SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 15, 2000
NATIONAL DISCOUNT BROKERS GROUP, INC.
(Exact name of Registrant as specified in Charter)
Delaware 1-9480 22-2394480
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
10 Exchange Place Centre, 15th Floor, Jersey City, New Jersey 07302-3913
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(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (201) 946-2200
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Not Applicable
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(Former name and former address, as changed since last report
<PAGE>
Item 5. Other Events
National Discount Brokers Group, Inc. (the "Corporation") consummated
the sale of 3,000,000 shares of its common stock to DB U.S. Financial Markets
Holding Corporation ("DBUS") for $45.31 per share or $135,930,000 in gross
proceeds pursuant to the Securities Purchase Agreement (the "SPA") dated as of
May 15, 2000 with DBUS. A copy of the press release announcing the transaction
is filed as an exhibit to this Form 8-K. The SPA has previously been filed with
the Securities and Exchange Commissions by the Corporation.
As part of the sale (i) the Corporation and DBUS and certain other
parties entered into a Registration Rights Agreement ("Registration Rights
Agreement") covering the right of DBUS to have its shares of common stock of the
Corporation registered under the Securities Act of 1933, as amended; (ii) the
Corporation and Deutsche Bank AG ("DB") entered into a Stockholder Agreement
(the "Stockholder Agreement") providing for (A) the prohibition of certain sales
by the Corporation of Voting Capital Stock (as defined) or Common Stock
Equivalents (as defined) of the Corporation without the consent of DB, (B)
certain rights of DB to acquire Common Stock of the Corporation from the
Corporation in the event of issuances or sales of Common Stock of the
Corporation by the Corporation, (C) the appointment of a representative of DB to
the Board of Directors of the Corporation, (D) restrictions on the voting of
Voting Capital Stock of the Corporation held by DB, (E) restrictions on DB
acquiring shares of Voting Capital Stock of the Corporation in excess of the
Standstill Percentage (as defined), (F) the obligation of DB to sell shares of
Common Stock of the Corporation to the Corporation in certain circumstances, and
(G) restrictions on DB conducting proxy contests, or taking certain other
actions with regard to the Corporation; (iii) DB entered into an agreement
regarding the providing of certain research materials prepared by DB or certain
of its affiliates to customers of the Corporation or its subsidiaries in the
United States, and (iv) DB entered into an agreement with respect to the
Corporation or one of its affiliates being a distributor of initial public
offerings of equity securities in the United States if DB or one of its
affiliates is an underwriter of the securities and the internet is a
distribution channel.
DB and the Corporation also executed term sheets for joint ventures
between DB or one of and more of its affiliates and the Corporation or one or
more of its affiliates regarding the offering of on line discount brokerage in
Europe and the rest of the world other than Europe and the United States. There
can be no assurance the parties will enter into definitive agreements regarding
these joint ventures.
The foregoing is a summary of the Registration Rights Agreement and the
Stockholder Agreement and is not complete. The Registration Rights Agreement and
the Stockholder Agreement are filed as exhibits with this Form 8-K and are
incorporated herein by reference.
Statements made in this Form 8-K constitute forward-looking statements,
as that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements are subject to risks and uncertainties. These statements
generally are accompanied by words such as "intend", "anticipated", "believe",
"estimate", "expect", "should" or similar expressions. It should be understood
that these forward-looking statements are subject to a number of assumptions,
risks and uncertainties, that could cause actual results to differ materially
from these expressed in the forward-looking statements. These uncertainties and
risks include changes in laws and rules or regulations.
Item 7. Financial Statements and Exhibits
(c) Exhibits
10(a) Stockholder Agreement between National Discount Brokers Group,
Inc. and Deutsche Bank A.G. dated June 15, 2000.
10(b) Registration Rights Agreement among National Discount Brokers
Group, Inc., DB U.S. Financial Markets Holding Corporation,
Go2Net, Inc., Vulcan Ventures Incorporated and IAT Reinsurance
Syndicate, Ltd.
99(a) Press Release dated June 15, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
National Discount Brokers Group, Inc.
Registrant
Dated: June 16, 2000 By:
Name: Arthur Kontos
Title: President and Chief
Executive Officer
<PAGE>
EXHIBIT 10(a)
CONFORMED COPY
STOCKHOLDER AGREEMENT
between
NATIONAL DISCOUNT BROKERS GROUP, INC.
and
DEUTSCHE BANK AG
Dated as of June 15, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
REPRESENTATIONS AND WARRANTIES
<S> <C> <C>
1.1 Representations and Warranties of the Parties..................................................1
ARTICLE II
AFFIRMATIVE COVENANTS OF THE COMPANY
2.1 Prohibition on Certain Sales...................................................................1
2.2 Anti-Dilution Right............................................................................2
2.3 Board of Directors.............................................................................3
2.4 SEC Documents..................................................................................4
2.5 Voting.........................................................................................4
2.6 Limitation on Certain Poison Pills.............................................................4
2.7 Termination of Certain Provisions..............................................................5
ARTICLE III
ADDITIONAL AGREEMENTS
3.1 Restrictions on Transfer.......................................................................6
3.2 Permitted Transfers; Legends...................................................................6
3.3 Determination of Beneficial Ownership; Computation of Percentage Ownership.....................8
3.4 Reporting of Beneficial Ownership..............................................................8
3.5 Regulatory Compliance Cooperation..............................................................9
ARTICLE IV
DB STANDSTILL AGREEMENT
4.1 DB Standstill.................................................................................10
4.2 Obligation to Sell............................................................................11
4.3 No Solicitation...............................................................................12
4.4 Termination of Article........................................................................13
4.5 Notice of Termination.........................................................................14
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
(continued)
ARTICLE V
MISCELLANEOUS
<TABLE>
<CAPTION>
<S> <C> <C>
5.1 Survival of Representations...................................................................14
5.2 Parties in Interest...........................................................................14
5.3 Amendments and Waivers; Entire Agreement......................................................15
5.4 Notices.......................................................................................15
5.5 Expenses......................................................................................16
5.6 Counterparts..................................................................................16
5.7 Effect of Headings............................................................................16
5.8 Governing Law.................................................................................16
5.9 Assignment....................................................................................16
5.10 Waiver of Jury Trial..........................................................................16
5.11 Attorneys' Fees...............................................................................17
5.12 Right of First Offer on Registered Public Offerings...........................................17
5.13 Right of First Refusal on Private and Rule 144 Sales..........................................18
5.14 Termination; Availability of Remedies.........................................................19
5.15 Injunctive Relief.............................................................................19
ii
<PAGE>
</TABLE>
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT (this "Agreement") is entered into
as of June 15, 2000 by and among National Discount Brokers Group, Inc., a
Delaware corporation (the "Company"), and Deutsche Bank AG, a corporation
organized under the laws of the Federal Republic of Germany ( "DB", and together
with the Company, the "Parties"). Capitalized terms used herein without
definition shall have the meanings set forth in Annex A hereto.
WHEREAS, it is a condition precedent to the consummation of
the transactions contemplated by the Securities Purchase Agreement that the
Parties shall have entered into an agreement substantially in the form hereof.
NOW, THEREFORE, for and in consideration of the mutual
consents and agreements herein contained, the parties hereto do hereby covenant
and agree as follows:
Article I
REPRESENTATIONS AND WARRANTIES
1.1 Representations and Warranties of the Parties. Each of the Parties hereby
represents and warrants to the other on and as of the date hereof that: (i) such
Party is a corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation; (ii) such Party has all necessary power and
has taken all necessary corporate action required for the due authorization,
execution, delivery and performance by such Party of this Agreement; (iii) this
Agreement is a legal, valid and binding obligation of such Party, enforceable in
accordance with its terms, except that the enforceability hereof or thereof may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding may be brought; and (iv) none of the
execution, delivery or performance of this Agreement will violate, or result in
any breach of, or constitute a default under any provision of the constituent
documents of such Party, or any statute, rule or regulation, material contract
or lease, judgment, decree or other material document or instrument by which
such Party is bound or to which its assets are subject.
Article II
AFFIRMATIVE COVENANTS OF THE COMPANY
Without limiting any other covenant or provision hereof, the
Company covenants and agrees that it shall observe the following covenants on
and after the date hereof:
2.1 Prohibition on Certain Sales. The Company shall not, without the prior
written consent of DB,
(a) issue or sell any shares of its Voting Capital Stock or Common Stock
Equivalents to any Prospective Purchaser (other than to any Existing Holder) if
upon consummation of such issuance or sale, such Prospective Purchaser would
beneficially own in the aggregate, directly or indirectly, more than nineteen
and three-tenths percent (19.3%), but less than a majority, of the then
outstanding Voting Capital Stock of the Company calculated on a fully diluted
basis (excluding for purposes of such calculation any Permitted Holdings of such
Prospective Purchaser); provided that, for purposes of this subsection (a), the
issuance or sale of any Common Stock Equivalent shall be deemed to be the
issuance or sale, at the date such Common Stock Equivalent is first issued or
sold, of the Voting Capital Stock issuable upon the conversion, exercise or
exchange of such Common Stock Equivalent (without regard to any adjustment
required by the terms of such instrument, or the purchase and sale thereof, in
the event of an extraordinary corporate transaction or any subsequent issuance
of Voting Capital Stock or Common Stock Equivalents), as if the holder's rights
to convert, exercise or exchange such Common Stock Equivalent had matured, and
such holder had performed all obligations required to be performed in connection
with such conversion, exercise or exchange on or as of the date of issuance or
sale of such Common Stock Equivalent (such Common Stock Equivalents, "As
Converted"); or
(b) issue or sell any shares of its Voting Capital Stock or Common Stock
Equivalents to any Restricted Purchaser;
provided, however, that (i) none of the foregoing limitations shall apply to
any Excluded Sale; and (ii) in determining the beneficial ownership interest
in the Company of any Prospective Purchaser, the Company shall be entitled to
rely upon (A) documents filed by or on behalf of such Prospective Purchaser
pursuant to Section 13(d) of the Exchange Act; and (B) representations and
warranties made to the Company by such Prospective Purchaser, whether
individually or on behalf of any Group, in connection therewith.
2.2 Anti-Dilution Right.
-------------------
(a) If at any time the Company issues or sells any Common Stock (whether such
issuance is made in any U.S. or non-U.S. public or private capital market,
including without limitation upon the conversion, exercise or exchange of Common
Stock Equivalents, but not including the issuance or sale of Common Stock
(i) pursuant to any Compensation Plan; (ii) upon the exercise of stock
purchase or similar rights distributed pro rata to all holders of the Common
Stock; or (iii) as a pro rata distribution to all holders of Common Stock and,
to the extent required by the terms of any other class or series of the
Company's capital stock as a result of such pro rata distribution, any pro rata
distribution to the holders of such class or series of capital stock), then the
Company shall give prompt written notice thereof to DB. Each such notice shall
specify the number of shares issued or sold, the date of such issuance or sale
and the total number of shares outstanding, after giving effect to such issuance
or sale.
(b) At the option of DB, exercised by written notice to the Company given not
later than twenty (20) Business Days following the date of the Company's notice
pursuant to subsection (a) above, subject to the conditions set forth in this
Section 2.2 and Article IV hereof, the Company shall sell to DB (or any DB Group
Member specified by DB in such notice) an amount of newly-issued Common Stock
sufficient to maintain the Existing Position of the DB Holders, at a purchase
price per share equal to the Average Closing Price for the thirty (30) Business
Day period immediately preceding the date of DB's notice to the Company;
provided that the purchase by DB (or any such DB Group Member) of Common Stock
under this Section 2.2 shall be subject to
(i) the filing of any notice required by the HSR Act and the termination or
expiration of any applicable waiting period thereunder;
(ii) the receipt of any required consents or approvals, including without
limitation approval by the Applicable Exchange of an application for listing of
such Common Stock and any other approval required by applicable rules of the
Applicable Exchange;
(iii) if sold in a private placement, investment representations substantially
similar to those contained in Article III of the Securities Purchase Agreement;
and
(iv) receipt of any required consent or approval of any Governmental Entity
or other Person and/or the stockholders of the Company.
(c) Each Party agrees to, and to cause its Subsidiaries to, diligently pursue
all appropriate proceedings to obtain any consent or approval necessary to the
purchase by DB or the applicable DB Group Member of Common Stock in accordance
with subsection (b) above; provided that no Party shall be required to (i) seek
the approval of its stockholders more than once with respect to any issuance or
sale; or (ii) agree to any material limitations on its actual or contemplated
financial services business activities in order to satisfy or fulfill any
condition to the receipt of a required consent or approval of any Governmental
Entity.
(d) Nothing in this Section shall prohibit DB or any DB Group Member from
purchasing from Third Parties shares of Common Stock up to an amount sufficient
to maintain the Existing Position in lieu of purchasing newly-issued shares of
Common Stock from the Company.
(e) "Existing Position" shall mean the percentage ownership of DB and its
Affiliates calculated as provided in Section 3.3 hereof immediately prior to the
issuance of securities giving rise to DB's option to purchase; provided that the
numerator of the ratio constituting the Voting Percentage shall be the number of
votes the holder or holders of Investment Shares are entitled to cast in the
election of directors of the Company.
2.3 Board of Directors. The Company shall use its commercially reasonable
efforts to cause the election of, and to thereafter continue in office until
such time as the DB Holders cease to beneficially own in the aggregate, directly
or indirectly, Investment Shares representing ten percent (10%) or more of the
then outstanding Voting Capital Stock of the Company, a Person designated by DB,
who must be reasonably satisfactory to the Company and who shall agree to serve
as a director of the Company (the "DB Representative"), as a member of the Board
of Directors, including without limitation recommending the DB Representative
for election at a meeting of the Company's stockholders. The DB Representative
shall initially be Kevin E. Parker. The Certificate of Incorporation and/or
By-laws of the Company shall at all times provide for indemnification of the
directors and limitations on the liability of the directors as currently
provided or enhanced. The Company shall enter into a mutually acceptable
indemnity agreement with the DB Representative similar in all material respects
to the agreement that the Company has with its other directors as of the date
hereof, which agreement shall be amended in a manner similar to any amendment of
any such other agreement favorable to the beneficiary thereunder. The Company
shall reimburse the DB Representative for his reasonable travel expenses,
including the cost of airfare and any necessary meals and lodging, incurred in
connection with attending meetings of the Board of Directors. In addition, the
Company shall maintain at all times a compensation committee and an audit
committee of the Board of Directors. Unless DB Holders shall no longer
beneficially own in the aggregate, directly or indirectly, Investment Shares
representing ten percent (10%) or more of the then outstanding Voting Capital
Stock of the Company, the Company shall use its commercially reasonable efforts
to fill any vacancy in the directorship to be occupied by the DB Representative
solely by a nominee of DB reasonably satisfactory to the Company. In the event
that DB Holders cease to beneficially own in the aggregate, directly or
indirectly, Investment Shares representing ten percent (10%) or more of the then
outstanding Voting Capital Stock of the Company, the DB Representative shall
resign from the Board of Directors, and either (i) such vacancy may be filled by
a nominee of the Company appointed by the Board of Directors in accordance with
the By-laws of the Company; or (ii) the size of the Board of Directors may be
reduced and DB shall no longer be entitled to designate for election or
appointment a representative to the Board of Directors. The DB Representative
shall be entitled to attend in person or by telephone conference call any and
all meetings of the Board of Directors and all committees thereof to the extent
he is a member of such committee or is designated by the Board of Directors as
an observer thereof. It is agreed by the Parties that the DB Representative
shall, upon his appointment to the Board of Directors, be entitled to observe
all meetings of the compensation committee of the Board of Directors.
2.4 SEC Documents. So long as DB shall have rights to request registration of
any DB Registrable Securities (as defined in the Registration Rights Agreement),
the Company shall file on a timely basis all reports in accordance with Sections
13(a) and 15(d) of the Exchange Act with the Commission in order to maintain its
eligibility to register Investment Shares on Form S-3 (or any successor form
thereto) under the Securities Act. From time to time upon the request of DB the
Company will deliver to DB a certificate, signed by one of the Company's
principal officers, stating whether the Company has filed the reports required
to be filed to satisfy the condition set forth in Section (c) of Rule 144 under
the Securities Act (or any successor provision).
2.5 Voting. From the Closing Date and for so long as DB and its Affiliates shall
beneficially own in the aggregate, directly or indirectly, Investment Shares
representing ten percent (10%) or more of any class or series of the then
outstanding Voting Capital Stock of the Company and to the fullest extent
permitted by applicable Law, DB shall, and shall cause its Affiliates to, either
(a) vote, or execute consents with respect to, all shares of Voting Capital
Stock owned by them in favor of all proposals recommended by management of the
Company; or (b) if DB or such Affiliate intends not to vote, or execute consents
with respect to, its shares of Voting Capital Stock in favor of any such
proposal, vote, to execute consents with respect to, such shares of Voting
Capital Stock with respect to such proposal in the same proportion (for, against
and abstaining) as do all other holders of Voting Capital Stock of the Company,
in each case in any vote or consent solicitation of the holders of Voting
Capital Stock of the Company.
2.6 Limitation on Certain Poison Pills. The Company shall not approve or
implement any "poison pill" (or any other anti-takeover device not requiring the
approval of stockholders) in such a way as to prevent the effective exercise of
(a) the right of DB or any DB Group Member to acquire shares of Common Stock up
to the Standstill Percentage; or (b) the right of DB or any of its Affiliates to
commence a tender offer for the Company that includes as a condition thereof
(which condition may not be waived by DB or such Affiliate) that upon
consummation of such offer DB or such Affiliate shall own, directly or
indirectly, not less than eighty-one percent (81%) of the Voting Capital Stock
of the Company.
2.7 Termination of Certain Provisions.
---------------------------------
(a) In the event that definitive agreements with respect to the European Joint
Venture and the Worldwide Joint Venture shall not have been executed and
delivered by the Company or one of its Affiliates, on the one hand, and DB or
one of its Affiliates, on the other hand, on or prior to the first anniversary
of the Closing Date, then at any time thereafter (until the execution and
delivery of each such definitive agreement by each party thereto), the Company
may by written notice to DB terminate the provisions of Sections 2.1 and 2.2
hereof, whereupon such provisions shall be null and void and shall have no
further force or effect.
(b) In the event that
(i) DB or any of its Affiliates shall give notice of termination of any Joint
Venture Agreement to which it is a party in the absence of a Joint Venture
Termination Event with respect to the Company or any of its Affiliates party to
such Joint Venture Agreement;
(ii) there shall have occurred a Joint Venture Termination Event with respect to
DB or any of its Affiliates party to any Joint Venture Agreement;
(iii) DB or any of its Affiliates shall have sold, transferred, assigned or
otherwise disposed of any interest in any Investment Shares otherwise than (A)
as a result of a Change in Law (provided that DB or such Affiliate shall have
used commercially reasonable efforts to comply with such Change in Law without
disposing of such Investment Shares); or (B) as required by Section 4.2 of this
Agreement;
(iv) upon the sale by DB or any such Affiliate of any Investment Shares as a
result of a Change in Law (provided that DB or such Affiliate shall have used
commercially reasonable efforts to comply with such Change in Law without
disposing of such Investment Shares), DB Holders beneficially own in the
aggregate, directly or indirectly, Investment Shares representing less than ten
percent (10%) of the then outstanding Common Stock; or
(v) DB shall cease to own all of its Investment Shares, directly or
indirectly, exclusively through DB Group Members;
then, at any time thereafter, the Company may by written notice to DB terminate
the provisions of Sections 2.1 and 2.2 hereof, whereupon such provisions shall
be null and void and shall have no further force or effect. (c) In the event
that
(i) DB or any of its Affiliates shall have willfully breached the provisions
of Section 3.4, 4.1 or 4.3 hereof; and
(ii) the Company shall have delivered to DB a notice in writing that specifies
in detail the matter constituting such breach and such action as may be
reasonably requested by the Company to effect its cure (taking account of any
restrictions on such action under applicable Law), and such breach shall not
have been cured by DB or waived in writing by the Company within ninety (90)
days following the delivery of such notice;
then the Company may by written notice to DB terminate the provisions of
Sections 2.1 and 2.2 hereof and the provisions of Section 2.3 hereof that are
binding upon the Company, whereupon such provisions shall be null and void and
shall have no further force or effect.
Article III
ADDITIONAL AGREEMENTS
3.1 Restrictions on Transfer. Until the earlier to occur of (a) the termination
of Article IV hereunder in its entirety and (b) the first date on which DB owns
Investment Shares representing less than ten percent (10%) of the then
outstanding Voting Capital Stock of the Company, neither DB nor any of its
Affiliates shall offer, sell, assign, transfer or otherwise dispose of all or
any portion of the Investment Shares owned by it to any Third Party if, upon the
consummation of any such offer, sale, assignment, transfer or other disposition,
such Third Party or any Group of which such Third Party is a member would
beneficially own ten percent (10%) or more of the then outstanding Voting
Capital Stock (other than Permitted Holdings), unless the acquiror of the
Investment Shares shall have agreed to be bound by the provisions of this
Section and Article IV of this Agreement, and the transferor shall have complied
with all provisions of this Agreement applicable to such Transfer, including
without limitation Section 3.2 hereof.
3.2 Permitted Transfers; Legends.
----------------------------
(a) The Company agrees that it will permit (i) a sale or transfer of Purchased
Shares or other securities of the Company by any DB Holder to any DB Group
Member, if such DB Group Member agrees in writing to be subject to the terms of
this Agreement as if it were an original party hereto; and (ii) subject to the
limitations contained in Section 5.12 hereof, a sale or other transfer of any of
the Purchased Shares if in either event such sale or other transfer is exempt
from the registration requirements of, or is covered by an effective
registration statement under, the Securities Act and in compliance with
applicable state securities or "blue sky" laws, and if requested, DB or the DB
Holder transferring Common Stock pursuant thereto has provided in accordance
herewith an opinion of counsel that such transfer is exempt from the
registration requirements of the Securities Act ("Permitted Transfers"). In
order to assure compliance with the Securities Act and any applicable state
securities or "blue sky" laws, DB agrees, for so long as DB or any of its
Affiliates shall be an "affiliate" as defined in Rule 144(a)(1) under the
Securities Act, (i) in the case of any Common Stock or Common Stock Equivalents
issued by the Company or Voting Capital Stock of the Company held by DB and its
Affiliates, other than Excluded Shares ("Restricted Securities") in the form of
book-entry securities, to take commercially reasonable measures to segregate
such Restricted Securities on the books and records of DB or the applicable
Affiliate and to prevent the resale thereof otherwise than in accordance with
this Agreement; and (ii) in the case of any Restricted Securities in the form of
certificated securities, to deliver such certificates or other instruments
representing such Restricted Securities to the Company in exchange for
certificates representing such Restricted Securities bearing a legend
substantially in the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or any state securities laws, and sale or transfer
hereof may not be effected except in accordance with the
registration requirements of the Act and any applicable state
securities laws or an applicable exemption therefrom. The
shares represented by this certificate are subject to certain
Standstill and Transfer Restriction provisions set forth in
that certain Stockholder Agreement, dated as of June 15, 2000,
between the Company and Deutsche Bank AG, a copy of which may
be obtained from the Secretary of the Company at its principal
offices."
The Company agrees to instruct its transfer agent to issue certificates without
the foregoing legend in connection with any sale of the securities represented
by such certificates or other instruments either pursuant to an effective
registration statement or in compliance with Rule 144 or the resale provisions
of Regulation S under the Securities Act.
(b) DB shall, and shall cause each Affiliate to, prior to any proposed Transfer
of any Restricted Securities, give written notice to the Company of such
holder's intention to effect such Transfer and to comply in all other respects
with the provisions of this Section. Each such notice shall describe the manner
and circumstances of the proposed Transfer. Upon the request of the Company, the
holder delivering such notice shall deliver a written opinion, addressed to the
Company, of counsel for such holder, stating that in the opinion of such counsel
(which opinion and counsel shall be reasonably satisfactory to the Company),
such proposed Transfer does not involve a transaction requiring registration or
qualification of such Restricted Securities under the Securities Act or the
securities or "blue sky" laws of any state of the United States. Such holder
shall be entitled to effect the Transfer of such Restricted Securities in
accordance with the terms of the notice delivered to the Company, if the Company
does not reasonably object to such Transfer and request such opinion within
fifteen (15) days after delivery of such notice, or, if it requests such
opinion, does not reasonably object to such Transfer within fifteen (15) days
after delivery of such opinion. Each certificate or other instrument evidencing
the securities issued upon the transfer of any Restricted Securities (and each
certificate or other instrument evidencing any untransferred balance of such
Restricted Securities) shall bear the legend set forth in subsection (a) above
unless (i) in such opinion of counsel to the holder of the Restricted Securities
(which opinion and counsel shall be reasonably satisfactory to the Company)
registration of any future transfer is not required by the applicable provisions
of the Securities Act; or (ii) the Company shall have waived the requirement of
such legend.
Notwithstanding the foregoing provisions of this Section, the
restrictions imposed by this Section upon the transferability of any Restricted
Securities shall cease and terminate when (i) any such Restricted Securities are
sold or otherwise disposed of (A) pursuant to an effective registration
statement under the Securities Act; or (B) in a transaction contemplated by
subsection (a) above that does not require that the Restricted Securities so
transferred bear the legend set forth in subsection (a) above; or (ii) the
Company shall be reasonably satisfied that the requirements for transfer of such
Purchased Shares under Rule 144 under the Securities Act have been satisfied
(subject to the delivery of opinions as set forth above). Whenever the
restrictions imposed by this Section shall terminate, the holder of any
Restricted Securities as to which such restrictions have terminated shall be
entitled to receive from the Company, without expense, a new certificate not
bearing the restrictive legend set forth in subsection (a) above and not
containing any other reference to the restrictions imposed by this Section.
3.3 Determination of Beneficial Ownership; Computation of Percentage Ownership.
--------------------------------------------------------------------------
Except as otherwise required by Sections 2.1 and 2.2 and subsections
(b) and (c) of this Section, beneficial ownership of any security shall be
determined, and the percentage ownership of outstanding securities owned by any
Person shall be computed, in accordance with the provisions of Rule 13d-3 under
the Exchange Act (or any successor provision), as the same may be in effect from
time to time.
(a) For purposes of determining the beneficial ownership of Investment Shares
acquired, held or transferred by DB or any of its Affiliates, including without
limitation calculation of the effect of any proposed acquisition, holding or
transfer for purposes of determining the Standstill Percentage or compliance
with Article IV hereof, a Person shall be deemed to be the beneficial owner of
Investment Shares if that Person has the right to acquire beneficial ownership
thereof as provided in Rule 13d-3(d)(1)(i)(A), (B), (C) or (D) (or any successor
provision) at any time (rather than within 60 days).
(b) For purposes of determining the percentage of any Investment Shares
beneficially acquired, held or transferred by DB or any of its Affiliates,
including without limitation calculation of the effect of any proposed
acquisition, holding or transfer for purposes of determining the Standstill
Percentage or compliance with Article IV hereof, such percentage shall be a
ratio (the "Voting Percentage"), the numerator of which is the number of votes
the holder of such securities is entitled to cast in the election of directors
to the Board of Directors, and the denominator of which is the total number of
votes entitled to be cast by all holders of outstanding securities of the
Company in the election of directors to the Board of Directors.
(c) For purposes of determining the Standstill Percentage or compliance with
Article IV hereof, the higher of the determinations specified in subsections (b)
and (c) above shall apply.
3.4 Reporting of Beneficial Ownership. From time to time upon the Company's
request and, in any event, following the end of each fiscal quarter of the
Company, DB shall, promptly prepare and deliver to the Company a certificate (a
"DB Report") certifying as to (a) the amount of each class and/or series of
Voting Capital Stock and any Common Stock Equivalents beneficially owned by DB
and each such Affiliate that represent Investment Shares; and (b) each transfer
of Investment Shares effected since the Closing Date or, if any, the preceding
DB Report. The failure by DB to provide a DB Report within twenty (20) Business
Days of any written request therefor from the Company shall constitute a willful
breach of this provision.
3.5 Regulatory Compliance Cooperation.
---------------------------------
(a) In the event that the Board of Directors shall determine in good faith,
based upon, among other factors, the written advice of a nationally recognized
law firm with recognized competence in bank regulatory matters, that the Company
has a Regulatory Problem, then the Company shall so notify DB in writing,
specifying the basis for such Regulatory Problem and including the written
advice of such law firm. The Parties shall forthwith consult and cooperate fully
with each other to make all reasonable efforts (including entering into
additional agreements or adopting amendments to this Agreement) to obtain from
the relevant authorities any consent, approval or forbearance from proceedings
with respect thereto that may be reasonably necessary to avoid such Regulatory
Problem or any order adverse to the Company from being issued or to otherwise
cure the event or circumstances underlying the Regulatory Problem.
(b) If, notwithstanding such consultation and action by the Parties, the Board
of Directors determines in good faith that such Regulatory Problem remains
unresolved, DB shall take such action, other than the sale or other disposition
of the Investment Shares, as the Company may reasonably request by written
notice to DB (which notice shall specify the basis on which the Company has
determined that such Regulatory Problem remains unresolved), including without
limitation the exchange of all or a portion of any voting security then held by
DB (or any of its Affiliates), as mutually agreed by the Company and DB, on a
one-for-one basis for a non-voting security of or other non-voting economic
interest in the Company, which non-voting security or other non-voting economic
interest shall be identical in all respects to the voting security exchanged
therefor, except that it shall be non-voting and shall be convertible into a
voting security or other voting economic interest on such terms as determined by
the Parties in light of regulatory considerations then prevailing.
(c) If, notwithstanding such further action, (i) an order is issued by the
Relevant Governmental Entity, not subject to further internal review by such
Relevant Governmental Entity, under which the Company or any of its Subsidiaries
is or will be required to discontinue or divest any portion of its business or
refrain from taking any contemplated business opportunity closely related to its
then actual business, which portion of its business or business opportunity is,
in the good faith judgment of the Board of Directors, material to the Company
and its Subsidiaries taken as a whole; or (ii) the Board of Directors is advised
in writing by a nationally recognized law firm with recognized competence in
bank regulatory matters that the directors or officers of the Company are or
will be subject to materially increased liability in connection with the
performance of their duties for or on behalf of the Company, then DB shall (and
shall cause its Affiliates to) sell, transfer, assign or otherwise dispose of an
amount of Investment Shares (or any securities received in exchange therefor
pursuant to subsection (b) above) sufficient to resolve the Regulatory Problem
as promptly as may be reasonably practicable, taking account of any restrictions
on any such disposition required under applicable Law, including without
limitation Article 9 of the Uniform Commercial Code and the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder.
(d) The Parties agree that (i) they will keep each other fully informed of all
communications they or any of their Affiliates receive from any Relevant
Governmental Entity regarding the Investment Shares; and (ii) each Party will
allow the other Party, if the other Party so requests, to participate actively
in (A) any dealings, submissions or communications they may have with any such
regulatory authority regarding the same; and (B) any proceedings affecting the
same. In particular, the Parties agree that they will cooperate fully with each
other in making reasonable efforts to prevent any divestiture proceedings
relating to the Investment Shares.
(e) "Regulatory Problem" shall mean any set of facts or circumstances wherein,
because of the beneficial ownership of Investment Shares by DB or any of its
Affiliates, (i) any Governmental Entity having supervisory authority over banks,
financial institutions or financial holding companies (the "Relevant
Governmental Entity"), has asserted or has advised the Company or DB or any of
its Affiliates that it intends to assert that the Company is a subsidiary of DB
or any such Affiliate; and (ii) either (A) such Relevant Governmental Entity has
asserted or has advised the Company that the Company is or will be required to
discontinue or divest any portion of its business or to refrain from taking any
contemplated business opportunity closely related to its then actual business,
which portion of its business or business opportunity is, in the good faith
judgment of the Board of Directors, material to the Company and its Subsidiaries
taken as a whole; or (B) the directors or officers of the Company are or will be
subject to materially increased liability in connection with the performance of
their duties for or on behalf of the Company.
Article IV
DB STANDSTILL AGREEMENT
4.1 DB Standstill.
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(a) DB agrees that, without the prior approval of the Board of Directors, from
and after the Closing Date and for so long as this Article IV shall remain in
effect, DB shall not, and shall cause its Affiliates not to, acquire or hold
directly or indirectly, whether by purchase or otherwise, beneficial ownership
of any Voting Capital Stock of the Company if, after giving effect to such
acquisition, DB and its Affiliates would beneficially own in the aggregate,
directly or indirectly, Investment Shares representing a percentage ownership in
the Company in excess of the then applicable Standstill Percentage; provided,
however, that if DB or any of its Affiliates shall sell any Investment Shares
otherwise than as a result of a Change in Law (provided that DB or any such
Affiliate shall have used commercially reasonable efforts to comply with such
Change in Law without disposing of such Investment Shares), then the Standstill
Percentage shall be reduced to the percentage of the then outstanding Voting
Capital Stock of the Company represented by the remaining Investment Shares
beneficially owned, directly or indirectly, by DB and its Affiliates; and
provided, further, that in no event shall the Standstill Percentage be reduced
below ten percent (10%).
(b) A failure by DB to exercise its right to purchase additional Common Stock
pursuant to Section 2.2 hereof shall not constitute a "sale" for purposes of
this Section.
4.2 Obligation to Sell.
------------------
(a) DB agrees that if, during any fiscal quarter of the Company, the Company
effects the repurchase of any of its Common Stock (whether through an issuer
self-tender offer, private transactions, purchases in the market or otherwise),
then upon the written request of the Company, DB shall, and shall cause its
Affiliates to, sell, no later than the end of the fiscal quarter of the Company
next succeeding the fiscal quarter in which such repurchase was made, an amount
of Investment Shares sufficient to reduce the aggregate interest of DB and its
Affiliates in the Company to a level not in excess of the then applicable
Standstill Percentage; provided, however, that DB and its Affiliates shall not
be obligated to sell any Investment Shares to the Company or any other Person if
(i) the price per share offered to DB therefor (whether by the Company or such
other Person, as the case may be) shall be less than or equal to the average
price originally paid by DB or such Affiliate to acquire the Investment Shares
then owned by them;
(ii) such sale of Investment Shares would result in the liability of DB or the
applicable Affiliate to repay to the Company any profit received by DB or such
Affiliate upon such sale in accordance with Section 16 of the Exchange Act, in
which event DB or such Affiliate shall sell Investment Shares as required by
this Section no later than the end of the fiscal quarter of the Company next
succeeding the first date on which such sale may be effected without such
liability of DB or such Affiliate, subject always to clause (i) of this proviso;
or
(iii) DB reasonably believes that such sale could result in any violation of
Law, in which event DB or the applicable Affiliate shall sell Investment Shares
as required by this Section no later than the end of the fiscal quarter of the
Company next succeeding the first date on which such sale may be effected
without such violation of Law;
and provided further, that
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(x) the Company shall require a covenant identical in all
material respects to this Section 4.2 from each Prospective Purchaser
(other than any Existing Holder) to which the Company sells Common
Stock or Common Stock Equivalents, in one or a series of transactions,
if upon consummation of such sale, such Prospective Purchaser would
beneficially own, directly or indirectly, ten percent (10%) or more of
the then outstanding Voting Capital Stock of the Company (after giving
effect to such sale and assuming any Common Stock Equivalents then
outstanding to be As Converted), unless such sale is an Excluded Sale;
(y) in determining the beneficial ownership interest in the
Company of any Prospective Purchaser for purposes of this Section
4.2(a), the Company shall be entitled to rely upon (A) documents filed
by or on behalf of such Prospective Purchaser pursuant to Section 13(d)
of the Exchange Act; and (B) representations and warranties made to the
Company by such Prospective Purchaser, whether individually or on
behalf of any Group; and
(z) in the event the Company fails to obtain from any
Prospective Purchaser as required hereby the covenant contemplated in
this proviso or grants a waiver of compliance therewith without the
prior written consent of DB, then DB shall be relieved from its
obligations under this Section 4.2.
(b) If at any time DB and its Affiliates own, directly or
indirectly, an aggregate amount of Investment Shares in excess of the
then applicable Standstill Percentage whether as a result of a
repurchase by the Company of any of its Common Stock as described in
subsection (a) above or otherwise, to the fullest extent permitted by
applicable Law, DB shall, and shall cause its Affiliates to, either (A)
vote, or execute consents with respect to, all such excess Investment
Shares owned by them in favor of all proposals recommended by
management of the Company; or (B) if DB or such Affiliate intends not
to vote, or execute consents with respect to, such excess Investment
Shares in favor of any such proposal in the same proportion (for,
against and abstaining) as do all other holders of Voting Capital Stock
of the Company, in each case in any vote or consent solicitation of the
holders of Voting Capital Stock of the Company.
4.3 No Solicitation. DB agrees that except as expressly permitted by this
Agreement or the Related Agreements, without the prior approval of the Board of
Directors for so long as this Article IV shall remain in effect, it shall not,
nor shall it permit its Affiliates to,
(a) in any manner acquire, agree to acquire, or make any proposal to acquire,
any securities or assets of the Company or any of its Subsidiaries;
(b) propose to enter into, directly or indirectly, any merger or other
business combination transaction with the Company;
(c) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
Commission) to vote, or seek to advise or influence any Person with respect to
the voting of any securities of the Company or obtaining written consents under
any circumstances for a change in the directors or management of the Company, or
in connection with a merger or acquisition of the Company, or deposit any
securities of the Company in a voting trust or subject them to a voting
agreement or other agreement of similar effect;
(d) initiate, propose, or otherwise solicit any stockholder of the Company for
the approval of, or induce or attempt to induce any other person to initiate,
any stockholder proposal for a change in the directors or management of the
Company or in connection with a merger or acquisition of the Company;
(e) otherwise take any action, individually or jointly, with any Person or
Group to seek to control or influence the management, Board of Directors or
policies of the Company;
(f) take any action, alone or in concert with others, which could be deemed
to be an exercise of a controlling influence over the Company (within the
meaning of 12 U.S.C.Sect.1841(a)(2)(C) as interpreted by the Board of Governors
of the Federal Reserve System);
(g) advise, assist or encourage any such Person or Group in taking any action,
which it or they could not take individually under the terms of this Section;
provided, however, that the foregoing limitations shall not prevent DB from
acquiring, directly or indirectly, Investment Shares representing an ownership
interest in the Company up to and including the then applicable Standstill
Percentage or from conducting bona fide business activities involving Excluded
Shares.
4.4 Termination of Article.
----------------------
(a) If the Board of Directors shall approve
(i) a tender offer for a majority of the outstanding capital stock of the
Company;
(ii) the liquidation of the Company or sale of all or substantially all of
the assets of the Company to any Person;
(iii) a merger or consolidation of the Company with any Person pursuant to which
holders of the voting securities of the Company outstanding immediately prior to
the consummation of such transaction receive securities entitling the holders
thereof to cast less than a majority of the votes entitled to be cast for
election of the board of directors or similar body of the Person surviving such
merger or resulting from such consolidation; or
(iv) the issuance or sale to any Person or Group of any Voting Capital Stock
entitling such Person or Group to cast a majority of the votes for the election
of directors to the Board of Directors generally;
then DB may, by written notice to the Company, terminate the provisions of
Sections 2.5, 3.1, 3.4, 3.5, 4.1, 4.2 and 4.3 hereof, whereupon such provisions
and the provisions of Sections 2.1 and 2.2 hereof shall be null and void and
shall have no further force or effect.
(b) If (i) the Company shall have willfully violated the provisions of Section
2.1(a) hereof, including without limitation by the sale of Voting Capital Stock
or Common Stock Equivalents to an Existing Holder then acting as a member of a
Group or otherwise in concert with any Person to which the Company would not
otherwise have been permitted to sell such securities pursuant to Section 2.1
hereof; and (ii) DB shall have delivered to the Company written notice
specifying in detail the matter constituting such breach and such action as may
be reasonably requested by DB to effect its cure, and such breach shall not have
been cured by the Company or waived in writing by DB within ninety (90) days
following the delivery of such notice, then DB may, by written notice to the
Company, terminate the provisions of Sections 4.1, 4.2 and 4.3 hereof, whereupon
such provisions shall be null and void and shall have no further force or
effect.
(c) This Article IV shall automatically terminate (i) upon the commencement of a
tender offer by DB or any Affiliate of DB that includes as a condition thereof
(which condition may not be waived by DB or such Affiliate) that upon
consummation of such offer DB or such Affiliate shall own, directly or
indirectly, not less than eighty-one percent (81%) of the Voting Capital Stock
of the Company and Sections 2.1 and 2.2 hereof shall terminate simultaneously
with such commencement; and (ii) in the event that any Person other than the
Company or any of its Affiliates (determined as of the date hereof and including
the Existing Holders, but excluding DB and any of its Affiliates) acquires or
holds, directly or indirectly, whether by purchase or otherwise, beneficial
ownership of any Voting Capital Stock of the Company representing in the
aggregate a percentage ownership in the Company in excess of nineteen and
three-tenths percent (19.3%), other than Permitted Holdings and proxies
appointed by the Board of Directors in connection with any meeting of the
stockholders of the Company or stockholder consent actions initiated by the
Company.
4.5 Notice of Termination. Upon any action by the Board of Directors described
in Section 4.4(a) hereof, the Company shall as promptly as practicable notify DB
thereof. All of the provisions of this Article and each other provision of this
Agreement terminated pursuant to Section 4.4(a) or (c) hereof shall be
reinstated and shall apply in full force according to their terms (including
without limitation the terms of this Section) in the event that
(a) if the provisions of Sections 2.5, 3.1, 3.4, 3.5, 4.1, 4.2 and 4.3 hereof
and Sections 2.1 and 2.2 hereof shall have been terminated as a result of a
tender offer under Section 4.4(a) (i) above, such tender offer (as originally
made or as extended or modified) shall have terminated (without any securities
being accepted thereunder for purchase) prior to the commencement of a tender
offer by DB or any of its Affiliates that would have been permitted pursuant to
such Section 4.4(a) (i) as a result of such third-party tender offer;
(b) any tender offer by DB or any of its Affiliates (as originally made or as
extended or modified) that was permitted to be made in response to actions
specified in Section 4.4(a) (ii) through (iv) hereof shall have terminated
(without any securities being accepted thereunder for purchase);
(c) if the preceding provisions of this Article shall have terminated as a
result of Section 4.4(a) (ii) through (iv) hereof, the Board of Directors of the
Company shall have determined to rescind or abandon the previous action
described in Section 4.4(a) (ii) through (iv) hereof (and no such action shall
have closed); or
(d) if the provisions of Article IV and Sections 2.1 and 2.2 hereof shall have
terminated pursuant to Section 4.4(c), such tender offer (as originally made or
as extended or modified) shall have been terminated (without any securities
being accepted thereunder for purchase).
Article V
MISCELLANEOUS
5.1 Survival of Representations. The representations, warranties, covenants and
agreements made herein or in any certificates or documents executed in
connection herewith shall survive the execution and delivery hereof and the
Closing for a period of two (2) years, regardless of any investigation made by
or on behalf of either Party hereto or any of their respective Affiliates or
their respective officers, directors, employees or agents.
5.2 Parties in Interest. Except as otherwise set forth herein, all covenants,
agreements, representations, warranties and undertakings contained in this
Agreement shall be binding on and shall inure to the benefit of the respective
successors and permitted assigns of the Parties.
5.3 Amendments and Waivers; Entire Agreement. Amendments or additions to this
Agreement may be made and compliance with any term, covenant, agreement,
condition or provision set forth herein may be omitted or waived (either
generally or in a particular instance and either retroactively or prospectively)
upon the written consent of the Company and DB. This Agreement (including any
Annexes, Schedules and Exhibits hereto from time to time, which are an integral
part of this Agreement) constitutes the full and complete agreement of the
Parties with respect to the subject matter hereof. In particular, this Agreement
supersedes the letter of intent, dated March 27, 2000, between the Company and
Deutsche Bank Americas Holding Corporation.
5.4 Notices. All notices, requests, consents, reports and demands shall be in
writing and shall be hand delivered, sent by facsimile or other electronic
medium, or mailed, postage prepaid, to the Company or to DB at the address set
forth below or to such other address as may be furnished in writing to the other
Party hereto:
The Company: National Discount Brokers Group, Inc.
10 Exchange Place Centre
Jersey City, New Jersey 07302
Attention: President
Tel: (201) 946-2200
Fax: 201-946-4510
E-mail: [email protected]
with copy to: National Discount Brokers Group, Inc.
10 Exchange Place Centre
Jersey City, New Jersey 07302
Attention: General Counsel
Tel: 201-946-4482
Fax: 201-946-4510
E-mail: [email protected]
Deutsche Bank AG Deutsche Bank AG, New York Branch
31 West 52nd Street
New York, New York 10019
Attention: General Counsel
Tel: 212-469-8200
with copy to: Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Janet L. Fisher, Esq.
Tel: (212) 225-2472
Fax: (212) 225-3999
E-mail: [email protected]
All such notices, request, demands, consents and other
communications shall be deemed to have been duly given or sent five (5) days
following the date on which deposited in the U.S. mail, or on the date on which
delivered by hand, by facsimile transmission or e-mail (receipt confirmed), as
the case may be, and addressed as aforesaid.
5.5 Expenses. Each Party hereto will pay its own expenses in connection
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with the transactions contemplated hereby.
5.6 Counterparts. This Agreement and any exhibit hereto may be executed in
multiple counterparts, each of which shall constitute an original but all of
which shall constitute but one and the same instrument. One or more counterparts
of this Agreement or any exhibit hereto may be delivered via telecopier, with
the intention that they shall have the same effect as an original counterpart
hereof.
5.7 Effect of Headings. The article and section headings herein are for
convenience only and shall not affect the construction or interpretation hereof.
5.8 Governing Law. The Parties hereby agree that this Agreement, and the
respective rights, duties and obligations of the Parties hereunder, shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of laws thereunder. To the
fullest extent permitted by applicable Law, each of the Parties hereby (i)
irrevocably consents and agrees that any legal or equitable action or proceeding
arising under or in connection with this Agreement shall be brought exclusively
in the courts of the United States of America for the Southern District of New
York; and (ii) by execution and delivery of this Agreement, irrevocably submits
to and accepts, with respect to any such action or proceeding, for itself and in
respect of its properties and assets, for purposes of this Agreement, the
jurisdiction of the aforesaid courts, and irrevocably waives any objection to
venue in such courts.
5.9 Assignment. Neither DB nor the Company may assign or transfer any of its
rights or obligations pursuant to this Agreement without the express written
consent of the other.
5.10 Waiver of Jury Trial. Each of the Company and DB hereby expressly waives
its rights to a jury trial of any claim or cause of action based upon or arising
out of this Agreement. Each of the Company and DB also waives any bond or surety
or security upon such bond which might, but for this waiver, be required of any
Party. The scope of this waiver is intended to be all encompassing of any and
all disputes that may be filed in any court and that relate to the subject
matter of this Agreement, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
The Company and DB further warrant and represent that each of them has reviewed
this waiver with its legal counsel, and that each voluntarily waives its jury
trial rights following consultation with legal counsel. This waiver is
irrevocable and may only be modified by written amendment to this Agreement
signed by each of the Parties. In the event of litigation relating to this
Agreement, this Agreement may be filed as a written consent to a trial (without
a jury) by the court.
5.11 Attorneys' Fees. If any legal proceeding is initiated by any Party hereto
to enforce this Agreement or otherwise with respect to the subject matter of
this Agreement, the prevailing Party or parties shall be entitled to recover
reasonable attorneys' fees incurred in connection with any such proceedings.
5.12 Right of First Offer on Registered Public Offerings.
---------------------------------------------------
(a) Prior to any offer or sale by any DB Holder of any Investment Shares in a
public offering pursuant to an effective registration statement under the
Securities Act, DB shall give written notice (a "First Offer Notice") to the
Company of such desire to sell, which shall identify (i) the number of
Investment Shares to be sold; (ii) the nature of the transfer; and (iii) any
other material terms and conditions of the proposed offer or sale (other than
the proposed sale price). On and prior to the Solicitation Date with respect to
any Investment Shares, and following the Solicitation Date if DB shall have
given an Acceptance Notice with respect to such Investment Shares, DB shall not,
shall not permit any of its Affiliates to, and shall not authorize or permit any
of its or their representatives to, directly or indirectly, solicit or encourage
the submission of any proposal from any Third Party, participate in any
discussion or negotiations with any Third Party, or authorize, engage in or
enter any agreement or understanding with any Third Party, with respect to the
sale of such Investment Shares; provided, however, that the foregoing shall not
in any way limit the participation by any DB Holder in (i) a self-tender offer
by, or other sale to, the Company; (ii) any merger, consolidation, tender offer
or exchange offer relating to the Company; or (iii) any Permitted Transfer.
(b) The Company shall have five (5) Business Days following the delivery of the
First Offer Notice (the "Response Period") to notify DB in writing (such
notification, an "Offer to Purchase") of its offer, or an offer by any of its
Affiliates, to purchase in cash all (but not fewer than all) of the Investment
Shares referred to in the relevant First Offer Notice. During the Response
Period, if requested by the Company or any of its Affiliates, DB shall, and
shall cause the relevant DB Holder to, negotiate in good faith with the Company
or such Affiliate with respect to the terms of a proposed purchase of Investment
Shares by the Company or such Affiliate. Any Offer to Purchase shall set forth a
proposed cash purchase price for such Investment Shares (the "Company Price")
and the proposed closing date for the purchase and may include other material
terms and conditions of the proposed purchase. The Company shall not be
obligated to deliver an Offer to Purchase, and if an Offer to Purchase is not
given prior to the end of the Response Period, the Company shall be deemed to
have declined to purchase such Investment Shares.
(c) DB shall have five (5) Business Days following the delivery of an Offer to
Purchase to accept the offer made by the Company or any of its Affiliates to
purchase all (but not fewer than all) of the applicable Investment Shares on the
terms and subject to the conditions set forth in the Offer to Purchase by giving
the Company or such Affiliate written notice to that effect (a "First Offer
Acceptance Notice"). If DB gives a First Offer Acceptance Notice, the closing
for such transaction shall take place at a time and place reasonably acceptable
to the Company and DB. If DB does not give a First Offer Acceptance Notice, DB
shall be deemed to have rejected the offer set forth in the relevant Offer to
Purchase.
(d) If DB shall have complied with the foregoing provisions of this Section and
shall not have given an Acceptance Notice with respect to any Investment Shares,
DB and the relevant DB Holder may enter into a valid and binding underwriting or
purchase agreement with any Person with respect to all (but not fewer than all)
of the applicable Investment Shares within one hundred (100) days following the
effectiveness of the related registration statement and sell all (but not fewer
than all) of the Investment Shares pursuant to such agreement within one hundred
eighty (180) days of such effectiveness; provided that (i) the purchase price
for such Investment Shares in such sale is at least one hundred percent (100%)
of the related Company Price, if any; and (ii) the terms and conditions of such
sale are otherwise not materially worse for the DB Seller than those set forth
in the related Offer to Purchase; and provided further, that, if such
registration statement is being filed pursuant to Section 2(c) or 3 of the
Registration Rights Agreement, (x) such one hundred eighty (180) day period
shall be extended to the same extent as any period specified Section 6(a) of the
Registration Rights Agreement shall be extended; and (y) the Company shall
comply with all of its obligations under the Registration Rights Agreement with
respect to such registration. If DB or the applicable DB Holder shall not have
executed a Purchase Agreement with respect to such Investment Shares within such
one hundred (100) day period following the relevant Solicitation Date, or shall
not have completed a sale of all such Investment Shares within such one hundred
eighty (180) day period, DB and such DB Holder shall no longer be permitted to
sell such Investment Shares without again fully complying with all the
provisions of this Section, and all the restrictions contained in this Section
shall again be in effect with respect to such Investment Shares.
(e) The right of first offer set forth in this Section shall not apply to
any Permitted Transfer.
(f) The rights and obligations of the Company, on the one hand, and DB and its
Affiliates, on the other hand, with respect to the registration of sales of
Investment Shares under the Securities Act are set forth in the Registration
Rights Agreement, and this Section 5.12 shall not be construed to impose any
additional obligations on the Company to effect any such registration.
5.13 Right of First Refusal on Private and Rule 144 Sales.
----------------------------------------------------
(a) If any DB Holder proposes to sell, transfer or assign any of its Investment
Shares (i) in a private transaction; or (ii) in one or more sales pursuant to
Rule 144 under the Securities Act aggregating, in any three-month period, more
than one percent (1%) of the then outstanding Common Stock, then prior to such
sale, transfer or assignment, such DB Holder shall give written notice to the
Company (or its nominee) of such transfer, sale or assignment for purposes of
offering the Company the opportunity to purchase such Investment Shares, free
and clear of all Liens, on the same terms and conditions as set forth in such
offer to purchase (the "First Refusal Notice"), which shall identify (x) the
number of Investment Shares to be sold; (y) the nature of the transfer and, if
such transfer is to be effected in a private transaction, the name and address
of each prospective purchaser or transferee and the consideration to be paid by
each of them for the applicable Investment Shares; and (z) any other material
terms and conditions of the proposed offer or sale (including the proposed
aggregate sale price); provided, however, that the foregoing shall not in any
way limit the participation by any DB Holder in (i) a self-tender offer by, or
other sale to, the Company; (ii) any merger, consolidation, tender offer or
exchange offer relating to the Company; or (iii) any Permitted Transfer.
(b) If within two (2) Business Days following its receipt of the First Refusal
Notice, the Company does not notify such DB Holder in writing of its desire to
purchase all, but not fewer than all, of the Investment Shares on the same terms
and conditions as set forth in the First Refusal Notice (a "First Refusal
Acceptance Notice"), then such DB Holder may sell (i) not less than all of the
Investment Shares proposed to be sold in the First Refusal Notice; (ii) if in a
private transaction, to the prospective purchaser or transferee identified in
the First Refusal Notice; and (iii) for consideration and upon terms no less
advantageous to such DB Holder as identified in the First Refusal Notice. If the
Company gives a First Refusal Acceptance Notice, then the Company (and/or its
nominee) shall effect the purchase of the Investment Shares, including payment
of the purchase price (x) if the Investment Shares to be purchased and sold
constitute five percent (5%) or less of the Voting Capital Stock then
outstanding, not more than one (1) Business Day after delivery of such First
Refusal Acceptance Notice, (y) if the Investment Shares to be purchased and sold
constitute more than five percent (5%) of the Voting Capital Stock then
outstanding, not more than three (3) Business Days after delivery of such First
Refusal Acceptance Notice and, in each case, at such time such DB Holder shall
deliver to the Company (if applicable) the certificate(s) representing the
Investment Shares to be purchased by the Company, each certificate to be
properly endorsed for transfer or with duly executed stock powers.
(c) The right of first refusal set forth in this Section shall not apply to
any Permitted Transfer.
5.14 Termination; Availability of Remedies.
-------------------------------------
(a) This Agreement shall be terminable by DB upon a Change in Control of
the Company and may also be terminated:
(i) by mutual written consent of the Company and DB; or
(ii) if at any time DB and its Affiliates shall have ceased to beneficially own
in the aggregate, directly or indirectly, Investment Shares representing five
percent (5%) or more of the then outstanding Voting Capital Stock of the
Company, by written notice either from DB to the Company or from the Company to
DB.
(b) No termination of this Agreement or any provision hereof shall operate to
relieve any Party of any liability it may have incurred thereunder prior to such
termination.
(c) No exercise by any Party of any remedy expressly permitted hereunder shall
operate to preclude such Party from exercising any other remedy to which it may
be entitled under applicable Law.
5.15 Injunctive Relief. The Parties agree that money damages would be
insufficient to compensate the Company in the event of any violation of DB of
Section 4.1 hereof and that the Company shall be entitled to injunctive relief
against DB, including without limitation specific performance, to enforce DB's
compliance with its obligations under such Section. The Parties further agree
that money damages would be insufficient to compensate DB in the event of any
violation by the Company of Sections 2.1 and 2.2 hereof and that DB shall be
entitled to injunctive relief against the Company, including without limitation
specific performance, to enforce the Company's compliance with its obligations
under such Sections. The Parties hereby waive any requirement to post a bond in
connection with an application for injunctive relief hereunder.
<PAGE>
IN WITNESS WHEREOF, the Company and DB have caused this Agreement to be
duly executed and delivered by their representatives thereunto duly authorized
as of the date first above written.
NATIONAL DISCOUNT BROKERS GROUP, INC.
By: /s/ Arthur Kontos
Name: Arthur Kontos
Title: President and CEO
DEUTSCHE BANK AG
By: /s/ Thomas A. Curtis
Name: Thomas A. Curtis
Title: Attorney-in-Fact
<PAGE>
Schedule 2.1
<PAGE>
ANNEX A
DEFINITIONS TO THE
STOCKHOLDER AGREEMENT
between
NATIONAL DISCOUNT BROKERS GROUP, INC
and
DEUTSCHE BANK AG
Dated as of June 15, 2000
and
THE SECURITIES PURCHASE AGREEMENT
between
NATIONAL DISCOUNT BROKERS GROUP, INC
and
DB U.S. FINANCIAL MARKETS HOLDING CORPORATION
Dated as of May 15, 2000
<PAGE>
DEFINITIONS
As used in the Stockholder Agreement and the Securities
Purchase Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Act" shall have the meaning set forth in Section 3.2(a) of
the Stockholder Agreement.
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 promulgated under the Exchange Act. Notwithstanding the foregoing, no
Party (nor any Affiliate of such Party) shall be considered an Affiliate of
another Party (or any of its Affiliates).
"Applicable Exchange" shall mean, at the time of
determination, the principal national securities exchange or automated quotation
system on which the Company's equity securities are listed or admitted for
trading, including without limitation the NYSE and the Nasdaq National Market.
"As Converted" shall have the meaning set forth in Section
2.1(a) of the Stockholder Agreement.
"Average Closing Price" shall mean the average of the closing
sales prices, regular way, as reported on the NYSE for any day or period
specified (or, if the Common Stock ceases to be listed on the NYSE, on the
principal national securities exchange on which the Common Stock is then listed
or admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the Nasdaq National Market or, if the Common Stock is
not quoted on the Nasdaq National Market, the average of the closing bid and
asked prices for the Common Stock on such day in the over-the-counter market as
reported by Nasdaq or, if bid and asked prices for the Common Stock on each such
date shall not have been reported by Nasdaq, the average of the bid and asked
prices of the Common Stock for such day as furnished by any NYSE member firm
regularly making a market in the Common Stock selected for such purpose by the
Board of Directors) or, if no such quotations are available, the fair market
value of the Common Stock furnished by any NYSE member firm selected from time
to time by the Board of Directors for such purpose.
"Balance Sheet" shall have the meaning set forth in Section
2.7(a) of the Securities Purchase Agreement.
"Balance Sheet Date" shall have the meaning set forth in
Section 2.7(a) of the Securities Purchase Agreement.
"Board of Directors" shall mean the Board of Directors of the
Company, as from time to time constituted.
"Business Day" shall mean any day, other than a Saturday,
Sunday or a day on which the NYSE or banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
"Certificate of Incorporation" shall mean the Restated
Certificate of Incorporation of the Company, as the same may be amended or
restated from time to time.
"Change in Control" shall mean, with respect to any Target,
(i) any merger or consolidation of the Target in which the holders of the voting
securities of the Target outstanding immediately prior to such merger or
consolidation have the right to receive, upon consummation of such transaction
less than fifty percent (50%) of the outstanding voting securities of the
surviving entity; (ii) any sale, assignment, transfer or other disposition of
all or substantially all of the assets of the Target other than to an Affiliate
of the Target; or (iii) any transaction in which any Person, or any two or more
Persons acting as a group, and all Affiliates of the Person or Persons, who
prior to such time owned shares representing less than fifty percent (50%) of
the voting power at elections for the board of directors or similar governing
body of the Target, shall acquire, whether by purchase, exchange, tender offer,
merger, consolidation or otherwise, such additional voting securities of the
Target in one or more transactions, or series of transactions, such that
following such transaction or transactions, such person or group and Affiliates
beneficially own, fifty percent (50%) or more of the voting power at elections
for the board of directors or similar governing body; provided, however, that
the foregoing shall not apply to the grant of proxy voting rights to a Person
designated by the board of directors or similar governing body of the Target in
connection with any meeting of the owners of the voting securities of the
Target.
"Change in Law" shall mean any change in Law or in any
interpretation or application thereof by any Governmental Entity responsible for
the implementation or enforcement of such Law that (i) results in DB or any of
its Affiliates being prohibited from owning or holding all or any portion of the
Investment Shares; or (ii) would impose or result in material restrictions
(economic or other) on DB or such Affiliate if it would continue to own or hold
such Investment Shares.
"Closing" and "Closing Date" shall have the meanings set forth
in Section 1.2 of the Securities Purchase Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commission" shall mean the U.S. Securities and Exchange
Commission.
"Common Stock" shall have the meaning set forth in the
preamble to the Securities Purchase Agreement.
"Common Stock Equivalents" shall mean any security issued by
the Company convertible into, or exchangeable or exercisable for, Common Stock.
"Company" shall mean National Discount Brokers Group, Inc., a
Delaware corporation , its predecessors, successors and assigns, other than any
Person that becomes a successor or assign pursuant to any merger, consolidation,
sale of substantially all assets or similar extraordinary corporate transaction.
"Company Price" shall have the meaning set forth in Section
5.12(b) of the Stockholder Agreement.
"Compensation Plan" shall mean any compensatory arrangement
duly approved by the Board of Directors for the benefit of any of the directors,
officers or employees of, and natural persons who are consultants to, the
Company or any of its Subsidiaries.
"Date Compliant" shall have the meaning set forth in Section
2.13 of the Securities Purchase Agreement.
"DB" shall mean Deutsche Bank AG, a corporation organized
under the laws of Federal Republic of Germany, its predecessors, successors and
assigns.
"DB Group Member" shall mean DB and each direct and indirect
Wholly-Owned Subsidiary of DB.
"DB Holder" shall mean, at the applicable date of
determination, any DB Group Member that, as of such date, is the record and
beneficial owner of shares of Voting Capital Stock.
"DB List" shall mean a list of Persons agreed from time to
time in writing by DB and the Company.
"DB Report" shall have the meaning set forth in Section 3.4 of
the Stockholder Agreement.
"DB Representative" shall have the meaning set forth in
Section 2.3 of the Stockholder Agreement.
"EJV Territory" shall mean, with respect to the European Joint
Venture, the Territory as defined in the term sheet with respect to the European
Joint Venture.
"Encumbrance" shall mean any lien, mortgage, security
interest, pledge, restriction on transferability, defect of title or other
claim, charge or encumbrance of any nature whatsoever on any property or
property interest.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"European Joint Venture" shall mean a joint venture between
the Company and DB or one or more of their respective Affiliates with respect to
areas within the EJV Territory for the provision of on-line discount equity
brokerage services to retail investors in the EJV Territory.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Excluded Sale" shall mean the issuance or sale by the Company
of Voting Capital Stock or Common Stock Equivalents (including any Voting
Capital Stock issuable upon exercise, exchange or conversion thereof) (i) in a
bona fide public offering by the Company effected on an underwritten basis or
through a placement agent, including in any such case the sale to the
underwriter or placement agent; (ii) in a bona fide private placement intended,
through the use of procedures and documentation customary in widely-placed
private offerings (including, without limitation, road shows and the use of
preliminary and final offering memoranda), to result in a widely placed offering
by the Company; (iii) pursuant to an agreement binding on the Company, if such
agreement could have been fully performed on the execution date thereof without
violating the terms of the Stockholder Agreement; (iv) as a pro rata
distribution to all holders of Common Stock of the Company and, to the extent
required by the terms of any other class or series of the Company's capital
stock as a result of such pro rata distribution, any pro rata distribution to
the holders of such class or series of capital stock; (v) solely for purposes of
Sections 2.1(a), 2.1(b) and 4.2(a)(x) of the Stockholder Agreement in connection
with the bona fide acquisition by the Company of a business by means of a
merger, consolidation, binding exchange of securities or similar transaction in
which one or more classes of equity securities of the Target is required to be
registered under the Exchange Act and is in fact publicly held; (vi) solely for
purposes of Section 2.1(a) of the Stockholder Agreement and solely to the extent
necessary to permit a tax-free reorganization in accordance with the Code and
the rules and regulations thereunder, in connection with the bona fide
acquisition by the Company of a business by means of a merger, consolidation,
binding exchange of securities or similar transaction in which the equity
securities of the Target are not required to be registered under the Exchange
Act; and (vii) pursuant to any Compensation Plan.
"Excluded Shares" shall mean (i) Voting Capital Stock of the
Company attributable to DB or any such Affiliate as a result of any bona fide
investment management services provided by DB or any such Affiliate to any Third
Party, whether or not the ownership of such Voting Capital Stock is reportable
to the Commission, any other securities regulatory authority or any bank
regulatory authority under applicable Law; (ii) Voting Capital Stock of the
Company acquired by DB or any such Affiliate in the ordinary course of its bona
fide broker-dealer activities on behalf of Third Parties; (iii) Voting Capital
Stock of the Company acquired by DB or any such Affiliate as a result of the
foreclosure on the collateral securing any bona fide loan or other credit
extended by DB or any such Affiliate to any Third Party in the ordinary course
of its business; provided, however, that DB or any such Affiliate shall make
commercially reasonable efforts to dispose of the Voting Capital Stock acquired
as a result of such foreclosure as promptly as may be reasonably practicable,
taking account of any restrictions on any such disposition required under
applicable Law, including without limitation Article 9 of the Uniform Commercial
Code and the Securities Act, the Exchange Act and the rules and regulations
promulgated under such statutes; (iv) Voting Capital Stock of the Company
acquired by DB or any such Affiliate in connection with any bona fide
broker-dealer or financing activity as to which DB or any such Affiliate
maintains and enforces written policies and procedures reasonably designed to
prevent the flow of information about the Company to Persons engaged in such
activity on a day-to-day basis (including without limitation merger and
acquisition advisory and ordinary course banking activities); and (v) Voting
Capital Stock of the Company held by DB or any such Affiliate in bona fide
trust, managed, custodial or nominee or similar account for the benefit of a
Third Party.
"Exclusivity and Non-Competition Provisions" shall mean, in
the case of each of the European Joint Venture and the Worldwide Joint Venture,
the terms upon which each of the Company and DB specifies (which terms shall be
in form and substance reasonably satisfactory to each of the Company and DB) (i)
the types of business and other activities that each of the Company and DB will
be obligated to pursue exclusively through the European Joint Venture and the
Worldwide Joint Venture and not through the Company or DB or any of their
respective Affiliates; and (ii) the types of business and other activities
and/or regions as to which the Company and DB agree that there shall be no
competition between the European Joint Venture and the Worldwide Joint Venture,
as the case may be, on the one hand, and the other businesses or operations of
either the Company or DB or their respective Affiliates, on the other hand.
"Existing Holder" shall mean (i) any Person or group that on
March 27, 2000 beneficially owned ten percent (10%) or more of the then
outstanding Voting Capital Stock; and (ii) with respect to any Person described
in clause (i) that is a natural person, the spouse and lineal descendants
thereof and any trust or other estate planning vehicle established for the
benefit of any such Persons.
"Existing Position" shall have the meaning set forth in
Section 2.2(e) of the Stockholder Agreement.
"First Offer Acceptance Notice" shall have the meaning set
forth in Section 5.12(c) of the Stockholder Agreement.
"First Offer Notice" shall have the meaning set forth in
Section 5.12(a) of the Stockholder Agreement.
"First Refusal Acceptance Notice" shall have the meaning set
forth in Section 5.13(b) of the Stockholder Agreement.
"First Refusal Notice" shall have the meaning set forth in
Section 5.13(a) of the Stockholder Agreement.
"GAAP" shall mean generally accepted accounting principles in
the United States as set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Go2Net" shall mean Go2Net, Inc., a Delaware corporation.
"Governmental Entity" shall mean any government or political
subdivision or department thereof, any governmental or regulatory body,
commission, board, bureau, agency or instrumentality, or any court or arbitrator
or alternative dispute resolution body, in each case whether federal, state,
local or foreign.
"Group" shall have the meaning set forth in Section 13(d)(3)
of the Exchange Act (or any successor provision).
"HSR Act" shall mean the Hart-Scott-Rodino Act of 1976, as
amended.
"Intellectual Property Rights" shall have the meaning set
forth in Section 2.12 of the Securities Purchase Agreement.
"Investment Shares" shall mean, as of any date of
determination, the number of shares of Voting Capital Stock of the Company
beneficially owned, directly or indirectly, by DB and its Affiliates, other than
Excluded Shares.
"Joint Venture Agreements" shall mean the definitive
agreements with respect to (a) the European Joint Venture; (b) the Worldwide
Joint Venture; (c) the U.S. Research Venture; and (d) the U.S. Underwriting
Venture.
"Joint Venture Termination Event" shall mean, with respect to
any Person party to a Joint Venture Agreement, the giving of a notice of
termination of such Joint Venture Agreement by the other Party based on facts or
circumstances specified in such Joint Venture Agreement as providing a basis for
termination "for cause".
"Knowledge" shall mean the actual knowledge of the President,
any Executive Vice President or Senior Vice President of the Company after due
inquiry and an investigation of the books and records of the Company and the
Principal Subsidiaries.
"Law" shall mean any law, treaty, statute, ordinance, code,
rule or regulation of a Governmental Entity or judgment, decree, order, writ,
award, injunction or determination of an arbitrator or court or other
Governmental Entity.
"Lien" shall mean, with respect to any asset of any Person,
any mortgage, deed of trust, pledge, hypothecation, assignment, security
interest, lien, charge, restriction, adverse claim by a third party, title
defect or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any assignment or other
conveyance of any right to receive income and any assignment of receivables with
recourse against assignor), any filing of any financing statement as debtor
under the Uniform Commercial Code or comparable law of any Jurisdiction and any
agreement to give or make any of the foregoing.
"Material Adverse Effect" shall mean a material adverse effect
upon the business, properties, assets, rights, operations, management, earnings,
financial condition, or prospects of the Company and its Subsidiaries, taken as
a whole, and shall exclude and not give effect to events, circumstances, or
conditions affecting the economy of the United States, the securities markets or
the brokerage or market making industries generally.
"NASD" shall have the meaning set forth in Section 2.9 of the
Securities Purchase Agreement.
"Nasdaq" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System.
"Nasdaq National Market" shall mean the National Market System
of Nasdaq.
"Offer to Purchase" shall have the meaning set forth in
Section 5.12(b) of the Stockholder Agreement.
"Permitted Holdings" shall mean, with respect to any Person,
(i) Voting Capital Stock of the Company attributable to such Person or any of
its Affiliates as a result of any bona fide investment management services
provided by such Person or any such Affiliate to any third party, whether or not
the ownership of such Voting Capital Stock is reportable to the Commission, any
other securities regulatory authority or any bank regulatory authority under
applicable Law; (ii) Voting Capital Stock of the Company acquired by such Person
or any such Affiliate in the ordinary course of its bona fide broker-dealer
activities on behalf of third parties; (iii) Voting Capital Stock of the Company
acquired by such Person or any such Affiliate as a result of the foreclosure on
the collateral securing any bona fide loan or other credit extended by such
Person or any such Affiliate to any third party in the ordinary course of its
business; and (iv) Voting Capital Stock of the Company acquired by such Person
or any such Affiliate in connection with any bona fide broker-dealer or
financing activity as to which such Person or any such Affiliate maintains and
enforces written policies and procedures reasonably designed to prevent the flow
of information about the Company to Persons engaged in such activity on a
day-to-day basis (including without limitation merger and acquisition advisory
and ordinary course banking activities); and (v) Voting Capital Stock of the
Company held by such Person or any such Affiliate in bona fide trust, managed,
custodial or nominee or similar accounts for the benefit of third parties.
"Permitted Transfer" shall have the meaning set forth in
Section 3.2(a) of the Stockholder Agreement.
"Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, trust or unincorporated organization
or a government or agency or political subdivision thereof.
"Plan" shall mean any plan, program, arrangement, agreement or
commitment which is an employment, consulting, non-competition or deferred
compensation agreement, or an executive compensation, incentive bonus or other
bonus, employee pension, profit-sharing, savings, retirement, stock option,
stock purchase, stock appreciation rights, severance pay, life, health,
disability or accident insurance plan, corporate-owned or key-man life
insurance, or other employee benefit plan, program, arrangement, agreement or
commitment, including any "employee benefit plan" as defined in Section 3(3) of
ERISA.
"Preferred Stock" shall mean the preferred stock of the
Company, $.01 per share, authorized for issuance from time to time under the
Certificate of Incorporation.
"Principal Subsidiaries" shall mean National Discount Brokers
Corporation and NDB Capital Markets Corporation, and their respective successors
and assigns.
"Prospective Purchaser" shall mean any Person or Group to
which the Company proposes to issue or sell any shares of its Voting Capital
Stock or Common Stock Equivalents.
"Purchased Shares" shall have the meaning set forth in the
preamble to the Securities Purchase Agreement.
"Purchaser" shall mean DB U.S. Financial Markets Holding
Corporation, a Delaware corporation.
"Registration Rights Agreement" shall mean the registration
rights agreement, dated as of the Closing Date, between the Company, Go2Net,
Vulcan, IAT Reinsurance Syndicate, Ltd. and the Purchaser, substantially in the
form attached as Exhibit A to the Securities Purchase Agreement.
"Regulatory Problem" shall have the meaning set forth in
Section 3.5(e) of the Stockholder Agreement.
"Related Agreements" shall have the meaning set forth in
Section 2.2 of the Securities Purchase Agreement.
"Response Period" shall have the meaning set forth in Section
5.12(b) of the Stockholder Agreement.
"Restricted Purchaser" shall mean any Prospective Purchaser
identified on the DB List.
"Restricted Securities" shall have the meaning set forth in
Section 3.2(a) of the Stockholder Agreement.
"SEC Documents" shall mean all reports, schedules,
registration statements and other documents (including all exhibits and
schedules thereto) filed by the Company with the Commission pursuant to Sections
13(a) or 14(a) of the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Purchase Agreement" shall mean the Securities
Purchase Agreement, dated as of May 15, 2000, between the Company and the
Purchaser as from time to time amended and in effect between the parties.
"Solicitation Date" shall mean, with respect to the Investment
Shares, the earlier of (i) the sixth day following the delivery of an Offer to
Purchase with respect to such Investment Shares; and (ii) the date on which the
Company shall have, or shall be deemed to have, declined to purchase such
Investment Shares, in each case pursuant to Section 5.12(b) of the Stockholder
Agreement.
"Special Voting Stock" shall mean, with respect to any Person,
securities of any class or classes of such Person entitling holders thereof any
vote in the election of members of the board of directors (or similar governing
body) of such Person only upon the happening of a contingency or only with
respect to a single class or category of members of such board (or similar
governing body).
"Standstill Percentage" shall mean, as of any date of
determination, nineteen and three-tenths percent (19.3%) of the Voting Capital
Stock of the Company outstanding as of such date of determination, calculated in
accordance with Section 3.3 of the Stockholder Agreement, as such percentage may
be reduced in accordance with Section 4.1 of the Stockholder Agreement.
"Stockholder Agreement" shall mean the Stockholder Agreement,
dated as of the Closing Date, between the Company and DB, as from time to time
amended and in effect between the parties, substantially in the form of Exhibit
B to the Securities Purchase Agreement.
"Subsidiary" or "Subsidiaries" shall mean any corporation,
association or other business entity of which the Company and/or any of its
other Subsidiaries (as herein defined), directly or indirectly owns at the time
more than fifty percent (50%) of the outstanding Voting Capital Stock of such
corporation or trust other than directors' qualifying shares.
"Target" shall mean any Person that at the time of
determination is, or may be, subject to a Change in Control.
"Tax" and "Taxes" shall have the meaning set forth in Section
2.11 of the Securities Purchase Agreement.
"Tax Return" shall mean a report, return or other information
(including any amendments) required to be supplied to a Governmental Entity with
respect to Taxes including, where permitted or required, combined or
consolidated returns for any group of entities that includes the Company or any
Subsidiary.
"Third Party" shall mean a Person other than DB, any DB Group
Member or any Affiliate of any of the foregoing.
"Transfer" shall mean any disposition of any Restricted Shares
or of any interest therein which constitutes a sale within the meaning of the
Securities Act, other than any disposition pursuant to an effective registration
statement under the Securities Act and complying with all applicable state
securities and "blue sky" laws.
"U.S. Research Agreement" shall mean the Research Agreement,
dated as of the Closing Date, between the Company and DB relating to the U.S.
Research Venture, substantially in the form of Exhibit C to the Securities
Purchase Agreement.
"U.S. Research Venture" shall mean a definitive agreement
pursuant to which DB and its Affiliates appoint the Company or one or more of
its subsidiaries as the exclusive on-line discount broker in the United States
for purposes of distributing research prepared by DB's Global Corporates &
Institutions Division (or any successor division) for distribution to retail
investors in the United States.
"U.S. Underwriting Agreement" shall mean the letter agreement,
dated as of the Closing Date, between the Company and DB, relating to the U.S.
Underwriting Venture, substantially in the form attached as Exhibit D to the
Securities Purchase Agreement.
"U.S. Underwriting Venture" shall mean a definitive agreement
pursuant to which DB shall agree that, insofar as any affiliate of DB seeks to
distribute in the United States through an on-line discount broker, any portion
of the equity securities allotted to such affiliate acting as an underwriter of
an initial public offering, such affiliate will use the Company (or one or more
of its subsidiaries) as its exclusive on-line discount broker for such purpose.
"Voting Capital Stock" shall mean, with respect to any Person,
securities of any class or classes of such Person entitling the holders thereof
to vote in the election of members of the board of directors (or any similar
governing body) of such Person but excluding Special Voting Stock.
"Voting Percentage" shall have the meaning set forth in
Section 3.3(c) of the Stockholder Agreement.
"Vulcan" shall mean Vulcan Ventures Incorporated, a Washington
corporation.
"Wholly Owned Subsidiary" shall mean any Subsidiary of a
Person as to which such Person owns, directly or indirectly through one or more
other wholly owned Subsidiaries, all of the Voting Capital Stock and Special
Voting Stock (other than directors' qualifying shares).
"Worldwide Joint Venture" shall mean a worldwide joint venture
between the Company and DB or one or more of their respective Affiliates for the
provision of on-line discount equity brokerage services to retail investors in
countries and territories around the world except for the United States and the
EJV Territory.
<PAGE>
EXHIBIT 10(b)
CONFORMED COPY
REGISTRATION RIGHTS AGREEMENT
dated as of June 15, 2000
among
NATIONAL DISCOUNT BROKERS GROUP, INC.
and the
STOCKHOLDERS LISTED HEREIN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 1......Definitions..................................... 1
Section 2......Demand Registration..............................5
Section 3......Piggyback Registration.......................... 7
Section 4......Expenses.........................................8
Section 5......Holdback Agreement...............................8
Section 6......Preparation and Filing.......................... 9
Section 7.......Indemnification................................ 11
Section 8.......Underwriting Agreement......................... 14
Section 9.......Information by Holder.......................... 14
Section 10......Exchange Act Compliance........................ 14
Section 11......Rule 144 Requirements.......................... 15
Section 12......Restriction on Transfer........................ 15
Section 13......Successors and Assigns......................... 16
Section 14......Assignment..................................... 17
Section 15......Entire Agreement............................... 17
Section 16......Notices........................................ 17
Section 17......Modifications; Amendments...................... 19
Section 18......Counterparts................................... 19
Section 19......Headings....................................... 19
Section 20......Severability................................... 20
Section 21......Governing Law; Submission to Jurisdiction...... 20
Section 22......Suspension of Disposition of Registrable Shares.20
</TABLE>
<PAGE>
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of June 15,
2000, among NATIONAL DISCOUNT BROKERS GROUP, INC., a Delaware corporation
(together with its successors, the "Company"), and the stockholders of the
Company listed on Schedule I hereto (the "Investors").
Each Investor currently owns or has the right to acquire the number of
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company set
forth opposite the name of such Investor on Schedule I. The parties hereto deem
it to be in their best interests to set forth their rights and obligations in
connection with certain public offerings and sales of shares of Common Stock.
Accordingly, the parties agree as follows:
Section 1
Definitions
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2
promulgated under the Exchange Act. Notwithstanding the foregoing, no Party (nor
any Affiliate of such Party) shall be considered an Affiliate of another Party
(or any of it Affiliates) provided, that no Person that is an Affiliate of an
Investor, on the one hand, shall be deemed to be an Affiliate of the Company, on
the other hand, and vice versa; and provided, further, that any Person that in
the absence of this provision might be deemed to be an Affiliate of both an
Investor and the Company shall for the purposes hereof be an Affiliate only of
the party with which such Person is principally affiliated.
"Board of Directors" shall mean the Board of Directors of the Company,
as from time to time constituted.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which the New York Stock Exchange or banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
"Change in Control" shall mean (i) any merger or consolidation of the
Company in which the holders of voting securities and Common Stock Equivalents
outstanding immediately prior to such merger or consolidation have the right to
receive, upon consummation of such transaction less than fifty percent (50%) of
the outstanding voting securities of the surviving entity; (ii) any sale,
assignment, transfer or other disposition of all or substantially all of the
assets of the Company other than to an Affiliate of the Company; or (iii) any
transaction in which any Person, or any two or more Persons acting as a group,
and all Affiliates of the Person or Persons, who prior to such time owned shares
representing less than fifty percent (50%) of the voting power at elections for
the Board of Directors, shall acquire, whether by purchase, exchange, tender
offer, merger, consolidation or otherwise, such additional shares of the
Company's capital stock in one or more transactions, or series of transactions,
such that following such transaction or transactions, such person or group and
Affiliates beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), fifty percent (50%) or more of the voting power at elections for
the Board of Directors; provided, however, that the foregoing shall not apply to
the grant of proxy voting rights to a Person designated by the Board of
Directors in connection with any meeting of stockholders of the Company.
"Change in Law" shall mean any change in Law or in any interpretation
or application thereof by any Governmental Entity responsible for the
implementation or enforcement of such Law that (i) results in DB or any of its
Affiliates being prohibited from owning or holding all or any portion of the DB
Investment Shares; or (ii) would impose or result in material restrictions
(economic or other) on DB or such Affiliate if it would continue to own or hold
such DB Investment Shares.
"Commission" shall mean the U.S. Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning set forth in the preamble to this
Agreement.
"Common Stock Equivalents" shall mean any security issued by the
Company convertible into, or exchangeable or exercisable for, Common Stock.
"DB" shall mean DB U.S. Financial Markets Holding Corporation, a
Delaware corporation.
"DB Group Investors" shall mean DB, each other DB Holder which owns DB
Registrable Shares and any successor to, or assignee or transferee of, a DB
Group Investor who shall agree in writing pursuant to Section 14 hereof to be
treated as a DB Group Investor and to be bound by the terms and comply with the
provisions of this Agreement.
"DB Group Securities Purchase Agreement" shall mean the Securities
Purchase Agreement dated as of May 15, 2000 between the Company and DB.
"DB Holder" shall have the meaning set forth in the DB Stockholder
Agreement.
"DB Investment Shares" shall mean the Investment Shares (as defined in
the DB Stockholder Agreement).
"DB Stockholder Agreement" shall mean the Stockholder Agreement dated
as of ____________, 2000, between the Company and Deutsche Bank AG,
substantially in the form of Exhibit D to the DB Group Securities Purchase
Agreement.
"EJV Territory" shall mean, with respect to the European Joint Venture,
the Territory as defined in the term sheet for the European Joint Venture.
"European Joint Venture" shall mean a joint venture between the Company
and DB or one or more of their respective Affiliates with respect to areas
within the EJV Territory for the provision of on-line discount equity brokerage
services to retail investors in EJV Territory.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect from time to time.
"Excluded Shares" shall have the meaning set forth in the DB
Stockholder Agreement.
"Go2Net" shall mean Go2Net, Inc., a Delaware corporation.
"Go2Net Agreement" shall mean the Securities Purchase Agreement dated
February 5, 2000, among the Company, Go2Net and Vulcan.
"Go2Net Group" shall mean Go2Net and Vulcan.
"Go2Net Group Investors" shall mean the Go2Net Group, any Affiliate of
Go2Net Group which owns Registrable Shares and any successor to, or assignee or
transferee of, a Go2Net Group Investor who shall agree in writing pursuant to
Section 14 hereof to be treated as a Go2Net Group Investor and to be bound by
the terms and comply with the provisions of this Agreement.
"Governmental Entity" shall mean any government or political
subdivision or department thereof, any governmental or regulatory body,
commission, board, bureau, agency or instrumentality, or any court or arbitrator
or alternative dispute resolution body, in each case whether federal, state,
local or foreign.
"IAT" shall mean IAT Reinsurance Syndicate, Ltd., a Bermuda
corporation.
"IAT Investors" shall mean IAT, any Affiliate of IAT which owns
Registrable Shares and any successor to, or assignee or transferee of, an IAT
Investor who shall agree in writing pursuant to Section 14 hereof to be treated
as an IAT Investor and to be bound by the terms and comply with the provisions
of this Agreement.
"Investors" shall have the meaning set forth in the preamble to this
Agreement.
"Law" shall mean any law, treaty, statute, ordinance, code, rule or
regulation of a Governmental Entity or judgment, decree, order, writ, award,
injunction or determination of an arbitrator or court or other Governmental
Entity.
"Other Shares" shall mean at any time those shares of Common Stock
which do not constitute Primary Shares or Registrable Shares.
"Permitted Transfer" shall mean (a) with respect to the Go2Net Group
Investors, shall have the meaning set forth in the Go2Net Agreement; and (b)
with respect to the DB Group Investors, shall mean have the meaning set forth in
the DB Stockholder Agreement.
"Person" shall mean an individual, corporation, partnership, limited
liability company, joint venture, trust or unincorporated organization or a
government or agency or political subdivision thereof.
"Primary Shares" shall mean at any time the authorized but unissued
shares of Common Stock or shares of Common Stock held by the Company in its
treasury.
"Purchased Shares" shall have the meaning set forth in the DB Group
Securities Purchase Agreement.
"Registrable Shares" shall mean at any time, (i) the DB Investment
Shares that have not previously been sold to the public pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144 or that
may not be sold by the holder thereof under Rule 144 and (ii) the Restricted
Shares.
"Restricted Shares" shall mean, with respect to the Go2Net Group
Investors and the IAT Investors, the shares of Common Stock and any other
securities convertible into, or exercisable or exchangeable for Common Stock and
any securities received by any of them upon any conversion, exercise or exchange
thereof that have not been sold to the public pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144 or that
may not be sold by the holder thereof under Rule 144.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act or
any successor or complementary rule thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect from time to time.
"Standstill Percentage" shall have the meaning set forth in the DB
Stockholder Agreement.
"Stockholders" shall mean the IAT Group Investors, the Go2Net Group
Investors and the DB Group Investors.
"Transfer" shall mean any disposition of any Registrable Shares or of
any interest therein which constitutes a sale within the meaning of the
Securities Act, other than any disposition pursuant to an effective registration
statement under the Securities Act and complying with all applicable state
securities and "blue sky" laws.
"U.S. Research Venture" shall mean a definitive agreement pursuant to
which DB and its Affiliates appoint the Company or one or more of its
subsidiaries as the exclusive on-line discount broker in the United States for
purposes of distributing research prepared by DB's Global Corporates &
Institutions Division (or any successor division) distribution to retail
investors in the United States.
"U.S. Underwriting Venture" shall mean a definitive agreement pursuant
to which DB shall agree that, insofar as any affiliate of DB seeks to distribute
in the United States through an on-line discount broker any portion of the
equity securities allotted to such affiliate acting as an underwriter of an
initial public offering, such affiliate will use the Company (or one or more of
its subsidiaries) as its exclusive on-line discount broker for such purpose.
"Vulcan" shall mean Vulcan Ventures Incorporated, a Washington
corporation.
"Worldwide Joint Venture" shall mean a worldwide joint venture between
the Company and DB or one or more of their respective Affiliates for the
provision of on-line discount equity brokerage services to retail investors in
countries and territories around the world except for the United States and the
EJV Territory.
Section 2.
Demand Registration
(a) Subject to subsection (e) below, at any time until June 30, 2002, the IAT
Investors shall be entitled to request once that the Company effect a
registration under the Securities Act of the Registrable Shares held by
them in accordance with this Section; provided that such IAT Investors must
request registration of at least fifty percent (50%) of such Registrable
Shares.
(b) Subject to subsection (e) below, the Go2Net Group Investors shall be
entitled to request once that the Company effect a registration under the
Securities Act of Registrable Shares held by them in accordance with this
Section; provided that such Go2Net Group Investors must request
registration of at least fifty percent (50%) of such Registrable Shares.
However, no request for registration may be made hereunder until February
5, 2001, unless such Registrable Shares may be sold, transferred or
assigned as provided in Section 9.17 of the Go2Net Agreement otherwise than
in a Permitted Transfer.
(c) Subject to Section (e) below, at any time after the second anniversary of
the closing for the sale of the Purchased Shares under the DB Securities
Purchase Agreement, the DB Group Investors shall be entitled to request
three (3) times, but not more than once in any twelve (12) month period,
that the Company effect a registration under the Securities Act of
Registrable Shares held by them in accordance with this Section; provided,
however, that such DB Group Investors must request registration of at least
thirty percent (30%) of such Registrable Shares and in any case not less
than 500,000 of such Registrable Shares; and provided further, that (i) DB
and each DB Holder shall be entitled to exercise their rights under this
subsection (A) at any time after the closing for the sale of the Purchased
Shares under the DB Securities Purchase Agreement, if DB or such DB Holder
is required to dispose of any Registrable Shares held by it as a result of
a Change in Law (provided that DB or such DB Holder shall have used
commercially reasonable efforts to comply with such Change in Law without
disposing of such Registrable Shares); and (B) at any time after the first
anniversary of the closing for the sale of the Purchased Shares under the
DB Securities Purchase Agreement, if (I) there shall have been a Change in
Control of the Company; (II) DB or one or more of its Affiliates, as
applicable, and the Company shall have failed to enter into definitive
agreements with respect to the European Joint Venture or the Worldwide
Joint Venture on or prior to such first anniversary; or (III) DB or one or
more of its Affiliates, as applicable, or the Company shall have given
notice of termination of any of the U.S. Research Venture, the U.S.
Underwriting Venture, the European Joint Venture or the Worldwide Joint
Venture as provided in the related definitive agreement; and (ii) the DB
Group Investors shall not be entitled to exercise any right provided for in
this subsection at such time as they beneficially own, directly or
indirectly, in the aggregate less than five percent (5%) of the outstanding
Common Stock.
(d) If the Company shall be requested to effect a registration under the
Securities Act of Registrable Shares in accordance with this Section, then
the Company shall promptly give written notice of such proposed
registration to all Stockholders who are then holders of Registrable Shares
and shall offer to include in such proposed registration any Registrable
Shares requested to be included in such proposed registration by such
holders who respond in writing to the Company's notice within thirty (30)
days after delivery of such notice (which response shall specify the number
of Registrable Shares proposed to be included in such registration). The
Company shall promptly use its commercially reasonable efforts in good
faith to effect the registration of the Registrable Shares that the Company
has been so requested to register on an appropriate form, including Form
S-3, or pursuant to Rule 415 under the Securities Act, if available, if so
requested by the Stockholders.
(e) The Company shall not be obligated to effect any registration under the
Securities Act requested under this Section except in accordance with the
following provisions:
(i) the Company shall not be required to register Registrable Shares not
eligible for resale pursuant to Section 9.17 of the Go2Net Agreement or any
Permitted Transfer.
(ii) the Company shall not be required to register a Transfer to an Affiliate of
any Stockholder;
(iii) the Company's obligation to file a registration statement under this
Section shall be suspended at any time when (A) it has not received a
request under subsection (a), (b) or (c) above; and (B) it has filed,
or the Board of Directors has approved the filing of, a registration
statement under the Securities Act (other than on Form S-4 or Form
S-8 or any successor forms thereto) for the offer and sale of Primary
Shares. Such obligation shall resume on the earliest to occur of (X) the
date on which such registration statement is withdrawn by the Company, or
the Board of Directors abandons its determination to file a registration
statement for the offer and sale of Primary Shares, (Y) the date that is
ninety (90) days after the effective date of such registration statement,
and (Z) the date that is one hundred eighty (180) days after the first
filing date of such registration statement;
(iv) the Company may delay the filing or effectiveness of any registration
statement pursuant to this Section for a period not to exceed ninety
(90) days after the date of the Company's receipt of a request for
registration if the Board of Directors has determined that such
registration would have a material adverse effect upon the Company or
its then current business plans; provided, however, that the Company
may cause such delay only once during any three hundred sixty (360) day
period; and
(v) with respect to any registration pursuant to this Section, the Company
may include in such registration any Primary Shares or Other Shares;
provided, however, that if the managing underwriter (if any) advises
the Company that the inclusion of all Registrable Shares, Primary
Shares and Other Shares proposed to be included in such registration
would interfere with the successful marketing (including pricing) of
all such shares, then the number of Registrable Shares, Primary Shares
and Other Shares proposed to be included in such registration shall be
included in the following order:
(A) first, the Registrable Shares held by the Stockholders
requesting that the Company effect a registration pursuant to
subsection (a), (b) (c) above, as applicable;
(B) second, the Registrable Shares held by any other Stockholders,
pro rata based upon the number of Registrable Shares owned by
each such Stockholder at the time of such registration;
(C) third, the Primary Shares, if any; and
(D) fourth, the Other Shares, if any.
(f) A requested registration under this Section may be rescinded by written
notice to the Company by all of the Stockholders requesting such
registration pursuant to subsection (a), (b) or (c); such rescinded
registration shall not count as a registration statement initiated pursuant
to this Section if such registration statement is rescinded prior to the
effective date thereof and if the Stockholders initiating such request
shall have reimbursed the Company for all reasonable out-of-pocket expenses
incurred by the Company in connection with such rescinded registration
after the first rescission. Even if a registration statement is not
rescinded pursuant to this subsection, the Company shall, at any time prior
to the effectiveness of a registration statement, deregister any or all of
a Stockholder's Registrable Shares included in such registration statement,
promptly upon the Company's receipt of a written request from such
Stockholder and the Company may withdraw a registration statement so
requested if a Stockholder requesting deregistration initiated the
registration statement.
Section 3
Piggyback Registration
(a) If the Company at any time proposes for any reason to register Primary
Shares or Other Shares under the Securities Act (other than on Form S-4 or
Form S-8 promulgated under the Securities Act or any successor forms
thereto or other than in connection with an exchange offer or offering
solely to the Company's stockholders), it shall promptly give written
notice to each Stockholder of its intention so to register the Primary
Shares or Other Shares and, upon the written request given within ten (10)
days after delivery of any such notice by the Company, of any Stockholder
to include in such registration Registrable Shares held by such Stockholder
(which request shall specify the number of Registrable Shares proposed to
be included in such registration), the Company shall use its commercially
reasonable efforts to cause all such Registrable Shares to be included in
such registration on the same terms and conditions as the securities
otherwise being sold in such registration; provided, however, that (i) the
IAT Group Investors and the Go2Net Investors may not exercise any rights
under this Section prior to such time as they would be entitled to exercise
rights under Sections 2(a) and (b) hereof, respectively, and the DB Group
Investors may not exercise any rights under this Section prior to the first
anniversary of the closing for the sale of the Purchased Shares under the
DB Securities Purchase Agreement; and (ii) if the managing underwriter
advises the Company that the inclusion of all Primary Shares, Other Shares
or Registrable Shares proposed to be included in such registration would
interfere with the successful marketing (including pricing) of the Primary
Shares proposed to be registered by the Company, if any, then the number of
Primary Shares, Registrable Shares and Other Shares proposed to be included
in such registration shall be included in the following order:
(A) first, the Primary Shares, if any;
(B) second, the Registrable Shares held by the Stockholders, pro
rata based upon the number of Registrable Shares (based upon
any required conversion of Common Stock Equivalents) specified
in their written requests made under this Section 3(a) above;
and
(C) third, the Other Shares, if any.
(b) Any Stockholder requesting registration under this Section in connection
with any registered offering of Primary Shares shall enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by the Company.
No Permitted Transfer may be registered pursuant to this Section. No
Stockholder may utilize a registration statement filed pursuant to this
Section to register securities for sale, transfer or other disposition of
which is restricted by Section 9.17 of the Go2Net Agreement.
Section 4
Expenses
Except as otherwise provided in Section 2(f), the Company shall bear
the expense of the registrations effected pursuant to Sections 2 and 3 hereof,
in each case including, without limitation, all registration and filing fees
(including all expenses incident to filing with the National Association of
Securities Dealers, Inc. (the "NASD")), fees and expenses of complying with
securities and "blue sky" laws, printing expenses, and fees and expenses of the
Company's counsel and accountants, and the fees and expenses of the Selling
Stockholders' Counsel (as defined below), but excluding any underwriters' or
brokers' discounts or commissions and the fees of any counsel to the selling
Stockholders other than the Selling Stockholders' Counsel.
Section 5
Holdback Agreement
If the Company at any time shall register shares of Common Stock under
the Securities Act (including any registration pursuant to Section 2 or 3
hereof) for sale to the public and the managing underwriter for such
registration shall request, the Stockholders shall not sell, make any short sale
of, grant any option for the purchase of, or otherwise dispose of any
Registrable Shares (other than those shares of Common Stock included in such
registration) without the prior written consent of the Company for a period
designated by the Company in writing to the Stockholders, which period shall not
begin more than ten (10) days prior to the effective date of the registration
statement pursuant to which such public offering shall be made and shall not
last more than one hundred eighty (180) days after the effective date of such
registration statement.
Section 6
Preparation and Filing
If and whenever the Company is under an obligation pursuant to the
provisions of this Agreement to use its commercially reasonable efforts to
effect the registration of any Registrable Shares, the Company shall, as
expeditiously as practicable:
(a) use its commercially reasonable efforts in good faith to cause a
registration statement that registers such Registrable Shares to become and
remain effective for a period of one hundred eighty (180) days (as extended
pursuant to Section 22 hereof) or until all of such Registrable Shares have
been disposed of (if earlier);
(b) furnish, at least five (5) Business Days before filing a registration
statement that registers such Registrable Shares, a prospectus relating
thereto or any amendments or supplements relating to such a registration
statement or prospectus, to one counsel selected by the holders of a
majority of such Registrable Shares (the "Selling Stockholders' Counsel"),
copies of all such documents proposed to be filed (it being understood that
such five (5) Business Day period need not apply to successive drafts of
the same document proposed to be filed so long as such successive drafts
are supplied to such counsel in advance of the proposed filing by a period
of time that is customary and reasonable under the circumstances);
(c) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for at
least a period of one hundred eighty (180) days (as extended pursuant to
Section 22 hereof) or until all of such Registrable Shares have been
disposed of (if earlier) and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of such
Registrable Shares;
(d) notify in writing the Selling Stockholders' Counsel promptly (i) of the
receipt by the Company of any notification with respect to any comments by
the Commission with respect to such registration statement or prospectus or
any amendment or supplement thereto or any request by the Commission for
the amending or supplementing thereof or for additional information with
respect thereto; (ii) of the receipt by the Company of any notification
with respect to the issuance by the Commission of any stop order suspending
the effectiveness of such registration statement or prospectus or any
amendment or supplement thereto or the initiation or threatening of any
proceeding for that purpose; and (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification of such
Registrable Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purposes;
(e) use its commercially reasonable efforts in good faith to register or
qualify such Registrable Shares under such other securities or "blue sky"
laws of such jurisdictions as any seller of Registrable Shares reasonably
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller of Registrable Shares to
consummate the disposition in such jurisdictions of the Registrable Shares
owned by such seller; provided, however, that the Company will not be
required to qualify generally to do business, subject itself to general
taxation or consent to general service of process in any jurisdiction where
it would not otherwise be required so to do but for this subsection;
(f) furnish to each seller of such Registrable Shares such number of copies of
a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and
such other documents as such seller of Registrable Shares may reasonably
request, in order to facilitate the public sale or other disposition of
such Registrable Shares;
(g) use its commercially reasonable efforts to cause such Registrable Shares to
be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
the Company to enable the seller or sellers thereof to consummate the
disposition of such Registrable Shares;
(h) notify on a timely basis each seller of such Registrable Shares at any time
when a prospectus relating to such Registrable Shares is required to be
delivered under the Securities Act within the appropriate period mentioned
in subsection (a) of this Section, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing and, at the request of such seller, prepare and furnish to
such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the offerees of such shares, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing;
(i) make available for inspection by the Selling Stockholders' Counsel or any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by a seller
of Registrable Shares or any such underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent
corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information (together with the
Records, the "Information") reasonably requested by any such Inspector in
connection with such registration statement. Any of the Information which
the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, shall not be disclosed by the
Inspectors unless (i) the disclosure of such Information is necessary to
avoid or correct a misstatement or omission in the registration statement;
(ii) the release of such Information is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction; or (iii) such
Information has been made generally available to the public. The
Stockholder agrees that it will, upon learning that disclosure of such
Information is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Information deemed
confidential;
(j) use its commercially reasonable efforts in good faith to obtain from its
independent certified public accountants "comfort" letters in customary
form and at customary times and covering matters of the type customarily
covered by comfort letters;
(k) use its commercially reasonable efforts in good faith to obtain from its
counsel an opinion or opinions in customary form;
(l) provide a transfer agent and registrar (which may be the same entity
and which may be the Company) for such Registrable Shares;
(m) issue to any underwriter to which any seller of Registrable Shares proposes
to sell shares in such offering certificates evidencing such Registrable
Shares; provided, however, that (i) the Company shall have the right to
approve any such underwriter which approval shall not be unreasonably
withheld or delayed; and (ii) the Company shall specify in writing the
reason for any rejection of an underwriter selected by the seller of such
Registrable Shares;
(n) list such Registrable Shares on any national securities exchange on which
any shares of the Common Stock are listed or, if the Common Stock is not
listed on a national securities exchange, use its commercially reasonable
efforts to qualify such Registrable Shares for inclusion on the automated
quotation system of NASD or such national securities exchange as the
holders of a majority of such Registrable Shares shall request;
(o) use its commercially reasonable efforts in good faith to comply with all
applicable rules and regulations of the Commission and make available to
its securityholders, as soon as reasonably practicable, earnings statements
(which need not be audited) covering a period of twelve (12) months
beginning within three (3) months after the fiscal quarter ending
immediately following the effective date of each registration statement,
which earnings statements shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder; and
(p) use its commercially reasonable efforts in good faith to take all other
steps necessary to effect the registration of such Registrable Shares
contemplated hereby.
Section 7
Indemnification
(a) In connection with any registration of any Registrable Shares under the
Securities Act pursuant to this Agreement, the Company shall and hereby
agrees to indemnify and hold harmless the seller of such Registrable
Shares, its officers and directors, each underwriter, broker or any other
person acting on behalf of such seller and each other person, if any, who
controls any of the foregoing persons within the meaning of the Securities
Act and the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, (or actions in respect thereof) to which any
of the foregoing persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
registration statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein or otherwise filed with the Commission, any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse such seller, such officer or director, such underwriter,
such broker or such other person acting on behalf of such seller and each
such controlling person for any legal or other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in said registration statement, preliminary prospectus, final prospectus,
amendment, supplement or document incident to registration or qualification
of any Registrable Shares in reliance upon and in conformity with written
information furnished to the Company in an instrument duly executed by such
seller or underwriter specifically for use in the preparation thereof;
provided, further, that the foregoing indemnity shall not inure to the
benefit of any underwriter, with respect to any preliminary prospectus,
from whom the person asserting any losses, claims, damages and liabilities
and judgments purchased Registrable Shares or any person controlling such
underwriter, if a copy of the prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto)
was not sent or given by or on behalf of such underwriter to such person,
if required by law so to have been delivered, or prior to a written
confirmation of the sale of the Registrable Shares to such person, and if
the prospectus (as so amended and supplemented) would have cured the defect
giving rise to such loss, claim, damage, liability or judgment, unless such
failure to deliver the prospectus (as so amended and supplemented) was a
result of noncompliance by the Company with Section 6(f) hereof.
(b) In connection with any registration of Registrable Shares under the
Securities Act pursuant to this Agreement, each seller of Registrable
Shares shall indemnify and hold harmless (in the same manner and to the
same extent as set forth in subsection (a) above) the Company, each
director of the Company, each officer of the Company who shall sign such
registration statement, each underwriter, broker or other person acting on
behalf of such seller, each other seller of Registrable Shares under such
registration statement and each person who controls any of the foregoing
persons within the meaning of the Securities Act and the Exchange Act with
respect to any statement or omission from such registration statement, any
preliminary prospectus or final prospectus contained therein or otherwise
filed with the Commission, any amendment or supplement thereto, if such
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company or such underwriter in an
instrument duly executed by such seller or underwriter specifically for use
in connection with the preparation of such registration statement,
preliminary prospectus, final prospectus, amendment or supplement;
provided, however, that such obligation to indemnify will be several, not
joint and several, among such sellers of Registrable Shares, and the
maximum amount of liability in respect of such indemnification shall be in
proportion to and limited to, in the case of each seller of Registrable
Shares, an amount equal to the lesser of (i) such seller's proportionate
share of any such loss, claim, damage, liability or expense which is equal
to the proportion that the public offering price of the Registrable Shares
sold by such seller under such registration statement bears to the total
public offering price of all securities sold thereunder; and (ii) the net
proceeds actually received by such seller from the sale of Registrable
Shares effected pursuant to such registration.
(c) The indemnification required by this Section will be made by periodic
payments during the course of the investigation or defense, as and when
bills are received or expenses incurred, subject to prompt refund in the
event any such payments are determined not to have been due and owing
hereunder.
(d) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in subsections (a)
or (b) of this Section, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the
latter of the commencement of such action, but the failure so to notify the
indemnifying party (i) will not relieve it from liability under subsection
(a) or (b) of this Section unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not,
in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided for in
such paragraph (a) or (b). In case any such action is brought against an
indemnified party, the indemnifying party will be entitled to participate
in and to assume the defense thereof, jointly with any other indemnifying
party similarly notified to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be responsible
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof; provided, however, that if
any indemnified party shall have reasonably concluded that there may be one
or more legal or equitable defenses available to such indemnified party
which are additional to or conflict with those available to the
indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided
in this Section, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party, and such
indemnifying party shall reimburse such indemnified party and any person
controlling such indemnified party for that portion of the fees and
expenses of any counsel retained by the indemnified party which is
reasonably related to the matters covered by the indemnity agreement
provided in this Section.
(e) The indemnification provided for under this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person of
such indemnified party and will survive the transfer of the Registrable
Shares by the relevant Stockholder.
(f) If the indemnification provided for in this Section is held by a court of
competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage, liability or action referred to herein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or
action in such proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and of the indemnified party,
on the other hand, in connection with the statements or omissions that
resulted in such loss, claim, damage or liability as well as any other
relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the sellers of Registrable Shares agree that it
would not be just and equitable if contributions pursuant to this
subsection were determined by pro rata allocation or by any other method of
allocation which did not take into account the equitable considerations
referred to herein. The amount paid or payable to an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to
above shall be deemed to include, subject to the limitation set forth in
subsection (d) of this Section, any legal or other expenses reasonably
incurred in connection with investigating or defending the same.
Notwithstanding the foregoing, in no event shall the amount contributed by
a seller of Registrable Shares exceed the lesser of (i) such seller's
proportionate share of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of the
Registrable Shares sold by such seller under such registration statement
bears to the total public offering price of all securities sold thereunder;
and (ii) the aggregate net proceeds actually received by such seller from
the sale of Registrable Shares effected pursuant to such registration.
Section 8
Underwriting Agreement
Notwithstanding the provisions of Sections 5, 6 and 7 hereof, the
Company and the Stockholders selling Registrable Shares in a proposed
registration shall enter into an underwriting or similar agreement, and to the
extent that such agreement contains provisions covering one or more issues
addressed in such Sections, the provisions contained in such Sections addressing
such issue or issues shall be superseded with respect to such registration by
such other agreement.
Section 9
Information by Holder
Each Stockholder selling Registrable Shares in a proposed registration
shall furnish to the Company such written information regarding such holder and
the distribution proposed by such Stockholder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
Section 10
Exchange Act Compliance
The Company shall comply with all of the reporting requirements of the
Exchange Act and with all other public information reporting requirements of the
Commission which are conditions to the availability of Rule 144 for the sale of
the Registrable Shares. The Company shall cooperate with each Stockholder in
supplying such information as may be necessary for such Stockholder to complete
and file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of Rule 144.
Section 11
Rule 144 Requirements
With a view to making available to the Stockholders the benefits of
Rule 144, the Company agrees to use its best efforts to
(a) make and keep current public information available, as those terms are
understood and defined in Rule 144(c)(1);
(b) file with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(c) furnish to any holder of Registrable Shares upon request a written
statement by the Company as to its compliance with the reporting
requirements of Rule 144(c)(1) and of the Securities Act and the Exchange
Act, a copy of the most recent annual or quarterly report of the Company
filed under Section 13 or 15(d) of the Exchange Act, and such other reports
and documents of the Company as such holder may reasonably request to avail
itself of any similar rule or regulation of the Commission allowing it to
sell any such securities without registration.
Section 12
Restriction on Transfer
(a) The Restricted Shares shall not be transferable except upon the conditions
specified in this Section, which conditions are intended to insure
compliance with the provisions of the Securities Act.
(b) Each certificate representing Restricted Shares shall (unless otherwise
permitted by the provisions of paragraph (c) and (d) below) be stamped or
otherwise imprinted with a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE ACT AND SUCH
LAWS OR (1) REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT
IS NOT REQUIRED." [APPLIES ONLY TO SHARES HELD BY GO2NET GROUP
INVESTORS - THESE SHARES ARE SUBJECT TO TRANSFER RESTRICTIONS SET FORTH
IN THE GO2NET AGREEMENT, AND HOLDERS OF THE SHARES ARE SUBJECT TO
STANDSTILL PROVISIONS SET FORTH IN THE GO2NET AGREEMENT.]
The foregoing legend shall be removed from the certificates representing any
Restricted Shares at the request of the holder thereof at such time as they
become registered and sold under the Securities Act or eligible for resale
pursuant to Rule 144 under the Securities Act.
(c) The holder of any Restricted Shares agrees, prior to any Transfer of any
Restricted Shares, to give written notice to the Company of such holder's
intention to effect such Transfer and to comply in all other respects with
the provisions of this Section. Each such notice shall describe the manner
and circumstances of the proposed Transfer. Upon request by the Company,
the holder delivering such notice shall deliver a written opinion,
addressed to the Company, of counsel for the holder of Restricted Shares,
stating that in the opinion of such counsel (which opinion and counsel
shall be reasonably satisfactory to the Company) such proposed Transfer
does not involve a transaction requiring registration or qualification of
such Restricted Shares under the Securities Act or the securities or "blue
sky" laws of any state of the United States. Such holder of Restricted
Shares shall be entitled to Transfer such Restricted Shares in accordance
with the terms of the notice delivered to the Company, unless the Company
reasonably objects to such Transfer. Each certificate or other instrument
evidencing the securities issued upon the Transfer of any Restricted Shares
(and each certificate or other instrument evidencing any untransferred
balance of such Restricted Shares) shall bear the legend set forth in
paragraph (b) above unless the Company shall reasonably determine that (i)
registration of any future transfer is not required by the applicable
provisions of the Securities Act and the restrictions referred to in such
legend do not apply to the transferee of such Restricted Securities; or
(ii) the Company shall have waived the requirement of such legends.
(d) Notwithstanding the foregoing provisions of this Section, the restrictions
imposed by this Section upon the transferability of any Restricted Shares
shall cease and terminate when (i) any such Restricted Shares are sold or
otherwise disposed of (A) pursuant to an effective registration statement
under the Securities Act or (B) in a transaction contemplated by paragraph
(c) above which does not require that the Restricted Shares so transferred
bear the legend set forth in paragraph (b) hereof; or (ii) the Company
shall be reasonably satisfied that the requirements for transfer of such
Restricted Shares under Rule 144 under the Securities Act have been
satisfied (subject to the delivery of opinions as set forth above).
Whenever the restrictions imposed by this Section shall terminate, the
holder of any Restricted Shares as to which such restrictions have
terminated shall be entitled to receive from the Company, without expense,
a new certificate not bearing the restrictive legend set forth in paragraph
(b) above and not containing any other reference to the restrictions
imposed by this Section.
Section 13
Successors and Assigns
This Agreement shall bind and inure to the benefit of the Company and
the Stockholders and, subject to Section 14 hereof, their respective successors
and assigns.
Section 14
Assignment
A Stockholder may assign its rights hereunder with respect to any
Registrable Shares to any Person that acquires such Registrable Shares from such
Stockholder; provided, however, that such Person shall, as a condition to the
effectiveness of such assignment, be required to execute a counterpart to this
Agreement whereupon such Person shall have the benefits of, and shall be subject
to the restrictions contained in, this Agreement with respect to such
Registrable Shares.
Section 15
Entire Agreement
This Agreement contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior arrangements or
understandings with respect hereto. In particular, this Agreement supersedes the
letter of intent, dated March 27, 2000, between the Company and Deutsche Bank
Americas Holding Corporation, with respect to the subject matter hereof, among
other matters.
Section 16
Notices
All notices, requests, consents and other communications hereunder to
any party shall be deemed to be sufficient if contained in a written instrument
and shall be deemed to have been duly given when delivered in person, by
telecopy, by nationally-recognized overnight courier, or by first class
registered or certified mail, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by the addressee to the addressor:
(a) if to the Company:
National Discount Brokers Group, Inc.
10 Exchange Place Centre
Jersey City, NJ 07302
Attention: General Counsel
Telephone: (201) 946-4482
Fax: (201) 946-4510
E-mail: [email protected]
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178-0060
Attention: David G. Nichols, Jr., Esq.
Telephone: (212) 309-6145
Fax: (212) 309-6273
E-mail: [email protected]
and to:
Gibbons, Del Deo, Dolan, Griffinger &
Vecchione
One Riverfront Plaza
Newark, New Jersey 07102
Fax: (973) 596-0545
Telephone: (973) 596-4549
Attention: James B. Keenan, Esq.
(b) if to the Investors:
to the address set forth for such Investor
on Schedule I, with copies to:
(i) for the DB Group Investors:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Janet L. Fisher, Esq.
Tel: (212) 225-2472
Fax: (212) 225-3999
E-mail: [email protected]
(ii) for the Go2Net Group Investors:
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, MA 02110
Fax: (617) 951-1295
Telephone: (617) 951-6600
Attention: Francis J. Feeney,
Jr., Esq.
Cooley, Godward LLP
5200 Carillon Point
Kirkland, WA 98033
Fax: (425) 893-7777
Attention: Christopher Wright, Esq.
and to:
(iii) for the IAT Investors:
Peter Kellogg
c/o Spear, Leeds & Kellogg
120 Broadway
New York, NY 10271
All such notices, requests, consents and other communications shall be deemed to
have been delivered (i) in the case of personal delivery or delivery by
telecopy, on the date of such delivery; (ii) in the case of a
nationally-recognized overnight courier, on the next Business Day; and (iii) in
the case of mailing, on the fifth Business Day following such mailing if sent by
certified mail, return receipt requested.
Section 17
Modifications; Amendments
The terms and provisions of this Agreement may not be modified or
amended, except pursuant to writing signed by the Company and all of the
Stockholders.
Section 18
Counterparts
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
Section 19
Headings
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
Section 20
Severability
It is the desire and intent of the parties that the provisions of
Agreement be enforced to the fullest extent permissible under the law and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any provision of this Agreement would be held in any
jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 21
Governing Law; Submission to Jurisdiction
The parties hereby agree that this Agreement, and the respective
rights, duties and obligations of the parties hereunder, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to principles of conflicts of laws thereunder. To the fullest
extent permitted by applicable law, each of the parties hereby (i) irrevocably
consents and agrees that any legal or equitable action or proceeding arising
under or in connection with this Agreement shall be brought exclusively in the
courts of the United States of America for the Southern District of New York;
and (ii) by execution and delivery of this Agreement, irrevocably submits to and
accepts, with respect to any such action or proceeding, for itself and in
respect of its properties and assets, for purposes of this Agreement, the
jurisdiction of the aforesaid courts, and irrevocably waives any objection to
venue in such courts.
Section 22
Suspension of Disposition of Registrable Shares
It shall be a condition precedent to the obligations of the Company
under Section 6 hereof that each seller of Registrable Shares shall have agreed
that, (i) upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 6(h) hereof, such selling Stockholder
will forthwith discontinue disposition of Registrable Shares until such selling
Stockholder receives copies of a supplemented or amended prospectus contemplated
by Section 6(h) hereof, or until such selling Stockholder is advised in writing
by the Company that the use of the prospectus may be resumed and has received
copies of any additional or supplemental filings which are incorporated by
reference in the prospectus; and (ii) if so directed by the Company, such
selling Stockholder will deliver to the Company (at the expense of the Company)
all copies, other than permanent file copies then in such selling Stockholder's
possession, of the prospectus covering such Registrable Shares current at the
time of receipt of such notice. The one hundred eighty (180) day periods
referred to in Sections 6(a) and 6(c) hereof shall be extended by the number of
days during which a selling Stockholder is prevented from disposing of
Registrable Shares by virtue of this Section.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
NATIONAL DISCOUNT BROKERS GROUP, INC.
By: /s/ Arthur Kontos
Name: Arthur Kontos
Title: President and CEO
DB U.S. FINANCIAL MARKETS HOLDING
CORPORATION
By: /s/ John A. Ross
Name: John A. Ross
Title: President and Chief Executive
Officer
By: /s/ Douglas R. Barnard
Name: Douglas R. Barnard
Title: Vice President and Chief
Financial Officer
GO2NET, INC.
By: /s/ Michael J. Riccio, Jr.
Name: Michael J. Riccio, Jr.
Title: Chief Operating Officer
VULCAN VENTURES INCORPORATED
By: /s/ William D. Savoy
Name: William D. Savoy
Title: President
IAT REINSURANCE SYNDICATE, LTD.
By: /s/ Peter R. Kellogg
Name: Peter R. Kellogg
Title: President
<PAGE>
FOR IMMEDIATE RELEASE EXHIBIT 99(a)
Contact: Rich Tauberman
Media Contact - National Discount Brokers Group, Inc.
The MWW Group
(201) 507-9500 [email protected]
Rafael H. Yaghoutiel
Vice President, Investor Relations
National Discount Brokers Group, Inc.
Tel. (201) 536-6830 [email protected]
Frank E. Lawatsch, Jr.
Executive Vice President and General Counsel
National Discount Brokers Group, Inc.
(201) 946-4482 [email protected]
Marc Lingnau
Press Office New York
Deutsche Bank
(212) 469-3993 [email protected]
Andrea Hurst
Press Office London
Deutsche Bank
(44) 207 547 1851 [email protected]
Ronald Weichert
Press Office Frankfurt
Deutsche Bank
49 (69) 910 38664 [email protected]
Deutsche Bank Closes Purchase of Equity Stake in National Discount Brokers
Alliance Will Create Jointly Owned Online Brokerage Initiatives Outside of U.S.
and Will Provide NDB with Access to World Class Research and IPOs
New York and Jersey City, NJ, June 15, 2000 - Deutsche Bank AG (OTC:DTBKY), the
world's largest financial services group, and National Discount Brokers Group,
Inc. (NYSE:NDB), a leading Internet brokerage and financial services company,
announced today that the companies have closed the purchase by a Deutsche Bank
subsidiary of a significant equity stake in NDB. This strategic investment by a
Deutsche Bank subsidiary is the first step in the parties previously announced
plans to create a global e-commerce and financial alliance.
Deutsche Bank purchased 3 million shares of common stock, a pro forma 14.3 %
equity stake in National Discount Brokers Group, for $45.31 per share resulting
in gross proceeds of $135,930,000 and bringing Deutsche Bank's total investment
in NDB to 16.0 %. Under the terms of the agreement, Deutsche Bank will be
permitted to purchase up to a 19.3% stake. The remaining 3.3% may be acquired
through open market purchases.
The strategic alliance provides NDB with access to Deutsche Bank's U.S. equity
research and initial public offering capabilities and Deutsche Bank with access
to NDB's online investor community. It also allows Deutsche Bank to take
advantage of NDB's technology platform with the aim of delivering an
international online brokerage capability. Together the companies will create
jointly owned online brokerage capabilities outside of the United States.
About Deutsche Bank
With over Euro 953 billion in assets as of March 31, 2000 and
approximately 90,000 employees, Deutsche Bank offers its clients
unparalleled financial services throughout the world. It ranks among
the leaders in asset management, capital markets, corporate finance,
custody, cash management and private banking. Deutsche Bank is divided
into five major business units: Global Corporates and Institutions,
Global Technology and Services, Asset Management, Corporates and Real
Estate and Private and Retail Banking. Deutsche Bank provides a fully
integrated investment and wholesale banking service to corporate
clients from its main centers in Frankfurt, London, New York,
Baltimore, Tokyo, Singapore, Hong Kong and Sydney, as well as its
regional offices around the globe. The keys to the Bank's success
remain constant: customer focus, the spirit of innovation, a broad
range of product skills combined with technological power and financial
strength delivered by highly skilled professionals. Deutsche Bank has
committed itself to expanding its e-commerce offerings with the
global-e initiative which coordinates e-commerce efforts across all
business divisions.
About National Discount Brokers Group
Headquartered in Jersey City, New Jersey, National Discount Brokers Group, Inc.,
an S&P Small Cap 600 Index company, is the parent company of two financial
services entities: National Discount Brokers Corporation|ndb.com and NDB Capital
Markets Corporation, formerly Sherwood Securities Corp. National Discount
Brokers, which was recently ranked #1 in the Barron's Best of Online Brokers
survey, on February 29, 2000 had 207,900 customer accounts, with assets of $12.2
billion. NDB Capital Markets is a market maker in approximately 4,300 Nasdaq and
other OTC securities as of February 29, 2000. The Company and its subsidiaries
have offices in Jersey City, New York, Los Angeles, Chicago, Denver and Boston.
Customers can access National Discount Brokers Corporation|ndb.com at , via the
PowerBroker automated touch-tone telephone system 800-631-8884 or by calling
800-4-1-PRICE.
Statements made in this press release constitute forward-looking statements, as
that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements are subject to risks and uncertainties. These forward-looking
statements generally are accompanied by words such as "intend", "anticipate",
"believe", "estimate", "expect", "should" or similar expressions. It should be
understood that these forward-looking statements are subject to a number of
assumptions, risks and uncertainties, that could cause actual results to differ
materially from those expressed or implied in the forward-looking statements.
These uncertainties and risks include changes in laws, rules or regulations,
customer growth at NDB.com, and the ability of software and hardware to be
modified to perform the services required by the agreement. Risks also include
unplanned expense increases, due among other things to unplanned expenditures
for software, hardware and marketing alliances, and other risks as set forth in
the Form 10-Q of National Discount Brokers Group Inc. for the quarter ended
February 29, 2000.
The common stock of the Company anticipated to be offered and sold as described
herein will not be registered under the Securities Act of 1933 and may not be
offered or sold in the United States absent such registration or an applicable
exemption from such registration requirements.
This news release shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of the common stock of the Company
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under applicable securities laws, or
absent the availability of an exemption from such registration or qualification
requirements.
