EXHIBIT 99.1
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
This AMENDMENT, dated as of September 3, 2002 (this
"Amendment"), is between Instinet Group Incorporated, a Delaware corporation
(the "Company"), and Mellon Investor Services LLC, a New Jersey limited
liability company, as Rights Agent (the "Rights Agent").
Recitals
WHEREAS, the Company and the Rights Agent are parties to a
Rights Agreement, dated as of May 15, 2001 (the "Rights Agreement");
WHEREAS, Island Holding Company, Inc., a Delaware corporation
("Island"), the Company and Instinet Merger Corporation, a Delaware corporation
and wholly-owned subsidiary of the Company ("Merger Sub"), entered into an
Agreement and Plan of Merger, dated as of June 9, 2002 (as it may be amended or
supplemented from time to time, and including all exhibits and schedules
thereto, the "Merger Agreement"), pursuant to which Merger Sub will merge with
and into Island (the "Merger");
WHEREAS, simultaneously with the execution of the Merger
Agreement, the Company entered into (a) a Stockholders Agreement with Reuters
Limited, Reuters C Corp., Reuters Holdings Switzerland SA, Edward Nicoll and the
other stockholders of Island named therein (the "Stockholders Agreement"), (b) a
Datek Stockholders Agreement with Reuters Limited and Datek Online Holdings
Corp. (the "Datek Stockholders Agreement"), (c) a Company Voting Agreement with
Island and the stockholders of Island named therein (the "Company Voting
Agreement"), (d) a Datek Voting Agreement with Datek Online Holdings Corp. (the
"Datek Voting Agreement"), (e) a Parent Voting Agreement with Reuters Limited,
Reuters C Corp., Reuters Holdings Switzerland SA and Island (the "Parent Voting
Agreement") and (f) an Amended and Restated Corporate Agreement with Reuters
Limited (together with the Stockholders Agreement, the Datek Stockholders
Agreement, the Company Voting Agreement, the Datek Voting Agreement and the
Parent Voting Agreement, the "Related Agreements");
WHEREAS, the Board of Directors of the Company has approved
the Merger Agreement, the Merger and each of the Related Agreements; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, for
so long as the Rights are then redeemable, the Company may in its sole and
absolute discretion, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of the Rights Agreement in accordance with the
provisions of such section. All acts and things necessary to make this Amendment
a valid agreement, enforceable in accordance with its terms, have been done and
performed, and the execution and delivery of this Amendment by the Company has
been in all respects duly authorized by the Company.
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements set forth in the Rights Agreement and herein, the parties
hereto agree as follows:
1. Amendments of Section 1(a). (a) Section 1(a) of the Rights
Agreement is amended to add the words "or more of the then outstanding shares of
Common Stock" following the first use of the words "Beneficial Owner of 15%".
(b) Section 1(a) of the Rights Agreement is further amended to
add the following sentence at the end thereof:
"Notwithstanding anything in this Agreement to the contrary, none of
the parties to the Agreement and Plan of Merger, dated as of June 9,
2002, among the Company, Instinet Merger Corporation and Island Holding
Company, Inc. (as it may be amended or supplemented from time to time,
and including all exhibits and schedules thereto, the "Island Merger
Agreement") or any of the Related Agreements (as defined in the Island
Merger Agreement and as the same may be amended or supplemented from
time to time), nor any of their Affiliates and Associates, shall be
deemed, individually or collectively, to be an Acquiring Person by
virtue of (i) the approval, execution or delivery of the Island Merger
Agreement or any of the Related Agreements, (ii) the consummation of
the Merger (as defined in the Island Merger Agreement) or (iii) the
consummation of any of the other transactions contemplated in the
Island Merger Agreement and the Related Agreements; provided, however,
that nothing contained in this sentence shall prevent any one or more
parties to the Related Agreements, or any of their Affiliates and
Associates, from being deemed an Acquiring Person as a result of the
acquisition of additional Common Stock or the taking of any action not
contemplated by the Island Merger Agreement and the Related
Agreements."
2. Amendment to Section 7(a). Section 7(a) of the Rights
Agreement is amended to replace the words "on May __, 2011" with the words "on
May 15, 2011".
3. Amendment of Section 26. Section 26 of the Rights Agreement
is amended to replace the words "Alan L. Beller" with the words "Yvette P.
Teofan".
4. Amendment of Section 30. Section 30 of the Rights Agreement
is amended to add the following sentence at the end thereof:
"Nothing in this Agreement shall be construed to give any
holder of Rights or any other Person any legal or equitable rights, remedies or
claims under this Agreement by virtue of (i) the approval, execution or delivery
of the Island Merger Agreement or any of the Related Agreements, (ii) the
consummation of the Merger, (iii) the consummation of any of the other
transactions contemplated in the Island Merger Agreement and the Related
Agreements or (iv) the public announcement of any of the foregoing."
5. Effectiveness. This Amendment shall be deemed effective as
of the date first written above, as if executed on such date. Except as
expressly provided herein, the Rights Agreement is not being amended, modified
or supplemented in any respect, and it remains in full force and effect.
6. Miscellaneous.
(a) Except as otherwise expressly provided, or unless the
context otherwise requires, capitalized terms used herein shall have the
respective meanings assigned to them in the Rights Agreement.
(b) This Amendment shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
state.
(c) This Amendment may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
(d) If any term, provision, covenant or restriction of this
Amendment is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Amendment shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It is the
intent of the parties hereto to enforce the remainder of the terms, provisions,
covenants and restrictions to the maximum extent permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date and year first above written.
INSTINET GROUP INCORPORATED
By: /s/ Mark Nienstedt
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Name: Mark Nienstedt
Title: Chief Financial Officer
MELLON INVESTOR SERVICES LLC,
AS RIGHTS AGENT
By: /s/ Deborah Bass
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Name: Deborah Bass
Title: Assistant Vice President