Exhibit 3
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT ("Agreement"), dated as
of December 28, 2001, by and among Vesta Insurance Group, Inc., a Delaware
corporation ("Vesta"), Capital Z Financial Services Fund II, L.P., a Bermuda
limited partnership ("Fund II"), and Capital Z Financial Services Private Fund
II, L.P., a Bermuda limited partnership ("Private Fund II" and, together with
Fund II, each a "Capital Z Party" and collectively, "Capital Z").
R E C I T A L S:
WHEREAS, Capital Z desires to purchase from Vesta, and
Vesta desires to issue and sell to Capital Z, shares of common stock of Vesta
("Vesta Common Stock");
WHEREAS, Fund II and Private Fund II are the record and
beneficial owners of the securities of Instant Insurance Holdings, Inc., a
Delaware corporation (the "Company"), listed on Annex I attached hereto (the
"Securities"); and
WHEREAS, as consideration for the Vesta Common Stock being
purchased and cash being delivered pursuant to this Agreement, Capital Z desires
to transfer to Vesta, and Vesta desires to accept as full payment, the
Securities;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and conditions
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to set forth the
terms and conditions of the transactions described herein and the mode of
carrying the same into effect, the parties hereby agree as follows:
A G R E E M E N T:
ARTICLE 1
THE TRANSACTIONS
1.1 Purchase and Sale of the Vesta Shares. Subject to the
terms and conditions of this Agreement, Capital Z hereby agrees to purchase from
Vesta, and Vesta agrees to issue and sell to Capital Z an aggregate of 1,500,000
shares of Vesta Common Stock (the "Vesta Shares") and Vesta agrees to pay to
Capital Z cash in the amount of $138,284 (the "Cash"), allocated between the
Capital Z Parties as set forth on Schedule 1.1. The purchase price for each
Vesta Share is $6.77. In consideration for the Vesta Shares and the Cash,
Capital Z is transferring the Securities to Vesta. The allocation of the Cash
and Vesta Shares received by each Capital Z Party to the Securities sold by such
Capital Z Party shall be pro rata in accordance with each such Security's fair
market value. The purchase obligation of each Capital Z Party is the several
obligation of such Capital Z Party to purchase the number of Vesta Shares
indicated on Schedule 1.1 hereto and no Capital Z Party will have any obligation
with respect to the purchase obligations of any other Capital Z Party.
1.2 The Closing. The closing of the purchase and sale of
the Vesta Shares (the "Closing") shall be held on the date hereof at the offices
of Weil, Gotshal & Xxxxxx LLP, Dallas, Texas, or such other date as the parties
hereto may agree. The date on which the Closing occurs is referred to herein as
the "Closing Date."
1.3 Waiver of Preemptive Rights. Vesta hereby waives any
rights of first offer (and any notices in connection therewith) that may be
applicable to the transfer of the Securities under the terms of the Third
Amended and Restated Stockholders Agreement, dated December 21, 2000, by and
among the Company and the stockholder party thereto.
ARTICLE 2
CONCURRENT EVENTS AND DELIVERIES
Concurrently with the execution and delivery of this
Agreement, the following events are occurring and the following deliveries are
being made:
2.1 Amendment to Registration Rights Agreement. Capital Z
and Vesta are executing and delivering the First Amendment to the Registration
Rights Agreement (the "Amendment"), which amends certain provisions of the
Registration Rights Agreement, dated December 21, 2000, by and among Vesta, Fund
II and Private Fund II.
2.2 Cash, Stock Certificates and Warrants. Each Capital Z
Party is hereby delivering to Vesta stock certificates and warrants, accompanied
by stock powers or other instruments of transfer duly executed in blank,
representing the Securities being purchased by Vesta, and Vesta is delivering to
each such Capital Z Party its portion of the Cash, by wire transfer of
immediately available funds to an account designated by such Capital Z Party,
and a certificate or certificates, validly executed by a duly authorized officer
of Vesta and in proper form, representing the Vesta Shares being purchased by
each such Capital Z Party.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CAPITAL Z
Each of Fund II and Private Fund II severally, and not
jointly, represents and warrants to each of the other parties as follows:
3.1 Organization. Such Capital Z Party is a limited
partnership, validly existing and in good standing under the laws of the
jurisdiction of its organization.
3.2 Authority. (a) Such Capital Z Party has full
partnership power and authority to execute and deliver this Agreement and the
Amendment, to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated on its part hereby and thereby; (b) the
execution, delivery and performance by such Capital Z Party of this Agreement
and the Amendment have been duly authorized by all necessary partnership action
on the part of such Capital Z Party; and (c) each of this Agreement and the
Amendment has been duly executed and delivered by such Capital Z Party and
(assuming due execution and delivery by the other parties hereto and thereto)
2
constitutes a legal, valid and binding agreement of such Capital Z Party,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and subject to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.3 No Violation. The execution and delivery by such
Capital Z Party of this Agreement and the Amendment, the performance by such
Capital Z Party of its obligations hereunder and thereunder and the consummation
by it of the transactions contemplated hereby and thereby will not (a) violate
any provision of law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award (collectively, "Requirements of Law") applicable
to such Capital Z Party, (b) require such Capital Z Party to obtain the consent,
waiver, approval, license or authorization of, or make any notice or filing by
such Capital Z Party with, any Person or Governmental Authority, or (c) violate,
result (with or without notice or the passage of time, or both) in a breach of
or give rise to the right to accelerate, terminate or cancel any obligation
under or constitute (with or without notice or the passage of time, or both) a
default under, any of the terms or provisions of any certificate of limited
partnership or partnership agreement, indenture, mortgage, agreement, contract,
order, judgment, ordinance, regulation or decree to which such Capital Z Party
is subject or by which such Capital Z Party is bound. As used in this Agreement,
"Person" shall mean any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Authority or other entity. As used in this Agreement,
"Governmental Authority" means any United States (federal, state, or local),
foreign or supra-national government, or governmental regulatory or
administrative authority, agency, commission, court or tribunal.
3.4 Brokers. Such Capital Z Party has not paid or become
obligated to pay any fee or commission to any broker, finder, investment banker
or other intermediary (not including attorneys' fees) in connection with this
Agreement.
3.5 Securities Act Representations.
(a) Except as expressly contemplated hereby, such Capital Z
Party is acquiring its portion of the Vesta Shares for investment for its own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the Securities Act of 1933, as
amended (the "Securities Act"). Except as expressly contemplated hereby, such
Capital Z Party does not have any present intention of selling, granting any
participation in, or otherwise distributing the Vesta Shares it is purchasing
otherwise than pursuant to an effective registration statement under the
Securities Act or in a transaction exempt from the registration requirements
under the Securities Act and applicable state securities laws. Except as
expressly contemplated hereby, such Capital Z Party does not have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to any of the
Vesta Shares it is purchasing.
(b) Such Capital Z Party acknowledges that the issuance of
its portion of the Vesta Shares will not be registered under the Securities Act
or any state securities laws on the basis of a claimed exemption by Vesta that
the issuance of the Vesta Shares as provided for herein is exempt from
3
registration under the Securities Act and applicable state securities laws. Such
Capital Z Party acknowledges that the availability of such exemption is
predicated in part on such Capital Z Party's representations set forth in this
Article 3 and that Vesta is relying on such representations.
(c) Such Capital Z Party has received all the information
it considers necessary or appropriate for deciding whether to accept the Vesta
Shares it is purchasing. Such Capital Z Party has had an opportunity to ask
questions of and to receive answers from Vesta regarding the terms and
conditions of the issuance of the Vesta Shares it is purchasing and the
business, properties, financial condition and prospects of Vesta and to obtain
additional information (to the extent Vesta possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to such Capital Z Party or to which such
Capital Z Party had access.
(d) Such Capital Z Party acknowledges that it is able to
bear the economic risk of the investment in the Vesta Shares it is purchasing,
and has such knowledge and experience in financial and business matters that it
is capable of evaluating the benefits and risks of the investment in the Vesta
Shares it is purchasing.
(e) Such Capital Z Party is an "accredited investor" as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
(f) Such Capital Z Party acknowledges that the Vesta Shares
it is purchasing may not be sold, transferred or otherwise disposed of without
registration under the Securities Act or an applicable exemption therefrom and
that in the absence of any effective registration statement covering such Vesta
Shares or an available exemption from registration under the Securities Act,
such Company Shares must be held indefinitely. Such Capital Z Party further
acknowledges that the Vesta Shares it is purchasing may not be sold pursuant to
Rule 144 promulgated under the Securities Act unless all of the conditions of
that rule are met.
(g) Such Capital Z Party acknowledges that each certificate
representing any of the Vesta Shares it is purchasing will be endorsed with a
legend substantially similar to the following:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR PURSUANT TO THE SECURITIES OR "BLUE SKY" LAWS
OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED,
EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH
RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH
ACT, (ii) RULE 144 UNDER SUCH ACT, OR (iii) ANY OTHER
EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
3.6 Securities. Such Capital Z Party is the true and lawful
owner, of record and beneficially, of the Securities, free and clear of any
liens, restrictions (other restrictions relating to transfer under the
4
Securities Act), security interests, claims, rights of another or encumbrances
(collectively, "Liens"). There are no outstanding options or other similar
rights, agreements or commitments to acquire from such Capital Z Party any of
its Securities. Such Capital Z Party has the full power and authority to convey,
and is conveying to Vesta, good and marketable title to the Securities, free and
clear of all Liens. To Capital Z's knowledge, the Securities consisting of
capital stock of the Company are validly issued and outstanding and no action
has been taken by Capital Z to redeem such Securities. The Securities consisting
of warrants or rights to acquire capital stock of the Company have not been
terminated and are in full force and effect. The Securities constitute all of
Capital Z's ownership interests or rights to acquire ownership interests in the
Company, whether issued by the Company or a third party.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx represents and warrants to each of Fund II and
Private Fund II to each of the other parties as follows:
4.1 Corporate Organization. Vesta is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2 Vesta Shares. The Vesta Shares to be sold by Vesta to
Capital Z in accordance with the terms of this Agreement have been duly
authorized, validly issued and, upon Vesta's receipt of the Securities, will be
fully paid and non-assessable. Each of Fund II and Private Fund II are acquiring
good and marketable title to the Vesta Shares it is purchasing, free and clear
of any and all Liens, except such Liens as may exist under applicable federal
and state securities laws.
4.3 Authority. Vesta has full corporate power and authority
to execute and deliver this Agreement and the Amendment, to carry out its
obligations hereunder and thereunder and to consummate the transactions
contemplated on its part, hereby and thereby. The execution, delivery and
performance by Vesta of this Agreement and each of the Amendment and the
consummation of the transactions contemplated on its part hereby or thereby have
been duly authorized by all necessary corporate action on the part of Vesta.
This Agreement and the Amendment have been duly executed and delivered by Vesta
and (assuming due execution and delivery by the other parties hereto and
thereto) constitute the legal, valid and binding obligation of Vesta,
enforceable against Vesta in accordance with their terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and subject to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.4 No Violation. The execution, delivery and performance
of this Agreement and the Amendment and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (a) violate any
Requirements of Law applicable to Vesta, (b) require Vesta to obtain the
consent, waiver, approval, license or authorization of, or make any notice or
filing by Vesta with, any Person or Governmental Authority, or (c) violate,
5
result (with or without notice or the passage of time, or both) in a breach of
or give rise to the right to accelerate, terminate or cancel any obligation
under, or constitute (with or without notice or the passage of time, or both) a
default under, any of the terms or provisions of Vesta's certificate of
incorporation or bylaws or any indenture, mortgage, agreement, contract, order,
judgment, ordinance, regulation or decree to which Vesta is subject or by which
Vesta is bound.
4.5 Brokers. Vesta has not paid or become obligated to pay
any fee or commission to any broker, finder, investment banker or other
intermediary (not including attorneys' fees) in connection with this Agreement.
4.6 Corporate Documents.
(a) Vesta has heretofore filed each report, schedule,
registration statement and definitive proxy statement required to be filed by it
with the Securities and Exchange Commission (the "SEC") (as any such documents
have since the time of their original filing been amended, the "Vesta
Documents") since January 1, 2000. As of its respective dates, each Vesta
Document did not contain any untrue statements of material facts or omit to
state material facts required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As of its respective date, each Vesta Document complied in all
material respects with the applicable requirements of the Securities Act, and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations promulgated under each of such statutes. The financial
statements contained in the Vesta Documents, together with the notes thereto,
have been prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods indicated (except as may be
indicated in the notes thereto, or, in the case of the unaudited financial
statements, as permitted by Form 10-Q), reflect all known liabilities of Vesta
required to be stated therein, including all known contingent liabilities as of
the end of each period reflected therein, and present fairly the financial
condition of Vesta at and as of said dates and the consolidated results of
operations and cash flows of Vesta for the periods then ended. The consolidated
balance sheet of Vesta at September 30, 2001 included in the Vesta Documents is
referred to herein as the "Vesta Balance Sheet."
(b) Except as disclosed in the Vesta Documents and except
for liabilities and obligations incurred in the ordinary course of business
consistent with past practices, since the date of the Vesta Balance Sheet,
neither Vesta nor any entity in which Vesta has an equity or other ownership
interest has incurred any liabilities or obligations of any nature, whether or
not accrued, contingent or otherwise, that have, or would be required to be
reflected or reserved against on a consolidated balance sheet of Vesta
(including the notes thereto) prepared in accordance with generally accepted
accounting principles, as applied in preparing the Vesta Balance Sheet.
4.7 Private Offering. No form of general solicitation or
general advertising has been used by Vesta or its representatives in connection
with the offer or sale of the Vesta Shares. Assuming the accuracy of the
representations made by each of Fund II and Private Fund II, no registration of
the Vesta Shares, pursuant to the provisions of the Securities Act or any state
6
securities or "blue sky" laws, will be required by the offer, sale or issuance
of such securities.
ARTICLE 5
MISCELLANEOUS
5.1 Amendment. This Agreement may be amended only by an
instrument in writing signed by each of the parties hereto.
5.2 Waiver. The observance of any term of this Agreement
may be waived by the party or parties entitled to enforce such term, but such
waiver shall be effective only if it is in a writing signed by the party or
parties entitled to enforce such term and against which such waiver is to be
asserted. No delay or omission on the part of any party in exercising any right
or privilege under this Agreement shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right or privilege under this
Agreement operate as a waiver of any other right or privilege under this
Agreement nor shall any single or partial exercise of any right or privilege
preclude any other or further exercise thereof or the exercise of any other
right or privilege under this Agreement.
5.3 Survival. The representations, warranties, covenants
and agreements set forth in this Agreement shall survive the Closing.
5.4 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been given
or made if in writing and delivered personally, sent by commercial carrier or
registered or certified mail (postage prepaid, return receipt requested) or
transmitted by facsimile with automated receipt confirmation to the parties at
the following addresses and numbers:
If to Fund II or Private Fund II, to:
Capital Z Financial Services Fund II, L.P.
00 Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
with copies, which shall not constitute notice to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Fax: (000) 000-0000
Attention: R. Xxx Xxxxx
7
If to Vesta, to:
Vesta Insurance Group, Inc.
0000 Xxxxx Xxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. XxXxxxxxxx
5.5 Confidentiality. Each party hereto shall, and shall
cause its respective officers, directors, employees, agents and representatives
to, maintain confidentiality with respect to, and not disclose, any proprietary
or otherwise confidential information of any other party hereto; provided,
however, that the limitations provided in this Section 5.5 shall not apply, with
respect to any party, to (a) information in the public domain or otherwise
publicly available (other than as a result of disclosure by such party or its
officers, directors, employees, agents or representatives, in violation of this
Agreement), (b) information the disclosure of which is required by law or
compelled by judicial or administrative process, or (c) disclosure of any such
information to such party's officers, directors, employees, agents and
representatives for legitimate purposes in connection with the transactions
contemplated by this Agreement (provided that the Persons to whom such
information is disclosed are notified of such party's confidentiality
obligations under this Agreement), or (d) information already in the possession
of such party prior to its receipt from the other party.
5.6 Headings. The headings contained in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
5.7 Publicity. So long as this Agreement is in effect,
except as required by law, regulation or stock exchange requirements, the
parties hereto shall not, and shall cause their Affiliates not to, issue or
cause the publication of any press release or other announcement with respect to
the transactions contemplated by this Agreement or the other agreements
contemplated hereby without the consent of the other parties, which consent
shall not be unreasonably withheld or delayed.
5.8 Entire Agreement. This Agreement constitutes the entire
agreement among the parties and supersedes all other prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.
5.9 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Prior to the Closing, no
party shall assign any of its rights under this Agreement; provided, however,
that each of Fund II, Private Fund II and Vesta may assign its rights (but not
obligations) under this Agreement, in whole or in part, to any entity that,
directly or indirectly, controls, is controlled by, or is under common control
with such Capital Z Party. No assignment of rights will relieve the assigning
party of liability in the event of any breach hereof. Any attempted assignment
in violation of this Agreement shall be void ab initio.
8
5.10 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
5.11 Governing Law. The validity and interpretation of this
Agreement shall be governed by the laws of the State of Delaware, without
reference to the conflict of laws principles thereof.
5.12 Third Party Beneficiaries. This Agreement (except as
otherwise expressly indicated in the indemnification provisions hereof) is not
intended to confer upon any other Person any rights or remedies hereunder.
5.13 Costs and Expenses. Each party hereto shall bear its
own legal and due diligence fees and expenses and other out-of-pocket expenses
relating to the transactions contemplated by this Agreement.
5.14 Number and Gender of Words. When the context so
requires in this Agreement, words of any gender shall include either or both of
the other genders and the singular number shall include the plural.
5.15 Execution of Additional Documents. Each party hereto
shall make, execute, acknowledge and deliver such other instruments and
documents, and take all such other actions as may be reasonably required in
order to effectuate the purposes of this Agreement and to consummate the
transactions contemplated hereby.
5.16 Interpretation. References to "Sections" herein are
references to sections of this Agreement. The words "herein," "hereof," "hereto"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision.
5.17 Reformation; Severability. In case any provision
hereof shall be invalid, illegal or unenforceable, such provision shall be
reformed to best effectuate the intent of the parties and permit enforcement
thereof, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. If such
provision is not capable of reformation, it shall be severed from this Agreement
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
5.18 Further Assurances. At and from time to time after the
date hereof, at the request of Vesta but without further consideration, Capital
Z shall execute and deliver such other instruments of conveyance, assignment,
transfer and delivery and take such other action as Vesta may reasonably request
in order to give effect to the transactions contemplated hereby.
5.19 Time of the Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
9
IN WITNESS WHEREOF, each of the Capital Z and Vesta has
caused this Agreement to be duly signed as of the date first written above.
CAPITAL Z:
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 partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P.
By: Capital Z Partners, L.P., its sole general partner
By: Capital Z Partners, Ltd., its sole
general partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
VESTA:
VESTA INSURANCE GROUP, INC.
By: /s/ Xxxx Micollough
---------------------------------------
Name: Xxxx Micollough
Title: Vice President
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
SCHEDULE 1.1
CAPITAL Z PARTY NUMBER OF VESTA SHARES PURCHASED
--------------- --------------------------------
Capital Z Financial Services Fund II, L.P. $137,553 1,492,074
Capital Z Financial Services Private Fund $731 7,926
II, L.P.
TOTAL $138,284 1,500,000
ANNEX I
SECURITIES
A. STOCK OWNERSHIP:
---------------------------------------- --------------------- --------------------------- ------------------ --------------------
STOCK CERTIFICATE # HOLDER # OF SHARES DATE OF ISSUE
----- ------------- ------ ----------- -------------
---------------------------------------- --------------------- --------------------------- ------------------ --------------------
Common, $0.01 par 26 Fund II 17,693 1/31/01
---------------------------------------- --------------------- --------------------------- ------------------ --------------------
Series A Preferred, $1.00 par 5 Fund II 198,943 4/14/00
---------------------------------------- --------------------- --------------------------- ------------------ --------------------
Series C Preferred, $1.00 par 001 Fund II 3,705,317 2/17/00
---------------------------------------- --------------------- --------------------------- ------------------ --------------------
Series C Preferred, $1.00 par 008 Fund II 3,705,317 4/28/00
----------------------------------------------------------------------------------------------------------------------------------
TOTAL FUND II SERIES C: 7,410,634
----------------------------------------------------------------------------------------------------------------------------------
Common, $0.01 par 27 Private Fund II 94 1/31/01
---------------------------------------- --------------------- --------------------------- ------------------ --------------------
Series A Preferred, $1.00 par 6 Private Fund II 1,057 4/14/00
---------------------------------------- --------------------- --------------------------- ------------------ --------------------
Series C Preferred, $1.00 par 002 Private Fund II 19,683 2/17/00
---------------------------------------- --------------------- --------------------------- ------------------ --------------------
Series C Preferred, $1.00 par 009 Private Fund II 19,683 4/28/00
----------------------------------------------------------------------------------------------------------------------------------
TOTAL PRIVATE FUND II SERIES C: 39,366
----------------------------------------------------------------------------------------------------------------------------------
B. WARRANTS TO PURCHASE COMMON STOCK:
---------------------------------------------------------------------------------------------------
DATE OF WARRANT FUND II WARRANTS PRIVATE FUND II WARARNTS TOTAL WARRANTS
--------------- ---------------- ------------------------ --------------
9/14/00 41,446.83 220.17 41,667
10/6/00 4,144.98 22.02 4,167
10/13/00 3,315.39 17.61 3,333
10/19/00 21,552.51 114.49 21,667
11/2/00 17,969.54 95.46 18,065
11/15/00 26,208.78 139.22 26,348
11/30/00 17,863.11 94.89 17,958
12/14/00 17,732.81 94.19 17,827
TOTALS: 150,233.95 798.05 151,032
---------------------------------------------------------------------------------------------------
C. CALL RIGHTS:
Any rights to acquire securities of the Company in favor of Capital Z contained
in the Third Amended and Restated Management Stock Call Agreement, dated as of
December 21, 2000, among Capital Z, X. Xxxxxxxx Xxxx III, X.X. Xxxxxx, Xxxxxxx
Xxxxxxxxxx, Xxxxxx X. Xxxx and the Company.
