EXHIBIT 10.15
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PURCHASE AGREEMENT
DATED AS OF
MARCH 26, 1999
BETWEEN
WIT CAPITAL GROUP, INC.
AND
THE XXXXXXX XXXXX GROUP, L.P.
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WIT CAPITAL GROUP, INC.
As of March 26, 1999
The Xxxxxxx Sachs Group, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
PURCHASE AGREEMENT
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Dear Ladies and Gentlemen:
The undersigned, WIT CAPITAL GROUP, INC., a Delaware corporation (the
"Corporation") hereby agrees with The Xxxxxxx Xxxxx Group, L.P. (the
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"Purchaser"), as follows:
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1. CERTAIN FILINGS.
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Prior to the Closing Date (as herein defined), the Corporation will
have filed with the Secretary of State of the State of Delaware (the "Secretary
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of State") (a) a Certificate of Amendment of the Certificate of Incorporation of
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the Corporation in the form of EXHIBIT A attached hereto (the "Certificate of
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Amendment") (i) authorizing the issuance of up to 50,000,000 shares of Class B
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Common Stock, par value $.01 per share ("Class B Common Stock"), of the
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Corporation and (ii) increasing the number of authorized shares of preferred
stock, par value $.01 per share ("Preferred Stock"), of the Corporation to
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104,000,000 and (b) a Certificate of Designations, Preferences and Rights, in
the form of EXHIBIT B attached hereto (the "Series E Certificate"), designating
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a series of 24,938,870 shares of non-voting Preferred Stock to be known as
"Series E Preferred Stock" (the "Series E Preferred Stock"). The Company may
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amend the form of Exhibit B to eliminate the second sentence of Section 5
thereof (and make related conforming changes to the Transaction Documents);
provided that (i) provision is added to such Exhibit B for the automatic
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conversion of Series E Preferred Stock, upon occurrence of a Qualifying
Transfer, into shares of preferred stock substantially identical to the Series E
Preferred Stock but having the voting rights specified in the second sentence of
Section 5 of such Exhibit B, and (ii) the form of Exhibit B, as so revised, is
in all respects reasonably satisfactory to the Purchaser.
2. ISSUANCE AND SALE OF SECURITIES; CLOSING.
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2.1 ISSUANCE OF PREFERRED SHARES AND WARRANTS.
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On the terms and subject to the conditions hereof, the Corporation has
authorized
(a) the issuance at the Closing (as hereinafter defined) of an aggregate of
16,666,667 shares of Preferred Stock (such shares of Series E Preferred Stock
being sometimes hereinafter collectively referred to as the "Preferred Shares"),
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(b) the issuance at the Closing of an aggregate of 8,053,279 warrants, each
representing the right to purchase one share of Series E Preferred Stock (the
"Warrants") and the issuance of up to 218,924 Additional Warrants (as
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hereinafter defined), if required by Section 7.4 hereof, at the exercise price
and on the other terms and conditions provided in the Warrant certificate, in
the form of EXHIBIT C attached hereto (the "Warrant Certificate"), and (c) the
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reservation of an aggregate of 8,272,203 shares of Series E Preferred Stock (the
"Reserved Preferred Shares") for issuance upon exercise of the Warrants and
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24,938,870 shares of Class B Common Stock and 24,938,870 shares of Voting Common
Stock, in each case, for issuance upon conversion or exercise of (i) the
Preferred Shares and (ii) the Reserved Preferred Shares or the Warrants (the
"Reserved Common Shares").
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2.2 AGREEMENT TO PURCHASE AND SELL SHARES.
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At the Closing, upon the terms and subject to the conditions
hereinafter set forth, (a) the Corporation will sell to the Purchaser and the
Purchaser shall purchase from the Corporation 16,666,667 Preferred Shares at a
purchase price of $1.50 per Preferred Share, and (b) the Corporation will issue
to the Purchaser 8,053,279 Warrants in consideration for such purchase of the
Preferred Shares and the Purchaser's agreements set forth herein, in the
Stockholders' Agreement, dated as of April 8, 1999 (the "Stockholders'
Agreement"), among the Corporation and the other signatories listed therein, in
substantially the form of EXHIBIT D, and in the Supplemental Agreement, dated as
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of April 8, 1999 (the "Supplemental Agreement"), between the Corporation and the
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Purchaser, in substantially the form attached hereto as EXHIBIT E, and certain
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cash consideration.
2.3 THE CLOSING.
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The closing (the "Closing") hereunder with respect to the Preferred
Shares and the Warrants will take place at the offices of Xxxxxxxx & Xxxxxxxx,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the date of the execution of this
Agreement or, if later, the date that is one business day following the
satisfaction or waiver of all conditions to the Closing set forth in Sections 6
and 7 hereof (other than any such conditions which, by their terms, cannot be
satisfied until the Closing), or at such other time and place as the Corporation
and the Purchaser may agree. The date on which the Closing occurs is referred as
to the "Closing Date."
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2.4 DELIVERY OF SHARES TO THE PURCHASER.
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At the Closing, the Corporation shall deliver to the Purchaser (a) a stock
certificate representing 16,666,667 Preferred Shares and (b) a Warrant
Certificate representing 8,053,279 Warrants, in each case registered in the
name of "The Xxxxxxx Sachs Group, L.P." and dated the Closing Date, against
receipt by the Corporation of a certified check payable to the
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Corporation, or a wire transfer of immediately available funds, to an account
designated by the Corporation, in either case in an amount equal to $25,000,000.
3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION.
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The Corporation hereby represents and warrants to the Purchaser as
follows:
3.1 ORGANIZATION.
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(a) The Corporation is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Corporation
has all requisite corporate power and authority to own and lease its properties,
to carry on its business as presently conducted and to carry out the
transactions contemplated hereby. The Corporation is qualified to do business as
a foreign corporation in the State of New York and is not qualified to do
business as a foreign corporation in any other jurisdiction and the failure to
be so qualified in any such other jurisdiction will not have a material adverse
effect on the Corporation's business or financial condition.
(b) The Corporation has only one operating subsidiary, Wit Capital
Corporation, a New York corporation and has one wholly-owned non-operating
subsidiary, BidPlus Corporation, a New York corporation (collectively, the
"Subsidiaries"). Each Subsidiary has all requisite corporate power and
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authority to own and lease its respective properties, to carry on its respective
business as presently conducted and to carry out the transactions contemplated
hereby. Each Subsidiary is qualified to do business as a foreign corporation in
those jurisdictions in which such qualification is necessary in order to
undertake its respective business and is not qualified to do business as a
foreign corporation only in such other jurisdictions in which the failure to be
so qualified will not have a material adverse effect on such Subsidiary's
business or financial condition.
3.2 CAPITALIZATION.
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The authorized capital stock of the Corporation immediately prior to
the consummation of the Closing shall, subject, in each case following the date
hereof, to (i) any grant of options to directors, officers, employees or
consultants approved by the Board of Directors of the Corporation, (ii) the
exercise or exchange of any options or warrants outstanding on the date hereof
(or options or warrants granted as contemplated by subclause (i) above) for
capital stock of the Corporation, and (iii) the issuance of Common Stock (as
defined herein) upon conversion of any Preferred Stock (as hereinafter defined)
outstanding on the date hereof, consist of:
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(a) 184,000,000 shares of Common Stock, $.01 par value ("Voting
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Common Stock") of which (i) 18,823,524 shares will be validly issued and
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outstanding, fully paid and nonassessable, (ii) 8,997,952 shares are reserved
for issuance upon conversion of the Series A Convertible Preferred Stock, $.01
par value, of the Corporation (the "Series A Preferred Stock"), (iii) 2,304,982
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shares are reserved for issuance upon conversion of the Series B Convertible
Preferred Stock, $.01 par value, of the Corporation (the "Series B Preferred
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Stock"), (iv) 7,445,000 shares are reserved for issuance upon conversion of the
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Series C Preferred Stock, $.01 par value, of the Corporation (the "Series C
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Preferred Stock"), (v) 31,333,334 shares are reserved for issuance upon
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conversion of the Series D Preferred Stock, $.01 par value, of the Corporation
(the "Series D Preferred Stock"), (vi) 25,000,000 will be reserved for issuance
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upon any transfer of shares of Class B Common Stock, or upon any conversion of
shares of Series E Preferred Stock or exercise of Warrants, in each case that
may become convertible into or exercisable for shares of Voting Common Stock,
(vii) 1,248,800 shares will be reserved for issuance upon exercise of the
warrants identified on Schedule 3.2 other than the DFJ Warrants (as hereinafter
defined) and (viii) 19,885,428 shares will be reserved for issuance to
employees, officers, directors and consultants pursuant to the Corporation's
1996 Stock Option Plan (the "Plan");
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(b) 25,000,000 shares of Class B Common Stock, of which (i) no shares
will be issued and outstanding and (ii) 24,938,870 shares are reserved for
issuance upon conversion of the Series E Preferred Stock and exercise of the
Warrants; and
(c) 104,000,000 shares of preferred stock, $.01 par value (the
"Preferred Stock"), of which (i) 10,000,000 shares are designated as Series A
Preferred Stock, of which 8,997,952 shares are validly issued and outstanding,
fully paid and non-assessable, (ii) 3,000,000 shares are designated as Series B
Preferred Stock, of which 2,304,982 shares are validly issued and outstanding,
fully paid and non-assessable, (iii) 7,445,000 shares are designated Series C
Preferred Stock, (A) of which 5,902,750 shares will be validly issued and
outstanding, fully paid and non-assessable, (B) of which 852,220 shares are
designated but are not issued (and are not subject to issuance) and (C) of which
690,030 shares are reserved for issuance upon exercise of Stock Subscription
Warrants issued by the Corporation to Xxxxxx Xxxxxx Jurvetson Partners, LLC and
Xxxxxx Xxxxxx Jurvetson Fund V, L.P (collectively, the "DFJ Warrants"), (iv)
31,333,334 shares are designated Series D Preferred Shares, of which 31,333,334
shares are validly issued and outstanding, fully paid and non-assessable and (v)
25,000,000 shares are designated Series E Preferred Stock, of which 16,666,667
are authorized for issuance at the Closing and 8,272,203 shares are reserved for
issuance upon exercise of the Warrants.
Except pursuant to this Agreement and the Third Amended and Restated Agreement,
dated as of April 8, 1999 (the "Stockholders' Agreement"), among the Corporation
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and the other signatories thereto, in substantially the form attached hereto as
Exhibit D, and except for Common Stock issuable (x) upon conversion of the
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock, (y) pursuant to options granted or to be granted under
the Plan in the ordinary course of business consistent with past
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practice or (z) as set forth on Schedule 3.2 or pursuant to the Series E
Certificate, there are no (i) outstanding warrants, options, agreements,
convertible securities or other commitments or instruments pursuant to which the
Corporation is or may become obligated to issue or sell any shares of capital
stock or other securities of the Corporation, (ii) preemptive or similar rights
to purchase or otherwise acquire shares of capital stock of the Corporation
pursuant to any provision of law, the Certificate of Incorporation or Bylaws of
the Corporation or any agreement to which the Corporation is party or otherwise
or (iii) obligation (contingent or otherwise) of the Corporation to purchase,
redeem or otherwise acquire any shares of its capital stock or any interest
therein or to pay any dividend or make any other distribution in respect
thereof. Schedule 3.2 sets forth a list of the record holders, immediately prior
to the Closing, of (a) all of the issued and outstanding shares of capital stock
of the Corporation, (b) all outstanding options granted under the Plan and (c)
all outstanding warrants to purchase capital stock of the Corporation. The
conversion, exercise or exchange of any security of the Corporation outstanding
on the date hereof, in accordance with the terms of the applicable agreement or
instrument governing the issuance of such security, shall not give rise to an
adjustment to the Conversion Price (in each case as defined in Section 3D of the
applicable Certificate of Designations, Rights and Preferences of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock or
the Series D Preferred Stock) pursuant to the terms of each such Certificate of
Designations, Rights and Preferences or the exercise price of any outstanding
warrant, option or other right to acquire capital stock of the Company.
(d) Upon the purchase and sale of the Preferred Shares and the
Warrants described herein, the Purchaser will hold at least 21.7% of the fully
diluted common stock of the Corporation, assuming for purposes of this Section
3.2(d) the conversion of all securities convertible at any time into shares of
the Corporation's common stock and the exercise of all options or warrants or
other rights to purchase or receive shares of the Corporation's common stock.
3.3 SUBSIDIARIES.
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Each of the outstanding shares of capital stock of each Subsidiary is
duly authorized, validly issued, fully paid and nonassessable and all such
shares are owned by the Corporation free and clear of any lien, pledge, security
interest, claim or other encumbrance.
3.4 AUTHORIZATION.
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The execution, delivery and performance by the Corporation of this
Agreement, the Warrant Certificate, the Stockholders' Agreement, the Third
Amended and Restated Registration Rights Agreement, dated as of April 8, 1999
(the "Registration Rights Agreement"), among the Corporation and the other
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signatories thereto, in substantially the form attached hereto
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as EXHIBIT F, and the Supplemental Agreement (all of such Agreements,
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collectively, the "Transaction Documents") and the consummation of the
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transactions contemplated hereby and thereby have been duly authorized by all
requisite corporate action on the part of the Corporation; this Agreement has
been, and at Closing the Stockholders' Agreement, the Registration Rights
Agreement and the Supplement Agreement shall have been duly executed and
delivered by the Corporation; and this Agreement constitutes and the
Stockholders' Agreement, the Registration Rights Agreement and the Supplemental
Agreement will, upon execution and delivery by the other requisite parties
thereto and upon the Closing, constitute, and the Warrant Certificate will, upon
execution and delivery by the Corporation upon the Closing, constitute the valid
and binding obligations of the Corporation, enforceable in accordance with their
respective terms, except as limited by (A) applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance or similar laws relating to or affecting the
rights and remedies of creditors and debtors and (B) equitable principles
generally, regardless of whether such principles are considered in a proceeding
at equity or at law. The execution, delivery and performance of each of the
Transaction Documents, and compliance with the provisions hereof and thereof by
the Corporation will not (a) violate in any material respect any law or statute
or order, judgment or decree of any court, administrative agency or other
governmental body applicable to the Corporation, any Subsidiary or their
respective properties or assets, (b) except as set forth on Schedule 3.4 and
subject to the approval of the amendment of the Certificate of Incorporation
contemplated by Section 1 by the requisite vote or consent of the stockholders
of the Corporation and the filing of the Certificate of Amendment with Secretary
of State, conflict in any respect with or result in any breach of any of the
terms or provisions or constitute (with due notice or lapse of time, or both) a
default under the Certificate of Incorporation or By-laws of the Corporation or
any Subsidiary, or any note, indenture, mortgage, lease agreement or other
material agreement, contract or instrument to which the Corporation or any
Subsidiary is a party or by which either of them or any of their respective
properties or assets may be bound or affected, or (c) result in the creation or
imposition of any lien, charge, restriction, claim or encumbrance of any nature
whatsoever upon any of the properties or assets of the Corporation or any
Subsidiary.
3.5 NO CONSENT OR APPROVAL REQUIRED.
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Except as provided in Section 1 and as set forth on Schedule 3.5, no
authorization, consent, approval or other order of, or declaration to or filing
with, any governmental agency or body or other person or entity is required for
the valid authorization, execution and delivery by the Corporation of this
Agreement or any of the other Transaction Documents or for the performance by
the Corporation of its obligations hereunder or thereunder or the offer, sale or
issuance of the Preferred Shares, the Warrants, the Reserved Common Shares or
the Reserved Preferred Shares or the consummation of the transactions
contemplated hereby or thereby.
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3.6 AUTHORIZATION OF PREFERRED SHARES AND WARRANTS.
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(a) The issuance, sale and delivery of the Preferred Shares have been
duly authorized by all requisite corporate action of the Corporation; and the
Preferred Shares will, upon the filings contemplated by Section 1 hereof, be
duly authorized and duly reserved for issuance pursuant to this Agreement, and
when issued, sold and delivered in accordance with the terms of this Agreement
and the Series E Certificate, the Preferred Shares will be validly issued and
outstanding, fully paid and nonassessable and will not be subject to preemptive
or other similar rights of the stockholders of the Corporation or others and,
except as set forth in this Agreement or in the Stockholders' Agreement, will be
free and clear of all liens, charges, restrictions, claims and encumbrances.
(b) The issuance, sale and delivery of the Warrants have been duly
authorized by all requisite corporate action of the Corporation; and the
Warrants will, upon the filings contemplated by Section 1 hereof, be duly
authorized and duly reserved for issuance pursuant to this Agreement, and when
executed, sold and delivered in accordance with the terms of this Agreement and
the Warrant Certificate, the Warrants will be duly executed and delivered by
the Corporation and constitute the valid and binding obligations of the
Corporation, enforceable in accordance with their terms, except as limited by
(A) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance or
similar laws relating to or affecting the rights and remedies of creditors and
debtors and (B) equitable principles generally, regardless of whether such
principles are considered in a proceeding at equity or at law, and will not be
subject to preemptive or other similar rights of the stockholders of the
Corporation or others and, except as set forth in this Agreement and the
Stockholders' Agreement, will be free and clear of all liens, charges,
restrictions, claims and encumbrances imposed.
3.7 AUTHORIZATION OF RESERVED PREFERRED SHARES AND RESERVED COMMON
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SHARES.
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(a) The Reserved Preferred Shares will, upon the filings contemplated
by Section 1 hereof, be duly authorized and duly reserved for issuance upon
exercise of the Warrants in accordance with the terms thereof. When and if
issued, sold and delivered in accordance with the terms of the Warrants, the
Reserved Preferred Shares will be duly authorized, validly issued and
outstanding, fully paid and nonassessable, and will not be subject to preemptive
or other similar rights of the stockholders of the Corporation or others.
(b) The Reserved Common Shares will, upon the filings contemplated by
Section 1 hereof, be duly authorized and duly reserved for issuance upon
conversion or exercise of Preferred Shares and Warrants. When and if issued,
sold and delivered in accordance with the terms of the Series E Certificate or
the Warrants, as the case may be, the Reserved Common Shares will be duly
authorized, validly issued and outstanding, fully paid and nonassessable and
will not be subject to preemptive or other similar rights of the stockholders of
the Corporation or
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others and, except as set forth in this Agreement or in the Stockholders'
Agreement, will be free and clear of all liens, charges, restrictions, claims
and encumbrances.
3.8 FINANCIAL STATEMENTS; LIABILITIES; CHANGES.
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(a) Attached hereto as Schedule 3.8 are the audited consolidated
balance sheet of the Corporation and the Subsidiaries as at December 31, 1998,
and the related audited consolidated statements(s) of income (loss) and cash
flows for the year then ended (collectively, the "Financial Statements"),
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prepared by the Corporation and compiled by Xxxxxx Xxxxxxxx LLP, the
Corporation's certified public accountants (the "Accountants"). Except as
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disclosed on Schedule 3.8 hereto, the Financial Statements present fairly the
financial condition and the results of operations of the Corporation and the
Subsidiaries, taken as a whole as of the dates and for the periods indicated in
accordance with generally accepted accounting principles ("GAAP") consistently
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applied through all relevant periods.
(b) Except as set forth on Schedule 3.8 hereto, since December 31,
1998, there has been no material adverse change in the assets, liabilities,
financial condition, business, operations or prospects of the Corporation or any
Subsidiary.
3.9 AGREEMENTS.
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Schedule 3.9 hereto sets forth a true and complete list of all
contracts, agreements, instruments, understandings or arrangements to which the
Corporation or any Subsidiary is a party or by which it is bound (i) that
involve liabilities or obligations of, or payments by or to the Corporation or
any Subsidiary or otherwise have a value in excess of $50,000, (ii) that involve
the license to or from the Corporation or any Subsidiary of any intellectual
property rights (other than licenses of, or licenses arising from purchases of,
"off-the-shelf" or other standard products), (iii) between the Corporation or
any Subsidiary and any of their respective officers, directors, employees or
consultants, (iv) that restricts the Corporation or any Subsidiary from engaging
in any aspect of its business or competing in any line of business in any
geographic area, (v) that pertain to the formation of "e-syndicates", (vi) that
pertain to the provision of technology services or (vii) that provide for the
payment of bonuses or other deferred or special compensation to an employee or
employees".
3.10 LITIGATION.
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Except as set forth on Schedule 3.10, there are no actions, suits,
proceedings or investigations pending nor, to the knowledge of the Corporation,
threatened against the Corporation or any Subsidiary by or before any court or
governmental agency. The foregoing includes actions pending or, to the
knowledge of the Corporation, threatened involving the prior
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employment of any of the Corporation's or any Subsidiary's respective employees,
their use in connection with the Corporation's or any Subsidiary's respective
business of any information or techniques allegedly proprietary to any of their
former employers, or their obligations under any agreements with prior
employers.
3.11 COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS.
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(a) Except as set forth on Schedule 3.11, and except in each case
for such matters as would not have a material adverse effect on its assets,
liabilities, financial condition, business, operations or property, each of the
Corporation and the Subsidiaries (i) has at all times since its respective time
of organization conducted its respective business and is conducting its
respective business in compliance in all material respects with all Applicable
Laws (as defined below), (ii) has, and each of its employees has, all licenses,
permits, qualifications, registrations, memberships and authorizations of, and
made all filings with, Governmental Authorities (as defined below) necessary for
the conduct of its business as currently conducted (collectively, the
"Permits"), and (iii) has at all times made and maintained records relating to
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its business which comply in all material respects with Applicable Law and which
accurately reflect all transactions in reasonable detail, including without
limitation all books, ledgers, files, reports, plans and operating records
whether maintained on electronic or magnetic media or otherwise (collectively,
the "Records"). The Permits are in full force and effect, and no material
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violations have been recorded in respect of any of the Permits, and no
proceeding is pending or, to the knowledge of the Corporation, threatened to
revoke or limit any of the Permits, with only such exceptions as would not have
a material adverse effect on its assets, liabilities, financial condition,
business, operations or property. Schedule 3.11 sets forth a list of each
material Permit.
(b) Neither the Corporation, any Subsidiary nor any "associated
person" of the Corporation or any Subsidiary is ineligible pursuant to (S)15(b)
of the Securities Exchange Act of 1934 to serve as a broker-dealer or as an
"associated person" of a registered broker-dealer. Neither the Corporation nor
any Subsidiary is engaged in any activity that would require it to be registered
as an investment advisor under the Investment Advisers Act of 1940 or as a
futures commission merchant under the Commodity Exchange Act.
(c) Prior to the date hereof, neither the Corporation nor any
Subsidiary has engaged in any trading of exchange-traded futures or options on
futures for proprietary accounts or any accounts over which it has discretionary
authority.
(d) Except (i) as set forth in Schedule 3.11, (ii) for such matters
as would not have a material adverse effect on the assets, liabilities,
financial condition, business, operations or property of the Company or any
Subsidiary, or (iii) for normal examinations conducted by a Governmental
Authority in the ordinary course of business of the Corporation and its
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Subsidiaries, since its respective time of organization, no Governmental
Authority has initiated any investigation, inquiry or proceeding into the
business or operations of the Corporation or its Subsidiaries or any employees
of the foregoing and, to the knowledge of the Corporation, there is no
reasonable basis for any such investigation, inquiry or proceeding. There is no
unresolved violation or exception by any Governmental Authority, in each case as
to which the Corporation or any Subsidiary has received written notice or which
has been specifically identified to it by such Governmental Authority, with
respect to any report or statement by any Governmental Authority relating to any
examination of any of the Corporation or its Subsidiaries or any employees of
the foregoing and, to the knowledge of the Corporation, there is no reasonable
basis for any such investigation, inquiry or proceeding. There is no unresolved
violation or exception by any Governmental Authority, in each case as to which
the Corporation or its Subsidiaries has received written notice or which has
been specifically identified to it by such Governmental Authority, with respect
to any report or statement by any Governmental Authority relating to any
examination of any of the Corporation or its Subsidiaries.
(e) Each of the Corporation and its Subsidiaries have in place
accounting controls, policies and procedures sufficient to ensure that their
transactions are recorded in a manner which permits the preparation of financial
statements in accordance with GAAP and applicable regulatory accounting
requirements. Each of the Corporation and the Subsidiaries have, since their
respective times of organization, made all filings required to be made by them
with any Governmental Authority.
(f) All sales and marketing materials used by the Corporation and
the Subsidiaries in the conduct of their respective businesses comply in all
material respects with Applicable Law, with only such exceptions as would not
have a material adverse effect on their respective assets, liabilities,
financial condition, business, operations or property.
(g) For the purposes of this Agreement, (i) "Applicable Law" means
any and all federal and state statutes, laws, rules, regulations, codes and
ordinances of any Governmental Authority, in each case as amended and in effect
from time to time and (ii) "Governmental Authority" means any federal, national
or state government, political subdivision thereof or governmental or regulatory
authority, agency, board, bureau, commission, court or self-regulatory
organization.
3.12 PATENTS, TRADEMARKS, ETC.
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Schedule 3.12 hereto sets forth a list of all domestic and foreign
patents, patent applications, trademarks, trademark applications, service marks,
service xxxx applications, trade names and copyrights owned by or registered in
the name of the Corporation or any Subsidiary, or with respect to which the
Corporation or any Subsidiary is a licensor or licensee (and all applications
therefor that are in the process of being prepared by or on behalf of the
Corporation or any Subsidiary). The Corporation and each of its Subsidiaries,
owns or possesses adequate
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licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights, manufacturing processes, formulae, trade secrets, customer
lists and know-how (collectively, "Intellectual Property") necessary to the
conduct of their respective businesses as presently conducted. No claim is
pending and neither the Corporation nor any Subsidiary has received written
notice from any third party to the effect that the operations of the Corporation
or any Subsidiary infringe upon or conflict with the asserted rights of any
person under any Intellectual Property. No claim is pending and neither the
Corporation nor any Subsidiary has received written notice from any third party
to the effect that any such Intellectual Property used under color of ownership
or licensed by the Corporation or any Subsidiary, or which the Corporation or
any Subsidiary uses or otherwise believes it has the right to use is invalid or
unenforceable by the Corporation or any Subsidiary. To the knowledge of the
Corporation, all technical information developed by and belonging to the
Corporation or any Subsidiary that has not been patented has been kept
confidential. Neither the Corporation nor any Subsidiary has granted or assigned
to any other person or entity any right to sell or provide the services offered
by the Corporation or any Subsidiary. Anything contained herein to the contrary
notwithstanding, no representation or warranty is being made hereunder by the
Corporation with respect to any content or information accessible through
hyperlinks from the Corporation's Web site on the Internet to third party Web
sites on the Internet or such third party's Intellectual Property or other
rights of any person related to such content or information.
3.13 EMPLOYEES.
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To the knowledge of the Corporation, no employee of the Corporation or
any Subsidiary is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of any such employee with the Corporation or any Subsidiary or any
other party as a result of the nature of the business presently conducted or
proposed to be conducted by the Corporation or any Subsidiary. Neither the
Corporation nor any Subsidiary has any collective bargaining agreement covering
any of its respective employees. Except for the Plan or as set forth on Schedule
3.13 attached hereto, neither the Corporation nor any Subsidiary has a written
employee benefit plan presently in force with respect to profit-sharing,
pensions, stock options, equity rights or other similar benefits.
3.14 TAXES.
-----
Except as set forth on Schedule 3.14, the Corporation and each
Subsidiary has filed all tax returns when due and paid all taxes shown thereon
to be due, if any, that are required to have been filed on or before the Closing
with appropriate Federal, state, foreign, county and local governmental agencies
or instrumentalities, including any and all payroll and withholding taxes,
except where the failure to do so would not have a material adverse effect upon
the business of the Corporation or any Subsidiary. Neither the Corporation nor
any Subsidiary has
-12-
been advised in writing (a) that any of its returns, Federal, state or other,
have been or are being audited as of the date hereof, or (b) of any deficiency
in assessment or proposed adjustment to its Federal, state or other taxes. The
Corporation and each Subsidiary have complied with all Federal, state, foreign
and local information reporting requirements and have retained appropriate
documentation of such compliance. The Corporation currently estimates that its
consolidated Federal net operating loss from inception of the Corporation
through December 31, 1998 was approximately $13,180,000. As of the date of this
Purchase Agreement, such net operating loss carryforward is not subject to the
limitations of Section 382 of the Internal Revenue Code of 1986, as amended.
3.15 TITLE TO PROPERTIES.
-------------------
Neither the Corporation nor any Subsidiary owns any real property and
all other properties (if any) owned by the Corporation are owned outright free
and clear of mortgages, pledges, security interests, liens, charges and other
encumbrances, except (a) liens for current taxes not yet due and (b) minor
imperfections of title, if any, not material in amount and not materially
detracting from the value or impairing the use of the property subject thereto
or impairing the operations or proposed operations of the Corporation or any
Subsidiary.
3.16 REGISTRATION RIGHTS.
-------------------
Except as provided in the Second Amended and Restated Registration
Rights Agreement, dated as of February 23, 1999, among the Corporation and each
of the investors parties thereto and, as of the Closing, the Registration
Rights Agreement, or as set forth on Schedule 3.16, the Corporation is not under
any contractual obligation to register any of its outstanding securities.
3.17 AGREEMENTS REGARDING CONFIDENTIAL INFORMATION, PROPRIETARY
----------------------------------------------------------
INFORMATION AND INTELLECTUAL PROPERTY.
-------------------------------------
Except as set forth on Schedule 3.17, the Chief Executive Officer and
each key employee of the Corporation has executed and delivered an agreement
with the Corporation with respect to non-disclosure, non-competition and
assignment of inventions.
3.18 SECURITIES OFFERINGS.
--------------------
(a) Subject to the accuracy of the Purchaser's representations and
warranties made in Section 4 hereof to the Corporation, (i) the offer, sale and
issuance of the Preferred Shares to the Purchaser in conformity with the terms
of this Agreement, (ii) the offer and issuance of the Warrants to the Purchaser
in conformity with the terms of this Agreement and the
-13-
Warrant Certificate, (iii) the issuance to the Purchaser of the Reserved
Preferred Shares issuable upon conversion of the Warrants and (iv) the issuance
to the Purchaser of the shares of the Reserved Common Shares issuable upon
conversion of the Preferred Shares and the Warrants, each constitute
transactions exempt from the registration requirements of Section 5 of the
Securities Act, and the registration or qualification requirements of any
applicable state securities or "blue sky" laws.
(b) With respect to each offering, sale and issuance of securities
heretofore made by the Corporation and its Subsidiaries, each such offering,
sale and issuance of securities constituted a transaction exempt from the
registration requirements of Section 5 of the Securities Act, and the
registration or qualification requirements of any applicable state securities or
"blue sky" laws. Each such offering, sale and issuance was undertaken in
compliance with all applicable securities laws.
3.19 USE OF PROCEEDS.
---------------
The Corporation intends to utilize the net proceeds from the sale of
the Preferred Shares for general corporate purposes.
3.20 BROKERS AND FINDERS.
-------------------
Except as set forth on Schedule 3.20, no person or entity acting on
behalf or under the authority of the Corporation is or will be entitled to any
broker's, finder's, or similar fee or commission in connection with the
transactions contemplated by this Agreement.
3.21 DISCLOSURE.
----------
To the knowledge of the Corporation, neither this Agreement nor any
Exhibit or Schedule hereto (when read together), contains an untrue statement of
material fact or omits to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading. Except for (i) information relating to this Agreement and
the transactions contemplated hereby and (ii) the ongoing development of the
business of the Corporation and its Subsidiaries as contemplated therein, and
taking into account the preliminary nature of the prospectus included therein,
the Registration Statement of the Corporation filed with the Securities and
Exchange Commission (the "SEC") on March 18, 1999 on Form S-1 (the "Registration
------------
Statement") does not contain an untrue statement of a material fact or omit to
---------
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The parties agree
that any changes to the Registration Statement in response to comments of the
SEC staff will not be presumed to be, or not to be, material. "Wit Capital
Group, Inc. Financial Projections 1999-2001" dated June, 1998, February 16, 1999
and March, 1999 and supplied to the Purchaser (the
-14-
"Other Projections") were prepared by the Corporation in good faith and the
-----------------
financial projections and other estimates contained in the Other Projections
were prepared by the Corporation based on its experience in the industry and on
assumptions of fact and opinion as to future events that the Corporation, at the
date of the Other Projections, believed to be reasonable, but which the
Corporation cannot and does not assure or guarantee, or otherwise represent or
warrant as to, the attainment of in any manner. Nothing contained in this
Section 3.21 shall diminish or derogate from any of the other representations
and warranties of the Corporation contained in this Section 3.
3.22 NO PREEMPTIVE RIGHTS.
--------------------
None of (i) the Corporation's issuance of the Preferred Shares, (ii)
the Corporation's authorization and reservation of the Reserved Preferred
Shares, (iii) the Corporation's issuance of the Warrants, (iv) the Corporation's
authorization and reservation of the Reserved Common Preferred Shares, (v) the
Corporation's issuance of Preferred Shares upon the exercise of the Warrants,
(vi) the Corporation's issuance of shares of its Common Stock upon conversion of
the Preferred Shares and/or exercise of the Warrants, (vii) the execution and
delivery of the Warrant Certificate, (viii) the Corporation's issuance of Voting
Common Stock upon transfer of Shares of Class B Common Stock or (ix) the
entering into on the part of the Corporation of any of the Transaction Documents
or any of the other agreements and transactions contemplated herein or therein
or otherwise entered into between the Corporation and the Purchaser in
connection herewith or therewith will create or vest any preemptive or other
similar rights, or cause any adjustment in the number of securities issuable
pursuant to, or the conversion or exercise price of, any outstanding rights, to
purchase, acquire or subscribe to shares in the Corporation or securities
convertible into shares of the Corporation by any of the beneficial holders of
shares of the Corporation or any securities convertible into, or exercisable
for, shares of capital stock of the Corporation.
3.23 YEAR 2000 COMPLIANCE . The Corporation and the Subsidiaries
---------------------
have each undertaken a year 2000 compliance program which is on schedule to
assure that the software and hardware operated by the Corporation and the
Subsidiaries are capable of providing uninterrupted functionality to recognize,
record, store, process and present calendar dates falling on or after January 1,
2000 and date-dependent data in substantially the same manner and with the same
functionality as such software and hardware recognizes, records, stores,
processes and presents calendar dates prior to January 1, 2000 and date-
dependent data as of the date hereof. To the knowledge of the officers of the
Corporation, after due inquiry, each supplier, vendor, customer, financial
institution or other organization with which the Corporation or any Subsidiary
conducts business has remedied or will remedy on a timely basis its own Year
2000 issues, except to the extent that any failure to remedy by any such
supplier, vendor, customer, financial institution or other organization would
not reasonably be expected to have a material adverse affect on the assets,
liabilities, financial condition, business or results of operations of the
-15-
Corporation or any Subsidiary. Prior to the date hereof, the Corporation has
discussed with the Purchaser the material steps that the Corporation and the
Subsidiaries have taken to become Year 2000 compliant and the costs the
Corporation expects to incur in connection therewith. There are no existing
circumstances or contemplated changes in any information systems of the
Corporation or any Subsidiary that would reasonably be expected to have a
material adverse affect on the assets, liabilities, financial condition,
business or results of operations or prospects of the Corporation or any
Subsidiary.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
-----------------------------------------------
The Purchaser hereby represents and warrants to the Corporation as
follows:
4.1 AUTHORIZATION.
-------------
The execution, delivery and performance by the Purchaser of each of
the Transaction Documents to which it is a party and the consummation of the
transactions contemplated thereby have been duly authorized by all requisite
action on the part of the Purchaser, and this Agreement has been duly executed
and delivered by the Purchaser; at the Closing the Stockholders' Agreement, the
Supplemental Agreement and the Registration Rights Agreement will be duly
executed and delivered by the Purchaser and this Agreement constitutes, and upon
execution and delivery by the Purchaser, the Stockholders' Agreement, the
Supplemental Agreement and the Registration Rights Agreement, will constitute,
the valid and binding obligations of such the Purchaser enforceable in
accordance with their respective terms, except as limited by (A) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws relating to or affecting the rights and remedies of creditors and
debtors and (B) equitable principles generally, regardless of whether such
principles are considered in a proceeding at equity or at law.
4.2 INVESTMENT INTENT.
-----------------
The Purchaser is acquiring the Preferred Shares and the Warrants for
investment and not with a view to, or for resale in connection with, any
distribution thereof, nor with any present intention of distributing or
reselling the same or any part thereof.
4.3 RESTRICTED SECURITIES.
---------------------
The Purchaser understands (i) that the Preferred Shares and the
Warrants have not been and will not be, and any Reserved Preferred Shares issued
upon exercise of the Warrants and any Reserved Common Shares issued upon
conversion of the Preferred Shares or the Warrants, will not be, registered
under the Securities Act or registered or qualified under any applicable state
securities or "blue-sky" laws by reason of their issuance in transactions exempt
from the registration requirements of the Securities Act or registration or
qualification
-16-
requirements any applicable state securities or "blue-sky" laws, (ii) that the
Preferred Shares, any Reserved Preferred Shares issuable upon conversion
thereof, and any Reserved Common Shares issuable upon conversion of the
Preferred Shares or the Warrants must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or registered or
qualified under any applicable state securities or "blue-sky" laws or is exempt
from such registration, (iii) that the Corporation is under no obligation to so
register any Preferred Shares or Warrants or, except as provided in the
Registration Rights Agreement, any Reserved Preferred Shares or Reserved Common
Shares issuable upon conversion thereof and (iv) that the certificate(s)
evidencing the Preferred Shares, the Warrants and Reserved Preferred Shares or
Reserved Common Shares issuable upon conversion thereof, will be imprinted with
a legend that prohibits the transfer substantially as set forth in Section 8(b)
hereof unless they are registered or such registration is not required.
4.4 ACCESS TO INFORMATION; EXPERIENCE.
---------------------------------
The Purchaser has been furnished with or has had access during the
course of this transaction and prior to the Closing to all information necessary
to enable the Purchaser to evaluate the merits and risks of a prospective
investment in the Corporation and the Purchaser has had an opportunity to
discuss with representatives of the Corporation the business and financial
affairs of the Corporation and the terms and conditions of the offering and to
obtain such additional information, to the extent that the Corporation possesses
such information or could acquire it without unreasonable effort or expense,
necessary to verify the accuracy of the information to which the Purchaser has
had access and all questions raised by the Purchaser have been answered to the
full satisfaction of the Purchaser. The Purchaser has conducted its own
investigation and analysis of the business and its investment in the Preferred
Shares and the Warrants. The Purchaser has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Corporation so that it is capable of evaluating the merits and
the risks of its investment in the Corporation and has the capacity to protect
its own interests in making its investment in the Corporation. The Purchaser can
afford to suffer a complete loss of the cash consideration paid in respect of
its investment in the Preferred Shares and the Warrants.
4.5 RULE 144.
--------
The Purchaser understands that the exemption from registration
afforded by Rule 144 (the provisions of which are known to such person)
promulgated under the Securities Act ("Rule 144") depends on the satisfaction of
various conditions and that, if applicable, Rule 144 may only afford the basis
for sales under certain circumstances only in limited amounts.
4.6 SPECULATIVE INVESTMENT.
----------------------
-17-
The Purchaser understands that the Corporation has a limited financial
and operating history, that the Preferred Shares and the Warrants are a
speculative investment which involve a high degree of financial risk, and that
there is no assurance of any economic, income or tax benefit from such
investment.
4.7 ACCREDITED INVESTOR.
-------------------
The Purchaser is an "accredited investor" (as such term is defined in
Rule 501 of Regulation D promulgated under the Securities Act).
5. CONDITIONS TO OBLIGATIONS OF THE PURCHASER AT THE CLOSING UNDER THIS
--------------------------------------------------------------------
AGREEMENT.
---------
The obligation of the Purchaser to purchase and pay for the Preferred
Shares and the Warrants on the Closing Date, is subject to the satisfaction of
the following conditions on or prior to the Closing Date:
5.1 CORPORATE PROCEEDINGS; CONSENTS; ETC.
-------------------------------------
All corporate and/or other proceedings to be taken by the Corporation,
its officers, directors and stockholders and all waivers and consents to be
obtained by the Corporation in connection with the transactions contemplated by
this Agreement, the Warrant Certificate, the Stockholders' Agreement, the
Supplement Agreement and the Registration Rights Agreement shall have been taken
or obtained.
5.2 BLUE SKY MATTERS.
----------------
All consents, approvals, qualifications and/or registrations required
to be obtained or effected under any applicable state securities or "blue-sky"
laws in connection with the execution and delivery of the Preferred Shares and
the Warrants shall have been obtained or effected.
5.3 STOCKHOLDERS' AGREEMENT.
-----------------------
The Stockholders' Agreement shall have been executed and delivered by
all of the parties thereto (including the Corporation) and shall have become
effective.
5.4 REGISTRATION RIGHTS AGREEMENT.
-----------------------------
The Registration Rights Agreement shall have been executed and
delivered by all of the parties thereto (including the Corporation) and shall
have become effective.
-18-
5.5 SUPPLEMENTAL AGREEMENT.
----------------------
The Supplemental Agreement shall have been executed and delivered by
the parties hereto and shall have become effective.
5.6 FILINGS.
-------
(a) The Certificate of Amendment shall have been filed with the
Secretary of State.
(b) The Series E Certificate shall have been filed with the Secretary
of State.
5.7 REPRESENTATIONS, WARRANTIES AND COVENANTS.
-----------------------------------------
Each representation and warranty of the Corporation shall be true and
correct in all material respects as of the Closing Date as if made on and as of
such date (other than representations and warranties that expressly speak only
as of a prior date); the Corporation shall have complied in all material
respects with its covenants and agreements to be performed at or prior to the
Closing; and the Corporation shall have delivered to the Purchaser an officer's
certificate of the Corporation certifying as to the foregoing matters.
5.8 NO LITIGATION.
-------------
No litigation or other formal proceeding shall have been instituted or
threatened seeking to enjoin any of the transactions contemplated hereby or
seeking damages in respect thereof, and no injunction or temporary restraining
order shall have been issued with respect to any of the transactions
contemplated hereby.
5.9 CAPITAL Z INVESTMENT.
--------------------
The closing of all of the transactions contemplated by that certain
Stock Purchase Agreement, dated as of February 23, 1998, among the Corporation
and the investors parties thereto, shall have been completed and the Corporation
shall have received cash proceeds therefrom in the amount of $25,000,000.01,
less expenses.
6. CONDITIONS TO OBLIGATIONS OF CORPORATION AT THE CLOSING UNDER THIS
------------------------------------------------------------------
AGREEMENT.
---------
The obligations of the Corporation to issue and sell the Preferred
Shares and to issue the Warrants on the Closing Date is subject to the
satisfaction of the following conditions on or prior to the Closing Date:
6.1 CORPORATE PROCEEDINGS; CONSENTS; ETC.
-------------------------------------
-19-
All limited partnership and/or other proceedings, if any, to be taken
by the Purchaser and its partners and all waivers and consents to be obtained by
the Purchaser in connection with the transactions contemplated hereby shall have
been taken or obtained.
6.2 BLUE SKY MATTERS.
----------------
All consents, approvals, qualifications and/or registrations required
to be obtained or effected under any applicable state securities or "blue-sky"
laws in connection with the execution and delivery of the Preferred Shares shall
have been obtained or effected.
6.3 STOCKHOLDERS' AGREEMENT.
-----------------------
The Stockholders' Agreement shall have been executed and delivered by
the Requisite Parties and the Purchaser and shall have become effective.
6.4 REGISTRATION RIGHTS AGREEMENT.
-----------------------------
The Registration Rights Agreement shall have been executed and
delivered by the Requisite Parties and the Purchasers and shall have become
effective.
6.5 SUPPLEMENTAL AGREEMENT.
----------------------
The Supplemental Agreement shall have been executed and delivered by
each of the parties and shall have become effective.
6.6 NO LITIGATION.
-------------
No litigation or other formal proceeding shall have been instituted or
threatened seeking to enjoin any of the transactions contemplated hereby or
seeking damages in respect thereof, and no injunction or temporary restraining
order shall have been issued with respect to any of the transactions
contemplated hereby.
6.7 REPRESENTATIONS, WARRANTIES AND COVENANTS.
-----------------------------------------
Each representation and warranty of the Purchaser shall be true and
correct in all material respects as of the Closing Date as if made on and as of
such date (other than representations and warranties that expressly speak only
as of a prior date); Purchaser shall have complied in all material respects with
its covenants and agreements to be performed at or prior to the Closing, and the
Purchaser shall have delivered to the Corporation an officer's certificate of
-20-
the Purchaser certifying as to the foregoing matters.
6.8 PAYMENT OF PURCHASE PRICE.
-------------------------
The Purchaser shall have delivered the Purchase Price.
7. COVENANTS.
---------
7.1 NONDISCLOSURE AND INVENTION ASSIGNMENT AGREEMENT.
------------------------------------------------
(a) The Corporation shall require each future employee of the
Corporation, as a condition to the employment of such employee, to execute and
deliver a non-disclosure, noncompetition and assignment of inventions agreement
in such form as shall be approved by the Board of Directors.
(b) The Corporation shall require each future consultant of the
Corporation, as a condition to the engagement of such consultant, to execute and
deliver a non-disclosure agreement in such form as shall be approved by the
Board of Directors.
7.2 EFFORTS. The Corporation, on the one hand, and the Purchaser, on
-------
the other hand, shall use commercially reasonable efforts to effectuate as
promptly as practicable those conditions to Closing contained in Sections 5 and
6, respectively, that are within their respective control.
7.3 PUBLIC DISCLOSURE OF TRANSACTIONS.
---------------------------------
(a) The Corporation shall not, without the prior consent of the
Purchaser, directly or indirectly issue any public disclosure (including
employee communications) with respect to this Agreement or the investment by
Purchaser pursuant to this Agreement, except as may be required by Applicable
Law, in which case the Corporation shall issue any required statement only after
consulting with the Purchaser and furnishing such disclosure to the Purchaser
prior to such consultation.
(b) The Purchaser and the Corporation shall mutually agree on a press
release and "tombstone" advertisement regarding the investment by Purchaser
pursuant to this Agreement. The Purchaser agrees that it shall place and shall
pay the costs of placing such an advertisement.
7.4 ADDITIONAL WARRANTS.
-------------------
The Corporation has advised the Purchaser that a former employee (the
"Former Employee"), has asserted that he remains entitled to his rights under
certain options covering up
-21-
to 800,000 shares of Voting Common Stock (the "Disputed Options"). The
Corporation has further advised the Purchaser that the Disputed Options have
been validly terminated and that the Former Employee has no rights thereunder.
The Corporation and the Purchaser agree that if by September 25, 1999,
there has not been a Final Resolution (as hereinafter defined) that the Disputed
Options were validly terminated and that the Former Employee has no rights
thereunder, the Corporation shall promptly issue to the Purchaser a warrant
certificate, substantially in the form of the Warrant Certificate, representing
218,924 Warrants (the "Additional Warrants"). If there has been a Final
Resolution that the Disputed Options were validly terminated and that the Former
Employee has no rights thereunder, the Corporation shall have no obligation to
issue any Additional Warrants under this Section 7.4. If there is a Final
Resolution by September 25, 1999 that some but not all of the Disputed Options
were validly terminated and the Former Employee is entitled to rights under some
but not all of the Disputed Options, the number of Additional Warrants to be
issued under this Section 7.4 shall be appropriately adjusted. See Schedule 7.4
for an example of this computation.
There shall be no additional consideration payable in respect of the
issuance of any Additional Warrants under this Section 7.4. The Corporation
shall use its best efforts to cause all of its representations and warranties
contained in Sections 3.4, 3.5, 3.6, 3.7, 3.18 and 3.22 of this Agreement to be
true and correct, as to the Additional Warrants and the securities of the
Corporation issuable upon exercise thereof, as of the date on which such
Additional Warrants are issued.
If there shall not have been a Final Resolution with respect to the
validity of the termination of the Disputed Options on or prior to September 25,
1999 and Additional Warrants are issued and at any time prior to the exercise of
such Additional Warrants there shall be Final Resolution that the Disputed
Options were validly terminated and that the Former Employee has no rights under
the Disputed Options or that some but not all of the Disputed Options were
validly terminated and that the Former Employee has rights under some but not
all of such Disputed Options, the Purchaser shall return to the Corporation for
cancellation Additional Warrants in a number that results in a net issuance by
the Corporation of total Additional Warrants equal to the number of Additional
Warrants that the Purchaser would have received if such Final Resolution had
occurred by September 25, 1999.
"Final Resolution" for purposes of this Section 7.4 shall mean a final
nonappealable order of a court of competent jurisdiction or a written, final
settlement agreement binding upon the Corporation and the Former Employee.
Additional Warrants shall be included in the definition of "Warrants" for all
purposes of this Agreement and the Transaction Documents.
If less than 218,924 Additional Warrants are issued under this Section
7.4, the
-22-
Corporation shall not issue any of the Series E Preferred Stock reserved for
issuance in respect of the exercise of any of the Additional Warrants that are
not issued.
8. TRANSFER OF SECURITIES.
----------------------
(a) RESTRICTIONS ON TRANSFER. The Purchaser acknowledges that the
------------------------
Preferred Shares, the Warrants, the Reserved Preferred Shares issuable upon
exercise of the Warrants and the Reserved Common Shares issuable upon conversion
of the Preferred Shares and the Reserved Preferred Shares or upon exercise of
the Warrants have not been and will not be registered under the Securities Act,
that such shares are being or will be issued pursuant to an exemption from
registration under the Securities Act and that such shares constitute
"restricted securities" under Rule 144. Accordingly, the Preferred Shares and
the Warrants held by the Purchaser, the Reserved Preferred Shares issuable upon
exercise of the Warrants and the Reserved Common Shares issuable upon conversion
or exercise of the Preferred Shares and the Warrants, when issued, shall not be
sold, transferred, assigned, pledged, encumbered or otherwise disposed of (each,
a "Transfer") except upon the conditions specified in this Section 8 (which
--------
provides for certain additional restrictions on transfer), which conditions are
intended to ensure compliance with the provisions of the Securities Act and this
Agreement.
(b) RESTRICTIVE LEGEND. Each certificate for Series E Preferred
------------------
Stock, Warrants and Class B Common Stock issued to the Purchaser at Closing or
issued hereafter upon conversion or exercise of such securities, and each
certificate for any such securities issued to subsequent transferees of any such
certificate shall (unless otherwise permitted by the provisions of Sections 8(c)
and 8(d)) be stamped or otherwise imprinted with a legend in substantially the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE SECURITIES OR "BLUE-SKY" LAWS.
THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR LAWS.
ADDITIONALLY, THE TRANSFER OF THESE SECURITIES IS SUBJECT TO THE
CONDITIONS SPECIFIED IN SECTION 8 OF THE PURCHASE AGREEMENT DATED AS
OF MARCH 26, 1999, BETWEEN WIT CAPITAL GROUP, INC. AND THE XXXXXXX
SACHS GROUP, L.P., AND NO TRANSFER OF THESE SECURITIES SHALL BE VALID
OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. THIS SECURITY
IS SUBJECT TO RESTRICTIONS ON TRANSFER,
-23-
VOTING AND OTHER TERMS AND CONDITIONS SET FORTH IN THE THIRD AMENDED
AND RESTATED STOCKHOLDERS AGREEMENT DATED AS OF APRIL 8, 1999 (THE
"STOCKHOLDERS AGREEMENT"), A COPY OF WHICH MAY BE OBTAINED FROM WIT
CAPITAL GROUP, INC. AT ITS PRINCIPAL EXECUTIVE OFFICES.
IF THIS CERTIFICATE IS OWNED BY A "XX XXXXXX" (AS SUCH TERM IS DEFINED
IN THE STOCKHOLDERS AGREEMENT), THE TRANSFER OF THESE SECURITIES IS
SUBJECT TO THE CONDITIONS SPECIFIED IN SECTION 13 OF THE SUPPLEMENTAL
AGREEMENT DATED AS OF APRIL 8, 1999 BETWEEN WIT CAPITAL GROUP, INC.
AND THE XXXXXXX SACHS GROUP, L.P. UPON THE FULFILLMENT OF ALL
APPLICABLE CONDITIONS, WIT CAPITAL GROUP, INC. HAS AGREED TO DELIVER
TO THE HOLDER HEREOF A NEW CERTIFICATE, NOT BEARING THIS LEGEND, FOR
THE SECURITIES REPRESENTED HEREBY REGISTERED IN THE NAME OF THE HOLDER
HEREOF.
(c) NOTICE OF TRANSFER. The Purchaser agrees, prior to any Transfer
------------------
of Preferred Shares, Warrants, Reserved Preferred Shares issuable upon exercise
of Warrants or Reserved Common Shares issuable upon conversion of Preferred
Shares and Warrants to give written notice to the Corporation of the Purchaser's
intention to effect such Transfer and to comply in all other respects with the
provisions of this Section 8. Each such notice shall describe the manner and
circumstances of the proposed Transfer and shall be accompanied by the written
opinion, addressed to the Corporation, of counsel for the holder of such shares,
stating that in the opinion of such counsel (which opinion and counsel shall be
reasonably satisfactory to the Corporation), such proposed Transfer does not
involve any transaction requiring registration or qualification of such shares
under the Securities Act or the securities or "blue-sky" laws of any relevant
state of the United States; provided, however, that no such opinion of counsel
-------- -------
shall be necessary for a Transfer pursuant to Rule 144. The Purchaser shall
thereupon be entitled to Transfer such shares in accordance with the terms of
the notice delivered by it to the Corporation. Each certificate or other
instrument evidencing the securities issued upon the Transfer of any such shares
(and each certificate or other instrument evidencing any untransferred balance
of such shares) shall bear the legend set forth in Section 8 unless (a) in such
opinion of counsel registration of any future Transfer is not required by the
applicable provisions of the Securities Act and applicable state securities or
"blue-sky" laws or (b) the Corporation shall have waived the requirement of such
legends; provided, however, that such legend shall not be required on any
-------- -------
certificate or other instrument evidencing the securities issued upon such
Transfer in the event such Transfer shall be made in compliance with the
requirements of Rule 144. The Purchaser shall not Transfer any Preferred Shares,
Warrants, Reserved Preferred Shares issuable
-24-
upon exercise of Warrants or Reserved Common Preferred Shares issuable upon
conversion or exercise of Preferred Shares and Warrants until such opinion of
counsel has been given (unless waived by the Corporation or unless such opinion
is not required in accordance with the provisions of this Section 8).
(d) REMOVAL OF LEGENDS, ETC. Notwithstanding the foregoing
------------------------
provisions of this Section 8, the restrictions imposed by this Section 8 upon
the transferability of any shares of the capital stock of the Corporation held
by the Purchaser shall cease and terminate when (a) any such shares are sold or
otherwise disposed of pursuant to an effective registration statement under the
Securities Act or as otherwise contemplated by Section 8(c) and, pursuant to
Section 8(c), the securities so transferred are not required to bear the legend
set forth in Section 8(b) or (b) the holder of such shares has met the
requirements for Transfer of such shares pursuant to subparagraph (k) of Rule
144. Whenever the restrictions imposed by this Section 8 shall terminate with
respect to any security held by the Purchaser hereunder, as herein provided, the
Purchaser shall be entitled to receive from the Corporation, without expense, a
new certificate representing such security not bearing the restrictive legend
set forth in Section 8(b) and not containing any other reference to the
restrictions imposed by this Section 8.
9. CONFIDENTIALITY.
---------------
The Purchaser agrees to and shall keep strictly confidential and will
not disclose or divulge any confidential, proprietary or secret information
which the Purchaser has obtained in the course of the negotiation and
consummation of the transactions contemplated hereby or may obtain from the
Corporation, including, by way of example and not in limitation thereof,
financial statements, reports and other information and materials submitted by
the Corporation as required hereunder, unless required to be disclosed by law or
pursuant to any judgment, order, subpoena or decree of any court having
competent jurisdiction, or unless such information is already known to the
Purchaser or is or becomes publicly known, or unless the Corporation provides
its written consent to the Purchaser's release of such information, except that
no such written consent shall be required (and the Purchaser shall be free to
release such information) (i) if such information is to be provided to the
Purchaser's officers, directors, lawyers, accountants, or partners, or (ii) in
respect of oral communications made to regulatory or self-regulatory authorities
to which Affiliates of the Purchaser are subject. The Purchaser acknowledges
that such information is for its use solely in connection with evaluating its
investment in the Corporation.
10. EXPENSES; BROKERS.
-----------------
(a) The Corporation, on the one hand, and Purchaser on the other
hand, shall bear its own expenses in connection with the preparation for and
consummation of the transactions contemplated by this Agreement.
(b) Each party hereto shall indemnify and hold each other party
hereto
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harmless from and against any claims, liabilities, damages or expenses incurred
by such party arising from the breach of the representation and warranty made by
such party hereunder with respect to brokers' or finders' fees (or any facts or
circumstances constituting such breach).
11. NOTICES.
-------
All notices, advices and communications to be given or otherwise made
to any party to this Agreement shall be deemed to be sufficient if contained in
a written instrument delivered in person or by telecopier or duly sent by first
class registered or certified mail, return receipt requested, postage prepaid,
or by overnight courier, or by electronic mail, with a copy thereof to be sent
by mail (as aforesaid) within 24 hours of such electronic mail, addressed to
such party at the address set forth below or at such other address as may
hereafter be designated in writing by the addressee to the addresser listing all
parties:
(a) if to the Corporation, to:
WIT Capital Group, Inc.
000 Xxxxxxxx
Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
e-mail address: XXxxxxxxx@xxxxxxxxxx.xxx
with a copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
e-mail address: Xxxxxxxxxx@xxxxxx.xxx
-and-
(b) if to the Purchaser, to:
The Xxxxxxx Xxxxx Group, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
-26-
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
e-mail address: Xxxxx.Xxxxxxxxx@xx.xxx
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
Telecopier: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance herewith. Any
such notice or communication shall be deemed to have been delivered and received
(i) in the case of personal delivery or delivery by telecopier, on the date of
such delivery, (ii) in the case of nationally-recognized overnight courier, on
the next business day after the date when sent and (iii) in the case of mailing,
on the third business day following that on which the piece of mail containing
such communication is posted. As used in this Section 11, "business day" shall
mean any day other than a day on which banking institutions in the State of New
York are legally closed for business.
12. SUCCESSORS AND ASSIGNS.
----------------------
Except as otherwise expressly provided herein, this Agreement shall
bind and inure to the benefit of the parties hereto and the respective
successors and permitted assigns of the parties hereto. Neither this Agreement,
nor the rights and obligations hereunder, is assignable by any party hereto
(except to a successor-in-interest by operation of law) without the prior
written consent of the Corporation, except that the Purchaser may assign its
rights and obligations hereunder to any wholly-owned subsidiary or to any
successor in interest without consent.
13. AMENDMENTS.
----------
The terms and provisions of this Agreement may only be amended or
waived either (a) with the written consent of the Corporation and the Purchaser
or (b) in a writing by the party or parties against whom such amendment or
waiver is sought to be enforced.
14. ENTIRE AGREEMENT.
----------------
This Agreement and the other writings referred to herein or delivered
pursuant
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hereto which form a part hereof contain the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings with respect thereto.
15. TERMINATION.
-----------
This Agreement may be terminated by either party if the other is in
material breach of this Agreement and such breach is not cured within ten days
following the delivery of written notice thereof. This Agreement may be
terminated by the Purchaser or by the Corporation if the Closing has not
occurred by May 31, 1999; provided, that the party seeking to exercise such
--------
termination right is not, at such time, in material breach of this Agreement.
Any termination right under this Section 15 may be exercised only by the
delivery of written notice of such termination by the terminating party to the
other party. No termination pursuant to this Section 15 will relieve any part of
liability for its prior breach.
16. COUNTERPARTS.
------------
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
17. HEADINGS.
--------
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
18. GOVERNING LAW.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed wholly therein.
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[COUNTERPART SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Purchase
Agreement to be executed as of the date first written above.
WIT CAPITAL GROUP, INC.
By:
Name:
Title:
THE XXXXXXX XXXXX GROUP, L.P.
By:
Name:
Title:
-29-
SCHEDULES
TO
STOCK PURCHASE AGREEMENT
DATED AS OF MARCH 26, 1999
BETWEEN WIT CAPITAL GROUP INC.
AND THE XXXXXXX SACHS GROUP, L.P.
Except with respect to Schedule 3.9, if, and to the extent, any information
that may be disclosed on any Schedule to the Stock Purchase Agreement is
contained on any other Schedule, such information shall be deemed to be included
on all Schedules on which such information may be included. The information on
Schedule 3.9 shall not be deemed to be included on any other Schedule. The
Company shall have until April 2, 1999 to review the disclosure on Schedule 3.9
to determine whether any of the information on said Schedule 3.9 should have
been included on any other Schedule and shall have until that date to furnish to
the Purchaser any other Schedule revised to include such information from
Schedule 3.9; provided that prior to the Closing the Company shall take whatever
steps are required to permit it to bring down its representations and warranties
to the Closing as required by Section 5.7 of the Purchase Agreement on the basis
of the Schedules in the form that they are attached to the Purchase Agreement at
the time of execution (and with the disclosures on Schedule 3.9 not being deemed
to be included on any other Schedule) and without regard to any revised
Schedules that the Company may deliver to the Purchaser on or prior to April 2,
1999.
The inclusion of any information on any Schedule shall not be deemed to be
an admission or acknowledgment by Wit Capital Group, Inc. (the "Company") that
such information is material to or outside the ordinary course of business of
the Company. Nothing herein constitutes an admission of liability or obligation
of the Company or an admission against the Company's interest. All capitalized
terms used and not otherwise defined herein shall have the meanings ascribed
thereto in the Stock Purchase Agreement.
SCHEDULE 7.4
------------
The number of Additional Warrants issued to the Purchaser shall, after giving
effect to the number of Disputed Options not validly terminated, enable the
Purchaser to maintain fully-diluted ownership of 21.7% (based on the number of
fully-diluted common shares outstanding immediately after the Closing and the
number of Disputed Options not validly terminated). The formula for calculating
the number of Additional Warrants is as follows:
0.217 = 24,719,946 + AW
---------------------
113,906,746 + DO + AW
where DO is the number of Disputed Options that are not validly terminated and
AW is the number of Additional Warrants. 24,719,946 is the number of Series
Preferred E Shares and Warrants owned by the Purchaser, and 113,906,746 is the
number of fully-diluted common shares outstanding immediately after the Closing.
For example, if a Final Resolution determines that 200,000 Disputed Options were
validly terminated and that 600,000 Disputed Options were not validly
terminated, the Company would issue to the Purchaser 163,497 Additional
Warrants, calculated as follows:
0.217 = 24,719,946 + AW
--------------------------
113,906,746 + 600,000 + AW
0.217*(114,506,746+AW)=24,719,946+AW
24,847,964+0.217*AW=24,719,946+AW
0.783*AW=128,018
AW=163,497
-31-
___________________________________
FIRST AMENDMENT TO
PURCHASE AGREEMENT
Dated as of April 9, 1999
between
Wit Capital Group, Inc.
and
The Xxxxxxx Xxxxx Group, L.P.
___________________________________
FIRST AMENDMENT TO
PURCHASE AGREEMENT
This FIRST AMENDMENT TO PURCHASE AGREEMENT (this "Amendment") is
---------
entered into as of April 9, 1999 and is by and between Wit Capital Group, Inc.
(the "Corporation") and The Xxxxxxx Sachs Group, L.P. (the "Purchaser").
----------- ---------
W I T N E S S E T H
-------------------
WHEREAS, the parties hereto (the "Parties") are the parties to that
certain Purchase Agreement dated as of March 26, 1999 (the "Purchase
Agreement"); and
WHEREAS, the Parties wish to amend the Purchase Agreement as
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and on the terms and
subject to the conditions herein set forth, the Parties, intending to be bound,
hereby agree as follows:
Section 1. Definitions. Capitalized terms not otherwise defined
-----------
herein shall have the meanings ascribed to such terms in the Purchase Agreement.
Section 2. Amendment of Purchase Agreement. The Purchase Agreement
-------------------------------
is hereby amended as follows:
(a) Section 2.2 of the Purchase Agreement is hereby amended by
deleting the words "as of the date hereof" in the sixth and eighth lines of such
Section and replacing each such occurrence of such words with the words "as of
the Closing Date".
(b) Section 3.2(a) of the Purchase Agreement is hereby amended by
deleting the number "50,000,000" occurring in the tenth line of such Section and
replacing therewith the number "25,000,000" and by replacing the number
"20,000,000" in the fifteenth line of such section and replacing such number
with the number "19,885,428".
(c) Section 3.2(b) of the Purchase Agreement is hereby amended by
deleting the number "50,000,000" occurring in the first line of such Section and
replacing such number with the number "25,000,000".
(d) Section 3.2(c) of the Purchase Agreement is hereby amended by
deleting the words "as of the date hereof" in the second line of such Section
and replacing such words with the words "as of the Closing Date".
(e) Section 3.4 of the Purchase Agreement is hereby amended by
deleting the term "as of the date hereof" in the third line of such Section and
replacing such words with the words "as of the Closing Date".
(f) Section 3.20 of the Purchase Agreement is hereby amended by
deleting the first word of such Section and replacing such word with the words
"Except as set forth on Schedule 3.20, no".
(g) Section 7.4 of the Purchase Agreement is hereby amended by
inserting the words "a warrant certificate, substantially in the form of the
Warrant Certificate, representing" between the word "Purchaser" and the number
"218,924" in the fourth line of the second paragraph of such Section.
(h) The term "Transaction Documents", as used in the Purchase
Agreement, shall refer to each of (i) the Purchase Agreement, (ii) this
Amendment, (iii) the Warrant Certificate, (iv) the Stockholders Agreement, (v)
the Registration Rights Agreement, (vi) the Supplemental Agreement, (vii) the
Registration Rights Forbearance Agreement, dated the Closing Date, among the
Purchaser, CFM Consulting, Inc., Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxx Xxxxx,
Xxxxxx Xxxxxxxxx and the Corporation, (viii) the Letter Agreement, dated the
Closing Date, between the Corporation and the Purchaser relating to the
reservation by the Corporation of certain shares of its capital stock and (ix)
the Settlement Agreement and Release, dated April 8, 1999, among the
Corporation, CFM Consulting, Inc. and Xxxxxx X. Xxxxx.
(i) Section 8(b) of the Purchase Agreement is hereby amended by
deleting the term "April __, 1999" from the seventeenth line of the first
subparagraph of such Section and from the fifth line of the second subparagraph
of such Section and replacing each such occurrence of such term with the term
"April 9, 1999".
(j) The disclosure schedules to the Purchase Agreement are hereby
deleted in their entirety and replaced with the disclosure schedules attached
hereto as Annex A.
Section 3. Effect. Except as amended hereby, the Purchase Agreement
------
shall remain in full force and effect in all respects.
SECTION 4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARITIES HEREUNDER SHALL BE DETERMINED
IN
-3-
ACCORDANCE WITH SUCH LAWS.
Section 5. Counterparts. This Amendment may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
-4-
IN WITNESS WHEREOF, the Parties have hereunto signed their names in
the space provided below.
Wit Capital Group, Inc.
By: _________________________
Name:
Title:
The Xxxxxxx Xxxxx Group, L.P.
By: _________________________
Name:
Title:
Wit Capital Group, Inc.
000 Xxxxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
April 9, 1999
The Xxxxxxx Sachs Group, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Purchase Agreement (the "Purchase Agreement"),
dated as of March 26, 1999, between Wit Capital Group, Inc. ("Wit") and The
Xxxxxxx Xxxxx Group, L.P. ("GS Group"). The parties hereto intended that the
Purchase Agreement provide that Wit would be obligated to authorize, reserve and
keep reserved for issuance (i) 50,000,000 shares of its Class B Common Stock for
issuance upon conversion of shares of the Series E Preferred Stock and (ii)
50,000,000 shares of Common Stock for issuance upon conversion of shares of the
Class B Common Stock and Series E Preferred Stock. The authorization of the
Class B Common Stock requires an amendment to Wit's Certificate of
Incorporation, which, in turn, requires the approval of the shareholders of Wit.
Wit has sought authorization from its shareholders for the authorization of
25,000,000 shares of Class B Common Stock. The parties hereto acknowledge that
obtaining shareholder authorization for the number of shares of Class B Common
Stock originally specified in the Purchase Agreement could materially delay the
Closing. In order to prevent a delay of the Closing to obtain such shareholder
approval, GS Group has agreed to modify the Purchase Agreement to require that
Wit reserve 25,000,000 shares of Common Stock and 25,000,000 shares of Class B
Common Stock in consideration of the agreements and covenants of Wit herein
contained.
In consideration of the premises set forth above, Wit hereby covenants and
agrees that it shall not issue any securities or undertake any stock split,
stock dividend or like dividend or distribution, recapitalization or similar
stock issuance (each, a "Stock Issuance Transaction") if the number of shares of
Common Stock or Class B Common Stock issuable as a result of such Stock Issuance
Transaction upon the conversion of the outstanding shares of the Series E
Preferred Stock and exercise of the outstanding Warrants, when added to the
number of outstanding shares of Class B Common Stock (such sum being the "Total
Number of Common
Equivalents"), exceeds the number of authorized shares of Class B Common Stock
or the number of shares of Common Stock reserved for issuance upon the
conversion of the Preferred Stock and Class B Common Stock and exercise of the
Warrants unless, in each case, Wit takes all necessary corporate action
(including obtaining shareholder approval and amending its certificate of
incorporation) to increase the number of authorized shares of Common Stock,
Class B Common Stock, or both, as necessary, such that the number of authorized
shares of Class B Common Stock and the number of shares of Common Stock so
reserved for issuance equals or exceeds the Total Number of Common Equivalents.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement.
This Agreement shall bind and inure to the benefit of the parties hereto.
The parties hereto may not assign their rights and obligations hereunder without
obtaining the prior written consent of the other party; provided, however, that
-------- -------
Wit may assign its rights and obligations hereunder to a wholly-owned subsidiary
as part of a corporate reorganization pursuant to which such subsidiary will
conduct the business theretofore conducted by Wit and GS Group may assign its
rights and obligations hereunder to any Affiliate or to any entity to which it
transfers all or substantially all of its assets or to any entity into which it
merges. The rights and obligations of GS Group hereunder shall inure to its
successors.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARITIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
This Agreement and the Transaction Documents constitute the entire
agreement and understanding, and supersede all prior agreements and
understandings (both written and oral) with respect to the subject matter hereof
between GS Group on the one hand and Wit on the other hand.
[SIGNATURE PAGE FOLLOWS]
If the foregoing is in accordance with your understanding, please sign and
return this letter to us, and upon acceptance hereof by you this letter shall
constitute a binding agreement between you and us.
Very truly yours,
THE XXXXXXX SACHS GROUP, L.P.
By:
Name:
Title:
Accepted as of the date hereof:
WIT CAPITAL GROUP, INC.
By:
Name:
Title:
