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AMENDMENT NO. 1 TO STOCKHOLDERS AGREEMENT
This Amendment No. 1 to Stockholders Rights Agreement ("Amendment") is
made as of January 27, 1997, by and among E-Z Serve Corporation, a Delaware
Corporation (the "Company"), Phemus Corporation, a Massachusetts corporation
("Phemus"), Intercontinental Mining & Resources Incorporated, a British Virgin
Islands corporation ("IMR"), Quadrant Capital Corp., a Delaware corporation,
formerly named Intercontinental Mining & Resources Limited ("QCC"), DLJ Capital
Corporation, a Delaware corporation ("DLJ"), and Tenacqco Bridge Partnership, a
New York partnership ("Tenacqco"). Phemus, IMR, QCC, DLJ and Tenacqco are
referred to herein together as the "Holders."
WHEREAS, the Company, the Holders and certain employees of the Company
entered into that certain Amended and Restated Stockholders Agreement dated as
of June 1, 1994 (the "Agreement"); and
WHEREAS, as of the date hereof, the Company has issued warrants to
purchase common stock of the Company to Phemus in conjunction with the issuance
by the Company of shares of its Series H Preferred Stock, par value $0.01 per
share ("Series H Preferred Stock"); and
WHEREAS, simultaneously with the issuance of the Series H Preferred
Stock, the Company shall use a portion of the proceeds from such issuance to
redeem all of the outstanding shares of the Company's $6.00 Convertible
Preferred Stock, Series C ("Series C Preferred Stock"); and
WHEREAS, the parties desire to amend the Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. As required by Section 3.2 of the Agreement, the parties
hereto consent to the issuance of the Series H Preferred Stock
to Phemus and the redemption of all of the outstanding shares
of the Series C Preferred Stock.
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2. Section 3.1(a) of the Agreement is hereby amended in its
entirety to be as follows:
(a) The Board of Directors shall be composed of seven members,
except to the extent required to be increased pursuant to the terms of
the Certificate of Designation of the Series H Preferred Stock.
3. A new Section 3.1(d) is hereby added to the Agreement as
follows:
(d) Each Holder agrees that it will vote all of its shares of
Common Stock and Options, at any regular or special meeting of the
stockholders of the Issuer called for the purpose of filling positions
of the Directors or to increase the number of authorized shares of
Common Stock, or in any written consent executed in lieu of such a
meeting of stockholders, and shall take all actions necessary, to
ensure the election of a director nominated by the holders of the
Series H Preferred Stock pursuant to the terms of the Certificate of
Designation of Series H Preferred Stock or to increase the number of
authorized shares of Common Stock, if necessary, to ensure the ability
of Phemus to exercise in full any warrants issued or issuable pursuant
to the Securities Purchase Agreement dated January 27, 1997, between
Phemus and the Company, as applicable. If the holders of Series H
Preferred Stock are entitled to a special directorship pursuant to
Section 7B(iv) of the Certificate of Designation for the Series H
Preferred Stock, Section 3.2(a) of this Agreement shall no longer be
applicable during the period in which the holders of Series H
Preferred Stock are so entitled. During such period, if the Issuer
proposed to take any action, but such action is not approved by the
requisite percentage (under applicable law) of the Issuer's
outstanding shares of Common Stock, if such approval is required by
applicable law, then: (i) Phemus shall have the right to invoke as a
Triggering Holder the Buy-Sell described in Section 3.2(b) and (c) of
this Agreement in accordance with such provisions, and (ii) the other
Holders shall respond in accordance with Section 3.2(c) of this
Agreement to the Trigger Price set by Phemus.
4. Section 4.2(a) of the Agreement is hereby amended in its
entirety to be as follows:
(a) Any term of this Agreement may be amended or waived only
with the written consent of each of the Holders; provided, however,
that the Company, without the consent of the Holders, may amend
Schedule 1 to this Agreement to reflect changes to the number of
fully-diluted shares of Common Stock held by the Holders. The Company
shall promptly distribute to the Holders any amended Schedule 1.
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5. Schedule 1 to the Agreement is amended in its entirety to be
as set forth in Schedule 1 attached hereto.
Except as expressly amended herein, the Agreement shall remain in full force
and effect.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date first above written.
E-Z SERVE CORPORATION
By: /s/ John T. Miller
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Name: John T. Miller
Title: Senior Vice President
PHEMUS CORPORATION
By: /s/ Michael R. Eisenson
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Name: Michael R. Eisenson
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By: /s/ Michael Thonis
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Name: Michael Thonis
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QUADRANT CAPITAL CORP.
By:
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Name:
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Title:
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INTERCONTINENTAL MINING & RESOURCES
INCORPORATED
By: /s/ Thomas A. Huser
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Name: Thomas A. Huser
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Title: Attorney in Fact
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DLJ CAPITAL CORPORATION
By: /s/ Paul Thompson III
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Name: Paul Thompson III
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Title: Vice President
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TENACQCO BRIDGE PARTNERSHIP
By DLJ Capital Corporation, its General Partner
By: /s/ Paul Thompson III
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Name: Paul Thompson III
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Title: Vice President
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SCHEDULE 1
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Holder Number of Shares of Common Stock
------ on a Fully Diluted Basis
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DLJ Capital / Tenacqco 29,715,364
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Phemus 17,660,457
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IMR / Quadrant 14,802,325
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