-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N6QIeVl/ns+UASsSgPRwt5mZvQYUHyV7zUL8oN+44Oq2eoej5rzCW3Oq3WwtD+We FW5I8E6UnXjrE2v6Tb8cVQ== 0000950152-97-004058.txt : 19970520 0000950152-97-004058.hdr.sgml : 19970520 ACCESSION NUMBER: 0000950152-97-004058 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970516 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL PROCESSING INC CENTRAL INDEX KEY: 0001016277 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 611303983 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-50175 FILM NUMBER: 97610930 BUSINESS ADDRESS: STREET 1: ONE OXMOOR PLACE STREET 2: 101 BULLITT LANE SUITE 450 CITY: LOUISVILLE STATE: KY ZIP: 40222 BUSINESS PHONE: 5023267000 MAIL ADDRESS: STREET 1: ONE OXMOOR PLACE STREET 2: 101 BULLITT LANE SUITE 450 CITY: LOUISVILLE STATE: KY ZIP: 40222 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL CITY CORP CENTRAL INDEX KEY: 0000069970 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 341111088 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1900 E NINTH ST CITY: CLEVELAND STATE: OH ZIP: 44114 BUSINESS PHONE: 2165752000 SC 13D 1 NATIONAL CITY/NATIONAL PROCESSING SCHEDULE 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d-101) Under the Securities Exchange Act of 1934 (Amendment No. _____ ) * National Processing, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, without par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 637229 10 5 ---------------------- (CUSIP Numbers) David L. Zoeller, Esq. National City Corporation 1900 East Ninth Street Cleveland, Ohio 44114-3484 216-575-2000 With a copy to: Dennis W. LaBarre, Esq. Jones, Day, Reavis & Pogue 901 Lakeside Avenue Cleveland, Ohio 44114 216-586-3939 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 7, 1996 -------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|. NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. (Continued on following pages) - ----------------- *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 2 - ---------------------------------------------------------------- CUSIP NO. 637229 10 5 13D ------------------------------------- - ----------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS National City Corporation 34-1111088 - ----------------------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------------------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |_| - ----------------------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ----------------------------------------------------------------------------------------------------------------------------------- 7 SOLE VOTING POWER 44,365,400 ------------------------------------------------------------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 OWNED BY ------------------------------------------------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 44,365,400 ------------------------------------------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 0 - ----------------------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 44,365,400 - ----------------------------------------------------------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 87.7% - ----------------------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO, HC - -----------------------------------------------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! 3 ITEM 1. SECURITY AND ISSUER. This Schedule 13D relates to the Common Stock, without par value (the "Common Stock"), of National Processing, Inc., an Ohio corporation (the "Company"). The principal offices of the Company are located at One Oxmoor Place, 101 Bullitt Lane, Suite 450, Louisville, Kentucky 40222. ITEM 2. IDENTITY AND BACKGROUND. (a)-(c) This Schedule 13D is filed by National City Corporation, a Delaware corporation and a registered bank holding company under the Bank Holding Company Act of 1956, as amended ("National City"). National City's principal executive offices are located at 1900 East Ninth Street, Cleveland, Ohio 44114. Pursuant to General Instruction "C" for Schedule 13D, the attached Annex 1 to this Schedule 13D sets forth certain information concerning the executive officers and directors of National City. The contents of Annex 1 are incorporated herein by reference. (d) During the last five years, neither National City nor, to the best of National City's knowledge, any of the executive officers or directors of National City has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, neither National City nor, to the best of National City's knowledge, any of the executive officers or directors of National City has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) All of the individuals identified in this Item 2 are citizens of the United States. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The aggregate amount of funds required by National City to purchase 1,265,400 shares of Common Stock was $11,505,225. All funds used by National City to purchase the Common Stock were obtained from the working capital of National City, and no part of the purchase price for the Common Stock consisted of borrowed funds. ITEM 4. PURPOSE OF TRANSACTION. Prior to the Company's initial public offering of 7,475,000 shares of its Common Stock on August 14, 1996, the Company was a wholly-owned subsidiary of National City. Following consummation of the initial public offering, National City continued to own directly 43,100,000 shares of the Company's Common Stock, or approximately 85.2% of the outstanding Common Stock. On May 2, 1997, National City announced its intent to acquire up to 2,000,000 additional shares of the Company's Common Stock in open market transactions in accordance with applicable federal and state laws and regulations. A copy of National City's press release announcing its intent to purchase the Common Stock is filed as an exhibit hereto and incorporated herein by reference. As set forth in Item 5(c), on May 7, 1997, National City purchased 1,114,200 shares of Common Stock at a price of $9.125 per share, and on May 8, 1997, National City purchased 151,200 shares of Common Stock at a price of $8.850 per share. National City announced its stock purchase program and purchased the Common Stock for general investment purposes and intends to review continuously its equity position in the Company. In an effort to partially offset the negative effects of margin pressure in its merchant card services business, the Company has announced its intent to implement overhead reductions at the corporate and business line levels. National City intends to monitor these efforts, and, depending upon its future evaluations of the business prospects of the Page 3 4 Company and upon other developments, including, without limitation, general economic and business conditions and money market and stock market conditions, National City may determine to increase or decrease its equity interest in the Company by acquiring additional shares of Common Stock or by disposing of all or a portion of its holdings of Common Stock, subject to any applicable legal or other restrictions on its ability to do so. Except as set forth herein, National City does not have any plans or proposals which would relate to or result in: (a) The acquisition of additional securities of the Company (in excess of National City's announced intent to acquire up to 2,000,000 shares of Common Stock), or the disposition of securities of the Company; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Company or of any of its subsidiaries; (d) Any change in the present board of directors or management of the Company (except for the Company's previously-announced efforts to reduce overhead costs), including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Company; (f) Any other material change in the Company's business or corporate structure (except for the Company's previously-announced efforts to reduce overhead costs); (g) Changes in the Company's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) Causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934 (the "Exchange Act"); or (j) Any action similar to any of those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) - (b) At the date hereof, National City has the sole power to vote and dispose of 44,365,400 shares of Common Stock. The Common Stock held by National City represents approximately 87.7% of the 50,575,000 shares of Common Stock outstanding as of May 12, 1997, based on the number of shares outstanding as reported in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1997. As of the date hereof, to the best of National City's knowledge, set forth below is information concerning the ownership of Common Stock by the individuals identified in Item 2: Page 4 5
Number of Shares Held With Sole Voting and Name Dispositive Power ---- ----------------- David A. Daberko 12,000 William R. Robertson 5,000 Vincent A. DiGirolamo 3,030 James R. Bell III 3,030 Gary A. Glaser 1,000 Thomas W. Golonski 1,000 Jon L. Gorney 300 J. Christopher Graffeo 5,000 Jeffrey D. Kelly 1,000 William E. MacDonald III 2,000 Robert G. Siefers 10,000 Harold B. Todd, Jr. 250 Thomas A. Richlovsky 1,000 Sandra H. Austin 1,212 Charles H. Bowman 200 Edward B. Brandon 8,000 Duane E. Collins 2,500 Daniel E. Evans 1,000 Otto N. Frenzel III 1,000 Bernadine P. Healy 750 Joseph H. Lemieux 1,000 W. Bruce Lunsford 7,000 Robert A. Paul 20,000 William F. Roemer 2,000 Stephen A. Stitle 1,000 Morry Weiss 10,000 ------- TOTAL 100,272
To the best of National City's knowledge, the aggregate shares of Common Stock owned by the individuals identified in Item 2 represents less than 1% of the outstanding Common Stock and 1.6% of the outstanding Common Stock held by persons other than National City. Except as set forth herein, to the best of National City's knowledge, none of the individuals identified in Item 2 has the sole or shared power to vote or the sole or shared power to dispose of any shares of Common Stock. (c) On May 7, 1997, National City purchased 1,114,200 shares of Common Stock at a price of $9.125 per share, and on May 8, 1997, National City purchased 151,200 shares of Common Stock at a price of $8.850 per share, all by means of placing orders for the purchase of such shares with a registered broker on the New York Stock Exchange. To the best of National City's knowledge, the individuals identified in Item 2 have effected the following transactions in shares of Common Stock during the past 60 days. On May 7, 1997, Robert A. Paul purchased 10,000 shares of Common Stock at a price of $9.125 per share. On May 9, 1997, David A. Daberko purchased 5,490 shares of Common Stock at a price of $8.50 per share, and Thomas A. Richlovsky purchased 800 shares of Common Stock at a price of $8.50 per share. All such transactions were executed by means of placing orders for the purchase of such shares with a registered broker on the New York Stock Exchange. National City anticipates that certain of its executive officers and directors may acquire shares of Common Stock for their individual accounts in open market transactions at prevailing prices, subject to any applicable legal or other restrictions on their ability to do so. There are no agreements, understandings or arrangements between National City and any of its executive officers or directors with respect to the Common Stock, and there can be no assurance that any acquisitions by such executive officers or directors will take place. Page 5 6 Except as set forth herein, no transactions in shares of Common Stock were effected during the past 60 days by National City, or to the best of National City's knowledge, by any of the individuals identified in Item 2. (d) Except as stated herein, to the best of National City's knowledge, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. On July 16, 1996, in connection with the Company's initial public offering of its Common Stock, the Company and National City entered into a Registration Rights Agreement (the "Registration Rights Agreement"). Pursuant to the Registration Rights Agreement, National City has the right to require the Company to use its best efforts to register under the Securities Act of 1933, as amended, and the securities or blue sky laws of any jurisdiction designated by National City, all or a portion of the issued and outstanding Common Stock held by National City for sale in accordance with National City's intended method of disposition thereof. Such demand rights are subject to the condition that the Company cannot be required to effect more than two demand registrations. National City also has the right to participate, or "piggy-back," in equity offerings initiated by the Company, subject to a reduction of the size of such offerings on the advice of the managing underwriter. National City's rights under the Registration Rights Agreement are fully assignable. Under the Registration Rights Agreement, certain costs incurred in connection with the registrations are allocated between National City and the Company, and the Company has agreed to indemnify National City against certain claims. The foregoing is a brief description of the Registration Rights Agreement and is qualified in its entirety by reference to such agreement, a copy of which is filed as an exhibit hereto and incorporated herein by reference. Except as set forth herein, and other than National City's internal policies requiring that all trading in securities by National City's employees and agents comply with federal and state securities laws and other applicable legal and contractual restrictions, to the best of National City's knowledge, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) among the persons identified in Item 2 and between such persons and any person with respect to any securities of the Company, including but not limited to, transfer or voting of any of the Company's securities, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a pledge or contingency the occurrence of which would give another person voting power over the securities of the Company. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 99.1 -- Press Release of National City, dated May 2, 1997 Exhibit 99.2 -- Registration Rights Agreement, dated as of July 16, 1996, between the Company and National City Page 6 7 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: May 16, 1997 NATIONAL CITY CORPORATION By: /s/ Thomas A. Richlovsky ----------------------------------- Name: Thomas A. Richlovsky Title: Senior Vice President & Treasurer 8 Annex 1 ------- Set forth below are the names, titles and present principal occupations for each of the executive officers and directors of National City. The business address for each of the following individuals is 1900 East Ninth Street, Cleveland, Ohio 44114.
Name Title Present Principal Occupation - ---- ----- ---------------------------- David A. Daberko Chairman of the Board and Chief Chairman of the Board and Chief Executive Officer Executive Officer of National City William R. Robertson President President of National City Vincent A. DiGirolamo Vice Chairman Vice Chairman of National City James R. Bell III Executive Vice President, Kentucky President and Chief Executive Officer, Banking National City Bank of Kentucky Gary A. Glaser Executive Vice President, Columbus President and Chief Executive Officer, Banking National City Bank of Columbus Thomas W. Golonski Executive Vice President, President and Chief Executive Officer, Pennsylvania Banking National City Bank of Pennsylvania Jon L. Gorney Executive Vice President, Executive Vice President, Information Information Services & Operations Services & Operations of National City Christopher Graffeo Executive Vice President, Indiana President and Chief Executive Officer, Banking National City Bank of Indiana Jeffrey D. Kelly Executive Vice President, Executive Vice President, Investments Investments of National City William E. MacDonald III Executive Vice President, Cleveland President and Chief Executive Officer, Banking National City Bank Robert J. Ondercik Executive Vice President, Credit Executive Vice President, Credit Administration Administration of National City Robert G. Siefers Executive Vice President, Chief Executive Vice President and Chief Financial Officer Financial Officer of National City Harold B. Todd, Jr. Executive Vice President, Executive Vice President, Institutional Institutional Trust & Investment Trust & Investment Services of Services National City James P. Gulick Senior Vice President, General Senior Vice President, General Auditor Auditor of National City Thomas A. Richlovsky Senior Vice President, Treasurer Senior Vice President, Treasurer of National City David L. Zoeller Senior Vice President, General Senior Vice President, General Counsel & Secretary Counsel & Secretary of National City Sandra Harden Austin Director Retired President, Physician Services of Caremark International
9 2
Name Title Present Principal Occupation - ---- ----- ---------------------------- Charles H. Bowman Director Retired Chairman and Chief Executive Officer of BP America Inc. Edward B. Brandon Director Retired Chairman of the Board of Directors of National City John G. Breen Director Chairman of the Board of Directors and Chief Executive Officer of The Sherwin-Williams Company James S. Broadhurst Director Chairman and Chief Executive Officer of Eat'n Park Restaurants Duane E. Collins Director President and Chief Executive Officer of Parker Hannifin Corporation Daniel E. Evans Director Chairman of the Board of Directors and Chief Executive Officer of Bob Evans Farms, Inc. Otto N. Frenzel III Director Retired Chairman of National City Bank of Indiana Bernadine P. Healy, M.D. Director Professor of Medicine and Dean of Ohio State University College of Medicine Joseph H. Lemieux Director Chairman and Chief Executive Officer of Owens-Illinois, Inc. W. Bruce Lunsford Director Chairman of the Board of Directors, President and Chief Executive Officer of Vendor, Inc. Robert A. Paul Director President and Chief Executive Officer of Ampco-Pittsburgh Corporation William F. Roemer Director Retired Chairman of the Board of Directors and Chief Executive Officer of Integra Financial Corporation Michael A. Schuler Director Chairman of the Board of Directors, President and Chief Executive Officer of Zippo Manufacturing Company Stephen A. Stitle Director Chairman of the Board of National City Bank of Indiana Morry Weiss Director Chairman of the Board of Directors and Chief Executive Officer of American Greetings Corporation
EX-99.1 2 EXHIBIT 99.1 1 Exhibit 99.1 National City(R) NATIONAL CITY CORPORATION P.O. Box 5756 Cleveland, OH 44101-0756 FOR MORE INFORMATION CONTACT: News Release Thomas A. Richlovsky Senior Vice President and Treasurer (216) 575-2126 For Immediate Release NATIONAL CITY ANNOUNCES INTENT TO ACQUIRE NATIONAL PROCESSING STOCK - ------------------------------------------------------------------- CLEVELAND, Ohio--May 2, 1997--National City Corporation (NYSE:NCC) today announced its intent to acquire up to two million shares of the common stock of National Processing, Inc. (NYSE:NAP). The shares will be acquired in the open market in accordance with applicable regulations of the Securities and Exchange Commission. The exact amounts and timing of purchases are subject to market conditions. The share purchases by National City are not intended to affect the listing of National Processing's common stock on the New York Stock Exchange. National City currently owns approximately 85% of the outstanding common stock of National Processing. If the share purchases are fully completed, National City's ownership percentage of National Processing would increase to approximately 89%. There are currently 50,575,000 shares outstanding of National Processing, of which National City owns 43,100,000. David A. Daberko, chairman and chief executive officer of National City, stated: "Following National Processing's successful initial public offering last August, the stock valuation has recently lagged its peer group. We believe it to be in the best interests of National City stockholders to increase National City's investment in National Processing at what appears to be an attractive price." As of the close of business on May 1, 1997, the trading price of National Processing's common stock was $7.00 per share. (more) 2 -2- National Processing is a provider of transaction processing services and customized processing solutions. Deploying technology and applications software, the Company provides products and value-added services which include processing of card and check transactions for merchants, outsourcing of administrative and financial functions, and ticket processing and settlement for providers of travel-related services. National City is a $50 billion diversified financial services company headquartered in Cleveland, Ohio. National City operates banks and other financial services subsidiaries primarily in Ohio, Kentucky, Indiana, and Pennsylvania. National City can be found on the Internet at www.national-city.com. -30- EX-99.2 3 EXHIBIT 99.2 1 EXHIBIT 99.2 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of this 16th day of July, 1996 between National City Corporation, a Delaware corporation ("National City"), and National Processing, Inc., an Ohio corporation (the "Company"). R E C I T A L S --------------- WHEREAS, the Company is currently a wholly owned subsidiary of National City; WHEREAS, the Company is contemplating the issuance of 6,900,000 shares of the Company's common stock, without par value (the "Common Stock"), in an initial public offering pursuant to a Registration Statement on Form S-1 (Registration No. 333-05507) (the "Offering"); WHEREAS, following the Offering, National City will be the beneficial and record owner of 43,100,000 shares of Common Stock; WHEREAS, in conjunction with the Offering, National City and the Company desire to enter into this Agreement to provide National City with certain registration rights as provided herein. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration had and received, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. DEFINITIONS. As used herein, the following terms shall have the following respective meanings: "Affiliate" shall mean any Person that directly or indirectly controls, is controlled by, or is under common control with such Person. A Person shall be deemed to control another Person if such Person owns 5% or more of any equity interest in the "controlled" Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock or partnership interests, by contract, agreement or understanding (whether oral or written), or otherwise. 2 "Common Stock" shall have the meaning in the second recital of this Agreement. "Designated Transferee" shall have the meaning set forth in Section 10 hereof. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Holders" shall mean National City, any Affiliate of National City (other than the Company) and any Designated Transferees who are holders of record of any Registrable Shares, and any combination of one or more such Holders. "NASD" shall mean the National Association of Securities Dealers, Inc. "Other Holders" shall mean Persons who are holders of record of equity securities of the Company who subsequent to the date hereof acquire more than 5% of the outstanding shares of Common Stock pursuant to a transaction with the Company and to whom the Company grants registration rights pursuant to a written agreement in connection with such transaction. "Person" shall mean any individual, corporation, association, partnership, group (as defined in Section 13(d)(3) of the Exchange Act), limited liability company, joint venture, business trust or unincorporated organization, or a government or any agency or political subdivision thereof. "Registrable Shares" shall mean (i) the 43,100,000 shares of Common Stock owned by the Holders on the date of this Agreement, and (ii) any equity securities of the Company issued or distributed after the date of this Agreement to a Holder in respect of Registrable Shares by way of any stock dividend, stock split or other distribution or any recapitalization or reclassification and any equity securities of the Company acquired by a Holder upon exercise or conversion of any such securities. As to any particular Registrable Share, such Registrable Share shall cease to be a Registrable Share when (w) it shall have been sold, transferred or otherwise disposed of or exchanged pursuant to a registration statement under the Securities Act; (x) it shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act; (y) it shall have been sold or transferred to a Person other than a Designated Transferee in a private transaction effected other than pursuant to a registration statement; or (z) it shall have been sold, transferred or otherwise disposed of in violation of this Agreement. 2 3 "Registration Expenses" shall have the meaning set forth in Section 7(a) hereof. "SEC" shall mean the Securities and Exchange Commission or any successor agency thereto. "Securities Act" shall mean the Securities Act of 1933, as amended. 2. INCIDENTAL REGISTRATIONS (A) RIGHT TO INCLUDE REGISTRABLE SHARES. Each time the Company shall determine to file a registration statement under the Securities Act in connection with a proposed offer and sale for cash of any equity securities (other than debt securities which are convertible into equity securities or an offering of equity securities in an amount not in excess of 5% of the number of shares of Common Stock outstanding at such time in connection with the offering of debt securities) either by it or by any holders of its outstanding equity securities, the Company will give prompt written notice of its determination to each Holder and of such Holder's rights under this Section 2, at least 30 days prior to the anticipated filing date of such registration statement. Upon the written request of each Holder made within 21 days after the receipt of any such notice from the Company, (which request shall specify the Registrable Shares intended to be disposed of by such Holder), the Company will use its best efforts to effect the registration under the Securities Act of all Registrable Shares which the Company has been so requested to register by the Holders thereof, to the extent required to permit the disposition of the Registrable Shares so to be registered; PROVIDED, HOWEVER, that (i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to proceed with the proposed registration of the securities to be sold by it, the Company may, at its election, give written notice of such determination to each Holder of Registrable Shares and thereupon shall be relieved of its obligation to register any Registrable Shares in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith), and (ii) if such registration involves an underwritten offering, all Holders of Registrable Shares requesting to be included in the Company's registration must sell their Registrable Shares to the underwriters on the same terms and conditions as apply to the Company, with such differences, including any with respect to indemnification and liability insurance, as may be customary or appropriate in combined primary and secondary offerings. If a registration requested pursuant to this Section 2(a) involves an underwritten public offering, any Holder of Registrable Shares requesting to be included in such registration may elect, in writing prior to the effective date of the registration statement filed in connection with such registration, not to register such 3 4 securities in connection with such registration. No registration effected under this Section 2 shall relieve the Company of its obligations to effect registrations upon request under Section 4 hereof. (B) PRIORITY IN INCIDENTAL REGISTRATION. If a registration pursuant to this Section 2 involves an underwritten offering and the managing underwriter or underwriters in good faith advises the Company in writing that, in its opinion, the number of securities which the Company, the Holders and any other Persons intend to include in such registration exceeds the largest number of securities which can be sold in such offering without having an adverse effect on such offering (including the price at which such securities can be sold), then the Company will include in such registration (i) first, if the registration pursuant to this Section 2 was initiated by Other Holders exercising demand registration rights, 100% of the securities such Other Holders propose to sell (except to the extent the terms of such Other Holders' registration rights provide otherwise); (ii) second, 100% of the securities the Company proposes to sell for its own account; (iii) third, to the extent that the number of securities which such Other Holders exercising demand registration rights and the Company propose to sell is less than the number of securities which the Company has been advised can be sold in such offering without having the adverse effect referred to above, such number of Registrable Shares which the Holders have requested to be included in such registration pursuant to Section 2(a) hereof and which, in the opinion of such managing underwriter or underwriters, can be sold without having the adverse effect referred to above; and (iv) fourth, to the extent that the number of securities which are to be included in such registration pursuant to clauses (i), (ii) and (iii) is, in the aggregate, less than the number of securities which the Company has been advised can be sold in such offering without having the adverse effect referred to above, such number of other securities requested to be included in the offering for the account of any Other Holders which, in the opinion of such managing underwriter or underwriters, can be sold without having the adverse effect referred to above. 3. HOLDBACK AGREEMENTS. (a) If any registration of Registrable Shares shall be in connection with an underwritten public offering, the Holders shall not effect any public sale or distribution (except in connection with such public offering), of any equity securities of the Company, or of any security convertible into or exchangeable or exercisable for any equity security of the Company (in each case, other than as part of such underwritten public offering), during the 90-day period (or such lesser period as the managing underwriter or underwriters may permit) beginning on the effective date of such registration, if, and to the extent, the managing underwriter or underwriters of any such offering determines such action is necessary or desirable to effect such offering; PROVIDED, HOWEVER, that each Holder has received the written notice required by Section 2(a) 4 5 hereof; PROVIDED, FURTHER, that each Holder shall not be obligated to comply with such restrictions arising as a result of an underwritten public offering subject to Section 2 hereof more than once in any twelve-month period. (b) If any registration of Registrable Shares shall be in connection with any underwritten public offering, the Company shall not effect any public sale or distribution (except in connection with such public offering) of any of its equity securities or of any security convertible into or exchangeable or exercisable for any of its equity securities (in each case other than as part of such underwritten public offering) during the 90-day period (or such lesser period as the managing underwriter or underwriters may permit) beginning on the effective date of such registration, and the Company shall use its best efforts to cause each member of the management of the Company who holds any equity security and each other holder of 5% or more of the outstanding shares of any equity security, or of any security convertible into or exchangeable or exercisable for any equity security, of the Company purchased from the Company (at any time other than in a public offering) to so agree. 4. REGISTRATION ON REQUEST. (a) REQUEST BY HOLDERS. Upon the written request of the Holders of at least 10% of the Registrable Shares that the Company effect the registration under the Securities Act of all or part of such Holders' Registrable Shares, and specifying the amount (which shall not be less than 10% of the outstanding Registrable Shares in the aggregate) and the intended method of disposition thereof, the Company will promptly give notice of such requested registration to all other Holders of Registrable Shares and, as expeditiously as possible, use its best efforts to effect the registration under the Securities Act of: (i) the Registrable Shares which the Company has been so requested to register by Holders of at least 10% of the Registrable Shares; and (ii) all other Registrable Shares which the Company has been requested to register by any other Holder thereof by written request received by the Company within 21 days after the giving of such written notice by the Company (which request shall specify the intended method of disposition of such Registrable Shares); PROVIDED, HOWEVER, that the Company shall not be required to effect more than two registrations pursuant to this Section 4; PROVIDED, FURTHER, that the Company shall not be obligated to file a registration statement relating to a registration request under this Section 4 (x) if the registration request is delivered after delivery of a notice by the Company of an intended registration and prior to the effective date of the registration statement referred to in such notice, or (y) within a period of 90 days after the effective date of any other registration statement of the Company requested by a Holder pursuant to this Section 4 or pursuant to which the Holders included Registrable Shares. The Holders initially requesting a registration pursuant to this Section 4 may, at any time prior to 5 6 the effective date of the registration statement relating to such registration, revoke such request by providing a written notice to the Company revoking such request; PROVIDED, HOWEVER, that, in the event the Holders shall have made a written request for a demand registration (I) which is subsequently withdrawn by the Holders after the Company has filed a registration statement with the SEC in connection therewith but prior to such demand registration being declared effective by the SEC or (II) which is not declared effective solely as a result of the failure of Holders to take all actions reasonably required in order to have the registration and the related registration statement declared effective by the SEC, then, in any such event, such demand registration shall be counted as a demand registration for purposes of this Section 4(a). Promptly after the expiration of the 21-day period referred to in clause (ii) above, the Company will notify all the Holders to be included in the registration of the other Holders and the number of shares of Registrable Shares requested to be included therein. (b) REGISTRATION STATEMENT FORM. If any registration requested pursuant to this Section 4 which is proposed by the Company to be effected by the filing of a registration statement on Form S-3 (or any successor or similar short-form registration statement) shall be in connection with an underwritten public offering, and if the managing underwriter or underwriters shall advise the Company in writing that, in its opinion, the use of another form of registration statement is of material importance to the success of such proposed offering, then such registration shall be effected on such other form. (c) EFFECTIVE REGISTRATION STATEMENT. A registration requested pursuant to this Section 4 will not be deemed to have been effected unless it has become effective under the Securities Act and, has remained effective for 270 days or such shorter period as all the Registrable Shares included in such registration have actually been sold thereunder. In addition, if within 180 days after it has become effective, the offering of Registrable Shares pursuant to such registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court, such registration will be deemed not to have been effected for purposes of this Section 4. (d) PRIORITY IN REQUESTED REGISTRATIONS. If a requested registration pursuant to this Section 4 involves an underwritten offering and the managing underwriter or underwriters in good faith advises the Company in writing that, in its opinion, the number of securities requested to be included in such registration (including securities of the Company which are not Registrable Shares) exceeds the largest number of securities which can be sold in such offering without having an adverse effect on such offering (including the price at which such securities can be sold), then the Company will include in such registration (i) first, 100% of the Registrable Shares 6 7 requested to be registered pursuant to Section 4(a) hereof (provided that if the number of Registrable Shares requested to be registered pursuant to Section 4(a) hereof exceeds the number which the Company has been advised can be sold in such offering without having the adverse effect referred to above, the number of such Registrable Shares to be included in such registration by the Holders shall be allocated pro rata among such Holders on the basis of the relative number of Registrable Shares each such Holder has requested to be included in such registration); (ii) second, to the extent that the number of Registrable Shares requested to be registered pursuant to Section 4(a) hereof is less than the number of securities which the Company has been advised can be sold in such offering without having the adverse effect referred to above, such number of shares of equity securities the Company requests to be included in such registration; and (iii) third, to the extent that the number of Registrable Shares requested to be included in such registration pursuant to Section 4(a) hereof and the securities which the Company proposes to sell for its own account are, in the aggregate, less than the number of equity securities which the Company has been advised can be sold in such offering without having the adverse effect referred to above, such number of other securities proposed to be sold by any Other Holder which, in the opinion of such managing underwriter or underwriters, can be sold without having the adverse effect referred to above (provided that if the number of such securities of such Other Holder requested to be registered exceeds the number which the Company has been advised can be sold in such offering without having the adverse effect referred to above, the number of such securities to be included in such registration pursuant to this Section 4(d) shall be allocated pro rata among all such Other Holders on the basis of the relative number of securities each such Other Holder has requested to be included in such registration). (e) ADDITIONAL RIGHTS. If the Company at any time grants to any other holders of equity securities of the Company any rights to request the Company to effect the registration of any such shares of equity securities on terms more favorable to such holders than the terms set forth in this Section 4 and in Section 5 hereof, the terms of this Section 4 and of Section 5 hereof shall be deemed amended or supplemented to the extent necessary to provide the Holders such more favorable rights and benefits. In no event shall the Company grant to any person any rights to request the Company to effect the registration of any shares of equity securities of the Company on terms which are adverse to rights of the Holders set forth in Section 2 and this Section 4. 5. REGISTRATION PROCEDURES. (a) If and whenever the Company is required by the provisions of Sections 2 or 4 hereof to use its best efforts to effect or cause the registration of Registrable Shares, the Company shall as expeditiously as possible: 7 8 (i) prepare and, in any event within 60 days after the end of the period within which a request for registration may be given to the Company, file with the SEC a registration statement with respect to such Registrable Shares and use its best efforts to cause such registration statement to become effective; (ii) prepare and file with the SEC 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 a period not in excess of 270 days and to comply with the provisions of the Securities Act, the Exchange Act, and the rules and regulations promulgated thereunder with respect to the disposition of all the securities covered by such registration statement during such period in accordance with the intended methods of disposition by the Holders thereof set forth in such registration statement; PROVIDED, HOWEVER, that (A) before filing a registration statement (including an initial filing) or prospectus, or any amendments or supplements thereto, the Company will furnish to one counsel selected by the Holders of a majority of the Registrable Shares covered by such registration statement copies of all documents proposed to be filed, which documents will be subject to the review and comment of such counsel and, (B) the Company will notify each Holder of Registrable Shares covered by such registration statement of any stop order issued or threatened by the SEC, any other order suspending the use of any preliminary prospectus or of the suspension of the qualification of the registration statement for offering or sale in any jurisdiction, and take all reasonable actions required to prevent the entry of such stop order, other order or suspension or to remove it if entered; (iii) furnish to each Holder and each underwriter, if applicable, of Registrable Shares covered by such registration statement such number of copies of the registration statement and of each amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and summary prospectus), in conformity with the requirements of the Securities Act, and such other documents as each Holder of Registrable Shares covered by such registration statement may reasonably request in order to facilitate the disposition of the Registrable Shares by such Holder; (iv) use its best efforts to register or qualify such Registrable Shares covered by such resignation statement under the state securities or blue sky laws of such jurisdictions as each Holder of Registrable Shares covered by such registration statement and, if applicable, each underwriter, may reasonably request, and do any and all 8 9 other acts and things which may be reasonably necessary to consummate the disposition in such jurisdictions of the Registrable Shares owned by such Holder, except that the Company shall not for any purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where, but for the requirements of this clause (iv), it would not be obligated to be so qualified; (v) use its best efforts to cause such Registrable Shares covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Holders thereof to consummate the disposition of such Registrable Shares; (vi) if at any time when a prospectus relating to the Registrable Shares is required to be delivered under the Securities Act, any event shall have occurred as the result of which any such prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, immediately give written notice thereof to each Holder and the managing underwriter or underwriters, if any, of such Registrable Shares and prepare and furnish to each such Holder a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Shares, such prospectus shall not include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (vii) use its best efforts to list any portion of such Registrable Shares not already listed on any securities exchange on which similar securities of the Company are then listed, and enter into customary agreements including a listing application and indemnification agreement in customary form, provided that the applicable listing requirements are satisfied, and provide a transfer agent and registrar for such Registrable Shares covered by such registration statement not later than the effective date of such registration statement; (viii) enter into such customary agreements (including an underwriting agreement in customary form) and take such other actions as each Holder of Registrable Shares being sold or the underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Shares, including customary indemnification and opinions. (ix) use its best efforts to obtain a "cold comfort" letter or letters from the Company's independent public 9 10 accountants in customary form and covering matters of the type customarily covered by "cold comfort" letters as the Holders of the Registrable Shares being sold or the underwriters retained by such Holders shall reasonably request; (x) make available for inspection by representatives of any Holder of Registrable Shares covered by such registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by such Holders or any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries' officers, directors and employees to supply all information and respond to all inquiries reasonably requested by such Holders or any such representative, underwriter, attorney, accountant or agent in connection with such registration statement; (xi) promptly prior to the filing of any document which is to be incorporated by reference into the registration statement or the prospectus (after initial filing of the registration statement), provide copies of such document to counsel to the Holders of Registrable Shares covered by such registration statement and to the managing underwriter or underwriters, if any, make the Company's representatives available for discussion of such document and make such changes in such document prior to the filing thereof as counsel for such Holders or underwriters may reasonably request; (xii) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable after the effective date of the registration statement, an earnings statement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder; (xiii) not later than the effective date of the applicable registration statement, use its best efforts to provide a CUSIP number for any portion of such Registrable Shares not already included in a CUSIP number for similar securities of the Company, and provide the applicable transfer agents with printed certificates for the Registrable Shares which are in a form eligible for deposit with the Depository Trust Company; (xiv) notify counsel for the Holders of Registrable Shares included in such registration statement and the managing underwriter or underwriters, if any, immediately and confirm the notice in writing, (A) when the registration statement, or any post-effective amendment to the 10 11 registration statement, shall have become effective, or any supplement to the prospectus or any amendment prospectus shall have been filed, (B) of the receipt of any comments from the SEC and (C) of any request of the SEC to amend the registration statement or amend or supplement the prospectus or for additional information; and (xv) cooperate with each seller of Registrable Shares and each underwriter, if any, participating in the disposition of such Registrable Shares and their respective counsel in connection with any filings required to be made with the NASD. (b) Each Holder of Registrable Shares hereby agrees that, upon receipt of any notice from the Company of the happening of any event of the type described in Section 5(a)(vi) hereof, such Holder shall forthwith discontinue disposition of such Registrable Shares covered by such registration statement or related prospectus until such Holder's receipt of the copies of the supplemental or amended prospectus contemplated by Section 5(a)(vi) hereof, and, if so directed by the Company, such Holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the prospectus covering such Registrable Shares at the time of receipt of such notice. In the event the Company shall give any such notice, the period mentioned in Section 5(a)(ii) hereof shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 5(a)(vi) hereof and including the date when such Holder shall have received the copies of the supplemental or amended prospectus contemplated by Section 5(a)(vi) hereof. If for any other reason the effectiveness of any registration statement filed pursuant to Section 4 hereof is suspended or interrupted prior to the expiration of the time period regarding the maintenance of the effectiveness of such Registration Statement required by Section 5(a)(ii) hereof so that Registrable Shares may not be sold pursuant thereto, the applicable time period shall be extended by the number of days equal to the number of days during the period beginning with the date of such suspension or interruption to and ending with the date when the sale of Registrable Shares pursuant to such registration statement may be recommenced. (c) Each Holder hereby agrees to provide the Company, upon receipt of its request, with such information about such Holder to enable the Company to comply with the requirements of the Securities Act and to execute such certificates as the Company may reasonably request in connection with such information and otherwise to satisfy any requirements of law. 6. UNDERWRITTEN REGISTRATIONS. Subject to the provisions of Sections 2, 3 and 4 hereof, any of the Registrable Shares covered by a registration 11 12 statement may be sold in an underwritten offering at the discretion of the Holder thereof. In the case of an underwritten offering pursuant to Section 2 hereof, the managing underwriter or underwriters that will administer the offering shall be selected by the Company; PROVIDED, HOWEVER, that such managing underwriter or underwriters shall be reasonably satisfactory to the Holders of a majority of the Registrable Shares to be registered. In the case of any underwritten offering pursuant to Section 4 hereof, the managing underwriter or underwriters that will administer the offering shall be selected by the Holders of a majority of the Registrable Shares to be registered; provided, however, that such underwriters shall be reasonably satisfactory to the Company. 7. EXPENSES. (a) Subject to Section 7(b), the Company shall pay all fees, costs and expenses of all registrations pursuant to Section 2 hereof, including all SEC and stock exchange or NASD registration and filing fees and expenses, reasonable fees and expenses of any "qualified independent underwriter" and its counsel as may be required by the rules of the NASD, fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the underwriters, if any, in connection with blue sky qualifications of the Registrable Shares), rating agency fees, printing expenses (including expenses of printing certificates for Registrable Shares and prospectuses), messenger, telephone and delivery expenses, the fees and expenses incurred in connection with the listing of the securities to be registered on each securities exchange or national market system on which similar securities issued by the Company are then listed, fees and disbursements of counsel for the Company and all independent certified public accountants (including the expenses of any annual audit, special audit and "cold comfort" letters required by or incident to such performance and compliance), the fees and disbursement of the underwriters customarily paid by issuers or sellers of securities (including expenses relating to "road shows" and other marketing activities), the reasonable fees and expenses of special experts required to be retained by the Company in connection with such registration, and the reasonable fees and expenses of other Persons required to be retained by the Company (collectively, "Registration Expenses"); PROVIDED, HOWEVER, that Registration Expenses shall not include (i) any allocation of the overhead of the Company, including any allocation of the compensation or benefits of employees of the Company that assist in a registration, or (ii) any other expense to the extent it would have been incurred by the Company in the absence of any sale of securities in connection with a registration pursuant to this Agreement (including the cost of the Company's annual audit). (b) The Holders shall pay the following: (i) all fees, costs and expenses of all registrations effected pursuant to Section 4 hereof, including all Registration Expenses, (ii) 12 13 any underwriting discounts or commissions or transfer taxes, if any, attributable to the sale of Registrable Shares by the Holders pursuant to this Agreement and (iii) all fees, costs and expenses of counsel to the Holders pursuant to this Agreement in connection with any registration pursuant to this Agreement. 8. INDEMNIFICATION. (a) INDEMNIFICATION BY THE COMPANY. In the event of any registration of any securities of the Company under the Securities Act pursuant to Sections 2 or 4 hereof, the Company will, and it hereby does, indemnify and hold harmless, to the extent permitted by law, each of the Holders of any Registrable Shares covered by such registration statement, each Affiliate of such Holder and their respective directors and officers, each other Person who participates as an underwriter in the offering or sale of such securities and each other Person, if any, who controls such Holder or any such underwriter within the meaning of the Securities Act (collectively, the "Indemnified Parties"), against any and all losses, claims, damages or liabilities, joint or several, and expenses (including any amounts paid in any settlement effected with the Company's consent, which consent shall not be unreasonably withheld) to which any Indemnified Party may become subject under the Securities Act, state securities or blue sky laws, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof, whether or not such Indemnified Party is a party thereto) or expenses arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereof, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration, and the Company will reimburse such Indemnified Party for any legal or any other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, liability, action or proceeding; PROVIDED, HOWEVER, that the Company shall not be liable to any Indemnified Party in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or amendment or supplement thereof or in any such preliminary, final or summary prospectus in reliance upon and in conformity with written information with respect to such Holder furnished to the Company by such Holder specifically for use in the preparation thereof. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf 13 14 of such Holder or any Indemnified Party and shall survive the transfer of such securities by such Holder. (b) INDEMNIFICATION BY THE HOLDERS AND UNDERWRITERS. The Company may require, as a condition to including any Registrable Shares in any registration statement filed in accordance with Sections 2 or 4 hereof, that the Company shall have received an undertaking reasonably satisfactory to it from the Holders of such Registrable Shares or any underwriter to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 8(a) hereof) the Company with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary, final or summary prospectus contained therein, or any amendment or supplement, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information with respect to the Holders of the Registrable Shares being registered or such underwriter furnished to the Company by such Holders or such underwriter specifically for use in the preparation of such registration statement, preliminary, final or summary prospectus or amendment or supplement, or a document incorporated by reference into any of the foregoing; provided, however, that no such Holder shall be liable for any indemnity claims in excess of the amount of the net proceeds received by such Holder from the sale of Registrable Shares. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any of the Holders, or any of their respective Affiliates, directors, officers or controlling Persons, and shall survive the transfer of such securities by such Holder. (c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified party hereunder of written notice of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Section 8, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; PROVIDED, HOWEVER, that the failure of the indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Section 8, except to the extent that the indemnifying party is actually materially prejudiced by such failure to give notice. 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, with counsel 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 will not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that the indemnified party shall have the right, at the sole cost and expense of the 14 15 indemnifying party, to employ counsel to represent the indemnified party and its respective controlling persons, directors, officers, employees or agents who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the indemnified party against such indemnifying party under this Section 8 if (i) the employment of such counsel shall have been authorized in writing by such indemnifying party in connection with the defense of such action, (ii) the indemnifying party shall not have promptly employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action or counsel, or (iii) any indemnified party shall have reasonably concluded that there may be defenses available to such indemnified party or its respective controlling persons, directors, officers, employees or agents which are in conflict with or in addition to those available to an indemnifying party; PROVIDED, FURTHER, that the indemnifying party shall not be obligated to pay for more than the expenses of one firm of separate counsel for the indemnified party (in addition to the reasonable fees and expenses of one firm serving as local counsel). No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. (d) If the indemnification provided for in this Section 8 shall for any reason be unavailable to any indemnified party under Section 8(a) or 8(b) hereof or is insufficient to hold it harmless in respect of any loss, claim, damage or liability, or any action in respect of any loss, claim, damage or liability, or any action in respect thereof referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the indemnified party and indemnifying party or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the indemnified party and indemnifying party with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. Notwithstanding any other provision of this Section 8(d), no Holder of Registrable Shares shall be required to contribute an amount greater than the dollar amount of the proceeds received by such Holder with respect to the sale of any such Registrable Shares. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) OTHER INDEMNIFICATION. Indemnification similar to that specified in the preceding subdivisions of this Section 8 15 16 (with appropriate modifications) shall be given by the Company and each Holder of Registrable Shares with respect of any required registration or other qualification of securities under any federal or state law or regulation other than the Securities Act. (f) NON-EXCLUSIVITY. The obligations of the parties under this Section 8 shall be in addition to any liability which any party may otherwise have to any other party. 9. RULE 144. The Company covenants that it will file in a timely manner the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder (or, if the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Shares, make publicly available such information), and it will take such further action as any Holder of Registrable Shares may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Shares without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder of Registrable Shares, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. 10. ASSIGNABILITY. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except as provided herein, no party may assign any of its rights or delegate any of its duties under this Agreement without the express consent of the other parties hereto. In addition, and whether or not any express assignment shall have been made, the provisions of this Agreement which are for the benefit of the parties hereto other than the Company shall also be for the benefit of and enforceable by any subsequent Holder of any Registrable Shares, subject to the provisions contained herein. Any Holder may assign any of its rights or delegate any of its duties under this Agreement; in whole or in part, without any prior consent of the Company, only to a Person (a "Designated Transferee") (a) who is an Affiliate of National City or (b) who is a transferee of Registrable Shares (whether through purchase, share exchange, bequest or otherwise) and who agrees to be bound by the terms of this Agreement. Any purported assignment in violation of this Section 11 shall be void. 11. NOTICES. Any and all notices, designations, consents, offers, acceptances or any other communications shall be given in writing by either (a) personal delivery to and receipted for by the addressee or by (b) telecopy or registered or certified mail which shall be addressed, in the case of the Company, to: Richard A. Alston, 1231 Durrett Lane, Louisville, Kentucky 40285-0001, fax no. (502) 364-2284; in the case of 16 17 Holders, to the address or addresses thereof appearing on the books of the Company or of the transfer agent and registrar for its Common Stock. All such notices and communications shall be deemed to have been duly given and effective: when delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed; and when receipt acknowledged, if telecopied. 12. NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders in this Agreement. 13. SPECIFIC PERFORMANCE. The Company acknowledges that the rights granted to the Holders in this Agreement are of a special, unique and extraordinary character, and that any breach of this Agreement by the Company could not be compensated for by damages. Accordingly, if the Company breaches its obligations under this Agreement, the Holders shall be entitled, in addition to any other remedies that they may have, to enforcement of this Agreement by a decree of specific performance requiring the Company to fulfill its obligations under this Agreement. The Company consents to personal jurisdiction in any such action brought in the United States District Court for the Northern District of Ohio or any such other court and to service of process upon it in the manner set forth in Section 11 hereof. 14. SEVERABILITY. If any provision of this Agreement or any portion thereof is finally determined to be unlawful or unenforceable, such provision or portion thereof shall be deemed any portion of such invalidated provision that is not invalidated by such a determination, shall remain in full force and effect. 15. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, together, shall constitute one and the same instrument. 16. DEFAULTS. A default by any party to this Agreement in such party's compliance with any of the conditions or covenants hereof or performance of any of the obligations of such party hereunder shall not constitute a default by any other party. 17. AMENDMENTS, WAIVERS. This Agreement may not be amended, modified or supplemented and no waivers of or consents to departures from the provisions hereof may be given unless consented to in writing by the Company and the holders of a majority of the Registrable Shares; provided, however, that no such amendment, supplement, modification or waiver shall deprive any Holder of any rights under Sections 2 or 4 hereof without the consent of such Holder. 17 18 18. CONSTRUCTION. The captions contained in this Agreement are for reference purposes only and shall not constitute a part of this Agreement. Unless the context requires otherwise, the use of the masculine shall include the feminine, and the use of the singular shall include the plural. The word "including" shall mean "including, without limitation,". 19. ATTORNEYS' FEES. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy. 20. ENTIRE AGREEMENT. This Agreement contains the entire agreement among the parties hereto with respect to the transactions contemplated herein and understandings among the parties relating to the subject matter hereof. Any and all previous agreements and understandings between or among the parties hereto regarding the subject matter hereof are, whether written or oral, superseded by this Agreement. 21. GOVERNING LAW. This Agreement is made pursuant to and shall be construed in accordance with the laws of the State of New York, without regard to that state's conflicts of laws principles. The parties hereto submit to the non-exclusive jurisdiction of the courts of the State of Ohio in any action or proceeding arising out of or relating to this Agreement. 18 19 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective authorized officers as of the date first written above. NATIONAL CITY CORPORATION By /s/ Thomas A. Richlovsky ----------------------------- Name: Thomas A. Richlovsky Title: Senior Vice President & Treasurer NATIONAL PROCESSING, INC. By /s/ Richard A. Alston ----------------------------- Name: Richard A. Alston Title: Executive Vice President -----END PRIVACY-ENHANCED MESSAGE-----