Document:

First Amendment to Amended and Restated Revolving Line of Credit Loan Agreement

 Exhibit 10.2 
  
 

 
  
 FIRST AMENDMENT TO AMENDED AND

 RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT 
  
 THIS FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT (“Agreement”), dated
as of July 19, 2005, by and between WILLIAM LYON HOMES, INC., a California corporation (“Borrower”), and CALIFORNIA BANK & TRUST, a California banking corporation (“Lender”), with reference to the following
facts: 
  
 RECITALS 
  
 A. Borrower originally agreed to borrow a sum not to exceed Fifty
Million Dollars ($50,000,000.00) (“Loan”) from Lender for the purpose of providing Borrower with funding for the acquisition and development of residential lots, the construction of existing and future residential home projects, and
the issuance of letters of credit for the payment of costs incurred or associated with said projects. The terms and conditions of the Loan are more particularly set forth in that certain Amended and Restated Revolving Line of Credit Loan Agreement
dated as of September 16, 2004, by and between Borrower and Lender (as the same has been or may be amended or modified from time to time, Loan Agreement”). All capitalized terms not specifically defined herein shall have the meanings
given to such terms in the Loan Agreement. 
  
 B. The Loan
is evidenced by a Third Amended and Restated Construction Loan Promissory Note dated for reference purposes as of September 16, 2004, given by Borrower to Lender (as the same has been and may be amended from time to time, “Current
Note”). 
  
 C. The Loan is secured by, among other
things, the “Deed of Trust” (as defined in the Loan Agreement). 
  
 D. This Agreement, the Current Note and the other documents evidencing or relating to the Loan collectively shall be referred to as the “Loan Documents.” 
  
 E. Borrower has requested that Lender modify the Loan by, among other
things, increasing (i) the maximum amount of the Loan, (ii) the maximum “Commitment Amount” (as defined in the Loan Agreement), and (iii) the face amount of the Current Note, from Fifty Million Dollars ($50,000,000.00) to Seventy
Million Dollars ($70,000,000.00) (“New Commitment Amount”). 
  
 F. Lender is willing to consent to the modifications to the Loan Documents set forth herein and in those certain amendments to deeds of trust of even date herewith executed by Borrower and Lender modifying each
Deed of Trust (collectively, “Recorded Amendments”), subject to the conditions set forth below. The date on which all Recorded Amendments are recorded in the applicable official records for the applicable counties shall be referred
to as the “Modification Closing Date.” 
  

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 TERMS AND CONDITIONS 
  
 NOW, THEREFORE, in consideration of the foregoing premises and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Recitals. The preamble, recitals and any exhibits hereto are hereby incorporated into this Agreement. 
  
 2. Increase in the Loan Amount. 
  
 2.1 Increase in the Maximum Commitment Amount. From and after the Modification Closing Date, the maximum
amount of the Loan and the maximum Commitment Amount are hereby increased from the current amount of Fifty Million Dollars ($50,000,000.00) to the New Commitment Amount of Seventy Million Dollars ($70,000,000.00). All references in the Loan
Documents to the maximum amount of Loan and maximum Commitment Amount shall be revised to refer to the New Commitment Amount set forth herein. 
  
 2.2 Increase in the Amount of the Current Note. As a result of the increase in the amount of the Loan and the
maximum Commitment Amount, the face amount of the Current Note shall be increased from the present amount of Fifty Million Dollars ($50,000,000.00) to the New Commitment Amount of Seventy Million Dollars ($70,000,000.00) (“New Note
Amount”). All references in the Loan Documents to the face amount of the Current Note shall be revised to refer to the New Note Amount set forth herein. 
  
 2.3 Amendment and Restatement of the Current Note. Borrower shall execute and
deliver to Lender a Fourth Amended and Restated Promissory Note of even date herewith (the Current Note, as amended by said document, shall hereafter be referred to as the “Note”) evidencing the increase in the amount of the Loan
and the maximum Commitment Amount as described herein. All references in the Loan Documents to the Current Note shall be revised to refer to the Note, as amended and restated. 
  
 3. Amendment to Definitions in Loan Agreement. 
  
 3.1 Commitment Amount. The
definition of “Commitment Amount” set forth in the Loan Agreement shall be replaced with the following: 
  
 “Commitment Amount” means (a) during the Initial Line Term, the sum of Seventy Million Dollars ($70,000,000.00), and (b)
during the Reduction Period, beginning upon the last day of the first Calendar Quarter following the Initial Line Maturity Date, and on or prior to the last day of each Calendar Quarter thereafter during the Reduction Period, the Commitment Amount
shall be reduced in the minimum amount of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000.00) (each, “Reduced Commitment Amount”): 
  

				
	 Date

	  	Reduced
Commitment
Amount

	 Initial Line Maturity Date
	  	$	70,000,000.00
	 First Calendar Quarter
	  	$	61,250,000.00
	 Second Calendar Quarter
	  	$	52,500,000.00
	 Third Calendar Quarter
	  	$	43,750,000.00
	 Fourth Calendar Quarter
	  	$	35,000,000.00
	 Fifth Calendar Quarter
	  	$	26,250,000.00
	 Sixth Calendar Quarter
	  	$	17,500,000.00
	 Seventh Calendar Quarter
	  	$	8,750,000.00
	 Eighth Calendar Quarter
	  	$	0.00

  

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 3.2 Maximum Aggregate Loan
Allocation(s). The definition of Maximum Aggregate Loan Allocation(s) shall be replaced with the following: 
  
 “Maximum Aggregate Loan Allocation(s)” shall mean each and every one of the following: 
  
 (a) With respect to all Qualified Projects included
in the Borrowing Base (collectively or individually “Geographic Concentration Limitation”): 
  
 (1) The aggregate Loan Allocations for all Lots and/or Homes for Qualified Projects (whether Advances have been made and/or have
been committed but have not yet advanced) located in the State of Arizona shall not exceed the sum of Twenty-Five Million Dollars ($25,000,000.00); and/or 
  
 (2) The aggregate Loan Allocations for all Lots and/or Homes for Qualified Projects (whether Advances have been made and/or have
been committed but have not yet advanced) located in the State of Nevada shall not exceed the sum of Twenty-Five Million Dollars ($25,000,000.00). 
  
 (b) With respect to all Lots to be included in the Borrowing Base, the aggregate Loan Allocations for all Entitled Land, Lots
Under Development and Developed Lots for all Qualified Projects (whether Advances have been made and/or have been committed but have not yet advanced) shall not exceed the sum of Twenty-Eight Million Dollars ($28,000,000.00) (“Lot
Concentration Limitation”). 
  
 (c) With respect to all Spec Homes to be included in the Borrowing Base (“Spec Home Concentration Limitation”): 
  
 (1) For all Qualified Projects financed hereunder, the aggregate Loan Allocations for all Spec Homes for all said Projects
(whether Advances have been made and/or have been committed but have not yet advanced) shall not exceed the sum of Sixteen Million Eight Hundred Thousand Dollars ($16,800,000.00); and/or 
  
 (2) For each and every Qualified Project financed hereunder, the total number of Spec Homes shall
not exceed (A) for the first phase of any Qualified Project, twenty-five (25), or (B) for all subsequent phases of any Qualified Project, the lesser of twenty-five (25) or four (4) months’ actual absorption for the subject Project, as
determined by Lender from time to time based upon the actual prior six-month Home sales average for said Project. 
  
 4. Amendment to Deed of Trust. Each Deed of Trust shall be amended to secure the obligations under the Note and the other Loan
Documents, as amended herein. 
  

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 5. Conditions Precedent. In no event shall Lender have any obligation to
close this transaction unless and until all of the following conditions are satisfied: 
  
 5.1 No Defaults. There shall be no: (a) uncured, material default hereunder or under the Loan Documents; (b)
continuing representation, covenant or warranty hereunder or under the Loan Documents that is false or misleading in any manner; and (c) event currently existing which, with the passage of time, will result in a material default or the falsity of
any continuing representation, covenant or warranty hereunder or under the Loan Documents. 
  
 5.2 No Financial Change. There has been no material adverse change in Borrower’s, financial condition
since the closing of the Loan. 
  
 5.3
Payment Of Lender’s Costs. Borrower shall pay all of Lender’s costs and expenses incurred in connection with the documentation and closing of the modifications to the Loan Documents described herein, including
without limitation all attorneys’ fees and other closing fees and costs. 
  
 5.4 Title Endorsement. Issuance to Lender of a CLTA Form 110.10 endorsement (or any substantially equivalent endorsement(s) as reasonably approved by Lender) to each ALTA Lender’s
Title Policy for each Deed of Trust in form satisfactory to Lender and insuring the continued first lien priority of the Deed of Trust, except for such exceptions as may be approved by Lender in its sole discretion. 
  
 5.5 Additional Documents. Lender
shall have received all additional documents executed by Borrower, as required by Lender in connection with this Agreement, including, without limitation, the Note and all Recorded Amendments. 
  
 6. Representations and Warranties. Borrower
hereby represents and warrants to Lender as follows: 
  
 6.1 No Default. No default or event of default under any of the Loan Documents has occurred that remains uncured, and no event has occurred which, with the giving of notice or the passage of time, or both, would
constitute a default or an event of default under any of the Loan Documents. 
  
 6.2 Representations and Warranties. As of the date hereof, all of the warranties and representations contained in all of the Loan Documents remain true, correct, complete and accurate.

  
 6.3 No Claims or
Defenses. As of the date hereof, neither Borrower nor its managing member has any claims against Lender nor defenses to the enforcement of any of the Loan Documents in accordance with their respective terms, as amended by this
Agreement. 
  
 6.4 Financial
Covenants. Borrower acknowledges and agrees that the financial covenants contained in the Loan Documents are in full force and effect and shall be monitored by Lender based on the financial reports to be provided under the Loan
Agreement. 
  
 6.5 Satisfaction of
Conditions. All of the conditions precedent set forth above have been fully satisfied. 
  
 7. Further Assurances. Borrower agrees to perform such other and further acts, and to execute such additional documents,
agreements, notices or financing statements, as Lender deems necessary or desirable from time to time to create, preserve, continue, perfect, validate or carry out any of Lender’s rights under this Agreement and the other Loan Documents.

  

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 8. Integration. All rights, remedies, powers and interest provided for Lender
herein are in addition to the rights, remedies, powers and interests provided for Lender in the Loan Documents, the terms and provisions of which are incorporated herein by this reference and made a part hereof. If and to the extent any term or
provision hereof is inconsistent with any term or provision of the Loan Documents, the term or provision of this Agreement shall prevail. 
  
 9. Entire Agreement; Amendments. This Agreement and the other Loan Documents contain the entire agreement between Borrower and
Lender with respect to the Loan Documents, and all prior negotiations, commitments, understandings and agreements are superseded by this Agreement and the Loan Documents. No amendment, modification, supplement, extension, termination or waiver of
any provision of this Agreement, any Loan Document, or any other agreement executed in connection with any of the foregoing shall be effective unless in writing and signed by Lender and Borrower, and then only in the specific instance and for the
specific purpose given. 
  
 10. Governing
Law. The Loan Documents shall be governed by, and construed and enforced in accordance with, the internal laws of the State of California, without regard to its conflict of laws principles. 
  
 11. Section Headings. The section headings of
this Agreement are included for convenience only, and shall not affect the construction or interpretation of any provision of this Agreement. 
  
 12. Attorneys’ Fees. If any action or other proceeding is brought to interpret or enforce any provision of this
Agreement, the prevailing party shall be entitled to recover attorneys’ fees and expenses. 
  
 13. Binding Effect. This Agreement and the other Loan Documents shall be binding upon, and shall inure to the benefit of,
Borrower and Lender and their respective successors and assigns, or heirs and personal representatives, as applicable, subject to any provision of the Loan Documents restricting transfers of the Property. 
  
 14. Severability of Provisions. No provision of
this Agreement or any other Loan Document that is held to be inoperative, unenforceable and invalid shall affect the remaining provisions, and this and all provisions of this Agreement and the Loan Documents are hereby declared to be severable.

  
 15. Miscellaneous. No reference to
this Agreement is necessary in any instrument or document at any time referring to the Loan Documents. A reference to the Loan Documents shall be deemed a reference to such document as modified hereby. 
  
 16. No Commitment. The furnishing of this
Agreement and other modification documents shall in no way be construed as a commitment by Lender to modify, amend, extend or otherwise alter the Loan Documents. Lender shall be under no obligation to close the transaction evidenced by this
Agreement unless this Agreement and all related documents are returned to Lender fully executed by Borrower, and unless this Agreement is actually executed by Lender and delivered to Borrower. 
  
 17. No Other Amendments. Except as expressly
amended herein, the Loan Agreement, and all of the other Loan Documents remain unmodified and in full force and effect. 
  
 18. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto on separate
counterparts, each of which, when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. 
  

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 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 6 

 IN WITNESS WHEREOF, this Agreement has been executed by Borrower and Lender as of the date first above
written. 
  

			
	BORROWER:
	
	WILLIAM LYON HOMES, INC., a California corporation
		
	 By:
	 	/s/ Richard S. Robinson
	 Name:
	 	 Richard S. Robinson

	 Title:
	 	 Senior Vice President

		
	 By:
	 	/s/ Michael D. Grubbs
	 Name:
	 	 Michael D. Grubbs

	 Title:
	 	 Senior Vice President

	
	LENDER:
	
	CALIFORNIA BANK & TRUST, a California banking corporation
		
	 By:
	 	/s/ Erin Johnson
	 Name:
	 	 Erin Johnson

	 Its:
	 	 Vice President

  

 Signature Page 1Settlement, Release, Covenant Not To Sue, Waiver and Non-Disclosure Agreement

 Exhibit 10.2 
  
 Execution Copy 
  
 SETTLEMENT, RELEASE, COVENANT NOT 
 TO SUE, WAIVER AND NON-DISCLOSURE AGREEMENT 
  
 WHEREAS, ANDREW BANHIDI, individually and on behalf of all his successors, heirs, executors, administrators, legal representatives, and assigns (hereinafter referred to collectively as “Banhidi”), and INSTINET GROUP INCORPORATED,
on behalf of its parents, subsidiaries divisions and affiliates, and their respective predecessors, successors, assigns, representatives, officers, directors, shareholders, agents, employees and attorneys (hereinafter referred to collectively as
“Instinet”), have reached agreement with respect to all matters arising out of Banhidi’s employment with Instinet and the termination thereof; 
  
 NOW, THEREFORE, in consideration of the mutual convenants and undertakings set forth herein, Banhidi and Instinet agree as follows: 
  
 1. Termination of Employment. By mutual agreement between the
parties, Banhidi’s employment with Instinet shall terminate on August 1, 2005 (“Termination Date”). Through the Termination Date, Instinet will continue to pay Banhidi at his current base salary of $350,000 per annum,
with continuation of Instinet’s benefit programs through such date. 
  
 2. Separation Payments and Benefits. Instinet will pay Banhidi the amounts described below, subject to the provisions of this Agreement. The payments to be provided by this paragraph are in place of, and not in
addition to, payments Banhidi would otherwise be entitled to pursuant to any policy or practice of Instinet. All payments made pursuant to this paragraph will be reduced by any and all applicable payroll deductions including, but not limited to,
federal, state and local tax withholdings. 
  
 (a) Severance
Payments. Banhidi will be entitled to receive severance payments for an 18 month period (the “Severance Period”) at the rate of $350,000 per annum from the Termination Date through February 1, 2007. During the Severance
Period, Banhidi will be eligible to continue his current health and dental coverage for himself and his family, but will not be eligible for life insurance, 401(k) contributions, long-term disability insurance or any other perquisites or benefits.

  

 1 

 (b) Pro Rata Bonus. Within five business days following the date (the “Bonus Payment
Date”) annual bonuses for such fiscal year are actually paid by Instinet to its active employees, but in no event later than February 28, 2006, Instinet will pay Banhidi $758,630 as his pro rata bonus for fiscal year 2005.

  
 (c) 150% of Average Annual Bonus. Instinet agrees to
pay Banhidi two equal installments of $975,000 each, the first such installment to be paid in February 2006 and the second such installment to be paid in February 2007. 
  
 3. Return of Instinet Property. Banhidi agrees to return to Instinet by no later than the Termination Date, any and
all property (including but not limited to files, records, computer software, computer access codes, home computers, laptop computers, pagers, Palm Pilots, fax machines, company IDs, business credit cards, proprietary and confidential information)
which belongs to Instinet, and shall not retain any copies, duplicates or excerpts thereof, except that Instinet agrees to transfer to Banhidi all rights to his Blackberry from the Termination Date. Banhidi will be responsible for all costs
relating to the Blackberry from August 2, 2005 forward. 
  
 4.
Outplacement Services. At the request of Banhidi, Instinet will make available executive outplacement services to Banhidi, to be provided by an outplacement firm to be selected by Instinet, for a period of up to three months. These services
will include the provision of an office and telephone for Banhidi to use during the outplacement period. 
  
 5. Instinet Options and Performance Shares. Banhidi agrees that any options awarded to him under Instinet 2000 Stock Option Plan (the “Option
Plan”) and any performance shares awarded him under the Instinet 2004 Performance Share Plan (the “Performance Share Plan”) will be treated as provided in the Option Plan and the Performance Share Plan. 
  

 2 

 6. Full Satisfaction. Banhidi, by entering into this Agreement, accepts the benefits to be
conferred on him hereunder in full and complete satisfaction of any and all asserted and unasserted claims of any kind or description against Instinet as of the date of this Agreement, including, but not limited to, claims arising under any federal,
state and local fair employment practice law, workers’ compensation law, and any other employee relations statute, executive order, law and ordinance, including, but not limited to, Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act of 1967, as amended, the Rehabilitation Act of 1973, as amended, the Family and Medical Leave Act, the Americans With Disabilities Act of 1990, as amended, the Civil Rights Acts of 1866 and 1871, and, except as
otherwise expressly set forth herein, of any other duty and/or other employment related obligation (all of which are hereinafter referred to as “employment relations laws”) as well as any claims arising from tort, tortious course of
conduct, contract (including without limitation any claims arising under Banhidi’s Employment Agreement dated November 1, 2003, any offer letter or secondment letter), obligations of “good faith,” public policy, statute, common law,
equity, and all claims for wages and benefits, monetary and equitable relief, punitive and compensatory relief, and attorneys’ fees and costs. 
  
 7. Releases. 
  
 (A) In consideration of the covenants and undertakings above, Banhidi releases and discharges Instinet from any and all liability, and waives any and all
rights of any kind and description that he has or may have against Instinet as of the date of this Agreement, including, but not limited to, any asserted and unasserted claims arising from any employment relations laws, tort, tortious course of
conduct, contract (including without limitation any claims arising under Banhidi’s Employment Agreement dated November 1, 2003, any offer letter or secondment letter), public policy, statute, common law, and equity, and claims for wages and
benefits, monetary and equitable relief, punitive and compensatory relief, and attorneys’ fees and costs. The foregoing notwithstanding, Banhidi’s release and waiver do not apply to: (a) his rights 

  

 3 

 
arising out of this Agreement; (b) any rights that Banhidi and any covered dependents may have to purchase health benefit continuation coverage under federal
law commonly known as COBRA; (c) any accrued and vested payouts or benefits under Instinet qualified benefit plans; or (d) any rights that Banhidi may have to indemnification under Instinet’s general corporate indemnity for acts undertaken by
Banhidi within the scope of his duties while employed at Instinet. 
  
 (B) Instinet releases and discharges Banhidi from any and all liability, and waives any and all rights of any kind and description that it has or may have against Banhidi as of the date of this Agreement, regarding which Instinet has actual
knowledge or should have had knowledge, other than rights under this Agreement or arising as a result of any criminal act of Banhidi. 
  
 8. Non-Competition Covenant. Banhidi agrees that he will not, through February 1, 2006, directly or indirectly, become employed by, engage in
business with, serve as an agent or consultant to, or become a partner, member, principal, stockholder or other owner (other than a holder of less than 1% of the outstanding voting shares of any publicly held company) of any direct market access
(“DMA”) broker-dealer or technology vendor (including but not limited to ITG, E*Trade Institutional, Lava Trading, Sonic Financial Technologies, Liquidnet, DEx unit of BNY Brokerage, AES unit of CSFB, DMA unit of BancAmerica Securities,
etc.) in the United States. For these purposes, DMA broker-dealers or technology vendors are those that offer a technology-enhanced consolidated point of entry to electronically and automatically route securities orders to market destinations and
pools of liquidity. This Section shall not, however, prevent or restrict Banhidi from being employed by an entity that conducts such DMA business, provided that Banhidi is not personally involved in the day-to-day activities of such entity in DMA
business. 
  

 4 

 9. Non-Solicitation Covenant. Banhidi further agrees that he will not (i) through August 1, 2006,
directly or indirectly solicit any employee of Instinet to leave the employ of Instinet, or otherwise interfere with the relationship of Instinet or any of its Affiliates with any natural person throughout the world who is or was employed by or
otherwise engaged to perform services for Instinet or any of its Affiliates at any time during which Banhidi was employed by Instinet; or (ii) through August 1, 2006, directly or indirectly solicit or initiate contact with any Instinet client to
transact with any other company business in which Instinet is engaged, including but not limited to institutional equities, order-matching, clearing and after-hours trading, or to reduce or refrain from doing any business with Instinet. The term
“client” means any client of Instinet with whom Banhidi had personal contact, or for whom he personally transacted business, or whose identity became known to him in connection with his relationship with or employment by Instinet.

  
 10. Non-Disparagement. Banhidi and Instinet each agree
that except, for truthful statements in any proceeding to enforce this Agreement or pursuant to a valid Subpoena or Court Order, neither will make or publish any statement (orally or in writing) that becomes or reasonably could be expected to become
publicly known, or instigate, assist or participate in the making or publication of any such statement, which would libel, slander or disparage (whether or not such disparagement legally constitutes libel or slander) the other or, with respect to
Instinet, any of its affiliates or any other entity or person within Instinet or its affiliates, any of their affairs or operations, or the reputations of any of their past or present officers, directors, agents, representatives and employees.

  
 11. Unauthorized Disclosure. Without the prior written
consent of Instinet, except to the extent required by an order of a court having jurisdiction or under subpoena from an 

  

 5 

 
appropriate government agency, in which event, Banhidi shall use his best efforts to consult with Instinet prior to responding to any such order or subpoena,
Banhidi shall not disclose any confidential or proprietary trade secrets, customer lists, drawings, designs, programs, software, protocols, information regarding product development, marketing plans, sales plans, manufacturing plans, management
organization information, operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information (a) relating to Instinet or any of its Affiliates or (b) that Instinet or
any of its Affiliates may receive belonging to suppliers, customers or others who do business with Instinet or any of its Affiliates (collectively, “Confidential Information”) to any third person unless such Confidential Information has
been previously disclosed to the public or is in the public domain (other than by reason of Banhidi’s breach of this Section). 
  
 The parties further agree that the terms of this Agreement, and the negotiations leading up to it shall not be disclosed by the parties to any person,
other than in a proceeding to enforce the terms of this Agreement or pursuant to valid subpoena or court order, with the exception of the parties’ lawyers, accountants, tax preparers and, with respect to Banhidi, his immediate family, provided
that the parties inform any such persons that they must not disclose the same to any person and they agree to that condition. In response to any inquiry from third parties, the parties and their attorneys may state only that the parties have
resolved the matter. 
  
 12. Rights To Intellectual
Property. Banhidi acknowledges and agrees that Instinet is the sole and exclusive owner of all right, title and interest in and to all trademarks, copyrights and all other rights in and to all software, computer programs, works of authorship,
writings (whether or not copyrightable), inventions (whether or not patentable), discoveries, methods, improvements, processes, ideas, systems, know-how, data, and any other intellectual creations of any nature whatsoever that Banhidi developed, or
assisted in the development of, in the course of 

  

 6 

 
his employment by Instinet (collectively, the “Instinet Intellectual Property”). All Instinet Intellectual Property is deemed to be “work made
for hire”pursuant to the United States Copyright Act of 1976 (the “Act”) and Instinet thereby owns all right, title and interest in all Instinet Intellectual Property. To the extent that the Instinet Intellectual Property or
any part thereof is deemed by any court of competent jurisdiction or any governmental or regulatory agency not to be a “work made for hire” within the meaning of the Act, the provisions of this section will still control and, for the
consideration set forth herein, Banhidi hereby irrevocably and absolutely assigns, sets over and grants to Instinet the Instinet Intellectual Property and all of his rights therein. Banhidi further agrees to deliver or execute such documents and to
do or refrain from doing such acts as Instinet or its nominee may reasonably request to protect its rights in the Instinet Intellectual Property. 
  
 13. Reemployment or Reinstatement. Banhidi agrees not to seek reinstatement or reemployment with Instinet, and hereby waives any rights that may
accrue to his from any rejection of any application for employment with Instinet that he may make. 
  
 14. No Admission of Liability. By entering into this Agreement, the parties do not admit to any liability, wrongdoing, breach of any contract,
commission of any tort or the violation of any statute or law alleged by the other to have been violated or otherwise. 
  
 15. Entire Agreement and Severability. This Agreement constitutes the complete settlement of all issues and disputes existing between Banhidi and
Instinet as of the date hereof, and may not be modified except by a suitable writing signed by both Banhidi and Instinet. This Agreement has been entered into by Banhidi and Instinet voluntarily, knowingly, and upon advice of counsel. If any
provision of this Agreement is held to be invalid, the remaining provisions shall remain in full force and effect. 
  
 16. Injunctive Relief. Banhidi acknowledges that a violation on Banhidi’s part of this Agreement, including in particular violation of the
provisions of paragraphs 8, 9, 10 and 11 

  

 7 

 
would cause irreparable damage to Instinet. Accordingly, Banhidi agrees that Instinet is entitled to injunctive relief from any court of competent
jurisdiction for any actual or threatened violation of this Agreement in addition to any other remedies it may have. 
  
 17. Change in Control. Instinet agrees that, should it experience a Change in Control (as defined herein), it will undertake to ensure that any
successor entity shall become legally responsible for Instinet’s obligations hereunder. Should Instinet fail to ensure that the successor entity will assume Instinet’s obligations hereunder, within 30 days of the event constituting a
Change of Control, then all remaining compensation obligations owed to Banhidi by Instinet shall become immediately due and payable. For purposes of this paragraph, “Change in Control” shall mean: (i) an acquisition in open market
purchases of Instinet Common Stock by a third party of the greater of 30% or the percentage then owned in aggregate by Reuters and its controlled affiliates; (ii) a merger or similar combination following which Instinet’s shareholders prior to
the merger are no longer in control of the surviving entity; and/or (iii) a sale of substantially all of Instinet’s assets or a liquidation of Instinet. 
  
 18. Breach of Agreement. Banhidi agrees that, without limiting Instinet’s remedies, should he commence, continue, join in, or in any other
manner attempt to assert any claim released in connection herewith, or otherwise violate in a material fashion any of the terms of this Agreement, Instinet shall not be required to make any further payments to Banhidi pursuant to this Agreement and
that Instinet shall be entitled to recover all payments already made by it (including interest thereon), in addition to all damages, attorney’s fees and costs, Instinet incurs in connection with the Banhidi’s proven breach of this
Agreement. Banhidi further agrees that Instinet shall be entitled to the repayments and recovery of damages described above without waiver of or prejudice to the release granted by him in connection with this Agreement, and that his proven violation
or breach of any provision of this Agreement shall forever release and discharge Instinet from the performance of its obligations arising from the Agreement. 
  

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 19. Attorney Fees. The parties agree that, in any suit brought by either party for breach of this
Agreement by the other, the non-prevailing party will be liable for the reasonable attorneys fees of the prevailing party. 
  
 20. Execution. 
  
 a. Banhidi acknowledges that he has had up to forty-five (45) days from his receipt of this document to review it. Upon execution, Banhidi or his attorney
must promptly send this document by overnight mail to the General Counsel at Instinet. A copy may be retained by Banhidi. 
  
 b. Following his signing of the Agreement, Banhidi has the right to revoke the Agreement at any time within seven (7) calendar days of his signing it, not
including the date of his signing (the “Revocation Period”). Notice of Revocation shall be given in writing and sent by overnight mail no later than the seventh day following the date Banhidi signs this Agreement to General Counsel,
Instinet Group Incorporated, 3 Times Square, New York, NY 10036. If Banhidi does not revoke the Agreement, this Agreement shall be deemed to be effective and to be enforceable as of the last date set forth opposite any signature hereto. If Banhidi
gives Notice of Revocation during the Revocation Period in the manner specified above, this Agreement shall become null and void and all rights and claims of the parties which would have existed, but for the execution of this Agreement shall be
restored. 
  
 21. Governing Law; Venue. This Agreement
shall be governed by and construed in accordance with the law of the State of New York. An action for breach of this Agreement may be brought in any court of competent jurisdiction located in New York. 
  
 22. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the heirs, successors and assigns of the parties hereto. 
  

 9 

 THE UNDERSIGNED, intending to be legally bound, have executed this Agreement on this 27th day of July,
2005. 
  

					
	ANDREW BANHIDI	 	INSTINET GROUP INCORPORATED
			
	 /s/ Andrew Banhidi

	 	By:	 	 /s/ Alexander Goor

	 	 	Name:	 	Alexander Goor
	 	 	Title:	 	Co-President

  
 STATEMENT BY THE EMPLOYEE WHO IS
SIGNING BELOW: INSTINET HAS ADVISED ME IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE. I HAVE CAREFULLY READ AND FULLY UNDERSTAND THE PROVISIONS OF THIS RELEASE AND HAVE HAD SUFFICIENT TIME AND OPPORTUNITY TO CONSULT WITH MY
PERSONAL TAX, FINANCIAL AND LEGAL ADVISORS PRIOR TO EXECUTING THIS DOCUMENT, AND I INTEND TO BE LEGALLY BOUND BY ITS TERMS. I UNDERSTAND THAT I MAY REVOKE THIS RELEASE WITHIN SEVEN (7) DAYS FOLLOWING MY SIGNING, AND THIS RELEASE WILL NOT BECOME
ENFORCEABLE OR EFFECTIVE UNTIL THAT SEVEN (7) DAY PERIOD HAS EXPIRED. 
  

			
	ANDREW BANHIDI
		
	Signed:	 	 /s/ Andrew Banhidi

  
 THIS IS A RELEASE. READ
CAREFULLY BEFORE SIGNING. 
  

 10

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