Document:

exv10w19

Exhibit 10.19

STOCKHOLDERS’ AGREEMENT

     THIS STOCKHOLDERS’ AGREEMENT (this “Agreement”) is entered into as of March
14, 2005 (the “Effective Date”), by and among TrustWave Holdings, Inc., a Delaware
corporation (the “Company”), the investors listed on Exhibit A hereto (the
“Investors”) and the stockholders listed on Exhibit B hereto (each, an “Other
Stockholder” and collectively, the “Other Stockholders”). The Investors and the Other
Stockholders are sometimes referred to in this Agreement collectively as the
“Stockholders.”

RECITALS

     WHEREAS, the Company currently has 106,820,402 shares of authorized capital stock, none of
which shares were issued and outstanding prior to the date hereof, consisting of: (i) 84,362,511
shares of common stock, $0.0001 par value per share, 78,187,857 of which are designated as Class A
Voting Common Stock (“Class A Common”) and 6,174,654 of which are designated as Class B
Nonvoting Common Stock (“Class B Common,” together with Class A Common, the “Common
Stock”); and (ii) 22,457,891 shares of preferred stock, $0.0001 par value per share (the
“Preferred Stock”), 10,952,633 of which are designated as Series A-1 Preferred Stock
(“Series A-1 Preferred”), 11,505,258 of which are designated as Series A-2 Preferred Stock
(“Series A-2 Preferred,” together with Series A-1 Preferred, the “Series A
Preferred”); and

     WHEREAS, on this date the Company is issuing shares of Common Stock to the Other Stockholders,
and shares of Series A Preferred to the Investors pursuant to the Contribution Agreement dated
March 14, 2005 (the “Contribution Agreement”); and

     WHEREAS, one of the conditions to the Contribution Agreement is the execution and delivery of
this Agreement relating to, among other things, the election of directors to the Company’s Board of
Directors and certain restrictions, obligations and rights with respect to the capital stock of the
Company held by the Stockholders (the “Shares”).

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises,
representations, warranties, covenants and conditions contained in this Agreement and the
Contribution Agreement and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

ARTICLE 1

BOARD OF DIRECTORS

     1.1 Election of Directors. Each of the Stockholders agrees to vote all of his, her or
its Shares which are voting Shares and any other voting securities of the Company over which such
Stockholder has voting control and shall take all other necessary or desirable actions within his,
her or its control (whether in its capacity as a stockholder, director, member of a board committee
or officer of the Company or otherwise, and including, without limitation, attendance

 

 

at meetings in person or by proxy for purposes of obtaining a quorum and execution of written
consents in lieu of meetings), and the Company shall take all necessary or desirable actions within
its control (including, without limitation, calling special board and stockholder meetings), so
that:

     (a) the authorized number of directors on the Company’s Board of Directors (the
“Board”) shall be no less than the number necessary to allow for the designations
provided for pursuant to Section 1.1(b) below; and

     (b) the following individuals shall be elected to the Board:

     (i) two (2) individuals nominated by Financial Technologies Management II LLC
(including its Affiliates, “FTV”) (the “FTV Directors”);

     (ii) two (2) individuals nominated by those holders (the “TrustWave Common
Holders”) of a majority of the issued and outstanding shares of Common Stock
listed on Exhibit C attached hereto (the “TrustWave Majority
Holders”) (the “TrustWave Directors”);

     (iii) two (2) individuals nominated by Richard Kiphart (“Kiphart”) (the
“Kiphart Directors”); and

     (iv) two (2) individuals nominated by MBK Ventures, LLC, an Illinois limited
liability company (“MBK”) (the “MBK Directors”).

Accordingly, as of the Effective Date, the Board shall initially be Richard Garman, Kevin Bradford,
Richard Kiphart, David Valentine, Joseph Patanella, Erik Schetina, Robert McCullen, and Andrew
Bokor (the “Initial Board”). The undersigned hereby approve and elect the Initial Board as
the Board of Directors of the Company until their successors are duly elected and qualified in
accordance with the provisions of this Agreement and the Company’s Bylaws.

     1.2 Vacancies and Removal.

     (a) Each of the directors designated in Section 1.1 shall be elected at any
annual or special meeting of stockholders (or by written consent in lieu of a meeting of
stockholders) and shall serve until his or her successor is elected and qualified or until
his earlier resignation or removal.

     (b) The Stockholders shall vote all of their shares of capital stock of the Company to
cause any FTV Director to be removed during his or her term of office, when and only when
they are so directed in writing by FTV or for Cause.

     (c) The Stockholders shall vote all of their shares of capital stock of the Company to
cause any Kiphart Director to be removed during his or her term of office, when and only
when they are so directed in writing by Kiphart or for Cause.

     (d) The Stockholders shall vote all of their shares of capital stock of the Company to
cause any TrustWave Director to be removed during his or her term of

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office, when and only when they are so directed to be removed in writing by TrustWave
Majority Holders or for Cause.

     (e) The Stockholders shall vote all of their shares of capital stock of the Company to
cause any MBK Director to be removed during his or her term of office, when and only when
they are so directed to be removed in writing by MBK or for Cause.

     (f) Any vacancy on the Board created by reason of the resignation, removal, incapacity
or death of a director shall be filled by another Person designated by the original party or
parties which had the right to designate such director in accordance with Section
1.1(b) above. Vacancies of the Board shall be filled within thirty (30) days of the
date such vacancy is created or immediately before the first action to be taken by the Board
after the date such vacancy is created.

As used herein, “Cause” shall mean, with respect to a director, one or more of the
following: (i) the conviction of (or plea of guilty or nolo contendere to) a felony (other than a
felony resulting from a traffic violation); or (ii) the commission of any other act or omission
involving fraud or embezzlement with respect to the Company.

     1.3 Right to Appoint Directors.

     (a) FTV. At such time as FTV holds less than fifty percent (50%) of the shares
of Series A-1 Preferred held by FTV on the date hereof (or shares of Common Stock into which
such shares of Series A-1 Preferred have been converted), FTV shall only be entitled to
nominate one (1) FTV Director pursuant to Section 1.1(b), and at such time as FTV holds less
than twenty percent (20%) of the shares of Series A-1 Preferred held by FTV on the date
hereof (or shares of Common Stock into which such shares of Series A-1 Preferred have been
converted), FTV shall not be entitled to nominate any FTV Director to the Board pursuant to
Section 1.1(b) and the obligations of the other Stockholders to vote their shares in favor
of election of FTV’s nominee(s) under Section 1.1(b), and the obligations of the other
Stockholders to vote to remove any FTV Director under Section 1.2, shall terminate and be of
no further force or effect.

     (b) Kiphart. At such time as Kiphart holds less than fifty percent (50%) of
the shares of Series A-2 Preferred held by Kiphart on the date hereof (or shares of Common
Stock into which such shares of Series A-2 Preferred have been converted), Kiphart shall
only be entitled to nominate one (1) Kiphart Director pursuant to Section 1.1(b), and at
such time as Kiphart holds less than twenty percent (20%) of the shares of Series A-2
Preferred held by Kiphart on the date hereof (or shares of Common Stock into which such
shares of Series A-2 Preferred have been converted), Kiphart shall not be entitled to
nominate any Kiphart Director to the Board pursuant to Section 1.1(b) and the obligations of
the other Stockholders to vote their shares in favor of election of Kiphart’s nominee(s)
under Section 1.1(b), and the obligations of the other Stockholders to vote to remove any
Kiphart Director under Section 1.2, shall terminate and be of no further force or effect.

     (c) MBK. At such time as MBK holds less than fifty percent (50%) of the shares
of Common Stock held by MBK on the date hereof, MBK shall only be entitled to

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nominate one (1) MBK Director pursuant to Section 1.1(b), and at such time as MBK holds
less than twenty percent (20%) of the shares of Common Stock held by MBK on the date hereof,
MBK shall not be entitled to nominate any MBK Director to the Board pursuant to Section
1.1(b) and the obligations of the other Stockholders to vote their shares in favor of
election of MBK’s nominee(s) under Section 1.1(b), and the obligations of the other
Stockholders to vote to remove any MBK Director under Section 1.2, shall terminate and be of
no further force or effect.

     (d) TrustWave Common Holders. At such time as the TrustWave Majority Holders
hold less than fifty percent (50%) of the shares of Common Stock held by the TrustWave
Common Holders on the date hereof, the TrustWave Majority Holders shall only be entitled to
nominate one (1) TrustWave Director pursuant to Section 1.1(b), and at such time as the
TrustWave Common Holders hold less than twenty percent (20%) of the shares of Common Stock
held by the TrustWave Common Holders on the date hereof, the TrustWave Majority Holders
shall not be entitled to nominate any TrustWave Director to the Board pursuant to Section
1.1(b) and the obligations of the other Stockholders to vote their shares in favor of
election of the TrustWave Majority Holders’ nominee(s) under Section 1.1(b), and the
obligations of the other Stockholders to vote to remove any TrustWave Director under Section
1.2, shall terminate and be of no further force or effect.

     (e) Vacancies. Any vacancies in the Board which are not filled pursuant to
Section 1.2 as a result of the application of this Section 1.3 shall be filled by the vote
of the holders of a majority of the Common Stock (assuming the conversion of all of the
Series A Preferred). Any director as to whom the provisions of Section 1.2 no longer apply
as a result of the application of this Section 1.3 may be removed during his or her term of
office, when and only when they are so directed to be removed by the vote of the holders of
a majority of the Common Stock (assuming the conversion of all of the Series A Preferred) or
for Cause.

     (f) Observer. FTV shall have the right to appoint one representative (an
“Observer”), who initially shall be Albert Chiang, from time to time who shall: (a)
receive notice of all meetings of the Board and each committee thereof (such notice to be
delivered or mailed at the same time as notice is given to the members of such Board and/or
committee); and (b) be entitled to attend (or, in the case of telephone meetings, monitor)
all such meetings. The rights granted to FTV under this Section may not be transferred by
FTV to any party.

     1.4 Expenses. The Company shall reimburse each director who is not an employee of the
Company for his or her reasonable out-of-pocket expense (including travel) incurred in connection
with the attendance of meetings of the Board or any committee thereof.

     1.5 Committees. The Board will initially have the following committees:

     (a) a Compensation Committee, which will include at least two (2) members, including at
least one (1) FTV Director and one (1) Kiphart Director. The Compensation Committee will
meet at least twice annually and shall recommend the overall

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compensation strategy for the Company to the Board. The compensation committee of the
Board shall assist the Board in determining the salary and incentive compensation of the
company’s officers and employees, and shall administer the company’s stock incentive plans
and other benefits; and

     (b) an Audit Committee, which will include at least (2) members who are non-employee
directors of the Company, including at least one (1) FTV Director and one (1) Kiphart
Director, will meet at least twice annually and shall approve the engagement of the
Company’s auditors and approve the audit prior to the issuance thereof each year.

     1.6 Certain Votes. The hiring or firing of the Chief Executive Officer, Chief
Operating Officer or President shall require the affirmative vote of a majority of the Board.

The provisions of this Article 1 shall terminate and be of no further force or effect upon the
first to occur of (i) a Qualified Public Offering (as defined in the Investor Rights Agreement) or
(ii) a Sale of the Company. For purposes of this Agreement, a “Sale of the Company” means
any transaction or series of transactions pursuant to which any Person or group of related Persons,
in the aggregate acquire (i) capital stock of the Company possessing the voting power (other than
voting rights accruing only in the event of a default, breach or event of noncompliance) to elect a
majority of the Board (whether by merger, consolidation, reorganization, combination, sale or
transfer of the Company’s capital stock, stockholder or voting agreement, proxy, power of attorney
or otherwise) or (ii) all or substantially all of the Company’s assets determined on a consolidated
basis.

ARTICLE 2

PROTECTIVE PROVISIONS

     2.1 Series A Stockholders Protective Provisions. The Company shall not, without the
prior written consent or affirmative vote of the holders of at least
66
2/3% of the then outstanding
shares of Series A Preferred, consenting or voting, as the case may be:

     (a) Except for capital expenditures incurred in the ordinary course of business or
contemplated by the annual budget of the Company, purchase, or permit any subsidiary to
purchase, any capital stock of any corporation, any voting interest in any partnership,
joint venture or other entity, or material asset of another entity, or making any loan or
advance to such an entity, if either (i) the business of such entity is not substantially
similar to the Company’s business or (ii) the total consideration (including cash, equity
issued and debt assumed) paid by the Company exceeds $250,000;

     (b) Except as contemplated by the annual budget of the Company, incur, create or
guarantee any indebtedness for borrowed money which, individually or in the aggregate,
exceeds $250,000;

     (c) Enter into any transaction between the Company and any of its officers, directors
or Affiliates, or any relatives of such officers or directors, except for transactions
entered into in the ordinary course of business such as customary

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employment arrangements with its employees and officers, expense reimbursement
arrangements with its directors and other ordinary course transactions;

     (d) Except for transactions permitted by subsection (a) above or as contemplated by the
annual budget of the Company, effect any single sale, transfer or other disposition, or any
series of related sales, transfers or other dispositions, of any assets of the Company
(other than in the ordinary course of business) which in the aggregate exceeds $250,000;

     (e) Amend, alter, change, waive or repeal any provisions of, or add any provisions to,
the Certificate of Incorporation or Bylaws of the Company relating to the rights of the
Series A Preferred or the number of authorized shares of Preferred Stock or Common Stock or
the number of authorized directors of the Company’s Board;

     (f) Authorize or issue any securities of the Company (or any instrument convertible or
exchangeable into a security of the Company) senior to or on parity with the Series A
Preferred in any respect;

     (g) Issue securities of the Company to any of its directors, employees or consultants
other than pursuant to the existing Stock Incentive Plan of the Company as of the date
hereof (“Stock Incentive Plan”), adopt any new stock option plan for the Company, or
increase the number of shares issuable under the Stock Incentive Plan (as adjusted for any
stock splits, stock dividends, reverse stock splits, stock combinations and other similar
events);

     (h) Pay any dividends or redeem/purchase any securities of the Company (other than the
repurchase of shares issued under the Stock Incentive Plan);

     (i) Consent to (i) a sale, transfer or any other disposition of all or substantially
all of its assets, (ii) a merger or consolidation or combination with or into any other
corporation, corporations, entity or entities, except a reincorporation or merger of a
subsidiary of the Company into the Company, or (iii) a liquidation, dissolution or winding
up of the Company;

     (j) Enter into any line of business other than in the information technology services
or products industry;

     (k) Hire a new Chief Executive Officer;

     (l) Amend, alter, change, waive or repeal any provisions of this Agreement; or;

     (m) Amend, alter, change, waive or repeal any provisions of the Investor Rights
Agreement.

     2.2 TrustWave Common Stockholders Protective Provisions. The Company shall not,
without the prior written consent or affirmative vote of the TrustWave Majority Holders, consenting
or voting, as the case may be, consent to (a) a sale, transfer or any other disposition of

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all or substantially all of its assets, (b) a merger or consolidation or combination with or
into any other corporation, corporations, entity or entities, except a reincorporation or merger of
a subsidiary of the Company into the Company, or (c) a liquidation, dissolution or winding up of
the Company, if (i) such transaction occurs prior to the 15th month anniversary of the Effective
Date and the proceeds from such transaction is less than $40 million, and (ii) the Company has Net
Cash greater than or equal to $3 million. At such time as the Company has Net Cash of less than $3
million, the provisions of this Section 2.2 shall automatically terminate and be of no further
force and effect. The term “Net Cash” used herein shall mean the amount of cash
equivalents (excluding accounts receivable) less all liabilities (excluding deferred revenue amount
and accrued dividends), determined in accordance with the United States generally accepted
accounting principles.

     2.3 MBK Protective Provisions. The Company shall not, without the prior written
consent or affirmative vote of MBK, consenting or voting, as the case may be, consent to (a) a
sale, transfer or any other disposition of all or substantially all of its assets, (b) a merger or
consolidation or combination with or into any other corporation, corporations, entity or entities,
except a reincorporation or merger of a subsidiary of the Company into the Company, or (c) a
liquidation, dissolution or winding up of the Company, if (i) such transaction occurs prior to the
15th month anniversary of the Effective Date and the proceeds from such transaction is less than
$24.4 million, and (ii) the Company has Net Cash greater than or equal to $3 million. At such time
as the Company has Net Cash of less than $3 million, the provisions of this Section 2.3 shall
automatically terminate and be of no further force and effect.

ARTICLE 3

STOCK RESTRICTION PROVISIONS

     3.1 Restrictions on Transfer. The Stockholders shall not sell, assign, transfer,
pledge, hypothecate or otherwise dispose of (a “Transfer”), by operation of law or
otherwise, any shares of the Company’s capital stock, or any interest thereon, except as permitted
in this Agreement, and the Investor Rights Agreement of even date herewith between the Company and
the Stockholders signatories thereto (the “Investor Rights Agreement”).

     3.2 Right of First Refusal.

     (a) Offer to Purchase; Notice to Company; and Eligible Stockholders. If at any
time any Stockholder desires to Transfer any Shares (the “Selling Stockholder”) to
any Person that is not a Permitted Transferee (the “Proposed Transferee”), and has
received a bona fide written offer (the “Bona Fide Offer”) from such Proposed
Transferee to purchase such capital stock from such Selling Stockholder, the Selling
Stockholder shall, before making any Transfer, submit a written offer (the “Offer”)
to sell such Shares (the “Offered Shares”) to the Company, and to Stockholders
holding at least 100,000 Shares (as adjusted for stock splits and on an as-converted basis)
(the “Eligible Stockholders”) as of the Effective Date and as of the date of the
Offer, on terms and conditions, including price, not less favorable to the Company and the
Eligible Stockholders than those on which the Selling Stockholder proposes to sell such
Offered Shares to the Proposed Transferee. As used in this Agreement, “Person” shall
be construed broadly and shall include an individual, a partnership, a corporation, an

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association, a joint stock company, a limited liability company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

     The Offer shall disclose the identity of the Proposed Transferee, the number of Offered
Shares proposed to be sold, the total number of Shares owned by the Selling Stockholder, and
the terms and conditions, including price, of the proposed sale, and shall be accompanied by
a copy of the Bona Fide Offer. The Offer shall further state that the Company and the
Eligible Stockholders may acquire, in accordance with the provisions of this Agreement, for
the price and upon the other terms and conditions, including deferred payment (if
applicable), of the proposed sale to the Proposed Transferee set forth therein (i) with
respect to the Company, all or any portion of the Offered Shares and (ii) with respect to
the Eligible Stockholders, that number of Offered Shares equal to the number of Offered
Shares not purchased by the Company multiplied by a fraction, the numerator of which is the
aggregate number of shares of capital stock owned by such Eligible Stockholder and the
denominator of which is the sum of all shares of capital stock owned by all of the
Stockholders, other than the Selling Stockholder (with such number of shares of capital
stock owned computed on an as-converted to Common Stock basis).

     (b) Exercise of Purchase Right by Company. If the Company desires to purchase
all or any of the Offered Shares, the Company shall deliver a written notice of its election
to purchase such shares to the Selling Stockholder and the Eligible Stockholders, which
notice shall state the number of Offered Shares the Company desires to purchase and shall be
delivered in person or mailed to such Selling Stockholder and Eligible Stockholders within
thirty (30) days of the date of receipt by the Company of the Offer. Such notice shall,
when taken in conjunction with the Offer, be deemed to constitute a valid, legally binding
and enforceable agreement for the sale and purchase of such Offered Shares to the Company on
the terms of the Offer as set forth in Section 3.2(a).

     (c) Exercise of Purchase Right. If the Company has not elected to purchase all
of the Offered Shares specified in the Offer within such thirty (30) day period, then any
Eligible Stockholder may elect to purchase that number of remaining Offered Shares equal to
the number of remaining Offered Shares multiplied by a fraction, the numerator of which is
the aggregate number of shares of capital stock owned by such Eligible Stockholder and the
denominator of which is the sum of all shares of capital stock owned by all of the
Stockholders, other than the Selling Stockholder (with such number of shares of capital
stock owned computed on an as-converted to Common Stock basis). If a Eligible Stockholder
desires to purchase all or any of the Offered Shares, the Eligible Stockholder shall deliver
a written notice of its election to purchase such shares to the Selling Stockholder and the
other Eligible Stockholders, which notice shall state the number of Offered Shares the
Eligible Stockholder desires to purchase and shall be delivered in person or mailed to the
Selling Stockholder within forty-five (45) days of the date of receipt by the Eligible
Stockholder of the Offer. If one (1) or more Eligible Stockholders, but not all of the
Eligible Stockholders, elect to purchase their portion of the Offered Shares, such electing
Eligible Stockholder(s), if they so indicate in the notice

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provided for in this Section, may likewise purchase that portion of the Offered Shares
that was available for purchase by the non-electing Eligible Stockholder(s), allocated
pro-rata among the electing Eligible Stockholders who choose to purchase such additional
Offered Shares. Such notice shall, when taken in conjunction with the Offer, be deemed to
constitute a valid, legally binding and enforceable agreement for the sale and purchase of
such Offered Shares (or such smaller number of Offered Shares if more than one Eligible
Stockholder elects to purchase Offered Shares, as calculated in accordance with Section
3.2(a)) to the electing Eligible Stockholder(s) on the terms of the Offer as set forth
in Section 3.2(a).

     (d) Closing. The closing of the sale of Offered Shares to the Company and/or
the electing Eligible Stockholder(s) pursuant to this Section shall be made at the offices
of the Company on such date as may be agreed by the Selling Stockholder and the Company
and/or the electing Eligible Stockholder(s) but no later than ninety (90) days following the
date of the Offer is received by the Company and the electing Eligible Stockholder(s) (if
any). Such sale shall be effected by the Selling Stockholder’s delivery to the Company and
the electing Eligible Stockholder(s) of a certificate or certificates evidencing the Offered
Shares (or any portion thereof) to be purchased by the Company and the electing Eligible
Stockholder(s), duly endorsed for transfer to the Company and the electing Eligible
Stockholder(s), against payment to the Selling Stockholder of the purchase price by the
Company and the electing Eligible Stockholder(s). The exercise or non-exercise by the
Company and the Eligible Stockholders of their rights pursuant to this Section 3.2
shall be without prejudice to their rights under this Article III with respect to any future
offer or sale of Offered Shares.

     (e) Sale of Offered Shares to Proposed Transferee. If the Company and the
Eligible Stockholders do not purchase all of the Offered Shares, the Offered Shares or the
remaining Offered Shares, as the case may be, may be sold by the Selling Stockholder at any
time within ninety (90) days after the date the Offer was made. Any such sale shall be to
the Proposed Transferee, at not less than the price and upon other terms and conditions, if
any, not more favorable to the Proposed Transferee than those specified in the Offer.
Promptly after completing the sale to the Proposed Transferee, the Selling Stockholder shall
provide notice of such sale (the “Notice”) to the Company. Any Offered Shares not
sold within the above-referenced ninety (90) day period shall again be subject to the
requirements of a prior offer pursuant to this Section.

     3.3 Right of Participation in Sales.

     (a) Co-Sale Right. If at any time any Selling Stockholder desires to Transfer
all or any of the capital stock beneficially owned by him or it (the “Tag-Along
Shares”) to any Proposed Transferee as part of a Bona Fide Offer as permitted under
Section 3.2, such Selling Stockholder shall, as a condition to making such Transfer,
make effective arrangement in the terms of the Bona Fide Offer so that each Eligible
Stockholder shall have the right to sell in the contemplated Transfer, at the same price per
share and on the same terms and conditions as indicated in the Offer, such number of shares
of capital stock equal to the Tag-Along Shares multiplied by a fraction, (i) the numerator
of which is the number of shares of capital stock owned by the Eligible Stockholder, and
(ii) the

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denominator of which is the sum of all shares of capital stock owned by the Selling
Stockholder and all Eligible Stockholders that elect to participate in the contemplated
Transfer. In the event that the shares of capital stock held by any Stockholders consist of
shares of Preferred Stock, such shares shall be computed on an as-converted basis, for purposes of the co-sale right contained in this Section 3.3.

     (b) Notice of Intent to Participate. If an Eligible Stockholder wishes to so
participate in any sale under this Section 3.3, it shall notify the Selling
Stockholder of such intention as soon as practicable after its receipt of the notice of the
Offer pursuant to Section 3.2(a), and in any event within thirty (30) days after
receipt of the Offer.

     (c) Sale to Proposed Transferee. The Selling Stockholder and the other
Eligible Stockholders shall sell to the Proposed Transferee all, or at the option of the
Proposed Transferee, any part of the shares proposed to be sold by them at not less than the
price and upon other terms and conditions, if any, not more favorable to the Proposed
Transferee than those in the Offer; provided, however, that any purchase of
less than all of such Shares by the Proposed Transferee shall be made from the Selling
Stockholder and the other participating Eligible Stockholders pro rata based upon the
relative amount of the Shares that each of them would otherwise be entitled to sell pursuant
to Section 3.3(a).

     3.4 Limitation on Transfer. Without limiting the provisions of Sections 3.1,
3.2 and 3.3 above, each party hereto agrees not to Transfer any capital stock of
the Company (i) to any Person engaging, as all or part of its business, in businesses substantially
similar to those of the Company (except in connection with a Sale of the Company), (ii) unless the
transferee agrees in writing to be bound by the terms and conditions of this Agreement and executes
a counterpart of this Agreement, and unless such party has complied with applicable law in
connection with such Transfer (except in connection with a Sale of the Company or a Public Sale),
and (iii) if, as a result thereof, the Company would be required to register such capital stock
under Section 12 of the Securities Exchange Act of 1934, as amended from time to time (the
“Exchange Act”) (other than in a public offering registered under the Securities Act of
1933, as amended (the “Securities Act”)). As used in this Agreement, “Public Sale”
means any sale of Shares to the public pursuant to an offering registered under the Securities Act
or to the public through a broker, dealer or market maker on a securities exchange or in the
over-the-counter market pursuant to the provisions of Rule 144 adopted under the Securities Act.

     3.5 Permitted Transfer. The terms and conditions of Sections 3.2 and
3.3 hereof shall not apply to any Permitted Transfer by a Stockholder. For purposes of
this Agreement, “Permitted Transfer” means any Transfer by a Stockholder of any shares of
capital stock (a) between any two Stockholders listed on Exhibit C, (b) to or for the
benefit of any immediate family member of the Stockholder, to a trust for the benefit of the
Stockholder or any immediate family member, or to a family partnership, (c) any Affiliate of a
Stockholder (including a distribution to a partner or a liquidation to the benefit of the partners
of the Stockholder), or (d) any transferee approved by a majority of the Board (collectively,
“Permitted Transferees”); provided, that the limitations contained in Section
3.4 shall still apply to any Permitted Transfer and shall apply to a Permitted Transferee upon
subsequent transfer. Each Permitted Transferee shall be deemed a Stockholder for purposes of this
Agreement. Notwithstanding the foregoing,

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no party hereto shall avoid the provisions of this Agreement by making one or more transfers
to one or more Permitted Transferees and then disposing of all or any portion of such party’s
interest in any such Permitted Transferee. For purposes of this Agreement, “Affiliate” of
a Person means any other Person controlling, controlled by or under common control with such
particular Person, where “control” means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of voting securities,
contract or otherwise.

     3.6 Drag Along Rights.

     (a) If the holders of at least a majority of the Series A Preferred then issued and
outstanding (the “Drag Along Investors”) desire to sell their shares of Preferred
Stock (or the shares of Common Stock into which such shares of Preferred Stock have been
converted) pursuant to a Bona Fide Sale approved by the Board where all Stockholders will
receive the same form and rate of consideration after giving effect to any applicable
liquidation or other preferences set forth in the Certificate of Incorporation of the
Company, then the Drag Along Investors shall furnish a written notice to each of the other
Stockholders (the “Drag Along Notice”), which notice shall set forth, in reasonable
detail, the principal terms of the Bona Fide Sale. Each Stockholder hereby agrees that if
the Drag Along Investors desire to consummate a sale pursuant to a Bona Fide Sale and (i)
the Bona Fide Sale involves the sale of at least a majority of the issued and outstanding
shares of capital stock of the Company, each Stockholder shall be required to sell the same
percentage of the shares of capital stock of the Company held by him or it as proposed to be
sold by the Drag Along Investors pursuant to the Bona Fide Sale on the same terms and
conditions as set forth in the Bona Fide Sale; or (ii) the Bona Fide Sale involves the
merger, recapitalization, consolidation or sale or exclusive license of all or substantially
all of the assets of the Company, each Stockholder hereby agrees to vote all of the shares
of capital stock of the Company held by him or it in favor of, and to consent to, such Bona
Fide Sale. Notwithstanding the foregoing, no Investor or Stockholder shall be required as
part of a Bona Fide Sale to become subject to a hold-back, indemnity or similar provision
which involves (x) joint and several liability or (y) possible recourse in excess of the
shares of capital stock of the Company held by such Investor or Stockholder or the proceeds
received or to be received by such Investor or Stockholder in such Bona Fide Sale. For
purposes of this Section 3.6, “Bona Fide Sale” shall mean a bona fide
written offer from any Person unaffiliated with any Stockholder (i) to purchase or
exclusively license all or substantially all of the assets of the Company, (ii) to purchase
at least a majority of the outstanding capital stock of the Company, (iii) to merge or
consolidate the Company with another entity, as a result of which at least a majority of the
voting securities of the Company or surviving entity is held by Persons other than those who
are Stockholders of the Company immediately prior to such transaction; or (iv) the
recapitalization of the Company as a result of which at least a majority of the voting
securities of the Company is held by Persons other than those who are Stockholders of the
Company immediately prior to such transaction.

     (b) If upon the one hundred eightieth (180th) day following the date of a particular
Drag Along Notice, the Drag Along Investors have not consummated the Bona Fide Sale, each of
the other Stockholders shall be released from his or its obligations

- 11 -

 

under such Drag Along Notice, the Drag Along Notice shall be null and void, and it
shall be necessary for another Drag Along Notice to be furnished, and the terms and
provisions of this Section 3.6 to be complied with, in order to consummate a Bona
Fide Sale pursuant to this Section 3.6.

ARTICLE 4

MISCELLANEOUS

     4.1 Duration of Agreement. The provisions of this Agreement shall continue with
respect to each Share held by the Stockholders until the earliest of (i) the date on which such
Share is sold to the public pursuant to an offering registered under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the provisions of Rule 144 adopted
under the Securities Act, (ii) upon consummation of a Qualified Public Offering, (iii) upon the
liquidation, dissolution or winding-up of the Company, or (iv) upon a redemption of all of the
outstanding Preferred Stock, as set forth in the Certificate of Incorporation of the Company.

     4.2 Failure to Deliver Shares. If a Stockholder becomes obligated to Transfer any
Shares owned by, or held for the benefit of, such Stockholder to another party hereto and fails to
deliver such Shares in accordance with the terms of this Agreement, such other party hereto may, at
its option, in addition to all other remedies it may have, send to the Company for the benefit of
such Stockholder the purchase price for such Shares as is herein specified. Thereupon, the Company
upon written notice to said Stockholder, (a) shall cancel on its books the certificate(s)
representing the Shares to be transferred and (b) shall issue, in lieu thereof, in the name of such
investor, a new certificate(s) representing such Shares, and thereupon all of said Stockholder’s
rights in and to such Shares shall terminate. The Company may exercise a similar remedy in
enforcing its rights under ARTICLE 3 hereof. If a Stockholder transfers any Shares to a purchaser
in violation of this Agreement, the Company may, at the election of a majority of the disinterested
members of the Board, cancel on the books of the Company any Shares then held by such Stockholder,
and any such breaching Stockholder agrees to purchase from the purchasers and any transferee a
number of shares of capital stock equal to the amount so transferred in violation of this
Agreement.

     4.3 Transfers in Violation of Agreement. Any Transfer or attempted Transfer of any
Shares in violation of any provision of this Agreement shall be void, and the Company shall not
record such Transfer on its books or treat any purported transferee(s) of such Shares as the owner
of such securities for any purpose.

     4.4 Legend, New Certificates.

     (a) Each certificate representing shares of capital stock that are subject to this
Agreement shall bear a legend in substantially the following form, until such time as the
shares of capital stock represented thereby are no longer subject to the provisions hereof:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED FROM TIME TO TIME, (THE “ACT”) OR ANY
STATE SECURITIES LAWS. THE SHARES HAVE BEEN ACQUIRED FOR

- 12 -

 

INVESTMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE
TRANSACTION IS MADE PURSUANT TO AND IN COMPLIANCE WITH RULE 144 OF THE ACT
OR THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ALSO FURTHER SUBJECT TO THE
PROVISIONS OF A STOCKHOLDERS’ AGREEMENT AMONG THE ISSUER OF SUCH SECURITIES
(THE “COMPANY”) AND CERTAIN OF THE COMPANY’S STOCKHOLDERS, AS THE SAME MAY
BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT
THE PRINCIPAL OFFICES OF THE COMPANY, AND, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, NO SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF
THESE SHARES SHALL BE VALID OR EFFECTIVE UNLESS MADE IN COMPLIANCE WITH ALL
OF THE TERMS AND CONDITIONS OF SUCH AGREEMENT.

     (b) No holder of Shares may Transfer any Shares (except pursuant to an effective
registration statement under the Securities Act) without first delivering to the Company a
written notice describing in reasonable detail the proposed Transfer, together with an
opinion of counsel (reasonably acceptable in form and substance to the Company) that neither
registration nor qualification under the Securities Act and applicable state securities laws
is required in connection with such Transfer. In addition, if the holder of the Shares
delivers to the Company an opinion of counsel that no subsequent Transfer of such Shares
shall require registration under the Securities Act, the Company shall promptly upon such
contemplated Transfer deliver new certificates for such Shares which do not bear the
Securities Act portion of the legend set forth in Section 4.4(a). If the Company is
not required to deliver new certificates for such Shares not bearing such legend, the holder
thereof shall not Transfer the same until the prospective transferee has confirmed to the
Company in writing its agreement to be bound by the conditions contained in this Section
4.4.

     4.5 Severability. It is the desire and intent of the parties hereto that the
provisions of this Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. Accordingly, in case
any provision of the Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, illegal, or unenforceable, such provision, as to such jurisdiction, shall be ineffective,
without affecting the validity, legality, and enforceability of the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

     4.6 Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without applying conflicts of law principles.

- 13 -

 

     4.7 Injunctive Relief. It is acknowledged that it will be impossible to measure the
damages that would be suffered by a party hereto if any other party fails to comply with the
provisions of this Agreement and that in the event of any such failure, the non-defaulting party
may not have an adequate remedy at law. The non-defaulting party may, therefore, be entitled to
obtain specific performance of the defaulting party’s obligations hereunder and to obtain immediate
injunctive relief.

     4.8 Successors and Assigns. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective permitted successors, assigns, heirs executors
and administrators. This Agreement is not intended to create any third party beneficiaries.

     4.9 Modification or Amendment. Neither this Agreement nor any provision hereof can be
modified, amended, changed, discharged or terminated except by an instrument in writing, signed by
at least a majority of the issued and outstanding shares of Common Stock (on an as-converted
basis); provided, that (x) Sections 1.1(b)(i) and 1.2(b) may not be amended
without the written consent of FTV, Sections 1.1(b)(iii) and 1.2(c)may not be
amended without the written consent of Kiphart, Sections 1.1(b)(ii) and 1.2(d) may
not be amended without the written consent of TrustWave Majority Holders, and Sections
1.1(b)(iv) and 1.2(e), may not be amended without the written consent of MBK, and (y)
Section 2.1 may not be amended without the written consent of the holders of at least 66 2/3%
of the then outstanding shares of Series A Preferred, Section 2.2 may not be amended
without the written consent of TrustWave Majority Holders and Section 2.3 may not be
amended without the written consent of MBK; provided further that, any such
amendment, modification, or waiver that would adversely affect the rights hereunder of any
Stockholder in its capacity as a Stockholder, without similarly affecting the rights hereunder of
all Stockholders of such class, in their capacities as Stockholders of such class, shall not be
effective as to such Stockholder without its prior approval. The inclusion of additional Persons
as parties to this Agreement pursuant to a counterpart signature page or joinder agreement approved
by the Company shall not require an amendment to this Agreement.

     4.10 Additional Stockholders. The Company shall not issue or sell, after the date
hereof, shares of its voting capital stock or any warrant to purchase shares of its voting capital
stock (taking into account all issuance to a single Person and its affiliates) unless such Person
executes and delivers or, in the case of a holder of warrants, agrees upon exercise to execute and
deliver a counterpart signature page to this Agreement, whereby such Person shall become a
Stockholder subject to and bound by all the terms and conditions of this Agreement, unless
otherwise agreed by a majority of the Board. Nothing herein shall limit the Company from issuing
additional securities so long as such security issuance is approved by the Board and in compliance
with Section 2.1 hereof.

     4.11 Counterparts. This Agreement may be executed by facsimile and in counterparts,
each of which shall be deemed to be an original, but all of which taken together shall constitute
one and the same instrument.

     4.12 Headings. The headings of the sections, subsections, and paragraphs of this
Agreement have been added for convenience only and shall not be deemed to be a part of this
Agreement.

- 14 -

 

     4.13 Notices. All notices and consents required or permitted hereunder must be in
writing and shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed facsimile, if sent during normal business hours of the
recipient, if not, then the next business day, (c) three (3) business days after having been sent
by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business
day after deposit with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the party to be notified
at the respective address of the Company and the Investors set forth on Exhibit A or of the
Other Stockholders set forth on Exhibit B, as may be amended from time to time, or at such
other address as such party may designate in writing to the other parties hereto.

     4.14 Entire Agreement. This Agreement and the Exhibits thereto, the Contribution
Agreement, the Investor Rights Agreement and the other documents delivered pursuant hereto embodies
the entire agreement and understanding between the parties hereto with regard to the subjects
hereof and supersedes all prior agreements and understandings relating to such subject matter.

     4.15 Further Assurances. From and after the date of this Agreement, upon the request
of the Investors or the Company, the Company, the Other Stockholders and the Investors shall
execute and deliver such instruments, documents and other writings as may be reasonably necessary
or desirable to confirm and carry out and to effectuate fully the intent and purposes of this
Agreement.

     4.16 After-Acquired Shares. Subject to Section 4.1 above, all of the
provisions of this Agreement shall apply to all shares of the Company’s capital stock now owned or
hereafter acquired by any of the parties hereto or any transferee of such Persons.

[Signature Page Follows]

- 15 -

 

     IN WITNESS WHEREOF, the parties hereto have caused this Stockholders’ Agreement to be executed
as of the Effective Date.

	 	 	 	 	 
	 	COMPANY:

TRUSTWAVE HOLDINGS, INC.

 	 
	 	By:  	/s/ Robert McCullen
 	 
	 	 	Name:  	Robert McCullen 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	STOCKHOLDERS:

Financial Technology Ventures II (Q), L.P.

By: Financial Technology Management II, LLC

 	 
	 	By:  	/s/ Richard N. Garman
 	 
	 	 	Name:  	Richard N. Garman 	 
	 	 	Title:  	Managing Member 	 
	 
	 	Financial Technology Ventures II, L.P.

By: Financial Technology Management II, LLC

 	 
	 	By:  	/s/ Richard N. Garman
 	 
	 	 	Name:  	Richard N. Garman 	 
	 	 	Title:  	Managing Member 	 
	 	 	 
	 	     /s/ Joseph L. Patanella
 	 
	 	Joseph L. Patanella 	 
	 	 	 
	 	    /s/ Erik S. Schetina
 	 
	 	Erik S. Schetina 	 
	 	 	 
	 	CALEDONIAN INVESTMENTS, L.P.

 	 
	 	By:  	/s/ Tim Nicholson
 	 
	 	 	Name:  	Tim Nicholson 	 
	 	 	Title:  	General Partner 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 
	 	THE NICHOLSON FAMILY LIMITED PARTNERSHIP

 	 
	 	By:  	/s/ Tim Nicholson
 	 
	 	 	Name:  	Tim Nicholson 	 
	 	 	Title:  	General Partner 	 
	 	 	 
	 	     /s/ Barry Patrick Smith
 	 
	 	Barry Patrick Smith 	 
	 	 	 
	 	      /s/ Frank R. Sourbeer
 	 
	 	Frank R. Sourbeer 	 
	 	 	 
	 	      /s/ Daniel Muldoon
 	 
	 	Daniel Muldoon 	 
	 	 	 
	 	      /s/ Jamie Romero
 	 
	 	Jamie Romero 	 
	 	 	 
	 	      /s/ Jacob Carlson
 	 
	 	Jacob Carlson 	 
	 
	 	PATANELLA FAMILY TRUST

 	 
	 	By:  	/s/ James S. Patanella
 	 
	 	Name:  	James S. Patanella 	 
	 	Its:       Trustee 	 
	 	 	 
	 	/s/ Ronald Waranowski
 	 
	 	Ronald Waranowski 	 
	 	 	 
	 	/s/ Phillip J. Smith
 	 
	 	Phillip J. Smith 	 
	 	 	 
	 	/s/ William Phillips
 	 
	 	William Phillips 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 
	 	 	 
	 	/s/ Allan Hannagan
 	 
	 	Allan Hannagan 	 
	 	 	 
	 	/s/ Vincent Allman
 	 
	 	Vincent Allman 	 
	 	 	 
	 	/s/ Joseph Krause
 	 
	 	Joseph Krause 	 
	 	 	 
	 	/s/ Brian Prather
 	 
	 	Brian Prather 	 
	 	 	 
	 	/s/ Kenneth Green
 	 
	 	Kenneth Green 	 
	 	 	 
	 	/s/ David Marchese
 	 
	 	David Marchese 	 
	 	 	 
	 	/s/ Brian Trevey
 	 
	 	Brian Trevey 	 
	 	 	 
	 	/s/ Adam Morson
 	 
	 	Adam Morson 	 
	 	 	 
	 	/s/ Robert Martin
 	 
	 	Robert Martin 	 
	 	 	 
	 	/s/ Terence McCarthy
 	 
	 	Terence McCarthy 	 
	 	 	 
	 	/s/ Christopher Chiappone
 	 
	 	Christopher Chiappone 	 
	 	 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 
	 	 	 
	 	/s/ Louis Poherence
 	 
	 	Louis Poherence 	 
	 	 	 
	 	/s/ David Froud
 	 
	 	David Froud 	 
	 	 	 
	 	/s/ Daniel Ennis
 	 
	 	Daniel Ennis 	 
	 	 	 
	 	/s/ David J. Smith
 	 
	 	David J. Smail 	 
	 	 	 
	 	/s/ Joseph Richmond, Jr.
 	 
	 	Joseph Richmond, Jr. 	 
	 	 	 
	 	/s/ Richard E. Morson
 	 
	 	Richard E. Morson 	 
	 	 	 
	 	/s/ Ryan Koley
 	 
	 	Ryan Koley 	 
	 	 	 
	 	/s/ Joseph L.  McCormick
 	 
	 	Joseph L. McCormick 	 
	 	 	 
	 	/s/ Bryan Morson
 	 
	 	Bryan Morson 	 
	 	 	 
	 	/s/ Robert D. Benitez
 	 
	 	Robert D. Benitez 	 
	 	 	 
	 	/s/ Mary Frances Valentino
 	 
	 	Mary Frances Valentino 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 
	 	 	 
	 	/s/ T.J. Loughlin
 	 
	 	T.J. Loughlin 	 
	 	 	 
	 	/s/ Rosemary B. Morson
 	 
	 	Rosemary B. Morson 	 
	 	 	 
	 	/s/ Joseph C. Morson
 	 
	 	Joseph C. Morson 	 
	 	 	 
	 	/s/ Jack Troia
 	 
	 	Jack Troia 	 
	 	 	 
	 	/s/ Vicky LeBlanc
 	 
	 	Vicky LeBlanc 	 
	 
	 	MBK VENTURES, LLC

 	 
	 	By:  	/s/ Andrew Bokor
 	 
	 	 	Andrew Bokor, its Manager 	 
	 	 	 
	 	By:  	                 /s/ Robert McCullen
 	 
	 	 	Robert McCullen, its Manager 	 
	 	 	 
	 	/s/ Julia Gluck
 	 
	 	Julia Gluck 	 
	 	 	 
	 	/s/ Rebecca Kiphart
 	 
	 	Rebecca Kiphart 	 
	 	 	 
	 	/s/ Richard Kiphart
 	 
	 	Richard Kiphart 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 
	 	                                              /s/ David Valentine
 	 
	 	David Valentine 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

EXHIBIT A

List of Investors

The Company:

TrustWave Holdings, Inc.

c/o TrustWave Corporation

201 Defense Highway, Suite 205

Annapolis, MD 21401

Facsimile: 410.571.8493

Name and Address

Series A-1 Preferred

Financial Technology Ventures II (Q), L.P.

c/o Financial Technology Management II, LLC

601 California Street, Suite 2200

San Francisco, California 94108

Attention: David Haynes

Facsimile: 415.229.3005

Financial Technology Ventures II, L.P.

c/o Financial Technology Management II, LLC

601 California Street, Suite 2200

San Francisco, California 94108

Attention: David Haynes

Facsimile: 415.229.3005

Series A-2 Preferred

Julia Gluck

530 Longwood

Glencoe, IL 60022

Rebecca Kiphart

c/o William Blair and Company

222 W. Adams

Chicago, IL 60606

Richard Kiphart

c/o William Blair and Company

222 W. Adams

Chicago, IL 60606

David Valentine

348 Sterling Road

Kenilworth, IL 60043

 

 

EXHIBIT B

List of Other Stockholders

Name and Address

Class A Common

Barry Patrick Smith

11816 Hunting Ridge Court

Potomac, Maryland 20854

Frank R. Sourbeer

100 Cumberland Road

Lemoyne, PA 17403

Caledonian Investments, L.P.

c/o Timothy F. Nicholson

304 Gilbert Road

Dillsburg, PA 17019

The Nicholson Family Limited Partnership

c/o Timothy F. Nicholson

304 Gilbert Road

Dillsburg, PA 17019

Joseph L. Patanella

3405 Hidden River View Rd

Annapolis, Maryland 21403

Erik S. Schetina

23 West 73rd St, Apt 903

New York, NY 10023

Ronald Waranowski

2914 Constellation Way

Finksburg, MD 21048

Phillip J. Smith

12127 Long Ridge Lane

Bowie, Maryland 20715

Jacob Carlson

558 11th St 25

Brooklyn, NY 11215

 

 

Daniel Muldoon

5228 Waugh Point Rd

King George, VA 22485

Jaime Romero

175 Bleecker Street, #13

New York, NY 10012

The Patanella Family Trust

c/o James S. Patanella

920 Sunset Valley Drive

Sykesville, MD 21784

Jack Troia

2632 Little Bighorn

Henderson, NV 89052

MBK Ventures, LLC

566 West Adams, Suite 401

Chicago, Illinois 60661

Attn: Andrew Bokor and Robert McCullen, Managersexv10w20

Exhibit 10.20

AMENDMENT TO STOCKHOLDERS’ AGREEMENT

     THIS AMENDMENT TO STOCKHOLDERS’ AGREEMENT (this “Amendment”) is entered into
as of December 29, 2006 (the “Amendment Date”), by and among TrustWave Holdings, Inc., a
Delaware corporation (the “Company”), and the persons signatory hereto (the
“Signatories”).

RECITALS

     WHEREAS, the Company and its stockholders are parties to that certain Stockholders’ Agreement,
dated as of March 14, 2005 (the “Original Agreement”); and

     WHEREAS, all capitalized terms used in this Amendment which are not defined herein shall have
the respective meanings assigned to them in the Original Agreement; and

     WHEREAS, the Signatories constitute the holders of at least a majority of the issued and
outstanding shares of Common Stock (on an as-converted basis); and

     WHEREAS, the parties hereto desire to amend the Original Agreement as provided in this
Amendment.

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises,
representations, warranties, covenants and conditions contained in this Amendment and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

     1. Addition of Stockholders. The stockholders listed on the attached Exhibit
D are hereby constituted as Other Stockholders and Stockholders for all purposes of the
Original Agreement, as amended by this Amendment.

     2. Election of Directors. Section 1.1(b) of the Original Agreement is hereby amended
to read, in its entirety, as follows:

     (b) the following individuals shall be elected to the Board:

     (i) two (2) individuals (the “FTV Directors”) nominated by Financial
Technologies Management II LLC (including its Affiliates, “FTV”);

     (ii) two (2) individuals (the “TrustWave Directors”) nominated by the
holders (the “TrustWave Majority Holders”) of a majority of the issued and
outstanding shares of Common Stock owned by the Persons listed on Exhibit C
attached hereto (the “TrustWave Common Holders”);

     (iii) two (2) individuals (the “Kiphart Directors”) nominated by
Richard Kiphart (“Kiphart”);

 

 

     (iv) two (2) individuals (the “MBK Directors”) nominated by MBK
Ventures, LLC, an Illinois limited liability company (“MBK”); and

     (v) one (1) individual (the “SecurePipe Director”) nominated by the
holders (the “SecurePipe Majority Holders”) of either (A) a majority of the
issued and outstanding shares of Common Stock owned by the Persons listed on
Exhibit D attached hereto (the “SecurePipe Major Holders”) or, (B)
if such a majority of the SecurePipe Common Holders cannot be obtained, a plurality
of the issued and outstanding shares of Common Stock owned by the SecurePipe Major
Holders.

     3. Election of SecurePipe Director. The undersigned hereby approve and elect
___________ to serve on the Board of Directors of the Company as the SecurePipe Director until his
successor is duly elected and qualified in accordance with the provisions of the Agreement, as
amended by this Amendment, and the Company’s Bylaws.

     4. Vacancies and Removal. Section 1.2 of the Original Agreement is amended by
inserting a new subsection (g) to read, in its entirety, as follows:

     (g) The Stockholders shall vote all of their shares of capital stock of the Company to
cause any SecurePipe Director to be removed during his or her term of office, when and only
when they are so directed to be removed in writing by SecurePipe Majority Holders or for
Cause.

     5. Right to Appoint Directors. Section 1.3 of the Original Agreement is amended by
inserting new subsections (g) and (h) to read, in their entireties, as follows:

     (g) SecurePipe Common Holders. At such time as the holders of Common Stock who
received such Common Stock pursuant to that certain Agreement and Plan of Merger and
Reorganization by and among the Company, SecurePipe, Inc. and certain stockholders of
SecurePipe, Inc. the (“SecurePipe Common Holders”) hold less than twenty percent
(20%) of the shares of Common Stock held by the SecurePipe Common Holders on the date
hereof, the SecurePipe Majority Holders shall not be entitled to nominate any SecurePipe
Director to the Board pursuant to Section 1.1(b) and the obligations of the other
Stockholders to vote their shares in favor of election of the SecurePipe Majority Holders’
nominee under Section 1.1(b), and the obligations of the other Stockholders to vote to
remove any SecurePipe Director under Section 1.2, shall terminate and be of no further force
or effect. For so long as the SecurePipe Majority Holders are entitled to nominate a
SecurePipe Director to the Board pursuant to Section 1.1(b), the Board shall not create any
committee other than the Compensation Committee and the Audit Committee without offering to
include on any such committee the SecurePipe Director.

     (h) SecurePipe Observer. The SecurePipe Majority Holders shall have the right
to appoint one representative (a “SecurePipe Observer”), who initially shall be
____________, from time to time who shall: (a) receive notice of all meetings of the Board
and each committee thereof (such notice to be delivered or mailed as specified

- 2 -

 

herein at the same time as notice is given to the members of such Board and/or
committee); (b) be entitled to attend (or, in the case of telephone meetings, monitor) all
such meetings; (c) receive all notices, information and reports which are furnished to the
members of such board and/or committee at the same time and in the same manner as the same
is furnished to any such member; (d) be entitled to participate in all discussions conducted
at such meetings; and (e) receive as soon as available (but in any event prior to the next
succeeding meeting of such board and/or committee) copies of the minutes of all such
meetings. If any action is proposed to be taken by such Board and/or committee by written
consent in lieu of a meeting, the Company will give written notice thereof to such
SecurePipe Observer. The rights granted to the SecurePipe Majority Holders under this
Section may not be transferred by the SecurePipe Majority Holders to any party. All
expenses related to the SecurePipe Observer’s participation shall be borne exclusively by
the SecurePipe Majority Holders.

     6. Definition of Eligible Stockholders. The definition of the term “Eligible
Stockholders” for purposes of Sections 3.2 and 3.3 of the Original Agreement, as amended by
this Amendment, is hereby amended to mean any Stockholder holding at least 100,000 Shares (as
adjusted for stock splits and on an as-converted basis) as of the Amendment Date and as of the date
of the Offer.

     7. Modification or Amendment. Section 4.9 of the Original Agreement is hereby amended
to read, in its entirety, as follows:

     4.9 Modification or Amendment. Neither this Agreement nor any provision hereof
can be modified, amended, changed, discharged or terminated except by an instrument in
writing, signed by at least a majority of the issued and outstanding shares of Common Stock
(on an as-converted basis); provided, that (x) Sections 1.1(b)(i),
1.2(b) and 1.3(a) may not be modified, amended, changed, discharged or
terminated without the written consent of FTV, Sections 1.1(b)(iii), 1.2(c)
and 1.3(b) may not be modified, amended, changed, discharged or terminated without
the written consent of Kiphart, Sections 1.1(b)(ii), 1.2(d) and
1.3(d) may not be modified, amended, changed, discharged or terminated without the
written consent of TrustWave Majority Holders, Sections 1.1(b)(iv), 1.2(e)
and 1.3(c) may not be modified, amended, changed, discharged or terminated without
the written consent of MBK, and Sections 1.1(b)(v), 1.2(g), 1.3(g)
and 1.3(h), may not be modified, amended, changed, discharged or terminated without
the written consent of the SecurePipe Majority Holders, and (y) Section 2.1 may not
be modified, amended, changed, discharged or terminated without the written consent of the
holders of at least 66 2/3% of the then outstanding shares of Series A Preferred, Section
2.2 may not be modified, amended, changed, discharged or terminated without the written
consent of TrustWave Majority Holders and Section 2.3 may not be modified, amended,
changed, discharged or terminated without the written consent of MBK; provided
further that, any such amendment, modification, change, discharge, termination or
waiver that would adversely affect the rights hereunder of any Stockholder in its capacity
as a Stockholder, without similarly affecting the rights hereunder of all Stockholders of
such class, in their capacities as Stockholders of such class, shall not be effective as to
such Stockholder without its prior approval. The inclusion of additional

- 3 -

 

Persons as parties to this Agreement pursuant to a counterpart signature page or
joinder agreement approved by the Company shall not require an amendment to this Agreement.

     8. No Other Amendments. Except as expressly amended by this Amendment, all of the
terms and provisions of the Original Agreement shall remain in full force and effect.

     9. Counterparts. This Amendment may be executed by facsimile and in counterparts,
each of which shall be an original, but all of which together shall constitute one instrument.

[Signature Page Follows]

- 4 -

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the
Amendment Date.

	 	 	 	 	 	 	 	 	 

	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TRUSTWAVE HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Robert McCullen	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	     Name:
	 	Robert McCullen	 	 
	 

	 	 	 	     Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	STOCKHOLDERS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Financial Technology Ventures II (Q), L.P.	 	 
	 	 	By:	 	Financial Technology Management II, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Richard N. Garman	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	     Name:
	 	Richard N. Garman	 	 
	 

	 	 	 	     Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Financial Technology Ventures II, L.P.	 	 
	 	 	By:	 	Financial Technology Management II, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Richard N. Garman	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	     Name:
	 	Richard N. Garman	 	 
	 

	 	 	 	     Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Richard Kiphart	 	 
	 	 	 	 	 
	 	 	Richard Kiphart	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ David Valentine	 	 
	 	 	 	 	 
	 	 	David Valentine	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Joseph L. Patanella	 	 
	 	 	 	 	 
	 	 	Joseph L. Patanella	 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 
	 	 	 
	 	                                              /s/ Phillip J. Smith
 	 
	 	Phillip J. Smith 	 
	 	MBK Ventures, LLC 	 
	 
	 	By:  	                                              /s/ Robert McCullen
 	 
	 	 	      Name:  	Robert McCullen 	 
	 	 	      Title:  	Manager 	 
	 
	 	[SECUREPIPE HOLDERS]

 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 	 	 	 	 

	 	 	ARGENTUM CAPITAL PARTNERS II, L.P.

By: Argentum Partners II, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Walter Barandiaran-	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PRISM OPPORTUNITY FUND IV, L.P.

By: POF Partners SBIC, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Robert A. Funkel	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	THE PRODUCTIVITY FUND IV, L.P.

By: First Analysis Management Company IV, 
L.L.C., its General Partner

By: First Analysis Venture Operations and 

Research, L.L.C., its Member

By: First Analysis Corporation, its Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Howard S. Smith	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	THE PRODUCTIVITY FUND IV ADVISORS FUND, L.P.

By: First Analysis Management Company IV, 

L.L.C., its General Partner

By: First Analysis Venture Operations and 

Research, L.L.C., its Member

By: First Analysis Corporation, its Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Howard S. Smith	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	FA PRIVATE EQUITY FUND IV, L.P.

By: FA Private Equity Management IV, 

L.L.C., its General Partner

By: First Analysis Private Equity Management 

Company IV, L.L.C., its Managing Member

By: First Analysis Venture Operations and 

Research, L.L.C., its Managing Member

By: First Analysis Corporation, its Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Howard S. Smith	 	 
	 

	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 

	 	 	/s/ Marvin Lader	 	 
	 	 	 	 	 
	 	 	Marvin Lader	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ James Macdonald	 	 
	 	 	 	 	 
	 	 	James Macdonald	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Jason Penn	 	 
	 	 	 	 	 
	 	 	Jason Penn	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Arch Moesta	 	 
	 	 	 	 	 
	 	 	Arch P. Moesta	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Dan Sterling	 	 
	 	 	 	 	 
	 	 	Dan Sterling	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Susan Sterling	 	 
	 	 	 	 	 
	 	 	Susan Sterling	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Art Roldan	 	 
	 	 	 	 	 
	 	 	Art Roldan	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Lawrence Levine	 	 
	 	 	 	 	 
	 	 	Lawrence Levine	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Lawrence Levine	 	 
	 	 	 	 	 
	 	 	Comet Capital LLC

Lawrence Levine, Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Daniel T. Moesta	 	 
	 	 	 	 	 
	 	 	Daniel T. Moesta	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Maxwell Guy and Cynthia Diane Morgan 

Revocable Trust dated November 15, 2002	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Maxwell Guy	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Georgy Milliken, Trustee Milliken Family Trust	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ George Miliken	 	 
	 

	 	 	 	 	 	 	 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 	 	 	 	 

	 	 	/s/ Michael Kiefer	 	 
	 	 	 	 	 
	 	 	Michael Kiefer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Purdy Family 2000 Trust, dated February 29, 2000	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Allen R. Purdy, Trustee	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Wonder Trust and Abundance Trust	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Shannon C. Kiklenny, Trustee of Abundance Trust	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Kathleen A. Currey, Trustee of Wonder Trust	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	The Billow Family Trust, dated May 10, 1999	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ [illegible signature]	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Charles A. Higdon	 	 
	 	 	 	 	 
	 	 	Charles A. Higdon	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Wayne C. Hardwick	 	 
	 	 	 	 	 
	 	 	Wayne C. Hardwick	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Sally P. Hardwick	 	 
	 	 	 	 	 
	 	 	Sally P. Hardwick	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Delois S. Morgan	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Nancy A. D’Onofrio	 	 
	 	 	 	 	 
	 	 	Nancy A. D’Onofrio	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Richard C. Conrad	 	 
	 	 	 	 	 
	 	 	Richard C. Conrad	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Barbara J. Conrad	 	 
	 	 	 	 	 
	 	 	Barbara J. Conrad	 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

	 	 	 	 	 	 	 	 	 

	 	 	/s/ Kendall Risselada	 	 
	 	 	 	 	 
	 	 	Kendall Riss	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ John Silva	 	 
	 	 	 	 	 
	 	 	John Silva	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Elizabeth Breslin	 	 
	 	 	 	 	 
	 	 	Elizabeth Breslin	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Maxwell Guy and Cynthia Diann
Morgan 

Revocable Trust, dated November 15, 2002	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Maxwell Morgan, Trustee	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	George Milliken, Trustee Milliken Family Trust	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ George Milliken	 	 
	 

	 	 	 	 	 	 	 	 

SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT

 

 

EXHIBIT D

List of SecurePipe Major Holders

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]