Document:

exv10w12

 

Exhibit 10.12

This Agreement for fully disclosed clearing services (“Agreement”) is made and entered into
this 15th day of August, 2005 by and between NATIONAL FINANCIAL SERVICES LLC (“NFS”), a Delaware
limited liability company, and THOMAS WEISEL PARTNERS LLC (“Correspondent”), a Delaware limited
liability company.

RECITALS

	A.	 	Correspondent is a broker or dealer registered with the Securities and Exchange
Commission (“SEC”). Correspondent engages in the business of providing securities and
investment services to customers.
	 
	B.	 	NFS is a broker and dealer registered with the SEC, and engages in the business of
executing and clearing transactions and carrying the accounts of brokers and dealers and
their customers.
	 
	C.	 	Correspondent desires to engage NFS to execute and clear transactions and carry
accounts on a fully disclosed basis on behalf of Correspondent and Correspondent’s
customers (“Customers”) which are introduced by Correspondent and accepted by NFS as
provided in Section IV.3 (all such accounts being referred to hereinafter as “Accounts”)
and to perform such other services as are provided for herein.
	 
	D.	 	NFS and Correspondent recognize their obligation to identify and allocate between
them certain functions or responsibilities pursuant to Rule 382(b) of the Rules of the New
York Stock Exchange, Inc. (the “NYSE”) and Rule 3230 of the Conduct Rules of the National
Association of Securities Dealers (the “NASD”), and agree that this Agreement is, among
other things, intended to effect such allocation.

NOW THEREFORE, in consideration of the mutual promises and agreements contained herein, the
parties agree as follows:

I. REPRESENTATIONS AND WARRANTIES

	 
	A.	 	Correspondent represents and warrants to NFS that:

		1)	 	Correspondent is a broker or dealer as defined in Section 3 of the Securities
Exchange Act of 1934 (“Exchange Act”). Correspondent is duly registered and in good
standing with the Securities and Exchange Commission (“SEC”), is a member firm in good
standing with the NASD, and Correspondent and each of its employees are in material
compliance and during the term of this Agreement will remain in material compliance
with the registration, qualification, capital, financial, reporting, customer
protection and other requirements, laws, rules and regulations of the United States,
the several states (where applicable), the SEC and the NASD, and each other
self-regulatory organization of which Correspondent is a member and to which any of
its employees or activities are subject.

	 	2)	 	Correspondent is a limited liability company or other business organization
duly organized, validly existing and in good standing under the laws of its state of
organization, and has all requisite authority, whether arising under its charter or
by-laws or applicable federal or state laws, to enter into this Agreement and to
discharge

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	 	 	 	the duties and obligations apportioned to it in accordance with the terms hereof, and
that the persons executing this Agreement on behalf of Correspondent are duly
authorized to do so.

	 	3)	 	Correspondent has advised NFS in writing of any arrangements that have been
made with any other firm for the provision by such other firm of clearing services for
any Accounts.

	 	4)	 	Upon entering into this Agreement, Correspondent has provided NFS with a copy
of Correspondent’s Securities Dealer or Brokers Blanket Bond insurance policy meeting
requirements as to form and type of coverage as the relevant self regulatory
organization may prescribe and which policy is current as of the date of this
Agreement. Such Brokers Blanket bond shall list NFS as a party to be notified if said
Bond’s monetary limits are reduced or if said Bond is canceled.

	 	5)	 	Correspondent has provided to NFS accurate information in all material
respects in conjunction with NFS’ consideration of entering into this Agreement with
Correspondent.

B. NFS represents and warrants to Correspondent that:

	 	1)	 	NFS is duly registered and in good standing as a broker and dealer with the
SEC and is a member firm in good standing with the NASD, NYSE and each other national
securities exchange of which it is a member. NFS and each of its employees are
in material compliance and during the term of this Agreement will remain in material
compliance with the registration, qualification, capital, financial, reporting,
customer protection and other requirements, laws, rules and regulations of the United
States, the several states (where applicable), the SEC and the NASD, and each other
self-regulatory organization of which NFS is a member and to which any of its
employees or activities are subject.

	 	2)	 	NFS is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has all requisite authority,
whether arising under its articles of organization or by-laws, applicable federal or
state laws, or the rules and regulations of the SEC, the NASD, or other
self-Regulatory organization to which NFS is subject, to enter into this Agreement and
to discharge the duties and obligations apportioned to it in accordance with the terms
hereof, and that the persons executing this Agreement on behalf of NFS are duly
authorized to do so.

	 	3)	 	NFS has fulfilled all registration and other requirements of all states and
the District of Columbia, to the extent such registration or other requirements are
applicable to NFS.

	 	4)	 	NFS has provided to the Correspondent accurate information, in all material
respects, in conjunction with Correspondent’s consideration of entering into this
Agreement with NFS.

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II. CORRESPONDENT’S REPORTING

	 	A.	 	Correspondent shall promptly notify NFS if any of its representations and warranties
set forth in Section I.A cease to be true and correct.

	 	B.	 	Correspondent will furnish to NFS upon execution of this Agreement a copy of
Correspondent’s balance sheet and statement of earnings for the current fiscal year and
for each of correspondent’s subsequent fiscal years. Each such balance sheet and
statement of earnings shall be certified by independent public accountants. Correspondent
will also furnish to NFS: (1) copies of the executed quarterly Forms X-17A-5 Part II A or
Part II filed with its self-regulatory organization, or other such successor forms as may
be applicable, (2) such financial reports regarding Correspondent or parent, subsidiary or
affiliate of Correspondent as NFS may from time to time request, and (3) copy of
Correspondent’s Restriction Letter issued by the NASD or other self- regulatory
organization

	 	C.	 	Correspondent agrees to provide to NFS, throughout the term of this Agreement, true,
correct and complete copies of (i) any material amendments to Correspondent’s Form BD
including but not limited to amendments or changes to name, address, ownership, officers,
directors and disciplinary history or events within five (5) calendar days of its filing
with the Central Registration Depository (“CRD”) operated by the NASD, (ii) any notices
which Correspondent receives concerning any investigation of its broker or dealer business
or operations by the SEC, the NASD, or other self-regulatory organization, within (5)
business days of Correspondent’s receipt thereof; or of any restrictions or limitations on
Correspondent’s broker or dealer business by the SEC, the NASD, or other self-regulatory
organization, within one (1) day of Correspondent’s receipt thereof, (iii) any notices
which Correspondent files with the SEC, the NASD, or other self-regulatory organization
pursuant to Section 17 of the Exchange Act and Rule 17a-11 thereunder, at the same time
and in the same manner as required under such Rule, and (iv) copy of any revisions to
Correspondent’s Membership Letter issued by the NASD or other self-regulatory
organization.

III. NFS’ REPORTING

A. NFS shall promptly notify Correspondent if any of its representations and warranties
set forth in Section I.B cease to be true and correct.

B. NFS will furnish to Correspondent upon execution of this Agreement a copy of
NFS’ Statement of Financial Condition for the current fiscal year and for each of NFS’
subsequent fiscal years. Each such balance sheet shall be certified by independent
public accountants.

C. NFS agrees to provide to Correspondent, throughout the term of this Agreement, true,
correct and complete copies of (i) any material amendments to NFS’ Form BD including but
not limited to amendments or changes to name, address, ownership, officers, directors and
disciplinary history or events within five (5) business days of filing with the CRD
operated by the NASD, (ii) any notices which NFS receives concerning any material
investigation of its business or operations by the SEC, the NASD, or other
self-regulatory organization, within five (5) business days of NFS’ receipt thereof; or
of any restrictions or limitations on NFS’s business by the SEC, the NASD, or other
self-regulatory organization, within one (1) business day of

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Correspondent’s receipt thereof, (iii) any notices which NFS files with the SEC, the
NASD, or other self-regulatory organization pursuant to Section 17 of the Exchange Act
and Rule 17a-11 thereunder and (iv) copy of any material revisions to NFS’ Membership
Letter issued by the NASD or other self-regulatory organization.

D. NFS shall furnish Correspondent a copy of a SAS 70 Type II report addressing certain
of NFS’ business services provided under this Agreement on annual basis within a
reasonable time following the receipt of such audit.

IV. CUSTOMER AND CORRESPONDENT ACCOUNTS AND TRANSACTIONS

	1)	 	Account Documentation and Due Diligence. Correspondent will be responsible
for obtaining and verifying the identity and information regarding each Customer and
potential Customer which is required under any federal, state or self-regulatory
organization law, rule or regulation including, but not limited to, such documents and
information as may be required under the Internal Revenue Code of 1986, as amended.
Correspondent shall be responsible for obtaining and approving all account applications.
Correspondent shall be responsible for ensuring that any person who executes documents or
gives instructions on behalf of another person or entity is properly authorized to do so
and for ensuring that each Account is authorized to engage in the transactions and other
activity in such Account. Correspondent shall forward to NFS completed and approved
account applications for margin, Fidelity prototype retirement and cash management
accounts and such other accounts as NFS may designate from time to time, as well as W-8
certifications to NFS in accordance with NFS’ procedures. With respect to Correspondent
proprietary accounts, one executed margin agreement may be submitted to NFS for all
proprietary accounts. Correspondent represents that to the best of its knowledge after
due investigation all documentation obtained or delivered to NFS in conjunction with the
establishment of any Account shall be genuine and properly executed by the Customer or
Customer’s duly authorized agent.
	 
	 	 	Correspondent will be responsible through a general partner, a principal executive officer
or a person designated for supervisory responsibilities to use due diligence to learn the
essential facts relative to every Customer Account, every cash, margin or option account
introduced by it to NFS and every person holding power of attorney over any Customer
Account. Correspondent shall use commercially reasonable efforts to ensure that every order
and transaction for each Account has been authorized by Customer, whether initiated by
Correspondent, Customer or Customer’s agent. Correspondent will be responsible for ensuring
that those of its customers who become Accounts hereunder shall not be minors or subject to
those prohibitions existing under the laws, rules or regulations generally relating to the
incapacity of any Account or any conflict of interest relating to such Account.

	2)	 	Record Retention and Retrieval. Correspondent will be responsible for the
maintenance and retention of all original documentation, including but not limited to
account applications except those relating to all margin, Fidelity prototype retirement,
cash management accounts, W-8 certifications and such other account documentation as NFS
may designate from time to time. Correspondent shall retain copies of documents maintained
by NFS to the extent required by law or regulation. Correspondent hereby acknowledges its
obligation to retain such documentation and account applications in an easily accessible
place in accordance with SEC rules and agrees to provide the original application by
overnight delivery or a legible copy by facsimile transmission thereof as

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	 	 	promptly as practicable after receiving of a request from NFS. Upon the request of NFS,
Correspondent will forward any additional documentation relating to the Customer account
that NFS may require in connection with opening, operating and maintaining of Customer
accounts.

	3)	 	Acceptance of Accounts. Correspondent shall be responsible for approving and
accepting each Customer and Account. Correspondent will not approve any Account unless all
information and due diligence required by Section IV.1 has been received and performed by
Correspondent. Each Account accepted and approved by Correspondent and opened with NFS
shall be subject to NFS’ acceptance. An account shall be deemed accepted by NFS if NFS has
not advised Correspondent of NFS’ intention not to accept the account within five (5) days
of establishment of the account. NFS reserves the right to reject, using reasonable
business judgment, any Customer or any Account and to terminate any Account submitted by
Correspondent or any Account previously accepted by NFS (it being understood that the
exercise of such reasonable business judgment shall be solely for the purpose of ensuring
NFS’ compliance with applicable laws, rules and regulations or for the purpose of
mitigating NFS’ own risk exposure). NFS shall be under no obligation to accept any
Account as to which any documentation or information requested by NFS pursuant to Section
IV.2 or required to be submitted to NFS or maintained by Correspondent pursuant to Section
IV.1 is incomplete. No action taken by NFS or any of its employees, including, without
being limited to, clearing a trade in any Account, shall be deemed to be or shall
constitute acceptance of such Account.

	4)	 	Acceptance of Orders. NFS may execute orders for Correspondent’s Customers
whose cash, margin or option accounts have been accepted by Correspondent for carrying by
NFS but only insofar as such orders are transmitted by Correspondent to NFS through the
NFS on-line system or telephonically, subject to approval and acceptance of such orders
and Accounts by an appropriate principal of Correspondent. All transactions executed
and/or cleared by NFS are subject to the constitution, rules, regulations, customs, and
usages of the exchange, market, or clearing house where executed, as well as to any
applicable federal or state laws, rules, and regulations. NFS reserves the right to
reject, using reasonable business judgment, any order or transaction for any Account (it
being understood that the exercise of such reasonable business judgment shall be solely
for the purpose of ensuring NFS’ compliance with applicable laws, rules and regulations or
for the purpose of mitigating NFS’ own risk exposure). Correspondent shall be solely and
exclusively responsible for approving all orders for the Accounts and for establishing
procedures to ensure that such orders are transmitted properly to NFS for execution and/or
clearance. NFS reserves the right, in its sole discretion, to restrict trading in any
Account, including Correspondent’s proprietary or market making accounts, to liquidating
orders or cash transactions only, or to prohibit certain trading strategies or trading of
certain types of securities. Correspondent acknowledges that NFS is not obligated to
accept for execution any order placed directly with NFS by a Customer. For the purpose of
this Agreement, the term “orders” shall include all orders transmitted to or through
Correspondent by Customers whether by telephone conversations, automated telephone
service, home computer or over the Internet.

	5)	 	Supervision of Orders and Accounts. As between NFS and Correspondent,
Correspondent will be responsible for reviewing, monitoring and supervising transactions,
investments and other activity by every Customer and Account. Correspondent shall be
responsible for ensuring that all transactions in and activities related to all Accounts
opened by it with NFS, including discretionary Accounts, will be in compliance with all
applicable laws, rules and regulations of the United States, the several states,
governmental agencies, securities exchanges, and the NASD, including

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any laws relating to Correspondent’s fiduciary responsibilities to Customers, either under
the Employee Retirement Income Security Act of 1974 or otherwise. Without limiting the
foregoing obligations of Correspondent, Correspondent shall be responsible for: (i)
determining the suitability of all investments, investment strategies and transactions,
including option transactions, (ii) ensuring that there is a reasonable basis for all
recommendations made to Customers, (iii) determining the appropriateness of the frequency
of trading in Accounts, (iv) providing all required documents and other disclosures to
Customers, including but not limited to the Options Clearing Corporation disclosure
document (where required), and (v) compliance with the sales practice, disclosure and other
requirements of Section 15(g) of the Exchange Act and the rules thereunder.

In addition to the terms herein, Correspondent shall be responsible for ensuring that
mutual fund transactions initiated by the Correspondent shall comply with Applicable Laws
and Regulations, the terms of any applicable prospectus or other governing documents, and
the policy and procedures of NFS and the mutual fund or its service providers, including
but not limited to matters relating to break point price eligibility, market timing,
excessive or disruptive trading and trade cut-off times and related transaction pricing.

Correspondent shall diligently supervise the activities of its officers, employees and
representatives with respect to such Accounts. Correspondent shall be responsible for: (i)
selecting, investigating, training, and supervising all personnel of the Correspondent who
open, approve, or authorize Accounts and transactions in the Accounts, (ii) establishing
written procedures for reviewing activity in Accounts and ongoing review of all
transactions in Accounts, and maintaining compliance and supervisory personnel adequate to
implement such procedures, and (iii) ensuring that each instruction given to NFS with
respect to any Customer or Account including but not limited to the acquisition,
disposition or transfer of funds or securities shall be properly authorized by such
Customer or Account. NFS reserves the right to reject any instruction unless such
instruction is accompanied by such documentation as NFS deems appropriate.

	6)	 	System Reports. To the extent required by applicable regulation, NFS shall
provide to Correspondent a list of reports, which are available from NFS for Correspondent
to assist Correspondent in supervising and monitoring Accounts. Correspondent shall
promptly designate to NFS in writing which of such reports Correspondent wishes to
receive.

	7)	 	Accounts of Employees of Member Organizations, Self-Regulatory Organizations and
Financial Institutions. Correspondent shall not accept an Account for any person who
is an employee or associated person of a NYSE or NASD member firm, or who is otherwise
subject to NYSE Rule 407 or NASD Conduct Rule 3050 until Correspondent has complied with
the provisions of such Rules and, if applicable, provided evidence of employer approval as
required by such Rules.

V. EXTENSION OF CREDIT

Responsibility for compliance with all applicable rules, regulations and requirements
affecting the extension of credit including but not limited to Regulation T of the Federal
Reserve Board, or any rule or regulation of the SEC, any exchange or self regulatory
organization and the house rules of NFS shall be allocated between NFS and Correspondent as
set forth in this Section V.

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	1)	 	Cash Accounts. All transactions for a Customer will be deemed to be cash
transactions, and payment for those transactions will be required in the manner applicable
to cash transactions, unless Correspondent has established a margin account for a Customer
subject to NFS acceptance. Correspondent shall establish and maintain cash accounts in
compliance with applicable regulations.

	2)	 	Margin Agreements. Upon approval by Correspondent, Correspondent may
establish a margin account for a Customer subject to NFS acceptance. Correspondent will
furnish NFS with an NFS margin agreement and consent to loan and hypothecation of
securities, executed by the Customer, on the form furnished to Correspondent by NFS. Such
margin agreement shall include a disclosure of credit terms to be retained by the Customer
in accordance with Rule 10b-16 under the Exchange Act. NFS will compute and charge margin
interest to each Account as set forth therein and as otherwise agreed between NFS and
Correspondent. Correspondent may customize the rate or method of computing margin interest
in any Account, but shall be responsible for providing to such Account the disclosure of
credit terms as required under Rule 10b-16 or any similar rule. In no event shall
Correspondent place orders to be executed on margin for any Account unless Correspondent
has reasonable grounds to believe the Correspondent will furnish to NFS an executed margin
agreement for such Account. If an order is placed and executed without such reasonable
grounds, NFS may cancel the transaction and rebook it as a cash transaction and all
transaction costs and losses associated with such cancellation and re-booking shall be for
the account of the Correspondent.

	3)	 	Margin and Margin Maintenance. Correspondent is responsible for the
collection of initial margin and all amounts necessary to meet subsequent maintenance
calls in each Customer and Correspondent Account to insure compliance with Regulation T,
the rules of any self-regulatory organization or exchange and the house rules of NFS.
Subject to prevailing market conditions, NFS will produce, maintain and provide to
Correspondent sufficient information to allow Correspondent to determine which of its
Accounts are under margined for purposes of Correspondent’s compliance with Regulation T,
any self-regulatory organization or exchange and NFS’ house rules. NFS will notify
Correspondent of all margin and maintenance calls relating to Accounts and Correspondent
shall notify Accounts of such calls and shall be responsible for ensuring that margin
requirements are met. NFS reserves the right to send notice of a margin requirement
directly to an Account and will provide a copy of the notice to Correspondent. If any
Account fails to comply with any margin requirement, Correspondent will sell out (or buy
in, as appropriate) such Account so as to bring the Account into compliance with
applicable margin or maintenance requirements. In the event that required margin is not
provided within the time reasonably specified by NFS or securities sold are not delivered
as required, NFS may take such action as NFS deems appropriate, including but not limited
to the sale or purchase of securities for, and at the risk of, the Account. Compliance
with a request by Correspondent to withhold action shall not be deemed a waiver by NFS of
any rights under this Agreement, including but not limited to the right to close out a
contract or position if NFS in its judgment determines that changing conditions render
such action advisable, with or without prior notification to the Customer or the
Correspondent. Correspondent may request in good faith that NFS file for an extension of
time to comply with Regulation T. Filing for such extension of time with the NYSE is
within the sole discretion of NFS.

	4)	 	Margin Requirements. Initial margin and margin maintenance requirements
applicable to any margin account shall be in accordance with the house rules of NFS,
rather than in accordance with any lower requirement of any law, any exchange or any
regulatory agency. Utilizing reasonable business judgment and subject to prevailing
market

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conditions, NFS may change the margin requirements applicable to any Customer, Account,
class of accounts or security, as described in its house rules, on appropriate notice to
Correspondent (it being understood that the exercise of such reasonable business judgment
shall be solely for the purpose of ensuring NFS’ compliance with applicable laws, rules and
regulations or for the purpose of mitigating NFS’ own risk exposure). Correspondent shall
be responsible for advising its Customers of the changed requirements and for collecting
any additional margin necessary to insure compliance with such increased requirements.

	5)	 	Interest on Margin Accounts and Credit Balances. Net interest income from
the Accounts shall be proprietary to and fully retained by NFS, subject to credit provided
therefore to Correspondent as described in Exhibit A attached hereto. NFS shall calculate
the net interest income on the Accounts promptly after the end of each month.

	6)	 	Miscellaneous Credit Provisions. In addition to the rules and regulations
specifically set forth in this Section, Correspondent is responsible for compliance with
all other rules and regulations pertaining to the extension of credit including but not
limited to Section 11(d) of the Exchange Act and Regulation B of the Federal Reserve
Board.

VI. MAINTENANCE OF BOOKS AND RECORDS

Unless otherwise provided herein, NFS will make and preserve records of transactions,
accounts and other activities conducted by NFS hereunder on a basis consistent with
generally accepted practices in the securities industry and in accordance with the rules of
the SEC and each self regulatory organization to which NFS is subject. Correspondent shall
make and preserve such records relating to its business as may be required by law or
regulation to which Correspondent is subject. NFS and Correspondent shall each be
responsible for preparing and filing the reports required by the governmental and
regulatory agencies which have jurisdiction over it, and NFS and Correspondent will each
provide the other with such information, if any, which is in the control of one party but
is required by the other to prepare any such report.

VII. RECEIPT AND DELIVERY OF FUNDS AND SECURITIES

	1)	 	Receipt and Delivery in the Ordinary Course of Business. NFS, through
Correspondent, will receive and deliver funds and securities in connection with
transactions for Customer and Correspondent Accounts in accordance with the
Correspondent’s instructions. Correspondent shall be responsible for advising Customers of
their obligations to deliver funds or securities in good form in connection with each such
transaction and shall be liable for any failure of any Customer to fulfill such
obligation. NFS shall be responsible for the safeguarding of all funds and securities
delivered to and accepted by it, subject to count and verification by NFS. NFS will not be
responsible for any funds or securities delivered by a Customer to Correspondent, its
agents or employees until such funds or securities are physically delivered to NFS’
premises and accepted by NFS or deposited in an account maintained in NFS’ name.

	2)	 	Custody Services. Whenever NFS has been instructed to act as custodian of
the securities in any Correspondent or Customer Account, or to hold such securities in
“safekeeping”, NFS may hold the securities in the Customer’s name or may cause such
securities to be registered in the name of NFS or its nominee or in the names or nominees
of any depository used by NFS. NFS will perform the services customarily associated with
acting as custodian for securities in Correspondent and Customer accounts, such as: (i)
collection and payment of dividends, (ii) transmittal and handling (through

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	 	 	Correspondent) of tender offers, exchange offers and other corporate actions to the extent
notice of such action is actually received by NFS, (iii) transmittal of all proxy materials
and other shareholder communication actually received by NFS, and (iv) handling of
exercises, redemptions or expirations of rights and warrants.

	3)	 	Receipt and Delivery Pursuant to Special Instruction. Upon instruction from
Correspondent or a Customer in a form acceptable to NFS, NFS will make reasonable efforts
to effect transfers of securities, funds or Accounts as may be requested. In the event the
transfer of an Account requires the liquidation of certain securities within such Account,
NFS shall forward the entire request to Correspondent for appropriate action.

	4)	 	Check-Issuing Authority. NFS may, in its sole discretion, authorize certain
of the Correspondent’s employees to sign checks as agent for NFS for issuance to
Correspondent’s Customers for amounts requested by such Customers to be withdrawn from
their Accounts in such amounts and subject to such conditions and limitations as NFS may
determine from time to time. Correspondent shall designate in writing the names of any
employees it wishes to receive the authorization described in this paragraph.
Correspondent shall not issue or sign any check that would cause the Account to fail to
comply with applicable law or regulation or the margin or account equity requirements of
NFS. Correspondent shall record the issuance of any check on the NFS system on the same
day on which such check is issued. Correspondent agrees that it will not request NFS to
authorize someone to sign checks who is not an employee of Correspondent. Correspondent
represents and agrees that at any time NFS grants to Correspondent check-issuing authority
under this section, Correspondent maintains and shall enforce supervisory procedures with
respect to the issuance of such checks or similar instruments. Correspondent agrees to
indemnify fully NFS from the negligence, fraud, or mistakes of Correspondent or
Correspondent’s employees in connection with any check issuing authority granted to them
and Correspondent authorizes NFS to charge any Correspondent Account, including the
Settlement Account provided for in Section X or any other assets of Correspondent held by
NFS with the amount of any such losses. Notwithstanding Section VII.1, NFS will not be
responsible for the safeguarding of funds withdrawn by Correspondent or Correspondent’s
employees pursuant to such check-issuing authority except to the extent required by
applicable law or regulation NFS may withdraw any check issuing authority granted
hereunder upon notice to Correspondent at any time during the time of this Agreement.

VIII. CONFIRMATIONS AND STATEMENTS

	1)	 	Confirmations. Unless otherwise agreed, NFS will be responsible for
preparing and transmitting confirmations of transactions on behalf of the Correspondent.
NFS agrees that such confirmations shall comply with applicable rules and regulations with
respect to information within the control of NFS. NFS shall not review or be responsible
for specific transaction or other information set forth or provided by Correspondent on
any confirmation. Correspondent shall not generate and/or prepare any statements, billings
or confirmation respecting any brokerage transaction or securities position in any Account
which is required to be sent under applicable regulation except as provided in this
Agreement or with the prior written consent of NFS.

	2)	 	Statements. NFS shall prepare and send to Customers monthly or quarterly
statements of Account. Such statements shall comply with applicable law and regulation
with respect to information within the control of NFS and shall indicate that
Correspondent introduced the Account. Certain of the information on such statements, such
as prices and descriptions of securities, is obtained from third parties. While NFS will
include on

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statements information only from sources NFS believes to be reliable, NFS cannot guarantee
the accuracy of the information. In the event Correspondent posts, or a Customer instructs
NFS to post, transaction or other information including security valuations to an Account
or to a statement of account, NFS does not undertake to independently verify such
information and shall not be liable for any inaccuracy thereof.

	 	3)	 	Examination and Notification of Errors. Correspondent shall examine promptly
all monthly statements of Account, monthly statements of clearing services and other
reports provided or made available to Correspondent by NFS. Correspondent shall notify
NFS of any potential error in any Account in connection with (i) any transaction prior to
the settlement date of such transaction, (ii) information appearing on daily reports
within seven days of such report, and (iii) information first appearing on such monthly
statements or reports within 30 days of Correspondent’s receipt of any monthly statement
or report. Any notice of error shall be accompanied by such documentation as may be
necessary to substantiate Correspondent’s claim. Correspondent shall provide promptly
upon NFS’ request any additional documentation which NFS reasonably believes is necessary
or desirable to establish and correct any such error. Correspondent shall not be deemed
to have waived its right to make a claim against NFS pursuant to this Agreement by reason
of any delay in notification.

IX. FEES AND SETTLEMENTS FOR SECURITIES TRANSACTIONS

	 	1)	 	Commissions and Fees.

	 	(a)	 	On each transaction or with respect to an Account, Correspondent shall
identify to NFS the commissions and fees (“Fees”) and NFS will charge each Customer
such Fees. NFS shall not exercise any control or influence over the Fees, mark-ups, or
other charges or expenses imposed by the Correspondent upon the Accounts.
	 
	 	(b)	 	NFS will charge Correspondent for the clearing services, products and
features provided as the date of this Agreement according to the fee schedule set
forth in Exhibit A attached hereto. Such fees may be changed by mutual consent during
the term of this Agreement. The parties agree to negotiate in good faith the fees
payable by Correspondent for new or additional products or services or for material
enhancements or upgrades to existing products or services. Expenses incurred by NFS
on behalf of Correspondent and which shall be deducted from any payments due to
Correspondent from NFS include the fees and expenses set forth in Exhibit A attached
hereto.

	 	2)	 	Settlements. NFS will collect commissions from Customers on behalf of
Correspondent and through Correspondent. On each Monday (or the first business day
thereafter if that Monday is not a business day or if that Monday is a day on which the
NYSE is closed) NFS shall credit Correspondent’s Settlement Account (as defined in Section
X.3) with commissions and other amounts earned by Correspondent during the previous week.
The amount of such payments is to be determined in NFS’ reasonable business judgment and
in accordance with Correspondent’s trade activity up to that point. On the first Monday
of each month, NFS shall credit Correspondent’s Settlement Account for the commissions and
other amounts earned by Correspondent during the previous week, net of all amounts due to
NFS from Correspondent (including, without being limited to, expenses due NFS hereunder,
Customers unsecured debit items, however arising). If the amount due to NFS in any month
exceeds the amount available in Correspondent’s Settlement Account as shown on the
statement for such Settlement Account, Correspondent shall, in accordance with the
provisions of Section X.3, immediately

10

 

	 	 	 	deposit with NFS additional cash so that the Settlement Account will always have a zero or
credit balance. Any amount due to NFS shall be paid to NFS by Correspondent immediately
upon demand by NFS. If NFS does not receive such payment, NFS will charge Correspondent
interest at the broker’s call rate on such amount until paid. With respect to any Customer
or Correspondent Account in which there exists an unsecured debit or other unsatisfied
financial obligation at the time of the commission payment, NFS reserves the right to
reserve an amount equal to that which is outstanding in those Accounts and deduct that
amount from the payment to be made to Correspondent for that month unless the debit is the
result of NFS’ error, negligence or willful misconduct and the deduction will be reflected
on Correspondent’s Clearing Statement. Correspondent will receive a credit for those
Accounts in which the unsecured short position or unsecured debit is eliminated.

Correspondent shall properly account for any debit, deficiency or other financial
obligation in the computation of net capital or preparation of financial reports in
accordance with Rules 15c3-1 and 15c3-3 under the Exchange Act.

X. NET CAPITAL, DEPOSIT AND SETTLEMENT ACCOUNT

	 	1)	 	Net Capital. Correspondent shall maintain net capital in an amount which is
the greater of Correspondent’s net capital requirement as calculated in accordance with
Rule 15c3-1 under the Exchange Act, and an amount as set forth in Exhibit B. NFS reserves
the right to review the nature and volume of Correspondent’s business or the nature of the
securities involved in Correspondent’s transactions (“Business Mix”) and the parties agree
to negotiate in good faith an appropriate modification to Correspondent’s net capital
and/or Business Mix.

	 	2)	 	Settlement Account. In connection with the clearing services performed by
NFS hereunder, NFS will establish on NFS’ books a ledger account designated as a
settlement account (the “Settlement Account”) through which NFS will record the amounts
payable to Correspondent or due to NFS from Correspondent pursuant to this Agreement. In
the event that Correspondent fails to meet any of Correspondent’s obligations under this
Agreement, Correspondent authorizes NFS to charge the Settlement Account in the amount
owed to NFS under this Agreement and Correspondent agrees that Correspondent will
immediately deposit with NFS additional cash so that the Settlement Account will at all
times have a credit or zero balance.

XI. INDEMNIFICATION

	 	1)	 	Indemnity. Correspondent shall indemnify and hold harmless NFS and each
person who controls NFS within the meaning of the Securities Exchange Act of 1934 from and
against any and all claims, damages, losses, judgments, costs and expenses (including
reasonable attorney’s fees) (“Losses”) that NFS may suffer or incur as a result of the
material failure of Correspondent to perform its obligations under this Agreement or the
negligence or willful misconduct of Correspondent. Without limiting the generality of the
foregoing, Correspondent shall indemnify and hold NFS harmless with respect to Losses,
except to the extent that such Losses are the result of NFS’ gross negligence of willful
misconduct, related to (i) failure by Correspondent or any Customer to promptly settle a
transaction or to maintain adequate margin; or (ii) NFS or Correspondent’s execution of a
transaction for the account of a customer pursuant to Section V.2; or (iii) NFS’
re-booking of margin transactions as cash transactions pursuant to Section V.2; or (iv)
material breach of any obligation existing between Correspondent and a Customer of
Correspondent that is related to the subject of this Agreement, including but not limited

11

 

to the terms of its margin agreement with NFS and consent to loan and hypothecation of
securities; or (v) Correspondent’s material failure to comply with any law, rule or
regulation of the United States, a state or territory thereof, the SEC, the Federal Reserve
Board, the NYSE or other authority, applicable to any transaction, customer or Account
contemplated by this Agreement; or (vi) the material failure of any Customer to satisfy his
or her obligation with respect to such Customer’s Account, including but not limited to
timely deposit good funds, deliver securities, settle any transaction or otherwise comply
with Regulation T including violation of Regulation T restrictions on an Account or the
margin rules of any self-regulatory organization, exchange or NFS; or (vii) breach by
Correspondent of any material representations or warranties made herein; or (viii) any
action by Correspondent or its employees in the receipt by Correspondent of an order or
cancellation of an order from an Account and its transmission to an order delivery or
execution system used by Correspondent or Correspondent Customers or (ix) suspension of
trading or bankruptcy or insolvency of any company, securities of which are held in
Customer’s Accounts.

NFS shall indemnify and hold harmless Correspondent and each person who controls
Correspondent within the meaning of the Securities Exchange Act of 1934 from and against
any and all Losses that Correspondent may suffer or incur as a result of the material
failure of NFS to perform its obligations under this Agreement or the negligence, or
willful misconduct of NFS. Without limiting the generality of the foregoing, NFS shall
indemnify and hold Correspondent harmless with respect to Losses, except to the extent that
such Losses are the result of Correspondent’s gross negligence or willful misconduct,
related to: (i) the loss of securities or cash after actual receipt by NFS from
Correspondent or prior to the delivery of securities to Correspondent from NFS by a courier
selected by NFS; (ii) failure by NFS to remain a member in good standing of the exchanges
necessary to provide the services contemplated hereunder or the failure to remain a duly
licensed broker/dealer in good standing under applicable law, (iii) any violation of
applicable law in the performance of its duties and obligations under this Agreement; (iv)
breach by NFS of any material representations or warranties made herein.

Promptly after receipt by a party entitled to indemnification under this Section (an
“Indemnified Party”) of notice of the commencement of an investigation, action, claim or
proceeding, such Indemnified Party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to the Indemnified Party under this Section. In
case any such action is brought against any Indemnified Party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the defense thereof, with
counsel satisfactory to such Indemnified Party. After notice from the indemnifying party
of its intention to assume the defense of an action or the actual assumption of the
defense, the Indemnified Party shall bear the expenses of any additional counsel obtained
by the Indemnified Party, and the indemnifying party shall not be liable to such
Indemnified Party under this Section for any legal or other expenses subsequently incurred
by such Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation. The Indemnified Party may not settle any action without the
written consent of the indemnifying party. The indemnifying party may not settle any
action without the written consent of the Indemnified Party unless such settlement
completely and finally releases the Indemnified Party from any and all liability and
imposes no further liability or obligation on the Indemnified Party. In either event,
consent shall not be unreasonably withheld.

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	 	2)	 	Security Interest; Authorization to Charge. Correspondent agrees that each
Correspondent Account and other property of Correspondent maintained by NFS shall be
subject to a lien and security interest in favor of NFS for the discharge of
Correspondent’s obligations to NFS under this Agreement. For purposes of this Agreement,
the defined term “Correspondent Accounts” does not include any Customer Accounts.
Correspondent authorizes NFS to charge any Correspondent Account maintained by NFS and any
other assets of Correspondent held by NFS with all amounts owing to NFS including, but not
limited to, (i) any reasonable cost or expense directly resulting from failures to deliver
or failures to receive; (ii) any losses directly resulting from unsecured debit balances
in any Customer or Correspondent Account; (iii) aged bank reconciliation items; and (iv)
any amounts to which NFS is otherwise entitled pursuant to the provisions of Section IX, X
or XI. Such charge may be made against any Correspondent Account or assets at any time on
notice and in such amount as NFS deems appropriate, utilizing reasonable business
judgment. No delay in charging any Correspondent Account or asset shall operate as a
waiver of NFS’ right to do so at any future time as and when NFS deems appropriate.
Correspondent may, at its option, satisfy its obligation to NFS under this section by
depositing immediately with NFS in a reserve or other appropriate account an amount
sufficient to cover the loss or unsecured indebtedness held in the Customer or
Correspondent Account.

XII. UNDERTAKINGS OF CORRESPONDENT

	 	1)	 	During the term of this Agreement, Correspondent will not obtain the services
contemplated hereunder through a broker other than NFS without prior written consent of
NFS. Notwithstanding the foregoing sentence, in the event that Correspondent requests NFS
to provide such services for certain financial products or to certain Customers and NFS is
unwilling or unable to provide such services for such products or to such Customers,
Correspondent may either self-clear or engage a third party to provide the clearing and/or
custody services for such products or to such Customers, only.

	 	2)	 	Suspension or Restriction. In the event that Correspondent or any principal
executive officer of Correspondent shall become subject to suspension or restriction by
the NYSE, NASD or any other regulatory body having jurisdiction over Correspondent and
Correspondent’s securities business, Correspondent will notify NFS immediately and
Correspondent authorizes NFS to take such steps as may be necessary for NFS to maintain
compliance with the rules and regulations to which NFS is subject. Correspondent further
authorizes NFS, in such event, to comply with directives or demands made upon NFS by any
such exchange or regulatory body. In connection with such directives or demands, NFS may
seek advice or legal counsel and Correspondent will reimburse NFS for reasonable fees and
expenses of such counsel.

	 	3)	 	(A) Tradenames of NFS. Correspondent acknowledges that the names and logos of
“Fidelity Investments Ò”, “National Financial Services LLC”, and their affiliates
(“Names”) are proprietary trademarks and tradenames and are of significant value and
importance. Correspondent will not undertake any written or oral sales, advertising,
marketing, promotional or solicitational activities which identify, make reference to or
otherwise use these Names, or suggest either orally or in writing that Correspondent is an
agent of, affiliated with or in any way part of the Fidelity InvestmentsÒ
organization, except as follows or as otherwise approved in writing by NFS:

	 	(a)	 	Correspondent may indicate that “Accounts are carried by National
Financial Services LLC, Member NYSE/SIPC, a Fidelity InvestmentsÒ company.”

13

 

	 	 	 	Any use of the Fidelity InvestmentsÒ name must be identified as a
registered trademark.

	 	(b)	 	In addition to any disclosures required by other rules, in describing
the SIPC and excess SIPC coverage on NFS accounts, the following language must be
used:

	 	 	 	“Securities in accounts carried by National Financial Services LLC
(“NFS”), a Fidelity Investments company, are protected by the Securities
Investor Protection Corporation (“SIPC”) up to $500,000 (including cash
claims limited to $100,000). NFS has arranged for additional insurance
protection for cash and securities to supplement its SIPC coverage. This
additional protection covers total account net equity in excess of the
$500,000/$100,000 coverage provided by SIPC. Neither coverage protects
against a decline in the market value of securities.”

	 	 	 	NFS shall provide Correspondent with evidence of its additional insurance protection for cash and securities to supplement
its SIPC coverage upon the request of Correspondent.

	 	(c)	 	Correspondent may indicate that Fidelity mutual funds are available
through Correspondent, and must if a specific fund is named use the full and
correct name of each mutual fund.

	 	(d)	 	No reference to the Fidelity companies or Fidelity mutual funds may
be made in such a way as to potentially mislead public customers.

	 	3)	 	(B) Tradenames of Correspondent. NFS acknowledges that the names and logos
of Correspondent are proprietary trademarks and tradenames and are of significant value
and importance. NFS will not undertake any written or oral sales, advertising, marketing,
promotional or solicitational activities which identify, make reference to or otherwise
use these names, or suggest either orally or in writing that NFS is an agent of,
affiliated with or in any way part of the Correspondent, except as approved in writing by
Correspondent.
	 
	 	4)	 	Regulation E Compliance. In the event any Account engages in any
transactions in an Account through the use of any electronic funds transfer mechanism or
procedure (“EFT”) and/or uses any access device, including any debit card, which may be
used for initiating an EFT, the Correspondent shall be solely liable and responsible for
compliance with the requirements of Regulation E promulgated by the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 205.1-15, all interpretations issued thereunder
and any rules, regulations, orders, or advisories promulgated by the FRB regarding
Regulation E or similar regulation.
	 
	 	5.	 	Tri-party Clearing Relationships. Correspondent shall not introduce to NFS
any Account, or transaction introduced to Correspondent by another broker or dealer
(“Tri-party Arrangement”) without the prior written consent of NFS. In the event
Correspondent wishes to enter into a Tri-party Arrangement, Correspondent shall indicate
such intention in Exhibit B and execute and require its Correspondent to execute such
agreements or other documents as NFS may require. Correspondent shall notify NFS promptly
in the event that a Tri-party Arrangement is terminated by Correspondent. Notwithstanding
anything herein to the contrary, for purposes of this Agreement, Correspondent’s directed
brokerage arrangement with Westminster Research Associates shall not constitute a
Tri-Party Arrangement. NFS agrees to support, in the ordinary course of business,
Correspondent’s environment for its clients utilizing Westminster Research for directed
brokerage, provide such support is not prohibited by law, rule, regulation or NFS’
policies.

14

 

	 	5)	 	Prospectus Delivery. Correspondent will have sole responsibility for
delivering any prospectus, offering circular or like document required pursuant to the
prospectus delivery or like requirements of the Securities Act of 1933, as amended, rules
of the Municipal Securities Rulemaking Board, other self regulatory organization, or as
required by the issuer. Correspondent shall be solely and exclusively responsible for
compliance with any and all disclosure document and prospectus delivery requirements in
connection with Accounts that are options accounts. Correspondent may retain NFS to
deliver or cause to be delivered prospectuses or similar documents which Correspondent is
otherwise required to deliver at such fees, as NFS and Correspondent shall agree from time
to time.

	 	6)	 	Compliance with State Law.

	 	a)	 	Correspondent. Correspondent shall be solely and exclusively
responsible for ensuring that each of activities in which it engages in connection
with this Agreement, including but not limited to, the handling of Customer Accounts,
the offer or sale of securities, and the qualification and registration of
Correspondent or its personnel shall be in material compliance with the laws and
regulations of each state and territory having jurisdiction over Correspondent or its
activities.
	 
	 	b)	 	NFS. NFS shall be solely and exclusively responsible for ensuring
that each of activities in which it engages in connection with this Agreement,
including but not limited to, extension of credit to Customer Accounts, and the
qualification and registration of NFS or its personnel shall be in material compliance
with the laws and regulations of each state and territory having jurisdiction over NFS
or its activities.

	 	7)	 	Electronic Transmission of Orders. Correspondent acknowledges that all NYSE
member firms must establish and maintain procedures designed to monitor and supervise the
electronic transmission of orders. Correspondent further acknowledges that it must either
(1) acknowledge to NFS that the procedures set forth on Exhibit C., (as such Exhibit may
be amended from time to time by NFS), have been adopted and implemented by Correspondent;
or (2) develop and implement its own procedures for the proper supervision of orders
placed with the NYSE by electronic transmission, and provide to NFS a copy of such
procedures. Correspondent has indicated its election in Exhibit C. and shall notify NFS in
writing in the event the election should change. The procedures set forth in Exhibit C are
intended to cover the limited aspect of supervision relating to electronic transmission of
orders and do not in any way alter Correspondent’s obligations as otherwise set forth by
law or in this Agreement.
	 
	 	8)	 	Delivery and Resale of Control and Restricted Securities. Correspondent shall
be responsible for compliance with all laws, rules, and regulations regarding the resale,
transfer, delivery or negotiation of securities under the Securities Act of 1933
(“Securities Act”), including but not limited to Rules 144, 145, 701 and Rule 144A
thereunder on behalf of any Customer or Correspondent Account. Correspondent shall notify
NFS whether any Customer or Account is a “control person” within the meaning of the
Securities Act with respect to any securities custodied at NFS from time to time.
In addition to the foregoing, Correspondent shall comply with such policies, procedures and
documentation requirements with respect to “control” and “restricted” securities (as such
terms are contemplated under the Securities Act) as NFS may provide to Correspondent from
time to time, including but not limited to the marginability of such securities.
	 
	 	 	 	In addition to the foregoing, Correspondent shall comply with such policies, procedures and
documentation requirements with respect to “control” and “restricted” securities (as such
terms are contemplated under the Securities Act) as NFS may provide to Correspondent from
time to time, including but not limited to the marginability of such securities.

15

 

	 	9)	 	(A) Order Routing. In the event that Correspondent uses or directs NFS to use NFS’
order routing network to direct orders to a particular broker, dealer or market center
through NFS’ order routing network, Correspondent hereby agrees to assume all regulatory
and fiduciary responsibilities associated with such order routing request(s), including
but not limited to customer disclosure and best execution. Correspondent hereby agrees to
indemnify and hold NFS harmless with respect to all losses, damages, or other financial
obligations suffered or alleged to have been suffered or incurred by a Customer arising
out of or related to any orders directed by Correspondent to such broker, dealer, or
market center; provided, however, that Correspondent is not responsible for any losses,
damages or other financial obligations suffered by a Customer arising out of or related to
any such orders directed by Correspondent as a result of NFS’ material failure to perform
its obligations under this Agreement or the gross negligence or willful misconduct of NFS.
Correspondent represents that it shall comply at all times with applicable regulations
regarding order routing, disclosure and inducements for order flow including Rules 11Ac1-3
and 10b-10 under the Securities Exchange Act of 1934 as in effect from time to time. NFS
represents and warrants that its routing network shall materially comply with applicable
laws, rules and regulations and that such network is reasonably designed to allow NFS to
direct orders as described herein.

(B) Executions with Other Counterparties. With respect to orders executed by
Correspondent directly with or through designated counterparties, and not through NFS, in
the event that the counterparty with whom Correspondent dealt fails to satisfy its
obligation with respect to any such transaction, Correspondent assumes the risk of such
failure by the counterparty and shall reimburse NFS for any loss which NFS may sustain.

	 	10)	 	Market Making and Underwriting Activity. It is understood by the parties that
Correspondent may engage in market making and/or participate in the distribution of
securities. NFS makes no opinion of the quality, investment potential or creditworthiness
of the issuer or the security. In the event that Correspondent wishes to engage in such
activity, Correspondent shall be responsible for compliance with applicable laws, rules
and regulations with respect to such activity. Due to the nature of the activity
contemplated hereunder, NFS reserves the right to increase the net capital and escrow
requirements as set forth in Exhibit B pursuant to Section X.1 and X.2 of this Agreement.
	 
	 	11)	 	Special Products or Services. Correspondent may elect to offer to its
customers or engage in certain products or services with prior written notice to NFS as
set forth in Exhibit B. Correspondent has indicated such intention in writing and in
Exhibit B and has executed the Addendum attached to such Exhibit.
	 
	 	12)	 	First Trade Day Deliverables. In addition to other items as may be mutually
agreed to by the parties hereto as necessary for Correspondent’s conversion to the NFS
platform, NFS shall provide to Correspondent on or before the first date the set of “First
Trade Day Deliverables” identified in Exhibit D. NFS recognizes that the “First Trade Day
Deliverables” identified in Exhibit D are critical to Correspondent’s conversion to the
NFS platform and NFS will work to provide to Correspondent such deliverables as quickly as
it is commercially reasonable to do so.
	 
	 	13)	 	Institutional Money Market Funds. Correspondent may continue to offer its
existing institutional money market funds and share classes available through Dreyfus.
NFS agrees to work with Dreyfus and Correspondent to develop the daily sweep transmissions
for the processing of the money market fund transactions. In the future, in the event NFS
provides a competitive money market alternative to the Dreyfus intuitional money market
funds, Correspondent agrees to consider in good faith utilizing such NFS alternative.

16

 

XIII. TERMINATION OF AGREEMENT; TRANSFER OF ACCOUNTS.

	 	1)	 	Effectiveness. This Agreement shall remain in full force and effect for an
initial term (the “Initial Term”) of (3) three years from the first trade date subject to
approval by the NYSE. Either party may terminate this Agreement at the end of such (3)
three-year period by giving 180 days prior written notification of termination. In such
event, this Agreement shall terminate at the end of such initial (3) three-year period.
	 
	 	 	 	In the event no written notification is given as set forth in the immediately preceding
paragraph, this Agreement shall be deemed to have been renewed for an additional two-year
period. At any time during such additional period, this Agreement may be terminated by
either party by giving 180 days prior written notification to the other party, and such
termination shall be effective as of the end of such 180-day period.
	 
	 	 	 	Thereafter, this Agreement shall be deemed to have been renewed for additional successive
one-year periods. At any time during such additional periods, this Agreement may be
terminated by either party by giving 180 days prior written notification to the other
party, and such termination shall be effective as of the end of such 180 day period.
	 
	 	2)	 	(a) Termination by NFS. NFS may terminate this Agreement at any time on 30
days written notice to Correspondent in the event that Correspondent:

	 	i.	 	materially fails to comply with the terms of this Agreement and upon
notification by NFS fails to remedy such material noncompliance within 10 days
from such notification; or
	 
	 	ii.	 	is enjoined, prohibited or suspended as a result of an administrative
or judicial proceeding for a period of more than 30 days from engaging in
securities business activities constituting all or portions of Correspondent’s
securities business, which injunction, prohibition or suspension in NFS’
reasonable judgment after consultation with outside counsel makes impracticable
the disclosed clearing relationship established in this Agreement; or
	 
	 	iii.	 	fails to comply with the net capital requirement pursuant to Section
X.1 and upon notification by NFS fails to correct such deficiency within 10 days
from such notification.

(b) Termination by Correspondent. Correspondent may terminate this Agreement at
any time on 30 days written notice to NFS in the event that NFS:

	 	i.	 	materially fails to comply with the terms of this Agreement and upon
notification by Correspondent fails to remedy such material noncompliance within
10 days from such notification; or

	 	ii.	 	is enjoined, prohibited or suspended as a result of an administrative
or judicial proceeding for a period of more than 30 days from engaging in
securities business activities constituting all or portions of NFS’s securities
business, which injunction, prohibition or suspension in Correspondent’s
reasonable judgment after consultation with outside counsel makes impracticable
the disclosed clearing relationship established in this Agreement.

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(c) Termination without Cause by Correspondent. Correspondent may terminate this
Agreement prior to the third anniversary of the Effective Date of this Agreement on 12
months written notice to NFS or between the third and fifth anniversary of the effective
date of this Agreement upon 180 days written notice to NFS.

	 	3)	 	Automatic Termination. The obligation of either party to perform services
pursuant to this Agreement shall terminate immediately in the event that either party:

	 	i.	 	is no longer registered as a broker-dealer with the SEC; or
	 
	 	ii.	 	is suspended or had material restrictions placed on its business by
the NASD or any national securities exchange of which a party is a member for
failure to comply with the rules and regulations thereof; or
	 
	 	iii.	 	ceases to conduct its business.

	 	4)	 	Conversion of Accounts. In the event that this Agreement is terminated for
any reason, it shall be Correspondent’s responsibility to arrange for the conversion of
Correspondent and Customer Accounts to another clearing broker. The parties agree to work
in good faith during such a conversion, but recognize that such a conversion is predicated
on the cooperation and good faith of the broker which will assume responsibility for
clearing services of the Customers. Correspondent will give NFS notice (the “Conversion
Notice”) of (i) the name of the broker which will assume responsibility for clearing
services for Customers and Correspondent, (ii) the date on which such broker will
commence providing such services, (iii) Correspondent’s undertaking, in form and substance
satisfactory to NFS, that Correspondent’s agreement with such broker provides that such
broker will accept on conversion all Correspondent and Customer Accounts, then maintained
by NFS and (iv) the name of an individual within that organization whom NFS can contact to
coordinate the conversion. The Conversion Notice shall be given within 30 days of NFS’ or
Correspondent’s notice of termination pursuant to Sections XIII.1 or XIII.2. or within 30
days of the occurrence of an event specified in Section XIII.3. If Correspondent fails to
give the Conversion notice to NFS, NFS may give to Customers such notice as NFS deems
appropriate of the termination of this Agreement and may make such arrangements as NFS
deems appropriate for transfer or delivery of Customer and Correspondent Accounts. In the
event NFS receives or gives notice of termination under this Section, or this Agreement
terminates automatically pursuant to Section XIII.3, NFS reserves the right to administer
each Account in such manner as NFS deems appropriate in NFS’ reasonable discretion,
including but not limited to rejecting transactions pursuant to Section IV.4. If (x)
Correspondent terminates this Agreement pursuant to Section XIII.1 or Section XIII.2(c),
(y) NFS terminates this Agreement pursuant to Section XIII.2(a) or (z) the Agreement
terminates pursuant to Section XIII.3 as a result of a development relating to
Correspondent, Correspondent will (a) pay to NFS reasonable and equitable programming
charges to process the conversion of Correspondent and Customer Accounts to another
clearing broker and (b) pay any costs incurred by NFS as billed by any third party vendors
such as transfer agents, etc. to process such conversion. If (x) Correspondent terminates
this Agreement pursuant to Section XIII.1 or Section XIII.2(b), or (y) the Agreement
terminates pursuant to Section XIII.3 as a result of a development relating to NFS, NFS
will (a) pay any programming charges to process the conversion of Correspondent and
Customer Accounts to another clearing broker and (b) pay any, reasonable, direct,
documented costs incurred by Correspondent to process such conversion. In the event that
during the Initial Term (x) Correspondent terminates this Agreement prior to the end of
the Initial Term pursuant to Section XIII.2(c), or (y) Correspondent intentionally
materially breaches this Agreement

18

 

	 	 	 	and, as a result, NFS terminates this Agreement, Correspondent shall pay to NFS a
termination fee as described in Exhibit A. In the event that Correspondent is the subject
of the issuance of a protective decree pursuant to the Securities Investor Protection Act
of 1970 (15 USC 78aaa-111), NFS’ claim for payment of a termination fee under this
Agreement shall be subordinate to claims of Correspondent’s customers that have been
approved by the Trustee appointed by the Securities Investor Protection Corporation
pursuant to the issuance of such protective decree.

	 	5)	 	Survival. Termination of this Agreement shall not affect the rights or
obligations of either party arising prior to the effective date of such termination. The
provisions of Sections XI. (Indemnification), XIII.4 (Conversion of Accounts); Section
IX.2 (Settlements) and XIV. (Confidential Nature of Information and Documents) shall
survive the termination of this Agreement.
	 
	 	6)	 	No Obligation to Release. NFS shall not be required to release to
Correspondent any securities or cash held by NFS for Correspondent in any Correspondent
Account or the Settlement Account until; (1) any amounts owing to NFS pursuant to the
provisions of this Agreement are determined and Correspondent’s outstanding obligations
hereunder to NFS are paid, including determination of any disputed amounts; (2) any
property of NFS in the possession of Correspondent is returned to NFS; (3) arrangements
satisfactory to NFS have been made by Correspondent with respect to each Account
introduced to NFS by Correspondent. NFS agrees to return any amounts owed to
Correspondent within 30 days from the effective termination of this Agreement.

XIV. CONFIDENTIAL NATURE OF INFORMATION AND DOCUMENTS

	 	 	 	Each party acknowledges and understands that any and all technical, trade secret, or
business information, including, without limitation, financial information, business or
marketing strategies or plans, product development or customer information, which is
disclosed to the other or is otherwise obtained by the other, its affiliates, agent or
representatives during the term of this Agreement (the “Proprietary Information”) is
confidential and proprietary, constitutes trade secrets of the owner, and is of great value
and importance to the success of the owner’s business. Each party agrees to comply with
its obligations under the terms of the Gramm-Leach-Bliley Act of 1999 (15 U.S.C. 6801 et
seq.) and other privacy laws, to the extent applicable, and to cooperate with the other
party at such party’s request in the fulfillment of any such obligations.
	 
	 	 	 	Proprietary information shall not include any information that is: (a) already known to the
other party or its affiliates at the time of the disclosure; (b) publicly known at the time
of the disclosure or becomes publicly known through no wrongful act or failure of the other
party; (c) subsequently disclosed to the other party or its affiliates on a
non-confidential basis by a third party not having a confidential relationship with the
owner and which rightfully acquired such information; (d) communicated to a third party by
the other party with the express written consent of the owner; or (e) legally compelled to
be disclosed pursuant to a subpoena, summons, order or other judicial or governmental
process, provided the disclosing party provides prompt notice of any such subpoena, order,
etc. to the other party so that such party will have the opportunity to obtain a protective
order.
	 
	 	 	 	Each party agrees to use its best efforts (the same being not less than that employed to
protect his own proprietary information) to safeguard the Proprietary Information and to
prevent the unauthorized, negligent or inadvertent use or disclosure thereof. Neither
party shall, without the prior written approval of any officer of the other, directly or
indirectly, disclose the Proprietary Information to any person or business entity except
for

19

 

	 	 	 	a limited number of employees, attorneys, accountants and other advisors of the other on a
need-to-know basis or as may be required by law or regulation. Each party shall promptly
notify the other in writing of any unauthorized, negligent or inadvertent use or disclosure
of Proprietary Information. Each party shall be liable under this Agreement to the other
for any use or disclosure in violation of the Agreement by its employees, attorneys,
accountants, or other advisors or agents. This Section XIV shall continue in full force
and effect notwithstanding the termination of this Agreement.

XV. INTENTIONALLY DELETED

XVI. NOTICE TO CUSTOMERS

	 	 	 	NFS shall provide, or cause to be provided to every Customer upon the opening of a Customer
Account, notice of the existence and general terms of this Agreement clearly indicating the
allocation of responsibility contained herein. This notice shall comply with New York Stock
Exchange Rule 382 and NASD Conduct Rule 3230.

XVII. CUSTOMER COMPLAINT PROCEDURES

	 	A.	 	Complaints Directed to Correspondent. Correspondent will be responsible for
the prompt handling of all Customer complaints directed to Correspondent. If any such
complaint is based upon an alleged act or failure to act by NFS or a responsibility
allocated to NFS, Correspondent will notify NFS promptly of such complaint and the basis
therefore and will consult with NFS and the parties will cooperate in determining the
validity of such complaint and the appropriate action to be taken. Correspondent will
forward a copy of such correspondence to NFS.
	 
	 	B.	 	Complaints Directed to NFS. NFS will be responsible for the prompt handling
of all Customer complaints directed to NFS. If any such complaint is based upon an alleged
act or failure to act by Correspondent or a responsibility allocated to Correspondent, NFS
will notify Correspondent promptly of such complaint and the basis therefore (with a copy
to Correspondent’s Designated Examining Authority to the extent required) and will consult
with Correspondent and the parties will cooperate in determining the validity of such
complaint and the appropriate action to be taken. NFS will forward a copy of such
correspondence to Correspondent.
	 
	 	C.	 	Regulatory Inquiries. Correspondent and NFS will each respond to the
inquiries they receive from regulatory authorities. Each will cooperate with the other in
production of information or documentation as necessary to respond to such inquiry in a
timely and complete manner.

XVIII. TELEPHONE RECORDING

	 	 	 	Each party understands and agrees that in order to verify securities transactions and other
information related to this Agreement, it may tape-record telephone conversations with its
employees. Each party also understands that such recordings may take place without an
audible electronic “beep”, tone or vocal announcement to indicate that the line may be
recorded. Each party will be solely responsible for notifying, and obtaining the consent
of, all present and future employees that such conversations may be recorded. Each party
consents to the admission of such recordings as evidence in any adjudication of any dispute
or claim arising under this Agreement.

20

 

XIX. REMEDIES CUMULATIVE

	 	 	 	The enumeration herein of specific remedies shall not be exclusive of any other remedies.
Any delay or failure by any party to this Agreement to exercise any right, power, remedy or
privilege herein contained, or now or hereafter existing under any applicable statute or
law, shall not be construed to be a waiver of such right, power, remedy or privilege, nor
to limit the exercise of such right, power, remedy, or privilege, nor shall it preclude the
further exercise thereof or the exercise of any other right, power, remedy or privilege.

XX. MISCELLANEOUS

	 	1)	 	NFS shall be responsible for providing IRS Form 1099 and other information required
to be reported by federal, state or local tax laws, rules or regulations, to Accounts
solely with respect to events subsequent to the effective date of this Agreement and for
the mailing of same at Correspondent’s expense.
	 
	 	2)	 	NFS shall limit its services pursuant to the terms of this Agreement to those
services expressly set forth herein and related thereto. NFS will perform such other
services including enhancements thereto, upon such terms and at such prices, as NFS and
Correspondent may from time to time agree. Neither Correspondent nor NFS shall hold
itself out as an agent, partner or joint venture partner of the other or any of the
subsidiaries or companies controlled directly or indirectly by or affiliated with the
other.
	 
	 	3)	 	This Agreement, including all Exhibits, which are hereby incorporated by reference,
constitutes and expresses the entire Agreement and understanding between the parties and
supersedes all previous communications, representations or agreements, whether written or
oral, with respect to the subject matter hereof. This Agreement may be modified only in
writing signed by both parties to this Agreement. Such modification shall not be deemed
as a cancellation of this Agreement.
	 
	 	4)	 	This Agreement shall be binding upon all successors, assigns or transferees of both
parties hereto, irrespective of any change with regard to the name of or the personnel of
Correspondent or NFS. Any assignment of this Agreement shall be subject to the requisite
review and/or approval of any regulatory agency or body whose review and/or approval must
be obtained prior to the effectiveness and validity of such assignment. No assignment of
this Agreement shall be valid unless the non-assigning party consents to such an
assignment in writing, provided that any assignment by either NFS or Correspondent to any
majority-owned subsidiary that they may create or to a company affiliated with or
controlled directly or indirectly by or under common control with either of them will be
deemed valid and enforceable in the absence of any consent from either party. Neither
this Agreement nor any operation hereunder is intended to be, shall not be deemed to be,
and shall not be treated as a general or limited partnership, association or joint venture
or agency relationship between Correspondent and NFS.
	 
	 	5)	 	Neither party shall be liable for any loss caused, directly or indirectly, by
government restrictions, exchange or market rulings, extreme market volumes or volatility,
suspension or trading, war (whether declared or undeclared), terrorist acts,
insurrection, riots, flooding, strikes, failure of utility services, accidents, adverse
weather or events of nature, or other conditions beyond the control of that party. In the
event that any communications network, data processing system, or computer system used by
a party, whether or not owned by such party, is rendered inoperable beyond the reasonable

21

 

	 	 	 	control of such party, such party shall not be liable to the other party for any loss,
liability, claim, damage or expense resulting, either directly or indirectly, therefrom.
	 
	 	6)	 	The construction and effect of every provision of this Agreement, the rights of the
parties hereunder and any questions arising out of the Agreement, shall be subject to the
statutory and common law of the Commonwealth of Massachusetts.
	 
	 	7)	 	In the event of a dispute between the parties such dispute shall be settled by
arbitration by arbitrators in accordance with the rules then in effect at the New York
Stock Exchange provided however that if the NYSE declines jurisdiction over the dispute it
shall be decided through the jurisdiction of the National Association of Securities
Dealers. Any final award rendered by such arbitrators shall be final and binding between
the parties and judgment thereon may be entered in any court of competent jurisdiction.
	 
	 	8)	 	The headings preceding the text and sections hereof have been inserted for
convenience and reference only and shall not be construed to affect the meaning,
construction, or effect of this Agreement.
	 
	 	9)	 	To the extent required by the Securities and Exchange Commission’s interpretation of
its financial responsibility rules and to the extent necessary to give Customers and
Accounts the full benefit of the Securities Investor Protection Act, Correspondent’s
Customers will be considered customers of NFS and not customers of the Correspondent.
Nothing herein shall cause the Correspondent’s Customers to be deemed to be customers of
NFS for any other purpose, or to negate the intent of any other section of this Agreement,
including but not limited to, the allocation of responsibilities as set forth elsewhere in
this Agreement.
	 
	 	10)	 	If any provision or condition of this Agreement shall be held to be invalid or
unenforceable by any court, or regulatory or self-regulatory agency or body, such
invalidity or unenforceability shall apply only to such provision or condition. The
validity of the remaining provisions and conditions shall not be affected thereby, and the
parties shall take diligent efforts to implement their original intentions as to the terms
of this Agreement.
	 
	 	11)	 	For the purposes of any and all notices, consents, directions, approvals,
restrictions, requests or other communications required or permitted to be delivered
hereunder, NFS’ address shall be:

	 	 	 
	 

	 	National Financial Services LLC
	 

	 	200 Seaport Blvd., Z2N
	 

	 	Boston, MA 02210
	 

	 	Attention: Jennifer Moran
	 
	 	 
	 

	 	and Correspondent’s address shall be:
	 
	 	 
	 

	 	Thomas Weisel Partners LLC
	 

	 	One Montgomery Street, Suite 3700
	 

	 	San Francisco, CA 94104
	 

	 	Attention: Shaugn Stanley and Mark Fisher

	 	 	 	and either party may provide such notice or change its address for notice purposes by
giving written notice pursuant to registered or certified mail, return receipt requested,
of

22

 

	 	 	 	the new address to the other party.

	 	12)	 	Authority to Execute; Counterparts; NYSE Approval. Each party represents to
the other that an officer duly authorized to enter into a fully disclosed clearing
relationship will execute this Agreement on behalf of such party. This Agreement may be
executed in one or more counterparts, all of which taken together shall constitute a
single Agreement. When each party hereto has executed and delivered to the other a
counterpart, this Agreement shall become binding on both parties, subject only to approval
by the NYSE. NFS will submit this Agreement to the NYSE promptly following execution.

Made and executed at Boston, Massachusetts this 15th day of August, 2005.

AGREED AND ACCEPTED:

THOMAS WEISEL PARTERS LLC

	 	 	 
	 

	 	By: /s/ David Baylor          
	 

	 	Name: David Baylor

Title: Authorized Officer

NATIONAL FINANCIAL SERVICES LLC

	 	 	 
	 
	 	 
	 

	 	By:/s/ Norman Malo          
	 

	 	Name: Norman Malo

Title: President

23exv4w2

 

Exhibit 4.2

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT 

     This Amended and Restated Registration Rights Agreement (this “Agreement”) is made and entered
into as of April 26, 2006, by and among Omniture, Inc., a Delaware corporation (the “Company”), the
persons and entities listed on Exhibit A attached hereto (the “Investors”), the persons and
entities listed on Exhibit B attached hereto (the “Founders”) and the persons and entities
listed on Exhibit C attached hereto (the “Additional Holders”).

     WHEREAS, certain of the Investors (the “Prior Investors”) are holders of outstanding shares of
the Company’s Series A-1 Preferred Stock (“Series A-1 Stock”), Series A-2 Preferred Stock (“Series
A-2 Stock”), Series A-3 Preferred Stock (“Series A-3 Stock”), Series A-4.1 Preferred Stock (“Series
A-4.1 Stock”), Series A-5 Preferred Stock (“Series A-5 Stock”), Series B Preferred Stock (“Series B
Stock”), Series B-1 Preferred Stock (“Series B-1 Stock”), Series B-2 Preferred Stock (“Series B-2
Stock”), Series C Preferred Stock and Series C-1 Preferred Stock (collectively, “Series C Stock”);

     WHEREAS, the Prior Investors have been granted certain registration rights under the Amended
and Restated Registration Rights Agreement dated as of March 27, 2006 (the “Prior Rights
Agreement”);

     WHEREAS, the Company, the Prior Investors and the Founders desire to enter into this Agreement
in order to amend, restate and replace their rights and obligations under the Prior Rights
Agreement with the rights and obligations set forth in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter
set forth, the parties hereto agree as follows:

     1. REGISTRATION RIGHTS.

          1.1 Definitions. For purposes of this Section 1:

               (a) Registration. The terms “register, “registration” and “registered” refer to a
registration effected by preparing and filing a registration statement in compliance with the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and the declaration or ordering of
effectiveness of such registration statement.

               (b) Registrable Securities. The term “Registrable Securities” means (1) all the
shares of Common Stock of the Company issued or issuable upon the conversion of any shares of
Preferred Stock that are now owned or may hereafter be acquired by any Investor or any Investor’s
permitted successors and assigns; (2) all the shares of Common Stock of the Company held by the
Founders that are now owned or may hereafter be acquired by any Founder or any Founder’s permitted
successors and assigns (the “Founders’ Shares”); (3) all the shares of Common Stock of the Company
held (or issuable upon the conversion or exercise of any warrant, right or other security which is
held) by the Additional Holders as of the date of this Agreement (the “Additional Holders’
Shares”); and (4) any shares of Common Stock of the Company issued as a

 

 

dividend or other distribution with respect to, or in exchange for or in replacement of, all
such shares of Common Stock described in clause (1), (2) or (3) of this Section 1.1(b);
excluding in all cases, however, any Registrable Securities sold by a person in a
transaction in which rights under this Section 1 are not assigned in accordance with this Agreement
or any Registrable Securities with respect to which, pursuant to Section 1.11 hereof, the holders
are no longer entitled to registration rights pursuant to Sections 1.2, 1.3 or 1.4 hereof;
provided, however, that notwithstanding anything herein to the contrary, the
Founders’ Shares and any shares of Common Stock described in clause (4) of this Section 1.1(b) that
are issued in respect of any Founders’ Shares (which with the Founders’ Shares are collectively
hereinafter referred to as the “Founder Excluded Shares”), shall not be counted as Registrable
Securities entitling the Founders to be an Initiating Holder for purposes of Section 1.2 of this
Agreement; provided, further that notwithstanding anything herein to the contrary,
the Additional Holders’ Shares and any shares of Common Stock described in clause (4) of this
Section 1.1(b) that are issued in respect of any Additional Holders’ Shares (which with the
Additional Holders’ Shares are collectively hereinafter referred to as the “Additional Holders
Excluded Shares”), shall not be counted as Registrable Securities entitling the Additional Holders
to be an Initiating Holder for purposes of Section 1.2 of this Agreement.

               (c) Registrable Securities Then Outstanding. The number of shares of “Registrable
Securities then outstanding” shall mean the number of shares of Common Stock which are Registrable
Securities that are then (1) issued and outstanding or (2) issuable pursuant to the exercise or
conversion of then outstanding and then exercisable and qualifying options, warrants or convertible
securities.

               (d) Holder. The term “Holder” means any person owning of record Registrable
Securities or any assignee of record of such Registrable Securities to whom rights set forth herein
have been duly assigned in accordance with this Agreement; provided, however, that
for purposes of this Agreement, a record holder of shares of Preferred Stock convertible into such
Registrable Securities shall be deemed to be the Holder of such Registrable Securities;
provided, further, that a holder of Founder Excluded Shares (as defined in Section
1.1(b)) or Additional Holders Excluded Shares (as defined in Section 1.1(b)) shall not be a Holder
with respect to such Founder Excluded Shares or Additional Holders Excluded Shares for purposes of
Section 1.2 of this Agreement; and provided, further, that the Company shall in no
event be obligated to register shares of Preferred Stock, and that Holders of Registrable
Securities will not be required to convert their shares of Preferred Stock into Common Stock in
order to exercise the registration rights granted hereunder, until immediately before the closing
of the offering to which the registration relates.

               (e) Form S-3. The term “Form S-3” means such form under the Securities Act as is in
effect on the date hereof or any successor registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial information by reference
to other documents filed by the Company with the SEC.

               (f) SEC. The term “SEC” or “Commission” means the U.S. Securities and Exchange
Commission.

-2-

 

          1.2 Demand Registration.

               (a) Request by Holders. If the Company shall receive at any time after six (6) months
after the effective date of the Company’s initial public offering of its securities pursuant to a
registration filed under the Securities Act, a written request from the Holders of at least 25% of
the Registrable Securities then outstanding (the “Initiating Holders”) that the Company file a
registration statement under the Securities Act covering the registration of Registrable Securities
pursuant to this Section 1.2, then the Company shall, within twenty (20) days after the receipt of
such written request, give written notice of such request (the “Request Notice”) to all Holders,
and effect, as soon as practicable (but in no event more than ninety (90) days following the
request from the Initiating Holders to register such shares), the registration under the Securities
Act of all Registrable Securities which Holders request to be registered and included in such
registration by written notice given by such Holders to the Company within twenty (20) days after
receipt of the Request Notice, subject only to the limitations of this Section 1; provided
that the Registrable Securities requested by all Holders to be registered pursuant to such request
must have an anticipated aggregate public offering price (before any underwriting discounts and
commissions) of not less than $7,500,000.

               (b) Underwriting. If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, then they shall so advise the
Company as a part of their request made pursuant to this Section 1.2 and the Company shall include
such information in the written notice referred to in Section 1.2(a). In such event, the right of
any Holder to include his, her, or its Registrable Securities in such registration shall be
conditioned upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority
in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall enter into an underwriting
agreement in customary form with the managing underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section 1.2, if the
underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the
number of securities to be underwritten then the Company shall so advise all Holders of Registrable
Securities that would otherwise be registered and underwritten pursuant hereto, and the number of
Registrable Securities that may be included in the underwriting shall be reduced as required by the
underwriter(s) and allocated among the Holders of Registrable Securities on a pro rata basis
according to the number of Registrable Securities then outstanding held by each Holder requesting
registration (including the Initiating Holders); provided, however, that the number
of shares of Registrable Securities to be included in such underwriting and registration shall not
be reduced unless all other securities of the Company are first entirely excluded from the
underwriting and registration. Any Registrable Securities excluded and withdrawn from such
underwriting shall be withdrawn from the registration.

               (c) Maximum Number of Demand Registrations. The Company is obligated to effect only
two (2) such registrations pursuant to this Section 1.2.

               (d) Deferral. Notwithstanding the foregoing, if the Company shall furnish to Holders
requesting the filing of a registration statement pursuant to this Section 1.2, a certificate

-3-

 

signed by the President or Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the
Company and its Founders for such registration statement to be filed and it is therefore essential
to defer the filing of such registration statement, then the Company shall have the right to defer
such filing for a period of not more than ninety (90) days after receipt of the request of the
Initiating Holders; provided, however, that the Company may not utilize this right
more than once in any twelve (12) month period and shall not register shares for its own account or
the account of others during such 90-day period.

               (e) Expenses. All expenses incurred in connection with a registration pursuant to
this Section 1.2, including without limitation all registration and qualification fees, printers’
and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and
disbursements of one (1) counsel for the selling Holders (but excluding underwriters’
discounts and commissions), shall be borne by the Company. However, each Holder participating in a
registration pursuant to this Section 1.2 shall bear such Holder’s proportionate share (based on
the number of shares sold by such Holder over the total number of shares included in such
registration at the time it is declared effective) of all discounts, commissions or other amounts
payable to underwriters or brokers in connection with such offering (but excluding all
out-of-pocket expenses as described in the underwriting agreement). Notwithstanding the foregoing,
the Company shall not be required to pay for any expenses of any registration proceeding begun
pursuant to this Section 1.2 if the registration request is subsequently withdrawn at the request
of the Holders of a majority of the Registrable Securities to be registered, unless the Holders of
a majority of the Registrable Securities then outstanding agree to forfeit their right to one (1)
demand registration pursuant to this Section 1.2 (in which case such right shall be forfeited by
all Holders of Registrable Securities); provided, further, however, that if at the
time of such withdrawal, the Holders have learned of a material adverse change in the condition,
business, or prospects of the Company not known to the Holders at the time of their request for
such registration and have withdrawn their request for registration with reasonable promptness
after learning of such material adverse change, then the Holders shall not be required to pay any
of such expenses and shall retain their demand registration rights pursuant to this Section 1.2.

          1.3 Piggyback Registrations. The Company shall notify all Holders of Registrable
Securities in writing at least thirty (30) days prior to filing any registration statement under
the Securities Act for purposes of effecting a public offering of securities of the Company
(including, but not limited to, registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements relating to any
registration under Section 1.2 or Section 1.4 of this Agreement or to any employee benefit plan or
a corporate reorganization or other transaction covered by Rule 145 promulgated under the
Securities Act, or a registration on any registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities,) and will afford each such
Holder an opportunity to include in such registration statement all or any part of the Registrable
Securities then held by such Holder. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by such Holder shall, within twenty
(20) days after receipt of the above-described notice from the Company, so notify the Company in
writing, and in such notice shall inform the Company of the number of Registrable Securities such
Holder wishes to include in such registration

-4-

 

statement. If a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall nevertheless continue to
have the right to include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings of its securities,
all upon the terms and conditions set forth herein. Notwithstanding anything in this Agreement to
the contrary, the provisions of this Section 1.3 shall not apply with respect to the Additional
Holders and the Additional Holders’ Excluded Shares in connection with any registration statement
(including any amendments or supplements to any such registration statement) filed in connection
with the Company’s initial public offering of its securities pursuant to a registration statement
filed under the Securities Act.

               (a) Underwriting. If a registration statement under which the Company gives notice
under this Section 1.3 is for an underwritten offering, then the Company shall so advise the
Holders of Registrable Securities. In such event, the right of any such Holder’s Registrable
Securities to be included in a registration pursuant to this Section 1.3 shall be conditioned upon
such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable
Securities in the underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an underwriting agreement
in customary form with the managing underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing underwriter determine(s) in
good faith that marketing factors require a limitation of the number of shares to be underwritten,
then the managing underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included in the
registration and the underwriting shall be allocated, first, to the Company, next to Holders
requesting inclusion of their Registrable Securities in such registration statement on a pro rata
basis based on the number of Registrable Securities each such Holder has requested to be included
in the registration; provided, however., that the right of the underwriters to
exclude shares (including Registrable Securities) from the registration and underwriting as
described above shall be restricted so that: (i) the number of Registrable Securities held by the
Investors included in any such registration is not reduced below 25% of the shares included in the
registration, except for a registration relating to the Company’s initial public offering, from
which all Registrable Securities may be excluded; and (ii) all shares that are not Registrable
Securities shall first be excluded from such registration and underwriting before any Registrable
Securities are so excluded. If any Holder disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice, given in accordance with Section 3.1
hereof, to the Company and the underwriter, delivered at least twenty (20) days prior to the
effective date of the registration statement. Any Registrable Securities excluded or withdrawn
from such underwriting shall be excluded and withdrawn from the registration. For any Holder that
is a partnership or corporation, the partners, retired partners and Founders of such Holder, or the
estates and family members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single “Holder,” and any pro rata reduction
with respect to such “Holder” shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such “Holder,” as defined in
this sentence.

               (b) Expenses. All expenses incurred in connection with the first registration
pursuant to this Section 1.3, including without limitation all registration and qualification

-5-

 

fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and
the reasonable fees and disbursements of one (1) counsel for the selling Holders (but
excluding underwriters’ discounts and commissions), shall be borne by the Company.
However, each Holder participating in a registration pursuant to this Section 1.3 shall bear such
Holder’s proportionate share (based on the number of shares sold by such Holder over the total
number of shares included in such registration at the time it goes effective) of all discounts,
commissions or other amounts payable to underwriters or brokers in connection with such offering
(but excluding all out-of- pocket expenses as described in the underwriting agreement), and
with respect to any registrations beyond the first one under this Section 1.3, any registration and
qualifications fees, printers’ and accounting fees, and any fees and disbursements of any counsel
for the participating Holders.

          1.4 Form S-3 Registration. In case the Company shall receive from any Holder or
Holders of Registrable Securities then outstanding a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance with respect to all
or a part of the Registrable Securities owned by such Holder or Holders, then the Company will do
the following:

               (a) Notice. Promptly give written notice of the proposed registration and the
Holder’s or Holders’ request therefor, and any related qualification or compliance, to all other
Holders of Registrable Securities.

               (b) Registration. As soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are
specified in such request, together with all or such portion of the Registrable Securities of any
other Holder or Holders joining in such request as are specified in a written request given within
twenty (20) days after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 1.4:

                    (1) if Form S-3 is not available for such offering;

                    (2) if the Holders, together with the holders of any other securities of the Company entitled
to inclusion in such registration, propose to sell Registrable Securities and such other securities
(if any) at an aggregate price to the public of less than $3,000,000;

                    (3) if the Company shall furnish to the Holders a certificate signed by the President or Chief
Executive Officer of the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its Founders for such Form S-3
Registration to be effected at such time, in which event the Company shall have the right to defer
the filing of the Form S-3 registration statement no more than once during any twelve (12) month
period for a period of not more than ninety (90) days after receipt of the request of the Holder or
Holders under this Section 1.4, but shall not register shares for its own account or the account of
others during such ninety (90) day period;

-6-

 

                    (4) if the Company has, within the twelve (12) month period preceding the date of such
request, already effected one (1) registration on Form S-3 for the Holders pursuant to this Section
1.4; or

                    (5) in any particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such registration,
qualification or compliance.

               (c) Expenses. Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities so requested to be
registered pursuant to this Section 1.4 as soon as practicable after receipt of the request or
requests of the Holders for such registration. The Company shall pay all expenses incurred in
connection with the first registration requested pursuant to this Section 1.4, (excluding
underwriters’ or brokers’ discounts and commissions), including without limitation all filing,
registration and qualification, printers’ and accounting fees and the reasonable fees and
disbursements of one (1) counsel for the selling Holder or Holders and counsel for the Company.
However, each Holder participating in a registration pursuant to this Section 1.4 shall bear such
Holder’s proportionate share (based on the number of shares sold by such Holder over the total
number of shares included in such registration at the time it goes effective) of all discounts,
commissions or other amounts payable to underwriters or brokers in connection with such offering
(but excluding all out-of- pocket expenses as described in the underwriting agreement), and
with respect to any registration beyond the first one under this Section 1.4, any registration and
qualification fees, printers’ and accounting fees, and any fees and disbursements of any counsel
for the participating Holders.

               (d) Not Demand Registration. Form S-3 registrations shall not be deemed to be demand
registrations as described in Section 1.2 above.

          1.5 Obligations of the Company. Whenever required to effect the registration of any
Registrable Securities under this Agreement, the Company shall, as expeditiously as reasonably
possible:

               (a) Prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use all commercially reasonable efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to ninety (90) days.

               (b) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement.

               (c) Furnish to the Holders such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition of the Registrable Securities
owned by them that are included in such registration.

-7-

 

               (d) Use all commercially reasonable efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holders, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.

               (e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Holder participating in such underwriting hereby agrees to also enter into and
perform its obligations under such an agreement.

               (f) Notify each Holder of Registrable Securities covered by 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 as a result of which the prospectus included 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
the light of the circumstances then existing.

               (g) Furnish, at the request of any Holder requesting registration of Registrable Securities,
on the date that such Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such securities becomes
effective: (1) an opinion, dated as of such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to underwriters in an
underwritten public offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (2) a “comfort” letter dated as of such date, from the
independent certified public accountants of the Company, in form and substance as is customarily
given by independent certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities.

          1.6 Furnish Information. It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Sections 1.2, 1.3 or 1.4 that the selling Holders shall
furnish to the Company such information regarding themselves, the Registrable Securities held by
them, and the intended method of disposition of such securities as shall be reasonably required to
timely effect the registration of their Registrable Securities.

          1.7 Delay of Registration. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this Section 1.

          1.8 Indemnification. In the event any Registrable Securities are included in a
registration statement under Sections 1.2, 1.3 or 1.4:

-8-

 

               (a) By the Company. To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, members, managing members, officers, employees and
directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the meaning of the Securities
Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), against any losses,
claims, damages, or liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively, the “Violations” and, individually, a
“Violation”): (1) any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto; or (2) 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; or (3) any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any federal or state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any federal or state securities law in connection with the
offering covered by such registration statement. The Company will reimburse each such Holder,
partner, member, managing member, officer, employee or director, underwriter or controlling person
for any legal or other expenses reasonably incurred by them as such expenses are incurred. Such
expenses shall be paid within three months after a request for reimbursement has been received by
the Company, in connection with investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the indemnity agreement contained in this
Section 1.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for
any such loss, claim, damage, liability or action to the extent such Violation occurred in reliance
upon and in conformity with written information furnished expressly for use in connection with such
registration by such Holder, partner, officer, director, underwriter or controlling person of such
Holder.

               (b) By Selling Holders. To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company within the meaning
of the Securities Act, any underwriter and any other Holder selling securities under such
registration statement or any of such other Holder’s partners, members, managing members,
directors, employees or officers or any person who controls such Holder within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, employee or controlling person,
underwriter or other such Holder, partner or director, member, managing member, officer, employee
or controlling person of such other Holder may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of any Violation, in each case to the extent (and only to
the extent) that such Violation occurred in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with such registration. Each
such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, controlling person, underwriter or other Holder, partner, member, managing
member, officer, employee, director or controlling person of such other Holder in connection with

-9-

 

investigating or defending any such loss, claim, damage, liability or action as such expenses
are incurred. Such expenses shall be paid within three months after a request for reimbursement
has been received by the indemnifying Holder, provided, however, that the indemnity
agreement contained in this Section 1.8(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected without the consent of
the Holder, which consent shall not be unreasonably withheld; and provided,
further, that the total amounts payable in indemnity by a Holder under this Section 1.8(b)
in respect of any Violation shall not exceed the net proceeds received by such Holder in the
registered offering out of which such Violation arises.

               (c) Notice. Promptly after receipt by an indemnified party under this Section 1.8 of
notice of the commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying party under this
Section 1.8, deliver to the indemnifying party a written notice of the commencement thereof. The
indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due to actual or potential
conflict of interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the indemnified party under
this Section 1.8 only to the extent of such prejudice, and the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.8.

               (d) Defect Eliminated in Final Prospectus. The foregoing indemnity agreements of the
Company and Holders are subject to the condition that, insofar as they relate to any Violation made
in a preliminary prospectus but eliminated or remedied in the amended prospectus on file with the
SEC at the time the registration statement in question becomes effective or the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the “Final Prospectus”), such indemnity agreement
shall not inure to the benefit of any person if a copy of the Final Prospectus was furnished to the
indemnified party and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Securities Act.

               (e) Contribution. If the indemnification provided for in this Section 1.8 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with respect to any
loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu
of indemnifying the indemnified party, shall contribute to the amount paid or payable by such
indemnified party with respect to such loss, liability, claim, damage or expense in the proportion
that is appropriate to reflect the relative fault of the indemnifying party and the indemnified
party in connection with the statements or omissions that resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations. The relative fault of
the indemnifying party and the indemnified party shall be determined by reference to, among other

-10-

 

things, whether the untrue or alleged untrue statement of material fact or the omission to
state a material fact relates to information supplied by the indemnifying party or by the
indemnified party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. In any such case, (A) no such Holder
will be required to contribute any amount in excess of the net proceeds received by such Holder
pursuant to sales under such registration statement less any amounts paid pursuant to Section
1.8(b); and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.

               (f) Conflict with Underwriting Agreement. Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement will control.

               (g) Survival. The obligations of the Company and Holders under this Section 1.8 shall
survive the completion of any offering of Registrable Securities in a registration statement, and
otherwise.

          1.9 “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the
extent requested by the Company or an underwriter of securities of the Company, sell or otherwise
transfer or dispose of any Registrable Securities or other shares of stock of the Company then
owned by such Holder (except for shares acquired on the public market and shares included in the
first registration statement of the Company filed under the Securities Act and other than transfers
to donees or partners of the Holder who agree to be similarly bound) for up to 90 days following
the effective date of any registration statement of the Company filed under the Securities Act (or
180 days following the effective date of the first registration statement of the Company filed
under the Securities Act); provided, however, that:

               (a) all officers and directors of the Company then holding Common Stock of the Company and all
stockholders holding in the aggregate at least 1% of the total equity of the Company, enter into
similar agreements; and

               (b) if any Holder is released from the obligations of this Section 1.9, then all Holders shall
be similarly released on a pro rata basis.

For purposes of this Section 1.9, the term “Company” shall include any wholly-owned subsidiary of
the Company into which the Company merges or consolidates. In order to enforce the foregoing
covenant, the Company shall have the right to place restrictive legends on the certificates
representing the shares subject to this Section and to impose stop transfer instructions with
respect to the Registrable Securities and such other shares of stock of each Holder (and the shares
or securities of every other person subject to the foregoing restriction) until the end of such
period. Each Holder further agrees to enter into any agreement reasonably required by the
underwriters to implement the foregoing within any reasonable timeframe so requested.

-11-

 

          1.10 Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the sale of the Registrable
Securities to the public without registration, after such time as a public market exists for the
Common Stock of the Company, 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, at all times after the effective date of the first registration
under the Securities Act filed by the Company for an offering of its securities to the general
public;

               (b) Use reasonable, diligent 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
(at any time after it has become subject to such reporting requirements); and

               (c) So long as a Holder owns any Registrable Securities, to furnish to the Holder forthwith
upon request a written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after ninety (90) days after the effective date of the
first registration statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it has become subject to
the reporting requirements of the Exchange Act), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company as a Holder may
reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder
to sell any such securities without registration (at any time after the Company has become subject
to the reporting requirements of the Exchange Act).

          1.11 Termination of the Company’s Obligations. The Company shall have no obligations
pursuant to Sections 1.2 through 1.4 with respect to the earlier of: (a) any request or requests
for registration made by any Holder on a date more than five (5) years after the dosing date of the
Company’s initial public offering; (b) any Registrable Securities proposed to be sold by a Holder
in a registration pursuant to Section 1.2, 1.3 or 1.4 if, in the opinion of counsel to the Company,
all such Registrable Securities proposed to be sold by a Holder may be sold in a single three (3)
month period without registration under the Securities Act pursuant to Rule 144 under the
Securities Act; or (c) the consummation of a Liquidation Event, as that term is defined in the
Company’s Restated Certificate of Incorporation (as amended from time to time).

          1.12 Limitations on Subsequent Registration Rights. From and after the date of this
Agreement, the Company shall not, without the prior written consent of the Holders of a majority of
the Series B Stock and Series C Stock then outstanding, enter into any agreement with any holder or
prospective holder of any securities of the Company which could result in (i) the Company being
required to file its first Registration Statement or (ii) a registration statement with respect to
any shares of the Company’s capital stock being declared effective prior to six (6) months after
the effective date of the Company’s initial public offerings of its securities pursuant to a
registration statement filed under the Securities Act.

-12-

 

     2. ASSIGNMENT AND AMENDMENT.

          2.1 Assignment. Notwithstanding anything herein to the contrary, the registration
rights of a Holder under Section 1 hereof may be assigned only to: (a) a party who acquires at
least 100,000 shares of Preferred Stock and/or an equivalent number (on an as converted basis) of
Registrable Securities issued upon conversion thereof or (b) a partner, limited partner, affiliate
(a person or entity controlling, controlled by or under common control with a Holder, where control
means majority voting control) of a Holder, member or former member; provided,
however that no party may be assigned any of the foregoing rights unless the Company is
given written notice by the assigning party at the time of such assignment stating the name and
address of the assignee and identifying the securities of the Company as to which the rights in
question are being assigned; provided, further, that any such assignee of such
rights is not deemed by the Board of Directors of the Company, in its reasonable judgment, to be a
competitor of the Company; and provided, further that any such assignee shall
receive such assigned rights subject to all the terms and conditions of this Agreement, including
without limitation the provisions of this Section 2. Notwithstanding the foregoing, assignments may
be made without the Company’s consent or obtaining the minimum number of shares of Registrable
Securities noted above if the assignment is to a partner, limited partner, affiliate, member or
former member.

          2.2 Amendment and Waiver of Rights. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and Investors (and/or
any of their permitted successors or assigns) holding shares of Preferred Stock and/or Conversion
Stock representing and/or convertible into a majority of all the Investors’ Shares (as defined
below); provided, however, that the piggyback registration rights granted to the
Founders under Section 1.3 of this Agreement may not be eliminated or materially and adversely
changed without the written consent of persons holding a majority of the Founders’ Shares;
provided, further, that the piggyback registration rights granted to the Additional
Holders under Section 1.3 of this Agreement may not be eliminated or materially and adversely
changed without the written consent of persons holding a majority of the Additional Holders’
Shares. As used herein, the term “Investors’ Shares” shall mean the shares of Common Stock then
issued or issuable upon conversion of all then outstanding shares of Preferred Stock plus all then
outstanding shares of Conversion Stock that were issued upon the conversion of any shares of
Preferred Stock. Any amendment or waiver effected in accordance with this Section 2.2 shall be
binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or
Holder and the Company.

     3. GENERAL PROVISIONS.

          3.1 Notices. Any and all notices required or permitted to be given to a party
pursuant to the provisions of this Agreement will be in writing and will be effective and deemed to
provide such party sufficient notice under this Agreement on the earliest of the following: (a) at
the time of personal delivery, if delivery is in person; (b) at the time of transmission by
facsimile, addressed to the other party at its facsimile number specified herein (or hereafter
modified by subsequent notice to the parties hereto), with confirmation of receipt made by both
telephone and printed confirmation sheet verifying successful transmission of the facsimile; (c)
one (1) business

-13-

 

day after deposit with an express overnight courier for United States deliveries, or two (2)
business days after such deposit for deliveries outside of the United States, with proof of
delivery from the courier requested; or (d) three (3) business days after deposit in the United
States mail by certified mail (return receipt requested) for United States deliveries. All notices
for delivery outside the United States will be sent by facsimile or by express courier. Notices by
facsimile shall be machine verified as received. All notices not delivered personally or by
facsimile will be sent with postage and/or other charges prepaid and properly addressed to the
party to be notified at the address or facsimile number as follows, or at such other address or
facsimile number as such other party may designate by one of the indicated means of notice herein
to the other parties hereto as follows:

               (i) if to an Investor, at such Investor’s respective address as set forth on Exhibit A
hereto;

               (ii) if to the Company, marked “Attention: President”, at 550 East Timpanogos Circle, Orem UT
84097;

               (iii) if to a Founder, at such Founder’s address as set forth on Exhibit B hereto.

          3.2 Entire Agreement. This Agreement and the documents referred to herein, together
with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with
respect to the subject matter of this Agreement, and supersede the Prior Rights Agreement and any
and all prior understandings and agreements, whether oral or written, between or among the parties
hereto with respect to the specific subject matter hereof. This Agreement will amend and restate
the Prior Rights Agreement to read as set forth herein, when it has been duly executed by parties
having the right to so amend and restate the Prior Rights Agreement.

          3.3 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO THAT BODY OF LAWS PERTAINING TO
CONFLICT OF LAWS.

          3.4 Severability. If any provision of this Agreement is determined by any court or
arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such
provision will be enforced to the maximum extent possible given the intent of the parties hereto.
If such clause or provision cannot be so enforced, such provision shall be stricken from this
Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or
unenforceable clause or provision had (to the extent not enforceable) never been contained in this
Agreement. Notwithstanding the forgoing, if the value of this Agreement based upon the substantial
benefit of the bargain for any party is materially impaired, which determination as made by the
presiding court or arbitrator of competent jurisdiction shall be binding, then both parties agree
to substitute such provision(s) through good faith negotiations.

          3.5 Third Parties. Nothing in this Agreement, express or implied, is intended to
confer upon any person, other than the parties hereto and their successors and assigns, any rights
or remedies under or by reason of this Agreement.

-14-

 

          3.6 Successors and Assigns. Subject to the provisions of Section 2.1, this Agreement,
and the rights and obligations of the parties hereunder, will be binding upon and inure to the
benefit of their respective successors, assigns, heirs, executors, administrators and legal
representatives.

          3.7 Titles and Headings. The titles, captions and headings of this Agreement are
included for ease of reference only and will be disregarded in interpreting or construing this
Agreement. Unless otherwise specifically stated, all references herein to “sections” and
“exhibits” will mean “sections” and “exhibits” to this Agreement.

          3.8 Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered will be deemed an original, and all of which together shall
constitute one and the same agreement.

          3.9 Costs And Attorneys’ Fees. In the event that any action, suit or other proceeding
is instituted concerning or arising out of this Agreement or any transaction contemplated
hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees
incurred in each such action, suit or other proceeding, including any and all appeals or petitions
therefrom.

          3.10 Aggregation of Stock. All shares held or acquired by affiliated entities or
persons shall be aggregated together for the purpose of determining the availability of any rights
under this Agreement.

          3.11 Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a
reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any
class or series, then, upon the occurrence of any subdivision, combination or stock dividend of
such class or series of stock, the specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the affect on the outstanding shares of such
class or series of stock by such subdivision, combination or stock dividend.

          3.12 Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Agreement.

          3.13 Facsimile Signatures. This Agreement may be executed and delivered by facsimile
and upon such delivery the facsimile signature will be deemed to have the same effect as if the
original signature had been delivered to the other party.

[SIGNATURE PAGE FOLLOWS]

-15-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Registration
Rights Agreement as of the date and year first written above.

	 	 	 	 	 
	 	THE COMPANY:

OMNITURE, INC.

	 
	 	Name:	/s/ Joshua G. James	 
	 	 	Joshua G. James 	 
	 	 	Chief Executive Officer 	 
	 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	 	 	 	 	 
	 	INVESTORS:

BAVP VII, L.P.

	 
	 	By:  	BA Venture Partners VII, LLC,
its General Partner
	 
	 	 	 	 
	 	 	 	 
	 	By:  	/s/ Rory O'Driscoll	 
	 	 	 	 
	 	Name:  	Rory O'Driscoll	 
	 	 	 	 
	 	Title:  	Managing Member 	 
	 

-2-

 

	 	 	 	 	 
	 	INVESTORS:

Hummer Winblad Venture Partners V, L.P.,

as nominee for

Hummer Winblad Venture Partners V, L.P. and

Hummer Winblad Venture Partners V-A, L.P.

by: Hummer Winblad Equity Partners V, L.L.C.,
	 
	 	 	 
	 	 	General Partner

	 
	 	By:  	/s/ Todd Forrest	 
	 	 	Todd Forrest 	 
	 	 	its Chief Financial Officer 	 
	 

-3-

 

	 	 	 	 	 
	 	ADDITIONAL HOLDER:

SILICON VALLEY BANK

	 
	 	By:  	/s/ Bruce Helberg	 
	 	Name:  	Bruce Helberg 	 
	 	Title:  	Vice President 	 
	 

-4-

 

EXHIBIT A

Investors

Name and Address

 

	 	 	 
	David Fraser Bullock

	 	M&S Investments, LLC.
	 
	 	 
	Roger B. McOmber

	 	John E. Richards
	 
	 	 
	Martin Culver

	 	Bradley Larkin
	 
	 	 
	Richard M. Knapp

	 	Peter Richards
	 
	 	 
	Scott W. Frazier

	 	Ty D. Mattingly
	 
	 	 
	Redlitz Family Trust ID #95-6579773

	 	E. Jeffrey Smith
	 
	 	 
	Edwin H. Adams

	 	David B. Allen
	 
	 	 
	Keith Leavitt

	 	Peter D. Harrison
	 
	 	 
	Sunridge Development Corp.

	 	D. Todd Shepherd
	 
	 	 
	James E. Sheffield

	 	Mark C. Hendricks
	 
	 	 
	Brent Robinson

	 	Andrew Dischman
	 
	 	 
	Stanford J. Ricks

	 	Ben Dummar
	 
	 	 
	Shawn K. O’Neill

	 	Alpine Securities, FBO J. Anthony Antonelli
	 
	 	 
	Lindorf Angel Investments LLC

	 	Vintage Estates LLC
	 
	 	 
	Stephen W. Gibson, Trustee for Stephen W.
Gibson Trust dated 06/25/91

	 	David Timpson

 

 

Name and Address

 

	 	 	 
	Nathan Ricks, Trustee of the J.T. Management, Inc. Emp. Ret. Plan
	 	VeriSign Capital Management, Inc.
	 	487 Middlefield Road, Building 2
	 	Mountain View, CA 94043
	 	Attn: General Counsel

	 
	 	 
	F&W Investments 1999

	 	University Opportunity Fund, LLC
	c/o Fenwick & West LLP

	 	299 South Main Street, Suite 900
	Silicon Valley Center

	 	Salt Lake City, UT 84111
	801 California, Mountain View, CA 94041

	 	Attn: Jared Hutchings
	 
	 	 
	Beverly Parenti

	 	Hummer Winblad Venture Partners V, L.P.
	 

	 	1 Lombard Street
	 

	 	San Francisco, CA 94111
	 

	 	Attn: Todd Forrest
	 
	 	 
	G&J Capital Management

	 	The Board of Trustees of the Leland
	 

	 	Stanford Junior University (Daper1)
	 

	 	Stanford Management Company
	 

	 	2770 Sand Hill Road
	 

	 	Menlo Park, CA 94025
	 

	 	Attn: Tyler Edelstein
	 
	 	 
	Margaret B. Horne Family Revocable Trust dated October 16, 1992
	 	F&W Investments LLC — Series 2004
	 	Silicon Valley Center
	 	801 California St., Mountain View, CA 94041
	 
	 	 
	Kyle Bowen Love, Trustee of KCL NACT Unitrust dtd 11/16/94
	 	DoubleClick Inc.
	 	111 Eighth Avenue
	 	New York, NY 10011
	 	Fax: 212-683-0001
	 	Attention: General Counsel
	 
	 	 
	Frank Johnson

	 	BAVP VII, L.P.
	 

	 	950 Tower Lane, Suite 700
	 

	 	Foster City, CA 94404
	 
	 	 
	Edward and Valerie Johnson
	 	 
	 
	 	 
	University Opportunity Affiliates Fund, LLC

	 	Attractor Ventures LLC
	299 South Main Street, Suite 900

	 	1440 Chapin Ave., Suite 201
	Salt Lake City, UT 84111

	 	Burlingame, CA 94010
	Attn: Jared Hutchings

	 	Attention: Harvey Allison
	 
	 	 
	Attractor QP LP

	 	Attractor LP
	1440 Chapin Ave., Suite 201

	 	1440 Chapin Ave., Suite 201
	Burlingame, CA 94010

	 	Burlingame, CA 94010
	Attention: Harvey Allison

	 	Attention: Harvey Allison

 

 

Name and Address

 

	 	 	 
	Attractor Institutional LP

	 	Arc Securities Ltd
	1440 Chapin Ave., Suite 201

	 	La Corvee House, La Corvee, Alderney
	Burlingame, CA 94010

	 	Channel Islands, GY93Tq
	Attention: Harvey Allison

	 	Admin. Office:
	 

	 	47 Strand Street, Suite 401, Cape Town 8001
	 
	 	 
	Francis Chen

	 	Levinthal/Schlein Family Trust
	 
	 	 
	Monarch Partners, LLC

	 	Shawn & Shannon O’Neill
	 
	 	 
	WS Investment Company, LLC (2005C)

	 	Beverly Parenti
	650 Page Mill Road
	 	 
	Palo Alto, CA 94304-1050
	 	 
	 
	 	 
	Dragon Development, LLC

	 	The Lynch Family Trust Agreement dated the
15th day of May, 2005, Morgan I. Lynch and
Rachelle Lynch,

Trustees

 

 

EXHIBIT B

Founders

Name and Address

 

Joshua G. James

Cocolalla, LLC

Erutinmo, LLC

Joseph F. Ollivier

The John Pestana Variable Charitable Trust, an irrevocable trust

 

 

EXHIBIT C

Additional Holders

Name and Address

 

3i Technology Partners II LP

275 Middlefield Road

Menlo Park, CA 94025

3i Global Technology 2004-06 LP

275 Middlefield Road

Menlo Park, CA 94025

3i Pan European Technology 2004-06 LP

275 Middlefield Road

Menlo Park, CA 94025

Mayflower LP

275 Middlefield Road

Menlo Park, CA 94025

Crosslink Ventures IV, L.P.

Two Embarcadero Center, Suite 2200

San Francisco, CA 94111

Crosslink Omega Ventures IV GmbH & Co. KG

Two Embarcadero Center, Suite 2200

San Francisco, CA 94111

Offshore Crosslink Omega Ventures IV (Cayman Islands Unit Trust)

Two Embarcadero Center, Suite 2200

San Francisco, CA 94111

Omega Bayview IV, LLC

Two Embarcadero Center, Suite 2200

San Francisco, CA 94111

Crosslink Crossover Fund IV, L.P.

Two Embarcadero Center, Suite 2200

San Francisco, CA 94111

Battery Ventures VII, L.P.

20 William Street, Suite 200

Wellesley, MA 02481

Battery Investment Partners VII, LLC

20 William Street, Suite 200

Wellesley, MA 02481

Silicon Valley Bank

3003 Tasman Drive

Santa Clara, CA 95054

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