EXHIBIT 10.13
THIRD AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
BY AND AMONG
WIT CAPITAL GROUP, INC.
AND
THE SIGNATORIES LISTED HEREIN
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Dated as of April 9, 1999
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TABLE OF CONTENTS
PAGE
Article 1 DEFINITIONS 1
Section 1.1 Definitions 1
Section 1.2 Rules of Construction 7
Article 2 MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES 7
Section 2.1 Board of Directors 7
2.1.1 Board Representation 7
2.1.2 Vacancies 8
2.1.3 Termination of Rights 9
2.1.4 Committee Representation 10
2.1.5 Costs and Expenses 10
2.1.6 Other Activities of the Holders;
Fiduciary Duties 10
Article 3 STANDSTILLS 11
Section 3.1 Capital Z Standstill 11
Section 3.2 GS Standstill 12
Article 4 CERTAIN TRANSFER PROVISIONS 14
Section 4.1 Preemptive Rights 14
4.1.1 Right to Participate in Future Issuances 14
4.1.2 Exceptions to Preemptive Rights 16
Section 4.2 Right of First Refusal 16
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 4.3 Tag-Along Rights 18
Section 4.4 Transfers by Key Employees 19
Section 4.5 Exceptions 19
Article 5 DRAG ALONG RIGHTS 20
Section 5.1 Applicability 20
Section 5.2 Notice of Significant Sale 20
Article 6 CERTIFICATE LEGEND 21
Section 6.1 Certificate Legend 21
Article 7 TERMINATION 21
Section 7.1 Termination 21
Article 8 MISCELLANEOUS 22
Section 8.1 Notices 22
Section 8.2 Issuance of Additional Stock 22
Section 8.3 Information Rights; Budgets 23
Section 8.4 Confidentiality 24
Section 8.5 Effectiveness 24
Section 8.6 Governing Law 24
Section 8.7 Successors and Assigns 24
Section 8.8 Duplicate Originals 24
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 8.9 Severability 25
Section 8.10 No Waivers; Amendments 25
Section 8.11 Entire Agreement 25
THIRD AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
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THIS THIRD AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Stockholders
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Agreement") dated as of April 9, 1999 (and to become effective at the time
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hereinafter described), is entered into by and among WIT Capital Group, Inc., a
Delaware corporation (including its successors, the "Company"), and the
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securityholders (or persons who have entered into agreements to acquire
securities of the Company) listed on the signature pages hereof or who may
execute counterpart signature pages hereto following the date hereof, in
accordance with Section 6.1 hereto.
WHEREAS, the Company and certain securityholders of the Company are parties
to that certain Second Amended and Restated Stockholders Agreement dated as of
February 23, 1999 (the "Existing Stockholders Agreement");
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WHEREAS, the parties hereto desire to enter into this Stockholders
Agreement in order to, upon the effectiveness of this Agreement, amend, restate
and replace the Existing Stockholders Agreement in its entirety; and
WHEREAS, this Stockholders Agreement will automatically become effective
upon the Closing (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements hereinafter contained and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
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SECTION 1.1 DEFINITIONS.
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"ACCREDITED INVESTOR" means an "Accredited Investor," as defined in
Regulation D, or any successor rule then in effect.
"AFFILIATE" means, with respect to any Person, any Person who,
directly or indirectly, controls, is controlled by or is under common
control with that Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.
"BENEFICIALLY OWNED" or "BENEFICIAL OWNERSHIP" shall have the meaning
assigned in Section 3.1, provided, however, that for the purposes of
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calculating the number of shares or other securities Beneficially Owned by
Xxxxxxx Xxxxx Group or the GS Holders and their Controlled Affiliates there
shall be excluded from such calculation any shares Beneficially Owned by a
Controlled Affiliate of Xxxxxxx Sachs Group or any other XX Xxxxxx that are
held (i) for the account of a registered investment company advised by
Xxxxxxx Sachs Group or any of its Controlled Affiliates, (ii) in an account
with respect to which Xxxxxxx Xxxxx Group or any of its Controlled
Affiliates has investment or voting discretion or (iii) in a fiduciary
capacity for others.
"BUDGET" shall have the meaning provided in Section 8.3.
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"CAPITAL Z" means, collectively, Capital Z Financial Services Fund II,
L.P. and Capital Z Financial Services Private Fund II, L.P.
"CAPITAL Z HOLDERS" means, collectively, Capital Z and any Affiliate
of such Person to which Capital Z, directly or indirectly, transfers Common
Stock or Common Stock Equivalents and any successive transferees thereafter
that are Affiliates of Capital Z.
"CLASS B COMMON STOCK" means shares of the Class B Common Stock, $.01
par value per share, of the Company, and any capital stock into which such
Class B Common Stock thereafter may be changed (not including any capital
stock into which the Class B Common Stock is mandatorily convertible in
accordance with its terms as of the date of original issuance of Class B
Common Stock).
"CLOSING" means the closing of the purchase of shares of Series E
Preferred Stock by the Purchaser (as defined in the Purchase Agreement)
pursuant to the Purchase Agreement.
"COMMON STOCK" means and includes the Company's authorized Voting
Common Stock and Class B Common Stock as constituted on the date hereof and
shall also include any capital stock of any class of the Company thereafter
authorized that shall not be limited to a fixed sum in respect of the
rights of the holders thereof to participate in dividends or in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company.
"COMMON STOCK EQUIVALENTS" means, without duplication with any other
Common Stock or Common Stock Equivalents, any security of the Company which
is convertible into, exercisable for or exchangeable for, directly or
indirectly, Common Stock of the Company, whether at the time of issuance or
upon the passage of time or the
occurrence of some future event.
"COMPANY" shall have the meaning provided in the introductory
paragraph hereof.
"CONTROLLED AFFILIATE" means, with respect to any Person, any
Affiliate of such Person who, directly or indirectly, is controlled by such
Person; provided, however, that the term "Controlled Affiliate" with
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respect to the Ultimate General Partner shall not include any entity with
respect to which, as of the time of such determination, the Ultimate
General Partner does not have the direct or indirect power (whether through
ownership of a majority of the voting securities of such entity or by
contract or otherwise) to elect a majority of the members of the board of
directors (or equivalent governing body) of such entity.
"CO-SELLER" shall have the meaning set forth in Section 5.1 hereof.
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"DFJ HOLDERS" means, collectively, Xxxxxx Xxxxxx Jurvetson Fund V,
L.P. and Xxxxxx Xxxxxx Jurvetson Partners, LLC and any Affiliate or partner
of such entities who is directly or indirectly transferred Common Stock or
Common Stock Equivalents or any interest therein by any DFJ Holder.
"DRAGGING HOLDERS" shall have the meaning provided in Section 5.1.
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"DRAG SALE" shall have the meaning provided in Section 5.1 hereof.
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"EFFECTIVE TIME" means the time of the consummation of the Closing.
"EQUIVALENT NON-VOTING STOCK" shall have the meaning provided in
Section 4.1.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"EXISTING STOCKHOLDERS AGREEMENT" shall have the meaning set forth in
the recitals hereto.
"FIRST OPTION" shall have the meaning provided in Section 4.2 hereof.
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"FULLY-DILUTED COMMON STOCK" means, at any time of determination, the
then outstanding Common Stock of the Company plus (without duplication) all
shares of Common Stock issuable, whether at such time or upon the passage
of time or the occurrence of future events, upon the conversion, exercise
or exchange of all then outstanding Common Stock Equivalents. References
in this Agreement to "own",
"owning" or "ownership" of Fully-Diluted Common Stock shall be deemed to be
references to ownership of Common Stock or securities, agreements or
instruments that provide, or may with passage of time or otherwise provide,
a right to acquire Voting Common Stock.
"FULLY-DILUTED VOTING COMMON STOCK" means, at any time of
determination, the then outstanding Voting Common Stock of the Company plus
(without duplication) all shares of Voting Common Stock issuable, whether
at such time or upon the passage of time or the occurrence of future
events, upon the conversion, exercise or exchange of all then outstanding
Voting Stock Equivalents. References in this Agreement to "own", "owning"
and "ownership" of Fully-Diluted Voting Common Stock shall be deemed to be
references to ownership of Voting Common Stock or securities, agreements or
instruments that provide, or may with passage of time or otherwise provide,
a right to acquire Voting Common Stock.
"XXXXXXX SACHS GROUP" means The Xxxxxxx Xxxxx Group, L.P., and its
successors and permitted assigns.
"GROUP" means, in the case of any Holder, such Holder and (i) all
Affiliates of such Holder, (ii) all partners of such Holder if such Holder
is a partnership, (iii) any Person to which such Holder transfers all or
substantially all of its assets or any entity into which such Holder merges
and (iv) in the case of a Holder that is an individual, the spouse and
lineal descendants of such Holder, any trust for the benefit of such spouse
or any such lineal descendant, or any other family member of such Holder.
"XX XXXXXX" means Xxxxxxx Xxxxx Group and any Affiliate of such Person
to which Xxxxxxx Sachs Group, directly or indirectly, transfers Common
Stock or Common Stock Equivalents and any successive transferees thereafter
that are Affiliates of Xxxxxxx Xxxxx Group.
"GS OPTION" shall have the meaning set forth in Section 4.1 hereof.
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"GS PREEMPTION NOTICE" shall have the meaning set forth in Section 4.1
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hereof.
"GS PREEMPTION TRANSACTION" shall have the meaning set forth in
Section 4.1 hereof.
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"HOLDER" means (i) a securityholder that, immediately prior to the
execution and delivery of this Stockholders Agreement, was a party to the
Existing Stockholders Agreement (which is being amended and restated
pursuant to this Stockholders Agreement), including but not limited to any
securityholder who, on or after the date of
the Existing Stockholders Agreement but at or prior to the Closing,
executes a counterpart signature page thereto as contemplated by the Stock
Purchase Agreement referred to therein, (ii) any other securityholder (or
person who has entered into an agreement to acquire securities of the
Company) listed on the signature pages hereof, and (iii) any direct or
indirect transferee of any such Person who shall become a party to this
Stockholders Agreement.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"KEY EMPLOYEES" means each of Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx.
"MAJORITY CAPITAL Z HOLDERS" means Capital Z Holders holding Common
Stock and/or Common Stock Equivalents representing a majority of the Fully-
Diluted Common Stock then held by all Capital Z Holders.
"MAJORITY DFJ HOLDERS" means DFJ Holders holding Common Stock and/or
Common Stock Equivalents representing a majority of the Fully-Diluted
Common Stock then held by all DFJ Holders.
"NON-RESPONDING HOLDER" shall have the meaning provided in Section 4.1
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hereof.
"OFFER NOTICE" shall have the meaning provided in Section 4.1 hereof.
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"OFFERED SECURITIES" shall have the meaning provided in Section 4.1
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hereof.
"OPTION HOLDERS" shall have the meaning provided in Section 4.2
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hereof.
"PARTICIPATION OFFER" shall have the meaning provided in Section 4.3
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hereof.
"PERSON" or "PERSONS" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or
political subdivision thereof.
"PREEMPTIVE RIGHTS OFFER" shall have the meaning set forth in Section
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4.1 hereof.
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"PREEMPTIVE RIGHTS OFFER NOTICE" shall have the meaning set forth in
Section 4.1 hereof.
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"PREEMPTIVE RIGHTS TRANSACTION" shall have the meaning set forth in
Section 4.1 hereof.
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"PURCHASE AGREEMENT" means the Purchase Agreement of even date
herewith, between the Company and Xxxxxxx Sachs Group.
"QUALIFIED IPO" means an underwritten public offering of Common Stock
pursuant to a registration statement under the Securities Act where both
(i) the proceeds to the Company (prior to deducting any underwriters'
discounts and commissions) equal or exceed Twenty-Five Million Dollars
($25,000,000) and (ii) the initial price per share at which such Common
Stock is sold to the public in such offering is at least $4.50 (subject to
equitable adjustment for stock splits, stock combinations,
recapitalizations and similar occurrences).
"REGULATION D" means Regulation D promulgated under the Securities Act
by the SEC.
"RESTRICTED OFFEREE" shall have the meaning set forth in Section 4.1
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hereof.
"SEC" means the U.S. Securities and Exchange Commission.
"SECOND OPTION" shall have the meaning provided in Section 4.2 hereof.
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"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"STANDSTILL LIMIT" shall have the meaning provided in Section 3.1.
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"STOCKHOLDERS AGREEMENT" means this Third Amended and Restated
Stockholders Agreement, as such from time to time may be amended.
"SUBSIDIARY" of any Person means (i) a corporation a majority of whose
outstanding shares of capital stock or other equity interests with voting
power, under ordinary circumstances, to elect directors, is at the time,
directly or indirectly, owned by such Person, by one or more Subsidiaries
of such Person or by such Person and one or more Subsidiaries of such
Person, and (ii) any other Person (other than a corporation) in which such
Person, a Subsidiary of such Person or such Person and one or more
Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (x) at least a majority ownership interest or
(y) the power to elect or direct the election of the directors or other
governing body of such Person.
"TRANSFER" means any sale or other disposition, whether voluntary or
involuntary, of any Common Stock and/or Common Stock Equivalent or any
interest therein.
"TRANSFEROR" shall have the meaning provided in Section 4.2 hereof.
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"TRANSFEROR NOTICE" shall have the meaning provided in Section 4.2
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hereof.
"VOTING COMMON STOCK" means shares of the Common Stock, $.01 per value
per share, of the Company, and any capital stock into which such Common
Stock thereafter may be changed.
"VOTING STOCK" means any capital stock of the Company which possesses
the right to vote generally in the election of directors.
"VOTING STOCK EQUIVALENTS" means, at any time of determination,
without duplication with any other Voting Stock or Voting Stock
Equivalents, any security of the Company which is convertible, exercisable
or exchangeable by the holder thereof at the relevant time of determination
into or for, directly or indirectly, Voting Stock of the Company, whether
at such time or upon the passage of time or the occurrence of some future
event. For the avoidance of doubt, Voting Stock Equivalents shall not
include those shares of Class B Common Stock, shares of the Company's
Series E Preferred Stock or warrants convertible into shares of such Series
E Preferred or shares of such Class B Common, in each case that are
Beneficially Owned by any XX Xxxxxx.
SECTION 1.2 RULES OF CONSTRUCTION. Unless the context otherwise requires
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(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words in
the plural include the singular;
(4) provisions apply to successive events and transactions;
and
(5) "herein," "thereof" and other words of similar import
refer to this Stockholders Agreement as a whole and not
to any particular Article, Section or other subdivision.
ARTICLE 2
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
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SECTION 2.1 BOARD OF DIRECTORS.
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2.1.1 Board Representation.
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(a) The Board of Directors of the Company shall initially consist
of nine (9) individuals. Subject to Section 2.1.3, (ii) the Majority DFJ Holders
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will be entitled to designate one (1) director, and (ii) the Majority Capital Z
Holders will be entitled to designate two (2) directors; provided, however, that
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if the size of the Board of Directors of the Company is increased, then the
Majority Capital Z Holders will be entitled to designate such additional number
of directors, if any, such that the total number of directors designated by the
Majority Capital Z Holders pursuant to this sentence shall not represent (as a
percentage of the total number of directors) less than the total percentage of
all shares of Fully-Diluted Common Stock represented by the shares of Fully-
Diluted Common Stock owned by the Capital Z Holders (in the event such
percentage would result in the Majority Capital Z Holders being entitled to any
fractional director, rounding down to the nearest whole number of directors).
The existence of the right, pursuant to this Section 2.1.1(a), on the part of
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the Majority DFJ Holders and the Majority Capital Z Holders to designate certain
directors will in no way limit or impair the right of the Majority DFJ Holders
and the Majority Capital Z Holders to vote their shares of Voting Stock of the
Company as they see fit with respect to the election of persons to fill seats on
the Board of Directors other than the seats filled as a result of the
designation rights under this Section 2.1.1(a).
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(b) Each Holder shall vote his or its shares of Voting Stock at
any regular or special meeting of stockholders of the Company or in any written
consent executed in lieu of such a meeting of stockholders and shall take all
other actions necessary to give effect to the agreements contained in this
Stockholders Agreement (including without limitation the election of persons
designated by the Majority DFJ Holders and/or the Majority Capital Z Holders to
be elected as directors as described in the preceding paragraph) and to ensure
that the Certificate of Incorporation and bylaws of the Company do not, at any
time hereafter, conflict in any respect with the provisions of this Stockholders
Agreement. In order to effectuate the provisions of this Section 2.1, each
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Holder hereby agrees that when any action or vote is required to be taken by
such Holder pursuant to this Stockholders Agreement, such Holder shall use his
or its best efforts to call, or cause the appropriate officers and directors of
the Company to call, a special or annual meeting of stockholders of the Company,
as the case may be, or execute or cause to be executed a consent in writing in
lieu of any such meetings pursuant to Section 228(a) of the General Corporation
Law of the State of Delaware.
(c) From and after the Effective Time, the GS Holders shall have
the right to
designate one individual to observe all meetings of the Board of Directors of
the Company and to receive concurrently with the Directors all notices of
meetings and all distributions of materials to such Board of Directors. In the
event that at any time there is or is created any executive, operating or other
similar committee or subcommittee of the Board of Directors, Xxxxxxx Sachs Group
shall have the right to designate an individual to observe the meetings of such
committee or subcommittee and to be included in all distributions of materials
distributed to the members of such committee or subcommittee. Xxxxxxx Xxxxx
Group shall have the right to appoint any successor to any such designee. Such
designee may be excluded from any meeting if (but only to the extent that) the
Board of Directors determines, on advice of counsel, that such exclusion is
necessary to preserve an otherwise available attorney-client privilege; provided
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that the Company shall use its best efforts to minimize the frequency and length
of any such exclusion and shall in any event keep such designee informed as to
the general nature and substance of all matters reviewed during the designee's
absence. Such designee shall be subject to the provisions of Section 8.4 to the
same extent as Xxxxxxx Sachs Group.
2.1.2 Vacancies. If, prior to his election to the Board of Directors of
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the Company pursuant to Section 2.1.1 hereof, any designee of the Majority DFJ
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Holders or the Majority Capital Z Holders shall be unable or unwilling to serve
as a director of the Company, then the Majority DFJ Holders or the Majority
Capital Z Holders, as applicable, shall be entitled to designate a replacement
designee. If, following an election to the Board of Directors of the Company
pursuant to Section 2.1.1 hereof, any designee of the Majority DFJ Holders or
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the Majority Capital Z Holders shall resign or be removed or be unable to serve
for any reason prior the expiration of his term as a director of the Company,
then the Majority DFJ Holders or the Majority Capital Z Holders, as applicable,
shall, within thirty (30) days of such event, notify the Board of Directors of
the Company in writing of a replacement designee, and either (i) the Holders
shall vote their shares of Voting Stock, at any regular or special meeting
called for the purpose of filling positions on the Board of Directors of the
Company or in any written consent executed in lieu of such a meeting of
stockholders, and shall take all such other actions necessary to ensure the
election to the Board of Directors of the Company of such replacement designee
to fill the unexpired term of the designee who such new designee is replacing or
(ii) the Board of Directors shall elect such replacement designee to fill the
unexpired term of the designee who such new designee is replacing. If the
Majority DFJ Holders or the Majority Capital Z Holders request that any of their
respective designees be removed as a director (with or without cause) by written
notice thereof to the Company, then each of the Holders shall vote all of its or
his Voting Stock in favor of, such removal upon such request.
2.1.3 Termination of Rights.
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(a) The right of the DFJ Holders to designate directors under
Section 2.1.1 and Section 2.1.2, and the obligation of the Holders to vote
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their shares as provided herein with respect to such designees, shall
terminate upon the first to occur of (i) the termination or expiration of this
Stockholders Agreement or Section 2.1.1(a), (ii) such time as the Majority DFJ
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Holders elect in writing to terminate their rights under Article 2, or (iii)
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such time as the DFJ Holders collectively cease to own at least five percent
(5%) of the Fully-Diluted Common Stock.
(b) The right of the Capital Z Holders to designate directors
under Section 2.1.1 and Section 2.1.2, and the obligation of the Holders to
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vote their shares as provided herein with respect to such designees, shall
terminate upon the first to occur of (i) the termination or expiration of this
Stockholders Agreement or Section 2.1.1(a), (ii) such time as the Majority
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Capital Z Holders elect in writing to terminate their rights under this Article
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2, or (iii) such time as the Capital Z Holders collectively cease to own at
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least five percent (5%) of the Common Stock (assuming that all of the
outstanding preferred shares of the Company that are convertible into Common
Stock have been so converted). In addition, prior to the time that the right of
the Majority Capital Z Holders to designate directors is terminated in
accordance with the provisions of the immediately preceding sentence, the number
of directors that the Majority Capital Z Holders are entitled to designate will
be decreased from two (2) directors to one (1) director from and following the
time that the Capital Z Holders collectively cease to own at least fifteen
percent (15%) of the Common Stock (assuming that all of the outstanding
preferred shares of the Company that are convertible into Common Stock have been
so converted).
(c) The right of the GS Holders to designate an observer to
meetings of the Board of Directors or certain committees thereof under
Section 2.1.1 shall terminate upon the first to occur of (i) the termination or
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expiration of this Stockholders Agreement or this Section 2.1.3(c), (ii) such
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time as the GS Holders elect in writing to terminate their rights under
Article 2, or (iii) such time as the GS Holders collectively cease to own at
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least five percent (5%) of the Fully-Diluted Common Stock.
2.1.4 Committee Representation. So long as the Capital Z Holders are
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entitled to designate any directors under Section 2.1.1, at least one (1) of the
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directors designated by the Majority Capital Z Holders shall be permitted to
serve on each committee of the Board of Directors of the Company. So long as
the DFJ Holders are entitled to designate any director under Section 2.1.1, the
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director designated by the Majority DFJ Holders shall be permitted to serve on
the Compensation Committee and the Audit Committee of the Board of Directors of
the Company.
2.1.5 Costs and Expenses. The Company will pay all reasonable out-of-
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pocket expenses incurred by in connection with the participation by directors
and any designated observers in meetings of the Board of Directors (and
committees thereof) of the Company and the Boards of Directors (and committees
thereof) of any Subsidiaries of the Company.
2.1.6 Other Activities of the Holders; Fiduciary Duties. It is
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understood and accepted that the Holders and their Affiliates have interests in
other business ventures which may be in conflict with the activities of the
Company and its Subsidiaries and that nothing in this Stockholders Agreement
shall limit the current or future business activities of the Holders and
their Affiliates whether or not such activities are competitive with those of
the Company and its Subsidiaries. Except as may be expressly agreed by the
Company and a Holder, no Holder or any Affiliate of a Holder shall be under any
obligation to refer business of any type to the Company or its Affiliates or
Subsidiaries and no Holder (nor its respective officers, directors,
representatives, control persons, Affiliates or Subsidiaries) will be liable to
the Company or any other Holder for engaging in any business engaged in by the
Company or pursuing any corporate opportunity pursued by the Company or
acquiring or attempting to acquire any business the Company has attempted or
attempts to acquire. Except as provided in this Section 2.1.6, nothing in this
Stockholders Agreement, express or implied, shall relieve any officer or
director of the Company or any of its Subsidiaries, or any Holder, of any
fiduciary or other duties or obligations they may have to the Company's
stockholders. The Company and each of the other signatories hereto (other than
Xxxxxxx Xxxxx Group) hereby acknowledges that the GS Holders and any observer of
Board of Directors meetings designated by it or them have no fiduciary duties
with respect to the stockholders of the Company and that the status of any XX
Xxxxxx with respect to the Company is solely as a stockholder and that its
relationship to the Company is otherwise a contractual one.
ARTICLE 3
STANDSTILLS
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SECTION 3.1 CAPITAL Z STANDSTILL.
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(a) For a period commencing upon the Closing and ending on the later
of (i) three (3) years after the Closing or (ii) if a Qualified IPO is
consummated within two years after the Closing, three years after the
consummation of such Qualified IPO, neither Capital Z nor Capital Z Partners,
Ltd., the ultimate general partner of Capital Z (the "Ultimate General
Partner") shall (nor shall the Ultimate General Partner permit any of its
Controlled Affiliates to), without the prior affirmative vote or written consent
of a majority of the directors of the Company (without counting as a director
for such purpose any director designated by the Capital Z Holders or the
proposed transferor or any Affiliate of either) directly or indirectly,
authorize or make a tender, exchange or other offer for, or purchase or
otherwise acquire, or agree to acquire, or obtain, directly or indirectly,
beneficial ownership (as defined in Rule 13d-3 promulgated under the Exchange
Act ("Beneficially Owned" or "Beneficial Ownership")) of any Common Stock or
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Common Stock Equivalents (except, in any case, by way of stock dividends or
other distributions or rights offerings made available to holders of any Common
Stock generally), if the effect of such acquisition would be to increase the
aggregate number of shares of Common Stock and Common Stock Equivalents then
Beneficially Owned by Capital Z and the Ultimate General Partner and its
Controlled Affiliates to an amount equal to or in excess of 25% of the total
Fully-Diluted Common Stock (the "Standstill Limit"). Notwithstanding the
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foregoing, for the purposes of calculating the number of shares of Common Stock
and Common
Stock Equivalents Beneficially Owned by Capital Z and the Ultimate General
Partner and its Controlled Affiliates, there shall be excluded from such
calculation any shares or other securities owned by any insurance company or
financial institution which is a Controlled Affiliate of the Ultimate General
Partner as part of such Controlled Affiliate's investment portfolio (and not
owned for the purpose of affecting control of the Company). Capital Z represents
and warrants to the Company that no single Person owns, together with its
Affiliates, in excess of 10% of the voting power of the Ultimate General
Partner.
(b) The provisions of this Section 3.1 shall terminate prior to
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expiration, and Capital Z or the Ultimate General Partner and its Controlled
Affiliates shall be free to acquire Common Stock without regard to the
Standstill Limit, at such earlier time as (A) prior to the Qualified IPO, any
Person other than Capital Z and the Ultimate General Partner or any of its
Controlled Affiliates (and other than any Person acting in concert with Capital
Z or the Ultimate General Partner or any of its Controlled Affiliates) acquires
Beneficial Ownership of Common Stock or Common Stock Equivalents representing,
together with any Common Stock or Common Stock Equivalents already Beneficially
Owned by such Person and its Affiliates, at least 25% of the total Fully-Diluted
Common Stock or (B) following the Qualified IPO, the earlier of the date on
which (i) any Person other than Capital Z or the Ultimate General Partner or any
of its Controlled Affiliates (and other than any Person acting in concert with
Capital Z or the Ultimate General Partner or any of its Controlled Affiliates)
acquires Beneficial Ownership of Common Stock or Common Stock Equivalents
representing, together with any Common Stock or Common Stock Equivalents already
Beneficially Owned by such Person and its Affiliates, at least 25% of the total
Fully-Diluted Common Stock or (ii) any Person other than Capital Z or the
Ultimate General Partner or any of its Controlled Affiliates (and other than any
Person acting in concert with Capital Z or the Ultimate General Partner or any
of its Controlled Affiliates) notifies in writing the Company or its Board of
Directors, or publicly announces, that it has acquired or that it intends to
acquire or offer to acquire (including but not limited to any offer to acquire
by means of a tender offer) (and in connection therewith discloses, in a
Schedule 13D or 14D-1 (or any other successor schedule or form promulgated or
adopted for such purpose by the Securities and Exchange Commission) filed under
the Exchange Act, or otherwise, an intention to acquire or offer to acquire)
Beneficial Ownership of Common Stock or Common Stock Equivalents representing,
together with any Common Stock already Beneficially Owned by such Person and its
Affiliates, at least 25% of the total Fully-Diluted Common Stock (and does not,
prior to any acquisition by Capital Z or the Ultimate General Partner or any of
its Controlled Affiliates of any Common Stock that would otherwise be prohibited
by this Section 3.1, disclose in any statement of which Capital Z has or could
-----------
reasonably be expected to have knowledge of an intention not to proceed with
such acquisition); provided, that the Company reasonably believes that (i) such
--------
Person is financially capable of consummating such acquisition and (ii) such
Person has a serious and bona fide intention to consummate such acquisition.
(c) The Capital Z Holders agree that it or they shall not exercise
any preemptive right otherwise provided under Section 4.1 or any right of first
-----------
refusal otherwise
provided under Section 4.2 if such exercise would violate the provisions of
-----------
Section 3.1(a) and cause Capital Z's and the Ultimate General Partner's and its
--------------
Controlled Affiliates' aggregate Beneficial Ownership of Common Stock and Common
Stock Equivalents to exceed the Standstill Limit; provided, however, that any
-------- -------
exercise (or indication of intention to exercise) by another Holder of any
preemptive right under Section 4.1 or any right of first refusal under Section
----------- -------
4.2 which would result in such Holder and its Affiliates collectively
---
Beneficially Owning at least 25% of the total Fully-Diluted Common Stock will be
deemed to constitute an action which, pursuant to Section 3.1(b), will terminate
--------------
the provisions of this Section 3.1.
-----------
SECTION 3.2 GS STANDSTILL.
-------------
(a) For a period commencing upon the Closing and ending on the
later of (i) three (3) years after the Closing or (ii) if a Qualified IPO is
consummated within two years after the Closing, three years after the
consummation of such Qualified IPO, the GS Holders shall not (and shall not
permit any of its Controlled Affiliates to), without the prior affirmative vote
or written consent of a majority of the directors of the Company, directly or
indirectly, authorize or make a tender, exchange or other offer for, or purchase
or otherwise acquire, or agree to acquire, or obtain, directly or indirectly,
Beneficial Ownership of any Common Stock or Common Stock Equivalents (except, in
any case, by way of stock dividends or other distributions or rights offerings
made available to holders of any Common Stock generally and except pursuant to
Section 4.1.1(b)), if the effect of such acquisition would be to increase the
----------------
aggregate number of shares of Common Stock and Common Stock Equivalents then
Beneficially Owned by the XX Xxxxxx and its or their Controlled Affiliates to an
amount at least equal to the Standstill Limit.
(b) The provisions of this Section 3.2 shall terminate prior to
-----------
expiration, and Xxxxxxx Sachs Group and its Controlled Affiliates shall be free
to acquire Common Stock without regard to the Standstill Limit, at such earlier
time as (A) prior to the Qualified IPO, any Person other than Xxxxxxx Xxxxx
Group or any Controlled Affiliates thereof (and other than any Person acting in
concert with Xxxxxxx Sachs Group or any Controlled Affiliates thereof) acquires
Beneficial Ownership of Common Stock or Common Stock Equivalents representing,
together with any Common Stock or Common Stock Equivalents already Beneficially
Owned by such Person and its Affiliates, at least 25% of the total Fully-Diluted
Common Stock or (B) following the Qualified IPO, the earlier of the date on
which (i) any Person other than Xxxxxxx Xxxxx Group or any Controlled Affiliates
thereof (and other than any Person acting in concert with Xxxxxxx Sachs Group or
any Controlled Affiliates thereof) acquires Beneficial Ownership of Common Stock
or Common Stock Equivalents representing, together with any Common Stock or
Common Stock Equivalents already Beneficially Owned by such Person and its
Affiliates, at least 25% of the total Fully-Diluted Common Stock or (ii) any
Person other than Xxxxxxx Xxxxx Group or any Controlled Affiliates thereof (and
other than any Person acting in concert with Xxxxxxx Sachs Group or any
Controlled Affiliates thereof) notifies in writing the Company or its Board of
Directors, or publicly announces, that it has acquired or that it intends
to acquire or offer to acquire (including but not limited to any offer to
acquire by means of a tender offer) (and in connection therewith discloses, in a
Schedule 13D or 14D-1 (or any other successor schedule or form promulgated or
adopted for such purpose by the Securities and Exchange Commission) filed under
the Exchange Act, or otherwise, an intention to acquire or offer to acquire)
Beneficial Ownership of Common Stock or Common Stock Equivalents representing,
together with any Common Stock already Beneficially Owned by such Person and its
Affiliates, at least 25% of the total Fully-Diluted Common Stock (and does not,
prior to any acquisition by Xxxxxxx Xxxxx Group or any Controlled Affiliates
thereof of any Common Stock that would otherwise be prohibited by this Section
-------
3.1, disclose in any statement of which Xxxxxxx Sachs Group has or could
---
reasonably be expected to have knowledge of an intention not to proceed with
such acquisition); provided, that the Company reasonably believes that (i) such
--------
Person is financially capable of consummating such acquisition and (ii) such
Person has a serious and bona fide intention to consummate such acquisition.
(c) The GS Holders agree that it or they shall not exercise any
preemptive right otherwise provided under Section 4.1 or any right of first
-----------
refusal otherwise provided under Section 4.2 if such exercise would violate the
-----------
provisions of Section 3.2(a) and cause the GS Holders' and their Controlled
--------------
Affiliates' aggregate Beneficial Ownership of Common Stock and Common Stock
Equivalents to exceed the Standstill Limit; provided, however, that any shares
-------- -------
of Common Stock or Common Stock Equivalents (and any securities into which such
shares or Common Stock Equivalents may be converted or exchanged) acquired or
proposed to be acquired by the GS Holders pursuant to acceptance of a GS Option
pursuant to Section 4.1.1(b) shall not be taken into account in any calculation
----------------
of the GS Holders' aggregate Beneficial Ownership for purposes of this Section
-------
3.2 and; provided, further, that any exercise (or indication of intention to
--- -------- ------- ----
exercise) by another Holder of any preemptive right under Section 4.1 or any
-----------
right of first refusal under Section 4.2 which would result in such Holder and
-----------
its Affiliates collectively Beneficially Owning at least 25% of the total Fully-
Diluted Common Stock will be deemed to constitute an action which, pursuant to
Section 3.2(b), will terminate the provisions of this Section 3.2.
-------------- -----------
ARTICLE 4
CERTAIN TRANSFER PROVISIONS
---------------------------
SECTION 4.1 PREEMPTIVE RIGHTS.
-----------------
4.1.1 Right to Participate in Future Issuances.
----------------------------------------
(a) In case the Company proposes at any time to issue or sell any
Common Stock or Common Stock Equivalents (the "Offered Securities"), the Company
------------------
shall, no later than twenty-five (25) days prior to the consummation of such
transaction (a "Preemptive Rights
Transaction"), give notice in writing (the "Preemptive Rights Offer Notice") to
------------------------------
each Holder of such Preemptive Rights Transaction. The Preemptive Rights Offer
Notice shall describe the proposed Preemptive Rights Transaction, identify the
proposed purchaser, and contain an offer (the "Preemptive Rights Offer") to sell
-----------------------
to each Holder, at the same price and for the same consideration to be paid by
the proposed purchaser (provided, that, in the event any of such consideration
--------
is non-cash consideration, at the election of such Holder to whom the Preemptive
Rights Offer is made, such Holder may pay cash equal to the value of such non-
cash consideration), all or any part of such Holder's pro rata portion of the
Offered Securities (which shall be a percentage of the Offered Securities equal
to the percentage of all Fully-Diluted Common Stock then outstanding (or deemed
outstanding) that is represented by the Fully-Diluted Common Stock owned by such
Holder). If any Holder to whom a Preemptive Rights Offer is made fails to accept
(a "Non-Responding Holder") in writing the Preemptive Rights Offer by the
---------------------
fifteenth (15th) day after the Company's delivery of the Preemptive Rights Offer
Notice, such Non-Responding Holders shall have no further rights with respect to
the proposed Preemptive Rights Transaction, and the Company shall provide a
second Preemptive Rights Offer Notice to the Holders (other than the Non-
Responding Holders) containing a Preemptive Rights Offer to each such Holder to
purchase such Holder's pro rata portion (which shall be a percentage of the
Offered Securities that were offered to the Non-Responding Holders equal to the
percentage of all Fully-Diluted Common Stock then outstanding (or deemed
outstanding) and owned by the Holders other than the Non-Responding Holders,
that is represented by the Fully-Diluted Common Stock then outstanding (or
deemed outstanding) owned by such Holder) of the Offered Securities which were
not accepted by such Non-Responding Holders. If any Holder to whom a second
Preemptive Rights Offer is made fails to accept in writing the second Preemptive
Rights Offer by the fifth (5th) day after the Company's delivery of the second
Preemptive Rights Offer Notice thereto, the Company may, subject to the
provisions of Section 4.1.1(b), proceed with the proposed Preemptive Rights
----------------
Transaction, free of any right on the part of such Holder and any Non-Responding
Holders under this Section 4.1.1 in respect thereof. For purposes of Preemptive
-------------
Rights Offer Notices and Preemptive Rights Offers, if at the time of any
Preemptive Rights Offer Notice, a Holder to whom a Preemptive Rights Offer is
made holds only capital stock of the Company that is not Voting Stock, the
"Offered Securities" with respect to such Holder shall be securities of the
Company that do not constitute Voting Stock but are in every other respect
equivalent to the Offered Securities with respect to each other Holder
("Equivalent Non-Voting Stock").
---------------------------
(b) In case (i) the Company proposes at any time following the
Effective Time to issue or sell to any Person identified on Schedule 4.1 hereto
or any Affiliate of such a Person (a "Restricted Offeree") Offered Securities
------------------
(for purposes of this Section 4.1.1(b), "shares"), except in connection with a
----------------
merger or other transaction which results in a change in control of the Company,
which would result in such Person Beneficially Owning in excess of 5% of the
total Fully-Diluted Common Stock after giving effect to such issuance and sale,
(ii) a XX Xxxxxx is at such time the Beneficial Owner of Common Stock or Common
Stock Equivalents
constituting not less than 10% of the Fully-Diluted Common Stock and (iii) (x)
the Company has made Preemptive Rights Offers with respect to the shares in
accordance with Section 4.1.1(a) and would be entitled, but for this Section
---------------- -------
4.1.1(b), to engage in the Preemptive Rights Transaction with respect to such
--------
number of shares as any Non-Responding Holders and other Holders fail to accept
in accordance with the terms of Section 4.1.1(a), (y) the Company has not made a
----------------
Preemptive Rights Offer with respect to the shares pursuant to an exception to
the Company's obligation to do so under Section 4.1.2 and would, but for this
-------------
Section 4.1.1(b), be entitled to proceed with the issue or sale to a Restricted
----------------
Offeree or (z) Section 4.1.1(a) has been terminated in accordance with the terms
----------------
of this Agreement and the Company would, but for this Section 4.1.1(b), be
----------------
entitled to proceed with the issue or sale to a Restricted Offeree, then in any
such case the Company shall, not less than twenty (20) days (five (5) days in
the event that sub-clause (x) applies) prior to the proposed consummation of
such transaction (a "GS Preemption Transaction"), give notice in writing (a "GS
------------------------- --
Preemption Notice") to the GS Holders of such GS Preemption Transaction. The GS
-----------------
Preemption Notice shall (i) specify the name of the Restricted Offeree, the
number of shares to be issued, the amount and type of consideration to be
received therefor, and the other material terms on which the Company proposes to
issue the shares that the Company would otherwise be permitted to issue and sell
to a Restricted Offeree and (ii) contain an offer to sell to the GS Holders all
of such shares (the "GS Option") at the same price per share and for
---------
consideration consisting of (x) cash equal to the amount of cash proposed to be
paid by the Restricted Offeree and (y) if any of the consideration to be paid by
the Restricted Offeree is non-cash consideration, either the same non-cash
consideration or, at the election of the GS Holders, cash having an equivalent
value to the non-cash consideration proposed to be paid by the Restricted
Offeree. The determination of equivalent value required by the preceding
sentence shall be made by a nationally recognized firm that regularly makes
appraisals of the type required, to be selected by mutual agreement of the
Company and the GS Holders and to be unaffiliated with such Persons, it being
understood that the fees and expenses of such firm shall be paid by the Company.
If the GS Holders (A) fail to notify the Company in writing within fifteen (15)
days (five (5) days in the event that subclause (x) of the first sentence of
this Section 4.1.1(b) applies) after receipt of the GS Preemption Notice that it
----------------
or they elect to accept all of the GS Option or (B) by written notice within
such 15-day (or 5-day) period reject the GS Option in whole, the Company may
issue all shares covered by the GS Preemption Notice and not accepted by the GS
Holders to the proposed transferee in accordance with the terms of such issue
set forth in the GS Preemption Notice; provided, however, that the consummation
-------- -------
of such issuance must occur no later than seventy-five (75) days after the date
the GS Preemption Notice was received by the Company or five (5) days after the
expiration or termination of any waiting period applicable to such transfer
pursuant to the HSR Act, whichever is later. If the GS Option is accepted in a
manner such that all shares covered by the GS Preemption Notice are to be
purchased, the Company shall issue all such shares (or Equivalent Non-Voting
Stock) to the accepting XX Xxxxxx within twenty (20) days after the date such
offer is accepted by the GS Holders, against delivery by the purchaser of the
consideration payable to the Company as set forth in the GS Preemption Notice;
provided that, if the HSR Act is applicable to the GS Option, such date shall be
--------
extended to the date which is five days after the date the applicable waiting
period expires or is terminated.
4.1.2 Exceptions to Preemptive Rights. Section 4.1.1 (a) shall not apply
------------------------------- -------------
to (i) issuances or sales of Common Stock or Common Stock Equivalents upon
exercise, conversion or exchange of any Common Stock Equivalent which, when
issued, was subject to or exempt from the preemptive rights provided under this
Section 4.1, (ii) shares of capital stock issued in a stock split or stock
-----------
dividend or shares of capital stock or other securities distributed ratably or
sold to all holders of Common Stock on a per share equivalent basis, (iii)
issuances of Common Stock or Common Stock Equivalents pursuant to any exercise,
conversion or exchange of any Common Stock Equivalent that was outstanding as of
the date of this Stockholders Agreement, (iv) issuances of Common Stock
Equivalents pursuant to the Purchase Agreement, (v) issuances or sales of Common
Stock or Common Stock Equivalents pursuant to acquisitions or strategic
investments or corporate partnering transactions or relationships, (vi)
issuances of Common Stock or Common Stock Equivalents pursuant to a merger of
the Company or a Subsidiary of the Company into or with another entity or
pursuant to an acquisition by the Company or a Subsidiary of the Company of the
capital stock or assets of another business, (vii) compensatory issuances of
options, restricted stock or other equity rights to officers, employees,
directors or consultants of the Company with approval of the Board of Directors
of the Company, (viii) issuances or sales of Common Stock in a Qualified IPO,
(ix) issuances of Common Stock or Common Stock Equivalents pursuant to
commercial transactions approved by the Board of Directors of the Company
(including but not limited to equipment leases or bank lines of credit), or (x)
issuances of Common Stock or Common Stock Equivalents approved in advance by
holders of a majority of the Fully-Diluted Common Stock held by all Holders.
SECTION 4.2 RIGHT OF FIRST REFUSAL. If at any time a Holder other than a
----------------------
Key Employee (a "Transferor") has received a bona fide offer to purchase any or
all of the shares of Common Stock and/or Common Stock Equivalents beneficially
owned by the Transferor and such Transferor desires to accept such offer to
purchase, or if a Transferor otherwise proposes to Transfer for value any shares
of Common Stock and/or Common Stock Equivalents (for purposes of this Section
-------
4.2, "shares") to any Person, the Transferor shall, not less than thirty (30)
---
days prior to the anticipated closing of such Transfer, give written notice (the
"Transferor's Notice") to the Company and the other Holders of such proposed
-------------------
Transfer. The Transferor's Notice shall (i) specify the proposed transferee
thereof, the number of shares to be transferred, the amount and type of
consideration to be received therefor, and the other material terms on which the
Transferor proposes to Transfer the Common Stock and/or Common Stock
Equivalents, (ii) contain an undertaking by the proposed transferee, if
applicable, to honor any Participation Offer which is made in accordance with
the terms of Section 4.3 hereof, and (iii) contain the following offer:
-----------
The Transferor shall offer to sell (the "First Option") all such
------------
shares to the Company at the same price per share and for consideration
consisting of (x) cash equal to the amount of cash proposed to be paid by
the proposed transferee and
(y) if any of the consideration to be paid by the proposed transferee is
non-cash consideration, either the same non-cash consideration or, at the
election of the Company, cash having an equivalent value to the non-cash
consideration proposed to be paid by the proposed transferee. The
determination of equivalent value required by the preceding sentence, as
well as the decision whether or not the Company will accept the First
Option, in any particular instance shall be made by a committee of the
Board of Directors of the Company, excluding therefrom any directors
designated by the Transferor or proposed transferee (or any Affiliate
thereof) utilizing any method and/or advisory assistance it deems
appropriate, and the Company shall give the Transferor and the other
Holders written notice of such determination within fifteen (15) days after
receipt of the Transferor's Notice. Notwithstanding the foregoing, in the
event the Transferor disputes the determination of equivalent value made
pursuant to the immediately preceding sentence, the Company shall engage a
nationally recognized investment banking firm to recompute the equivalent
value of the non-cash consideration offered by the Company pursuant to the
First Option, it being understood that the fees and expenses of such
investment banking firm shall be paid one-half by the Company and one-half
by the Transferor, and the investment banking firm's method of calculation
of equivalent value shall be used in determining the amount of non-cash
consideration permitted to be paid by the Company pursuant to the First
Option or by the Option Holders pursuant to the Second Option (in each
case, as defined below). If the Company (A) fails to notify the Transferor
in writing within fifteen (15) days after receipt of the Transferor's
Notice that it elects to accept the First Option or (B) by written notice
within such 15-day period rejects the First Option in whole or in part, the
Transferor shall offer to sell (the "Second Option") the shares not to be
-------------
so purchased to the other Holders (the "Option Holders") at the same price
--------------
per share and for consideration consisting of (x) cash in an amount equal
to the amount of cash proposed to be paid by the proposed transferee and
(y) cash or non-cash consideration, if any, having an equivalent value
(determined as provided above) with the non-cash consideration proposed to
be paid by the proposed transferee. The Option Holders may purchase the
shares so offered in the proportions upon which they mutually agree, or, if
they are unable to agree upon an allocation of such shares among
themselves, then in proportion to the number of shares of Fully-Diluted
Common Stock owned by each such Option Holder who wishes to participate in
the purchase of such shares pursuant to the Second Option. The Second
Option may be accepted by one or more of such Option Holders by written
notice delivered to the Transferor within thirty (30) days after receipt of
the Transferor's Notice; provided, however, that any Option Holder who
-------- -------
holds only capital stock of the Company that is not Voting Stock shall be
entitled to accept shares under a Second Option, subject to the exchange of
any Voting Stock or Voting Stock Equivalents thereby offered to Equivalent
Non-Voting Stock, and the Company shall cause such exchange.
Unless, through exercise of the First Option and/or the Second Option, all
the securities proposed to be transferred in the Transferor's Notice are to
be acquired by the Company and/or the Option Holders, the Transferor may
transfer, subject to Section 4.3 hereof, all shares covered by the
-----------
Transferor's Notice to the proposed transferee in accordance with the terms
of such transfer set forth in the Transferor's Notice; provided, however,
-------- -------
that such transfer must occur no later than seventy-five (75) days after
the date the Transferor's Notice was received by the Company or five (5)
days after the expiration or termination of any waiting period applicable
to such transfer pursuant to the HSR Act, whichever is later. If the First
Option and/or the Second Option, as the case may be, is accepted in a
manner such that all shares covered by the Transferor's Notice are to be
purchased, the Transferor shall transfer all such shares (free of all liens
and encumbrances except this Agreement, all as reasonably determined by the
Company) to the respective purchasers thereof within twenty (20) days after
the date such offer is accepted by the Company and/or Option Holders,
whichever is later, against delivery by the purchaser of the consideration
payable to the Transferor as set forth in the Transferor's Notice; provided
--------
that, if the HSR Act is applicable to the First Option or the Second
Option, such date shall be extended to the date which is five days after
the date the applicable waiting period expires or is terminated.
SECTION 4.3 TAG-ALONG RIGHTS. In the event that a Transferor proposes, in
----------------
a single transaction or series of related transactions, to Transfer for value
Common Stock and/or Common Stock Equivalents representing (alone or together
with Common Stock and/or Common Stock Equivalents to be Transferred by other
Transferors in such transaction or series of related transactions) at least five
percent (5%) of the Fully-Diluted Common Stock, then the Transferor's Notice
delivered pursuant to Section 4.2 hereof shall also state (the "Participation
----------- -------------
Offer") that, in lieu of exercising the Second Option, each Option Holder may
-----
request to have included in the proposed Transfer such Option Holder's pro rata
portion of the Common Stock and/or Common Stock Equivalents to be Transferred
(which shall be based on the number of shares of Common Stock and/or Common
Stock Equivalents held by the Transferor and any Option Holders exercising tag-
along rights under this Section 4.3 ) at the same per share price and for the
-----------
same consideration that the Transferor proposes to sell the Common Stock and/or
Common Stock Equivalents to be Transferred (it being understood that the price
to be paid for any Common Stock Equivalents will be based on the per share price
to be paid for the Common Stock less the exercise price or any other amount
payable upon exercise or conversion then applicable to such Common Stock
Equivalents). The Participation Offer shall be conditioned upon the execution
and delivery by each Option Holder that accepts the Participation Offer of all
agreements and other documents as the Transferor is required to execute and
deliver in connection with such proposed Transfer, reflecting the same per share
price and other terms as for the Transferor. If the First Option and/or Second
Option is not exercised with respect to all
the securities proposed to be transferred by the Transferor and any Option
Holder shall accept the Participation Offer, the Transferor shall reduce, to the
extent necessary, the number of shares of Common Stock and Common Stock
Equivalents it otherwise would have sold in the proposed Transfer so as to
permit those Option Holders who have accepted the Participation Offer to sell
the number of shares of Common Stock and/or Common Stock Equivalents, if
applicable, that they are entitled to sell under this Section 4.3, and the
-----------
Transferor and such Option Holders shall transfer the number of shares of Common
Stock and/or, if applicable, Common Stock Equivalents specified in the
Participation Offer to the proposed transferee in accordance with the terms of
such Participation Offer. Notwithstanding the foregoing, if the transferee
refuses to purchase any Common Stock and/or Common Stock Equivalents, if
applicable, proposed to be sold by each Option Holder that accepts the
Participation Offer, the Transferor shall be prohibited from consummating the
Transfer in respect of which the Participation Offer was made.
SECTION 4.4 TRANSFERS BY KEY EMPLOYEES.
--------------------------
(a) Subject to Section 4.4(b), no Key Employees shall Transfer any
--------------
Common Stock and/or Common Stock Equivalents unless all of the Common Stock and
Common Stock Equivalents of the Company are being transferred as part of the
same transaction.
(b) Notwithstanding the provision of paragraph (a) of this Section
-------
4.4, following the consummation of a Qualified IPO, each of the two Key
Employees may Transfer in any given calendar year, the sum of (i) one half of
the number of securities he could sell into the public market during each
calendar quarter of such year under Rule 144 promulgated under the Securities
Act without registration under the Securities Act (prorated for the partial year
in which the Qualified IPO is consummated, and calculated assuming that such Key
Employee at all times is an "affiliate" of the Company for purposes of such
rule), plus (ii) if any Capital Z Holder Transfer of any of its shares
(including any disposition or distribution to any partner of such Capital Z
Holder, but excluding any Transfers between Capital Z Financial Services Fund
II, L.P. and Capital Z Financial Services Private Fund II, L.P.), that number of
his securities as represents the same percentage of the securities so
Transferred by such Capital Z Holder, plus, (iii) any amount of securities
permitted to be Transferred under this provision in a prior calendar year that
he did not so Transfer.
SECTION 4.5 EXCEPTIONS. In no event shall any exchange, reclassification,
----------
or other conversion of shares of Common Stock or Common Stock Equivalents into
any cash, securities, or other property pursuant to a recapitalization or a
merger or consolidation of the Company or any Subsidiary of the Company with,
any sale of all of the outstanding Common Stock and Common Stock Equivalents to,
or any sale or Transfer by the Company or any Subsidiary of the Company of all
or substantially all its assets to, any Person (a "Corporate Transaction")
---------------------
constitute a Transfer of shares of Common Stock or Common Stock Equivalents for
purposes of Section 4.2, Section 4.3, or Section 4.4 hereof. In addition,
----------- ----------- -----------
Section 4.2, Section 4.3 and Section 4.4 hereof shall not apply to any Transfer
----------- ----------- -----------
of Common Stock or Common Stock
Equivalents by a Holder to a member of such Holder's Group; provided, however,
-------- -------
that, for purposes of Section 4.4, any member of a Key Employee's Group who
-----------
acquires securities of any Key Employee will itself be deemed (together with
such Key Employees transferor) to constitute a single Key Employee for purposes
of Section 4.4.
-----------
ARTICLE 5
DRAG ALONG RIGHTS
-----------------
SECTION 5.1 APPLICABILITY. In the event Holders who collectively own more
-------------
than fifty percent (50%) of the Fully-Diluted Common Stock propose to Transfer
for value in a bona fide sale to an unaffiliated third party on an arm's-length
---- ----
basis, in a single transaction or series of related transactions, Common Stock
and/or Common Stock Equivalents representing a majority of the Fully-Diluted
Common Stock in a case which the right of first refusal provided for in Section
-------
4.2 hereof has not been exercised with respect to all such Common Stock and/or
---
Common Stock Equivalents proposed to be Transferred (a "Drag Sale"), such
---------
Holders (the "Dragging Holders") shall have the right to require each non-
----------------
selling Holder (each, a "Co-Seller") to Transfer a portion of its Common Stock
---------
and/or Common Stock Equivalents which represents the same percentage of the
Fully-Diluted Common Stock held by such Co-Seller as the shares being disposed
of by the Dragging Holder represent of the Fully-Diluted Common Stock held
collectively by the Dragging Holders. (For example, if the Dragging Holders
collectively are selling fifty percent (50%) of their Fully-Diluted Common Stock
position, each Co-Seller shall be required to sell fifty percent (50%) of its
Fully-Diluted Common Stock position. All Common Stock or Common Stock
Equivalents (it being understood that the price to be paid for any Common Stock
Equivalents will be based on the per share price to be paid for the Common Stock
less the exercise price or any other amount payable upon exercise or conversion
then applicable to such Common Stock Equivalents) Transferred by Holders
pursuant to this Section 5.1 shall be sold at the same price and otherwise
-----------
treated identically with the Common Stock or Common Stock Equivalents being sold
by the Dragging Holders in all respects; provided, that the Co-Seller shall not
be required to make any representations or warranties in connection with such
Transfer other than representations and warranties as to (i) such Co-Seller's
ownership of his or its Common Stock and/or Common Stock Equivalents to be
Transferred free and clear of all liens, claims and encumbrances, (ii) such Co-
Sellers power and authority to effect such Transfer, and (iii) such matters
pertaining to compliance with securities laws as the transferee may reasonably
require except the transferee may not require that each Co-Seller be an
Accredited Investor.
SECTION 5.2 NOTICE OF SIGNIFICANT SALE. The Dragging Holders shall give
--------------------------
each Co-Seller at least thirty (30) days' prior written notice of any Drag Sale
as to which the Dragging Holders intend to exercise their rights under this
Section 5.2. If the Dragging Holders elect to exercise their rights under this
-----------
Section 5.2, the Co-Sellers shall take such actions as may be
-----------
reasonably required and otherwise cooperate in good faith with the Dragging
Holders in connection with consummating the Drag Sale (including, without
limitation, the voting of Common Stock or other voting capital stock of the
Company to approve such Drag Sale). At the closing of such Drag Sale, each Co-
Seller shall deliver certificates for all shares of Common Stock and/or Common
Stock Equivalent to be sold by such Co-Seller, duly endorsed for transfer, with
the signature guaranteed, to the purchaser against payment of the appropriate
purchase price.
ARTICLE 6
TRANSFERS; CERTIFICATE LEGEND
-----------------------------
SECTION 6.1 TRANSFERS SUBJECT TO THIS AGREEMENT. Other than transfers to
-----------------------------------
the public pursuant to an effective registration statement or sales to the
public pursuant to Rule 144 promulgated under the Securities Act otherwise
permitted hereunder, each Holder will cause any proposed transferee of any
Common Stock or Common Stock Equivalent held by him or it to agree to take and
hold such Common Stock or Common Stock Equivalent subject to the provisions and
upon the conditions specified in this Stockholders Agreement and to become a
party to this Stockholders Agreement.
SECTION 6.2 CERTIFICATE LEGEND. Each share of Common Stock and/or Common
------------------
Stock Equivalent issued to each Holder or a subsequent transferee that is
required to be bound by this Stockholders Agreement shall include, in addition
to any other legend that may be required by agreement of the Holder, a legend in
the following form or a substantially similar form:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER, VOTING AND OTHER
TERMS AND CONDITIONS SET FORTH IN THE THIRD AMENDED AND RESTATED STOCKHOLDERS
AGREEMENT DATED AS OF APRIL 9, 1999, A COPY OF WHICH MAY BE OBTAINED FROM WIT
CAPITAL GROUP, INC. AT ITS PRINCIPAL EXECUTIVE OFFICES.
ARTICLE 7
TERMINATION
-----------
SECTION 7.1 TERMINATION. The provisions of this Stockholders Agreement
-----------
shall terminate on the date that is 10 years following the Effective Time;
provided, however, that (i) Sections 2.1.1(a), 2.1.1(b), 2.1.2, 2.1.3(a) and
-------- ------- ----------------- -------- ----- --------
2.1.3(b), 2.1.4, 2.1.5, 4.1.1(a), 4.2 and 4.3, Article 5 and Sections 8.2 and
-------- ----- ----- -------- --- --- --------- ------------
8.3 of this Stockholders Agreement shall terminate upon the consummation prior
---
to the expiration of such ten (10) year period of a Qualified IPO, (ii) Article
-------
3 of this Stockholders Agreement will terminate at the time indicated therein,
-
if applicable, prior to the expiration of such ten (10) year period, (iii)
Section 4.4 of this Stockholders Agreement shall terminate at the earlier of (x)
-----------
the date on which the Capital Z holders cease to own, in the aggregate, at least
50% of the number of shares of Fully-Diluted Common Stock owned by the Capital Z
Holders immediately following consummation of the Closing, or (y) the date on
which the Capital Z Holders cease to own, in the aggregate, at least 10% of the
total Fully-Diluted Common Stock and (iv) Sections 2.1.1(c) and 2.1.3(c) and
----------------- --------
shall terminate on the date on which the GS Holders cease to own, in the
aggregate, at least 5% of the total Fully-Diluted Common Stock and Section
-------
4.1.1(b) will terminate on the date on which the GS Holders cease own, in the
--------
aggregate, at least 10% of the total Fully-Diluted Common Stock.
ART
MISCELLANEOUS
-------------
SECTION 8.1 NOTICES. Any notices or other communications required or
-------
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows or at such other
address as may be substituted by notice given as herein provided.
If to the Company:
Wit Capital Group, Inc.
000 Xxxxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
e-mail address: Xxxxxxxxx@xxxxxxxxxx.xxx
with copies to (which shall not constitute notice):
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
' Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
e-mail address: Xxxxxxxxxx@xxxxxx.xxx
If to any Holder, at its address listed on the signature pages hereof.
Any notice or communication hereunder shall be deemed to be have been given
or made
as of the date so delivered if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if telecopied, and five (5) calendar days
after mailing if sent by registered or certified mail (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee).
Failure to mail a notice or communication to a Holder or any defect in it
shall not effect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 8.2 ISSUANCE OF ADDITIONAL STOCK. The Company will not issue any
----------------------------
additional Common Stock or Common Stock Equivalents (other than Common Stock
issuable upon the exercise, conversion or exchange of Common Stock Equivalents
that are outstanding as of the date hereof) if such issuance would result in the
acquiror thereof Beneficially Owning (immediately or following the exercise,
exchange or conversion of any security convertible into exchangeable for or
exercisable for any Common Stock or Common Stock Equivalents) at least one
percent (1%) of the Fully-Diluted Common Stock, unless such acquiror is a party
to this Stockholders Agreement or becomes a party to this Stockholders Agreement
at or prior to the time of such issuance by the Company.
SECTION 8.3 INFORMATION RIGHTS; BUDGETS.
---------------------------
(a) Information. The Company shall provide for each Holder the
-----------
following:
(i) General. The Company will permit each such Holder on
-------
reasonable notice to visit and inspect during normal business hours any of the
properties of the Company and to examine its books and records, and to discuss
with its officers the business and affairs of the Company, at such reasonable
times as such persons may desire without disruption of the Company's normal
business and affairs for any reasonable purpose relating to this investment in
the Company.
(ii) Quarterly Reports. As soon as available, but no later
-----------------
than 45 days after the end of each fiscal quarter of the Company, the Company
will provide to each Holder unaudited financial statements of the Company, which
shall include a statement of operations for such quarter and a balance sheet as
of the last day thereof, prepared in accordance with generally accepted
accounting principles, consistently applied.
(iii) Annual Reports. As soon as available, but no later than
--------------
90 days after the end of each fiscal year of the Company, the Company will
provide to each Holder audited financial statements of the Company, which shall
include a statement of cash flows and statements of operations for such fiscal
year and a balance sheet as at the last day thereof, each prepared in accordance
with generally accepted accounting principles, consistently applied, and
accompanied by the report of a "Big Five" accounting firm selected by the Board
of Directors by
the Company, subject to the approval of the holders of at least a majority of
the Fully-Diluted Voting Common Stock (which approval shall not be unreasonably
withheld or delayed).
(b) Budget. With respect to each calendar year, the Company shall
------
prior to the commencement of each such calendar year, prepare a proposed budget
(the "Budget") of the Company (containing monthly and quarterly breakdowns of
income (loss), balance sheet items and cash flow) and an update five year
strategic plan of the company. The Budget shall be accepted as the Budget for
such fiscal year when it has been approved by the Board of Directors of the
Company. The Budget shall be reviewed by the Company periodically and all
changes therein and all material deviations therefrom shall be resubmitted to
the Board of Directors of the Company in advance and shall be accepted when
approved by the Board if Directors of the Company.
SECTION 8.4 CONFIDENTIALITY. Each Holder agrees to and shall keep strictly
---------------
confidential and will not disclose or divulge any confidential, proprietary or
secret information which such Holder has obtained in the course of the
negotiation and consummation of the transactions contemplated hereby or may
obtain from the Company, including, by way of example and not in limitation
thereof, financial statements, reports and other information and materials
submitted by the Company 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 Holder or is or has become publicly known, or unless the Company gives its
written consent to the Holder's release of such information, except that such
written information may be provided to the Holder's lawyers, accountants or
other advisors; provided, such recipient is advised of the confidential nature
--------
of such information. Each Holder acknowledges that such information is for it
use solely in connection with evaluating its investment in the Company.
SECTION 8.5 EFFECTIVENESS. This Stockholders Agreement will become
-------------
effective on the Effective Date.
SECTION 8.6 GOVERNING LAW. THIS STOCKHOLDERS AGREEMENT SHALL BE GOVERNED
-------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 8.7 SUCCESSORS AND ASSIGNS. This Stockholders Agreement shall be
binding upon the Company, each Holder and their respective successors and
permitted assigns. Notwithstanding anything to the contrary set forth in this
Stockholders Agreement, no Person who becomes a Holder as a result of the
Transfer to such Person by another Holder of securities subject to this
Agreement shall be entitled to any rights of a Holder under Article 4, unless
---------
the Company has consented in writing to such Transfer, which consent shall not
be unreasonably withheld; provided, however, that no such written consent shall
-------- -------
be required if the Transfer is to any member of such Holder's Group; if the
Transfer is permitted by an agreement to which the Company is a party; or if
such Transfer includes at least a majority of the Fully-Diluted Common
Stock owned by such Holder and its Affiliates and the Company is given written
notice of such Transfer identifying the name and address of such transferee and
the securities being Transferred, provided, further, that the Company may refuse
-------- -------
such written consent (in a case where such written consent is required) if the
Board of Directors of the Company determines, in its reasonable discretion, that
the transferee is a direct competitor of the Company or has indicated an
intention to compete directly with the Company; provided, further, that under
-------- -------
all circumstances any permitted transferee shall have agreed in advance in
writing to be bound by and comply with this Agreement to the same extent as the
transferor. The provisions of this Section 8.7 shall not be construed as an
exception to or limitation of the provisions of Article 4.
---------
SECTION 8.8 DUPLICATE ORIGINALS. All parties may sign any number of copies
-------------------
of this Stockholders Agreement. Each signed copy shall be an original, but all
of them together shall represent the same agreement.
SECTION 8.9 SEVERABILITY. In case any provision in this Stockholders
Agreement shall be held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 8.10 NO WAIVERS; AMENDMENTS.
----------------------
8.10.1 No failure or delay on the part of the Company or any Holder in
exercising any right, power or remedy hereunder shall operate as a waiver
hereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
any Holder at law or in equity or otherwise.
8.10.2 Any provision of this Stockholders Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
the Company and the Holders holding at least 66-2/3% of the Fully-Diluted Common
Stock; provided that no such amendment or waiver shall, (i) unless signed by the
Majority DFJ Holders or the Majority Capital Z Holders, as applicable, amend the
provisions of Section 2.1 applicable to such Majority DFJ Holders or Majority
-----------
Capital Z Holders, (ii) unless signed by the Majority Capital Z Holders, amend
the provisions of Section 3.1, (iii) unless signed by the GS Holders, amend the
-----------
provisions of Section 2.1 applicable to the GS Holders (including Section
----------- -------
2.1.6), the provisions of Section 3.2, Section 4.1.1(b) (or Section 4.1 insofar
----------- ---------------- -----------
as it relates to Section 4.1.1(b)) or Section 4.5, (iv) unless signed by Holders
----------------- -----------
holding at least 66-2/3% of the Fully-Diluted Common Stock held by all Holders,
amend the provisions of Section 4.1, Section 4.2 or Section 4.3 (or Section 4.5
----------- ----------- ----------- -----------
insofar as it relates to Section 4.1, Section 4.2 or Section 4.3), (v) unless
----------- ----------- -----------
signed by the Key Employees, amend the provisions of Section 4.4 (or Section 4.5
----------- -----------
insofar as it relates to Section 4.4), or (vi) unless signed by all of the
-----------
Holders affected, (A) amend the provisions of this Section 8.10.2
(B) change the number of Holders which shall be required for the Holders or any
of them to take any action under this Section 8.10.2 or any other provision of
--------------
this Stockholders Agreement. Any such transferee who obtains such rights must
agree to be bound by the provisions of this Agreement.
SECTION 8.11 ENTIRE AGREEMENT. This Stockholders Agreement, which shall be
----------------
effective upon the Closing, contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings with respect to such subject matter, including, without
limitation, the Existing Stockholders Agreement, which, effective upon the
Closing, shall cease and terminate in its entirety and be of no further force or
effect; provided, however, that in the event that the Closing shall not occur,
-------- -------
then this Stockholders Agreement shall cease and terminate and be of no force or
effect and the Existing Stockholders Agreement shall continue in full force and
effect.
WIT CAPITAL GROUP, INC.
By:
Name:
Title:
CAPITAL Z FINANCIAL SERVICES
FUND II, L.P.
By: Capital Z Partners, L.P., its sole
general partner
By: Capital Z Partners, Ltd., its sole
general partners
By:
Name:
Title:
THE XXXXXXX XXXXX GROUP, L.P.
By:
Name:
Title:
ADDITIONAL INVESTORS:
By:
Name:
Title:
Name and Addresses of Investors
-------------------------------
--------------------------------------
Investors
--------------------------------------
Xxxxxx X. Xxxxxxx
c/o ComCast Corporation
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
--------------------------------------
Xxx Xxxxxxxx
c/o Safeguard Scientific
000 Xxxxx Xxxx Xxxxx, Xxxx. 000
Xxxxx, XX 00000
--------------------------------------
Xxxxx Xxxxxxxxx
c/x Xxxxxxxxx Partners
One World Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
--------------------------------------
Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
--------------------------------------
Xxxxxx X. Fleischrnan
c/o Linklaters Paines
1345 Avenue of the Americas
00/xx/ Xxxxx
Xxx Xxxx, XX 00000
--------------------------------------
Xxxxx X. Xxxx
00 Xxxxxxx Xxxx
Xxx Xxxxxxxxx, XX 00000
--------------------------------------
Xxxx X. Xxxxxx
c/x Xxxxxx Xxxxxxx X.X. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------
Xxxx Xxxxxxx
00 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
--------------------------------------
Xxxx X. Xxxxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
--------------------------------------
--------------------------------------
Xxxxx Xxxxxx
Xxx Xxxxx Xxxxxx #00
Xxxxxxxxxx, XX 00000
--------------------------------------
Xxxxxx X. Xxxxxx
Wit Capital Group, Inc.
000 Xxxxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
--------------------------------------
Xxxxxxx X. Xxxxxx
c/o Hicks, Muse, Xxxx & Xxxxx Inc.
0000 Xxxxxx xx Xxxxxxxx
00/xx/ Xxxxx
Xxx Xxxx, X.X. 00000
--------------------------------------
Highland Capital Partners IV
Limited Partnership
0 Xxxxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxxxxx, XX 00000
--------------------------------------
Highland Entrepreneurs' Fund
IV Limited Partnership
0 Xxxxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxxxxx, XX 00000
--------------------------------------
Xxxxx XxXxxxxxx
00 Xxx Xxxxx Xxxx
Xxxxxxx, XX 00000
--------------------------------------
Xxxx Xxxxxx
000 Xxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------
Xxxx X. Xxxxx
0 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
--------------------------------------
Xxxxxx Smellick
Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
--------------------------------------
Xxxx Xxxxxx
c/o Xxxx.xxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
--------------------------------------
Xx. Xxxxx Ungerleida
000 00/xx/ Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
--------------------------------------
--------------------------------------
Xxxxx X. Xxxxx
Xxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------
Kunihiko Yogo
Xxxxxxxxxx 0-00-00-000
Xxxxxx-xx, Xxxxx 000-0000
Xxxxx
--------------------------------------
Capital Z Financial Services
Fund II, L.P.
1 Chase Xxxxxxxxx Xxxxx
00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------
Capital Z Financial Services
Xxxxxxx Xxxx XX, X.X.
0 Xxxxx Xxxxxxxxx Xxxxx
00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------
Drapor Xxxxxx Jurvetson Fund V, L.P.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Mr. Xxxx Xxxxxx
--------------------------------------
Xxxxxx Xxxxxx Jurvetson Partners LLC
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Mr. Xxxx Xxxxxx
--------------------------------------
DS Capital Group LLC
00 Xxxxxxx Xxxx.
Xxxxxxxx, X.X. 00000
Attn: Xxxx Xxxxxxxx
--------------------------------------
FG-Wit
0000 Xxxxxxxx Xxxxxx,
00/xx/ Xxxxx
Xxxxxxxx, XX 00000
--------------------------------------
MC Capital Inc.
000 Xxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
--------------------------------------
SiliconValley, Inc.
000 Xxxxxx Xxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attn: Kogi Osawa
--------------------------------------
--------------------------------------
MediaOne Interactive Services, Inc.
Attention: President
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
--------------------------------------
Roccia Ventures L.L.P.
x/x Xxxxxxx Xxxxxx
000 Xxxx 00/xx/ Xxxxxx
Xxx. 00X
Xxx Xxxx, XX 00000
--------------------------------------
Pacific Mandarin I LTD
Xxxxx 0000, Xxxxxx Xxxxx
0-0 Xxxxxxxxx Xxxx
Xxxxxxx-Xxxx Xxxx
Attn: X.X. Xxxxxx
--------------------------------------
BNP/ XXXXXX XXXX GROUP INVESTORS
--------------------------------------
Xxxxx X. Xxxxx
000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
--------------------------------------
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
--------------------------------------
Xxxxx X. XxXxxxxxx
00 Xxxxxxxx Xxxx
Xxxxx, XX 00000
--------------------------------------
Xxxxx X. Xxxxxx
000 Xxxxxxxxxx Xxxx
Xxxxxxxxx XX 00000
--------------------------------------
Xxx X. Xxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
--------------------------------------
Xxxx X. Xxxxx
0000 Xxx. Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
--------------------------------------
Xxxxxx X. Xxxxxxxxx, Xx.
00 Xxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
--------------------------------------
Xxxxxxx X. Xxxxxx
000 Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
--------------------------------------
--------------------------------------
Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
--------------------------------------
Xxxxx Xxxxxx
0000 X. Xxxx Xxx.
Xxxxxxx, XX 00000
--------------------------------------
ULTRA PARTNERS GP INVESTORS
--------------------------------------
Xxxxxx Xxxxxxx
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
--------------------------------------
Xxxxxx Xxxxxxx Family Trust
110 West 00/xx/ Xxxxxx
00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------
Xxxxxxx Xxxxxxx
000 Xxxx 00/xx/ Xxxxxx
0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------
THE XXXXXXX XXXXX GROUP, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
--------------------------------------
SCHEDULE 4.1
------------
. BankAmerica
. Bear, Xxxxxxx & Co. Inc.
. Chase
. Credit Suisse First Boston
. Deutsche Bank/Bankers Trust
. Xxxxxxxxx Xxxxxx & Xxxxxxxx
. Fleet/BankBoston (Xxxxxxxxx Xxxxxxxx)/*/
. Xxxxxxxxx & Xxxxx
. X.X. Xxxxxx & Co.
. Xxxxxx Brothers
. Xxxxxxx Xxxxx & Co.
. Xxxxxx Xxxxxxx Xxxx Xxxxxx
. Xxxxx Xxxxxx
. Xxxxxxx Xxxxx Xxxxxx (Citigroup)
. SBC Warburg
. UBS
_____________________________
/*/ Fleet/Bank Boston (Xxxxxxxxx Xxxxxxxx) will not be a "Restricted Offeree"
for purposes of Section 4.1.1(b) of the Stockholders Agreement in
connection with a proposal by the Company to issue securities of the
Company to Fleet/Bank Boston (Xxxxxxxxx Xxxxxxxx) in return for its
provision of material assistance and services in connection with the
digital trading facility as described in the Company's Registration
Statement filed with the Securities Exchange Commission on March 18, 1999,
if such issuance has been approved by a majority of the independent
directors on the Company's Board of Directors.
