Exhibit 10.6
DATEK VOTING AGREEMENT
AGREEMENT, dated as of June 9, 2002 (this "Agreement"), by and
between Datek Online Holdings Corp. (the "Stockholder") and Instinet Group
Incorporated ("Parent").
WHEREAS, simultaneously with the execution of this Agreement,
Parent, Daiquiri Merger Corporation, a Delaware corporation ("Merger Sub"), and
Island Holding Company, Inc. (the "Company") are entering into an Agreement and
Plan of Merger, dated as of the date hereof (the "Merger Agreement") providing,
among other things, for the merger of Merger Sub with the Company (the
"Merger");
WHEREAS, as of the date hereof, the Stockholder is the
Beneficial Owner (as defined below) of, and has the sole right to vote and
dispose of (i) 1,794,745.1 shares of Class L common stock, $0.001 par value per
share, of the Company (the "Class L Common Stock") and (ii) 143,088 shares of
Class A-1 common stock, $0.001 par value per share, of the Company (the "Class
A-1 Common Stock", and together with the Class L Common Stock, the "Company
Common Stock") (collectively, together with any additional Securities hereafter
acquired by the Stockholder or its controlled Affiliates (and except as provided
in Section 18), the "Subject Shares"); and
WHEREAS, as a condition to Parent's entering into the Merger
Agreement, Parent has required that the Stockholder agree, and the Stockholder
has agreed, to enter into this Agreement.
NOW, THEREFORE, to induce Parent to enter into the Merger
Agreement and in consideration of the premises herein contained, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Certain Definitions. Capitalized terms used but not defined
in this Agreement are used in this Agreement with the meanings given to such
terms in the Merger Agreement. In addition, for purposes of this Agreement:
"Affiliate" means, with respect to any specified Person, any
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified. For purposes of this Agreement, with respect to the Stockholder,
"Affiliate" shall not include the Company and the Persons that directly, or
indirectly through one or more intermediaries, are controlled by the Company.
"Ameritrade Merger Agreement" means the Amended and Restated
Agreement and Plan of Merger, dated as of May 16, 2002, by and between the
Stockholder, Ameritrade Holding Corporation, Arrow Stock Holding Corporation,
Arrow Merger Corp. and Dart Merger Corp, as in effect from time to time
(provided that none of the provisions in such agreement relating to the Datek
Distribution shall have been amended in any respect applicable to this Agreement
without Parent's written consent).
"Beneficially Owned" or "Beneficial Ownership" with respect to
any securities means having beneficial ownership of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act, disregarding the
phrase "within 60 days" in paragraph (d)(1)(i) thereof), including pursuant to
any agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
all Affiliates of such Person and all other Persons with whom such Person would
constitute a "Group" within the meaning of Section 13(d) of the Exchange Act and
the rules promulgated thereunder.
"Beneficial Owner" with respect to any securities means a
Person that has Beneficial Ownership of such securities.
"DGCL" means the Delaware General Corporation Law, as amended
from time to time.
"Person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Pro Rata Securityholder Distribution" means a distribution
(by dividend or otherwise) of the Subject Shares by the Stockholder in respect
of its capital stock or securities exercisable therefor to its stockholders and
optionholders in which the Bain Holders, the TA Holders and the Silver Lake
Holders receive at least their pro rata share of the Subject Shares (based on
their fully diluted interest in the Stockholder as of the date hereof adjusted
for the effects of employee stock options or similar stock issuances occurring
after the date hereof) and the other Subject Shares are distributed
substantially as widely as set forth in Section 3.17(a) of the Company
Disclosure Schedule attached to the Merger Agreement, including with respect to
approximate number of security holders and approximate range of sizes of share
holdings.
"Transfer" means, with respect to a security, the sale,
transfer, pledge, hypothecation, encumbrance, assignment or disposition of such
security or the Beneficial Ownership thereof, whether directly or indirectly
(pursuant to any transaction involving a security linked to such security,
including any equity swap, put, put equivalent, collar, sale of exchangeable
security or similar transaction, the creation of a derivative security or
otherwise), the offer to make such a sale, transfer or other disposition, and
each option, agreement, arrangement or understanding, whether or not in writing,
to effect any of the foregoing. As a verb, "Transfer" shall have a correlative
meaning.
2. Stockholder Vote. The Stockholder agrees that, unless this
Agreement has been terminated in accordance with its terms, (a) at such time as
the Company conducts a meeting of or otherwise seeks a vote or consent of its
stockholders for the purpose of approving and adopting the Merger Agreement and
the Merger and/or the Company Charter Amendment, it will vote or provide a
consent with respect to and will cause its controlled Affiliates to vote or
provide a consent with respect to, as the case may be, all Subject Shares then
Beneficially Owned by the Stockholder or its controlled Affiliates in favor of
the Merger Agreement and the Merger and/or the Company Charter Amendment (as
applicable) and (b) it will (at any meeting of stockholders) vote its Subject
Shares against, and it will not consent to, and will cause its controlled
Affiliates to vote against and not to consent to, any Prohibited Transaction.
Without limiting the foregoing, it is understood that the obligations under this
Section 2 shall remain applicable in respect of each meeting of stockholders of
the Company duly called (or solicitation of consents) for the purpose of
approving the Merger Agreement and the Merger and/or the Company Charter
Amendment and/or any Prohibited Transaction regardless of the position of the
Company's board of directors as to the Merger or any such Prohibited Transaction
at the time of such meeting or solicitation.
3. Grant of Irrevocable Proxy; Registration Rights; Merger
Consideration. (a) Until this Agreement is terminated, the Stockholder hereby
irrevocably appoints Parent, its officers, agents and nominees, with full power
of substitution, as proxy for and attorney in fact of the Stockholder to act
with respect to and vote the Subject Shares then Beneficially Owned by the
Stockholder for and in the name, place and stead of the Stockholder at any
annual, special or other meeting of the holders of shares of Company capital
stock and at any adjournment or postponement thereof or pursuant to any written
consent in lieu of a meeting, to the fullest extent that the Subject Shares are
entitled to be voted in accordance with Section 2; provided that Parent, its
officers, agents or nominees may exercise this irrevocable proxy only if the
Stockholder fails to comply with the terms of Section 2. The Stockholder will
cause its controlled Affiliates to grant such an irrevocable proxy with respect
to each Subject Share now Beneficially Owned or hereafter acquired by such
controlled Affiliates. In all other matters, the Subject Shares shall be voted
by and in the manner determined by the Stockholder upon at least 3 business
days' prior written notice to Parent. The Stockholder hereby represents that it
has not heretofore granted any irrevocable proxy with respect to the Subject
Shares and hereby revokes any and all proxies which may heretofore have been
granted by the Stockholder with respect to the Subject Shares.
(b) The Stockholder understands and acknowledges that Parent
is entering into the Merger Agreement in reliance upon the Stockholder's
execution and delivery of this Agreement. The Stockholder hereby affirms that
the irrevocable proxy set forth in this Section 3 is given in connection with
and as an inducement for the execution by Parent of the Merger Agreement and to
secure the performance of the duties of the Stockholder under this Agreement.
The Stockholder hereby further affirms that the irrevocable proxy is coupled
with an interest and may not be revoked. The Stockholder hereby ratifies and
confirms all that such proxy may lawfully do or cause to be done by virtue
hereof in accordance with the provisions hereof. This proxy is executed and
intended to be irrevocable in accordance with the provisions of the DGCL.
(c) Unless the Subject Shares shall have been distributed (i)
to holders of capital stock of the Stockholder as contemplated by the Ameritrade
Merger Agreement or (ii) a Pro Rata Securityholder Distribution, the Stockholder
agrees to take all requisite action in its power so that as promptly as
practicable after the date hereof, and in any event no later than the expiration
of Parent's October 1, 2001 Registration Rights Agreement, a registration rights
agreement will be entered into among Reuters Limited, Reuters C Corp. and
Reuters Holdings Switzerland SA, Parent, the Stockholder and certain other
Persons on the terms and conditions described in Exhibit J to the Merger
Agreement and in the manner contemplated by Section 4.17 of the Merger
Agreement.
(d) The Stockholder hereby agrees that the example of the
allocation of the Merger Consideration set forth in Exhibit 2.7(c)(i) to the
Merger Agreement accurately reflects the method of allocating such Merger
Consideration in accordance with the Company's Certificate of Incorporation.
4. Additional Covenants of the Stockholder. The Stockholder
hereby covenants and agrees with Parent that, until this Agreement terminates:
(a) Except as contemplated by the terms of this Agreement, the
Stockholder shall not, and shall cause its controlled Affiliates not to (i)
without the prior written consent of Parent, Transfer or consent to Transfer any
or all of the Subject Shares (other than (A) as contemplated by the Amertitrade
Merger Agreement or (B) a Pro Rata Securityholder Distribution), (ii) reduce the
Stockholder's risk (economic or otherwise) relative to the shares of Parent
Common Stock to be received in the Merger in respect of Subject Shares
Beneficially owned by it (including pursuant to any transaction involving a
security linked to Parent Common Stock, including any equity swap, put, put
equivalent, collar, sale of exchangeable security or similar transaction, the
creation of a derivative security or otherwise), (iii) grant any proxy or
power-of-attorney with respect to any such Subject Shares other than pursuant to
this Agreement or (iv) take any other action that would have the effect of
preventing, impeding, interfering with or adversely affecting its ability to
perform its obligations under this Agreement.
(b) In the event of a stock dividend or distribution, or any
change in the capital stock of the Company by reason of any stock dividend or
distribution, split-up, recapitalization, combination, exchange of shares or the
like (excluding the Merger), the term "Subject Shares" shall be deemed to refer
to and include the Subject Shares as well as all such stock dividends and
distributions and any securities into which or for which any or all of the
Subject Shares may be changed or exchanged or which are received in such
transaction.
(c) In his, her or its capacity as a stockholder of the
Company, the Stockholder shall not, nor shall such Stockholder permit any
controlled Affiliate of the Stockholder to, nor shall the Stockholder act in
concert with or permit any controlled Affiliate to act in concert with any
Person to make, or in any manner participate in, directly or indirectly, a
"solicitation" of "proxies" (as such terms are used in the rules of the
Securities and Exchange Commission) or powers of attorney or similar rights to
vote, or seek to advise or influence any Person with respect to the voting of
any Securities in connection with any vote or other action on any matter in a
manner inconsistent with recommending that stockholders of the Company vote (x)
in favor of adoption of the Merger Agreement and approval of the Merger and the
Company Charter Amendment and otherwise as expressly provided by this Agreement
or (y) against a Prohibited Transaction.
(d) The Stockholder shall not, nor shall the Stockholder
permit any controlled Affiliate of the Stockholder to, nor shall the Stockholder
act in concert with or permit any controlled Affiliate to act in concert with
any Person to, deposit any Securities in a voting trust or subject any
Securities to any arrangement or agreement with any Person with respect to the
voting of such Securities, except as expressly provided by this Agreement.
(e) The Stockholder will take all action necessary to (i)
permit (x) the shares of Company Common Stock Beneficially Owned by the
Stockholder to be acquired in the Merger and (y) the voting of such shares in
accordance with the terms of this Agreement and (ii) prevent creditors in
respect of any pledge of such shares from exercising their rights under such
pledge in a manner inconsistent with the terms of this Agreement.
(f) The Stockholder shall not, and shall cause its controlled
Affiliates and representatives not to, directly or indirectly, solicit,
initiate, facilitate or encourage any inquiries or proposals from, discuss or
negotiate with, or provide any non-public information to, any Person relating to
any Prohibited Transaction.
(g) Unless required by applicable law, the Stockholder shall
not, and shall cause its controlled Affiliates not to, make any press release,
public announcement or other public communication with respect to the business
or affairs of the Company or Parent, including this Agreement and the Merger
Agreement and the transactions contemplated hereby and thereby, without the
prior written consent of Parent.
(h) The Stockholder will (i) use all reasonable efforts to
cooperate with the Company, Parent and Merger Sub in connection with the
transactions contemplated by the Merger Agreement, (ii) promptly take such
actions as are necessary or appropriate to consummate such transactions, and
(iii) provide any information reasonably requested by the Company, Parent and
Merger Sub for any regulatory application or filing (including any registration
statement) made or approval sought for such transactions.
(i) The Stockholder hereby irrevocably waives, and agrees not
to exercise, its appraisal rights pursuant to Section 262 of the DGCL in respect
of the Subject Shares in connection with the Merger Agreement and the
transactions contemplated thereby.
(j) Other than the Company Charter Amendment, the Stockholder
shall not consent to, and shall cause its controlled Affiliates not to consent
to, any amendment to the certificate of incorporation of the Company or any
other change in the share capital structure of the Company, including the filing
of any certificate of designations relating to preferred stock.
(k) The Stockholder shall take all requisite action in its
power to prevent the conversion of the Class L Shares into Class A Shares. In
connection with the consummation of the transactions contemplated by the
Ameritrade Merger Agreement, the Stockholder agrees to distribute the shares of
Class A Common Stock and Class L Common Stock Beneficially Owned by it in
accordance with and in the manner set forth in Section 3.17(a) of the Company
Disclosure Schedule.
5. Representations and Warranties of the Stockholder. Each
Stockholder hereby represents and warrants to Parent that:
(a) (i) The Subject Shares described in the recitals to this
Agreement are the only shares of capital stock of the Company, securities
convertible into capital stock of the Company, or other rights in respect of
capital stock of the Company (collectively, "Securities") Beneficially Owned or
owned of record by the Stockholder or its controlled Affiliates on the date
hereof; (ii) the Stockholder has valid title to such Subject Shares, free and
clear of all liens, claims, charges, options, proxies, security interests and
encumbrances of any kind whatsoever (except as contemplated by this Agreement),
and none of the Subject Shares is subject to any pledge or any voting trust or
other agreement or arrangement (except as created by this Agreement) with
respect to the voting of the Subject Shares; and (iii) neither the Stockholder
nor any of its controlled Affiliates presently owns any options to purchase or
rights to subscribe for or otherwise acquire any other Securities.
(b) The Stockholder has full right, power and authority to
execute and deliver this Agreement and to perform all of the Stockholder's
obligations hereunder, and such execution, delivery and performance have been
duly authorized by all requisite action of the Stockholder and no other
proceedings or actions are necessary therefor.
(c) This Agreement has been duly and validly executed and
delivered by the Stockholder and represents a valid and legally binding
obligation of the Stockholder, enforceable against the Stockholder in accordance
with its terms.
(d) The execution, delivery and performance of this Agreement
by the Stockholder will not constitute a violation of, conflict with, require
any consent (not yet obtained) under or result in a default (whether with notice
or lapse of time or both) under (i) any of its Constituent Documents or any
contract, understanding or arrangement to which the Stockholder is a party or by
which the Stockholder or the Subject Shares are bound, (ii) any judgment,
injunction, decree or order applicable to the Stockholder, or (iii) any
applicable law, statute, rule or regulation.
6. Representations, Warranties and Covenants of Parent. Parent
hereby represents and warrants to the Stockholder that (i) Parent has full
corporate right, power and authority to execute and deliver this Agreement and
to perform its obligations hereunder, (ii) such execution, delivery and
performance have been duly authorized by all requisite corporate action by
Parent, and no other corporate proceedings or actions are necessary therefor,
(iii) this Agreement has been duly and validly executed and delivered by Parent
and represents a valid and legally binding obligation of Parent, enforceable
against Parent in accordance with its terms, and (iv) the execution, delivery
and performance of this Agreement by Parent will not constitute a violation of,
conflict with, require any consent (not yet obtained) under or result in a
default (whether with notice or lapse of time or both) under (A) any of its
Constituent Documents or any contract, understanding or arrangement to which
Parent is a party or by which it is bound, (B) any judgment, injunction, decree
or order applicable to Parent, or (C) any applicable law statute, rule or
regulation.
7. Termination. This Agreement, other than the obligations set
forth in Section 9, shall terminate at the earlier of the Effective Time or
immediately upon termination of the Merger Agreement pursuant to its terms.
8. Severability. Any term, provision, covenant or restriction
contained in this Agreement held by a court or other Authority of competent
jurisdiction to be invalid, void or unenforceable shall be ineffective to the
extent of such invalidity, voidness or unenforceability, but neither the
remaining terms, provisions, covenants or restrictions contained in this
Agreement nor the validity or enforceability thereof in any other jurisdiction
shall be affected or impaired thereby. Any term, provision, covenant or
restriction contained in this Agreement that is so found to be so broad as to be
unenforceable shall be interpreted to be as broad as is enforceable.
9. Expenses. Costs and expenses incurred in connection with
the transactions contemplated hereunder shall be paid in accordance with Section
8.7 of the Merger Agreement. The Stockholder hereby consents to the payment by
the Company of certain expenses incurred by certain stockholders of the Company
as provided in Section 8.7 of the Merger Agreement.
10. Entire Agreement. This Agreement (including the documents
and the instruments referred to herein) constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, agreements or representations by or between the
parties, written and oral, with respect to the subject matter hereof and
thereof.
11. Successors; No Third Party Beneficiaries. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any party (whether by operation of law or otherwise) without the
prior written consent of the other parties. Nothing in this Agreement, expressed
or implied, is intended to confer upon any party, other than the parties hereto
and their respective successors and assigns, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided herein.
12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or dispatched by a nationally recognized
overnight courier service to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent, to:
Instinet Group Incorporated
3 Times Square
New York, New York 10036
Fax: (646) 223-9017
Attention: Paul Merolla, Esq.
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Fax: (212) 225-3999
Telephone: (212) 225-2000
Attention: Yvette P. Teofan, Esq.
(b) if to Stockholder:
Datek Online Holdings Corp.
70 Hudson Street
Jersey City, New Jersey 07302
Fax: (201) 761-8044
Attention: Stuart Sindell
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Fax: (212) 859-4000
Attention: F. William Reindel, Esq.
and to:
Ropes & Gray
One International Place
Boston, MA 02110
Telephone: (617) 951-7372
Facsimile: (617) 951-7050
Attention: Alfred O. Rose, Esq.
(c) if to the Company, to:
Island Holding Company, Inc.
50 Broad Street
New York, New York 10004
Facsimile: (212) 231-5945
Attention: Matt Andresen
and
Ropes & Gray
One International Place
Boston, MA 02110
Telephone: (617) 951-7372
Facsimile: (617) 951-7050
Attention: Alfred O. Rose, Esq.
13. Counterparts. This Agreement may be executed in
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
14. Specific Performance. The parties hereto agree that if for
any reason Parent or the Stockholder shall have failed to perform its respective
obligations under this Agreement, then the party hereto seeking to enforce this
Agreement against such non-performing party shall be entitled to specific
performance and injunctive and other equitable relief, and the parties hereto
further agree to waive any requirement for the securing or posting of any bond
and the defense of adequacy of a remedy at law in connection with the obtaining
of any such injunctive or other equitable relief. This provision is without
prejudice to any other rights that any party hereto may have against any other
party hereto for any failure to perform its obligations under this Agreement.
15. Governing Law. This Agreement shall be governed by the
laws of the State of New York applicable to contracts made and to be performed
entirely in such State, except to the extent that the Delaware General
Corporation Law applies as a result of the Company being a Delaware corporation.
16. Waiver and Amendment. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto,
17. Additional Subject Shares. Notwithstanding the provisions
of Section 16, in the event that the Stockholder or any of its controlled
Affiliates acquires, or acquires Beneficial Ownership over, any additional
Securities (including as a result of a distribution or other Transfer by the
Stockholder as contemplated by the Ameritrade Merger Agreement), (i) such
Stockholder shall promptly notify Parent in writing of such acquisition and (ii)
such Securities shall, without further action of the parties, be subject to the
provisions of this Agreement.
18. Datek Distribution. Notwithstanding any provision to the
contrary contained herein, the parties agree that this Agreement shall not
restrict or prevent the Datek Distribution. Any Subject Shares distributed,
exchanged or otherwise Transferred in connection with the Datek Distribution
prior to the termination of this Agreement shall cease to be Subject Shares
hereunder; provided, however, that the foregoing shall not limit the provisions
of Section 17 hereof or of the Company Voting Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above written.
INSTINET GROUP INCORPORATED
By:
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Name:
Title
DATEK ONLINE HOLDINGS CORP.
By:
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Name:
Title