AMENDMENT NO. 2 TO THE AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
This AMENDMENT NO. 2 TO THE AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT (this "Amendment No. 2 to the Amended and
Restated Investors' Rights Agreement") is made as of the 23 day of July, 2003,
by and among OPTIMARK INNOVATIONS INC., f/k/a OTSH, Inc., a Delaware
corporation (the "Company"), OPTIMARK HOLDINGS, INC., a Delaware
corporation ("Holdings"), OPTIMARK, INC., a Delaware corporation
("OptiMark"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ JURVETSON EPLANET VENTURES, L.P., a
Cayman Islands limited partnership ("ePlanet Ventures"), ▇▇▇▇▇▇
▇▇▇▇▇▇ JURVETSON EPLANET PARTNERS FUND, LLC, a California limited
liability company ("ePlanet Partners") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ JURVETSON EPLANET
VENTURES GmBH & CO. KG., a German partnership ("ePlanet KG"), SOFTBANK CAPITAL
PARTNERS LP, a Delaware limited partnership ("Capital Partners"), SOFTBANK
CAPITAL LP, a Delaware limited partnership ("SOFTBANK Capital"), and
SOFTBANK CAPITAL ADVISORS FUND LP, a Delaware limited partnership ("Capital
Advisors"). For purposes of this Agreement: (i) each of Capital Partners,
SOFTBANK Capital, and Capital Advisors may be referred to as a "SOFTBANK
Entity" and, collectively, as the "SOFTBANK Entities;" (ii) each of
ePlanet Ventures ePlanet Partners and ePlanet KG may be referred to as
an "ePlanet Entity" and, collectively, as the "ePlanet Entities"; and
(iii) the Company, Holdings, OptiMark, each ePlanet Entity and each
SOFTBANK Entity are sometimes hereinafter referred to individually as a
"Party" and collectively as the "Parties."
WHEREAS, the Parties are party to that certain (i) Amended and Restated
Investors' Rights Agreement, dated as of May 3, 2002, and Amendment No. 1
to such Amended and Restated Investors' Rights Agreement, dated as of
February 6, 2003 ("Amendment No. 1 to the Amended and Restated Investors'
Rights Agreement" and collectively with the Amended and Restated
Investors' Rights Agreement, dated as of May 3, 2002, the "Amended and
Restated Investors' Rights Agreement");
WHEREAS, pursuant to that certain Loan Agreement, dated as of July
23, 2003, by and among the SOFTBANK Entities, Holdings, OptiMark and the
Company (solely with respect to Section 3.5 thereof) (the "Loan Agreement"),
the SOFTBANK Entities have agreed to extend credit to Holdings in the
principal amount of $940,000 (the "Loan"); and
WHEREAS, in accordance with the terms of Section 3.5 of the Loan
Agreement, upon maturity of the Loan, the SOFTBANK Entities may elect, in
their sole discretion, to have a portion of the Loan repaid by decreasing the
number of shares of the Company's Common Stock held by the SOFTBANK Entities
that Holdings has the right or is required to reacquire pursuant to Sections
5.2, 5.4 and 5.5 of the Amended and Restated Investors' Rights Agreement
(the "Revised Call Rights"); and
WHEREAS, in connection with the Revised Call Rights, the Parties have
agreed to enter into this Amendment No. 2 to the Amended and Restated
Investors' Rights Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, and for good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the Parties agree
to amend the Amended and Restated Investors' Rights Agreement as follows:
1. Defined Terms. Except as defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Amended
and Restated Investors' Rights Agreement.
2. Amendment of Section 5.2(a) of the Amended and Restated
Investors' Rights Agreement. The first sentence of Section 5.2(a) of the
Amended and Restated Investors' Rights Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"(a) First Call Right. Commencing on September 23,
2003 and continuing until September 30, 2003 (the "First
Call Exercise Period"), the Independent Committee, in its
sole discretion, shall have the right to require each of the
SOFTBANK Entities to sell to Holdings (the "First Call
Right") 100 shares of the Common Stock held by the
SOFTBANK Entities (as appropriately adjusted for stock
splits, reverse stock splits and stock dividends) in exchange
for an aggregate consideration of (i) US$125,000 and (ii)
16,667 shares of authorized but unissued shares of the
Series E Preferred Stock; provided, however, that (i) in
accordance with Section 3.5(a)(ii) of that certain Loan
Agreement, by and among the SOFTBANK Entities,
Holdings, OptiMark and the Company (solely with respect
to Section 3.5 thereof), dated as of February 6, 2003 (the
"Original Loan Agreement"), pursuant to which the
SOFTBANK Entities have agreed to extend credit to
Holdings in the principal amount of $940,000 (the
"Original Loan"), the SOFTBANK Entities may elect, in
their sole discretion, to have the principal amount of the
Original Loan re-paid by reducing the number of shares of
Common Stock held by the SOFTBANK Entities that
Holdings has the right to reacquire pursuant to the First
Call Right by twenty (20) shares (as adjusted pursuant to
Sections 3.5(b) and (d) of the Original Loan Agreement);
and (ii) in accordance with Section 3.5(a)(ii) of that certain
Loan Agreement, by and among the SOFTBANK Entities,
Holdings, OptiMark and the Company (solely with respect
to Section 3.5 thereof), dated as of July 23, 2003 (the
"Second Loan Agreement"), pursuant to which the
SOFTBANK Entities have agreed to extend credit to
Holdings in the principal amount of
$940,000 (the "Second Loan"), the
SOFTBANK Entities may elect, in their sole discretion, by
written notice given to Holdings on or before September
22, 2003, to have the principal amount of the Second Loan
re-paid by reducing the number of shares of Common
Stock held by the SOFTBANK Entities that Holdings has
the right to reacquire pursuant to the First Call Right by
twenty (20) shares (as adjusted pursuant to Sections 3.5(b)
and (d) of the Second Loan Agreement)."
3. Amendment of Section 5.4(a) of the Amended and Restated
Investors' Rights Agreement. The first sentence of Section 5.4(a) of the
Amended and Restated Investors' Rights Agreement is hereby amended by deleting
it in its entirety and replacing it with the following:
"(a) Discretionary Call. Subject to the rights granted to
the Independent Committee in Section 5.4(d) hereof, in the
event of a Company Liquidity Event on or before
September 30, 2003, then Holdings shall purchase (the
"Discretionary Call") 100 shares of Common Stock held by
the SOFTBANK Entities (as appropriately adjusted for
stock splits, reverse stock splits and stock dividends) in
exchange for an aggregate consideration of (i) US$125,000
and (ii) 16,667 shares of authorized but unissued shares of
the Series E Preferred Stock; provided, however, that (i) in
accordance with Section 3.5(a)(ii) of the Original Loan
Agreement, the SOFTBANK Entities may elect, in their
sole discretion, to have the principal amount of the Original
Loan re-paid by reducing the number of shares of Common
Stock held by the SOFTBANK Entities that Holdings is
required to reacquire pursuant to the Discretionary Call by
twenty (20) shares (as adjusted pursuant to Sections 3.5(b)
and (d) of the Original Loan Agreement); and (ii) in
accordance with Section 3.5(a)(ii) of the Second Loan
Agreement, the SOFTBANK Entities may elect, in their
sole discretion, by written notice given to Holdings on or
before September 22, 2003, to have the principal amount of
the Second Loan re-paid by reducing the number of shares
of Common Stock held by the SOFTBANK Entities that
Holdings is required to reacquire pursuant to the
Discretionary Call by twenty (20) shares (as adjusted
pursuant to Sections 3.5(b) and (d) of the Second Loan
Agreement)."
4. Amendment of Section 5.5(a) of the Amended and Restated
Investors' Rights Agreement. The first two sentences of Section 5.5(a)
of the Amended and Restated Investors' Rights Agreement are hereby
amended by deleting them in their entirety and replacing them
with the following:
"(a) Mandatory Call. In the event that: (i) none of the
options set forth in Sections 5.2 through 5.4 of this
Agreement have been exercised on or before September 30,
2003; (ii) the Independent Committee no longer exists; and
(iii) no independent directors sit on the Holdings Board
and, after reasonable good faith efforts by the remaining
members of the Holdings Board, no independent persons
qualified to serve on the Holdings Board have been found
or, if found, are not willing to sit on the Holdings Board,
then the Holdings Board shall engage an independent
investment banking, accounting or third party valuation
firm to evaluate whether or not it is in the best interests of
Holdings that it purchase the shares of Common Stock held
by the SOFTBANK Entities. In the event that such
independent investment banking, accounting or third party
valuation firm selected by the Holdings Board thereafter
recommends to the Holdings Board that Holdings purchase
the shares of Common Stock held by the SOFTBANK
Entities, then Holdings shall be obligated to purchase (the
"Mandatory Call") on or before December 31, 2003 (the
"Mandatory Call Period") 100 shares of Common Stock
held by the SOFTBANK Entities (as appropriately adjusted
for stock splits, reverse stock splits and stock dividends) in
exchange for an aggregate consideration of (x) US$125,000
and (y) 16,667 shares of authorized but unissued shares of
the Series E Preferred; provided, however, that (i) in
accordance with Section 3.5(a)(ii) of the Original Loan
Agreement, the SOFTBANK Entities may elect, in their
sole discretion, by written notice given to Holdings on or
before December 1, 2003, to have the principal amount of
the Original Loan re-paid by reducing the number of shares
of Common Stock held by the SOFTBANK Entities that
Holdings is required to reacquire pursuant to the Mandatory
Call by twenty (20) shares (as adjusted pursuant to Sections
3.5(b) and (d) of the Original Loan Agreement); and (ii) in
accordance with Section 3.5(a)(ii) of the Second Loan
Agreement, the SOFTBANK Entities may elect, in their
sole discretion, to have the principal amount of the Second
Loan re-paid by reducing the number of shares of Common
Stock held by the SOFTBANK Entities that Holdings is
required to reacquire pursuant to the Mandatory Call by
twenty (20) shares (as adjusted pursuant to Sections 3.5(b)
and (d) of the Second Loan Agreement)."
5. Insertion of Sections. The following Section 5.2(d) is
inserted into the Amended and Restated Investors' Rights Agreement:
"(d) Any reduction (other than a reduction pursuant to Section
5.4(d) or 5.5(d)) in the number of shares of Common Stock held by the
SOFTBANK Entities that Holdings has the right to reacquire pursuant to
the First Call Right shall also concurrently reduce, by an equal number of
shares, the number of shares of Common Stock held by the SOFTBANK
Entities that Holdings has the right to reacquire pursuant to either of the
Discretionary Call or the Mandatory Call."
The following Section 5.4(d) is inserted into the Amended and
Restated Investors' Rights Agreement:
"(d) Any reduction (other than a reduction pursuant to Section
5.2(d) or 5.5(d)) in the number of shares of Common Stock
held by the SOFTBANK Entities that Holdings has the right to
reacquire pursuant to the Discretionary Call shall also concurrently
reduce, by an equal number of shares, the number of shares of Common
Stock held by the SOFTBANK Entities that Holdings has the right to
reacquire pursuant to either of the First Call Right or the
Mandatory Call."
The following Section 5.5(d) is inserted into the Amended and
Restated Investors' Rights Agreement:
"(d) Any reduction (other than a reduction pursuant to Section 5.2(d) or
5.4(d)) in the number of shares of Common Stock held by the
SOFTBANK Entities that Holdings has the right to reacquire pursuant to
the Mandatory Call shall also concurrently reduce, by an equal number of
shares, the number of shares of Common Stock held by the SOFTBANK
Entities that Holdings has the right to reacquire pursuant to either of the
First Call Right or the Discretionary Call."
6. Continuing Effect of the Amended and Restated Investors'
Rights Agreement. This Amendment No. 2 to the Amended and Restated
Investors' Rights Agreement shall not constitute a waiver, amendment
or modification of any other provision of the Amended and Restated
Investors' Rights Agreement not expressly referred to herein. Except
as expressly amended or modified herein, the provisions of the
Amended and Restated Investors' Rights Agreement are and shall remain
in full force and effect. From and after the date hereof, all
references made in the Amended and Restated Investors' Rights
Agreement to "the Agreement" and "this Agreement" shall be a
reference to the Amended and Restated Investors' Rights Agreement,
dated as of May 3, 2002, as amended by Amendment No. 1 to the
Amended and Restated Investors' Rights Agreement and this Amendment
No. 2 to the Amended and Restated Investors' Rights Agreement.
7. Governing Law. This Amendment No. 2 to the Amended and
Restated Investors' Rights Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to
the principles of conflicts of law thereof.
8. Valid and Binding. This Amendment No. 2 to the Amended and
Restated Investors' Rights Agreement shall be binding upon and inure to
the benefit of each of the Parties hereto and their respective
successors and assigns.
9. Counterparts. This Amendment No. 2 to the Amended and
Restated Investors' Rights Agreement may be executed in any number of
counterparts and by the Parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(Signature page follows)
IN WITNESS WHEREOF, the undersigned have executed, or have caused
to be executed, this Amendment No. 2 to the Amended and Restated
Investors' Rights Agreement on the date first written above.
OPTIMARK INNOVATIONS INC.
By: /s/
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
OPTIMARK, INC.
By: /s/
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
OPTIMARK HOLDINGS, INC.
By: /s/
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
SOFTBANK CAPITAL PARTNERS LP
By: SOFTBANK Capital Partners LLC,
its general partner
By: /s/
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Admin. Member
SOFTBANK CAPITAL LP
By: SOFTBANK Capital Partners LLC,
its general partner
By: /s/
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Admin. Member
SOFTBANK CAPITAL ADVISORS FUND LP
By: SOFTBANK Capital Partners LLC,
its general partner
By: /s/
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Admin. Member
▇▇▇▇▇▇-▇▇▇▇▇▇ JURVETSON EPLANET
VENTURES, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Jurvetson ePlanet Partners, Ltd.,
its general partner
By: /s/
Name: ▇▇▇▇▇▇▇. ▇. ▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇ JURVETSON EPLANET
PARTNERS FUND, LLC
By: /s/
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇ JURVETSON EPLANET
VENTURES GMBH & CO. KG
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Jurvetson ePlanet SLP Germany,
Ltd., its special limited partner
By: /s/
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
(Signature page to Amendment No. 2 to Amended and Restated
Investors' Rights Agreement)
