<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-1)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 5)
The WMF Group, Ltd.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
929289106
-------------------------
(CUSIP Number)
COPY TO:
Tami E. Nason, Esq. Larry J. Rowe, Esq.
Charlesbank Capital Partners, LLC Ropes & Gray
600 Atlantic Avenue One International Place
Boston, MA 02210 Boston, MA 02110
(617) 619-5400 (617) 951-7000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 10, 2000
----------------------------------------------------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [_].
Page 1 of 7 Pages
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SCHEDULE 13D
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CUSIP No. 929289106 Page 2 of 7 Pages
- ----------------------- ---------------------
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Demeter Holdings Corporation
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Massachusetts
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SOLE VOTING POWER
7
NUMBER OF 5,164,483 shares (see Item 5)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
----
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 5,164,483 shares (see Item 5)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
----
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,164,483 shares
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
47.0%
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TYPE OF REPORTING PERSON*
14
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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SCHEDULE 13D
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CUSIP No. 929289106 Page 3 of 7 Pages
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Phemus Corporation
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Massachusetts
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 281,419 shares (see Item 5)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
----
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 281,419 shares (see Item 5)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
----
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
281,419 shares
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.6%
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TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
------------
The WMF Group, Ltd.
-------------------
Amendment No. 5
---------------
This Amendment No. 5 hereby amends the initial Schedule 13D filed on July
10, 1998, Amendment No. 1 to the initial Schedule 13D filed on September 25,
1998, Amendment No. 2 to the initial Schedule 13D filed on January 11, 1999,
Amendment No. 3 to the initial Schedule 13D filed on February 2, 1999, and
Amendment No. 4 to the initial Schedule 13D filed on April 5, 1999.
Item 4. Purpose of Transaction.
----------------------
Item 4 is amended by adding the following thereto:
On May 10, 2000, the Issuer, Prudential Mortgage Capital Company, LLC, a
Delaware limited liability company (the "Parent") and Prudential Mortgage
Capital Acquisition Corp., a Delaware corporation that is a wholly-owned
subsidiary of Parent (the "Purchaser") entered into an Agreement and Plan of
Merger (the "Merger Agreement"). Under the terms of the Merger Agreement, the
Purchaser has agreed to commence a tender offer to purchase for cash all of the
issued and outstanding shares, $.01 par value per share, of the Issuer (the
"Common Stock") at a price of $8.90 per share (the "Tender Offer").
Contemporaneously with the execution of the Merger Agreement, Parent
entered into a stockholders agreement (the "Stockholders Agreement") with
Demeter, Phemus and certain other holders of the Common Stock listed on Schedule
A thereto (Demeter, Phemus, and the Stockholders listed on such Schedule A are
collectively referred to as the "Principal Stockholders"). Pursuant to the
Stockholders Agreement, each of Demeter and Phemus have agreed to tender all
shares of the Common Stock beneficially owned by them in the Tender Offer. The
Stockholders Agreement also provides for, among other things, the agreement of
each Principal Stockholder to cause all shares of Common Stock beneficially
owned by such Principal Stockholder (except as otherwise set forth in the
Stockholders Agreement) to vote in favor of the adoption of the Merger Agreement
and the transactions contemplated thereby and to vote against any Acquisition
Proposal (as defined in the Merger Agreement), any amendment to the Issuer's
certificate of incorporation or by-laws or other proposal, which transaction,
amendment or proposal would be reasonably likely to impede, frustrate, prevent
or nullify the Merger or the Merger Agreement or any other transactions
contemplated by the Merger Agreement. Each Principal Stockholder has agreed not
to transfer, or enter into any arrangement with respect to any transfer of, any
of such Principal Stockholder's Common Stock or to enter into any voting
arrangement in connection with any Acquisition Proposal and agreed not to commit
or agree to take any of the foregoing actions other than transfers to such
Principal Stockholder's Affiliates (as defined in the Stockholders Agreement)
provided that such Affiliates agree to be bound by the terms of the Stockholders
Agreement. The Stockholders Agreement will terminate upon the earlier of (i)
the Effective Date (as defined in the Merger Agreement) and (ii) the date upon
which the Merger Agreement is terminated in accordance with its terms.
A copy of the Merger Agreement has been filed with the Securities and
Exchange Commission (the "SEC") by the Issuer as Exhibit 2.2 to the current
Report on Form 8-K of the Issuer dated May 10,
Page 4 of 7 Pages
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2000. The description of the Merger Agreement is qualified by reference to the
Merger Agreement as filed with the SEC. A copy of the Stockholders Agreement has
been filed by Demeter and Phemus as Exhibit D to this Amendment No. 5. The
description of the Stockholders Agreement is qualified by reference to the
Stockholders Agreement as so filed.
Item 5. Interest in Securities of the Issuer.
------------------------------------
Item 5, paragraph (a) is amended in its entirety to read as follows:
(a) Demeter is the beneficial owner of 5,164,483 shares of the Issuer's
Common Stock (approximately 47.0% of the shares of Common Stock outstanding)
(calculated assuming 10,989,321 shares of Common Stock outstanding based on
10,959,321 shares outstanding as reported in the Issuer's most recent filing
with the SEC plus options for 30,000 shares owned by Demeter which have either
vested or will vest within 60 days from the date of this Amendment No. 5). The
shares of Common Stock reported herein as beneficially owned by Demeter include
20,000 shares of Common Stock that Demeter may acquire at any time upon exercise
of options to purchase such shares. 10,000 of such options are exercisable at a
price of $9.15 per share and 10,000 of such options are exercisable at a price
of $6.00 per share. Demeter also owns an option to acquire 10,000 shares of
Common Stock which has not vested and is exercisable at a price of $5.75 per
share. If the transactions contemplated by the Merger Agreement are consummated
in accordance with their terms, all of Demeter's outstanding options to purchase
the Issuer's Common Stock, whether vested or unvested, will be canceled in
exchange for a cash payment by Purchaser equal to (i) the product of the total
number of shares of the Issuer's Common Stock subject to such option and (ii)
the excess of the Tender Offer price of $8.90 per share over the exercise price
of such option. Phemus is the beneficial owner of 281,419 shares of the
Issuer's Common Stock (approximately 2.6% of the shares of Common Stock
outstanding) (calculated assuming 10,989,321 of Common Stock outstanding based
on 10,959,321 shares outstanding as reported in the Issuer's most recent filing
with the SEC plus options for 30,000 shares owned by Demeter which have either
vested or will vest within 60 days from the date of this Amendment No. 5). If
the transactions contemplated by the Merger Agreement and the Stockholders
Agreement are consummated in accordance with their terms, Demeter and Phemus
will ultimately be the beneficial owners of no shares of the Issuer's Common
Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
---------------------------------------------------------------------
to the Securities of the Issuer.
-------------------------------
Item 6 is amended by adding the following thereto:
Reference is made to Item 4 above for a description of the Merger
Agreement and the Stockholders Agreement.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Item 7 is amended by adding the following thereto:
Exhibit D-- Stockholders Agreement dated as of May 10, 2000 among Prudential
Mortgage Capital Company, LLC and the stockholders listed on
Schedule A attached thereto.
Page 5 of 7 Pages
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Signature
---------
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: May 10, 2000
DEMETER HOLDINGS CORPORATION
By: /s/ Tami E. Nason
----------------------------------
Name: Tami E. Nason
Title: Authorized Signatory
PHEMUS CORPORATION
By: /s/ Tami E. Nason
----------------------------------
Name: Tami E. Nason
Title: Authorized Signatory
Page 6 of 7 Pages
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EXHIBIT INDEX
- -------------
Exhibit
Number Description
- ------ -----------
A* Information Concerning Reporting Persons'
Directors and Executive Officers
B* Stock Purchase Agreement, dated as of
October 16, 1998, among the Issuer,
Demeter, Phemus, Capricorn and HPCH
C* Standby Purchase Agreement, dated as of
October 16, 1998, among the Issuer,
Demeter, Phemus and Capricorn
D Stockholders Agreement dated as of
May 10, 2000 among Prudential Mortgage
Capital Company, LLC and the stockholders
listed on Schedule A attached thereto
- ---------------
* Previously filed with Amendment No. 2 to the initial Schedule 13D filed on
January 11, 1999.
Page 7 of 7 Pages
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of May 10, 2000, among Prudential
Mortgage Capital Company, LLC, a Delaware limited liability company ("Parent")
and the holders listed on Schedule A attached hereto (each, a "Stockholder" and,
collectively, the "Stockholders") of shares of common stock, par value $0.01 per
share (the "Shares") of The WMF Group, Ltd., a Delaware corporation (the
"Company").
R E C I T A L S:
WHEREAS Parent, Prudential Mortgage Capital Acquisition Corp., a
Delaware corporation that is a wholly-owned subsidiary of Parent (the
"Purchaser") and the Company propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (as the same may be amended or supplemented,
the "Merger Agreement"), providing for the merger of the Purchaser with and into
the Company (the "Merger"), upon the terms and subject to the conditions set
forth in the Merger Agreement;
WHEREAS the execution and delivery of this Agreement by the parties
hereto is a condition precedent to Parent's willingness to enter into the Merger
Agreement;
WHEREAS each Stockholder owns the number of Shares set forth opposite
such Stockholder's name on Schedule A attached hereto (such Shares, together
with any other shares of capital stock of the Company acquired by such
Stockholders after the date hereof and during the term of this Agreement
(including, without limitation, through the exercise of any stock options,
warrants or similar instruments), being collectively referred to herein as the
"Subject Shares");
WHEREAS, Parent has undertaken and will continue to undertake
substantial expenses in connection with the negotiation and execution of the
Merger Agreement and the subsequent actions necessary to consummate the
transactions contemplated therein; and
WHEREAS, capitalized terms used herein without definition shall have
the respective meanings specified therefor in the Merger Agreement;
NOW, THEREFORE, to induce Parent to enter into, and in consideration
of its entering into, the Merger Agreement, and in consideration of the premises
and the
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representations, warranties and agreements contained herein, the parties hereto
agree as follows:
A G R E E M E N T:
1. Representations and Warranties of Each Stockholder. Each
Stockholder hereby, severally and not jointly, represents and warrants to Parent
as of the date hereof in respect of himself, herself or itself as follows:
(a) Authority. Such Stockholder has all requisite power and
authority to enter into this Agreement and to perform its obligations
hereunder. This Agreement has been duly and validly authorized, executed
and delivered by such Stockholder and constitutes the valid and binding
obligation of such Stockholder enforceable against such Stockholder in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights and by the effect of general
principles of equity. Neither the execution and delivery by such
Stockholder of this Agreement nor the performance by such Stockholder of
its obligations hereunder will violate or conflict in any material respect
with, result in a breach of any material provision of or constitute a
default under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust or any material license,
franchise, permit, lease, contract, agreement or other instrument,
commitment or obligation to which such Stockholder is a party or by which
such Stockholder is bound.
(b) The Subject Shares. Such Stockholder is the record and
beneficial owner of and has valid title to, the Subject Shares set forth
opposite such Stockholder's name on Schedule A attached hereto, free and
clear of any claims, liens, encumbrances and security interests whatsoever.
Except to the extent set forth in footnotes 1, 2, 3 and 4 to Schedule A
attached hereto, such Stockholder does not own, of record or beneficially,
any shares of capital stock of the Company other than the Subject Shares
set forth opposite such Stockholder's name on Schedule A attached hereto.
Such Stockholder has the sole right to vote such Subject Shares, and none
of such Subject Shares is subject to any voting trust or other agreement,
arrangement or restriction with respect to the voting of such Subject
Shares, except as contemplated by this Agreement.
2. Representation and Warranty of Parent. Parent hereby represents and
warrants to each Stockholder that it has all requisite power and authority to
enter into this
2
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Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly authorized, executed and delivered by Parent and
constitutes the valid and binding obligation of Parent enforceable against it in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general applicability relating to or affecting
the enforcement of creditors' rights and by the effect of general principles of
equity. Neither the execution and delivery by Parent of this Agreement nor the
consummation by Parent of the transactions contemplated hereby will: (a) violate
or conflict in any material respect with, result in a breach of any material
provision of, constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, result in the termination or in
a right of termination of, accelerate the performance required by or benefit
obtainable under, result in the vesting, triggering or acceleration of any
payment or other obligations pursuant to, or result in there being declared
void, voidable, subject to withdrawal, or without further binding effect, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed
of trust or any material license, franchise, permit, lease, contract, agreement
or other instrument, commitment or obligation to which Parent is a party, by
which it or any of its properties are bound, or under which it or any of its
properties are entitled to a benefit; (b) other than the filings required under
the HSR Act or any Exchange Act filings, require any consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Entity; or (c) violate in any material respect any laws applicable to Parent.
3. Covenants of Each Stockholder. Until the termination of this
Agreement in accordance with Section 7, each Stockholder severally and not
jointly agrees as follows:
(a) At any meeting of the stockholders of the Company called to
vote upon the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with
respect to the Merger and the Merger Agreement is sought, such Stockholder
shall vote (or cause to be voted) its Subject Shares in favor of the
adoption by the Company of the Merger Agreement (as it may be amended from
time to time, provided that such amendment is not adverse to such
Stockholder) and the approval of the terms thereof and each of the
transactions contemplated thereby. Any vote cast in accordance with this
Section 3(a) or in accordance with Section 3(b) shall be cast in such
manner as will ensure that such vote is duly counted for purposes of
determining whether a quorum is present and for purposes of determining the
result of such vote.
(b) At any meeting of the stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which such
Stockholder's vote, consent or
3
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other approval is sought, such Stockholder shall vote (or cause to be
voted) its Subject Shares against any (i) Acquisition Proposal or (ii) any
amendment of the Company's certificate of incorporation or by-laws or other
proposal, which transaction or amendment or other proposal would be
reasonably likely to impede, frustrate, prevent or nullify the Merger or
the Merger Agreement (as it may be amended from time to time, provided such
amendment is not adverse to such Stockholder), or any of the other
transactions contemplated by the Merger Agreement or change in any manner
the voting rights of the Shares. Such Stockholder further agrees not to
enter into any agreement inconsistent with the foregoing.
(c) Such Stockholder shall not, prior to the earliest of (i) the
Effective Time and (ii) the termination of the Merger Agreement in
accordance with its terms, (x) sell, transfer, give, pledge, assign or
otherwise dispose of (including by gift) (collectively, "Transfer"),
consent to any Transfer of, or enter into any contract, option or other
arrangement with respect to the Transfer of any or all of such
Stockholder's Subject Shares or any interest therein or (y) enter into any
voting arrangement, whether by proxy, voting agreement or otherwise, in
connection with any Acquisition Proposal and agrees not to commit or agree
to take any of the foregoing actions other than Transfers to its Affiliates
provided that such transferee agrees to be bound by the terms hereof, and
Transfers pursuant to the terms of Section 3(d).
(d) In the event that Parent, Purchaser, or any affiliate thereof
conducts a tender offer in accordance with the Merger Agreement, such
Stockholder shall validly tender such Stockholder's Subject Shares and
shall not withdraw Subject Shares so tendered.
(e) Until after the earlier to occur of the Merger being
consummated or the Merger Agreement being terminated, such Stockholder,
solely in its capacity as stockholder, shall use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done,
and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other transactions
contemplated by the Merger Agreement (as it may be amended from time to
time, provided such amendment is not adverse to such Stockholder).
(f) Such Stockholder, solely in its capacity as stockholder, shall
not take any action which would restrict, limit or frustrate in any way the
transactions contemplated by this Agreement.
4
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4. Further Assurances. (a) From time to time, at any party's request
and without further consideration, each other party shall execute and deliver
such additional documents and take all such further action as may be reasonably
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
(b) By its execution of this Agreement, (i) each Stockholder
acknowledges that it has been afforded the opportunity to consult with its legal
counsel and financial advisors with respect to its investment decision to
execute this Agreement and (ii) each Stockholder acknowledges that it has been
afforded the opportunity to discuss the Merger Agreement with representatives of
Parent. Each Stockholder further acknowledges that it has otherwise investigated
this matter to its full satisfaction and will not seek rescission or revocation
of this Agreement or seek to withdraw or revoke any vote, irrevocable proxy or
irrevocable instruction delivered by it or on its behalf in connection
therewith.
5. Certain Events. Each Stockholder agrees that this Agreement and the
obligations hereunder shall attach to such Stockholder's Subject Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Subject Shares shall pass, whether by operation of law or
otherwise, including without limitation such Stockholder's heirs, guardians,
administrators or successors. In the event of any stock split, stock dividend,
merger, reorganization, recapitalization or other change in the capital
structure of the Company affecting the Shares, or the acquisition of additional
Shares or other voting securities of the Company by any Stockholder, the number
of Subject Shares listed in Schedule A beside the name of such Stockholder shall
be adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional Shares or other voting securities of the Company issued
to or acquired by such Stockholder.
6. Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties without the
prior written consent of the other parties, except that Purchaser may assign, as
contemplated by Section 10.5 of the Merger Agreement, in its sole discretion,
any and all of its rights, interests and obligations hereunder to Parent or any
other affiliate of The Prudential Insurance Company of America. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
7. Termination. This Agreement, and all rights and obligations of the
parties hereunder shall terminate upon the earlier of (a) the Effective Time and
(b) the date upon which the Merger Agreement is terminated in accordance with
its terms provided that if the Merger
5
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Agreement has been terminated for any reason, Sections 6, 7, 8, 9 and 10 shall
survive for one year following such termination.
8. General Provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder shall be
in writing and shall be deemed given if hand delivered or sent by overnight
courier (providing proof of delivery) to Parent in accordance with Section
10.4 of the Merger Agreement and to the Stockholders at their respective
addresses set forth on Schedule A attached hereto (or at such other address
for a party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include," "includes"
or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
(d) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more of the counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that each party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law thereof.
6
<PAGE>
9. Enforcement. Each Stockholder agrees that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
Each Stockholder accordingly agrees that Parent shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the Southern District of New York or in a New York
state court, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, Parent and each Stockholder (a)
consent to submit such party to the personal jurisdiction of any Federal court
located in the Southern District of New York or any New York state court in the
event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (b) agree that such party will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (c) agree that such party will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court other than a
Federal court sitting in the state of New York or a New York state court and (d)
waive any right to trial by jury with respect to any claim or proceeding related
to or arising out of this Agreement or any of the transactions contemplated
hereby.
10. Public Announcements. Each party to this Agreement will consult
with the other party before issuing, and provide the other party with the
opportunity to review and comment upon, any press release or other public
statements with respect to the transactions contemplated by this Agreement that
expressly identifies any of the Stockholders, and shall not issue any such press
release or make any such public statement without the prior approval of the
other party, which approval shall not be unreasonably withheld.
11. Stop Transfer. Each Stockholder agrees with and covenants to
Parent that such Stockholder shall not request that the Company register the
transfer of any certificate or uncertificated interest representing any of such
Stockholder's Subject Shares, unless such transfer is made in compliance with
this Agreement. Each Stockholder agrees, with respect to any Subject Shares in
certificated form, that such Stockholder will submit to the Company, within ten
business days after the date hereof, the certificates representing such Subject
Shares in order for the Company to inscribe upon such certificates the following
legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS AGREEMENT DATED AS OF MAY 10, 2000, AND, PURSUANT TO THE TERMS
THEREOF, MAY NOT BE SOLD, TRANSFERRED, GIVEN, PLEDGED, ASSIGNED OR OTHERWISE
DISPOSED OF, AND ARE SUBJECT TO FURTHER RESTRICTIONS REGARDING, AMONG OTHER
THINGS, VOTING RIGHTS AND CERTAIN INDIRECT TRANSFERS AS SET FORTH IN SUCH
STOCKHOLDERS AGREEMENT." Each Stockholder agrees that within ten business days
after the date hereof, such Stockholder will no longer hold any Subject Shares,
whether certificated or uncertificated, in "street name" or in the name of any
nominee.
7
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IN WITNESS WHEREOF, Parent and the Stockholders have caused this
Agreement to be duly executed and delivered as of the date first written above.
Prudential Mortgage Capital Company, LLC
By: /s/ Michael A. Jameson
___________________________
Name: Michael A. Jameson
Title: Senior Vice President
Stockholders:
Phemus Corporation
By: /s/ Mark Rosen
___________________________
Name: Mark Rosen
Title: Authorized Signatory
Demeter Holdings Corporation
By: /s/ Mark Rosen
___________________________
Name: Mark Rosen
Title: Authorized Signatory
Capricorn Investors II, L.P.
By Capricorn Holdings, LLC,
its General Partner
By: /s/ Herbert S. Winokur, Jr.
___________________________
Name: Herbert S. Winokur, Jr.
Title: Manager
Capricorn Holdings, Inc.
By: /s/ Herbert S. Winokur, Jr.
___________________________
Name: Herbert S. Winokur, Jr.
Title: President
8
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Commonwealth Overseas Trading
By: /s/ Shekar Narasimham
________________________
Name: Shekar Narasimham
Title: President
Shekar Narasimhan
/s/ Shekar Narasimham
____________________________
John D. Reilly
/s/ John D. Reilly
____________________________
Mohammed A. Al-Tuwaijri
/s/ Mohammed A. Al-Tuwaijri
____________________________
J. Roderick Heller, III
/s/ J. Roderick Heller, III
____________________________
9
<PAGE>
SCHEDULE A
----------
Share Ownership
---------------
<TABLE>
<CAPTION>
Shares Underlying Stock Options
Name and Address -------------------------------------------
of Stockholder Existing Shares Vested Unvested Total
- -------------- --------------- ------ -------- ------
<S> <C> <C> <C> <C>
Demeter Holdings Corporation 5,134,483 20,000 10,000 5,164,483
c/o Charlesbank Capital Partners,
LLC
600 Atlantic Ave., 26th Floor
Boston, MA 02110
Phemus Corporation 281,419 -- -- 281,419
c/o Charlesbank Capital Partners,
LLC
600 Atlantic Ave., 26th Floor
Boston, MA 02110
Capricorn Investors II, L.P. (1) 1,730,532 10,000 5,000 1,745,532
30 East Elm St.
Greenwich, CT 06830
Capricorn Holdings, Inc. (1) 163,533 -- -- 163,533
30 East Elm St.
Greenwich, CT 06830
Shekar Narasimhan (2) 55,415 118,867 41,800 216,082
c/o WMF Group Ltd.
1593 Spring Hill Rd
Suite 400
Vienna, VA 22192
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Shares Underlying Stock Options
Name and Address -------------------------------------------
of Stockholder Existing Shares Vested Unvested Total
- -------------- --------------- ------ -------- ------
<S> <C> <C> <C> <C>
Commonwealth Overseas Trading 145,040 -- -- 145,040
Company Limited
c/o Ms. Donna Simmons
The Bank of N.T. Butterfield & Son,
Limited
65 Front Street
Hamilton, HMAX
Bermuda
Mohammed A. (3) -- 10,000 5,000 15,000
Al-Tuwaijri
P.O. Box 60212
Tamaneen Street
Riyadh 11545
Saudi Arabia
J. Roderick Heller III (4) 169,464 130,290 5,000 304,754
2445 M Street, N.W. Suite 460
Washington, DC 20037
John D. Reilly (5) 210,033 10,000 5,000 225,033
5335 Wisconsin Avenue, N.W.
Washington, DC 20015
</TABLE>
(1) Does not include 10,000 shares owned by two revocable trusts benefiting
members of Herbert S. Winokur, Jr.'s family.
(2) Excludes 20,000 shares of restricted stock subject to forfeiture unless
certain events occur and 145,040 shares of common stock owned by
Commonwealth Overseas Trading Company Limited, over which Mr. Narasimhan and
Mr. Al-Tuwaijri share voting power.
11
<PAGE>
(3) Excludes 145,040 shares of common stock owned by Commonwealth Overseas
Trading Company Limited, over which Mr. Narasimhan and Mr. Al-Tuwaijri share
voting power.
(4) Notwithstanding Section 1(b) of the Agreement, the number of Subject Shares
includes 35,000 shares owned by the Heller Family Foundation, a charitable
foundation of which Mr. Heller is an officer, and 6,000 shares held of
record by Mr. Heller as custodian for his minor granddaughter.
(5) Excludes 23,108 shares owned by a trust benefiting members of Mr. Reilly's
family of which Mr. Reilly has no voting or investment control.
12
