EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made as of July 9,
1998, by and between E*TRADE Group, Inc., a Delaware corporation ("Seller"), and
SOFTBANK Holdings Inc., a Delaware corporation ("Buyer"). Seller and Buyer are
hereunder also referred to collectively as the "Parties" and individually as
"Party."
WHEREAS, Seller wishes to issue and sell to Buyer, and Buyer wishes to
purchase from Seller, 15,647,922 shares (the "Shares") of Common Stock, par
value $.01 per share, of Seller ("Common Stock") at a purchase price of $25.5625
per share, upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1. Purchase and Sale of Stock
1.1. Purchase and Sale. Upon the terms and subject to the
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conditions set forth in this Agreement, at the Closing (as defined below),
Seller will issue and sell to Buyer, and Buyer will purchase from Seller, the
Shares for an aggregate purchase price (the "Purchase Price") of Four Hundred
Million Dollars ($400,000,000).
1.2. Closing. The consummation of the purchase and sale of the
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Shares (the "Closing") shall take place at the offices of Xxxxxxx, Xxxxxxx &
Xxxxxxxx LLP, 2200 Geng Road, Two Embarcadero Place, Palo Alto, California, at
10:00 a.m., Pacific Time, on the first business day after the last of the
conditions to the Closing set forth in Section 5 have been satisfied or waived
by the party or parties entitled to waive the same, or such other location or
time as the parties may mutually agree (the "Closing Date"). At the Closing,
Seller shall deliver to Buyer a certificate representing the Shares, registered
in the name of Buyer, against the payment by Buyer to Seller of the Purchase
Price for the Shares, by wire transfer of immediately available funds to an
account designated by Seller prior thereto.
2. Representations and Warranties of Seller
Seller represents and warrants to Buyer as follows:
2.1. Organization, Good Standing and Qualification. Each of Seller
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and E*TRADE Securities, Inc. ("Seller Subsidiary") is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
organization with all requisite power and authority to own its properties and
carry on its business as currently conducted. Each of Seller and Seller
Subsidiary is duly qualified to transact business and is in good standing in
each jurisdiction in which the failure to so qualify would have a material
adverse effect on the financial condition or business of Seller and its
subsidiaries, taken as a whole (a "Material Adverse Effect").
2.2. Permits; Approvals. Each of Seller and Seller Subsidiary (i) has
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complied with all federal, state, local and foreign laws, regulations and orders
applicable to its business,
except where the failure to so comply would not have a Material Adverse Effect,
and (ii) holds all licenses, permits, certifications and other authorizations,
including without limitation any such authorizations required under U.S. federal
securities laws, the absence of which would have a Material Adverse Effect.
There has been no default or violation under any such authorization and there is
no proceeding or investigation that is pending or, to Seller's knowledge,
threatened under which any such authorization may be revoked, terminated or
suspended.
2.3. Authorization. Subject to the ratification by the Board of
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Directors of Seller of this Agreement and the transactions contemplated hereby,
(i) Seller has the corporate power and authority to execute, deliver and perform
this Agreement and to issue and sell the Shares; (ii) this Agreement constitutes
Seller's valid and legally binding obligation, enforceable against Seller in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting rights of creditors generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity); and (iii) the execution, delivery and performance of this Agreement by
Seller and the issuance and delivery of the Shares have been duly authorized by
all necessary corporate action.
2.4. Valid Issuance of Shares. The Shares, when and if issued, sold
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and delivered in accordance with the terms hereof, against full payment of the
Purchase Price therefor, will be duly and validly issued, fully paid and
nonassessable.
2.5. No Consent or Approval Required. Other than (i) as required
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under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations thereunder (the "HSR Act"), (ii) filings required
under U.S. federal securities laws by virtue of Seller Subsidiary's status as a
broker-dealer, (iii) filings required under U.S. federal and state securities
laws in connection with Buyer's purchase of the Shares hereunder, (iv) any
consent, approval, authorization or filing required under Japanese law, U.S.
federal or state securities laws or the rules of the Nasdaq National Market in
connection with the provisions of Section 7 hereof, and (v) the ratification by
the Board of Directors of Seller of this Agreement and the transactions
contemplated hereby, no consent, approval or authorization of, or filing with,
any third party, including any governmental or regulatory authority, is required
for the valid authorization, execution and delivery by Seller of this Agreement
or for the valid authorization, issuance, sale and delivery of the Shares.
2.6. Disclosure. Seller has previously furnished to Buyer the
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documents listed on attached Exhibit 2.6 (collectively, the "Commission
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Filings"). As of their respective dates, the Commission Filings (including all
documents incorporated by reference therein) did not contain any 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, in light of the
circumstances under which they were made, not misleading, except for statements
or omissions which have been corrected in a subsequent Commission Filing.
2.7. Capitalization. The authorized capital stock of Seller consists
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of (i) 150,000,000 shares of Common Stock, of which 39,329,961 shares were
issued and outstanding on June 30, 1998, and (ii) 1,000,000 shares of Preferred
Stock, $.01 par value per share, none of which are issued or outstanding on the
date hereof. Other than (i) as disclosed in the
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Commission Filings (or in documents incorporated by reference therein), (ii) the
Stock Purchase Agreement dated as of June 5, 1998 (the "Existing Stock Purchase
Agreement"), between Seller and Buyer, (iii) the Agreement and Plan of
Reorganization dated as of July 6, 1998, by and among Seller, SDI Acquisition
Corporation and ShareData, Inc., and (iv) options granted by Seller's Board of
Directors and employee stock purchases, following the date of the most recent
Commission Filing, under Seller's stock option, stock incentive and stock
purchase plans described in the Commission Filings, there are no outstanding
options, warrants or commitments of any kind to which Seller is a party or by
which it is bound obligating Seller to issue, deliver or sell any shares of
capital stock of Seller.
2.8. Financial Statements. The financial statements of Seller,
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including the notes thereto, included in the Commission Filings (the "Seller
Financial Statements") have been prepared and fairly present the financial
position of Seller as of the dates thereof and the results of operations and
cash flows for the periods indicated therein in accordance with generally
accepted accounting principles consistently applied.
2.9. Intellectual Property. Each of Seller and Seller Subsidiary
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owns, licenses or otherwise has the right to use all patents, trademarks,
service marks, trade names and other similar intellectual property necessary to
enable it to carry on its business as now conducted and as currently proposed by
Seller and Seller Subsidiary to be conducted without, to Seller's knowledge, any
conflict with or infringement of the rights of others, except where the failure
to have such rights (and except for conflicts or infringements that) would not
have a Material Adverse Effect.
2.10. Litigation. Except as disclosed in the Commission Filings, there
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is no litigation or proceeding pending or, to Seller's knowledge, threatened
against Seller or its properties or business, which is reasonably likely to have
a Material Adverse Effect.
2.11. Finders. Other than BancAmerica Xxxxxxxxx Xxxxxxxx (the fees and
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expenses of which will be borne by Seller), there is no investment banker,
broker, finder, consultant or other intermediary that has been retained by, or
is authorized to act on behalf of, Seller who is entitled to any fee or
commission upon consummation of the transactions contemplated by this Agreement.
3. Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller as follows:
3.1. Organization. Buyer is a corporation duly organized and validly
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existing under the laws of the jurisdiction of its incorporation.
3.2. Authorization. Buyer has the corporate power and authority to
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execute, deliver and perform this Agreement and to purchase the Shares. This
Agreement constitutes Buyer's valid and legally binding obligation, enforceable
against Buyer in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting rights of creditors generally and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law or
in
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equity). The execution, delivery and performance of this Agreement by Buyer have
been duly authorized by all necessary corporate action.
3.3. No Consent or Approval Required. Other than (i) the filing of a
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foreign exchange notification under the Foreign Exchange and Foreign Trade
Control Law with the Ministry of Finance of Japan through the Bank of Japan, and
acceptance of such notification by the Ministry of Finance, and (ii) as required
under the HSR Act, no consent, approval or authorization of, or filing with, any
third party, including any governmental or regulatory authority, is required for
the valid authorization, execution and delivery by Buyer of this Agreement or
for the purchase of the Shares in accordance with the terms hereof.
3.4. Purchase Entirely for Own Account. The Shares will be acquired
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for Buyer's own account and not with a view to the resale or distribution of any
portion thereof. Buyer has no present intention of transferring, selling or
otherwise distributing the Shares and is not a party to any agreement or
arrangement to sell or transfer any of the Shares to any person.
3.5. Beneficial Ownership of Seller Common Stock. As of the date
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hereof and immediately prior to the Closing, Buyer and its affiliates do not own
and will not own any shares of Common Stock.
3.6. Disclosure of Information. Buyer believes it has received all
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the information it considers necessary or appropriate for deciding whether to
purchase the Shares. Buyer further represents that it has had an opportunity to
ask questions and receive answers from Seller regarding the Shares and the
business of Seller.
3.7. Investment Experience. Buyer (i) is an "accredited investor" as
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such term is defined in Rule 501(a) under the Securities Act of 1933, as amended
(the "1933 Act"); (ii) has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares, and has so evaluated the
merits and risks of such investment; and (iii) is able to bear the economic risk
of an investment in the Shares and, at the present time, is able to afford a
complete loss of such investment.
3.8. Restricted Securities. Buyer understands that unless the Shares
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are registered under Section 7, the Shares will be "restricted securities" under
the federal securities laws and that under such laws and applicable regulations
such Shares may be resold without registration under the 1933 Act , only in
certain limited circumstances, including pursuant to Rule 144 under the 1933
Act, or any successor rule thereto ("Rule 144"). Unless a transfer of Shares is
made in accordance with an effective registration statement under the 1933 Act
pursuant to Section 7, Buyer shall not transfer any Shares unless it shall
furnish Seller with an opinion of counsel, in form and substance reasonably
satisfactory to Seller, that such disposition will not require registration of
such shares under the 1933 Act.
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3.9. Legends. It is understood that each certificate evidencing
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Shares will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, HAVE BEEN
ACQUIRED FOR THE HOLDER'S OWN ACCOUNT AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO OFFER, SALE OR DISPOSITION OF THESE
SECURITIES MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933. IN ADDITION, THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAS AGREED NOT TO DIRECTLY OR INDIRECTLY SELL, TRANSFER,
ASSIGN, PLEDGE OR OTHERWISE DISPOSE OF ANY SUCH SHARES OTHER THAN IN
ACCORDANCE WITH A STOCK PURCHASE AGREEMENT DATED AS OF JULY 9, 1998
WITH THE COMPANY, A COPY OF WHICH IS ON FILE WITH THE COMPANY.
Notwithstanding the foregoing, Buyer (or any other Holder, as such
term is defined herein) shall have the right, upon written request to Seller on
or after termination of all applicable limitations on transfer with respect to
any Shares, to receive from Seller, without expense, a new certificate omitting
any legend with respect to the terminated limitations.
3.10. Finders. There is no investment banker, broker, finder,
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consultant or other intermediary that has been retained by, or is authorized to
act on behalf of, Buyer who is entitled to any fee or commission upon
consummation of the transactions contemplated by this Agreement.
4. Covenants
4.1. Transfer Restrictions. Buyer shall not, directly or
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indirectly, sell, transfer, assign, pledge or otherwise dispose of any interest
in any of the Shares acquired hereunder for a period of two (2) years following
the acquisition of such Shares (the "Holding Period"), provided that such
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agreement shall not be deemed to limit Buyer's right to consummate a merger or
other corporate transaction involving a change of control of Buyer as a result
of which Shares may be deemed to be transferred by operation of law to a
successor in interest of Buyer; and provided further that, notwithstanding
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anything in this Section 4.1 to the contrary, Buyer shall be permitted to (i)
sell, transfer, assign or pledge all or any part of the Shares to (A) any
directly or indirectly wholly-owned subsidiary of SOFTBANK Corp. or Buyer or (B)
any "affiliate" (as such term is defined under Rule 144) of Buyer with the
written consent of Seller, which consent shall not unreasonably be withheld, and
(ii) pledge up to fifty percent (50%) of the Shares owned of record or
beneficially by Buyer as collateral security for (A) senior indebtedness of
SOFTBANK Corp. or Buyer or their respective wholly-owned subsidiaries to
commercial banks or other private lending institutions or (B) margin loans made
by U.S. or Japanese security firms of international standing or reputation to
SOFTBANK Corp. or Buyer for the purchase or
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carrying of securities by SOFTBANK Corp. or Buyer. Buyer will not (and will not
permit any such subsidiary or affiliate to which Buyer sells, transfers, assigns
or pledges any Shares to) sell or transfer the Shares or any interest therein
except in compliance with the 1933 Act and applicable state securities laws and
this Agreement.
4.2. Standstill. For a period ("Restricted Period") commencing on the
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date of this Agreement and ending on the date which is five (5) years following
the date of this Agreement, neither Buyer nor any of its affiliates nor any
representatives shall, without the prior written consent of Seller or its Board
of Directors:
(a) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of Seller (other than the
Shares) or any subsidiary of Seller, or of any successor to or person in control
of Seller, or any assets of Seller or any subsidiary or division of Seller or of
any such successor or controlling person, except as provided in Section 4.5 and
Section 1 of the Existing Stock Purchase Agreement;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the rules of the
Securities and Exchange Commission ("Commission")), or seek to advise or
influence any person or entity with respect to the voting of any voting
securities of Seller;
(c) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any extraordinary
transaction involving Seller or any of its securities or assets;
(d) form, join or in any way participate in a "group" as defined in
Section 13(d)(3) of the 1934 Act (as defined below), in connection with any of
the foregoing;
(e) otherwise act or seek to control the management, the Board of
Directors or policies of Seller; or
(f) take any action that could reasonably be expected to require
Seller to make a public announcement regarding the possibility of any of the
events described in clauses (a) through (e) above.
During the Restricted Period, Buyer shall promptly advise Seller of any inquiry
or proposal made to Buyer or any of its affiliates, directors, officers,
employees, agents, advisors or other representatives, including without
limitation financial advisors, attorneys and accountants ("Representatives")
with respect to any of the foregoing.
4.3. Non-Solicitation. Buyer agrees that neither it nor any of its
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subsidiaries will, at any time from the date of this Agreement until the two (2)
year anniversary of such date, directly or indirectly, knowingly solicit for
employment any officer or key employee of Seller.
4.4. Publicity. Seller and Buyer shall consult with each other prior
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to issuing any press releases or otherwise making any public statement with
respect to the transactions
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contemplated hereby and prior to making any filings with any federal or state
governmental or regulatory agency or any self-regulatory organization with
respect thereto.
4.5. Board of Directors. On or before the Closing Date, Seller shall
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cause Mr. Xxxxxxxxx Xxx, President and CEO of SOFTBANK Corp., to be elected or
appointed as a director of Seller.
5. CONDITIONS TO THE CLOSING
5.1. Conditions to Buyer's Obligations. Buyer's obligation to purchase
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the Shares is subject to the satisfaction at or prior to the Closing of the
following conditions:
(a) The representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date (except that to the extent that any such representation or warranty
relates to a particular date, such representation or warranty shall be so true
and correct as of that particular date).
(b) Seller shall have performed or complied in all material respects with
all covenants required under this Agreement to be performed or complied with by
Seller at or prior to the Closing.
(c) At the Closing, there shall be no injunction, restraining order or
decree of any nature of any court or government authority of competent
jurisdiction that is in effect that restrains or prohibits the consummation of
the transactions contemplated hereby.
(d) All filings under the HSR Act shall have been made and any required
waiting period applicable to the sale of the Shares shall have expired or been
earlier terminated.
(e) Seller shall have delivered to Buyer a certificate, signed by an
executive officer of Seller, certifying as to the fulfillment of the conditions
set forth in this Section 5.1.
(f) Buyer shall have received an opinion from Xxxxxxx, Xxxxxxx & Xxxxxxxx
LLP, counsel to Seller, in customary form as agreed between the Parties.
5.2. Conditions to Seller's Obligations. Seller's obligation to issue and
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sell the Shares hereunder is subject to the satisfaction at or prior to the
Closing of the following conditions:
(a) The representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date (except that to the extent that any such representation or warranty
relates to a particular date, such representation or warranty shall be so true
and correct as of that particular date).
(b) Buyer shall have performed or complied in all material respects with
all covenants required under this Agreement to be performed or complied with by
Buyer at or prior to the Closing.
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(c) At the Closing, there shall be no injunction, restraining order or
decree of any nature of any court or government authority of competent
jurisdiction that is in effect that restrains or prohibits the consummation of
the transactions contemplated hereby.
(d) All filings under the HSR Act shall have been made and any required
waiting period applicable to the sale of the Shares shall have expired or been
earlier terminated.
(e) Mr. Xxxxxxxxx Xxx shall have become a director of Seller, effective
upon the Closing.
(f) Buyer shall have delivered to Seller a certificate, signed by an
executive officer of Buyer, certifying as to the fulfillment of the conditions
set forth in this Section 5.2.
(g) Seller shall have received an opinion from Xxxxxxxx & Xxxxxxxx,
counsel to Buyer, in customary form as agreed between the Parties.
6. Registration Rights
6.1. Demand Registration. (a) If, following expiration of the Holding
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Period pursuant to Section 4.1 hereof, Seller shall receive a written request
from the Holders (as defined in Section 6.9) that Seller file a registration
statement under the 1933 Act covering the registration of at least thirty
percent (30%) of the Registrable Securities (as defined in Section 6.9) then
outstanding (or a lesser percent if the anticipated aggregate offering price,
net of underwriting discounts and commissions, would exceed $100,000,000), then
Seller shall:
(i) within ten (10) days of the receipt thereof, give written notice
of such request to all Holders; and
(ii) as soon as practicable, and in any event within sixty (60) days
of the receipt of such request, file a registration statement under the 1933 Act
covering the registration of all Registrable Securities which the Holders
request to be registered, subject to the limitations of subsection 6.1(b),
within twenty (20) days of the mailing of such notice by Seller in accordance
with Section 9.3.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise Seller as a
part of their request made pursuant to subsection 6.1(a) and Seller shall
include such information in the written notice referred to in subsection 6.1(a).
The underwriter will be selected by the Initiating Holders and shall be
reasonably acceptable to Seller. In such event, the right of any Holder to
include his Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by the Initiating Holders and such Holder) to the extent provided herein.
All Holders proposing to distribute their securities through such underwriting
shall (together with Seller) enter into an underwriting agreement in customary
form (including the provision of Section 6.6) with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this Section 6.1, if the underwriter advises the Initiating
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Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Initiating Holders shall so advise all
Holders of Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of Seller owned by each Holder; provided, however, that
the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting.
(c) Notwithstanding the foregoing, if Seller shall furnish to Holders
requesting a registration statement pursuant to this Section 6.1, a certificate
signed by the Chief Executive Officer of Seller stating that in the good faith
judgment of the Board of Directors of Seller, it would be detrimental to Seller
and its shareholders for such registration statement to be filed, Seller shall
have the right to defer taking action with respect to such filing for a period
of not more than 120 days after receipt of the request of the Initiating
Holders.
(d) In addition, Seller shall not be obligated to effect, or to take any
action to effect, any registration pursuant to this Section 6.1:
(i) After Seller has effected two registrations pursuant to this
Section 6.1 and such registrations have been declared or ordered effective; or
(ii) During the period starting with the date sixty (60) days prior
to Seller's good faith estimate of the date of filing of, and ending on a date
one hundred eighty (180) days after the effective date of, a registration
subject to Section 6.2 hereof; provided that Seller is actively employing in
good faith all reasonable efforts to cause such registration statement to become
effective.
6.2. "Piggy-Back" Registration. (a) If, following expiration of the
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Holding Period pursuant to Section 4.1 hereof, Seller contemplates filing with
the Commission a registration statement under the 1933 Act in connection with
the public offering of Seller's securities (including any registration effected
by Seller for shareholders other than Holders) other than a registration
relating solely to the sale of securities to participants in an employee stock
option, bonus or other compensation plan or in connection with an acquisition,
merger or other business combination, Seller shall so notify the Holders in
writing of its intention to do so at least thirty (30) days prior to the filing
of such registration statement. Any Holder who gives written notice to Seller,
within fifteen (15) days after the Holder's receipt of such notice from Seller,
that such Holder desires to have any of its Registrable Securities included in
such registration statement, may, subject to the provisions of this Section 6.2,
have such Registrable Securities so included. Irrespective of whether a Holder
decides to include any of its Registrable Securities in any registration
statement thereafter filed by Seller, such Holder shall nevertheless have the
right to include any remaining Registrable Securities in any subsequent
registration statement as may be filed by Seller with respect to offerings of
its securities, all upon the terms and conditions set forth herein.
(b) If the registration of which Seller gives notice is for a registered
public offering involving an underwriting, Seller shall so advise the Holders as
part of the written notice
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given pursuant to Section 6.2(a). In such event, the right of any Holder to
registration pursuant to this Section 6.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute Registrable Securities through such underwriting
shall (together with Seller and the other holders of Seller securities
participating therein) enter into an underwriting agreement in customary form
(including the provision of Section 6.6) with the representative of the
underwriter or underwriters selected by Seller.
(c) Notwithstanding any other provision of this Section 6.2, if the
representative of the underwriters advises Seller in writing that the number of
Registrable Securities proposed to be sold in any such offering or sale is
greater than the number of shares which the representative believes feasible to
sell at that time at the price and upon the terms approved by Seller, the
representative may (subject to the limitations set forth below) exclude all
Registrable Securities from, or limit the number of Registrable Securities to be
included in, the registration and underwriting. Seller shall advise all holders
of securities requesting registration of any such marketing limitation, and the
number of securities that are entitled to be included in the registration and
underwriting shall be allocated first to Seller, for securities being sold for
its own account, and thereafter among the Holders and other holders of Seller's
securities with equivalent registration rights on a pro-rata basis based upon
the number of Registrable Securities and securities held by such other holders.
6.3. Obligations of Seller. When effecting the registration of any
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Registrable Securities under this Section 6, Seller shall:
(a) Prepare and file with the Commission a registration statement with
respect to Registrable Shares and use its best efforts to cause the applicable
registration statement to become effective, and to keep such registration
statement effective for up to one hundred twenty (120) days, unless Seller
elects to file a registration statement pursuant to Rule 415 under the 1933 Act
(or any successor rule thereto), which Seller shall keep effective until the
disposition of all Registrable Securities. However, if Seller shall furnish to
each Holder a certificate signed by the President of Seller stating that, in the
good faith judgment of the Board of Directors of Seller, it would be seriously
detrimental to Seller and its stockholders for such registration statement to be
filed in the near future and it is therefore essential to defer the filing of
such registration statement, Seller shall have the right to defer such filing
for a period of not more than one hundred twenty (120) days after receipt of the
request for registration.
(b) Prepare and file with the Commission such amendments and supplements
to the registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities covered
by the registration statement.
(c) Furnish to each Holder (or to any broker or other person at its
request) the numbers of copies of the then current prospectus, including a
preliminary prospectus, and any amendment of or supplement to the prospectus, in
conformity with the requirements of the 1933 Act, and such other documents as
the Holder may reasonably request in order to facilitate the disposition of
Registrable Securities.
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(d) Furnish, on the day that such Registrable Securities are delivered to
the underwriters for sale, if securities are being sold through the
underwriters, or, if such securities are not being sold through underwriters, on
the day that the registration statement with respect to the securities become
effective, (i) an opinion, dated as of the closing date of the offering, of the
counsel representing Seller for purposes of such registration, in form and
substance as its customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Shares and (ii) letters dated as of (x) the
effective date of the registration statement covering such Registrable Shares
and (y) the Closing Date of the offering, from the independent certified public
accountants of Seller, in form and substance as its customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to be Holders, addressed to the
underwriters, if any, and if permitted by applicable accounting standards, to
the Holders requesting registration of Registrable Shares.
(e) Use its best efforts to register and qualify, at its expense, the
Registrable Securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by any Holder to effectuate their disposition and shall continue such
qualification in effect so long as may be necessary to comply with all
applicable laws regulating sales of securities, provided that Seller shall not
be required to qualify to do business or to file a general consent to service of
process in any jurisdiction.
(f) In connection with any registration statement referred to in Section
6 hereof, promptly advise each Holder whose Registrable Securities are included
therein, and confirm such advice in writing (i) when the registration statement
has become effective, (ii) upon the filing of any amendment or supplement to the
registration statement, (iii) when any post-effective amendment to the
registration statement becomes effective, and (iv) of any request by the
Commission for any amendment or supplement to the registration statement or
prospectus or for additional information.
(g) If at any time the Commission should institute or threaten to
institute any proceeding for the purpose of issuing, or should issue, a stop
order suspending the effectiveness of the registration statement, promptly
notify the Holders whose Registrable Securities are included in such
registration statement, and use its best efforts to prevent the issuance of any
such stop order or to obtain the withdrawal thereof as soon as possible.
(h) Advise the Holders promptly of an order or communication of any
public board or body addressed to Seller suspending or threatening to suspend
the qualification of any shares of Common Stock for sale in any jurisdiction.
(i) Notify each Holder at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act or 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 any Holder, promptly prepare and furnish to such Holder a
reasonable number of copies of the amended or supplemented prospectus.
11
6.4. Furnish Information. To facilitate a registration requested under
-------------------
this Section 6, each Holder shall furnish to Seller such information regarding
itself, the Registrable Securities held by it, and the intended method of
disposition of such securities as Seller may reasonably request in writing and
as shall be required to effect the registration of its Registrable Securities.
6.5. Expenses of Registration. In connection with any registration of
------------------------
Registrable Securities hereunder, the Holders shall be solely responsible for
any (i) underwriting discounts and commissions applicable to the Registrable
Securities subject to such registration, (ii) income or withholding taxes
payable by any Holder on the proceeds received by such Holder on the sale of
such Registrable Securities, (iii) any applicable stamp duties or transfer
charges incurred in connection with the sale of such Registrable Securities and
(iv) the fees and disbursements of the Holders' legal counsel, if any. Seller
shall be responsible for all other expenses, including, without limitation, all
registration, filing, qualification, printers and accounting fees and the fees
and disbursements of counsel for Seller.
6.6. Indemnification. With respect to any registration rights under this
---------------
Section 6:
(a) To the extent permitted by law, Seller will indemnify, hold harmless
and defend each Holder and any underwriter of Registrable Securities sold by
such Holder pursuant to this Section 6 (an "Underwriter") (and any of such
Holder's or Underwriter's directors, officers, employees, and legal counsel) and
each person, if any, who controls, is controlled by or under common control of
any Holder or Underwriter within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), against any and all losses,
claims, damages, liabilities (joint or several) or expenses (including
reasonable legal and other expenses incurred in investigating and defending
against the same) to which the Holders or Underwriters, or any of them, may
become subject under the 1933 Act, the 1934 Act or other statute or common law,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon a claim by a third party
alleging any violation (a "Violation") by Seller of the 1933 Act, the 1934 Act,
or any state securities law or any rule or regulation promulgated under any of
the foregoing; provided, however, that Seller shall not be liable for any such
--------
loss, claim, damage, liability, expense or action to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, Underwriter or controlling person.
(b) To the extent permitted by law, each Holder whose Registrable
Securities are included in a registration statement will, severally and not
jointly, indemnify, hold harmless and defend Seller, each of its directors, each
of its officers who has signed the registration statement, each person, if any,
who controls, is controlled by or under common control of Seller within the
meaning of the 1933 Act, any other Holder selling securities under such
registration statement, any Underwriter and any person who controls, is
controlled by or under common control of any such Holder or Underwriter, against
any losses, claims, damages, liabilities or expenses (joint or several) to which
any of the foregoing persons may become subject, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such
12
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
provided, however, that in no event shall any indemnity by a Holder hereunder
--------
exceed the proceeds from the offering received by such Holder.
(c) An indemnified party will promptly notify the indemnifying party of
the commencement of any action or proceeding for which it believes such
indemnity is provided. The indemnifying party shall have the right to
participate in and to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to deliver written notice to the
indemnifying party within a reasonable time for the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve the
indemnifying party of any liability to the indemnified party under this Section
6.6.
(d) An indemnifying party shall have no indemnification obligation under
this Section 6.6 if the indemnified party settles an action, claim or proceeding
without the prior written consent of the indemnifying party, unless such consent
has been unreasonably withheld.
(e) If the indemnification provided for in this Section 6.6 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall, to the extent permitted by applicable law, contribute to the amount paid
or payable by such indemnified party as a result of such loss, claim, damage or
liability 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
in connection with the Violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equivalent considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by a court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the 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;
provided, however, that in no event shall any contribution by a Holder hereunder
exceed the proceeds from the offering received by such Holder.
(f) The obligations of Seller and the Holders under this Section 6.6
shall survive the completion of any offering of Registrable Securities
registration under this Section 6 and any termination of this Agreement.
6.7. Assignment of Registration Rights. The rights to cause Seller to
---------------------------------
register Registrable Securities pursuant to this Section 6 may be assigned by
any Holder together with any transfer of Registrable Securities provided that
(i) the transfer of the Registrable Securities complies with the applicable
terms of this Agreement, including, without limitation, Section 3.8 and (ii)
immediately after such transfer, the transferee holds at least five percent (5%)
of the then-outstanding Registrable Securities.
6.8. Market Holdback. If Seller provides a notice pursuant to Section 6.1
---------------
or 6.2(a) of its intention to file a registration statement in connection with a
public offering of Seller's securities and any Holder fails to exercise its
right to have its Registrable Securities
13
included in such registration statement, such Holder shall not sell, transfer or
otherwise dispose of any of its Registrable Securities during any specified
holdback period (not to exceed one hundred eighty (180) days following the
effective date of the registration statement) if such holdback is requested by
the managing underwriter of the offering and the same restriction is agreed to
by the officers and directors of Seller and all other persons with registration
rights with respect to Common Stock (whether or not pursuant to this Agreement).
6.9. Definitions.
-----------
(a) The term "Holder" (or, as the context may require, "Holders") means
Buyer and any transferee of Registrable Securities to which the registration
rights conferred by this Agreement have been transferred in accordance with
Section 6.7.
(b) The term "Registrable Securities" means Shares (and securities issued
by Seller in connection with any stock dividends on, or stock splits with
respect to, the Common Stock) that have not been sold to the public in
accordance with an effective registration statement under the 1933 Act or in
accordance with Rule 144.
7. Rule 144 Reporting
With a view to making available the benefits of Rule 144 to Holders, Seller
shall:
7.1. Make and keep available public information, as those terms are
understood and defined in Rule 144, at all times during which Seller is subject
to the reporting requirements of the 1933 Act or the 1934 Act;
7.2. File with the Commission in a timely manner all reports and other
documents required by the Commission to be filed by Seller as a condition to the
availability of an exemption under Rule 144 for the sale of Shares; and
7.3. Provide each Holder, promptly upon request, with (i) a written
statement by Seller as to its compliance with the reporting requirements of Rule
144 and (ii) such information as such Holder may reasonably request to avail
itself of any rule or regulation of the Commission allowing a Holder to sell any
Shares without registration.
8. INCIDENTAL AND CONSEQUENTIAL DAMAGES
BUYER WILL NOT BE LIABLE UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY
OR OTHER THEORY FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING
WITHOUT LIMITATION LOST PROFITS) WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT.
9. Miscellaneous
9.1. Successors and Assigns. The terms and conditions of this Agreement
----------------------
shall not be assignable except to an affiliate of Buyer which acquires
Registrable Securities pursuant to Section 6.7. Subject to the foregoing, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the successors and assigns of the Parties and shall inure to the
14
benefit of, and be enforceable by, each person who shall be a Holder from time
to time. Nothing in this Agreement, express or implied, is intended to confer
upon any Party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
9.2. Governing Law and Dispute Resolution. This Agreement shall be
------------------------------------
governed by and construed under the laws of the State of California without
giving effect to any choice of law rule that would cause the application of the
laws of any jurisdiction other than the internal laws of the State of California
to the rights and duties of the Parties hereunder. Any disputes arising among
the Parties in connection with this Agreement shall be settled by the Parties
amicably through good faith discussions upon the written request of any Party.
In the event that any such dispute cannot be resolved through such discussions
within a period of sixty (60) days after delivery of such notice, the dispute
shall be finally settled by arbitration in San Francisco, California, U.S.A., in
accordance with the rules then in effect of the American Arbitration
Association. The arbitrator(s) shall have the authority to grant specific
performance, and to allocate between the Parties the costs of arbitration in
such equitable manner as the arbitrator(s) may determine. The prevailing party
in the arbitration shall be entitled to receive reimbursement of its reasonable
expenses incurred in connection therewith, including (if Buyer is the prevailing
party) costs of travel to, and meals and hotel accommodations in, the United
States. Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be.
9.3. Notices. Any and all notices, requests, demands and other
-------
communications required or otherwise contemplated to be made under this
Agreement, shall be in writing and in English and shall be deemed to have been
duly given (i) if delivered personally, when received, (ii) if transmitted by
facsimile, on the first (1st) Business Day following receipt of a confirmation
of receipt, or (iii) if by international courier service, on the fourth (4th)
Business Day following the date of deposit with such courier service. All such
notices, requests, demands and other communications shall be addressed as
follows:
If to Seller:
E*TRADE Group, Inc.
Four Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Mr. Xxxxxxx Xxxxxxxx
Xx. Xxxxxxx Xxxxxxx
Telephone: 0-000-000-0000
Facsimile: 0-000-000-0000
15
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Xxxxxx X. Mo, Esq.
Telephone: 0-000-000-0000
Facsimile: 0-000-000-0000
If to Buyer:
SOFTBANK Holdings Inc.
00 Xxxxxxx Xxxx, Xxxxx 00
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx
Attention: Xxxxxx X. Xxxxxx,
Vice Chairman
Telephone: 0-000-000-0000
Facsimile: 0-000-000-0000
with copies to:
SOFTBANK CORP.
00-0, Xxxxxxxxxx-Xxxxxxxxxxx
Xxxx-xx, Xxxxx 000, Xxxxx
Attention: Xx. Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxxxxx, Esq.
Telephone: 00-0-0000-0000
Facsimile: 00-0-0000-0000
and
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone: 0-000-000-0000
Facsimile: 0-000-000-0000
9.4. Expenses. Each Party shall pay all costs and expenses incurred by it
--------
in connection with this Agreement; provided, however, that the Parties shall
-------- -------
share equally the cost of any filing fees under the HSR Act required in
connection with the transactions contemplated hereby. Each Party agrees to
cooperate with the other Party (at the other Party's expense) in obtaining any
regulatory approvals required in connection with the transactions contemplated
hereby.
16
9.5. Amendments and Waivers. Any term of this Agreement may be amended
----------------------
only with the written consent of each of the Parties. No waiver of any term or
condition of this Agreement be valid or binding on any Party unless the same
shall have been mutually assented to in writing by each Party. The failure of a
Party to enforce at any time any of the provisions of this Agreement, or the
failure to require at any time performance by one or both of the other Parties
of any of the provisions of this Agreement, shall in no way be construed to be a
present or future waiver of such provisions, nor in any way affect the ability
of a Party to enforce each and every such provision thereafter.
9.6. Severability. If any provision in this Agreement shall be found or
------------
be held to be invalid or unenforceable then the meaning of said provision shall
be construed, to the extent feasible, so as to render the provision enforceable,
and if no feasible interpretation would save such provision, it shall be severed
from the remainder of this Agreement which shall remain in full force and effect
unless the severed provision is essential and material to the rights or benefits
received by any Party. In such event, the Parties shall use best efforts to
negotiate, in good faith, a substitute, valid and enforceable provision or
agreement which most nearly affects the Parties' intent in entering into this
Agreement.
9.7. Further Assurances. The Parties shall each perform such acts,
------------------
execute and deliver such instruments and documents, and do all such other things
as may be reasonably necessary to accomplish the transactions contemplated in
this Agreement.
9.8. Specific Performance. Without prejudice to the rights and remedies
--------------------
otherwise available to Seller, Seller shall be entitled to equitable relief by
way of injunction or otherwise if Buyer or any of its Representatives breach or
threaten to breach any of the provisions under Section 4 of this Agreement. In
the event of litigation relating to this letter agreement, if a court of
competent jurisdiction determines in a final order from which there is no appeal
that this letter agreement has been breached by Buyer or by its Representatives,
Buyer will reimburse Seller for its costs and expenses (including, without
limitation, legal fees and expenses) incurred in connection with the enforcement
of this Agreement and such litigation.
9.9. References; Subject Headings. Unless otherwise indicated, references
----------------------------
to Sections and Exhibits herein are to Sections of, and Exhibits to, this
Agreement. The subject headings of the Sections of this Agreement are included
for the purpose of convenience of reference only, and shall not affect the
construction or interpretation of any of its provisions.
9.10. Counterparts. This Agreement may be executed in one or more
-----------
counterparts, but all of which together shall constitute one and the same
instrument.
9.11. Existing Stock Purchase Agreement. The Existing Stock Purchase
---------------------------------
Agreement shall be terminated, and be of no further force or effect, upon the
completion of the Closing. Seller shall not exercise its rights under the
Existing Stock Purchase Agreement until such time as the conditions to the
Closing are unable to be satisfied, and by virtue thereof Seller terminates this
Agreement upon written notice to Buyer confirming that Buyer's obligations to
purchase Shares hereunder are released and discharged. It is understood that
Seller shall only be entitled to sell shares of Common Stock to Buyer under
either this Agreement or the Existing Stock Purchase Agreement, but not both.
17
IN WITNESS WHEREOF, the Parties have caused their respective duly
authorized representatives to execute this Agreement as of the date first
written above.
E*TRADE GROUP, INC. SOFTBANK HOLDINGS INC.
By: By:
---------------------- -------------------------
Xxxxx Xxxxxxxx Xxxxxxxxx Xxx
Executive Vice President Chairman
Commission Filings
1. Annual Report on Form 10-K for the fiscal year ended September 30.
2. Quarterly Reports on Form 10-Q for the quarters ended December 31, 1997 and
March 31, 1998.
3. Definitive Proxy Statement dated and filed as of January 16, 1998.
