Exhibit C
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 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 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 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
compiled 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, certificates
and other authorization, 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
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 corporation action.
2.4. Valid Issuance of Shares. The Shares, when and if issued, sold and
delivered in accordance with the terms hereof, against full payment of the
Purchase Price therefore, will be duly and validly issued, fully paid and
nonassessable.
2.5. No Consent or Approval Required. Other than (i) as required 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.
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2.6. Disclosure. Seller has previously furnished to Buyer the documents
listed on attached Exhibit 2.6 (collectively, the "Commission 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 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 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 of 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,
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 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
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
expenses of which will be borne by Seller), 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, 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
existing under the laws of the jurisdiction of its incorporation.
3.2. Authorization. Buyer has the corporate power and authority to
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 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
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 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 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 the
information it considers necessary or appropriate for deciding whether to
purchase the Shares. Buyer further represents that it has an opportunity to ask
questions and receive answers from Seller regarding the Shares and the business
of Seller.
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3.7. Investment Experience. Buyer (i) is an "accredited investor" as
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
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.
3.9. Legends. It is understood that each certificate evidencing 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 therein) 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.
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3.10. Finders. There is no investment banker, broker, finder,
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 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 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 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 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
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 participation, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the rules of the
Securities and
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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
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 to
issuing any press releases or otherwise making any public statement with respect
to the transactions 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
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
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
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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 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 compiled 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.
(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.
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(e) Mr. Xxxxxxxxx Xxx shall 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
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 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 Holders in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the Initiating Holders
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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
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
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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 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
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.
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(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 number 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.
(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 the 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
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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.
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
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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 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
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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 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 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
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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 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
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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
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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 a 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
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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.
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.
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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.
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: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxxxx Xxx
----------------------------- ------------------------------
Xxxxx Xxxxxxxx Xxxxxxxxx Xxx
Executive Vice President Chairman
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EXHIBIT 2.6
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.
