CONFORMED COPY
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REGISTRATION RIGHTS AGREEMENT
dated as of June 15, 2000
among
NATIONAL DISCOUNT BROKERS GROUP, INC.
and the
STOCKHOLDERS LISTED HEREIN
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TABLE OF CONTENTS
Page
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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
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of June 15,
2000, among NATIONAL DISCOUNT BROKERS GROUP, INC., a Delaware corporation
(together with its successors, the "Company"), and the stockholders of the
Company listed on Schedule I hereto (the "Investors").
Each Investor currently owns or has the right to acquire the number of
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company set
forth opposite the name of such Investor on Schedule I. The parties hereto deem
it to be in their best interests to set forth their rights and obligations in
connection with certain public offerings and sales of shares of Common Stock.
Accordingly, the parties agree as follows:
SECTION 1
Definitions
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2
promulgated under the Exchange Act. Notwithstanding the foregoing, no Party (nor
any Affiliate of such Party) shall be considered an Affiliate of another Party
(or any of it Affiliates) provided, that no Person that is an Affiliate of an
Investor, on the one hand, shall be deemed to be an Affiliate of the Company, on
the other hand, and vice versa; and provided, further, that any Person that in
the absence of this provision might be deemed to be an Affiliate of both an
Investor and the Company shall for the purposes hereof be an Affiliate only of
the party with which such Person is principally affiliated.
"Board of Directors" shall mean the Board of Directors of the Company,
as from time to time constituted.
"Business Day" shall mean any day other than a Saturday, Sunday or a day
on which the New York Stock Exchange or banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
"Change in Control" shall mean (i) any merger or consolidation of the
Company in which the holders of voting securities and Common Stock Equivalents
outstanding immediately prior to such merger or consolidation have the right to
receive, upon consummation of such transaction less than fifty percent (50%) of
the outstanding voting securities of the surviving entity; (ii) any sale,
assignment, transfer or other disposition of all or substantially all of the
assets of the Company other than to an Affiliate of the Company; or (iii) any
transaction in which any Person, or any two or more Persons acting as a group,
and all Affiliates of the Person or Persons, who prior to such time owned shares
representing less than fifty percent (50%) of the voting power at elections for
the Board of Directors, shall acquire, whether by purchase, exchange, tender
offer, merger, consolidation or otherwise, such additional shares of the
Company's capital stock in one or more transactions, or series of transactions,
such that following such transaction or transactions, such person or group and
Affiliates beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), fifty percent (50%) or more of the voting power at elections for
the Board of Directors; provided, however, that the foregoing shall not apply to
the grant of proxy voting rights to a Person designated by the Board of
Directors in connection with any meeting of stockholders of the Company.
"Change in Law" shall mean any change in Law or in any interpretation or
application thereof by any Governmental Entity responsible for the
implementation or enforcement of such Law that (i) results in DB or any of its
Affiliates being prohibited from owning or holding all or any portion of the DB
Investment Shares; or (ii) would impose or result in material restrictions
(economic or other) on DB or such Affiliate if it would continue to own or hold
such DB Investment Shares.
"Commission" shall mean the U.S. Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning set forth in the preamble to this
Agreement.
"Common Stock Equivalents" shall mean any security issued by the Company
convertible into, or exchangeable or exercisable for, Common Stock.
"DB" shall mean DB U.S. Financial Markets Holding Corporation, a
Delaware corporation.
"DB Group Investors" shall mean DB, each other XX Xxxxxx 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.
"XX Xxxxxx" 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 June 15, 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 XX Xxxxxx 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 XX Xxxxxx is required to dispose of any
Registrable Shares held by it as a result of a Change in Law (provided that DB
or such XX Xxxxxx 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.
SSECTION 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.
00 Xxxxxxxx Xxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxxxx.xxx
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxx@xxx.xxx
and to:
Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, 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, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxx.xxx
(ii) for the Go2Net Group Investors:
Xxxxxxxx, Xxxxxxx & Xxxxxxx
A Professional Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Xxxxxx, Godward LLP
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx Xxxxxx, Esq.
and to:
(iii) for the IAT Investors:
Xxxxx Xxxxxxx
c/o Spear, Leeds & Xxxxxxx
000 Xxxxxxxx
Xxx Xxxx, XX 00000
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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
NATIONAL DISCOUNT BROKERS GROUP, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title: President and CEO
DB U.S. FINANCIAL MARKETS HOLDING CORPORATION
By: /s/ Xxxx X. Xxxx
----------------
Name: Xxxx X. Xxxx
Title: President and Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Chief Financial
Officer
GO2NET, INC.
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Chief Operating Officer
VULCAN VENTURES INCORPORATED
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
IAT REINSURANCE SYNDICATE, LTD.
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: President
