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):
May 18, 2000
NATIONAL DISCOUNT BROKERS GROUP, INC.
(Exact name of Registrant as specified in Charter)
Delaware 1-9480 22-2394480
(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
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (201) 946-2200
Not Applicable
(Former name and former address, as changed since last report
Item 5. Other Events
National Discount Brokers Group, Inc. (the "Corporation") announced on
May 18, 2000, that it had entered into a Securities Purchase Agreement (the
"SPA") dated as of May 15, 2000 with DB U.S. Financial Markets Holding
Corporation ("DBUS") pursuant to which the Corporation would sell 3,000,000
shares of its common stock to DBUS for $45.31 per share. A copy of the press
release announcing the transaction is filed as an exhibit to this Form 8-K. The
SPA together with certain exhibits is also filed with this Form 8-K.
In addition to the sale of shares of common stock by the Corporation, the
SPA provides that as a condition to the sale, (i) the Corporation and DBUS and
certain other parties enter into a Registrations 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") enter into a 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; (G) restrictions on DB conducting proxy
contests, or taking certain other actions with regard to the Corporation; (iv)
DB enter into an agreement regarding the providing of certain research materials
prepared by DB to customers of the Corporation or its subsidiaries in the United
States; and (v) DB enter 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.
The transaction is subject to several conditions including, but not
limited to, review under the Hart-Scott-Rodino Antitrust Improvement Act, the
negotiation of 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.
The SPA is subject to termination by mutual agreement of the parties or
by either of the parties if the transaction cannot be consummated on or prior to
dates set forth in the SPA.
The foregoing is a summary of the SPA and certain other proposed
agreements and is not complete. The SPA and other proposed forms of agreements
filed as exhibits with this Form 8-K are incorporated herein by reference. There
can be no assurance that the transactions contemplated by the SPA will be
consummated or consummated on schedule.
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", "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 these expressed in the forward-looking statements. These uncertainties and
risks include changes in laws and rules or regulations, and the inability of
the parties to the SPA or their respective affiliates to satisfy conditions to
closing of the transaction proposed in the SPA.
Item 7. Financial Statements and Exhibits
(c) Exhibits
10(a) Securities Purchase Agreement between National Discount
Brokers Group, Inc. and DB U.S. Financial Markets Holding
Corporation dated as of May 15, 2000. The Corporation agrees
to provide the Commission with copies of omitted Schedules and
Exhibits at its request.
10(b) Proposed Form of Stockholder Agreement between National
Discount Brokers Group, Inc. and Deutsche Bank A.G.
10(c) Proposed Form of Registration Rights Agreement among between
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 May 18, 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: May 19, 2000 By:
Name: Arthur Kontos
Title: President and Chief Executive Officer
<PAGE>
EXHIBIT 10(a)
SECURITIES PURCHASE AGREEMENT
between
NATIONAL DISCOUNT BROKERS GROUP, INC.
and
DB U.S. FINANCIAL MARKETS HOLDING CORPORATION
Dated as of May 15, 2000
<PAGE>
TABLE OF CONTENTS
(continued)
TABLE OF CONTENTS
<TABLE>
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ARTICLE I
PURCHASE AND SALE OF SHARES
<S> <C> <C>
1.1 Purchase and Sale.........................................................................................................1
1.2 Closing...................................................................................................................1
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1 Organization and Corporate Power..........................................................................................2
2.2 Authorization.............................................................................................................2
2.3 Government Approvals......................................................................................................2
2.4 Authorized and Outstanding Stock..........................................................................................3
2.5 Subsidiaries..............................................................................................................3
2.6 Securities Law Compliance.................................................................................................4
2.7 Commission Documents; Financial Information and Controls..................................................................4
2.8 Absence of Certain Events; No Material Adverse Effect.....................................................................5
2.9 Litigation................................................................................................................6
2.10 Compliance with Laws and Other Instruments................................................................................6
2.11 Taxes.....................................................................................................................6
2.12 Intellectual Property; Proprietary Rights; Employee Restrictions..........................................................7
2.13 Date Compliance...........................................................................................................7
2.14 Agreements of Directors, Officers and Employees...........................................................................8
2.15 Governmental and Industrial Approvals.....................................................................................8
2.16 Contracts and Commitments.................................................................................................8
2.17 Employee Matters..........................................................................................................9
2.18 No Brokers or Finders.....................................................................................................9
2.19 Transactions with Affiliates..............................................................................................9
2.20 Assumptions, Guarantees, etc. of Indebtedness of Other Persons............................................................9
2.21 Investment Company Act....................................................................................................9
2.22 Disclosures...............................................................................................................9
ARTICLE III
REPRESENTATIONS OF THE PURCHASER
3.1 Representations and Warranties...........................................................................................10
3.2 Wholly Owned Subsidiary..................................................................................................11
ARTICLE IV
CONDITIONS TO THE PURCHASER'S OBLIGATION
4.1 Effect of Conditions.....................................................................................................11
4.2 Representations and Warranties...........................................................................................11
4.3 Performance..............................................................................................................11
4.4 Board Election...........................................................................................................12
4.5 Opinions of Counsel......................................................................................................12
4.6 Certified Documents, etc.................................................................................................12
4.7 No Material Adverse Effect...............................................................................................12
4.8 Registration Rights Agreement............................................................................................12
4.9 Stockholder Agreement....................................................................................................12
4.10 Venture Agreements.......................................................................................................12
4.11 HSR Act..................................................................................................................12
4.12 Listing of Purchased Shares..............................................................................................13
4.13 Consents and Waivers.....................................................................................................13
4.14 Establishment of Firewalls...............................................................................................13
4.15 Common Stock Certificate.................................................................................................13
ARTICLE V
CONDITIONS OF THE COMPANY'S OBLIGATION
5.1 Effect of Conditions.....................................................................................................13
5.2 Representations and Warranties...........................................................................................13
5.3 Performance..............................................................................................................13
5.4 Registration Rights Agreement............................................................................................13
5.5 Stockholder Agreement....................................................................................................13
5.6 Venture Agreements.......................................................................................................14
5.7 HSR Act..................................................................................................................14
5.8 Consents and Waivers.....................................................................................................14
5.9 Listing of Purchased Shares..............................................................................................14
5.10 Establishment of Firewalls...............................................................................................14
5.11 Tender of Purchase Price.................................................................................................14
5.12 Fairness Opinion.........................................................................................................14
5.13 Opinions of Counsel......................................................................................................14
5.14 Certified Documents, etc.................................................................................................15
ARTICLE VI
MISCELLANEOUS
6.1 Survival of Representations..............................................................................................15
6.2 Parties in Interest......................................................................................................15
6.3 Amendments and Waivers...................................................................................................15
6.4 Notices..................................................................................................................15
6.5 Expenses.................................................................................................................16
6.6 Counterparts.............................................................................................................16
6.7 Effect of Headings.......................................................................................................17
6.8 Adjustments..............................................................................................................17
6.9 Governing Law............................................................................................................17
6.10 Assignment...............................................................................................................17
6.11 Waiver of Jury Trial.....................................................................................................17
6.12 Attorneys' Fees..........................................................................................................17
6.13 Termination..............................................................................................................17
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Exhibit A Form of Registration Rights Agreement
Exhibit B Form of Stockholder Agreement
Exhibit C Form of U.S. Research Agreement
Exhibit D Form of U.S. Underwriting Agreement
Schedule 2.2 Related Agreements
Schedule 2.4(c) Outstanding Obligations Regarding Common Stock
Schedule 2.5 Subsidiaries and Investments
Schedule 2.7(b) Material Liabilities and Obligations
Schedule 2.8 Certain Events and Commitments
Schedule 2.9 Litigation
Schedule 2.12 Intellectual Property
Schedule 2.15(b) Pending Registrations
Schedule 2.16 Certain Contracts
Schedule 2.18 Brokers and Finders
Schedule 2.20 Guarantees
</TABLE>
<PAGE>
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT is entered into as of May
15, 2000 by and among National Discount Brokers Group, Inc., a Delaware
corporation (the "Company"), and DB U.S. Financial Markets Holding Corporation,
a Delaware corporation (the "Purchaser").
WHEREAS, the Purchaser has indicated a desire to purchase from
the Company 3,000,000 shares of (the "Purchased Shares") the Company's common
stock, $0.01 par value per share (the "Common Stock");
WHEREAS, the Company has indicated a desire to sell an
aggregate of 3,000,000 shares of Common Stock to the Purchaser; and
WHEREAS, in consideration of, and in connection with, such
purchase and sale of Common Stock, the Company and the Purchaser have indicated
their intention to pursue certain strategic alliances involving on-line discount
brokerage services both in the United States and elsewhere;
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.........
PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale. Subject to the terms and conditions hereinafter set
forth, at the Closing (as defined below) the Company shall issue and sell to the
Purchaser, and the Purchaser shall purchase from the Company, the Purchased
Shares, at a price per share equal to forty-five dollars and thirty-one cents
($45.31) payable as provided in Section 1.2. The Purchased Shares shall have all
the rights, terms and privileges of Common Stock as set forth in the Certificate
of Incorporation. Capitalized terms used herein without definition shall have
the meanings set forth in Annex A.
1.2 Closing. Subject to the satisfaction or waiver of the conditions set forth
in Articles IV and V hereof, a closing (the "Closing") for the sale and purchase
of the Purchased Shares shall take place at the offices of Cleary, Gottlieb,
Steen & Hamilton, One Liberty Plaza, New York, New York, at 10:00 A.M., on the
second Business Day following receipt by the parties of the regulatory approvals
and other consents and approvals specified in Sections 4.11, 4.12, 5.7 and 5.8,
hereof, or such other date, time and place as shall be mutually agreed upon by
the Company and the Purchaser (the "Closing Date"). At the Closing, the Company
will deliver the Purchased Shares in the form of a certificate issued in the
name of the Purchaser (or any DB Group Member), upon receipt by the Company of
payment in U.S. dollars of the full purchase price therefor by or on behalf of
the Purchaser to the Company by wire transfer of immediately available funds to
an account designated in writing by the Company to the Purchaser.
Article II........
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser on
and as of the date hereof as follows:
2.1 Organization and Corporate Power. Each of the Company and its Principal
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite power and authority to own its properties and to carry on its business
as currently conducted. Each of the Company and its Principal Subsidiaries is
duly licensed or qualified to do business as a foreign corporation in each
jurisdiction wherein the character of its property or the nature of the
activities currently conducted by it makes such qualification necessary, except
where the failure to so qualify is not reasonably likely to have a Material
Adverse Effect.
2.2 Authorization. The Company has all necessary power and has taken all
necessary corporate action required for the due authorization, execution,
delivery and performance by the Company of this Agreement and the agreements and
instruments set forth on Schedule 2.2 hereto (collectively, the "Related
Agreements"), the consummation of the transactions contemplated herein or
therein and the due authorization, issuance and delivery of the Purchased
Shares. The issuance of the Purchased Shares will not require any further
corporate action and is not and will not be subject to any preemptive right,
right of first refusal or the like in favor of any other Person. This Agreement
and the Related Agreements will each be a legal, valid and binding obligation of
the Company 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.
2.3 Government Approvals. No consent, approval, license or authorization of, or
designation, declaration or filing with, any Governmental Entity will be
required on the part of the Company in connection with the execution, delivery
and performance by the Company of this Agreement, any of the Related Agreements
or the issuance of the Purchased Shares, except for (a) those which have been
made or granted; (b) the filing of registration statements with the Securities
and Exchange Commission (the "Commission") at the times and in the manner
required by the Registration Rights Agreement and, in connection therewith, the
filing of notices with any applicable state securities commission; (c) the
listing of the Purchased Shares on the New York Stock Exchange; (d) the filing
of Form D with the Commission; and (e) any required filing under the HSR Act and
the expiration or termination of any required waiting period thereunder (or
extension thereof).
2.4 Authorized and Outstanding Stock.
(a) The authorized capital stock of the Company immediately prior to the Closing
will consist of 51,000,000 shares of capital stock, of which 50,000,000 shares
are Common Stock and 1,000,000 shares are Preferred Stock.
(b) As of the date hereof, the issued and outstanding capital stock of the
Company consists of 17,998,567 shares of Common Stock. As of the date hereof,
options to purchase 1,943,859 shares of Common Stock have been granted and are
unexercised under the Company's stock option plans. All of the issued and
outstanding shares of capital stock of the Company are, and when issued in
accordance with the terms hereof, the Purchased Shares will be, duly authorized
and validly issued and fully paid and non-assessable, with no personal liability
attaching to the ownership thereof, and will be free and clear of all Liens,
claims, charges, Encumbrances, or transfer restrictions imposed by or through
the Company, except for restrictions imposed by (i) federal or state securities
or "blue sky" laws; and (ii) this Agreement. The designations, powers,
preferences, rights, qualifications, limitations and restrictions in respect of
each class or series of capital stock of the Company are as set forth in the
Certificate of Incorporation, and all such designations, powers, preferences,
rights, qualifications, limitations and restrictions are valid, binding and
enforceable in accordance with their terms and in accordance with applicable
Law.
(c) Except as set forth in Schedule 2.4(c) hereto, (i) no subscription, warrant,
option, convertible security or other right (contingent or otherwise) to
purchase or acquire any shares of capital stock of the Company is authorized or
outstanding; (ii) the Company has no obligation (contingent or otherwise) to
issue any subscription, warrant, option, convertible security or other such
right or to issue or distribute to holders of any shares of its capital stock
any evidences of indebtedness or assets of the Company; (iii) the Company has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any shares of its capital stock or any interest therein or to pay any dividend
or make any other distribution in respect thereof; and (iv) there are no
agreements, written or oral, between the Company and any holder of its capital
stock or, to the Knowledge of the Company, among any holders of its capital
stock, relating to the acquisition, disposition or voting of the capital stock
of the Company. Except as set forth in Schedule 2.4(c) hereto, no Person is
entitled to (i) any preemptive right, right of first refusal or similar right
granted by the Company with respect to the issuance of any capital stock of the
Company. Except as set forth in Schedule 2.4(c) hereto and as provided in the
Registration Rights Agreement, no Person has been granted rights by the Company
with respect to the registration of any capital stock of the Company under the
Securities Act of 1933, as amended (the "Securities Act"). All of the issued and
outstanding shares of the Company's capital stock have been offered, issued and
sold by the Company in compliance with applicable federal and state securities
laws.
2.5 Subsidiaries. Except as set forth in the SEC Documents and Schedule 2.5
hereto, the Company has no Subsidiaries nor any material investment or other
interest in, or any outstanding loan or advance in excess of $2,500,000 to or
from, any officer or director of the Company or any Person who owns 5% or more
of the issued and outstanding capital stock of the Company. The Company owns of
record and beneficially, free and clear of all Liens, claims, charges or
Encumbrances, all of the issued and outstanding capital stock of each of its
Principal Subsidiaries.
2.6 Securities Law Compliance. Assuming the representations, warranties and
covenants of the Purchaser set forth in Section 3.1 hereof are true and correct
in all material respects, the offer and sale of the Purchased Shares pursuant to
this Agreement will be exempt from the registration requirements of Section 5 of
the Securities Act. Neither the Company nor any Person acting on its behalf has,
in connection with the offer and sale of the Purchased Shares, engaged in (i)
any form of general solicitation or general advertising (as those terms are used
within the meaning of Rule 502(c) under the Securities Act); (ii) any action
involving a public offering within the meaning of Section 4(2) of the Securities
Act; or (iii) any action that would require the registration under the
Securities Act of the offering and sale of the Purchased Shares pursuant to this
Agreement or that would violate applicable state securities or "blue sky" laws.
The Company has not made, and will not prior to the Closing make, directly or
indirectly, any offer or sale of the Purchased Shares or of securities of the
same or similar class as the Purchased Shares if, as a result, the offer and
sale contemplated hereby could fail to be entitled to an exemption from the
registration requirements of the Securities Act. As used herein, the terms
"offer" and "sale" have the meanings specified in Section 2(3) of the Securities
Act.
2.7 Commission Documents; Financial Information and Controls.
(a) The Company has made available to the Purchaser true and complete copies of
all SEC Documents filed by it with the Commission since June 1, 1997. As of
their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act, the Exchange Act and the
rules and regulations of the Commission thereunder applicable to the SEC
Documents, and as of their respective dates, none of the SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company and its
consolidated subsidiaries included in the SEC Documents comply as of their
respective dates in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q promulgated by the Commission),
and present fairly in all material respects as of their respective dates the
consolidated financial position of the Company and the subsidiaries and the
consolidated results of their operations and their consolidated cash flows for
each of the respective periods, in conformity with GAAP. As used in this
Agreement, the consolidated balance sheet of the Company and its consolidated
subsidiaries at May 31, 1999, previously provided to the Purchaser, is
hereinafter referred to as the "Balance Sheet," and May 31, 1999 is hereinafter
referred to as the "Balance Sheet Date."
(b) Except as set forth in Schedule 2.7(b) and to the extent expressly set forth
in the Balance Sheet (including the notes, schedules or exhibits thereto) or as
expressly disclosed in the SEC Documents, (i) as of the Balance Sheet Date,
neither the Company nor the Principal Subsidiaries had any material liabilities
or obligations (whether absolute, contingent, accrued or otherwise) that would
be required to be included on a balance sheet prepared in accordance with GAAP;
and (ii) since the Balance Sheet Date, the Company and its consolidated
Subsidiaries have not incurred any such material liabilities or obligations
other than in the ordinary course of business and not exceeding $5,000,000 in
the aggregate.
(c) The Company has received a representation from PricewaterhouseCoopers LLP in
connection with the audit of the Company's financial statements for the year
ended May 31, 1999 to the effect that PricewaterhouseCoopers LLP are independent
public accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder, and the Company has no Knowledge that
PricewaterhouseCoopers LLP are not independent public accountants as so
required.
(d) The Company and each of its Subsidiaries maintain systems of internal
accounting controls sufficient to provide reasonable assurances that (i)
material transactions are executed in accordance with management's general or
specific authorization; (ii) material transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
the respective material assets of the Company and each such Subsidiary, as the
case may be, is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any material differences.
2.8 Absence of Certain Events; No Material Adverse Effect. Except as disclosed
in Schedule 2.8 or in the SEC Documents filed with the Commission prior to the
date hereof, since the Balance Sheet Date, the Company and its Principal
Subsidiaries have conducted their respective business operations in the ordinary
course, and there has not occurred any event or condition having, or that is
reasonably likely to have, a Material Adverse Effect. Without limiting the
generality of the foregoing, other than as is disclosed in the SEC Documents
filed with the Commission prior to the date hereof or Schedule 2.8 hereto, since
the Balance Sheet Date there has not occurred:
(a) any change or agreement to change the character or nature of the
business of the Company or any of its Principal Subsidiaries;
(b) any purchase, sale, transfer, assignment, conveyance or pledge of the assets
or properties of the Company or any of its Principal Subsidiaries, except in the
ordinary course of business;
(c) any waiver or modification by the Company or any of its Principal
Subsidiaries of any right or rights reasonably likely to have a Material Adverse
Effect;
(d) any liability, contract, agreement, license, loan, advance, or capital
expenditure or other commitment entered into or assumed by or on behalf of the
Company or any of its Principal Subsidiaries relating to the business, assets or
properties of the Company or any of its Principal Subsidiaries, whether oral or
written, except in the ordinary course of business or that is not reasonably
likely to have a Material Adverse Effect;
(e) any change in the accounting principles, methods, practices or procedures
followed by the Company in connection with the business of the Company or any
change in the depreciation or amortization policies or rates theretofore adopted
by the Company in connection with the business of the Company and the Principal
Subsidiaries;
(f) any declaration or payment of any dividends, or other distributions in
respect of the outstanding shares of capital stock of the Company or any other
change in the authorized capitalization of the Company, except as contemplated
in this Agreement; or
(g) any commitment by the Company (contingent or otherwise) to do any of
the foregoing.
2.9 Litigation. Except as otherwise set forth on Schedule 2.9, there is no
litigation or governmental proceeding or investigation pending, including
without limitation any proceeding, investigation or arbitration by the
Commission, the National Association of Securities Dealers, Inc. ("NASD"), any
stock exchange, other self-regulatory organization or state securities
commission or the National Securities Clearing Corporation, The Depository Trust
Company or any other clearing agency or, to the Knowledge of the Company,
threatened, against the Company or any Principal Subsidiary which, if determined
adversely to the Company or any of its Principal Subsidiaries is reasonably
likely to have, singly or in the aggregate, a Material Adverse Effect or prevent
the consummation of the transactions contemplated by this Agreement.
2.10 Compliance with Laws and Other Instruments. The Company is in compliance
with all of the provisions of this Agreement, and the Company and the Principal
Subsidiaries are in compliance with their respective constituent documents
(including without limitation any charter, by-laws or similar document) and,
except where such non-compliance is not reasonably likely to have a Material
Adverse Effect, with the provisions of each mortgage, indenture, lease, license,
other agreement or instrument, and each judgment, decree, judicial order,
statute and regulation (whether issued under domestic, foreign or international
law) by which any of them is bound or to which any of them or any of their
respective properties is subject, including, without limitation, of the NASD,
any stock exchange, the National Securities Clearing Corporation, The Depository
Trust Company and any other clearing agency, which apply to the conduct of their
respective businesses. Neither the execution, delivery or performance of this
Agreement or any of the Related Agreements, nor the offer, issuance, sale or
delivery of the Purchased Shares, will violate, or result in any breach of, or
constitute a default under, or result in the imposition of any encumbrance upon
any asset of the Company or any Principal Subsidiary pursuant to any provision
of the constituent documents of the Company or such Principal Subsidiary, or any
statute, rule or regulation, material contract or lease, judgment, decree or
other material document or instrument by which the Company or such Principal
Subsidiary is bound or to which the Company, such Principal Subsidiary or any of
their respective properties is subject, or, to the Knowledge of the Company,
will cause the Company or such Principal Subsidiary to lose the benefit of any
right or privilege it currently enjoys or, to the Knowledge of the Company,
cause any Person who is expected to normally do business with the Company or
such Principal Subsidiary to discontinue to do so on the same basis, except
where such discontinuance is not reasonably likely to have a Material Adverse
Effect.
2.11 Taxes. The Company and each Subsidiary have filed all material Tax Returns
(including statements of estimated Taxes owed) required to be filed within the
applicable periods for such filings (taking into account any extensions) and
have paid all Taxes required to be paid as indicated by the applicable Tax
Return. All such Tax Returns are true, correct and complete, except where the
failure to be true, correct and complete in the aggregate would not be likely to
have a Material Adverse Effect. The Company and each Subsidiary have filed all
other Tax Returns required to be filed within the applicable periods for such
filing (taking into account any extensions) and have paid all amounts due with
respect to Taxes (regardless of whether such amounts are shown on a Tax Return),
except to the extent that the failure to file such Tax Returns or pay such Taxes
would not in the aggregate be likely to have a Material Adverse Effect. All Tax
liabilities have been adequately provided for in the consolidated financial
statements of the Company. For purposes of this Agreement, the terms "Tax" and
"Taxes" shall include all federal, state, local and foreign taxes, including any
interest and penalties that may become payable in respect thereof, and including
income, franchise, property, sales and use, withholding, payroll, stamp,
value-added, transfer, excise and employment taxes.
2.12 Intellectual Property; Proprietary Rights; Employee Restrictions. For
purposes of this Agreement, "Intellectual Property Rights" shall mean (a) all
registered copyrights, copyright registrations and copyright applications,
trademark registrations and applications for registration, patents and patent
applications, trademarks, service marks, trade names and Internet domain names
that are used by the Company in the Company's business or by a Principal
Subsidiary in its business as currently conducted, together with all other
intellectual property rights owned by the Company and/or any of its Principal
Subsidiaries and used in connection with its business and all licenses,
assignments and releases of intellectual property rights of others in material
works embodied in the Company's or any Principal Subsidiary's products; (b) any
and all intellectual property rights, licenses, databases, computer programs and
other computer software user interfaces, know-how, trade secrets, customer
lists, proprietary technology, processes and formulae, source code, object code,
algorithms, architecture, structure, display screens, layouts, development
tools, instructions, templates and marketing materials created by or on behalf
of the Company or any Principal Subsidiary; and (c) inventions, trade dress,
logos and designs created by or on behalf of the Company or any Principal
Subsidiary. The Company and each of its Principal Subsidiaries own or possess
all requisite licenses or other rights to use all the Intellectual Property
Rights in order to conduct their business as conducted and as proposed to be
conducted, except where the lack of any such license or right is not reasonably
likely to have a Material Adverse Effect. Except as set forth on Schedule 2.12,
the present business activities or products of the Company and any of its
Principal Subsidiaries do not materially infringe any Intellectual Property
Rights of others, and any non-material infringements would not, individually or
in the aggregate, be likely to have a Material Adverse Effect.
2.13 Date Compliance. All data and data sensitive systems of the Company are
fully Date Compliant. "Date Compliant" shall mean (a) that such data and data
sensitive systems are able to manage and manipulate data involving dates,
including, but not limited to, single-century formulas and multi-century
formulas, date data century recognition and calculations that accommodate same
century and multi-century formulas, comparing and sequencing, and leap year
calculations; (b) that a subsequent abnormally ending scenario within the data
and data sensitive systems or the generation of incorrect values involving such
dates will not occur; and (c) that all date-related user interface
functionalities, data fields, continuing date values, date data interface values
and date-related functions will provide valid and unambiguous results.
2.14 Agreements of Directors, Officers and Employees. To the Knowledge of the
Company, no director, officer or employee of or consultant to the Company or any
Principal Subsidiary is in violation of any terms of any employment contract,
non-competition agreement, non-disclosure agreement, patent disclosure or
assignment agreement or other contract or agreement containing restrictive
covenants relating to the right of any such director, officer, employee or
consultant to be employed or engaged by the Company or the Principal Subsidiary
because of the nature of the business conducted or proposed to be conducted by
the Company or the Principal Subsidiary, or relating to the use of trade secrets
or proprietary information of others.
2.15 Governmental and Industrial Approvals. (a) The Company and each of its
Principal Subsidiaries have all material permits, licenses, orders, franchises
and other rights and privileges of all federal, state, local or foreign
governmental or regulatory bodies necessary for the Company and the Principal
Subsidiaries to conduct their respective businesses as currently conducted or
proposed to be conducted except to the extent the failure of the Company or any
such Subsidiary to have any such permit, license, order, franchise or other
right or privilege would not be reasonably likely to result in a Material
Adverse Effect. Except when the failure is reasonably likely to result in a
Material Adverse Effect, all such permits, licenses, orders, franchises and
other rights and privileges are in full force and effect and, to the Knowledge
of the Company, no suspension or cancellation of any of them is threatened, and
none of such permits, licenses, orders, franchises or other rights and
privileges will be affected by the consummation of the transactions contemplated
in this Agreement and the Related Agreements.
(b) Each of National Discount Brokers Corporation and NDB Capital Markets
Corporation is registered as a broker-dealer with the Commission, is a duly
qualified member of the NASD and is duly qualified or registered as a
broker-dealer in each jurisdiction where the failure to be so qualified or
registered is reasonably likely to have a Material Adverse Effect. Neither the
Company nor any of the Principal Subsidiaries is not registered or qualified as
a broker-dealer with the Commission or in any jurisdiction where the failure to
be so registered or qualified is reasonably likely to result in a Material
Adverse Effect. Except as set forth on Schedule 2.15(b), the applications for
which are being diligently prosecuted, neither the Company nor any Principal
Subsidiary is required to obtain any registration as an investment adviser, a
commodity trading advisor, a commodity pool operator, a futures commission
merchant, an insurance agent, a sales person or in any similar capacity with the
Commission, the NASD, the Commodity Futures Trading Commission, any clearing
agency, or any securities commission or self-regulatory organization in the
United States, that has not been obtained or is not in full force and effect,
nor has the Company or any such Subsidiary received notice of any requirement to
register as any of the foregoing in any jurisdiction outside the United States,
where the failure to obtain such registration would be reasonably likely to have
a Material Adverse Effect.
2.16 Contracts and Commitments. All of the contracts of the Company and each
Principal Subsidiary that are in effect on the date of this Agreement and that
are required to be described in the SEC Documents or to be filed as exhibits
thereto prior to the date hereof are described in the SEC Documents filed prior
to the date hereof or filed as exhibits thereto and are in full force and
effect, except where the failure to have described or filed any such contract is
not reasonably likely to have a Material Adverse Effect. True and correct copies
of all material contracts to which the Company or its Principal Subsidiaries are
parties on or prior to the date hereof which will be required to be described or
filed as an Exhibit in the SEC Documents following the date hereof have been
made available to the Purchaser except as listed on Schedule 2.16. The contracts
listed in Schedule 2.16 are in full force and effect. Neither the Company nor
any of its Principal Subsidiaries nor, to the Knowledge of the Company, any
other party is in material breach of or in default under any such contract.
2.17 Employee Matters. (a) The Company is in compliance in all material respects
with all currently applicable provisions of ERISA; no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any pension plan or (ii) Sections
412 or 4971 of the Code; and each pension plan for which the Company would have
any liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
(b) The transactions contemplated by this Agreement (alone or together with any
other event which, standing alone, would not by itself trigger such entitlement
or acceleration) will not (i) entitle any person to any benefit under any Plan;
or (ii) accelerate the time of payment or vesting, or increase the amount, of
any compensation due to any person under any Plan.
2.18 No Brokers or Finders. Except as set forth in Schedule 2.18, no person has
or will have, as a result of the transactions contemplated by this Agreement,
any right, interest or claim against or upon the Company, any of its Principal
Subsidiaries or the Purchaser for any commission, fee or other compensation as a
finder or broker because of any act or omission by the Company or any of its
Principal Subsidiaries.
2.19 Transactions with Affiliates. There are no loans, leases or other
agreements, understandings or continuing transactions between the Company or any
Principal Subsidiary on the one hand, and any officer or director of the Company
or any Principal Subsidiary or any person owning five percent (5%) or more of
the Common Stock of the Company or any respective family member or affiliate of
such officer, director or shareholder, on the other hand, which are required to
be disclosed in the SEC Documents and which are not so disclosed.
2.20 Assumptions, Guarantees, etc. of Indebtedness of Other Persons. Except as
set forth on Schedule 2.20 and other than in the ordinary course of its
business, neither the Company nor any Principal Subsidiary has assumed,
guaranteed, endorsed or otherwise become directly or contingently liable on or
for any indebtedness of any other Person, except a Subsidiary and guarantees by
endorsement of negotiable instruments for deposit or collection.
2.21 Investment Company Act. The Company is not an "investment company," or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
2.22 Disclosures. Neither this Agreement, any Schedule or Exhibit to this
Agreement, the Related Agreements contains any untrue statement of a material
fact by the Company or omits a material fact required to make the statements
made herein or therein, in light of the circumstances under which they were
made, not misleading.
Article III.......
REPRESENTATIONS OF THE PURCHASER
3.1 Representations and Warranties. The Purchaser hereby represents and warrants
to the Company, understanding and agreeing that the Company is entering into
this Agreement in part in reliance on such representations and warranties, as
follows:
(a) The Purchaser is an "accredited investor" as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act;
(b) The Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite power and authority to own its properties and to carry on its business
as currently conducted. The Purchaser is duly authorized to execute this
Agreement and the Related Agreements to which it is a party, and assuming due
execution and delivery by the Company of the Agreement and the Related
Agreements to which it is a party, this Agreement and the Related Agreements to
which the Purchaser is a party constitute legal, valid and binding obligations
of the Purchaser, enforceable against the Purchaser in accordance with their
respective 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;
(c) The Purchaser has been advised by the Company that the Purchased Shares have
not been registered under the Securities Act, that the Purchased Shares will be
issued on the basis of the statutory exemption provided by Section 4(2) of the
Securities Act or Regulation D promulgated thereunder, or both, relating to
transactions by an issuer not involving any public offering and under similar
exemptions under certain state securities laws, that this transaction has not
been reviewed by, passed on or submitted to any federal or state agency or
self-regulatory organization where an exemption is being relied upon (other than
any required filing under the HSR Act), and that the Company's reliance thereon
is based in part upon the representations made by the Purchaser in this
Agreement and the Related Agreements. The Purchaser acknowledges that it has
been informed by the Company of, or is otherwise familiar with, the nature of
the limitations imposed by the Securities Act and the rules and regulations
thereunder on the transfer of securities;
(d) The Purchaser is purchasing the Purchased Shares for investment purposes,
for its own account and not with a view to, or for sale in connection with, any
distribution thereof in violation of federal or state securities laws, and it
has had access to such financial and other information and has been afforded the
opportunity to ask such questions of representatives of the Company and receive
answers thereto as it deems necessary in connection with the purchase of the
Purchased Shares;
(e) By reason of its business or financial experience, the Purchaser has the
capacity to protect its own interest in connection with the transactions
contemplated hereunder;
(f) No Person has or will have, as a result of the transaction contemplated by
this Agreement, any right, interest or claim against or upon the Purchaser, the
Company, or any of its Principal Subsidiaries for any commission, fee or other
compensation as a finder or broker because of any act or omission by the
Purchaser;
(g) The Purchaser understands that an investment in the Common Stock bears a
high degree of risk and represents that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of purchasing the Purchased Shares and is able to bear the economic risk
of its investment for an indefinite period of time;
(h) The principal executive offices of the Purchaser are located in the State of
New York. No material consent, approval, license or authorization of, or
designation, declaration or filing with, any court or Governmental Entity is or
will be required on the part of the Purchaser in connection with the execution,
delivery and performance by the Purchaser of this Agreement or any of the
Related Agreements, except for (i) those which have already been made or
granted; (ii) any required filing under the HSR Act and the expiration or
termination of any required waiting period thereunder (or any extension
thereof); and (iii) the filing with the Commission of Forms 3 and 13D under the
Exchange Act; and
(i) The Purchaser is not (i) a "Related Party" as that term is defined for
purposes of Section 312.03(b)(1) of the New York Stock Exchange Listed Company
Manual; (ii) a subsidiary, affiliate or other closely-related person of a
Related Party; or (iii) a company or entity in which a Related Party has a
substantial direct or indirect interest.
3.2 Wholly Owned Subsidiary. The Purchaser is wholly owned, directly or
indirectly, by DB.
Article IV........
CONDITIONS TO THE PURCHASER'S OBLIGATION
4.1 Effect of Conditions. The obligation of the Purchaser to purchase and pay
for the Purchased Shares at the Closing, if any, shall be subject to the
satisfaction, or the waiver thereof by the Purchaser, of each of the conditions
set forth in this Article.
4.2 Representations and Warranties. The representations and warranties of (a)
the Company contained in this Agreement and the Stockholder Agreement; and (b)
the Company and each Affiliate of the Company party thereto contained in the
U.S. Research Agreement and the U.S. Underwriting Agreement shall be true and
correct on and as of the Closing Date, and the Purchaser shall have received a
certificate dated the Closing Date and signed on behalf of the Company to that
effect.
4.3 Performance. The Company and each Affiliate of the Company party to the U.S.
Research Agreement and the U.S. Underwriting Agreement, as applicable, shall
have performed and complied in all material respects with all of the agreements,
covenants and conditions contained in this Agreement, the Stockholder Agreement,
the U.S. Research Agreement and the U.S. Underwriting Agreement required to be
performed or complied with by it at or prior to the Closing, and the Purchaser
shall have received a certificate dated the Closing Date and signed on behalf of
the Company and each such Affiliate to that effect.
4.4 Board Election. Concurrently with the Closing, the DB Representative
shall have been appointed as a member of the Board of Directors.
4.5 Opinions of Counsel. The Purchaser shall have received opinions, dated as of
the date of the Closing, from Gibbons, Del Deo, Dolan, Griffinger & Vecchione,
P.C. and Morgan, Lewis & Bockius LLP, each counsel to the Company, and from
Frank E. Lawatsch, Jr., Executive Vice President, Secretary and General Counsel
of the Company, each in form and scope reasonably satisfactory to the Purchaser.
4.6 Certified Documents, etc. Counsel for the Purchaser shall have received a
copy of the Certificate of Incorporation certified by the Secretary of State of
the State of Delaware and a copy of the Company's By-laws certified by the
Secretary of the Company, as well as any and all other documents, including
authorizing resolutions, certificates as to votes adopted and incumbency of
officers and certificates from appropriate authorities as to the legal existence
and good standing of the Company and its Principal Subsidiaries, which the
Purchaser or its counsel may reasonably request.
4.7 No Material Adverse Effect. No Material Adverse Effect shall have
occurred since the date of this Agreement.
4.8 Registration Rights Agreement. The Purchaser shall have received from the
Company a counterpart of the Registration Rights Agreement executed by the
Company, Go2Net, Vulcan and IAT Reinsurance Syndicate, Ltd.
4.9 Stockholder Agreement. The Purchaser shall have received from the
Company a counterpart of the Stockholder Agreement executed by the Company.
4.10 Venture Agreements. The Purchaser shall have received from the Company (a)
a counterpart of each of the U.S. Research Agreement and the U.S. Underwriting
Agreement executed by the Company or an Affiliate of the Company; and (b) a
counterpart of each of the term sheets summarizing the principal terms of each
of the European Joint Venture and the Worldwide Joint Venture initialed by the
Company or an Affiliate of the Company, which term sheets shall be in form and
substance reasonably satisfactory to the Purchaser and shall include Exclusivity
and Non-Competition Provisions that shall be binding in accordance with their
terms from and including the Closing until the execution by the parties of
definitive agreements relating to the European Joint Venture and the Worldwide
Joint Venture.
4.11 HSR Act. All required filings under the HSR Act shall have been made by the
parties required to do so, and any waiting period thereunder (and any extension
thereof) applicable to the transactions contemplated hereby shall have expired
or shall have terminated, and neither the Company nor the Purchaser shall be
subject to any injunction or temporary restraining order against consummation of
the transactions contemplated hereby.
4.12 Listing of Purchased Shares. The Purchased Shares shall have been
approved for listing on the NYSE.
4.13 Consents and Waivers. The Company, the Purchaser and any of their
respective Affiliates party to any of the Related Agreements shall have obtained
all other consents or waivers necessary to execute this Agreement and the
Related Agreements, to issue the Purchased Shares and to carry out the
transactions contemplated hereby and thereby. All corporate and other action and
governmental filings necessary to effectuate the terms of this Agreement, the
Related Agreements and the other agreements and instruments to be executed and
delivered by the Company and the Purchaser in connection herewith shall have
been made or taken by it, except the filing by the Company of Form D with the
Commission.
4.14 Establishment of Firewalls. The Purchaser shall have received from the
Company evidence reasonably satisfactory in all material respects to the
Purchaser of the establishment of appropriate "firewalls" between the Purchaser
and its Affiliates, on the one hand, and the Company and its Affiliates, on the
other hand, with respect to their respective businesses.
4.15 Common Stock Certificate. The Company shall have delivered a stock
certificate to the Purchaser representing the Purchased Shares.
Article V.........
CONDITIONS OF THE COMPANY'S OBLIGATION
5.1 Effect of Conditions. The obligation of the Company to sell the Purchased
Shares to the Purchaser at the Closing, if any, shall be subject to the
satisfaction, or the waiver thereof by the Company, of each of the conditions
set forth in this Article.
5.2 Representations and Warranties. The representations and warranties of (a)
the Purchaser contained in this Agreement; and (b) DB contained in the U.S.
Research Agreement, the U.S. Underwriting Agreement and the Stockholder
Agreement shall be true and correct on and as of the Closing Date, and the
Company shall have received a certificate dated the Closing Date and signed on
behalf of the Purchaser and DB, as applicable, to that effect.
5.3 Performance. The Purchaser or DB, as applicable, shall have performed and
complied in all material respects with all of the agreements, covenants and
conditions contained in this Agreement, the Stockholder Agreement, the U.S.
Research Agreement and the U.S. Underwriting Agreement required to be performed
or complied with by it at or prior to the Closing, and the Company shall have
received a certificate dated the Closing Date and signed on behalf of the
Purchaser and DB, as applicable, to that effect.
5.4 Registration Rights Agreement. The Company shall have received from the
Purchaser a counterpart of the Registration Rights Agreement executed by the
Purchaser, Go2Net, Vulcan and IAT Reinsurance Syndicate, Ltd.
5.5 Stockholder Agreement. The Company shall have received from the
Purchaser a counterpart of the Stockholder Agreement executed by DB.
5.6 Venture Agreements. The Company shall have received from the Purchaser (a) a
counterpart of each of the U.S. Research Agreement and the U.S. Underwriting
Agreement executed by DB; and (b) a counterpart of each of the term sheets
summarizing the principal terms of the European Joint Venture and the Worldwide
Joint Venture initialed by each Affiliate of the Purchaser party to such term
sheets, which term sheets shall be in form and substance reasonably satisfactory
to the Company and shall include Exclusivity and Non-Competition Provisions that
shall be binding in accordance with their terms from and including the Closing
until the execution by the parties of definitive agreements relating to the
European Joint Venture and the Worldwide Joint Venture.
5.7 HSR Act. All required filings under the HSR Act shall have been made by the
parties required to do so, and any waiting period thereunder (and any extension
thereof) applicable to the transactions contemplated hereby shall have expired
or shall have terminated, and neither the Company nor the Purchaser shall be
subject to any injunction or temporary restraining order against consummation of
the transactions contemplated hereby.
5.8 Consents and Waivers. The Company, the Purchaser and any of their respective
Affiliates party to any of the Related Agreements shall have obtained all
consents or waivers necessary to execute this Agreement and the Related
Agreements, to issue the Purchased Shares and to carry out the transactions
contemplated hereby and thereby. All corporate and other action and governmental
filings necessary to effectuate the terms of this Agreement, the Related
Agreements and the other agreements and instruments to be executed and delivered
by the Company, the Purchaser and, to the extent required, any of their
respective Affiliates in connection herewith shall have been made or taken by
it, except the filing by the Company of Form D with the Commission.
5.9 Listing of Purchased Shares. The Purchased Shares shall have been
approved for listing on the NYSE.
5.10 Establishment of Firewalls. The Company shall have received from the
Purchaser, DB and, to the extent required, any of their respective Affiliates
evidence reasonably satisfactory in all material respects to the Company of the
establishment of appropriate "firewalls" between the Purchaser and its
Affiliates, on the one hand, and the Company and its Affiliates, on the other
hand, with respect to their respective businesses.
5.11 Tender of Purchase Price. The Purchaser shall have tendered payment
for the Purchased Shares in accordance with Section 1.2 hereof.
5.12 Fairness Opinion. The Board of Directors shall have received an opinion
from the Company's financial advisor, dated as of the date of the Closing, that
the consideration to be received by the Company for the Purchased Shares is fair
to the Company from a financial point of view.
5.13 Opinions of Counsel. The Company shall have received opinions, dated as of
the date of the Closing, from Cleary, Gottlieb, Steen & Hamilton, U.S. counsel
to DB, and from internal counsel for DB, each in form and scope reasonably
satisfactory to the Company.
5.14 Certified Documents, etc. Counsel for the Company shall have received (i) a
copy of the certificate of incorporation of the Purchaser certified by the
Secretary of State of the State of Delaware and a copy of the Purchaser's
By-laws certified by the Secretary of the Purchaser, as well as any and all
other documents, including authorizing resolutions, certificates as to votes
adopted and incumbency of officers and certificates from appropriate authorities
as to the legal existence and good standing of the Purchaser, which the Company
or its counsel may reasonably request; and (ii) such certificates of officers of
DB similar in form and scope to those customarily provided by DB in connection
with offerings of its debt securities in the public markets.
Article VI........
MISCELLANEOUS
6.1 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 of the transactions contemplated hereby 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.
6.2 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 hereto.
6.3 Amendments and Waivers. 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 the Purchaser. This Agreement (including the Schedules and
Exhibits annexed hereto, which are an integral part of this Agreement)
constitutes the full and complete agreement of the parties with respect to the
subject matter hereof, except that the provisions of the letter of intent, dated
March 27, 2000, between the Company and Deutsche Bank Americas Holding
Corporation specified therein as being binding and enforceable shall remain in
full force and effect until the consummation of the Closing.
6.4 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 the Purchaser at the
address set forth below or to such other address as may be furnished in writing
to the other parties 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]
DB U.S. Financial Markets
Holding Corporation: DB U.S. Financial Markets Holding
Corporation
31 West 52nd Street
New York, New York 10019
Attention: Thomas A. Curtis, Esq.
Tel: 212-469-7151
Fax: 212-469-8173
E-mail: [email protected]
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 two (2) days
following the date on which mailed, 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.
6.5 Expenses. Each party hereto will pay its own expenses in connection
with the transactions contemplated hereby.
6.6 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.
6.7 Effect of Headings. The article and section headings herein are for
convenience only and shall not affect the construction or interpretation hereof.
6.8 Adjustments. All provisions of this Agreement shall be automatically
adjusted to reflect any stock dividend, stock split or other such form of
recapitalization.
6.9 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.
6.10 Assignment. Neither the Purchaser nor the Company may assign or transfer
any of its rights pursuant to this Agreement unless the assigning Person shall
have first obtained the express written consent of the other party hereto,
except that the Purchaser may assign or transfer any of its rights pursuant to
this Agreement in connection with (and in proportion to) its transfer of any
Purchased Shares to any DB Group Member.
6.11 Waiver of Jury Trial. Each of the Company and the Purchaser 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 the
Purchaser 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 the Purchaser 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, this Agreement may be filed as a written consent to a trial
(without a jury) by the court.
6.12 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.
6.13 Termination. This Agreement shall be terminable (a) upon the mutual consent
of the parties hereto; and (b) by either party hereto upon written notice to the
other party if the Closing shall not have occurred on or prior to the later of
(i) June 16, 2000; and (ii) the date that is three (3) Business Days after the
satisfaction of the conditions specified in Sections 4.11 and 5.7 hereof, but in
no event later than November 16, 2000.
<PAGE>
IN WITNESS WHEREOF, the Company and the Purchaser 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:
Name:
Title:
DB U.S. FINANCIAL MARKETS HOLDING CORPORATION
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT 10(b)
STOCKHOLDER AGREEMENT
between
NATIONAL DISCOUNT BROKERS GROUP, INC.
and
DEUTSCHE BANK AG
Dated as of , 2000
<PAGE>
TABLE OF CONTENTS
(continued)
TABLE OF CONTENTS
ARTICLE I
REPRESENTATIONS AND WARRANTIES
<TABLE>
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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
ARTICLE V
MISCELLANEOUS
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
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STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT (this "Agreement") is entered into
as of _______, 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 VII.......
REPRESENTATIONS AND WARRANTIES
7.1 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 VIII......
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:
8.1 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 none of the foregoing limitations shall apply to
any Excluded Sale; and 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.
8.2 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
pursuant to any Compensation Plan; upon the exercise of stock
purchase or similar rights distributed pro rata to all holders of the Common
Stock; or 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.
8.3 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.
8.4 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).
8.5 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.
8.6 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.
8.7 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 IX........
ADDITIONAL AGREEMENTS
9.1 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.
9.2 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 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 ________,
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.
(c) 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.
9.3 Determination of Beneficial Ownership; Computation of Percentage
Ownership.
(a) 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.
(b) 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).
(c) 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.
(d) 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.
9.4 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.
9.5 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 X.........
DB STANDSTILL AGREEMENT
10.1 DB Standstill.
(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.
10.2 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
(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.
10.3 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. ss.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.
10.4 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.
10.5 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 XI........
MISCELLANEOUS
11.1 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.
11.2 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.
11.3 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.
11.4 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
31 West 52nd Street
New York, New York 10019
Attention: Thomas Curtis, Esq.
Tel: 212-469-7151
Fax: 212-469-8173
E-mail: [email protected]
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.
11.5 Expenses. Each Party hereto will pay its own expenses in connection
with the transactions contemplated hereby.
11.6 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.
11.7 Effect of Headings. The article and section headings herein are for
convenience only and shall not affect the construction or interpretation hereof.
11.8 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.
11.9 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.
11.10 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.
11.11 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.
11.12 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.
11.13 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.
11.14 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.
11.15 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:
Name:
Title:
DEUTSCHE BANK AG
By:
Name:
Title:
By:
Name:
Title:
<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 __________, 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(c)
REGISTRATION RIGHTS AGREEMENT
dated as of _____________, 2000
among
NATIONAL DISCOUNT BROKERS GROUP, INC.
and the
STOCKHOLDERS LISTED HEREIN
<PAGE>
TABLE OF CONTENTS
(continued)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <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
________________, 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:
Name:
Title:
DB U.S. FINANCIAL MARKETS HOLDING CORPORATION
By:
Name:
Title:
By:
Name:
Title:
GO2NET, INC.
By:
Name:
Title:
VULCAN VENTURES INCORPORATED
By:
Name:
Title:
IAT REINSURANCE SYNDICATE, LTD.
By:
Name:
Title:
<PAGE>
EXHIBIT 99(a)
FOR IMMEDIATE RELEASE
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
Deutsche Bank
(212) 469-3993 [email protected]
DEUTSCHE BANK AND NATIONAL DISCOUNT BROKERS
SIGN E-COMMERCE AND FINANCIAL ALLIANCE
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, May 18, 2000 - Deutsche Bank (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 completed a definitive stock purchase
agreement, which is part of the parties' previously announced intention to
create a global e-commerce and financial alliance. Together the companies will
create jointly owned online brokerage capabilities outside of the United States.
The strategic alliance also provides NDB with access to Deutsche Bank's U.S.
equity research and initial public offering capabilities. Deutsche Bank will
purchase up to a 19.3% stake in NDB, which includes 3 million shares to be
purchased directly from NDB.
The Deutsche Bank/National Discount Brokers strategic alliance provides 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.
The agreement calls for Deutsche Bank to purchase 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 definitive stock purchase agreement supercedes the letter of intent signed
by the parties on March 28, 2000. The parties expect the transaction to close
before June 30, 2000. The closing is subject to several conditions including a
review under the Hart-Scott-Rodino Antitrust Improvement Act. There can be no
assurance the transaction will close or close on schedule.
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.
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, at February 29, 2000 had 207,900 customer accounts, with assets of $12.2
billion. NDB Capital Markets main operations are as a market maker in
approximately 4,300 Nasdaq and other OTC securities as of February 29, 2000. The
Company has offices in Jersey City, New York, Los Angeles, Chicago, San
Francisco, 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.
