THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Penson Worldwide, Inc. (PNSN)

5/18/2006 424B4 Information

Private placement of equity

5% Stockholders, directors and executive officers

Since January 2002, we have raised capital primarily through the sale of our common stock and Series A and Series B Preferred Stock, including the following sales to holders of more than 5% of our common stock and to our directors and executive officers:

• we sold 18,601 shares of common stock at $2.688 per share and 155,472 shares of common stock at $3.216 per share to Roger J. Engemoen, the Chairman of our board of directors.

• we sold 18,601 shares of common stock at $2.688 per share and 124,377 shares of common stock at $3.216 per share to William D. Gross, one of our directors.

• we sold 19,642 shares of common stock at $2.688 per share and 11,607 shares of common stock at $3.216 per share to David M. Kelly, one of our directors.

• we sold 18,660 shares of common stock at $2.688 per share to Philip A. Pendergraft, Chief Executive Officer of the Company and one of our directors.

• we sold 19,642 shares of common stock at $2.688 per share and 7,773 shares of common stock at $3.216 per share to James S. Dyer, one of our directors. Of the shares purchased by Dr. Dyer, 21,287 are held by Austin Trust Company FBO James Dyer IRA and 6,129 shares are held by Austin Trust Company FBO James Dyer Rollover IRA.

On June 9, 2004, TCV V, L.P. and TCV Member Fund, L.P. (the TCV Funds) purchased a total of 1,360,544 shares of Series A Preferred Stock for a total cost of $12.8 million and 1,296,768 shares of Series A Preferred Stock for a total of $12.2 million on August 31, 2004. The rights and preferences of the Series A Preferred Stock are described under “Description of capital stock—Preferred stock.” John Drew, one of our directors, is a member of Technology Crossover Management V, L.L.C., which is the general partner of each of the TCV Funds. As a result of these transactions, the TCV Funds collectively became a holder of greater than 5% of our stock. On September 30, 2005 the TCV Funds purchased a total of 939,009 shares of Series B Preferred Stock for a total cost of $10.0 million. The rights and preferences of the Series B Preferred Stock are described under “Description of capital stock—Preferred stock.”

Other transactions

Promissory notes

On December 6, 2001, one of the companies within SAMCO Division entered into a promissory note in the principal amount of $5.0 million with Service Lloyds Insurance Company (Service Lloyds). In January 2003, we purchased the SAMCO Division (as further described in “Certain relationships and related transactions”), and this note is now included in notes payable in the consolidated statement of financial condition. Service Lloyds is owned by the Gray Family, which for this purpose includes J. Kelly Gray, JoAnn Gray Smith, Janey Gray Trowbridge, and The Gray Family Trust who collectively hold 3,341,250 shares of the Company’s common stock. Mr. Gray is also Chairman and President of Service Lloyds. Mr. Engemoen was formerly an officer and director of Service Lloyds until he resigned on March 31, 2006. Interest on the note accrues at an annual rate of 8% from the date of the note until the maturity date of November 1, 2006. As of December 31, 2005, the outstanding balance under this note was $1.0 million. In connection with this note, a majority of the shares of common stock of Penson Worldwide, Inc. are currently pledged as security.

In addition to the outstanding Service Lloyds note dated December 6, 2001, Penson entered into previous promissory notes in favor of Service Lloyds, none of which are currently outstanding, including: a note dated July 31, 1997 in the principal amount of $2.0 million with a maturity date of October 1, 2004, and a note dated August 15, 1997 in the principal amount of $5.0 million with a maturity date of October 1, 2004.

On June 26, 2003, Call Now, Inc. entered into a convertible promissory note in the principal amount of $6.0 million with Penson. On December 23, 2003, Call Now, Inc. entered into a promissory note in the principal amount of $0.6 million with Penson. On December 23, 2003, Thomas R. Johnson, one of our directors, entered into a convertible promissory note in the principal amount of $0.05 million with Penson. Interest on these convertible notes accrued at a rate of 5% above the brokers call rate, which approximated 9% at December 31, 2004. These notes were converted to 1,378,523 shares of common stock on June 30, 2005 at a conversion price of $4.824 per share, pursuant to the terms of the note. Upon acquiring this note, Call Now, Inc. became a holder of greater than 5% of our stock. Thomas R. Johnson, one of our directors, is the President, Chief Executive Officer and a member of the board of directors of Call Now, Inc.

On June 30, 2003, Philip A. Pendergraft, Chief Executive Officer of the Company and one of our directors, entered into a convertible promissory note in the principal amount of $250,000 with Penson. Interest on this convertible note accrued at a rate of 5% above the brokers call rate, which approximated 9% at December 31, 2004. This note was converted to 51,824 shares of common stock on June 30, 2005 at a conversion price of $4.824 per share, pursuant to the terms of the note.

On June 30, 2003, the Koslow/Ratner Trust (an entity controlled by Andrew B. Koslow, Senior Vice President and General Counsel of the Company) entered into a convertible promissory note in the principal amount of $50,000 with Penson. Interest on this convertible note accrued at a rate of 5% above the brokers call rate, which approximated 9% at December 31, 2004. This note was converted to 10,365 shares of common stock on June 30, 2005 at a conversion price of $4.824 per share, pursuant to the terms of the note.

Personal guarantees

Pursuant to the $32 million term loan from Guaranty Bank, dated April 30, 2001, as amended on September 30, 2005, four of our directors, Roger J. Engemoen, Jr., William D. Gross, Philip A. Pendergraft and Daniel P. Son executed Guaranty Agreements dated December 31, 2002, as reaffirmed by the September 30, 2005 amendment to the Guaranty Bank loan agreement. Under the Guaranty Agreements, the foregoing guarantors’ respective liabilities are limited as follows:

Guarantor

Roger J. Engemoen, Jr. $ 1,408,000 William D. Gross $ 864,000 Philip A. Pendergraft $ 864,000 Daniel P. Son $ 864,000

None of the above persons has been compensated by the Company for executing the Guaranty Agreements. We believe that the foregoing transactions were on terms no less favorable to us than could be obtained from unaffiliated third parties.

Certain relationships and transactions

Christine Pendergraft, daughter of Philip A. Pendergraft, Chief Executive Officer of the Company and one of our directors, is currently an employee of the Company and has earned total compensation of $53,208, $55,125 and $61,954 in 2003, 2004 and 2005, respectively.

Certain subsidiaries of the Company have entered into property leases in the ordinary course of business with Service Life & Casualty Insurance Company (Service Life), a private company owned by the Gray Family, which includes J. Kelly Gray, JoAnn Gray Smith, Janey Gray Trowbridge, and The Gray Family Trust who collectively hold 3,341,250 shares of the Company’s common stock. Mr. Gray is also Chairman, President and Chief Executive Officer of Service Life. Payments under these leases total approximately $275,000 per year.

In September 2003, SAMCO Capital Markets, one of the businesses within the SAMCO division, and William D. Gross, a director, acquired a 25% interest in Service Capital Partners, LP (SCP), the general partner of Service Equity Partners, LP (SEP), a private equity fund. As general partner, SCP committed to provide 1% of the capital to SEP. In June 2005, SCP accepted final subscriptions of approximately $89 million, and as a result, SCP committed to provide $897,000 of capital to SEP. Both SAMCO Capital Markets and William D. Gross each committed to invest its prorata share of this amount of approximately $224,000 or 25%. In addition, in June 2004, SAMCO Capital Markets and William D. Gross, committed to invest $250,000 in SEP. In April 2005, Philip A. Pendergraft, Chief Executive Officer of the Company and director, committed to invest $200,000 in SEP. In April 2005, James S. Dyer, one of our directors, and his wife Kathryn A. Dyer together committed to invest $75,000 in SEP. Also, in June 2004, Service Lloyds and Service Life each individually committed to invest $4,483,450 in SEP. In 2005, Ronald G. Steinhart, one of our directors, committed to invest $100,000 in SEP.

Other information

Some of our directors and officers and their affiliates have from time to time maintained brokerage accounts with us directly or indirectly through our correspondents, and we may extend margin credit to these individuals or entities through these accounts and cash balances in these accounts may earn interest. All such accounts are established in the ordinary course of business and are on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable accounts we maintain with our correspondents and their customers. In no case has the amount of payments we have received from an entity affiliated with any of our officers or directors in connection with such an account exceeded five percent of our gross revenues or the other entity’s gross revenues for the year in which it held that account.

Registration rights

For information on registration rights we have granted to some of our officers and directors, please see “Description of capital stock—Registration rights.”

SAMCO Division and sale or split off transaction

While our core business is focused on providing securities-processing infrastructure products and services to the global securities and investment industry, we have in the past acquired and operated other lines of business that are not part of our core business. From 1995 through September 2000, our predecessor entity operated certain non-core businesses in the securities industry comprised of fixed income underwriting, sales and trading, investment banking, public finance, research, and institutional and high net worth sales, as well as retail brokerage and registered investment advisory businesses and the offering of private equity funds. We refer to the businesses which comprise these non-core operations as the SAMCO Division.

In September 2000, in contemplation of an initial public offering, our predecessor entity distributed all of the shares representing the SAMCO Division to its shareholders on a pro-rata basis in what we believe was a tax-free distribution. As a result of this distribution, the results of the SAMCO Division are shown as discontinued operations in our financial statements for the period in 2000 prior to the restructuring.

Following our decision not to proceed with an initial public offering at that time, we reacquired the SAMCO Division from all of our stockholders who had been stockholders at the time of the distribution in September 2000 on a pro-rata basis in January 2003 for no consideration. Since then, the businesses comprising the SAMCO Division have been operated by a number of direct and indirect wholly-owned subsidiaries of Penson.

We have determined to focus on our core business as a public company and that the businesses within the SAMCO Division would not be appropriate operations for us as a public company. Accordingly, on March 2, 2006, our Board of Directors approved the disposal by sale of the SAMCO Division, and the assets and liabilities of SAMCO have been classified as held for sale in our consolidated statements of operations. While the SAMCO Division is currently available for sale, there is no specific sale transaction currently under negotiation. In the event that a sale does not otherwise occur prior to the closing of this initial public offering, it is our intention in connection and concurrently with this public offering, to effect a restructuring so as to split off the SAMCO Division from Penson. It is possible, however, that we may elect to complete the reorganization in advance of the initial public offering, particularly if SAMCO Holdings elects to exercise its option to purchase the Keefe Entities discussed below prior to completion of the initial public offering. In any event, the SAMCO Division will either be sold or split off prior to the closing of this offering.

In order to effect the sale of the SAMCO Division or, in the alternative, the restructuring, we will reorganize the SAMCO Division along with certain related business operations that we acquired subsequent to January 2003 (which now operate within the SAMCO Division), and transfer substantially all of the assets and liabilities associated with the SAMCO Division to a newly-formed holding company (known as SAMCO Holdings) and its wholly-owned subsidiaries. In addition to the transfer of substantially all of the assets and liabilities of the SAMCO Division, if we effect the restructuring we will also make a capital contribution to SAMCO Holdings. The stock of SAMCO Holdings will then be exchanged for an aggregate of 1,041,667 shares of Penson common stock. The capital contribution to SAMCO Holdings would be in an amount equal to the difference between the net book value of the SAMCO Division as of December 31, 2005 and the value of the 1,041,667 shares of Penson common stock to be exchanged. In the event of a restructuring, the Penson common stock will be valued, for these purposes, at the initial offering price per share of Penson stock in the initial public offering. At an initial public offering price of $17.00 per share, we would transfer approximately $7.2 million in cash to SAMCO on the date of the split off. To prepare for the possibility of a restructuring, the opportunity to exchange Penson common stock for stock in SAMCO Holdings was offered to all Penson stockholders of record as of February 7, 2006 on a pro rata basis, although stockholders were allowed to elect to exchange additional shares or less than their full pro rata share or to decline to participate at all. Penson has structured this split off transaction with the intent that it will be treated as a tax-free transaction for Penson, SAMCO and participating stockholders, although no tax opinion has been obtained. Among other requirements, to be treated as tax-free it is necessary for the holders of a majority of the outstanding shares of Penson to own a majority of the outstanding shares of SAMCO immediately following the split off. Our determination was based on our review of the relevant tax regulations regarding this type of transaction and the specific structure selected. If the transaction were determined to be taxable, Penson would recognize taxable gain equal to the excess of the value received by Penson, in the form of returned Penson shares, over the tax basis in the assets of SAMCO. Because of the nature of the SAMCO assets, particularly the large proportion of cash, we do not believe any such taxable gain would result in a significant tax liability for Penson.

Among the assets held by the SAMCO Division are securities representing minority interests in certain private companies, known as the Keefe Entities. In the possible split off transaction, the minority interests held in the Keefe Entities would be transferred to SAMCO Holdings. Additionally, SAMCO Holdings has entered into a Purchase Option Agreement with the other members of the Keefe Entities pursuant to which SAMCO Holdings has an option to acquire the remaining equity interests in the Keefe Entities. If exercised, this option would result in the creation of a new holding company called Keefe SAMCO Holdings, Inc. The stock of SAMCO Holdings would be exchanged for stock of Keefe SAMCO with SAMCO Holdings becoming a wholly owned subsidiary of Keefe SAMCO Holdings. Simultaneously with this exchange the other members of the Keefe Entities would exchange their equity interests in the Keefe Entities for stock of Keefe SAMCO Holdings, such that the Keefe Entities would also become wholly owned subsidiaries of Keefe SAMCO Holdings. The amount of Keefe SAMCO Holdings stock to be issued to the members of the Keefe Entities (other than SAMCO Holdings) would be between 17.25 and 19.99 per cent of the total issued stock of Keefe SAMCO Holdings. The decision to exercise the option is in SAMCO Holdings’ discretion, though it is subject to a number of conditions precedent in favor of the other members of the Keefe Entities and Keefe SAMCO Holdings. Principal among these are a requirement that the reorganization to split off the SAMCO Division have occurred and that the tangible common equity of Keefe SAMCO Holdings after the exercise of the option will be at least $13.75 million. SAMCO Holdings has until September 30, 2006 to decide whether or not to exercise this option. SAMCO Holdings will not exercise the option prior to completion of the split off transaction in any event. Following the sale or split off, Penson and SAMCO Holdings will be operated independently, but in the event of a split off the SAMCO Holdings businesses will, at least for a transitional period, have continued operational support from Penson, through a transitional services agreement which will provide for certain shared facilities, a sublease of approximately 18,000 square feet of office space in Dallas, Texas occupied by the SAMCO Holdings businesses, and certain shared administrative functions. These services will be provided on a cost pass-through basis. In the event the restructuring is completed in lieu of a sale, the SAMCO Holdings businesses will also continue to maintain clearing agreements with Penson. In addition, because the split off is only available to Penson stockholders, following the split off there would be substantial common ownership between Penson and SAMCO Holdings. Messrs. Engemoen, Gray and Gross, directors of Penson, have indicated that they intend to participate in the exchange offer if it is consummated and, as a result, they would control a significant portion of SAMCO Holdings following the split off. Mr. Engemoen will serve as our Chairman and as the Chairman of SAMCO Holdings, and Mr. Gross would serve as a director of Penson and a director of SAMCO Holdings. Messrs. Engemoen and Gross will be employees of SAMCO Holdings.