

  	
  Severability

  	
   

  	
  19

  
	
  14.9.

  	
   

  	
  Further
  Assurances

  	
   

  	
  19

  
	
  14.10.

  	
   

  	
  Force
  Majeure

  	
   

  	
  19

  
	
  14.11.

  	
   

  	
  Advertising and Publicity

  	
   

  	
  20

  
	
  14.12.

  	
   

  	
  Amendments; Waivers

  	
   

  	
  20

  
	
  14.13.

  	
   

  	
  Assignment

  	
   

  	
  20

  
	
  14.14.

  	
   

  	
  Successors;
  Assigns; Third-Party Beneficiaries

  	
   

  	
  20

  

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.15.

  	
   

  	
  Survival

  	
   

  	
   

  
	
  14.16.

  	
   

  	
  Counterparts

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
  20

  
	
  Exhibits, Appendices and Annexes

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  Exhibit
  A

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  Annex
  I

  	
   

  	
   

  
	
   

  	
   

  	
  A                                      Appendix I

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B                                        Appendix II

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  Annex
  II

  	
   

  	
   

  

 

 

iii

EXECUTION COPY

 

DATAFEED
LICENSE AGREEMENT

 

This
Datafeed License Agreement (this “Agreement”), entered into on the 27th
day of October, 2003 (“Effective Date”), sets forth the understanding between
ADP Investor Communication Services, Inc., a Delaware corporation (“ADP”), and
Institutional Shareholder Services, Inc., a Delaware corporation (“ISS”),
concerning the implementation and operation of the Consolidated Datafeed to
facilitate straight-through processing of Ballots and Vote Instructions.

 

WHEREAS,
ADP owns a Datafeed which ISS wishes to license in connection with the
management and tracking of proxy votes by ISS, and ADP wishes to so license the
Consolidated Datafeed to ISS for such purposes;

 

NOW,
THEREFORE, be it resolved that, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties to this
Agreement hereby agree as follows:

 

SECTION 1.                               Definitions

 

As used herein, the
following terms have the following meanings:

 

“ADP” has the meaning set
forth in the Preamble hereto.

 

“ADP Proprietary Information”
has the meaning set forth in Section 5.4(a).

 

“Affiliate”
means, with respect to any Person, (a) any Person directly or indirectly
controlling, controlled by or under common control with such Person and (b) any
executive officer or director of such Person. For purposes of this definition,
the terms “controlling,” “controlled by,” or “under common control with” shall
mean possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“Agreement”
has the meaning set forth in the preamble hereto. Agreement, as used herein,
shall include all Exhibits, Annexes, Schedules and Appendices attached hereto.

 

“Applicable
Law” means, as to any Person, any statute, law, rule, regulation, directive,
treaty, judgment, order, decree or injunction of any Governmental Authority
that is applicable to or binding upon such Person or any of its properties.

 

“Ballot” means any voteable
position identified by ADP to be sent to ISS by any means.

 

“Business Day” means a day
other than a Saturday, Sunday or other day on which banks in the State of New
York are not required or authorized to close

 

“Confidential Information”
has the meaning set forth in Section 11.2.

 

 

“Consolidated Datafeed”
means the specific data exchanges of the consolidated agenda file, consolidated
meeting file, consolidated director file, consolidated ballot file datafeed and
the returned ballot confirmation file and vote instruction files for accounts
of institutions for which ISS has voting authority.

 

“Datafeed Vote Instruction
Fee“ has the meaning set forth in Section 6.1.

 

“Disclosing Party” has the
meaning set forth in Section 11.1.

 

“Downtime”
means those periods of time during which the Consolidated Datafeed is not
available to ISS for purposes of processing meeting, agenda and Ballot
information, but not including Scheduled Maintenance and Unscheduled
Maintenance.

 

“Effective
Date” means the date of this Agreement. 

 

“Enhanced
Components” has the meaning set forth in Section 3.3.

 

“Extended
Third-Party Agreement” has the meaning set forth in Section 8.3.

 

“File Transfer” means a file
transfer that is encrypted using the SCP (secure copy) over SSH (secure shell)
open standards based protocol or its equivalent as mutually agreed to by ADP
and ISS

 

“Governmental
Authority” means any domestic or foreign government, governmental authority,
court, tribunal, agency or other regulatory, administrative or judicial agency,
commission or organization, and any subdivision, branch or department of any of
the foregoing.

 

“Initial
Term” has the meaning set forth in Section 12.1. 

 

“ISS”
has the meaning set forth in the Preamble hereto.

 

“ISS
Agenda Codes” has the meaning set forth in the Statement of Work.

 

“ISS
Business” has the meaning set forth in Section 3.1.

 

“ISS
Proprietary Information” has the  meaning set forth in Section 5.3(a).

 

“ISS
Vote Instructions” has the meaning set forth in the Statement of Work.

 

“Live
Date” has the meaning set forth in Section 2.1.

 

“Material
Adverse Effect” means a material adverse effect on the business, financial
condition, assets or results of
operations of a party.

 

“Minimum Monthly Ballot
Requests Fee” has the meaning set forth in Section 6.3.

 

“Monthly Fee Ballot
Percentage” has the meaning set forth in Section 6.3.

 

2

 

“Nominees” has the meaning
set forth in Section 12.2(e).

 

“Person”
means any natural person, corporation, partnership, limited liability company,
trust or any other legal entity.

 

“Proxy
Edge License Agreement” has the meaning set forth in Section 3.6.

 

“Receiving
Party” has the meaning set forth in Section 11.1.

 

“Revised
Term” has the meaning set forth in Section 8.2.

 

“Scheduled
Maintenance” means those periods of time, during which ADP performs maintenance
to or repairs all or part of the Consolidated Datafeed. Any Scheduled
Maintenance shall occur between 11:00 a.m. and 4:00 p.m. E.S.T. on Saturday or
Sunday, and is subject to prior e-mail notification to ISS, at least two weeks
in advance of the Scheduled Maintenance.

 

“Service
Agreement” has the meaning set forth in Section 4.1. 

 

“Services”
has the meaning set forth in Section 4.2.

 

“Statement
of Work” has the meaning set forth in Section 2.1.

 

“Support
Services” has the meaning set forth in Section 4.1.

 

“Term”
has the meaning set forth in Section 12.1.

 

“Third-Party
Agreement” has the meaning set forth in Section 8.1.

 

“Third-Party
Favorable Terms” has the meaning set forth in Section 8.2.

 

‘Transition
Period” has the meaning set forth in Section 12.3.

 

“Unsanctioned
Method or Unsanctioned Form” means any method or form of Vote Instruction
transmitted electronically by ISS other than through such method or form
prescribed by ADP in the instructions published
and available for review by a user upon accessing the applicable electronic form or method
in question.

 

“Unscheduled Maintenance” means those periods
of time, aside from Scheduled Maintenance
periods, during which ADP performs maintenance to or repairs all or part of the
Consolidated Datafeed.

 

“Vote
Instruction” means any instruction given by a beneficial owner of a security
that directs a Person with legal authority to vote such security and which is
transmitted to ADP.

 

SECTION
2.                     Implementation and Operation of the
Consolidated Datafeed.

 

2.1.                                  Deadline. The parties shall implement and operate the Consolidated Datafeed pursuant to the statement of work attached hereto as Exhibit A, which shall include a

 

3

 

detailed migration plan (the
“Statement of Work”). The completion of the Consolidated Datafeed migration and
implementation shall be deemed to have occurred when the Consolidated Datafeed
is fully operational, which shall be no later than January 8, 2004 (the “Live
Date”); provided, however, that in the event any of the migration milestones
set forth in the Statement of Work have not been met, the deadline for
implementation of the Consolidated Datafeed shall be extended by the parties to
a date to be mutually agreed upon in good faith (the date upon which the
Consolidated Datafeed is fully operational shall be deemed to be the Live
Date). The obligations of ISS and ADP with respect to implementation are set
forth in this Section 2 and the Statement of Work. Notwithstanding the
foregoing, either party may terminate this Agreement in the event that the
Consolidated Datafeed is not fully operational by September 1, 2004.

 

2.2.                                 Expenses; Availability. ADP shall, at its expense, provide the
Consolidated Datafeed to ISS in the ADP standard format and as described in the
related documentation. ADP shall provide ISS in a timely manner related
documentation, which will include a data dictionary describing each data field
(with mandatory or optional designations and acceptable values for the data
fields) and sample files. The Consolidated Datafeed will be delivered in the
manner set forth in the Statement of Work, or as otherwise agreed between both
parties. ADP shall ensure that the Consolidated Datafeed is available to ISS at
all times, other than during Scheduled Maintenance, Unscheduled Maintenance or
emergency maintenance as set forth in the Statement of Work.

 

2.3.                                 Access. ISS may access the Consolidated Datafeed from any ISS personal
computer, local area network or other central processing unit located at any
ISS facility. ISS shall provide at its own expense all communications
equipment, including telephone lines and modems, usage or connect charges,
necessary for access to the Consolidated Datafeed.

 

2.4.                                 Distribution Guidelines. ADP will be responsible for the accuracy,
completeness, and timely availability of meeting notice, ballots and agenda
data on the Consolidated Datafeed that are generated, in keeping with ADP’s
normal standards for delivery of such information.

 

2.5.                                 Updates. During the Term, ADP may from time to time update, enhance or modify
the Consolidated Datafeed. ADP shall provide ISS with the most current,
up-to-date version of the Consolidated Datafeed, including, without limitation,
the most current version of the Consolidated Datafeed, reflecting any updates,
enhancements or modifications as may be required by applicable law or
Securities and Exchange Commission rules or regulations, at such time as the
new version is released. Any such updates to the Consolidated Datafeed shall be
no additional charge. The parties acknowledge that from time to time the
Consolidated Datafeed may require certain mutually agreed upon modifications to
properly interface with each of the parties’ servers. Upon ISS’s request, ADP
shall perform necessary modifications to the Consolidated Datafeed so that it
will continue to interface properly with the ISS server.

 

2.6.                                 New Components. If, during the Term, ADP develops new
components or functionality for the Consolidated Datafeed, then the new
components or functionality shall be offered to ISS at an additional fee to be
mutually agreed upon. ISS may, at its option, accept or reject the inclusion of
each new component or functionality in the Consolidated Datafeed. Upon the acceptance
of each new component or functionality by ISS, such new component or

 

4

 

functionality
will be automatically included in the license granted to ISS hereunder and ADP
shall support the new component or functionality on terms and conditions
mutually acceptable to both parties. If ISS accepts a new component or
functionality that requires customization for integration into the Consolidated
Datafeed, both parties shall use commercially reasonable efforts to enter into
a statement of work to integrate such new component or functionality. Upon
execution by the parties, each such statement of work shall constitute an
amendment to this Agreement. If at any time during the Term ISS elects not to
use any new component or functionality, then included in the Consolidated
Datafeed, then ISS shall, at its sole expense and within 60 days of the
implementation of such new component or functionality, do whatever is necessary
to adapt to any format changes that may be required to allow ISS to continue to
use the Consolidated Datafeed as contemplated by this Agreement.

 

SECTION
3.                           License.

 

3.1.                                 License Grant of Consolidated Datafeed. During the Term, ADP hereby grants to ISS a
non-exclusive, worldwide license to use, possess, display and otherwise process
and handle the Consolidated Datafeed in all electronic forms and media in
connection with ISS’s voting agent services solely and exclusively for the
purposes of processing meeting, agenda and ballot information of custodians using
ADP as their proxy processing agent for accounts for which ISS has voting
authority and generating, distributing and returning ISS Vote Instructions for
positions held with such custodians. Except for the license granted herein, ISS
shall have no other rights to the Consolidated Datafeed or the information
provided by ADP.

 

3.2.                                 Sublicenses. During the Term, ISS shall have the right to sublicense (including,
without limitation, the right to further sublicense) to any Affiliate the
rights licensed to ISS in Section 3.1 License Grant of Consolidated Datafeed
exclusively, provided that each sublicensee agrees in writing to be bound by
the terms of this Agreement.

 

3.3                                    License Grant of Enhanced Components. During the Term, ISS hereby grants to ADP a
royalty-free worldwide license to use, possess, reproduce, modify, display,
distribute and otherwise process and handle ISS Vote Instructions and ISS
Agenda Codes (collectively, “Enhanced Components”) solely for the purpose of
providing the Consolidated Datafeed to ISS pursuant to the terms of this
Agreement. ADP shall not use the Enhanced Components in any fashion that would
reveal, disclose or identify any information (which was not otherwise previously known or acquired by ADP
through lawful means) about ISS clients or their voting histories or
instructions.

 

3.4.                                 Scope of License. Except as expressly provided herein, no license, right, title or interest in or to the
Consolidated Datafeed is granted to ISS, and no license, right, title or
interest in or to the Enhanced Components is granted to ADP, either expressly
or by implication, estoppel or otherwise.

 

3.5.                                 Creation of Reports. Notwithstanding anything to the contrary
contained in this Agreement, ISS is hereby authorized to extract investment
position and vote history information generated by the use of the Consolidated
Datafeed (including the Enhanced Components) and to incorporate such extracted
information into ISS’s vote compilation software for the purpose of creating
reports, which indicate an investor’s combined positions and voting

 

5

 

history records across all
accounts for which ISS has voting authority. ISS is solely responsible for the
content of any and all information and/or data extracted as set forth above and
ADP shall have no liability or obligation with respect to the accuracy of such
information and data or the accuracy of any reports generated therefrom.

 

3.6.                                 Termination of Existing License. Between the Effective Date and the Live
Date, all Ballots processed through the existing Proxy Edge Software (and not
through the Consolidated Datafeed) shall be governed in all respects by the
existing Proxy Edge Software License and Services Agreement dated January 1,
1998 between ADP and ISS (as amended, the “Proxy Edge License Agreement”). As
of the Live Date, this Agreement shall supersede and replace the Proxy Edge
License Agreement, which shall be terminated as of the Live Date.

 

SECTION
4.                            Support Services

 

4.1.                                 Service Agreement ADP shall provide the support services
specified in and according to the terms and conditions as set forth in the
Service Level Agreement (the “Service Agreement”) between ADP and ISS, and
attached hereto as Annex I (the “Support Services”).

 

4.2.                                  Additional Support Services. ADP shall, at no additional cost, provide
to ISS the following support services (together with the Support Services, the “Services”)
for the Consolidated Datafeed (including all updates, enhancements and
modifications thereto): (a) provide telephone support on every Business Day to
assist in the implementation, utilization and maintenance of the Consolidated
Datafeed; (b) provide upgrades or updates (and appropriate documentation) that
contain error or defect corrections; and (c) correct any error or defect in
content or the transmission of the Consolidated Datafeed reported by ISS, or
any of which ADP becomes aware, within a reasonable time frame given the
severity of such error or defect, which error or defect causes the Consolidated
Datafeed not to perform substantially in accordance with the description of its
functions contained in the Statement of Work; and (d) answer questions and
respond to problems related to (i) data communications, data quality and
accuracy, (ii) whether a share position has been reported, and (iii) whether an
electronic ballot has been transmitted, received, confirmed, released, or
reported for tabulation. Upon request by ISS or custodians of ISS’ clients, ADP
will ascertain the current voting status of any account, including review of
unreleased votes. Telephone or telecommunication charges under this Agreement
will be borne by the party placing the call. ADP may but shall not be obligated
to record telephone calls and ISS hereby consents to the recording of such
calls.

 

SECTION
5.                            Ownership of Intellectual Property

 

5.1.                                 Ownership of Consolidated Datafeed. ISS acknowledges that as between the
parties ADP owns all right, title and interest in and to the Consolidated
Datafeed other than the Enhanced Components. ISS shall not take any action that
is inconsistent with such ownership of the Consolidated Datafeed and agrees
that nothing in this Agreement and no use of the Consolidated Datafeed by ISS
pursuant to this Agreement shall vest in ISS, or be construed to vest in ISS,
any right of ownership in or to the Consolidated Datafeed other than the right
to use the Consolidated Datafeed solely in accordance with the terms and
conditions of this Agreement.

 

6

 

5.2.                                  Ownership of Enhanced Components. ADP acknowledges that as between the
parties ISS owns all right, title and interest in and to the Enhanced
Components. ADP shall not take any action that is inconsistent with such
ownership of the Enhanced Components and agrees that nothing in this Agreement
and no use of the Enhanced Components by ADP pursuant to this Agreement shall
vest in ADP, or be construed to vest in ADP, any right of ownership in or to
the Enhanced Components other than the right to use the Enhanced Components
solely in accordance with the terms and conditions of this Agreement.

 

5.3.                            ISS Proprietary Information.

 

(a)                                        ADP acknowledges and understands ISS’s
representation that the securities holdings, investment plans, client records
and other proprietary or confidential information of ISS, and all information
relating thereto, are confidential, proprietary and trade secrets of ISS and
ISS’s clients (except with respect to information in the public domain) (“ISS
Proprietary Information”). ADP acknowledges that during its performance of its
obligations hereunder, ADP may be provided with or have access to ISS
Proprietary Information, which it shall treat as Confidential Information and
comply with the obligations concerning Confidential Information set forth in
Section 11. ADP further agrees that in addition to ISS’s right to equitable and
injunctive relief to prevent unauthorized, negligent or inadvertent use or
disclosure of ISS Proprietary Information as provided for in Section 11.6, ISS
shall be entitled to recover the amount of all such damages (including
reasonable attorneys’ fees and expenses)
in connection with such use or disclosure.

 

(b)                                       Notwithstanding anything in this Section 5.3
to the contrary, ADP may use (i) information obtained from ISS such as its
feedback and suggestions regarding the Consolidated Datafeed, and (ii) ISS’s
and ISS clients’ voting patterns for purposes of providing statistical data to
third parties, provided that in each case neither ISS’s nor its clients’
identities are disclosed nor could reasonably be inferred from the context of
the description. ISS shall have the right to review and approve in writing the
characterization of ISS ‘ client voting records (identified. as such) or
patterns prior to any dissemination of such information to any Person other
than ISS. Nothing in this paragraph or anywhere else in this Agreement shall be
interpreted as a restriction of any kind on ADP’s use of information (i) that
is not ISS Proprietary Information; (ii) of which ISS is not the owner or (iii)
that did not emanate from ISS (so long as such information was previously known
or acquired by ADP through lawful means).

 

7

 

5.4.                            ADP
Proprietary Information.

 

(a)                                          ISS
acknowledges and understands ADP’s representation that the securities holdings,
investment plans, client records as well as certain intellectual property
contained in ADP’s Proxy Plus System and other proprietary or confidential
information of ADP, and all information relating thereto, are confidential, proprietary
and trade secrets of ADP and ADP’s clients (except with respect to information
in the public domain) (“ADP Proprietary Information”). ISS acknowledges that
during its performance of its obligations hereunder, ISS may be provided with
or have access to ADP Proprietary Information, which it shall treat as
Confidential Information and comply with the obligations concerning
Confidential Information set forth in Section 11.6. ISS further agrees that in
addition to ADP’s right to equitable and injunctive relief to prevent
unauthorized, negligent or inadvertent use of disclosure of ADP Proprietary
Information as provided for in Section 11, ADP shall be entitled to recover the
amount of all such damages (including reasonable attorney’s fees and expenses)
in connection with such use or disclosure.

 

SECTION 6.                        Fees.

 

6.1.           Vote Instruction Fee. ISS and ADP
shall each use commercially reasonable efforts to minimize the number of paper
ballots transmitted by ADP to ISS, and returned by ISS to ADP, during the Term,
to further a system of full electronic interchange between the parties. During
the Term, subject to Section 6.3 below, ISS shall pay ADP a fee per Vote
Instruction (the “Datafeed Vote Instruction Fee”) as set forth on Annex II
hereto (subject to any adjustments pursuant to Section 8 herein) for Vote
Instructions pertaining to Ballots transmitted via any method by ADP to ISS,
and returned by ISS to ADP through the Consolidated Datafeed. The aggregate
Datafeed Vote Instruction Fees shall be invoiced to ISS on a monthly basis.

 

6.2.          Services Fee. ADP shall provide the
Services (outlined in Section 4.1 and 4.2 herein) to ISS at no additional cost.

 

6.3.           Minimum Monthly Ballot Requests Fee.
Notwithstanding anything contained in this Agreement to the contrary, with
respect to each month of the Term, ISS shall be obligated to pay to ADP a
minimum fee (the “Minimum Monthly Ballot Requests Fee”) equal to the product of
(x) the weighted average of the applicable
monthly Datafeed Vote Instruction Fee(s) and (y) a number equal to 95%
(the “Monthly Fee Ballot Percentage”) of all Ballots which ISS’s clients have
requested that ISS vote on their behalf and which are sent or transmitted by
ADP, by whatever means, to ISS during the month in question. ISS’s obligation
to pay the Minimum Monthly
Ballot Requests Fee shall be absolute, irrespective
of the number of Vote Instructions actually transmitted to ADP via the Consolidated Datafeed for the month in
question. On an annual basis during the Term, beginning on the first anniversary
of the Live Date, ADP and ISS shall, in good faith, perform a review of (i) the
total number of Ballots transmitted by ADP, by whatever means, to ISS during
the previous year, (ii) the total number of Ballots voted by ISS and
returned to ADP, by whatever means, during the previous year, (iii) the total
number of Ballots voted by ISS and returned to ADP via the Consolidated
Datafeed during the previous year, and (iv) any qualifying factors identified by each of ISS and ADP with
respect to the immediately preceding clauses (i) through (iii), in order to
determine whether any

 

8

 

adjustment to the Monthly
Fee Ballot Percentage is required based on the initial formula used to
determine the Monthly Fee Ballot Percentage. If, and to the extent, such
percentage shall be adjusted, the aggregate Minimum Monthly Ballot Requests
Fees for the previous year shall be reconciled to reflect a credit or balance
due to or by ISS for such adjustment of the Monthly Fee Ballot Percentage.

 

6.4.                                  Failure to Pay and Overdue Payments. Any payments other than payments subject to
a bona fide dispute, that are not made within 60 days of the invoice date as
provided in this Section 6 shall bear interest at the annual rate of 8%. Such
remedy is not exclusive but shall be cumulative along with any and all other
remedies available to ADP under this Agreement and Applicable Law.

 

SECTION
7.                        Representations, Warranties and Covenants.

 

7.1.                                  ISS Representations. ISS represents and warrants to ADP the
following:

 

(a)                                  It is duly incorporated, validly existing,
and in good standing under the laws of the State of Delaware and has full power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. All requisite corporate actions necessary for the due
authorization, execution, delivery, and performance of this Agreement by ISS
have been duly taken. ISS has duly executed and delivered this Agreement. This
Agreement constitutes a valid and binding obligation of ISS enforceable against
ISS in accordance with its terms (except as may be limited by bankruptcy,
insolvency, or similar laws of general application and by the effect of general
principles of equity, regardless of whether considered at law or in equity).

 

(b)                                 The execution, delivery and performance by
ISS of this Agreement does not and will not violate or conflict with, or
require the consent of any third party under, any agreements, rights, or
obligations existing between ISS and any other Person.

 

(c)                                  It has the full legal right to grant to ADP
the licenses granted under this Agreement. ISS’ performance of its obligations
under this Agreement does not infringe upon any intellectual property right or
proprietary right of any Person

 

7.2.                                  ADP Representations. ADP represents and warrants to ISS the
following:

 

(a)                                  It is duly organized, validly existing, and
in good standing under the laws of the State of Delaware and has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. All requisite corporate actions necessary for the due authorization, execution,
delivery, and performance of this Agreement by ADP have been duly taken. ADP
has duly executed and delivered this Agreement. This Agreement constitutes a
valid and binding obligation of ADP enforceable against ADP in accordance with
its terms (except as may be limited by bankruptcy,
insolvency, or similar laws of general application and by the effect of
general principles of equity, regardless of whether considered at law or in
equity).

 

9

 

(b)                                      The execution, delivery  and
performance by ADP of this Agreement does not and will not violate or conflict
with, or require the consent of any third party under, any agreements, rights,
or obligations existing between ADP and any other Person.

 

(c)                                       It has the full legal right to grant to ISS
the licenses granted under this Agreement and its performance of its
obligations under this Agreement does not infringe upon any intellectual
property right or proprietary right of any Person.

 

7.3.                            ADP Covenants. ADP covenants to ISS as follows:

 

(a)                                       During the Term, ADP shall not knowingly
distribute any material or operate any system including, without limitation,
its Consolidated Datafeed that (i) infringes any intellectual property rights
of any Person or (ii) violates any law, statute, ordinance, or regulation
(including without limitation, the laws and regulations governing export
control), and shall use commercially reasonable efforts to prevent the
distribution of any material, program, device or system, including, without
limitation, the Consolidated Datafeed, that contains any viruses, trojan
horses, worms, time bombs, cancelbots, or other computer programming routines
that are intended to damage, detrimentally interfere with; surreptitiously
intercept, gain unauthorized access
to or control over, or expropriate any system, data or personal information or
in anyway affect its obligations hereunder.

 

(b)                                      The Consolidated Datafeed shall comply in all
material respects, and operate in substantial conformance, with the
descriptions and representations set forth in this Agreement, including the
Statement of Work (and any amendments to this Agreement).

 

(c)                                       During the Term, ADP shall conduct an annual
SAS-70 audit or similar audit at least as comprehensive as a SAS-70 audit and
shall provide the results of such audit to ISS.

 

(d)                                      During the Term, ADP shall conduct a
bi-annual disaster recovery test and provide the results of such test to ISS.

 

(e)                                       During the Term, but only on one (1) occasion
per year, ISS may retain an independent third party, at its cost, to conduct a
quality assurance review of the Consolidated Datafeed; however, such review
shall not extend to review, disclosure and audit of any proprietary systems,
trade secrets or intellectual property of ADP, including, but not limited to,
source code or password protected code, inventions, know-how, confidential
customer data or third party software or proprietary material licensed by ADP.
The audit may be conducted provided that the actual report and the results of
such audit shall be deemed Confidential Information of ADP and the report and
results of such audit may only be disclosed to ISS after execution by ISS of an
appropriate non-disclosure agreement, and in no event shall the report and
results be disclosed to any third party without ADP’s prior written consent. In
no event shall the results of the audit be used by ISS to compete with ADP or
to the detriment of ADP’s business.

 

(f)                                         On the first anniversary of the Term, ADP
shall negotiate in good faith with ISS to determine the appropriateness and
extent, if any, of a mutually beneficial increase to the de minimis activity
threshold set forth in Section 12.2(e).

 

10

 

7.4.                              ISS Covenants. ISS covenants to ADP as follows:

 

(a)                                       During the Term, ISS shall not knowingly
distribute any material or operate any system, including, without limitation,
the Enhanced Components, that (i) infringes any intellectual property rights of
any Person or (ii) violates any law, statute, ordinance, or regulation
(including without limitation, the laws and regulations governing export
control), and shall use commercially reasonable efforts to prevent the distribution
of any material, program, device or system, including, without limitation, the
Enhanced Components, that contains any viruses, trojan horses, worms, time
bombs, cancelbots, or other computer programming routines that are intended to
damage, detrimentally interfere with, surreptitiously intercept, gain
unauthorized access to or control over, or expropriate any system, data or
personal information or in anyway affect its obligations hereunder.

 

(b)                                      During the Term, ISS shall conduct an annual
SAS-70 audit or similar audit at least as comprehensive as a SAS-70 audit and
shall provide the results of such audit to ADP.

 

(c)                                       During the Term, ISS shall conduct a
bi-annual disaster recovery test and provide the results of such test to ADP.

 

(d)                                      During the Term, but only on one (1) occasion
per year, ADP may retain an independent third party, at its cost, to conduct an
audit of the process flow and controls used by ISS to provide the ISS proxy
voting services contemplated under this Agreement; however, such audit shall
not extend to review, disclosure and audit of any proprietary systems, trade
secrets or intellectual property of ISS, including, but not limited to, source
code or password protected code, inventions, know-how, confidential customer
data or third party software or proprietary material licensed by ISS. The audit
may be conducted provided that the actual report and the results of such audit
shall be deemed Confidential Information of ISS and the report and results of
such audit may only be disclosed to ADP after execution by ADP of an
appropriate non-disclosure agreement, and in no event shall the report and results
be disclosed to any third party without ISS’s prior written consent. In no
event shall the results of the audit be used by ADP to compete with ISS or to
the detriment of ISS’s business.

 

(e)                                       Subject to ADP’s obligations set forth in
Annex I, ISS agrees to transmit all Vote Instructions pertaining to Ballots
received from ADP via the Consolidated Datafeed by use of the Consolidated
Datafeed unless ISS shall be precluded from transmitting such Vote Instructions
by such means due to Downtime, Scheduled Maintenance or Unscheduled
Maintenance. In the event that ISS (i) receives a Ballot from ADP via any
method other than via the Consolidated Datafeed, or (ii) is precluded from
transmitting Vote Instructions via the Consolidated Datafeed due to Downtime,
Scheduled Maintenance or Unscheduled Maintenance or due to any act or omission
of ADP in contravention of its obligations under this Agreement, ISS may, under
such circumstances, transmit Vote Instructions through such method(s)
(including, without limitation, via the Internet, telephone and facsimile) as
ISS shall determine in its sole discretion. Notwithstanding the foregoing, ISS
shall not use any Unsanctioned Method or Unsanctioned Form.

 

11

 

(f)                                         On the first anniversary of the Term, ISS
shall negotiate in good faith with ADP to determine the appropriateness and
extent, if any, of a mutually beneficial increase to the de minimis activity
threshold set forth in Section 12.2(e).

 

7.5.                              Disclaimer of Warranties. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, ALL OTHER WARRANTIES AND CONDITIONS ON BEHALF OF EITHER
PARTY, WHETHER EXPRESSED OR IMPLIED BY STATUTE, COMMON LAW, OR OTHERWISE, ARE
TO THE EXTENT PERMISSIBLE BY LAW HEREBY EXCLUDED. IN PARTICULAR,
ADP AND ISS HEREBY ACKNOWLEDGE THAT NEITHER ADP NOR ISS MAKES
ANY WARRANTY, EXPRESS OR IMPLIED, TO THE OTHER OR TO ANY THIRD PARTIES AS TO
THE QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PRODUCTS AND SERVICES OFFERED UNDER THIS AGREEMENT. EXCEPT AS EXPRESSLY STATED
IN THIS AGREEMENT, NEITHER PARTY GIVES ANY ASSURANCE OR WARRANTY REGARDING THE
PAST OR CONTINUED SUPPLY, ACCURACY, CALCULATION OR PUBLICATION OF THE
CONSOLIDATED DATAFEED OR THE ENHANCED COMPONENTS.

 

SECTION
8.                        Pricing Adjustment.

 

***

 

12

 

SECTION
9.                        Limitation of Liability.

 

NEITHER
PARTY SHALL HAVE ANY LIABILITY FOR LOST PROFITS OR INDIRECT, PUNITIVE OR
SPECIAL DAMAGES ARISING OUT OF THIS AGREEMENT, EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

SECTION
10.                  Indemnification.

 

10.1.                      ISS Indemnity. ISS shall indemnify and hold harmless ADP,
its Affiliates and their respective officers, directors, partners, employees
and agents against any and all judgments, damages, costs or losses of any kind
(including reasonable attorneys’ and experts’ fees) resulting from any third
party claim, action, or proceeding that directly arises out of or relates to:
(i) any breach by ISS of its representations, warranties or covenants
hereunder; or (ii) any claim that the Enhanced Components, any part thereof or
any technology used in connection therewith, infringes any U.S. patent,
copyright, trademark, trade name or other proprietary right, including
misappropriation of trade secrets; provided, however, that (a) ADP notifies ISS
promptly of any such claim, action or proceeding; (b) ADP grants ISS control of
its defense and/or settlement; and (c) ADP cooperates with ISS, at ISS’s
expense, in the defense thereof. Upon request by ADP, ISS shall periodically
reimburse ADP for its reasonable expenses incurred under this Section 10.1. ADP
shall have the right, at its own expense, to participate in the defense of any
claim, action or proceeding against which it is indemnified hereunder;
provided, however, it shall have no right to control the defense, consent to
judgment, or agree to settle any such claim, action or proceeding without the
written consent of ISS without waiving the indemnity hereunder. ISS, in the
defense of any such claim, action or proceeding, except with the written
consent of ADP, shall not consent to the entry of any judgment or enter into
any settlement which either (A) does not include, as an unconditional term, the
grant by the claimant to ADP of a release of all liabilities in respect of such
claims or (B) adversely affects the rights or public image of ADP in respect of
such claim, action or proceeding.

 

10.2.                     ADP Indemnity.

 

(a)                             ADP shall indemnify and hold harmless ISS,
its Affiliates and their officers, directors, partners, employees and agents
against any and all judgments, damages, costs or losses of any kind (including
reasonable attorneys’ and experts’ fees) resulting from any third party claim,
action, or proceeding that directly arises out of or relates to: (i) any breach
by ADP of its representations, warranties or covenants hereunder; or (ii) any
claim that the Consolidated Datafeed, any part thereof or any technology used
in connection therewith, infringes any U.S.
patent, copyright, trademark, trade name or other proprietary right, including misappropriation of trade
secrets; provided, however, that (a) ISS notifies ADP promptly of any such claim, action or proceeding of which it
becomes aware; (b) ISS grants ADP control of its defense and/or settlement; and
(c) ISS cooperates with ADP, at ADP’s expense, in the defense thereof. Upon
request by ISS, ADP shall periodically reimburse ISS for its reasonable
expenses incurred under this Section 10.2. ISS shall have the right, at its own
expense, to participate in the  defense of any claim, action or proceeding against which it is
indemnified hereunder; provided, however, it shall have no right to control the
defense, consent to judgment, or agree to settle any such claim, action or
proceeding without the written consent of ADP without waiving the indemnity
hereunder. ADP, in the defense of any such claim, action or proceeding, except
with the written

 

13

 

consent of ISS, shall not
consent to the entry of any judgment or enter into any settlement which either
(A) does not include, as an unconditional term, the grant by the claimant to
ISS of a release of all liabilities in respect of such claims or (B) adversely
affects the rights or public image of ISS in respect of such claim, action or
proceeding.

 

(b)                                       Without limiting the rights to
indemnification set forth herein, if, as a result of any such infringement
claim, ISS is enjoined from using the Consolidated Datafeed, or in ADP’s
judgment such an injunction is likely to be issued, ADP, at its expense, may
either modify the Consolidated Datafeed so that it is no longer infringing (so
long as its functionality is not impaired), replace the Consolidated Datafeed
with functionally equivalent products or services, or obtain a right from such
claimant for ISS to continue to use the Consolidated Datafeed on terms no less
favorable than those set forth in this Agreement.

 

SECTION
11.                      Confidentiality.

 

11.1.                          Confidential Information. The parties recognize that, in connection
with the performance of this Agreement (including the Services), before and
after the date of this Agreement, each party or their respective Affiliates (in
such capacity, the “Disclosing Party”) has disclosed and may disclose
Confidential Information to the other party or such party’s Affiliates (the “Receiving
Party”). For purposes of this Agreement, “Confidential Information” means (i)
all information about either party’s business, business plans, customers,
strategies, trade secrets, operations, records, finances, assets, and
information that reveals the processes, methodologies, technology (including
source code and object code) or know-how by which either party’s existing or
future products, services, applications and methods of operation are developed,
conducted or operated, regardless of its form or the medium in which it is
stored; or (ii) any information that reasonably should be expected by the
Receiving Party to be confidential by virtue of its content or context.

 

11.2.                          Use of Confidential Information. Notwithstanding anything to the contrary
contained in Section 11.1, “Confidential Information” shall not include
information which: (i) was at the time of disclosure already in the possession
of the Receiving Party and not subject to any duty or obligation of
confidentiality or nondisclosure, as shown by written record; (ii) becomes
publicly known through no
wrongful act of the Receiving Party; (iii) was independently made available to
the Receiving Party by an unrelated and independent third party whose
disclosure shall not, to the knowledge of the Receiving Party after due
inquiry, constitute a breach of any duty of confidentiality owed to the
Disclosing Party; or (iv) has been independently developed by the Receiving
Party. The Receiving Party agrees (A) not to use any such Confidential
Information for any purpose other
than in the performance of its obligations
under this Agreement or as permitted hereby and (B) not to disclose any
such Confidential Information, except (1) to a limited number of its employees
on a need to know basis, (2) to its agents, representatives, lawyers and other
advisers that have a need to know such Confidential Information, (3) to
software consultants and advisors who have a need to know such Confidential
Information in the course of the performance of their duties, provided that
such parties enter into appropriate written agreements to keep all Confidential
Information confidential which are enforceable by the Disclosing Party, to
protect the confidentiality of such Confidential Information, and (4) if
compelled to be disclosed pursuant to a court order or other legal process,

 

14

 

provided that the Disclosing
Party shall first have the opportunity to request an appropriate protective
order.

 

11.3.                           Unauthorized Use. The Receiving Party shall take all
commercially reasonable measures to protect the secrecy and confidentiality of,
and avoid disclosure or unauthorized use of, the Disclosing Party’s
Confidential Information and shall be responsible for any disclosure or misuse
of Confidential Information that results from a failure to comply with this
Section 11.3. The Receiving Party shall be fully responsible for any breach of
this Agreement by its agents, contractors, representatives and employees. The
Receiving Party shall promptly report to the Disclosing Party any actual or
suspected violation of the terms of this Agreement and shall take all reasonable
further steps required by the Disclosing Party to prevent, control or remedy
any such violation.

 

11.4.                           Return of Information. The  Receiving Party shall, at the request of the
Disclosing Party, retrieve all Confidential Information from its permitted
disclosees and thereafter shall (i) promptly return all Confidential
Information held or used by the Receiving Party in whatever form, or (ii) at
the discretion of the Receiving Party, promptly destroy all such Confidential
Information and certify such destruction to the Disclosing Party, provided
that during the Term, the Disclosing Party will not make such a request with
respect to Confidential Information necessary for the Receiving Party to
perform its obligations hereunder.

 

11.5.                          Tax Treatment. Notwithstanding any statement to the
contrary in this Agreement, each of the parties and their respective affiliates
and their advisors authorize employees, representatives or other agents, from
and after the commencement of any discussions with any such party, to disclose
to any and all Persons without limitation of any kind the tax treatment and tax
structure related to this Agreement and all materials of any kind (including
opinions or other tax analyses) relating to such tax treatment or tax structure
that may be provided, except for any information identifying either party
hereto or their Affiliates. For purposes hereof, the terms “tax treatment” and “tax
structure” shall have the meaning provided by Treasury Regulation Section 1.6011-4.

 

11.6.                           Injunctions. In view of the difficulties of placing a monetary value on the
Confidential Information, the Disclosing Party may be entitled to a preliminary
and final injunction without the necessity of posting any bond or undertaking
in connection therewith to prevent any further breach of this Section 11 or
further unauthorized use of its Confidential Information. This remedy is
separate from and in addition to any other remedy the Disclosing Party may
have.

 

11.7.                          Existing Non Disclosure Agreement. This Section 11 supercedes and replaces the
existing Non Disclosure Agreement between ISS and ADP and such Non Disclosure
Agreement shall be deemed terminated as of the Effective Date.

 

SECTION
12.                     Term and Termination.

 

12.1.                           Term. Subject to early termination under Section 12.2, the term of this
Agreement shall commence on the Effective Date and terminate on the eighth (8th)
anniversary of the Effective Date (the “Initial Term”); provided, that
this Agreement shall be renewable for

 

15

 

successive five (5) year
periods (together with the Initial ‘Term, the “Term”) unless it is terminated
by either party by giving written notice to the other party at least ninety
(90) days before the end of the Initial Term or any succeeding renewal term.

 

12.2.                    Termination. Notwithstanding anything to the contrary contained herein, this
Agreement may be terminated at any time:

 

(a)                                       By mutual consent of ADP and ISS;

 

(b)                                     By ISS if ADP has breached any
representation, warranty, covenant or agreement contained in this Agreement and
has not, in the case of a breach of a covenant or agreement, cured such breach
within ten Business Days after written notice of such breach is given to ADP
(provided that ISS is not then in material breach of the terms of this
Agreement, and provided further that no cure period shall be required for a
breach which  by its nature
cannot be cured) unless such breach shall not reasonably be likely to prevent
the consummation of the transactions contemplated by this Agreement or have a
Material Adverse Effect on ISS;

 

(c)                                      By ADP if ISS has breached any
representation, warranty, covenant or agreement contained in this Agreement and
has not, in the case of a breach of a covenant or agreement, cured such breach
within ten Business Days after written notice of such breach is given to ISS
(provided that ADP is not then in material breach of the terms of this
Agreement, and provided further that no cure period shall be required for a
breach which by its nature cannot be cured) unless such breach shall not
reasonably be likely to prevent the consummation of the transactions
contemplated by this Agreement or have a Material Adverse Effect on ADP;

 

(d)                                     By ISS upon a breach by ADP of Section
7.3(f);

 

(e)                                      Subject to Sections 7.3(f) and 7.40), by ADP
if, during the Term, ISS commences any activity, other than on a “de minimis”
basis, related to acting as an agent or otherwise as an outsourced service
provider, on behalf of banks, broker-dealers or other nominees in North America
(in the aggregate, “Nominees”), in connection with fulfilling such Nominees’
obligations pursuant to Rules 14b-1 or 14b-2, respectively, under the
Securities Exchange Act of 1934, as amended, or any successor rules or
regulations. For purposes of this Section 12.2(e), a “de minimis” basis shall
mean the processing by ISS of 3,000 or fewer Nominee customer accounts in any
calendar year; provided, such Nominee customer accounts (i) contain positions
for securities of North American issuers trading on North American securities
exchanges and (ii) are accounts of Persons not domiciled in North America.
Within 10 Business Days after the end of each calendar year during the Term,
ISS shall deliver to ADP a certificate signed by the President and Chairman of
ISS certifying ISS’s compliance with the provisions of this Section 12.2(e);

 

(f)                                        By either party upon a breach by the other
party of Section 14.13 (Assignment);

 

(g)                                     By either party if: (i) there shall be a
final, non-appealable order of a Federal or state court in effect preventing
consummation of the transactions contemplated

 

16

 

hereby; or (ii) there shall be any final action taken, or any statute,
rule, regulation or order enacted, promulgated or issued or deemed applicable
to the transactions contemplated hereby by any Governmental Entity which would
make consummation of the transactions contemplated hereby illegal; and

 

(h)                                  By either party in the event the other party
intentionally discloses any Confidential Information of the other party in
breach of this Agreement.

 

12.3.                      Effect of Termination.

 

(a)                                    Upon the expiration or termination of this
Agreement, provided that ISS continues to pay Fees pursuant to Section 6, ADP
shall permit and not prohibit ISS’s continued use of the Consolidated Datafeed
for a transition period (the “Transition Period”) in order to provide ISS
adequate time to execute an uninterrupted migration by ISS from the use of the
Consolidated Datafeed to the use and operation of an alternate system so as not
to disrupt the business activities of ISS or any of ISS’s clients. Once such
alternate system is operational on the ISS system, ISS shall discontinue all
use of the Consolidated Datafeed and return to ADP all materials and
documentation related to the Consolidated Datafeed that are proprietary to ADP.
In no event shall this Transition Period be less than 120 days or greater than
six (6) months from the date of expiration or termination of this Agreement.

 

(b)                                    Upon the termination of this Agreement
pursuant to Section 12.2(e) above, ISS shall have the right to license ADP’s
Proxy Edge Software for purposes of processing Ballots on such terms and
conditions in existence under the Proxy Edge License Agreement immediately
prior to the Live Date, except for the term set forth in such agreement, which
shall be of no shorter duration than the then-remaining portion of the Term
under this Agreement. Notwithstanding the foregoing, in the event that the
parties revert to the Proxy Edge Software License Agreement, the pricing terms
set forth in such agreement immediately prior to the Live Date shall automatically be increased to reflect the aggregate
annual increase in the United States Consumer Price Index as released by the
United States Department of Labor.

 

(c)                                      Subject to Section 12.3(a), upon the
expiration or termination of this Agreement, (i)
ADP shall return to ISS all materials and documentation related to the Enhanced
Components that are proprietary to ISS, and (ii) ISS shall return to ADP all
materials and documentation related to the Consolidated Datafeed that are
proprietary to ADP.

 

SECTION 13. Notice.

 

13.1.                         Notice of ADP System. During the Term, ISS shall display in all
views available to vote agency clients, subject to ADP’s prior approval in each
instance, notice that the platform is electronically connected to the ADP Proxy
Plus system.

 

SECTION 14. Miscellaneous.

 

14.1.                          Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the United States of America and the
State of New York applicable to agreements made and to be performed entirely
within such state, without regard to the conflict of law principles of such
state.

 

 

17

 

14.2.                          Consent to Jurisdiction. Each of ADP and ISS irrevocably and
unconditionally submits, for itself and its property, to the non-exclusive jurisdiction
of the courts of New York State sitting in the County of New York or any
federal court of the United States of America sitting in the Southern District
of New York arising out of or relating to this Agreement or the transactions
contemplated thereby.

 

14.3.                         Waiver of a Jury Trial. Each party waives, to the fullest extent
permitted by Applicable Law, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under or in
connection with this Agreement. Each party (i) certifies that no
representative, agent or attorney of the other party has represented, expressly
or otherwise, that the other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (ii) acknowledges that it and the other
party have been induced to enter into this Agreement by, among other things,
the mutual waivers and certifications in this Section 14.3.

 

14.4.                         Relationship. Nothing contained in this Agreement shall
be construed as creating a joint venture, partnership, agent or employment
relationship between the parties. Each party will refrain from acting in any
manner which will prejudice or pledge the credit of the other party, from
representing to any other Person that it has the authority to act as agent on
behalf of such party and from making or purporting to make any contract on
behalf such party.

 

14.5.                         No Promotion. Except as contemplated in this Agreement,
each party agrees that it will not, without the prior written consent of the
other party in each instance, (i) use in external advertising, publicity, or
otherwise the name of the other party, or any affiliate of such party, or any
partner or employee of such party, nor any trade name, trademark, trade device,
service mark, symbol or any abbreviation, contraction or simulation thereof
owned by the other party or its affiliates, or (ii) represent, directly or
indirectly, that any information or any service provided by either party has
been approved or endorsed by the other party.

 

14.6.                         Notices. All notices and other communications under this Agreement shall be:

 

(a)               in writing,

 

(b)              delivered by hand, by registered or certified
mail, return receipt requested, by overnight delivery service, or by facsimile
transmission (with confirmation of receipt by telephone) to the address set
forth below or such address as either party shall specify by a written notice
to the other, and

 

(c)               deemed given upon receipt.

 

	
  Notice to ADP:

  	
   

  	
  Automatic Data Processing,
  Inc.

  
	
   

  	
   

  	
  1 ADP Boulevard

  
	
   

  	
   

  	
  Roseland, New Jersey 07068
  1728

  
	
   

  	
   

  	
  Tel: (973) 974 5000

  
	
   

  	
   

  	
  Fax: (973) 974 3324

  
	
   

  	
   

  	
  Attention: General Counsel

  

 

18

 

 

 

	
   

  	
   

  	
  with a copy
  to:

  
	
   

  	
   

  	
  General
  Manager

  
	
   

  	
   

  	
  ADP Investor
  Communications

  
	
   

  	
   

  	
  51 Mercedes
  Way

  
	
   

  	
   

  	
  Edgewood,
  New York 11717

  
	
   

  	
   

  	
  Fax: (631)
  254 7616

  
	
   

  	
   

  	
  Phone: (631)
  254 7448

  
	
   

  	
   

  	
   

  
	
  Notice to
  ISS:

  	
   

  	
  Institutional
  Shareholder Services, Inc.

  
	
   

  	
   

  	
  2099 Gaither
  Road, Suite 501

  
	
   

  	
   

  	
  Rockville,
  MD 20850

  
	
   

  	
   

  	
  Tel: (301)
  556-0500

  
	
   

  	
   

  	
  Fax: (301)
  556-0491

  
	
   

  	
   

  	
  Attention:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Willkie Farr
  & Gallagher LLP

  
	
   

  	
   

  	
  787 Seventh
  Avenue

  
	
   

  	
   

  	
  New York, NY
  10019

  
	
   

  	
   

  	
  Tel: (212)
  728-8000

  
	
   

  	
   

  	
  Fax: (212)
  728-8111

  
	
   

  	
   

  	
  Attention:
  Jeffrey R. Poss, Esq.

  

 

14.7.                          Entire
Agreement. This Agreement and the Schedule, Exhibits, Appendices and
Annexes attached hereto contain the entire agreement between the parties hereto
with respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings between the parties relating to the subject matter
hereof and thereof, including, without limitation, the Proxy Edge License
Agreement.

 

14.8.                           Severability.
If any provision of this Agreement or the application of any such provision to
any Person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality
or unenforceability  shall not affect any other
provision of this Agreement.

 

14.9.                           Further
Assurances. The parties shall each perform such acts, execute and deliver
such instruments and documents, and do all such other things as may be
commercially reasonable to accomplish the transactions contemplated by this
Agreement.

 

14.10.                     Force
Majeure. Neither ADP nor ISS shall bear responsibility or liability for any
losses arising out of any delay in or interruptions of their respective
performance of their obligations under this Agreement due to any act of God,
act of Governmental Authority, act of the public enemy or due to war, the
outbreak or escalation of hostilities, riot, fire, flood, civil commotion,
insurrection, labor difficulty (including, without limitation, any strike, or
other work stoppage or slow down), severe or adverse weather conditions,
communications line failure, or other similar cause beyond the reasonable
control of the party so affected. So long as any such delay or interruption
continues, the party responsible for such performance will use its

 

19

 

reasonable best efforts to
eliminate such conditions, as applicable, and will keep the other party fully
informed at all times concerning the matters causing such delay or default and
the prospects for their termination.

 

14.11.                     Advertising and Publicity. Neither party, nor anyone acting on such
party’s behalf, shall publish, distribute or otherwise disseminate any press
release, advertising or publicity matter having any reference to the other
party of this Agreement, unless and until such matter has first been submitted
to and approved in writing by the other party.

 

14.12.                     Amendments: Waivers. Except as otherwise expressly provided in
this Agreement, no amendment to this Agreement shall be effective unless it
shall be in writing and signed by the parties. Any failure of a party to comply
with any obligation, covenant, agreement or condition contained in this
Agreement may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure of compliance.

 

14.13.                      Assignment. ADP shall have the right to assign or sublicense this Agreement and
any of its rights, interests, or obligations hereunder to any Person, without
ISS’s prior written consent, so
long as such assignee does not directly or materially compete with ISS
immediately prior to the date of such assignment and, provided that, such
assignee shall be obligated to perform, and capable of performing, all of ADP’s
obligations under this Agreement and shall so agree in writing to such
obligation to perform. ISS shall have the right to assign or sublicense this
Agreement and any of its rights, interests, or obligations hereunder to any
Person, without ADP’s prior written consent, so long as such assignee does not
directly or materially provide substantially similar services or product
offerings as those provided by ADP to ISS customers immediately prior to the
date of such assignment and, provided that, such assignee shall be obligated to
perform, and capable of performing, all of ISS’s obligations under this
Agreement and shall so agree in writing to such obligation to perform.

 

14.14.                      Successors; Assigns: Third-Party Beneficiaries. This Agreement shall be binding upon and
inure to the benefit of each of the parties, and any Person who may become a
party hereto and their respective successors, heirs and legatees and permitted
assigns.

 

14.15.                      Survival. Sections 5, 9, 10, 11, 12.3 shall survive the termination or
expiration of this Agreement. Any and all accrued liabilities shall survive the
termination or expiration of this Agreement.

 

14.16.                      Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other party.

 

20

 

The
parties have caused their respective duly authorized representatives to execute
this Agreement as o f this 27th day of October, 2003.

 

 

	
   

  	
   

  	
  INSTITUTIONAL SHAREHOLDER
  SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
   /s/ Robert CS Monks

  	
   

  
	
   

  	
   

  	
   

  	
  NAME: Robert CS Monks

  
	
   

  	
   

  	
   

  	
  TITLE: Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ADP INVESTOR COMMUNICATION
  SERVICES. INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
  /s/ Robert Schifellite

  	
   

  
	
   

  	
   

  	
   

  	
  NAME: Robert Schifellite

  
	
   

  	
   

  	
   

  	
  TITLE: Senior Vice
  President

  

 

 

21

 

 

Exhibit
A

 

Statement
of Work

 

***

 

 

 

Annex
I

 

Principal
Terms of 

 

Service
Level Agreement

 

***

 

 

Appendix I to Annex I

 

 

Appendix I
to Annex I

 

Contact Details

 

ISS

 

	
  Contact Information

  	
   

  	
   

  
	
  Primary Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
  ISS Helpdesk

  
	
  Telephone

  	
   

  	
  (301) 556-0556

  
	
  Fax

  	
   

  	
   

  
	
  Email

  	
   

  	
  helpdesk@issproxy.com

  
	
  Secondary Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
  Lauren Morningstar

  
	
  Telephone

  	
   

  	
  (301) 556-0276

  
	
  Fax

  	
   

  	
   

  
	
  Email

  	
   

  	
  lauren.morningstar@issproxy.com

  
	
  Emergency/Escalation

  	
   

  	
   

  
	
  Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
  Tim Matthews

  
	
  Telephone

  	
   

  	
  (301) 556-0268

  
	
  Fax

  	
   

  	
   

  
	
  Email

  	
   

  	
  tim.matthews@issproxy.com

  
	
  Data Feed Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax

  	
   

  	
   

  
	
  Email

  	
   

  	
   

  
	
  Data Feed Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
  Telephone

  	
   

  	
   

  
	
  Fax

  	
   

  	
   

  
	
  Email

  	
   

  	
   

  

 

ADP

 

	
  Contact Information

  	
   

  	
   

  
	
  Primary Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
  Network Operations Center

  
	
  Telephone

  	
   

  	
  (631) 254-7500

  
	
  Fax

  	
   

  	
  (631) 254 7699

  

 

 

	
  Email

  	
   

  	
  netalert@adp.com

  
	
  Secondary Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
  Network Operations Center

  
	
  Telephone

  	
   

  	
  (631) 254-7500

  
	
  Fax

  	
   

  	
  (631) 254 7699

  
	
  Email

  	
   

  	
  netalert@adp.com

  
	
  Emergency/Escalation

  Contact

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
  Telephone

  	
   

  	
   

  
	
  Fax

  	
   

  	
   

  
	
  Email

  	
   

  	
   

  
	
  Data Feed Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
  Telephone

  	
   

  	
   

  
	
  Fax

  	
   

  	
   

  
	
  Email

  	
   

  	
   

  
	
  Data Feed Contact

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
  Telephone

  	
   

  	
   

  
	
  Fax

  	
   

  	
   

  
	
  Email

  	
   

  	
   

  

 

 

Appendix II to Annex I

 

 

ADP/ICS

 

APPENDIX 2

 

 

Version 1.1

October 17, 2003

 

ADP/1CS CONSOLIDATED DATA FEED

 

1

 

 

ADP/ICS

APPENDIX 2

 

INDEX OF CONTENTS

 

 

	
  SECTION

  	
   

  	
   

  	
   

  	
  PAGE

  
	
  1.

  	
   

  	
  PE LITE SECURITY/MEETING

  	
   

  	
  3 – 12

  
	
  2.

  	
   

  	
  PE LITE AGENDA

  	
   

  	
  13 – 18

  
	
  3.

  	
   

  	
  PE LITE BALLOT

  	
   

  	
  19 – 25

  
	
  4.

  	
   

  	
  PE LITE DIRECTOR

  	
   

  	
  26 – 30

  
	
  5.

  	
   

  	
  PE LITE BALLOT CONFIRMATION

  	
   

  	
  31 – 35

  
	
  6.

  	
   

  	
  ISS DOMESTIC VOTE

  	
   

  	
  36 – 45

  
	
  7.

  	
   

  	
  ISS GLOBAL VOTE

  	
   

  	
  46 – 56

  

 

2

 

ADP/ICS

PE LITE SECURITY/MEETING

INTERFACE FILE REQUIREMENTS

‘469’

 

 

Version 1.1

October
17, 2003

 

3

 

 

PE LITE SECURITY/MEETING

INCOMING RECORD LAYOUT

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
   

  	
  PAGE

  
	
  1.

  	
   

  	
  LEAD
  RECORD LAYOUT

  	
   

  	
         5

  
	
  2.

  	
   

  	
  LEAD.
  RECORD SUMMARY

  	
   

  	
         7

  
	
  3.

  	
   

  	
  PE LITE
  SECURITY/MEETING INFORMATION 

  	
   

  	
         12

  

 

4

 

***

 

5

 

 

ADP/ICS

PE LITE AGENDA

INTERFACE FILE REQUIREMENTS

‘138’

 

 

Version 1.1 

October 17, 2003

 

13

PE LITE AGENDA INCOMING

RECORD LAYOUT

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
  1.

  	
   

  	
  LEAD
  RECORD LAYOUT

  	
  15

  
	
  2.

  	
   

  	
  LEAD
  RECORD SUMMARY

  	
  16

  
	
  3.

  	
   

  	
  PE LITE
  AGENDA INFORMATION

  	
  18

  

 

14

 

***

 

15

 

ADP/ICS

PE LITE BALLOT

INTERFACE FILE REQUIREMENTS

‘388’

 

 

Version 1.1

October 17, 2003

 

19

 

PE LITE BALLOT INCOMING

RECORD LAYOUT

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
  1.

  	
   

  	
  LEAD
  RECORD LAYOUT

  	
  21

  
	
  2.

  	
   

  	
  LEAD
  RECORD SUMMARY

  	
  22

  
	
  3.

  	
   

  	
  PE LITE BALLOT INFORMATION

  	
  25

  

 

20

 

***

 

21

 

ADP/ICS 

PE LITE DIRECTOR

INTERFACE FILE REQUIREMENTS

‘45’

 

 

Version 1.1 

October 17, 2003

 

26

 

PE LITE DIRECTOR INCOMING

RECORD LAYOUT

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
  1.

  	
   

  	
  LEAD RECORD LAYOUT

  	
  28

  
	
  2.

  	
   

  	
  LEAD RECORD SUMMARY 

  	
  29

  
	
  3.

  	
   

  	
  PE LITE
  DIRECTOR INFORMATION

  	
  30

  

 

27

 

***

 

28

 

ADP/ICS

PE LITE BALLOT
CONFIRMATION

INTERFACE FILE REQUIREMENTS

‘31’

 

 

Version 1.0 

September 16, 2003

 

 

PE LITE BALLOT CONFIRMATION

INCOMING RECORD LAYOUT

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
  1.

  	
   

  	
  LEAD RECORD LAYOUT

  	
  3

  
	
  2.

  	
   

  	
  LEAD RECORD SUMMARY

  	
  4

  
	
  3.

  	
   

  	
  PE LITE BALLOT CONFIRMATION INFORMATION

  	
  5

  

 

2

 

***

 

3

 

ADP/ICS 

ISS DOMESTIC VOTE

INTERFACE FILE REQUIREMENTS

‘180’

 

 

Version 1.1 

October 17, 2003

 

36

 

ISS DOMESTIC VOTE 

INCOMING RECORD LAYOUT

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  HEADER
  RECORD LAYOUT

  	
  38

  
	
  2.

  	
   

  	
  HEADER
  RECORD SUMMARY

  	
  39

  
	
  3.

  	
   

  	
  DETAIL
  RECORD LAYOUT

  	
  40

  
	
  4.

  	
   

  	
  DETAIL
  RECORD SUMMARY

  	
  41

  
	
  5.

  	
   

  	
  TRAILER
  RECORD LAYOUT

  	
  43

  
	
  6.

  	
   

  	
  TRAILER
  RECORD SUMMARY

  	
  44

  
	
  7.

  	
   

  	
  ISS
  DOMESTIC VOTE INFORMATION 

  	
  45

  

 

37

 

***

 

38

 

ADP/ICS 

ISS GLOBAL VOTE

INTERFACE FILE REQUIREMENTS

‘250’

 

 

Version 1.1 

October 17, 2003

 

46

 

ISS GLOBAL VOTE 

INCOMING RECORD LAYOUT

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
  1.

  	
   

  	
  HEADER
  RECORD LAYOUT

  	
  48

  
	
  2.

  	
   

  	
  HEADER
  RECORD SUMMARY

  	
  49

  
	
  3.

  	
   

  	
  DETAIL
  RECORD LAYOUT

  	
  50

  
	
  4.

  	
   

  	
  DETAIL
  RECORD SUMMARY

  	
  51

  
	
  5.

  	
   

  	
  TRAILER
  RECORD LAYOUT

  	
  54

  
	
  6.

  	
   

  	
  TRAILER
  RECORD SUMMARY

  	
  55

  
	
  7.

  	
   

  	
  ISS
  GLOBAL VOTE INFORMATION

  	
  56

  

 

47

 

***

 

48

 

Annex II

 

 

Annex II

ISS Vote Instruction Returned via the Consolidated Datafeed

 

	
  Year

  	
   

  	
  ISS Vote Instruction

  	
   

  	
  Volume

  	
   

  
	
  Year 1

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year 2

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year 3

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year 4

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year 5

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Year 6

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year 7

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year 8

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Each Renewal Term Year

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1)   The Price Per Vote Instruction set forth in
this column may be reduced from time to time pursuant to Section 8.1.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]